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CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
ANSWERS TO BAR
EXAMINATION QUESTIONS
IN
CIVIL LAW
ARRANGED BY TOPIC
(1990 – 2006)
First Edition - Edited and Arranged by:

July 26, 2005
Atty. Janette Laggui-Icao and
Atty. Alex Andrew P. Icao
(Silliman University College of Law)
Latest Edition – Edited and Arranged by:

ROMUALDO L. SEÑERIS II
Silliman University College of Law
From the ANSWERS TO BAR EXAMINATION QUESTIONS

by the UP LAW COMPLEX
&
Philippine Association of Law Schools
Page 1 of 119
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knowledge of the law. We would like to seek the reader’s indulgence for a lot of
typographical errors in this work.
The Authors
Page 2 of 119
Table of Contents
GENERAL PRINCIPLES ......................................................................................................................10
Civil law vs. Common Law (1997) ..............................................................................................................10
Effect of Obiter & Dissenting Opinion; SC Decisions (1994)...............................................................................10
Effectivity of Laws (1990) ........................................................................................................................10
Equity follows the Law (2003) ...................................................................................................................10
Ignorance of the Law vs. Mistake of Fact (1996) .............................................................................................11
Inferior Courts Decisions (1994)................................................................................................................11
Prejudicial Questions (1997) ....................................................................................................................11
PERSONS...........................................................................................................................................11
Change of Name; Under RA 9048 (2006) ......................................................................................................11
Death; Effects; Simultaneous Death (1998)...................................................................................................12
Juridical Capacity vs. Capacity to Act (1996) ................................................................................................12
Juridical Capacity; Natural Persons (1999) ...................................................................................................13
Waiver of Rights (2004) ..........................................................................................................................13
CONFLICT OF LAWS ..........................................................................................................................13
Appilicable Laws; laws governing contracts (1992) .........................................................................................13
Applicable Laws; Arts 15, 16 & 17 (1998) .....................................................................................................13
Applicable Laws; Arts 15, 16, 17 (2002) .......................................................................................................14
Applicable Laws; Capacity to Act (1998) ......................................................................................................14
Applicable Laws; Capacity to Buy Land (1995) ..............................................................................................15
Applicable Laws; Capacity to Contract (1995) ...............................................................................................15
Applicable Laws; capacity to succeed (1991) ................................................................................................15
Applicable Laws; contracts contrary to public policy (1996) ..............................................................................15
Applicable Laws; Contracts of Carriage (1995) ..............................................................................................16
Applicable Laws; Labor Contracts (1991).....................................................................................................16
Applicable Laws; laws governing marriages (1992).........................................................................................17
Applicable Laws; laws governing marriages (2003).........................................................................................17
Applicable Laws; Sale of Real Property (1995) ............................................................................................17
Applicable Laws; Succession; Intestate & Testamentary (2001) ..........................................................................18
Applicable Laws; Sucession of Aliens (1995) ................................................................................................18
Applicable Laws; Wills executed abroad (1993) .............................................................................................18
Definition; Cognovit; Borrowing Statute; Characterization (1994) ........................................................................18
Definition; forum non-conveniens; long-arm statute (1994) ...............................................................................19
Divorce; effect of divorce granted to former Filipinos; Renvoi Doctrine (1997) ........................................................19
Domiciliary theory vs. Nationality Theory (2004) ............................................................................................19
Forum Non Conveniens & Lex Loci Contractus (2002) .....................................................................................19
Nationality Theory (2004) ........................................................................................................................20
Naturalization (2003) .............................................................................................................................20
Theory; significant relationships theory (1994) ..............................................................................................20
Torts; Prescriptive Period (2004) ...............................................................................................................21
ADOPTION .........................................................................................................................................21
Adoption; Use of Surname of her Natural Mother (2006) ...................................................................................21
Inter-Country Adoption; Formalities (2005) ...................................................................................................21
Parental Authority; Rescission of Adoption (1994) ......................................................................................21
Qualification of Adopter (2005) .................................................................................................................22
Qualification of Adopter; Applicable Law (2001).............................................................................................22
Qualifications of Adopter (2000)................................................................................................................22
Qualifications of Adopter (2003)................................................................................................................23
Successional Rights of Adopted Child (2004)................................................................................................23
FAMILY CODE ....................................................................................................................................23
Emancipation (1993) ............................................................................................................................23
Family Code; Retroactive Application; Vested Rights (2000) ..............................................................................24
Page 3 of 119
Family Home; Dwelling House (1994)..........................................................................................................24
Family; Constitutional Mandates; Divorce (1991)............................................................................................24
Marriage; Annulment; Effects; Requisites Before Remarriage (1990) ....................................................................24
Marriage; Annulment; Grounds (1991) ........................................................................................................25
Marriage; Annulment; Judicial Declaration (1993)...........................................................................................25
Marriage; Annulment; Legal Separation; Prescription of Actions (1996) ................................................................25
Marriage; Annulment; Proper Party (1990) ...................................................................................................26
Marriage; Annulment; Proper Party (1995) ...................................................................................................26
Marriage; Divorce Decree; Void Marriages (1992) ...........................................................................................26
Marriage; Divorce Decrees; Filiation of Children (2005) ....................................................................................26
Marriage; Divorce Decrees; Filipino Spouses becoming Alien (1996) ...................................................................27
Marriage; Divorce Decrees; Filipino Spouses becoming Alien (1999) ...................................................................27
Marriage; Donations by Reason of Marriage; Effect of Declaration of Nullity (1996) ..................................................28
Marriage; Grounds; Declaration of Nullity: Annulment: Legal Separation: Separation of Property (2003) ..................28
Marriage; Grounds; Nullity; Annulment; Legal Separation (1997) ........................................................................29
Marriage; Legal Separation; Declaration of Nullity (2002) ..................................................................................29
Marriage; Legal Separation; Grounds; Prescriptive Period (1994) ........................................................................29
Marriage; Legal Separation; Mutual guilt (2006) .............................................................................................29
Marriage; Non-Bigamous Marriages (2006) ...................................................................................................30
Marriage; Property Relations; Void Marriages (1991) .......................................................................................30
Marriage; Psychological Incapacity (1996) .................................................................................................30
Marriage; Requisites (1995) ...................................................................................................................31
Marriage; Requisites (1999) ...................................................................................................................32
Marriage; Requisites; Marriage License (1996) ..............................................................................................32
Marriage; Requisites; Marriage License (2002) ..............................................................................................33
Marriage; Requisites; Solemnizing Officers (1994) ..........................................................................................33
Marriage; Requisites; Void Marriage (1993) ..................................................................................................33
Marriage; Void Marriages (2004)................................................................................................................34
Marriage; Void Marriages (2006)................................................................................................................34
Marriage; Void Marriages; Psychological Incapacity (2002) ...............................................................................35
Parental Authority; Child under 7 years of age (2006) ......................................................................................35
Parental Authority; Special Parental Authority; Liability of Teachers (2003)............................................................35
Parental Authority; Substitute vs. Special (2004) ............................................................................................35
Paternity & Filiation (1999) ......................................................................................................................36
Paternity & Filiation; Artificial Insemination; Formalities (2006) ..........................................................................36
Paternity & Filiation; Common-Law Union (2004) ........................................................................................36
Paternity & Filiation; Proofs; Limitations; Adopted Child (1995) ......................................................................36
Paternity & Filiation; Recognition of illegitimate Child (2005) .............................................................................37
Paternity & Filiation; Rights of Legitimate Children (1990) ................................................................................37
Presumptive Legitime (1999)....................................................................................................................38
Property Relations; Absolute Community (1994) ............................................................................................38
Property Relations; Ante Nuptial Agreement (1995) ........................................................................................39
Property Relations; Conjugal Partnership of Gains (1998).................................................................................39
Property Relations; Marriage Settlement; Conjugal Partnership of Gains (2005) ......................................................39
Property Relations; Marriage Settlements (1991) ............................................................................................40
Property Relations; Marriage Settlements (1995) ............................................................................................40
Property Relations; Obligations; Benefit of the Family (2000) .........................................................................41
Property Relations; Unions without Marriage (1992)........................................................................................41
SUCCESSION .....................................................................................................................................42
Amount of Successional Rights (2004)........................................................................................................42
Barrier between illegitimate & legitimate relatives (1993) ..................................................................................42
Barrier between illegitimate & legitimate relatives (1996) ..................................................................................43
Collation (1993)....................................................................................................................................43
Disinheritance vs. Preterition (1993) ...........................................................................................................43
Disinheritance; Ineffective (1999) ..............................................................................................................43
Disinheritance; Ineffective; Preterition (2000) ................................................................................................44
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Heirs; Intestate Heirs; Reserva Troncal (1995) ...............................................................................................44
Heirs; Intestate Heirs; Shares (2003) ..........................................................................................................45
Intestate Succession (1992) .....................................................................................................................45
Intestate Succession; Reserva Troncal (1999) ...............................................................................................47
Legitime (1997) ...................................................................................................................................47
Legitime; Compulsory Heirs (2003) ............................................................................................................47
Legitime; Compulsory Heirs vs. Secondary Compulsory Heirs (2005)...................................................................48
Preterition (2001)..................................................................................................................................48
Preterition; Compulsory Heir (1999) ...........................................................................................................48
Proceedings; Intestate Proceedings; Jurisdiction (2004) ..................................................................................48
Succession; Death; Presumptive Legitime (1991) ...........................................................................................49
Wills; Codicil; Institution of Heirs; Substitution of Heirs (2002) ...........................................................................49
Wills; Formalities (1990) .........................................................................................................................50
Wills; Holographic Wills; Insertions & Cancellations (1996) ...............................................................................50
Wills; Holographic Wills; Witnesses (1994)...................................................................................................50
Wills; Joint Wills (2000) ..........................................................................................................................50
Wills; Probate; Intrinsic Validity (1990)........................................................................................................51
Wills; Probate; Notarial and Holographic Wills (1997) ......................................................................................51
Wills; Revocation of Wills; Dependent Relative Revocation (2003).......................................................................51
Wills; Testamentary Disposition (2006) .......................................................................................................52
Wills; Testamentary Intent (1996) ..............................................................................................................52
DONATION .........................................................................................................................................52
Donation vs. Sale (2003) .........................................................................................................................52
Donations; Condition; Capacity to Sue (1996) ...............................................................................................52
Donations; Conditions; Revocation (1991) ...................................................................................................53
Donations; Effect; illegal & immoral conditions (1997) .....................................................................................53
Donations; Formalities; Mortis Causa (1990).................................................................................................54
Donations; Formalities; Mortis Causa (1998).................................................................................................54
Donations; Inter Vivos; Acceptance (1993) ...................................................................................................54
Donations; Perfection (1998)....................................................................................................................54
Donations; Requisites; Immovable Property .................................................................................................55
Donations; Unregistered; Effects; Non-Compliance; Resolutory Condition (2006) ....................................................55
Donations; Validity; Effectivity; for Unborn Child (1999) ...............................................................................55
Donations; with Resolutory Condition (2003) ................................................................................................56
PROPERTY.........................................................................................................................................56
Accretion; Alluvion (2001) .......................................................................................................................56
Accretion; Avulsion (2003) ......................................................................................................................56
Builder; Good Faith (1992) ......................................................................................................................57
Builder; Good Faith vs. Bad Faith (1999)......................................................................................................57
Builder; Good Faith vs. Bad Faith (2000)......................................................................................................57
Builder; Good Faith vs. Bad Faith; Accession (2000) .......................................................................................58
Builder; Good Faith vs. Bad Faith; Presumption (2001) ....................................................................................58
Chattel Mortgage vs. Pledge (1999) ............................................................................................................58
Chattel Mortgage; Immovables (1994) .........................................................................................................59
Chattel Mortgage; Immovables (2003) .........................................................................................................59
Chattel Mortgage; Possession (1993) .........................................................................................................60
Chattel Mortgage; Preference of Creditors (1995) ...........................................................................................60
Easement vs. Usufruct (1995)...................................................................................................................60
Easement; Effects; Discontinuous Easements; Permissive Use (2005) .................................................................61
Easement; Nuisance; Abatement (2002) ......................................................................................................61
Easements; Classification (1998) ............................................................................................................62
Easements; Right of Way (1993) ...............................................................................................................62
Easements; Right of Way (2000) ...............................................................................................................62
Easements; Right of Way; Inseparability (2001) .............................................................................................62
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Easements; Right of Way; Requisites (1996) .................................................................................................63
Ejectment Suit vs. Cancellation of Title (2005) ...............................................................................................63
Ejectment Suit; Commodatum (2006)..........................................................................................................63
Extra-Judicial Partition; Fraud (1990)..........................................................................................................63
Hidden Treasure (1995) ..........................................................................................................................64
Hidden Treasures (1997) .........................................................................................................................64
Mortgage; Pactum Commissorium (1999) ....................................................................................................64
Mortgage; Pactum Commissorium (2001) ....................................................................................................65
Mortgage; Right of Redemption vs. Equity of Redemption (1999) ........................................................................65
Nuisance; Family House; Not Nuisance per se (2006) ......................................................................................65
Nuisance; Public Nuisance vs. Private Nuisance (2005) ...................................................................................65
Ownership; Co-Ownership (1992) ..............................................................................................................66
Ownership; Co-Ownership; Prescription (2000) .............................................................................................66
Ownership; Co-Ownership; Prescription (2002) .............................................................................................67
Ownership; Co-Ownership; Redemption (1993) .............................................................................................67
Possession (1998) ................................................................................................................................68
Property; Real vs. Personal Property (1995) .................................................................................................68
Property; Real vs. Personal Property (1997) .................................................................................................68
Sower; Good Faith/ Bad Faith (2000) ..........................................................................................................69
Usufruct (1997) ...................................................................................................................................69
LAND TRANSFER & DEEDS ...............................................................................................................69
Acquisition of Lands; Citizenship Requirement (2003) .....................................................................................69
Adverse Claims; Notice of Levy (1998) ........................................................................................................69
Annotation of Lis Pendens; When Proper (2001) ............................................................................................70
Foreshore Lands (2000)..........................................................................................................................70
Forgery; Innocent Purchaser; Holder in Bad Faith (2005) ..................................................................................70
Forgery; Innocent Purchaser; Mirror Principle (1991) ...................................................................................71
Fraud; Procurement of Patent; Effect (2000) .................................................................................................71
Homestead Patents; Void Sale (1999) .........................................................................................................71
Innocent Purchaser for Value (2001)...........................................................................................................72
Mirror Principle (1990) ...........................................................................................................................72
Mirror Principle; Forgery; Innocent Purchaser (1999) ......................................................................................73
Notice of Lis Pendens (1995)....................................................................................................................73
Notice of Lis Pendens; Transferee Pendente Lite (2002) ...................................................................................73
Prescription & Laches; Elements of Laches (2000) .........................................................................................74
Prescription & Laches; Indefeasibility Rule of Torrens Title (2002) ......................................................................74
Prescription (1990) ...............................................................................................................................75
Prescription; Real Rights (1992)................................................................................................................75
Primary Entry Book; Acquisitive Prescription; Laches (1998) .........................................................................76
Reclamation of Foreshore Lands; Limitations (2000) .......................................................................................76
Registration; Deed of Mortgage (1994) ........................................................................................................77
Remedies; Judicial Confirmation; Imperfect Title (1993) ...................................................................................77
Remedies; Judicial Reconstitution of Title (1996) ...........................................................................................77
Remedies; Procedure; Consulta (1994) .......................................................................................................77
Remedies; Reconveyance vs. Reopening of a Decree; Prescriptive Period (2003) ...............................................78
Remedies; Reconveyance; Elements (1995) .................................................................................................78
Remedies; Reconveyance; Prescriptive Period (1997) .....................................................................................79
Remedies; Reopening of a Decree; Elements (1992)........................................................................................79
Torrens System vs. Recording of Evidence of Title (1994).................................................................................80
Unregistered Land (1991)........................................................................................................................80
CONTRACTS ......................................................................................................................................80
Consensual vs. Real Contracts; Kinds of Real Contracts (1998)..........................................................................80
Consideration; Validity (2000) ..................................................................................................................80
Contract of Option; Elements (2005)...........................................................................................................81
Inexistent Contracts vs. Annullable Contracts (2004).......................................................................................81
Nature of Contracts; Obligatoriness (1991)...................................................................................................81
Nature of Contracts; Privity of Contract (1996) ..............................................................................................82
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Nature of Contracts; Relativity of Contracts (2002) .........................................................................................82
Rescission of Contracts; Proper Party (1996) ................................................................................................82
OBLIGATIONS ....................................................................................................................................83
Aleatory Contracts; Gambling (2004) ..........................................................................................................83
Conditional Obligations (2000) .................................................................................................................83
Conditional Obligations (2003) .................................................................................................................83
Conditional Obligations; Promise (1997)......................................................................................................84
Conditional Obligations; Resolutory Condition (1999) .....................................................................................84
Extinguishment; Assignment of Rights (2001) ...............................................................................................84
Extinguishment; Cause of Action (2004) ......................................................................................................85
Extinguishment; Compensation (2002)........................................................................................................85
Extinguishment; Compensation vs. Payment (1998)........................................................................................85
Extinguishment; Compensation/Set-Off; Banks (1998) .................................................................................85
Extinguishment; Condonation (2000)..........................................................................................................85
Extinguishment; Extraordinary Inflation or Deflation (2001) ...............................................................................86
Extinguishment; Loss (1994) ..................................................................................................................86
Extinguishment; Loss; Impossible Service (1993) ..........................................................................................86
Extinguishment; Novation (1994) ..............................................................................................................87
Extinguishment; Payment (1995) .............................................................................................................87
Liability; Lease; Joint Liability (2001)..........................................................................................................87
Liability; Solidary Liability (1998) ..............................................................................................................87
Liability; Solidary Obligation (1992) ...........................................................................................................88
Liability; Solidary Obligation; Mutual Guaranty (2003) .....................................................................................88
Loss of the thing due; Force Majeure (2000) .................................................................................................88
Non-Payment of Amortizations; Subdivision Buyer; When justified (2005) .............................................................89
Period; Suspensive Period (1991) ..............................................................................................................89
TRUST ................................................................................................................................................89
Express Trust; Prescription (1997).............................................................................................................89
Implied Trust (1998) ..............................................................................................................................90
Trust; Implied Resulting Trust (1995) ..........................................................................................................91
SALES ................................................................................................................................................91
Assignment of Credit vs. Subrogation (1993) ................................................................................................91
Conditional Sale vs. Absolute Sale (1997) ....................................................................................................91
Contract of Sale vs. Agency to Sell (1999) ....................................................................................................91
Contract of Sale; Marital Community Property; Formalities (2006) .......................................................................91
Contract to Sell (2001) ...........................................................................................................................92
Contract to Sell vs. Contract of Sale (1997) ..................................................................................................92
Contract to Sell; Acceptance; Right of First Refusal (1991) ...............................................................................92
Double Sales (2001) ..............................................................................................................................92
Double Sales (2004) ..............................................................................................................................93
Equitable Mortgage (1991) ......................................................................................................................93
Equitable Mortgage vs. Sale (2005) ............................................................................................................93
Immovable Property; Rescission of Contract (2003) ........................................................................................94
Maceda Law (2000) ...............................................................................................................................94
Maceda Law; Recto Law (1999) .................................................................................................................95
Option Contract (2002) ...........................................................................................................................95
Option Contract; Earnest Money (1993) ....................................................................................................95
Perfected Sale; Acceptance of Earnest Money (2002) ......................................................................................95
Redemption; Legal; Formalities (2001) ........................................................................................................96
Redemption; Legal; Formalities (2002) ........................................................................................................96
Right of First Refusal; Lessee; Effect (1996) .................................................................................................96
Right of First Refusal; Lessee; Effect (1998) .................................................................................................97
Right of Repurchase (1993) .....................................................................................................................97
Transfer of Ownership; Non-Payment of the Price (1991) ..................................................................................97
Transfer of Ownership; Risk of Loss (1990) ..................................................................................................97
LEASE ................................................................................................................................................97
Extinguishment; Total Distruction; Leased Property (1993) ...............................................................................97
Implied New Lease (1999) .......................................................................................................................98
Lease of Rural Lands (2000) ....................................................................................................................98
Page 7 of 119
Leasee & Lessor; Rights and Obligations (1990) ............................................................................................98
Leasee; Death Thereof; Effects (1997).........................................................................................................98
Option to Buy; Expired (2001) ..................................................................................................................98
Sublease vs. Assignment of Lease; Rescission of Contract (2005) ..................................................................99
Sublease; Delay in Payment of Rentals (1994) ...............................................................................................99
Sublease; Sublessee; Liability (1999) ....................................................................................................... 100
Sublease; Sublessee; Liability (2000) ....................................................................................................... 100
Sublease; Validity; Assignment of Sublease (1990)....................................................................................... 100
COMMON CARRIERS ....................................................................................................................... 100
Extraordinary Diligence (2000) ............................................................................................................... 100
AGENCY ........................................................................................................................................... 101
Agency (2003) ................................................................................................................................... 101
Agency vs. Sale (2000) ......................................................................................................................... 101
Agency; coupled with an interest (2001) .................................................................................................... 101
Agency; Guarantee Commission (2004)..................................................................................................... 101
Agency; Real Estate Mortgage (2004) ....................................................................................................... 101
Appointment of Sub-Agent (1999)............................................................................................................ 102
General Agency vs. Special Agency (1992)................................................................................................. 102
Powers of the Agent (1994).................................................................................................................... 102
Termination; Effect of Death of Agent (1997)............................................................................................... 103
PARTNERSHIP ................................................................................................................................. 103
Composition of Partnerships; Spouses; Corporations (1994)........................................................................... 103
Conveyance of a Partner’s Share Dissolution (1998) ..................................................................................... 103
Dissolution of Partnership (1995) ............................................................................................................ 103
Dissolution of Partnership; Termination (1993) ............................................................................................ 104
Effect of Death of Partner (1997) ............................................................................................................. 104
Obligations of a Partner (1992) ............................................................................................................... 104
Obligations of a Partner; Industrial Partner (2001) ........................................................................................ 104
COMMODATUM & MUTUUM ..................................................................................................................... 104
Commodatum (1993) ........................................................................................................................... 104
Commodatum (2005) ........................................................................................................................... 105
Commodatum vs. Usufruct (1998) ........................................................................................................... 105
Mutuum vs. Commodatum (2004) ............................................................................................................ 106
Mutuum; Interests (2001) ...................................................................................................................... 106
DEPOSIT .......................................................................................................................................... 107
Compensation; Bank Loan (1997) ............................................................................................................ 107
Deposit; Exchange (1992) ..................................................................................................................... 107
SURETY ........................................................................................................................................... 107
Recovery of Deficiency (1997) ................................................................................................................ 107
ANTICHRESIS .................................................................................................................................. 107
Antichresis (1995) .............................................................................................................................. 107
PLEDGE ........................................................................................................................................... 108
Pledge (1994) .................................................................................................................................... 108
Pledge (2004) .................................................................................................................................... 108
Pledge; Mortgage; Antichresis (1996) ....................................................................................................... 108
QUASI-CONTRACT .......................................................................................................................... 108
Quasi-Contracts; Negotiorium Gestio (1992) ............................................................................................... 109
Quasi-Contracts; Solutio Indebiti (2004) .................................................................................................... 110
TORTS & DAMAGES ........................................................................................................................ 110
Collapse of Structures; Last Clear Chance (1990) ......................................................................................... 110
Damages (1994) ................................................................................................................................. 111
Damages arising from Death of Unborn Child (1991) ..................................................................................... 111
Damages arising from Death of Unborn Child (2003) ..................................................................................... 111
Death Indemnity (1994) ........................................................................................................................ 111
Page 8 of 119
Defense; Due Diligence in Selection (2003) ................................................................................................ 112
Filing of Separate Civil Action; Need for Reservation (2003) ............................................................................ 112
Fortuitous Event; Mechanical Defects (2002) .............................................................................................. 112
Liability; Airline Company; Non-Performance of an Obligation (2004) ................................................................. 112
Liability; Airline Company; Non-Performance of an Obligation (2005) ................................................................. 113
Liability; Employer; Damage caused by Employees (1997) .............................................................................. 113
Liability; owner who was in the vehicle (1996) ............................................................................................. 114
Moral Damages & Atty Fees (2002) .......................................................................................................... 114
Moral Damages; Non-Recovery Thereof (2006) ............................................................................................ 115
Quasi-Delict (1992) ............................................................................................................................. 115
Quasi-Delict (2005) ............................................................................................................................. 115
Quasi-Delict; Acts contrary to morals (1996) ............................................................................................... 115
Quasi-Delict; Mismanagement of Depositor’s Account (2006) .......................................................................... 116
Vicarious Liability (1991) ...................................................................................................................... 116
Vicarious Liability; Public Utility (2000) ..................................................................................................... 118
INTELLECTUAL PROPERTY ............................................................................................................ 118
Intellectual Creation (2004) .................................................................................................................... 118
Page 9 of 119
cannot have the force of official precedents. It is as if the

GENERAL PRINCIPLES Court were turning aside from the main topic of the case to
Civil law vs. Common Law (1997) collateral subjects: a dissenting opinion affirms or overrules
How would you compare the Civil Law system in its a claim, right or obligation. It neither disposes nor awards
governance and trend with that of the Common Law anything it merely expresses the view of the dissenter. (Civil
system? Code, Paras]
SUGGESTED ANSWER:
As regards "governance": 3) A decision of a division of the Supreme Court maybe
Governance in Civil Law is codal, statutory and written law. set aside by the Supreme Court sitting en banc, a Supreme
It is additionally derived from case law. Common law Court decision may be set aside by a contrary ruling of the
is basically derived from case law. Supreme Court itself or by a corrective legislative act
of Congress, although said laws cannot adversely affect
As regards "trend": those favored prior to the Supreme Court decision. [Civil
Civil law is now tending to rely more and more on decisions Code, Paras).
of the courts explaining the laws. Common law is now
codifying laws more and more. So they are now Effectivity of Laws (1990)
merging towards similar systems. After a devastating storm causing widespread destruction in
four Central Luzon provinces, the executive and legislative
Additional Answers:
branches of the government agreed to enact a special
1. COMMON LAW refers to the traditional part of law appropriating P1 billion for purposes of relief
the law as distinct from legislation; it refers to the and rehabilitation for the provinces. In view of the urgent
universal part of law as distinct from particular nature of the legislative enactment, it is provided in its
local customs (Encyclopedia Americana, Vol. 7). effectivity clause that it shall take effect upon approval
On the other hand, CIVIL LAW is understood to be and after completion of publication in the Official
that branch of law governing the relationship Gazette and a newspaper of general circulation in the
of persons in respect of their personal and Philippines. The law was passed by the Congress on July 1,
private interests as distinguished from both 1990. signed into law by the President on July 3, 1990,
public and international laws. and published in such newspaper of general circulation
on July 7, 1990 and in the Official Gazette on July 10, 1990.
In common law countries, the traditional responsibility
(a) As to the publication of said legislative enactment,
has for the most part been with the judges; in civil law is there sufficient observance or compliance with
countries, the task is primarily reposed on the the requirements for a valid publication? Explain
lawmakers. Contemporary practices, however, your answer.
so indicate a trend towards centralizing that (b) When did the law take effect? Explain your answer.
function to professional groups that may indeed, (c) Can the executive branch start releasing and disbursing
see the gradual assimilation in time of both systems. funds appropriated by the said law the day following its
[Vitug, Civil. Law and Jurisprudence, p. XX) approval? Explain your answer.
SUGGESTED ANSWER:
2. In Civil Law, the statutes theoretically take precedence (a) Yes, there is sufficient compliance. The law
over court decisions interpreting them; while in itself prescribes the requisites of publication for its
Common Law, the court decisions resolving effectivity, and all requisites have been complied with.
specific cases are regarded as law rather than the (Article 2, Civil Code)
statutes themselves which are, at the start, merely (b) The law takes effect upon compliance with all the
embodiments of case law. Civil Law is code law or conditions for effectivity, and the last condition
written law, while Common Law is case law. was complied with on July 10, 1990. Hence, the" law
Civil Law adopts the deductive method - from the became effective on that date.
general to the particular, while the Common Law uses (c) No. It was not yet effective when it was approved by
the inductive approach - from the particular to the Congress on July 1, 1990 and approved by the President on
general. Common Law relies on equity. Civil Law July 3, 1990. The other requisites for its effectivity were not
anchors itself on the letter of the law. The civilists yet complete at the time.
are for the judge-proof law even as the Common
Law Is judge-made law. Civil Law judges are merely Equity follows the Law (2003)
supposed to apply laws and not interpret them. It is said that “equity follows the law” What do you
understand by this phrase, and what are its basic
Effect of Obiter & Dissenting Opinion; SC Decisions (1994) implications? 5%
2) What are the binding effects of an obiter dictum and a SUGGESTED ANSWER:
dissenting opinion? “Equity Follows the law” means that courts exercising
3) How can a decision of the Supreme Court be set aside? equity jurisdiction are bound by rules of law and have no
ALTERNATIVE ANSWERS: arbitrary discretion to disregard them. (Arsenal v IAC, 143
2) None. Obiter dictum and opinions are not necessary to SCRA 40 [1986]). Equity is applied
the determination of a case. They are not binding and only in the absence of
Page 10 of 119
but never against statutory law. (Toyota Motor Phil. V CA 1. The civil action involves an issue similar or intimately
216 SCRA 236 [1992]). related to the issue raised in the criminal action, and
2. the resolution of such issue determines whether or not
Ignorance of the Law vs. Mistake of Fact (1996) the criminal action may proceed.
Is there any difference in their legal effect between
ignorance of the law and ignorance or mistake of fact? (c) Consequences
SUGGESTED ANSWER: The criminal case must be suspended. Thus, in a criminal
Yes, there is a difference. While ignorance of the law is not case for damages to one's property, a civil action that
an excuse for not complying with it, ignorance of fact involves the ownership of said property should first be
eliminates criminal intent as long as there is no negligence
resolved (De Leon vs. Mabanag. 38 Phil. 202)
(Art, NCC). In addition, mistake on a doubtful or difficult
question of law may be the basis of good faith (Art. 526.
NCC). Mistake of fact may, furthermore, vitiate consent in a PERSONS
contract and make it voidable (Art. 1390. NCC).
ALTERNATIVE ANSWER:
Change of Name; Under RA 9048 (2006)
Yes. ignorance of the law differs in legal effect from
Zirxthoussous delos Santos filed a petition for change of
Ignorance or mistake of fact. The former does not excuse a
name with the Office of the Civil Registrar of Mandaluyong
party from the legal consequences of his conduct while the
City under the administrative proceeding provided in
latter does constitute an excuse and is a legal defense.
Republic Act No. 9048. He alleged that his first name
sounds ridiculous and is extremely difficult to spell and
Inferior Courts Decisions (1994) pronounce. After complying with the requirements of the
Are decisions of the Court of Appeals considered laws?
law, the Civil Registrar granted his petition and changed his
ALTERNATIVE ANSWERS:
1) a) No, but decisions of the Court of Appeals may first name Zirxthoussous to "Jesus." His full name now
serve as precedents for inferior courts on points of law not reads "Jesus delos Santos."
covered by any Supreme Court decision, and a ruling of the
Court of Appeals may become a doctrine. (Miranda vs.. Jesus delos Santos moved to General Santos City to work in
a multi-national company. There, he fell in love and married
Imperial 77 Phil. 1066).
Mary Grace delos Santos. She requested him to have his
b) No. Decisions of the Court of Appeals merely have first name changed because his new name "Jesus delos
persuasive, and therefore no mandatory effect. However, a Santos" is the same name as that of her father who
conclusion or pronouncement which covers a point of law abandoned her family and became a notorious drug lord.
still undecided may still serve as judicial guide and it is She wanted to forget him. Hence, Jesus filed another
possible that the same maybe raised to the status of petition with the Office of the Local Civil Registrar to
doctrine. If after it has been subjected to test in the crucible change his first name to "Roberto." He claimed that the
of analysis, the Supreme Court should find that it has merits change is warranted because it will eradicate all vestiges of
and qualities sufficient for its consideration as a rule of the infamy of Mary Grace's father.
Will the petition for change of name of Jesus delos Santos to
jurisprudence (Civil Code, Paras).
Roberto delos Santos under Republic Act No. 9048 prosper?
Explain. (10%)
Prejudicial Questions (1997) SUGGESTED ANSWER: No, under the law, Jesus may only
In the context that the term is used in Civil Law, state the change his name once. In addition, the petition for change
(a) concept, (b) requisites and (c) consequences of a of name may be denied on the following grounds:
prejudicial question. (1) Jesus is neither ridiculous, nor tainted with dishonor
SUGGESTED ANSWER:
(a) Concept nor extremely difficult to write or pronounce.
A prejudicial question is one which must be decided first (2) There is no confusion to be avoided or created with
before a criminal action may be instituted or may proceed the use of the registered first name or nickname of the
because a decision therein is vital to the judgment in the petitioner.
criminal case. In the case of People vs. Adelo Aragon (L- (3) The petition involves the same entry in the same docu-
5930, Feb. 17, 1954), the Supreme Court defined it as one
ment, which was previously corrected or changed
which arises in a case, the resolution of which question is a under this Order [Rules and Regulations Implementing
logical antecedent of the issues involved in said case and the RA 9048].
cognizance of which pertains to another tribunal (Paras,
What entries in the Civil Registry may be changed or
Vol. 1, Civil. Code Annotation, 1989 ed. p, 194). corrected without a judicial order? (2.5%)
SUGGESTED ANSWER: Only clerical or typographical
(b) Requisites errors and first or nick names may be changed or corrected
1. The prejudicial question must be determinative of the
without a judicial order under RA 9048.
case before the court.
2. Jurisdiction to try said question must be lodged in Clerical or typographical errors refer to mistakes committed
another tribunal. in the performance of clerical work in writing, copying,
ADDITIONAL ANSWER:
transcribing or typing an entry in the civil register. The
mistake is harmless and innocuous, such as errors in
Page 11 of 119
spelling, visible to the eyes or obvious to the understanding, absolute community amounting to 1 Million Pesos. His
and can be corrected or changed only by reference to other wife, will, therefore, inherit O.25 Million Pesos and his
existing records. Provided, however, that no correction parents will inherit 0.25 Million Pesos.
must involve the change of nationality, age, status or sex of When Mrs. Cruz died, she was succeeded by her parents as
the petitioner. her intestate heirs. They will inherit all of her estate
consisting of her 0.5 Million half share in the absolute
community and her 0.25 Million inheritance from her
Death; Effects; Simultaneous Death (1998) husband, or a total of 0.750 Million Pesos.
Jaime, who is 65, and his son, Willy, who is 25, died in a
plane crash. There is no proof as to who died first. Jaime's In sum, the parents of Mr. Cruz will inherit 250,000 Pesos
only surviving heir is his wife, Julia, who is also Willy's while the parents of Mrs. Cruz will inherit 750,000 Pesos.
mother. Willy's surviving heirs are his mother, Julia and his
wife, Wilma. (b) This being a case of succession, in the absence of
1. In the settlement of Jaime's estate, can Wilma proof as to the time of death of each of the spouses, it is
successfully claim that her late husband, Willy had a presumed they died at the same time and no transmission of
hereditary share since he was much younger than his father rights from one to the other is deemed to have taken place.
and, therefore, should be presumed to have survived Therefore, each of them is deemed to have an estate valued
longer? [3%] at P500,000,00, or one-half of their conjugal property of
2. Suppose Jaime had a life insurance policy with his wife, P1 million. Their respective parents will thus inherit the
Julia, and his son, Willy, as the beneficiaries. Can Wilma entire P1 Million in equal shares, of P500,000.00 per set of
successfully claim that one-half of the proceeds should parents.
belong to Willy's estate? |2%J
SUGGESTED ANSWER: Death; Effects; Simultaneous Death (2000)
1. No, Wilma cannot successfully claim that Willy had a b) Cristy and her late husband Luis had two children, Rose
hereditary share in his father's estate. Under Art. 43, Civil and Patrick, One summer, her mother-in-law, aged 70, took
Code, two persons "who are called to succeed each other" the two children, then aged 10 and 12, with her on a boat
are presumed to have died at the same time, in the absence trip to Cebu. Unfortunately, the vessel sank en route, and
of proof as to which of them died first. This presumption of the bodies of the three were never found. None of the
simultaneous death applies in cases involving the question survivors ever saw them on the water. On the settlement of
of succession as between the two who died, who in this case her mother-in-law's estate, Cristy files a claim for a share of
are mutual heirs, being father and son. her estate on the ground that the same was inherited by her
SUGGESTED ANSWER: children from their grandmother in representation of their
2. Yet, Wilma can invoke the presumption of survivorship father, and she inherited the same from them. Will her
and claim that one-half of the proceeds should belong to action prosper? (2%)
Willy's estate, under Sec. 3 (jj) par. 5 Rule 131, Rules of SUGGESTED ANSWER:
Court, as the dispute does not involve succession. Under No, her action will not prosper. Since there was no proof as
this presumption, the person between the ages of 15 and 60 to who died first, all the three are deemed to have died at
years is deemed to have survived one whose age was over the same time and there was no transmission of rights from
60 at the time of their deaths. The estate of Willy endowed one to another, applying Article 43 of the New Civil Code.
with juridical personality stands in place and stead of Willy, ALTERNATIVE ANSWER:
as beneficiary. No, her action will not prosper. Under Article 43 of the
New Civil Code, inasmuch as there is no proof as to who
Death; Effects; Simultaneous Death (1999) died first, all the three are presumed to have died at the
Mr. and Mrs. Cruz, who are childless, met with a serious same time and there could be no transmission of rights
motor vehicle accident with Mr. Cruz at the wheel and Mrs. among them. Her children not having inherited from their
Cruz seated beside him, resulting in the instant death of Mr. grandmother. Cristy has no right to share in her mother-in-
Cruz. Mrs. Cruz was still alive when help came but she also law's estate. She cannot share in her own right as she is not
died on the way to the hospital. The couple acquired a legal heir of her mother-in-law. The survivorship
properties worth One Million (P1 ,000,000.00) Pesos during provision of Rule 131 of the Rules of Court does not apply
their marriage, which are being claimed by the parents of to the problem. It applies only to those cases where the
both spouses in equal shares. Is the claim of both sets of issue involved is not succession.
parents valid and why? (3%)
(b) Suppose in the preceding question, both Mr. and Mrs. Juridical Capacity vs. Capacity to Act (1996)
Cruz were already dead when help came, so that no-body Distinguish juridical capacity from capacity to act,
could say who died ahead of the other, would your answer SUGGESTED ANSWER:
be the same to the question as to who are entitled to the JURIDICAL CAPACITY is the fitness to be the subject of
properties of the deceased couple? (2%) legal relations while CAPACITY TO ACT is the power or
SUGGESTED ANSWER: to do acts with legal effect. The former is inherent in every
(a) No, the claim of both parents is not valid. When Mr. natural person and is lost only through death while the latter
Cruz died, he was succeeded by his wife and his parents as is merely acquired and may be lost even before death (Art.
his intestate heirs who will share his estate equally. His 37, NCC).
estate was 0.5 Million pesos which is his half share in the ALTERNATIVE ANSWER;
Page 12 of 119
Juridical capacity, as distinguished from capacity to act: (a) conditions detrimental to the moral well-being of their
the former is passive while the latter is active, (b) the former children acting in the movies is in violation of the Family
is inherent in a person while the latter is merely acquired, (c) Code and Labor laws. Thus, the waiver is invalid and not
the former is lost only through death while the latter may be binding.
lost through death or restricted by causes other than death,
and Id) the former can exist without capacity to act while The Child Labor Law is a mandatory and prohibitory law
the latter cannot exist without juridical capacity. and the rights of the child cannot be waived as it is contrary
to law and public policy.
Juridical Capacity; Natural Persons (1999)
Elated that her sister who had been married for five years
was pregnant for the first time, Alma donated P100,000.00 CONFLICT OF LAWS
to the unborn child. Unfortunately, the baby died one hour
after delivery. May Alma recover the P100.000.00 that she
had donated to said baby before it was born considering Appilicable Laws; laws governing contracts (1992)
that the baby died? Stated otherwise, is the donation valid X and Y entered into a contract in Australia, whereby it was
and binding? Explain. (5%) agreed that X would build a commercial building for Y in
SUGGESTED ANSWER: the Philippines, and in payment for the construction, Y will
The donation is valid and binding, being an act favorable to transfer and convey his cattle ranch located in the United
the unborn child, but only if the baby had an intra-uterine States in favor of X.
life of not less than seven months and pro-vided there was What law would govern:
due acceptance of the donation by the proper person a) The validity of the contract?
representing said child. If the child had less than seven b) The performance of the contract?
months of intra-uterine life, it is not deemed born since it c) The consideration of the contract?
died less than 24 hours following its delivery, in which ease SUGGESTED ANSWER:
the donation never became effective since the donee never (a) The validity of the contract will be governed by
became a person, birth being determinative of personality. Australian law, because the validity refers to the element of
ALTERNATIVE ANSWER: the making of the contract in this case.
Even if the baby had an intra-uterine life of more than (Optional Addendum:"... unless the parties agreed to be
seven months and the donation was properly accepted, it bound by another law".}
would be void for not having conformed with the proper
form. In order to be valid, the donation and acceptance of (b) The performance will be governed by the law of the
personal property exceeding five thousand pesos should be Philippines where the contract is to be performed.
in writing. (Article 748, par. 3)
(c) The consideration will be governed by the law of the
Waiver of Rights (2004) United States where the ranch is located.
B. DON, an American businessman, secured parental (Optional Addendum: In the foregoing cases, when the
consent for the employment of five minors to play certain foreign law would apply, the absence of proof of that
roles in two movies he was producing at home in Makati. foreign law would render Philippine law applicable
They worked at odd hours of the day and night, but always under the "eclectic theory".)
accompanied by parents or other adults. The producer paid
Applicable Laws; Arts 15, 16 & 17 (1998)
the children talent fees at rates better than adult wages.
Juan is a Filipino citizen residing in Tokyo, Japan. State
But a social worker, DEB, reported to OSWD that these what laws govern:
children often missed going to school. They sometimes 1. His capacity to contract marriage in Japan, [ 1%]
drank wine, aside from being exposed to drugs. In some 2. His successional rights as regards his deceased Filipino
scenes, they were filmed naked or in revealing costumes. In father's property in Texas, U.S.A. [1%]
his defense, DON contended all these were part of artistic 3. The extrinsic validity of the last will and testament
freedom and cultural creativity. None of the parents which Juan executed while sojourning in Switzerland.
complained, said DON. He also said they signed a contract [2%]
containing a waiver of their right to file any complaint in 4. The intrinsic validity of said will. (1%)
any office or tribunal concerning the working conditions of SUGGESTED ANSWER:
their children acting in the movies. 1. Juan's capacity to contract marriage is governed
by Philippine law - i.e., the Family Code -pursuant to Art.
Is the waiver valid and binding? Why or why not? Explain. 15, Civil Code, which provides that our laws relating to,
(5%) among others, legal capacity of persons are binding upon
SUGGESTED ANSWER:
citizens of the Philippines even though living abroad.
The waiver is not valid. Although the contracting parties
may establish such stipulations, clauses, terms and SUGGESTED ANSWER:
conditions as they may deem convenient, they may not do 2. By way of exception to the general rule of lex rei sitae
so if such are contrary to law, morals, good customs, public prescribed by the first paragraph of Art. 16. Civil Code, a
order, or public policy (Article 1306, Civil Code). The person's successional rights are governed by the national law
parents' waiver to file a complaint concerning the working of the decedent (2nd par.. Art. 16). Since Juan's deceased
Page 13 of 119
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-
2006) father was a Filipino citizen, Philippine law governs Juan's
successional rights. (2). With respect to Felipe the divorce is valid, but with
respect to Felisa it is not. The divorce will not capacitate
ANOTHER ANSWER: Felisa to remarry because she and Felipe were both Filipinos
2. Juan's successional rights are governed by Philippine law, at the time of their marriage. However, in DOJ Opinion
pursuant to Article 1039 and the second paragraph of No. 134 series of 1993, Felisa is allowed to remarry because
Article 16, both of the Civil Code. Article 1039, Civil Code, the injustice sought to be corrected by Article 26 also
provides that capacity to succeed shall be governed by the obtains in her case.
"law of the nation" of the decedent, i.e.. his national law.
Article 16 provides in paragraph two that the amount of SUGGESTED ANSWER:
successional rights, order of succession, and intrinsic validity B. The foreigner who executes his will in the
of testamentary succession shall be governed by the Philippines may observed the formalities described in:
"national law" of the decedent who is identified as a Filipino 1. The Law of the country of which he is a citizen
in the present problem. under Article 817 of the New Civil Code, or
2. the law of the Philippines being the law of the
SUGGESTED ANSWER:
place of execution under Article 17 of the New Civil Code.
3. The extrinsic validity of Juan's will is governed by (a)
Swiss law, it being the law where the will was made (Art. 17. SUGGESTED ANSWER:
1st par. Civil Code), or (b) Philippine law, by implication C. Philippine law will not govern the intrinsic validity
from the provisions of Art. 816, Civil Code, which allows of the will. Article 16 of the New Civil Code provides that
even an alien who is abroad to make a will in conformity intrinsic validity of testamentary provisions shall be
with our Civil Code. governed by the National Law of the person whose
succession is under consideration. California law will govern
SUGGESTED ANSWER:
the intrinsic validity of the will.
4. The intrinsic validity of his will is governed by
Philippine law, it being his national law. (Art. 16, Civil Applicable Laws; Capacity to Act (1998)
Code) Francis Albert, a citizen and resident of New Jersey, U.S.A.,
under whose law he was still a minor, being only 20 years of
Applicable Laws; Arts 15, 16, 17 (2002) age, was hired by ABC Corporation of Manila to serve for
Felipe and Felisa, both Filipino citizens, were married in two years as its chief computer programmer. But after
Malolos, Bulacan on June 1, 1950. In 1960 Felipe went to serving for only four months, he resigned to join XYZ
the United States, becoming a U.S. citizen in 1975. In 1980 Corporation, which enticed him by offering more
they obtained a divorce from Felisa, who was duly notified advantageous terms. His first employer sues him in Manila
of the proceedings. The divorce decree became final under for damages arising from the breach of his contract of
California Law. Coming back to the Philippines in 1982, employment. He sets up his minority as a defense and asks
Felipe married Sagundina, a Filipino Citizen. In 2001, Filipe, for annulment of the contract on that ground. The plaintiff
then domiciled in Los Angeles, California, died, leaving one disputes this by alleging that since the contract was executed
child by Felisa, and another one by Sagundina. He left a will in the Philippines under whose law the age of majority is 18
which he left his estate to Sagundina and his two children years, he was no longer a minor at the time of perfection of
and nothing to Felisa. the contract.
Sagundina files a petition for the probate of Felipe’s will. 1. Will the suit prosper? [3%]
Felisa questions the intrinsic validity of the will, arguing that 2. Suppose XYZ Corporation is impleaded as a co-
her marriage to Felipe subsisted despite the divorce defendant, what would be the basis of its liability, if any?
obtained by Felipe because said divorce is not recognized in [2%]
the Philippines. For this reason, she claims that the SUGGESTED ANSWER:
properties and that Sagundina has no successional rights. 1. The suit will not prosper under Article 15, Civil Code,
A. Is the divorce secured by Felipe in California New Jersey law governs Francis Albert's capacity to act,
recognizable and valid in the Philippines? How does it being his personal law from the standpoint of both his
affect Felipe’s marriage to Felisa? Explain. (2%). nationality and his domicile. He was, therefore, a minor at
B. What law governs the formalities of the will? Explain. the time he entered into the contract.
(1%) ALTERNATIVE ANSWER:
C. Will Philippine law govern the intrinsic validity of the 1. The suit will not prosper. Being a U.S. national, Albert's
will? Explain. (2%) capacity to enter into a contract is determined by the law of
SUGGESTED ANSWER: the State of which he is a national, under which he to still a
A. (1.) The divorce secured by Felipe in California is minor. This is in connection with Article 15 of the Civil
recognizable and valid in the Philippines because he was no Code which embodies the said nationality principle of lex
longer a Filipino at that time he secured it, Aliens may patriae. While this principle intended to apply to Filipino
obtain divorces abroad which may be recognized in the citizens under that provision, the Supreme Court in Recto v.
Philippines provided that they are valid according to their Harden is of the view that the status or capacity of
national law (Van Dorn V. Romillo, Jr., 139 SCRA 139 foreigners is to be determined on the basis of the same
[1985]; Quita v. Court of Appeals, 300 SCRA 406 [1998]; provision or principle, i.e., by U.S. law in the present
Llorente v. Court of Appeals, 345 SCRA 595 [2000] ). problem.
Page 14 of 119
persons is governed by the law of his nationality, capacity
Plaintiffs argument does not hold true, because status or concerning transactions involving property is an exception.
capacity is not determined by lex loci contractus but by lex Under Article 16 of the NCC the capacity of persons in
patriae. transactions involving title to property is governed by the
ANOTHER ANSWER: law of the country where the property is situated. Since
1. Article 17 of the Civil Code provides that the forms the property is in the Philippines, Philippine law governs the
and solemnities of contracts, wills and other public capacity of the seller.
instruments shall be governed by the laws of the country in
which they are executed. Applicable Laws; capacity to succeed (1991)
Jacob, a Swiss national, married Lourdes, a Filipina, in
Since the contract of employment was executed in Manila, Berne, Switzerland. Three years later, the couple decided to
Philippine law should govern. Being over 18 years old and reside in the Philippines. Jacob subsequently acquired
no longer a minor according to Philippine Law, Francis several properties in the Philippines with the money he
Albert can be sued. Thus, the suit of ABC Corporation inherited from his parents. Forty years later. Jacob died
against him for damages will prosper. intestate, and is survived by several legitimate children and
SUGGESTED ANSWER: duly recognized illegitimate daughter Jane, all residing in the
2. XYZ Corporation, having enticed Francis Albert to Philippines.
break his contract with the plaintiff, may be held liable for (a) Suppose that Swiss law does not allow illegitimate
damages under Art. 1314, Civil Code. children to inherit, can Jane, who is a recognized illegitimate
ALTERNATIVE ANSWER:
2. The basis of liability of XYZ Corporation would be child, inherit part of the properties of Jacob under
Article 28 of the Civil Code which states that:
Philippine law?
(b) Assuming that Jacob executed a will leaving certain
"Unfair competition in agricultural, commercial, or
industrial enterprises or in labor through the use of properties to Jane as her legitime in accordance with the law
force, intimidation, deceit, machination or any other of succession in the Philippines, will such testamentary
unjust, oppressive or highhanded method shall give rise disposition be valid?
SUGGESTED ANSWER:
to a right of action by the person who thereby suffers A. Yes. As stated in the problem. Swiss law does not allow
damage." illegitimate children to inherit Hence, Jane cannot inherit
ANOTHER ANSWER:
the property of Jacob under Philippine law.
2. No liability arises. The statement of the problem does not
in any way suggest intent, malice, or even knowledge, on the SUGGESTED ANSWER:
part of XYZ Corporation as to the contractual relations B. The testamentary disposition will not be valid if it would
between Albert and ABC Corporation. contravene Swill law; otherwise, the disposition would be
valid. Unless the Swiss law is proved, it would be presumed
Applicable Laws; Capacity to Buy Land (1995) to be the same as that of Philippine law under the Doctrine of
3. What law governs the capacity of the Filipino to buy the Processual Presumption.
land? Explain your answer and give its legal basis.
SUGGESTED ANSWER: Applicable Laws; contracts contrary to public policy (1996)
Philippine law governs the capacity of the Filipino to buy Alma was hired as a domestic helper in Hongkong by the
the land. In addition to the principle of lex rei sitae given Dragon Services, Ltd., through its local agent. She executed
above. Article 15 of the NCC specifically provides that a standard employment contract designed by the Philippine
Philippine laws relating to legal capacity of persons are Overseas Workers Administration (POEA) for overseas
binding upon citizens of the Philippines no matter where Filipino workers. It provided for her employment for one
they are. year at a salary of US$1,000.00 a month. It was submitted to
and approved by the POEA. However, when she arrived in
Applicable Laws; Capacity to Contract (1995) Hongkong, she was asked to sign another contract by
2. What law governs the capacity of the Japanese to sell the Dragon Services, Ltd. which reduced her salary to only
land? Explain your answer and give its legal basis. US$600.00 a month. Having no other choice, Alma signed
SUGGESTED ANSWER:
the contract but when she returned to the Philippines, she
Japanese law governs the capacity of the Japanese to sell the
demanded payment of the salary differential of US$400.00 a
land being his personal law on the basis of an interpretation
of Art. 15, NCC. month. Both Dragon Services, Ltd. and its local agent
ALTERNATIVE ANSWERS;
claimed that the second contract is valid under the laws of
a) Since capacity to contract is governed by the personal Hongkong, and therefore binding on Alma.
law of an individual, the Japanese seller's capacity should be Is their claim correct? Explain.
SUGGESTED ANSWER:
governed either by his national law (Japanese law) or by the
Their claim is not correct. A contract is the law between the
law of his domicile, depending upon whether Japan follows
parties but the law can disregard the contract if it is contrary
the nationality or domiciliary theory of personal law for its
to public policy. The provisions of the 1987 Constitution on
citizens.
the protection of labor and on social justice (Sec. 10. Art II)
b) Philippine law governs the capacity of the Japanese embody a public policy of the Philippines. Since the
owner in selling the land. While as a general rule capacity of application of Hongkong law in this case is in violation of
Page 15 of 119
that public policy, the application shall be disregarded by Court of Appeals (G.R No. 104235, Nov. 10, 1993) the
our Courts. (Cadalin v. POEA. 238 SCRA 762) Supreme Court applied Philippine law in recovery of
ALTERNATIVE ANSWERS; damages for breach of contract of carriage for the reason
a) Their claim is not correct. Assuming that the second that it is the law of the place where the contract was
contract is binding under Hongkong law, such second executed.
contract is invalid under Philippine law which recognizes as ALTERNATIVE ANSWER:
valid only the first contract. Since the case is being litigated If the violation of the contract was attended with bad faith,
in the Philippines, the Philippine Court as the forum will there is a ground to recover moral damages. But since there
not enforce any foreign claim obnoxious to the forum's was a federal regulation which was the basis of the act
public policy. There is a strong public policy enshrined in complained of, the airline cannot be in bad faith. Hence,
our Constitution on the protection of labor. Therefore, only actual damages can be recovered. The same is true with
the second contract shall be disregarded and the first regards to exemplary damages.
contract will be enforced. (Cadalin v. POEA, 238 SCRA 762).
Applicable Laws; Labor Contracts (1991)
b) No, their claim is not correct. The second contract A. The Japan Air Lines (JAL), a foreigner corporation
executed in Hongkong, partakes of the nature of a waiver licensed to do business in the Philippines, executed in
that is contrary to Philippine law and the public policy Manila a contract of employment with Maritess Guapa
governing Filipino overseas workers. Art. 17, provides under which the latter was hired as a stewardess on the
that our prohibitive laws concerning persons, their acts, or aircraft flying the Manila-Japan-Manila route. The contrast
their property or which have for their object public order, specifically provides that (1) the duration of the contract
public policy and good customs shall not be rendered shall be two (2) years, (2) notwithstanding the above
ineffective by laws or conventions agreed upon in a foreign duration, JAL may terminate the agreement at any time by
country. Besides, Alma's consent to the second contract was giving her notice in writing ten (10) days in advance, and (3)
vitiated by undue influence, being virtually helpless and the contract shall be construed as governed under and by
under financial distress in a foreign country, as indicated by the laws of Japan and only the court in Tokyo, Japan shall
the given fact that she signed because she had no choice. have the jurisdiction to consider any matter arising from or
Therefore, the defendants claim that the contract is valid relating to the contract.
under Hongkong law should be rejected since under the
DOCTRINE OF PROCESSUAL PRESUMPTION a JAL dismissed Maritess on the fourth month of her
foreign law is deemed similar or identical to Philippine law employment without giving her due notice. Maritess then
in the absence of proof to the contrary, and such is not filed a complaint with the Labor Arbiter for reinstatement,
mentioned in the problem as having been adduced. backwages and damages. The lawyer of JAL contends that
neither the Labor Arbiter nor any other agency or court in
Applicable Laws; Contracts of Carriage (1995) the Philippines has jurisdiction over the case in view of the
On 8 December 1991 Vanessa purchased from the Manila above provision (3) of the contract which Maritess
office of Euro-Aire an airline ticket for its Flight No. 710 voluntarily signed. The contract is the law between her and
from Dallas to Chicago on 16 January 1992. Her flight JAL.
reservation was confirmed. On her scheduled departure Decide the issue.
Vanessa checked in on time at the Dallas airport. However,
at the check-in counter she discovered that she was B. Where under a State's own conflicts rule that domestic
waitlisted with some other passengers because of intentional law of another State should apply, may the courts of the
overbooking, a Euro-Aire policy and practice. Euro-Alre former nevertheless refuse to apply the latter? If so, under
admitted that Vanessa was not advised of such policy when what circumstance?
she purchased her plane ticket. Vanessa was only able to fly SUGGESTED ANSWER:
two days later by taking another airline.
A, Labor Legislations are generally intended as expressions
Vanessa sued Euro-Aire in Manila for breach of contract of public policy on employer-employee relations. The
and damages. Euro-Aire claimed that it cannot be held liable contract therefore, between Japan Air Lines (JAL) and
for damages because its practice of overbooking passengers Maritess may apply only to the extent that its provisions are
was allowed by the U.S. Code of Federal Regulations. not inconsistent with Philippine labor laws intended
Vanessa on the other hand contended that assuming that particularly to protect employees.
the U.S. Code of Federal Regulations allowed Intentional
overbooking, the airline company cannot invoke the U.S. Under the circumstances, the dismissal of Maritess without
Code on the ground that the ticket was purchased in Manila, complying with Philippine Labor law would be invalid and
hence, Philippine law should apply, under which Vanessa any stipulation in the contract to the contrary is considered
can recover damages for breach of contract of carriage. void. Since the law of the forum in this case is the
Decide. Discuss fully. Philippine law the issues should-be resolved in accordance
SUGGESTED ANSWER: with Philippine law.
Vanessa can recover damages under Philippine law for
breach of contract of carriage, Philippine law should govern B. The third paragraph of Art. 17 of the Civil Code provides
as the law of the place where the plane tickets were bought that:
and the contract of carriage was executed. In Zalamea v.
Page 16 of 119
"Prohibitive laws concerning persons, their acts or Maris then returned to the Philippines and in a civil
property, and those which have for their object public ceremony celebrated in Cebu City according to the
order, public policy and good customs shall not be formalities of Philippine law, she married her former
rendered ineffective by laws or judgments promulgated, classmate Vincent likewise a Filipino citizen.
or by determinations or conventions agreed upon in a a) Was the marriage of Maris and Johnson valid when
foreign country." celebrated? Is their marriage still validly existing now?
Reasons.
Accordingly, a state's own conflict of laws rule may, SUGGESTED ANSWER:
exceptionally be inapplicable, given public policy (a) The marriage of Mans and Johnson was valid when
celebrated because all marriages solemnized outside the
considerations by the law of the forum.
Philippines (Tokyo) in accordance with the laws in force in
Going into the specific provisions of the contract in the country where they are solemnized (Japan), and valid
question, I would rule as follows: there as such, are also valid in the Philippines.
1. The duration of the contract is not opposed to
Philippine law and it can therefore be valid as Their marriage no longer validly subsists, because it has
stipulated; been dissolved by the absolute divorce validly obtained by
2. The second provision to the effect that Johnson which capacitated Maris to remarry (Art. 26.
notwithstanding duration, Japan Air Lines (JAL) may Family Code).
terminate her employment is invalid, being inconsistent
with our Labor laws; Applicable Laws; laws governing marriages (2003)
3. That the contract shall be construed as governed under Gene and Jane, Filipino, met and got married in England
and by the laws of Japan and only the courts of Tokyo, while both were taking up post-graduate courses there. A
Japan shall have jurisdiction, is invalid as clearly few years after their graduation, they decided to annul their
opposed to the aforecited third paragraph of Arts. 17 marriage. Jane filed an action to annul her marriage to
and 1700 of the Civil Code, which provides: Gene in England on the ground of latter’s sterility, a ground
"Art. 1700. The relations between capital and labor for annulment of marriage in England. The English court
are not merely contractual. They are so impressed decreed the marriage annulled. Returning to the
with public interest that labor contracts must yield Philippines, Gene asked you whether or not he would be
to the common good. Therefore, such contracts free to marry his former girlfriend. What would your legal
are subject to the special laws on labor unions, advice be? 5%
collective bargaining, strikes and lockouts, closed SUGGESTED ANSWER:
shop, wages, working conditions, hours of labor No, Gene is not free to marry his former girlfriend. His
marriage to Jane is valid according to the forms and
and similar subjects."
solemnities of British law, is valid here (Article 17, 1st par.,
ALTERNATIVE ANSWER; NCC). However, since Gene and Jane are still Filipinos
A. When a contract has a foreign element such as in the although living in England, the dissolution of their marriage
factual setting stated in the problem where one of the is still governed by Philippine law (Article 15, NCC). Since,
parties is a foreign corporation, the contract can be sterility is not one of the grounds for the annulment of a
sustained as valid particularly the stipulation expressing that marriage under Article 45 of the Family Code, the
the contract is governed by the laws of the foreign country. annulment of Gene’s marriage to Jane on that ground is not
Given this generally accepted principle of international law, valid in the Philippines (Article 17, NCC)
the contract between Maritess and JAL is valid and it should ALTERNATIVE ANSWER:
Yes, Gene is free to marry his girlfriend because his
therefore be enforced.
marriage was validly annulled in England. The issue of
Applicable Laws; laws governing marriages (1992) whether or not a marriage is voidable, including the grounds
In 1989, Maris, a Filipino citizen, married her boss Johnson, therefore, is governed by the law of the place where the
an American citizen, in Tokyo in a wedding ceremony marriage was solemnized (lex loci celebrationis). Hence,
celebrated according to Japanese laws. One year later, even if sterility is not a ground to annul the marriage under
Johnson returned to his native Nevada, and he validly the Philippine law, the marriage is nevertheless voidable
obtained in that state an absolute divorce from his wife because sterility makes the marriage voidable under English
Maris. law. Therefore, annulment of the marriage in England is
valid in the Philippines.
After Maris received the final judgment of divorce, she
married her childhood sweetheart Pedro, also a Filipino Applicable Laws; Sale of Real Property (1995)
citizen, in a religious ceremony in Cebu City, celebrated While in Afghanistan, a Japanese by the name of Sato sold
according to the formalities of Philippine law. Pedro later to Ramoncito, a Filipino, a parcel of land situated in the
left for the United States and became naturalized as an Philippines which Sato inherited from his Filipino mother.
American citizen. Maris followed Pedro to the United 1. What law governs the formality in the execution of the
States, and after a serious quarrel, Maris filed a suit and contract of sale? Explain your answer and give its legal
obtained a divorce decree issued by the court in the state of basis.
SUGGESTED ANSWER:
Maryland.
Page 17 of 119
Under Art. 16 par. 1, NCC, real property is subject to the 3. The distribution of the personal properties in Germany
law of the country where it is situated. Since the property is shall be governed by French law. The legal basis is Art. 16,
situated in the Philippines, Philippine law applies. The rule NCC).
of lex rei sitae in Article 16 prevails over lex loci contractu
in Article 17 of the NCC. Applicable Laws; Wills executed abroad (1993)
ALTERNATIVE ANSWER: A, a Filipino, executed a will in Kuwait while there as a
Afghanistan law governs the formal requirements of the contract worker. Assume that under the laws of Kuwait, it is
contract since the execution is in Afghanistan. Art. 17 of the enough that the testator affix his signature to the presence
Civil Code provides that the forms and solemnities of of two witnesses and that the will need not be
contracts, wills, and other public instruments shall be acknowledged before a notary public.
governed by the laws of the country in which they are May the will be probated in the Philippines?
executed. However, if the contract was executed before the SUGGESTED ANSWER:
diplomatic or consular officials of the Republic of the Yes. Under Articles 815 and 17 of the Civil Code, the
Philippines in Afghanistan, Philippine law shall apply. formality of the execution of a will is governed by the law of
the place of execution. If the will was executed with the
Applicable Laws; Succession; Intestate & Testamentary formalities prescribed by the laws of Kuwait and valid there
(2001) as such, the will is valid and may be probated in the
Alex was born a Filipino but was a naturalized Canadian Philippines.
citizen at the time of his death on December 25, 1998. He Definition; Cognovit; Borrowing Statute; Characterization
left behind a last will and testament in which he bequeathed (1994)
all his properties, real and personal, in the Philippines to his In Private International Law (Conflict of Laws) what is:
acknowledged illegitimate Fillpina daughter and nothing to 1} Cognovit?
his two legitimate Filipino sons. The sons sought the 2) A borrowing statute?
annulment of the last will and testament on the ground that 3) Characterization?
it deprived them of their legitimes but the daughter was able SUGGESTED ANSWER:
to prove that there were no compulsory heirs or legitimes 1) a) COGNOVIT is a confession of judgment whereby a
under Canadian law. Who should prevail? Why? (5%) portion of the complaint is confessed by the defendant who
SUGGESTED ANSWER: denies the rest thereof (Philippine law Dictionary, 3rd Ed.)
The daughter should prevail because Article 16 of the New (Ocampo v. Florenciano, L-M 13553, 2/23/50).
Civil Code provides that intestate and testamentary
succession shall be governed by the national law of the b) COGNOVIT is a "statement of confession"
person whose succession is under consideration. Oftentimes, it is referred to as a "power of attorney" or
simply as a "power", it is the written authority of the debtor
Applicable Laws; Sucession of Aliens (1995) and his direction to the clerk of the district court, or justice
Michelle, the French daughter of Penreich, a German of the peace to enter judgment against the debtor as stated
national, died in Spain leaving real properties in the therein. (Words and Phrases, vol. 7, pp. 115-166).
Philippines as well as valuable personal properties in
Germany. c) COGNOVIT is a plea in an action which acknowledges
1. What law determines who shall succeed the deceased? that the defendant did undertake and promise as the
Explain your answer and give its legal basis. plaintiff in its declaration has alleged, and that it cannot
2. What law regulates the distribution of the real properties deny that it owes and unjustly detains from the plaintiff the
in the Philippines? Explain your answer and give its legal sum claimed by him in his declaration, and consents that
basis. judgment be entered against the defendant for a certain
3. What law governs the distribution of the personal sum. [Words and Phrases, vol. 7, pp. 115-166).
properties in Germany? Explain your answer and give its
legal basis. d) COGNOVIT is a note authorizing a lawyer for
SUGGESTED ANSWER:
confession of judgment by defendant.
Assuming that the estate of the decedent is being settled in
the Philippines) 2) "BORROWING STATUTE" - Laws of the state or
1. The national law of the decedent (French law) shall jurisdiction used by another state in deciding conflicts
govern in determining who will succeed to his estate. The questioned involved in the choice of law (Black's Law
legal basis is Art. 16 par. 2, NCC.
Dictionary, 5th ed. 1979).
ALTERNATIVE ANSWER:
French law shall govern the distribution of his real 3) a) "CHARACTERIZATION" is otherwise called
properties in the Philippines except when the real property "classification" or "qualification." It is the process of
is land which may be transmitted to a foreigner only by assigning a disputed question to its correct legal category
hereditary succession.
(Private International Law, Salonga).
SUGGESTED ANSWER:
2. The distribution of the real properties in the Philippines
b) "CHARACTERIZATION" is a process in determining
shall be governed by French law. The legal basis is Art. 16,
NCC). under what category a certain set of facts or rules fall.
(Paras, Conflict of Laws, p. 94. 1984 ed.)
SUGGESTED ANSWER:
Page 18 of 119
Definition; forum non-conveniens; long-arm statute (1994) nationality theory, and the issue involved is which of the
1) What is the doctrine of Forum non conveniens? laws of the two countries should apply to determine the
2) What is a "long arm statute"? order of succession, the amount of successional rights, or,
SUGGESTED ANSWER: the intrinsic validity of testamentary provisions. Such issue
1) a) FORUM NON CONVENIENS is a principle in is not involved in this case.
Private International Law that where the ends of justice ALTERNATIVE ANSWER:
strongly indicate that the controversy may be more suitably Yes. "Renvoi" - which means "referring back" is relevant
tried elsewhere, then jurisdiction should be declined and the because here, we are applying U.S. law to Mario, being
parties relegated to relief to be sought in another forum. already its citizen, although the formalities of the second
(Moreno. Philippine Law Dictionary, p. 254, 1982 ed.). marriage will be governed by Philippine law under the
principle of lex loci celebrationis.
b) Where in a broad sense the ends of justice strongly
indicate that the controversy may be more suitably tried Domiciliary theory vs. Nationality Theory (2004)
elsewhere, then jurisdiction should be declined and the Distinguish briefly but clearly between: Domiciliary theory
parties relegated to relief to be sought in another forum. and nationality theory of personal law. (5%)
SUGGESTED ANSWER:
(Handbook on Private International Law, Aruego).
DOMICILIARY THEORY posits that the personal status
c) FORUM NON CONVENIENS means simply that a and rights of a person are governed by the law of his
court may resist imposition upon its jurisdiction even when domicile or the place of his habitual residence. The
jurisdiction is authorized by the letter of a general venue NATIONALITY THEORY, on the other hand, postulates
that it is the law of the person's nationality that governs
statute. (Salonga. Private International Law. p, 51. 1967 ed.)
such status and rights
d) Forum non conveniens is a doctrine whereby a court of
law having full Jurisdiction over a case brought in a proper Forum Non Conveniens & Lex Loci Contractus (2002)
venue or district declines to determine the case on its merits Felipe is a Filipino citizen. When he went to Sydney for
because Justice would be better served by the trial over the vacation, he met a former business associate, who proposed
to him a transaction which took him to Moscow. Felipe
case in another jurisdiction. (Webster's Dictionary)
brokered a contract between Sydney Coals Corp. (Coals), an
SUGGESTED ANSWER: Australian firm, and Moscow Energy Corp. (Energy), a
(2} a) LONG ARM STATUTE is a legislative act which Russian firm, for Coals to supply coal to Energy on a
provides for personal jurisdiction, via substituted service or monthly basis for three years. Both these firms were not
process, over persons or corporations which are non- doing, and still do not do, business in the Philippines. Felipe
residents of the state and which voluntarily go into the state, shuttled between Sydney and Moscow to close the contract.
directly or by agent or communicate with persons in the He also executed in Sydney a commission contract with
state for limited purposes, inactions which concern claims Coals and in Moscow with Energy, under which contracts
relating to performance or execution of those purposes he was guaranteed commissions by both firms based on a
(Black's Law Dictionary, 5th Ed. 1979). percentage of deliveries for the three-year period, payable in
Sydney and in Moscow, respectively, through deposits in
b) Long arm statute refers simply to authorized substituted accounts that he opened in the two cities. Both firms paid
service. Felipe his commission for four months, after which they
stopped paying him. Felipe learned from his contacts, who
Divorce; effect of divorce granted to former Filipinos; are residents of Sydney and Moscow, that the two firms
Renvoi Doctrine (1997) talked to each other and decided to cut him off. He now
In 1977, Mario and Clara, both Filipino citizens, were files suit in Manila against both Coals and Energy for
married in the Philippines. Three years later, they went to specific performance.
the United States of America and established their residence A. Define or explain the principle of “lex loci contractus”.
in San Francisco, California. In 1987, the couple applied for, (2%)
and were granted, U.S. citizenship. In 1989, Mario, claiming B. Define or explain the rule of “forum non conveniens”
to have been abandoned by Clara, was able to secure a (3%)
decree of divorce in Reno, Nevada, U.S.A. C. Should the Philippine court assume jurisdiction over
the case? Explain. (5%)
In 1990, Mario returned to the Philippines and married SUGGESTED ANSWER:
Juana who knew well Mario's past life. A. LEX LOCI CONTRACTUS may be understood
(a) Is the marriage between Mario and Juana valid? in two senses, as follows:
(b) Would the renvoi doctrine have any relevance to the (1) It is the law of the place where contracts, wills, and
case? other public instruments are executed and governs their
SUGGESTED ANSWER: “forms and solemnities”, pursuant to the first
(a) Yes, because Phil law recognizes the divorce between paragraph, Article 17 of the New Civil Code; or
Mario and Clara as valid. (2) It is the proper law of the contract; e.i., the system
SUGGESTED ANSWER: of law intended to govern the entire contract, including
(b) No, The renvoi doctrine is relevant in cases where one its essential requisites, indicating the law of the place
country applies the domiciliary theory and the other the with which the contract has its closest connection or
Page 19 of 119
where the main elements of the contract converge. As country of which they are citizens. Since their marriage is
illustrated by Zalamea v. Court of Appeals (228 SCRA 23 valid under Hong Kong law, it shall be valid and respected
[1993]), it is the law of the place where the airline ticket in the Philippines.
was issued, where the passengers are nationals and
residents of, and where the defendant airline company Naturalization (2003)
maintained its office. Miss Universe, from Finland, came to the Philippines on a
tourist visa. While in this country, she fell in love with and
ALTERNATIVE ANSWER: married a Filipino doctor. Her tourist visa having been
A. Under the doctrine of lex loci contractus, as a expired and after the maximum extension allowed therefore,
general rule, the law of the place where a contract is made the Bureau of Immigration and Deportation (BID) is
or entered into governs with respect to its nature and presently demanding that she immediately leave the country
validity, obligation and interpretation. This has been said to but she refuses to do so, claiming that she is already a
be the rule even though the place where the contract was Filipino Citizen by her marriage to a Filipino citizen. Can
made is different from the place where it is to be the BID still order the deportation of Miss Universe?
performed, and particularly so, if the place of the making Explain. 5%
and the place of performance are the same (United Airline v. SUGGESTED ANSWER:
CA, G.R. No. 124110, April 20, 2001). Yes, the BID can order the deportation of Miss Universe.
The marriage of an alien woman to a Filipino does not
SUGGESTED ANSWER:
automatically make her a Filipino Citizen. She must first
B. FORUM NON CONVENIENS means that a
prove in an appropriate proceeding that she does not have
court has discretionary authority to decline jurisdiction over
any disqualification for Philippine citizenship. (Yung Uan
a cause of action when it is of the view that the action may .
Chu v. Republic of the Philippines, 158 SCRA 593 [1988])
be justly and effectively adjudicated elsewhere.
Since Miss Universe is still a foreigner, despite her marriage
SUGGESTED ANSWER:
to a Filipino doctor, she can be deported upon expiry of her
C. No, the Philippine courts cannot acquire jurisdiction allowable stay in the Philippines.
ANOTHER SUGGESTED ANSWER:
over the case of Felipe. Firstly, under the rule of forum non
No, the Bureau of Immigration cannot order her
conveniens, the Philippine court is not a convenient forum
deportation. An alien woman marrying a Filipino, native-
as all the incidents of the case occurred outside the
born or naturalized, becomes ipso facto a Filipino if she is
Philippines. Neither are both Coals and Energy doing
not disqualified to be a citizen of the Philippines (Mo Ya
business inside the Philippines. Secondly, the contracts were Lim v Commission of Immigration, 41 SCRA 292 [1971]), (Sec
not perfected in the Philippines. Under the principle of lex 4, Naturalization Law). All that she has to do is prove in
loci contractus, the law of the place where the contract is the deportation proceeding the fact of her marriage and that
made shall apply. Lastly, the Philippine court has no power she is not disqualified to become a Filipino Citizen.
to determine the facts surrounding the execution of said ANOTHER SUGGESTED ANSWER:
contracts. And even if a proper decision could be reached, It depends. If she is disqualified to be a Filipino citizen, she
such would have no biding effect on Coals and Energy as may be deported. If she is not disqualified to be a Filipino
the court was not able to acquire jurisdiction over the said citizen, she may not be deported. An alien woman who
corporations. (Manila Hotel Corp. v. NLRC. 343 SCRA 1, 13- marries a Filipino citizen becomes one. The marriage of
14[2000]) Miss Universe to the Filipino doctor did not automatically
make her a Filipino citizen. She still has to prove that she is
Nationality Theory (2004)
not disqualified to become a citizen.
PH and LV are HK Chinese. Their parents are now
Filipino citizens who live in Manila. While still students in Theory; significant relationships theory (1994)
MNS State, they got married although they are first cousins. Able, a corporation domiciled in State A, but, doing
It appears that both in HK and in MNS State first cousins business in the Philippines, hired Eric, a Filipino engineer,
could marry legally. for its project in State B. In the contract of employment
executed by the parties in State B, it was stipulated that the
They plan to reside and set up business in the Philippines. contract could be terminated at the company's will, which
But they have been informed, however, that the marriage of stipulation is allowed in State B. When Eric was summarily
first cousins here is considered void from the beginning by dismissed by Able, he sued Able for damages in the
reason of public policy. They are in a dilemma. They don’t Philippines.
want to break Philippine law, much less their marriage vow. Will the Philippine court apply the contractual stipulation?
They seek your advice on whether their civil status will be SUGGESTED ANSWER:
adversely affected by Philippine domestic law? What is your a) Using the "SIGNIFICANT RELATIONSHIPS
advice? (5%) THEORY", there are contacts significant to the Philippines.
SUGGESTED ANSWER: Among these are that the place of business is the
My advise is as follows: The civil status of' PH and LV will Philippines, the employee concerned is a Filipino and the
not be adversely affected by Philippine law because they are suit was filed in the Philippines, thereby justifying the
nationals of Hong Kong and not Filipino citizens.Being application of Philippine law. In the American Airlines case
foreigners, their status, conditions and legal capacity in the the Court held that when what is involved is
Philippines are governed by the law of Hong Kong, the PARAMOUNT STATE INTEREST such as the
Page 20 of 119
protection of the rights of Filipino laborers, the court can natural mother as her middle name. The Court has ruled
disregard choice of forum and choice of law. Therefore the that there is no law prohibiting an illegitimate child adopted
Philippine Court should not apply the stipulation in by her natural father to use, as middle name, her mother's
question. surname. What is not prohibited is allowed. After all, the
ALTERNATIVE ANSWER: use of the maternal name as the middle name is in accord
b) No, lex fori should be applied because the suit is filed in with Filipino culture and customs and adoption is intended
Philippine courts and Eric was hired in the Philippines. The for the benefit of the adopted [In re: Adoption of Stephanie
Philippine Constitution affords full protection to labor and Nathy Astorga Garcia, G.R. No. 148311, March 31, 2005;
the stipulation as to summary dismissal runs counter to our Rabuya, The Law on Persons and Family Relations, p. 613].
fundamental and statutory laws.
Torts; Prescriptive Period (2004) Inter-Country Adoption; Formalities (2005)

In a class suit for damages, plaintiffs claimed they suffered Hans Berber, a German national, and his Filipino wife,
injuries from torture during martial law. The suit was filed Rhoda, are permanent residents of Canada. They desire so
upon President EM’s arrival on exile in HI, a U.S. state. much to adopt Magno, an 8-year old orphaned boy and a
The court in HI awarded plaintiffs the equivalent of P100 baptismal godson of Rhoda. Since the accidental death of
billion under the U.S. law on alien tort claims. On appeal, Magno's parents in 2004, he has been staying with his aunt
EM’s Estate raised the issue of prescription. It argued that who, however, could hardly afford to feed her own family.
since said U.S. law is silent on the matter, the court should Unfortunately, Hans and Rhoda cannot come to the
apply: (1) HI’s law setting a two-year limitation on tort Philippines to adopt Magno although they possess all the
claims; or (2) the Philippine law which appears to require qualifications as adoptive parents.
that claims for personal injury arising from martial law be Is there a possibility for them to adopt Magno? How
brought within one year. should they go about it? (5%)
SUGGESTED ANSWER:
Plaintiffs countered that provisions of the most analogous Yes, it is possible for Hans and Rhoda to adopt Magno.
federal statute, the Torture Victims Protection Act, should Republic Act No. 8043 or the Inter-Country Adoption Act,
be applied. It sets ten years as the period for prescription. allows aliens or Filipinos permanently residing abroad to
Moreover, they argued that equity could toll the statute of apply for inter-country adoption of a Filipino child. The law
limitations. For it appeared that EM had procured however requires that only legally free child, or one who has
Constitutional amendments granting himself and those been voluntarily or involuntarily committed to the DSWD
acting under his direction immunity from suit during his or any of its accredited agencies, may be subject of inter-
country adoption. The law further requires that aside from
tenure.
possessing all the qualifications, the adoptive parents must
In this case, has prescription set in or not? Considering the come from a country where the Philippines has diplomatic
differences in the cited laws, which prescriptive period relations and that the government maintains a similarly
should be applied: one year under Philippine law, two years accredited agency and that adoption is allowed under the
under HI’s law, ten years under U.S. federal law, or none of national law of the alien. Moreover, it must be further
the above? Explain. (5%) shown that all possibilities for a domestic adoption have
SUGGESTED ANSWER: been exhausted and the inter-country adoption is best for
The US Court will apply US law, the law of the Jorum, in the interest of the child.
determining the applicable prescriptive period. While US
law is silent on this matter, the US Court will not apply Hans and Rhoda have to file an application to adopt
Philippine law in determining the prescriptive period. It is Magno, either with the Regional Trial Court having
generally affirmed as a principle in private international law jurisdiction over Magno or with the Inter-Country
that procedural law is one of the exceptions to the Adoption Board in Canada. Hans and Rhoda will then
application of foreign law by the forum. Since prescription undergo a trial custody for six (6) months from the time of
is a matter of procedural law even in Philippine placement. It is only after the lapse of the trial custody that
jurisprudence, (Codaltn v. POEA/ JVLRC/Broum and the decree of adoption can be issued.
Root International, 238 SCRA 721 [1994]), the US Court
will apply either HI or Federal law in determining the Parental Authority; Rescission of Adoption (1994)
applicable prescriptive period and not Philippine law. The In 1975, Carol begot a daughter Bing, out of wedlock.
Restatement of American law affirms this principle. When Bing was ten years old, Carol gave her consent for
Bing's legal adoption by Norma and Manuel, which was
granted by the court in 1990. In 1991, Carol learned that
Norma and Manuel were engaged in a call-girl-ring that
ADOPTION catered to tourists. Some of the girls lived with Norma and
Adoption; Use of Surname of her Natural Mother (2006) Manuel. Carol got Bing back, who in the first place wanted
May an illegitimate child, upon adoption by her natural to return to her natural mother.
father, use the surname of her natural mother as the middle 1) Who has a better right to the custody of Bing, Carol or
name? (2.5%) Norma?
SUGGESTED ANSWER: Yes, an illegitimate child, upon 2) Aside from taking physical custody of Bing, what legal
adoption by her natural father, can use the surname of her actions can Carol take to protect Bing?
Page 21 of 119
SUGGESTED ANSWER: sister. Thus, under the above-cited provision, Eva is
1) a) It depends on whether or not Bing was at least 18 qualified to adopt Vicky.
years old at the time Carol asserts the prerogative to take
custody of Bing. If she was at least 18 years old, then she is b) Would your answer be the same if they sought to
no longer under parental authority and neither Carol nor adopt Eva's illegitimate daughter? Explain. (2%)
Norma can assert the prerogative to take custody. However, SUGGESTED ANSWER:
if she was less than 18 years old, then Norma has a better My answer will still be the same. Paragraph 3(a) of Article
right since the adoption by Norma of Bing terminates the 184 of the Family Code does not make any distinction. The
parental authority of Carol over Bing. provision states that an alien who is a former Filipino
citizen is qualified to adopt a relative by consanguinity.
b) The natural mother, Carol, should have the better right in
light of the principle that the child's welfare is the c) Supposing that they filed the petition to adopt
paramount consideration in custody rights. Obviously, Vicky in the year 2000, will your answer be the same?
Bing's continued stay in her adopting parents' house, where Explain. (2%)
interaction with the call girls is inevitable, would be SUGGESTED ANSWER:
detrimental to her moral and spiritual development. This Yes, my answer will still be the same. Under Sec. 7(b), Art.
could be the reason for Bing's expressed desire to return to III of the New Domestic Adoption Act, an alien who
her natural mother. It should be noted, however, that Bing possesses all the qualifications of a Filipino national who is
is no longer a minor, being 19 years of age now. It is qualified to adopt may already adopt provided that his
doubtfu1 that a court can still resolve the question of country has diplomatic relations with the Philippines, that
custody over one who is sui juris and not otherwise he has been living in the Philippines for at least three (3)
incapacitated. continuous years prior to the filing of the application for
SUGGESTED ANSWER: adoption and maintains such residence until the adoption
2) a) On the assumption that Bing is still a minor or decree is entered, that he has been certified by his
otherwise incapacitated, Carol may petition the proper court diplomatic or consular office or any appropriate
for resolution or rescission of the decree of adoption on the government agency that he has the legal capacity to adopt in
ground that the adopting parents have exposed, or are his country, and that his government allows the adoptee to
exposing, the child to corrupt influence, tantamount to enter his country as his adopted child.
giving her corrupting orders or examples. She can also ask
for the revesting in her of parental authority over Bing. If Qualification of Adopter; Applicable Law (2001)
However, Bing is already 19 years of age and therefore no A German couple filed a petition for adoption of a minor
longer a minor, it is not Carol but Bing herself who can Filipino child with the Regional Trial Court of Makati under
petition the court for judicial rescission of the adoption, the provisions of the Child and Youth Welfare Code which
provided she can show a ground for disinheritance of an allowed aliens to adopt. Before the petition could be heard,
ascendant. the Family Code, which repealed the Child and Youth
Welfare Code, came into effect. Consequently, the Solicitor
b) Carol may file an action to deprive Norma of parental General filed a motion to dismiss the petition, on the
authority under Article 231 of the Family Code or file an ground that the Family Code prohibits aliens from adopting.
action for the rescission of the adoption under Article 191 If you were the judge, how will you rule on the motion?
in relation to Article 231 (2) of the Family Code. (5%)
SUGGESTED ANSWER:
Qualification of Adopter (2005) The motion to dismiss the petition for adoption should be
In 1984, Eva, a Filipina, went to work as a nurse in the denied. The law that should govern the action is the law in
USA. There, she met and fell in love with Paul, an American force at the time of filing of the petition. At that time, it was
citizen, and they got married in 1985. Eva acquired the Child and Youth Welfare Code that was in effect, not
American citizenship in 1987. During their sojourn in the the Family Code. Petitioners have already acquired a vested
Philippines in 1990, they filed a joint petition for the right on their qualification to adopt which cannot be taken
adoption of Vicky, a 7-year old daughter of Eva's sister. The away by the Family Code. (Republic v. Miller G.R. No.
government, through the Office of the Solicitor General, 125932, April 21, 1999, citing Republic v. Court of Appeals,
opposed the petition on the ground that the petitioners, 205 SCRA 356)
ALTERNATIVE ANSWER:
being both foreigners, are disqualified to adopt Vicky.
The motion has to be granted. The new law shall govern
a) Is the government's opposition tenable? Explain. their qualification to adopt and under the new law, the
(2%) German couple is disqualified from adopting. They cannot
SUGGESTED ANSWER:
The government's position is untenable. Under paragraph 3, claim that they have already acquired a vested right because
Article 184 of the Family Code, an alien, as a general rule adoption is not a right but a mere privilege. No one acquires
cannot adopt. However, an alien who is a former Filipino a vested right on a privilege.
[Note: If the examinee based his answer on the current law, RA 8552, his
citizen and who seeks to adopt a relative by consanguinity is
answer should be considered correct. This question is based on the repealed
qualified to adopt, (par. 3[a], Art. 184, Family Code)
provision of the Family Code on Adoption.]
In the given problem, Eva, a naturalized American citizen Qualifications of Adopter (2000)
would like to adopt Vicky, a 7-year old daughter of her
Page 22 of 119
Sometime in 1990, Sarah, born a Filipino but by then a under Sec. 7(b) of RA8552. The Supreme Court has held in
naturalized American citizen, and her American husband several cases that when husband and wife are required to
Tom, filed a petition in the Regional Trial Court of Makati, adopt jointly, each one of them must be qualified to adopt
for the adoption of the minor child of her sister, a Filipina. in his or her own right (Republic v. Toledano, 233 SCRA 9
Can the petition be granted? (5%) (1994). However, the American husband must comply with
SUGGESTED ANSWER: the requirements of the law including the residency
(per dondee) It depends. Rules on Adoption effective requirement of three (3) years. Otherwise, the adoption will
August 22, 2002 provides the following; not be allowed.
SEC. 4. Who may adopt. – The following may adopt:
Any Filipino Citizen
Successional Rights of Adopted Child (2004)
a. of legal age, of full civil capacity and legal rights, A Filipino couple, Mr. and Mrs. BM, Jr., decided to adopt
b. in possession
c. of good moral character, YV, an orphan from St. Claire’s orphanage in New York
d. has not been convicted of any crime involving moral City. They loved and treated her like a legitimate child for
turpitude; they have none of their very own. However, BM, Jr., died
e. who is emotionally and psychologically capable of caring in an accident at sea, followed to the grave a year later by his
for children, sick father, BM, Sr. Each left a sizable estate consisting of
f. at least sixteen (16) years older than the adoptee, bank deposits, lands and buildings in Manila. May the
g. and who is in a position to support and care for his adopted child, YV, inherit from BM, Jr.? May she also
children in keeping with the means of the family. inherit from BM, Sr.? Is there a difference? Why? Explain.
• The requirement of a 16-year difference between the (5%)
age of the adopter and adoptee may be waived when the SUGGESTED ANSWER:
adopter is the biological parent of the adoptee or is the YV can inherit from BM, Jr. The succession to the estate of
spouse of the adoptee’s parent;
BM, Jr. is governed by Philippine law because he was a
Any Alien possessing the same qualifications as above-stated Filipino when he died (Article 16, Civil Code). Under
for Filipino nationals: Provided, Article 1039 of the Civil Code, the capacity of the heir to
a) That his country has diplomatic relations with the succeed is governed by the national law of the decedent and
Republic of the Philippines, not by the national law of the heir. Hence, whether or not
b) that he has been living in the Philippines for at least YV can inherit from BM, Jr. is determined by Philippine
three (3) continuous years prior to the filing of the law. Under Philippine law, the adopted inherits from the
petition for adoption and maintains such residence until
adopter as a legitimate child of the adopter.
the adoption decree is entered,
c) that he has been certified by his diplomatic or consular
office or any appropriate government agency to have the
YV, however, cannot inherit, in his own right, from the
legal capacity to adopt in his country, father of the adopter, BM, Sr., because he is not a legal heir
d) and that his government allows the adoptee to enter his of BM, Sr. The legal fiction of adoption exists only between
country as his adopted child. the adopted and the adopter. (Teotico v. Del Val 13 SCRA
406 [1965]). Neither may he inherit from BM, Sr. by
Provided, further, That the requirements on residency and representing BM, Jr. because in representation, the
certification of the alien’s qualification to adopt in his country representative must be a legal heir not only of the person he
may be waived for the following: is representing but also of the decedent from whom the
a) a former Filipino citizen who seeks to adopt a relative represented was supposed to inherit (Article 973, Civil
within the fourth (4th) degree of consanguinity or Code).
affinity; or
b) one who seeks to adopt the legitimate child of his
c) Filipino spouse; or to a Filipino citizen and seeks to FAMILY CODE
one who is married
adopt jointly with his spouse a relative within the fourth
(4th) degree of consanguinity or affinity of the Filipino Emancipation (1993)
spouse. Julio and Lea, both 18 years old, were sweethearts. At a
party at the house of a mutual friend. Lea met Jake, also 18
Qualifications of Adopter (2003) years old, who showed interest in her. Lea seemed to
Lina, a former Filipina who became an American citizen entertain Jake because she danced with him many times. In
shortly after her marriage to an American husband, would a fit of jealousy, Julio shot Jake with his father's 38 caliber
like to adopt in the Philippines, jointly with her husband, revolver which, before going to the party he was able to get
one of her minor brothers. Assuming that all the required from the unlocked drawer inside his father's bedroom. Jake
consents have been obtained, could the contemplated joint died as a result of the lone gunshot wound he sustained. His
adoption in the Philippine prosper? Explain. parents sued Julio's parents for damages arising from quasi-
SUGGESTED ANSWER: delict. At the time of the incident, Julio was 18 years old
Yes, Lina and her American husband can jointly adopt a living with his parents. Julio's parents moved to dismiss the
minor brother of Lina because she and her husband are complaint against them claiming that since Julio was already
both qualified to adopt. Lina, as a former Filipino citizen, of majority age, they were no longer liable for his acts.
can adopt her minor brother under Sec. 7(b)(i) of RA 8552 1) Should the motion to dismiss be granted? Why?
(Domestic Adoption Act of 1998), or under Art. 184 (3)(1) 2) What is the liability of Julio's parents to Jake's parents?
of the Family Code. The alien husband can now adopt Explain your answer.
Page 23 of 119
SUGGESTED ANSWER: Family; Constitutional Mandates; Divorce (1991)
1) No, the Motion to Dismiss should not be A. How does the 1987 Constitution strengthen the family
granted. Article 236 of the Family Code as amended by as an Institution?
Republic Act 6809, provides in the third paragraph that B. Do the Constitutional policy on the family and
"nothing in this Code shall be construed to derogate the provision that marriage is the foundation of the family
from the duty or responsibility of parents and and shall be protected by the State bar Congress from
guardians for children and wards below twenty-one enacting a law allowing divorce in the Philippines?
years of age mentioned in the second and third SUGGESTED ANSWER:
paragraphs of Article 2180 of the Civil Code". A. Sec, 2, Article II of the Constitution provides that: The
2) The liability of Julio's parents to Jake's parents arises State recognizes the sanctity of family life and shall protect
from quasi-delict (Arts. 2176 and 2180 Civil Code) and strengthen the family as a basic autonomous social
and shall cover specifically the following: institution. It shall equally protect the life of the mother and
a) P50,000.00 for the death of the son; the life of the unborn from conception. The natural
b) such amount as would correspond to lost earning and primary right and duty of parents in the rearing of the
capacity; and youth for civic efficiency and the development of moral
c) moral damages. character shall receive the support of the Government.
Family Code; Retroactive Application; Vested Rights (2000) Section I, Article XV, further provides that: The State
On April 15, 1980, Rene and Angelina were married to each recognizes the Filipino family as the foundation of the
other without a marriage settlement. In 1985, they acquired nation. Accordingly, it shall strengthen its solidarity and
a parcel of land in Quezon City. On June 1, 1990, actively promote its total development.
when Angelina was away in Baguio, Rene sold the said (Note: The Committee recommends that a citation of either one of
lot to Marcelo. Is the sale void or voidable? (2%) the provisions be credited as a complete answer).
SUGGESTED ANSWER: SUGGESTED ANSWER:
The sale is void. Since the sale was executed in 1990, B, No, the Constitutional policy, as well as the supporting
the Family Code is the law applicable. Under Article 124 of provision, does not amount to a prohibition to Congress to
the FC, the sale of a conjugal property by a spouse without enact a law on divorce. The Constitution only meant to help
the consent of the other is void. the marriage endure, to "strengthen its solidarity
ALTERNATIVE ANSWER: and actively promote its total development."
The sale is voidable. The provisions of the Family ALTERNATIVE ANSWER:
Code may apply retroactively but only if such application B. Yes. Congress is barred from enacting a law
will not impair vested rights. When Rene and Angelina got allowing divorce, since Section 2 of Article XV
married in 1980, the law that governed their property provides: "Sec. 2. Marriage, as an inviolable social
relations was the New Civil Code. Under the NCC, as institution, is the foundation of the family and shall
interpreted by the Supreme Court in Heirs of Felipe v. be protected by the State." Since marriage is "Inviolable",
Aldon, 100 SCRA 628 and reiterated in Heirs of Ayuste it cannot be dissolved by an absolute divorce.
v. Malabonga, G.R No, 118784, 2 September 1999, the sale
executed by the husband without the consent of the Marriage; Annulment; Effects; Requisites
wife is voidable. The husband has already acquired a Before Remarriage (1990)
vested right on the voidable nature of dispositions made The marriage of H and W was annulled by the competent
without the consent of the wife. Hence, Article 124 of the court. Upon finality of the judgment of nullity. H
Family Code which makes the sale void does not apply. began looking for his prospective second mate. He fell
in love with a sexy woman S who wanted to be married as
Family Home; Dwelling House (1994) soon as possible, i.e., after a few months of courtship. As a
In 1991, Victor established judicially out of young lawyer, you were consulted by H,
conjugal property, a family home in Manila worth (a) How soon can H be joined in lawful wedlock to
P200.000.00 and extrajudicially a second family home his girlfriend S? Under existing laws, are there certain
in Tagaytay worth P50.000.00. Victor leased the family requisites that must be complied with before he can
home in Manila to a foreigner. Victor and his family remarry? What advice would you give H?
transferred to another house of his in Pasig. (b) Suppose that children were born from the union of H
Can the two family homes be the subject of execution on a and W, what would be the status of said children? Explain
judgment against Victor's wife for non-payment of the your answer.
purchase in 1992 of household appliances? (c) If the subsequent marriage of H to S was
SUGGESTED ANSWER: contracted before compliance with the statutory condition
The two (2) so-called family homes can be the subject of for its validity, what are the rights of the children of the first
execution. Neither of the abodes are considered family marriage (i.e., of H and W) and of the children of the
homes because for purposes of availing the benefits under the subsequent marriage (of H and S)?
Family Code, there can only be one (1) family home SUGGESTED ANSWER:
which is defined as the "dwelling house" where the husband (a) H, or either spouse for that matter, can marry again after
and the wife and their family actually "reside" and the land on complying with the provisions of Article 52 of the Family
which it is situated. (Arts. 152 and 161, Family Code) Code, namely, there must be a partition and distribution, of the
properties of the spouses, and the delivery of the
Page 24 of 119
children's presumptive legitimes which should be recorded sexually-transmissible disease, found to be serious and
in the appropriate civil registry and registries of property. H appears incurable. Two (2) years after their marriage, which
should be so advised. took place on 10 October 1988, Bethel discovered that her
ALTERNATIVE ANSWER: for (a) husband James has a sexually-transmissible disease which he
The following are the requisites prescribed by law and I contracted even prior to their marriage although James did
advice to H is to comply with them, namely: not know it himself until he was examined two [2) years
1) If either spouse contracted the marriage in bad faith, later when a child was already born to them. Bethel sues
his or her share of the net profits of the community James for annulment of their marriage. James opposes the
property : or conjugal partnership property shall be annulment on the ground that he did not even know that he
forfeited in favor of the common children or, if there had such a disease so that there was no fraud or bad faith
are none, the children of the guilty spouse by a on his part. Decide.
previous marriage or, in default of children, the B. Suppose that both parties at the time of their marriage
innocent spouse; were similarly afflicted with sexually-transmissible diseases,
2) Donations by reason of marriage shall remain valid serious and incurable, and both knew of their respective
except that if the donee contracted the marriage in bad infirmities, can Bethel or James sue for annulment of their
faith, such donations made to said donee are revoked marriage?
by operation of law; SUGGESTED ANSWER:
3) The spouse who contracted the subsequent marriage in A. The marriage can be annulled, because good faith is not
bad faith shall be disqualified to inherit from the a defense when the ground is based upon sexually-
innocent spouse by testate and intestate succession; transmissible disease on the part of either party.
4) If both spouses of the subsequent marriage acted in SUGGESTED ANSWER:
bad faith all donations by reason of marriage and B. Yes, the marriage can still be annulled because the fact
testamentary dispositions made by one in favor of the that both of them are afflicted with sexually-transmissible
other are revoked by operation of law. diseases does not efface or nullity the ground.
Alternative Answer:
5) The judgment of annulment of the marriage, the
B. No, the marriage can no longer be annulled, because the
partition and distribution of the properties of the fact that both were afflicted and that both knew of their
spouses, and the delivery of the children's presumptive
respective infirmities constitutes a waiver of that ground.
legitimes shall be recorded in the appropriate civil
registry and registers of property, (Articles 53. 52, 43.
Marriage; Annulment; Judicial Declaration (1993)
44. Family Code).
Maria and Luis, both Filipinos, were married by a Catholic
priest in Lourdes Church, Quezon City in 1976, Luis was
SUGGESTED ANSWER:
(b) The children born from the union of H and W would be drunk on the day of his wedding. In fact, he slumped at the
legitimate children if conceived or born before the decree of altar soon after the ceremony. After marriage, Luis never
annulment of the marriage (under Art. 45 of the Family had a steady job because he was drunk most of the time.
Code) has become final and executory (Art. 54, Family Finally, he could not get employed at all because of
drunkenness. Hence, it was Maria who had to earn a living
Code}.
to support herself and her child begotten with Luis. In 1986,
SUGGESTED ANSWER: Maria filed a petition in the church matrimonial court in
(c) The children of the first marriage shall be considered Quezon City to annul her marriage with Luis on the ground
legitimate children if conceived or born before the of psychological incapacity to comply with his marital
Judgment of annulment of the marriage of H and W has obligation. Her petition was granted by the church
become final and executory. Children conceived or born of matrimonial court.
the subsequent marriage shall likewise be legitimate even if 1) Can Maria now get married legally to another man
the marriage of H and S be null and void for failure to under Philippine laws after her marriage to Luis was
comply with the requisites of Article 52 of the Family Code annulled by the church matrimonial court? Explain.
(Article 53, Family Code). 2) What must Maria do to enable her to get married
As legitimate children, they have the following rights; lawfully to another man under Philippine laws?
a) To bear the surnames of the father and the mother SUGGESTED ANSWER:
in conformity with the provisions of the Civil 1) No, Maria cannot validly contract a subsequent marriage
Code on Surnames; without a court declaration of nullity of the first marriage.
b) To receive support from their parents, their The law does not recognize the church declaration of nullity
ascendants, and in proper cases, their brothers and of a marriage.
sisters, in conformity with the provisions of this
Code on Support; and 2) To enable Maria to get married lawfully to another man.
c) To be entitled to the legitime and other she must obtain a judicial declaration of nullity of the prior
successional rights granted to them by the Civil marriage under Article 36 Family Code.
Code (Article 174, Family Code).
Marriage; Annulment; Legal Separation; Prescription of
Marriage; Annulment; Grounds (1991) Actions (1996)
One of the grounds for annulment of marriage is that either 2) Bert and Baby were married to each other on December
party, at the time of their marriage was afflicted with a 23, 1988. Six months later, she discovered that he was a
Page 25 of 119
drug addict. Efforts to have him rehabilitated were In 1989, Maris, a Filipino citizen, married her boss Johnson,
unsuccessful. an American citizen, in Tokyo in a wedding ceremony
Can Baby ask for annulment of marriage, or legal celebrated according to Japanese laws. One year later,
separation? Explain. Johnson returned to his native Nevada, and he validly
SUGGESTED ANSWER: obtained in that state an absolute divorce from his wife
No, Baby cannot ask for annulment of her marriage or for Maris.
legal separation because both these actions had already After Maris received the final judgment of divorce, she
prescribed. married her childhood sweetheart Pedro, also a Filipino
While concealment of drug addiction existing at citizen, in a religious ceremony in Cebu City, celebrated
the time of marriage constitutes fraud under Art. 46 of the according to the formalities of Philippine law. Pedro later
FC which makes the marriage voidable under Art. 45 of the left for the United States and became naturalized as an
FC, the action must, however, be brought within 5 years American citizen. Maris followed Pedro to the United
from the discovery thereof under Article 47(3), FC, Since States, and after a serious quarrel, Marts filed a suit and
the drug addiction of Bert was discovered by Baby in June obtained a divorce decree issued by the court in the state of
1989, the action had already prescribed in June of 1994. Maryland.
Although drug addiction is a ground for legal separation Maris then returned to the Philippines and in a civil
under Art. 55(5) and Art. 57 of the FC requires that the ceremony celebrated in Cebu City according to the
action must be brought within 5 years from the occurrence formalities of Philippine law, she married her former
of the cause. Since Bert had been a drug addict from the classmate Vincent likewise a Filipino citizen.
time of the celebration of the marriage, the action for legal b) Was the marriage of Maris and Pedro valid when
separation must have been brought not later than 23 celebrated? Is their marriage still valid existing now?
December 1993. Hence, Baby cannot, now, bring the action Reasons.
for legal separation. c) Was the marriage of Marts and Vincent valid when
celebrated? Is their marriage still validly existing now?
Marriage; Annulment; Proper Party (1990) Reasons.
D and G, age 20 and 19, respectively, and both single, d) At this point in time, who is the lawful husband of
eloped and got married to each other without parental Marts? Reasons.
consent in the case of G, a teenaged student of an exclusive SUGGESTED ANSWER:
college for girls. Three years later, her parents wanted to (b) The marriage of Maris and Pedro was valid when
seek judicial annulment on that ground. You were consulted celebrated because the divorce validly obtained by Johnson
and asked to prepare the proper complaint. What advice in Manila capacitated Maris to marry Pedro. The marriage of
would you give G's parents? Explain your answer. Maris and Pedro is still validly existing, because the marriage
SUGGESTED ANSWER: has not been validly dissolved by the Maryland divorce [Art.
G himself should file the complaint under Article 45 of the 26, Family Code).
Family Code, and no longer the parents because G is
already 22 years of age. (c) The marriage of Maris and Vincent is void ab initio
because it is a bigamous marriage contracted by Maris
Marriage; Annulment; Proper Party (1995) during the subsistence of her marriage with Pedro (Art 25
Yvette was found to be positive for HIV virus, considered and 41, Family Code).
sexually transmissible, serious and incurable. Her boyfriend The marriage of Maris and Vincent does not validly exist
Joseph was aware of her condition and yet married her. because Article 26 does not apply. Pedro was not a
After two (2) years of cohabiting with Yvette, and in his foreigner at the time of his marriage with marts and the
belief that she would probably never be able to bear him a divorce abroad (in Maryland) was initiated and obtained not
healthy child, Joseph now wants to have his marriage with by the alien spouse, but by the Filipino spouse. Hence, the
Yvette annulled. Yvette opposes the suit contending that Maryland divorce did not capacitate Marts to marry
Joseph is estopped from seeking annulment of their
Vincent.
marriage since he knew even before their marriage that she
was afflicted with HIV virus. (d) At this point in time, Pedro is still the lawful husband of
Can the action of Joseph for annulment of his marriage with Maris because their valid marriage has not been dissolved by
Yvette prosper? Discuss fully. any valid cause (Art. 26. Family Code)
SUGGESTED ANSWER:
No, Joseph knew that Yvette was HIV positive at the time Marriage; Divorce Decrees; Filiation of Children (2005)
of the marriage. He is, therefore, not an injured party. The In 1985, Sonny and Lulu, both Filipino citizens, were
FC gives the right to annul the marriage only to an injured married in the Philippines. In 1987, they separated, and
party. [Art. 47 (5), FC] Sonny went to Canada, where he obtained a divorce in the
ALTERNATIVE ANSWER:
same year. He then married another Filipina, Auring, in
The action for annulment can prosper because the
Canada on January 1,1988. They had two sons, James and
prescriptive period of five (5) years has not yet lapsed. [Art.
45 (6), FC]. John. In 1990, after failing to hear from Sonny, Lulu
married Tirso, by whom she had a daughter, Verna. In 1991,
Sonny visited the Philippines where he succumbed to heart
Marriage; Divorce Decree; Void Marriages (1992)
attack..
Page 26 of 119
a) Discuss the effect of the divorce obtained by Sonny Flor and Virgillo were married to each other in Roxas City
and Lulu in Canada. (2%) in 198O. In 1984, Flor was offered a teaching Job in
SUGGESTED ANSWER: Canada, which she accepted. In 1989, she applied for and
The divorce is not valid. Philippine law does not provide for was granted Canadian citizenship. The following year, she
absolute divorce. Philippine courts cannot grant it. A sued for divorce from Virgilio in a Canadian court. After
marriage between two (2) Filipinos cannot be dissolved by a Virgilio was served with summons, the Canadian court tried
divorce obtained abroad. (Garcia v. Redo, G.R. No. 138322, the case and decreed the divorce. Shortly thereafter, Flor
October 2, 2001). Philippine laws apply to Sonny and Lulu. married a Canadian.
Under Article 15 of the New Civil Code, laws relating to Can Virgilio marry again in the Philippines? Explain.
family rights and duties, status, and capacity of persons are SUGGESTED ANSWER:
binding upon citizens of the Philippines wherever they may No, Virgilio cannot validly remarry. His case is not covered
be. Thus, the marriage of Sonny and Lulu is still valid and by Article 26 of the Family Code, For said Article to be
subsisting. applicable, the spouse who filed for divorce must be a
foreigner at the time of the marriage. Since both of them
b) Explain the status of the marriage between Sonny were Filipinos at the time of the marriage, the divorce
and Auring. (2%) obtained by Flor did not capacitate Virgilio to remarry. The
SUGGESTED ANSWER: fact that Flor was already an alien at the time she obtained
Since the decree of divorce obtained by Lulu and Sony in the divorce does not give Virgilio the capacity to remarry
Canada is not recognized here in the Philippines, the under Philippine Law.
marriage between Sonny and Auring is void. (Art. 35, ALTERNATIVE ANSWERS:
Family Code) Any marriage subsequently contracted during a) Yes, Virgilio can validly remarry. Art. 26 of the FC,
the lifetime of the first spouse shall be illegal and void, merely States the alien spouse without taking into
subject only to the exception in the cases of absence or consideration his or her nationality at the time of the
where the prior marriage was dissolved or annulled. (Ninal marriage. While his case is not covered by the letter of
v. Bayadog, G.R. No. 133778, March 14, 2000) The marriage Article 26 FC, it is, however, covered by the spirit of said
of Sonny and Auring does not fall within the exception. Article, the injustice to the Filipino spouse sought to be
cured by said Article is present in this case. (Department of
c) Explain the status of the marriage between Lulu Justice Opinion No. 134 Series of 1993).
and Tirso. (2%)
SUGGESTED ANSWER: b) Although the marriage originally involved Filipino
The marriage of Lulu and Tirso is also void. Mere absence citizens, it eventually became a marriage between an alien
of the spouse does not give rise to a right of the present and a Filipino after Flor became a Canadian citizen. Thus,
spouse to remarry. Article 41 of the Family Code provides the divorce decree was one obtained by an alien spouse
for a valid bigamous marriage only where a spouse has been married to a Filipino. Although nothing is said about
absent for four consecutive years before the second whether such divorce did capacitate Flor to remarry, that
marriage and the present spouse had a well-founded belief fact may as well be assumed since the problem states that
that the absent spouse is already dead. (Republic v. Nolasco, she married a Canadian shortly after obtaining the divorce.
G.R. No. 94053, March 17, 1993) Hence, Virgillo can marry again under Philippine law,
pursuant to Art. 26. FC which applies because Flor was
d) Explain the respective filiation of James, John and already an alien at the time of the divorce.
Verna. (2%)
SUGGESTED ANSWER: Marriage; Divorce Decrees; Filipino Spouses becoming
James, John and Verna are illegitimate children since their
Alien (1999)
parents are not validly married. Under Article 165 of the Ben and Eva were both Filipino citizens at the time of their
Family Code, children conceived and born outside a valid marriage in 1967, When their marriage turned sour, Ben
marriage are illegitimate, unless otherwise provided in this went to a small country in Europe, got himself naturalized
Code. there, and then divorced Eva in accordance with the law of
that country, Later, he returned to the Philippines with his
e) Who are the heirs of Sonny? Explain. (2%) new wife.
Suggested answer: Eva now wants to know what action or actions she can file
Sonny's heirs include James, John, and Lulu. Article 887 of against Ben. She also wants to know if she can likewise
the Civil Code provides that the compulsory heirs of the marry again. What advice can you give her? {5%)
deceased are among others, his widow and his illegitimate SUGGESTED ANSWER:
children. The widow referred to in Article 887 is the legal Considering that Art. 26(2nd par.) contemplates a divorce
wife of the deceased. Lulu is still a compulsory heir of between a foreigner and a Filipino, who had such respective
Sonny because the divorce obtained by Sonny in Canada nationalities at the time of their marriage, the divorce in
cannot be recognized in the Philippines. The legitime of Europe will not capacitate the Filipino wife to remarry. The
each illegitimate child shall consist of one-half of the advice we can give her is either to file a petition for legal
legitime of a legitimate child. (Art. 176, Family Code) separation, on the ground of sexual infidelity and of
contracting a bigamous marriage abroad, or to file a petition
Marriage; Divorce Decrees; Filipino Spouses becoming to dissolve the conjugal partnership or absolute community
Alien (1996) of property as the case maybe.
Page 27 of 119
ALTERNATIVE ANSWER: the marriage, the conclusion is that Digna's father may
Eva may file an action for legal separation on the grounds revoke the donation and get back the car.
of sexual infidelity of her husband and the contracting by
her husband of a bigamous marriage abroad. Marriage; Grounds; Declaration of Nullity: Annulment:
Legal Separation: Separation of Property (2003)
She may remarry. While a strict interpretation of Article 26 Which of the following remedies, i.e., (a) declaration of
of the Family Code would capacitate a Filipino spouse to nullity of marriage, (b) annulment of marriage, (c) legal
remarry only when the other spouse was a foreigner at the separation, and/or (d) separation of property, can an
time of the marriage, the DOJ has issued an opinion aggrieved spouse avail himself/herself of-
(Opinion 134 s. of 1993) that the same injustice sought to (i) If the wife discovers after the marriage that her
be cured by Article 26 is present in the case of spouses who husband has “AIDS”.
were both Filipino at the time of the marriage but one (ii) If the wife goes (to) abroad to work as a nurse and
became an alien subsequently. Said injustice is the anomaly refuses to come home after the expiration of her
of Eva remaining married to her husband who is no longer three-year contract there.
married to her. Hence, said Opinion makes Article 26 (iii) If the husband discovers after the marriage that his
applicable to her case and the divorce obtained abroad by wife has been a prostitute before they got married.
her former Filipino husband would capacitate her to (iv) If the husband has a serious affair with his secretary
remarry. To contract a subsequent marriage, all she needs to and refuses to stop notwithstanding advice from
do is present to the civil registrar the decree of divorce relatives and friends.
when she applies for a marriage license under Article 13 of (v) If the husband beats up his wife every time he
the Family Code. comes home drunk. 5%
SUGGESTED ANSWER:
Marriage; Donations by Reason of Marriage; Effect of (i) Since AIDS is a serious and incurable sexually-
Declaration of Nullity (1996) transmissible disease, the wife may file an action for
1) On the occasion of Digna's marriage to George, her annulment of the marriage on this ground whether such fact
father gave her a donation propter nuptias of a car. was concealed or not from the wife, provided that the
Subsequently, the marriage was annulled because of the disease was present at the time of the marriage. The
psychological immaturity of George. marriage is voidable even though the husband was not
May Digna's father revoke the donation and get back the aware that he had the disease at the time of marriage.
car? Explain.
SUGGESTED ANSWER: (ii) If the wife refuses to come home for three (3)
No, Digna's father may not revoke the donation because months from the expiration of her contract, she is
Digna was not in bad faith, applying Art. 86(3) of the presumed to have abandoned the husband and he may file
Family Code. an action for judicial separation of property. If the refusal
ALTERNATIVE ANSWER:
continues for more than one year from the expiration of her
a) Yes, the donation is revocable. Since the ground for the
annulment of the marriage is the psychological immaturity contract, the husband may file the action for legal
of George, the judgment was in the nature of a declaration separation under Art. 55 (10) of the Family Code on the
of nullity under Art. 36 of the FC and, therefore, the ground of abandonment of petitioner by respondent
donation may be revoked under Art. 86( 1) of the FC for without justifiable cause for more than one year. The wife is
the reason that the marriage has been judicially declared deemed to have abandoned the husband when she leaves
void ab initio. the conjugal dwelling without any intention of returning
ALTERNATIVE ANSWER: (Article 101, FC). The intention not to return cannot be
b) No, the donation cannot be revoked. The law provides presumed during the 30year period of her contract.
that a donation by reason of marriage may be revoked by
the donor if among other cases, the marriage is judicially (iii) If the husband discovers after the marriage that his
declared void ab initio [par. (1) Art. 86. Family Code], or wife was a prostitute before they got married, he has no
when the marriage is annulled and the donee acted in bad remedy. No misrepresentation or deceit as to character,
faith [par. (3), Id.]. Since the problem states that the health, rank, fortune or chastity shall constitute fraud as
marriage was annulled and there is no intimation of bad legal ground for an action for the annulment of marriage
faith on the part of the donee Digna, the conclusion is that (Article 46 FC).
the donor cannot revoke the donation.
ALTERNATIVE ANSWER: (iv) The wife may file an action for legal separation.
c) Yes, the donation can be revoked. The ground used in The husband’s sexual infidelity is a ground for legal
dissolving the marriage was the psychological immaturity of separation 9Article 55, FC). She may also file an action for
George, which is not a ground for annulment of marriage. judicial separation of property for failure of her husband to
If this term is equated with psychological incapacity as used comply with his martial duty of fidelity (Article 135 (4), 101,
in Art. 36 of the Family Code, then it is a ground for
FC).
declaration of nullity of the marriage. Consequently, par. (1)
of Art. 86, FC, is the applicable law. Since Art. 86 of the FC (v) The wife may file an action for legal separation on
makes no qualification as to who furnished the ground or the ground of repeated physical violence on her person
who was in bad faith in connection with the nullification of (Article 55 (1), FC). She may also file an action for judicial
Page 28 of 119
separation of property for failure of the husband to comply Saudi Arabia to work. There, after being converted into
with his marital duty of mutual respect (Article 135 (4), Islam, Ariel married Mystica, Rosa learned of the second
Article 101, FC). She may also file an action for declaration marriage of Ariel on January 1, 1992 when Ariel returned to
of nullity of the marriage if the husband’s behavior the Philippines with Mystica. Rosa filed an action for legal
constitute psychological incapacity existing at the time of separation on February 5, 1994,
1) Does Rosa have legal grounds to ask for legal separation?
the celebration of marriage.
2) Has the action prescribed?
Marriage; Grounds; Nullity; Annulment; Legal Separation SUGGESTED ANSWER:
1) a) Yes, the abandonment of Rosa by Ariel for more than
(1997)
one (1) year is a ground for legal separation unless upon
Under what conditions, respectively, may drug addiction be
a ground, if at all, (a) for a declaration of nullity of marriage, returning to the Philippines, Rosa agrees to cohabit with
(b) for an annulment of the marriage contract, and (c) for Ariel which is allowed under the Muslim Code. In this case,
there is condonation.
legal separation between the spouses?
SUGGESTED ANSWER:
b) Yes. The contracting of a subsequent bigamous marriage
(a) Declaration of nullity of marriage: whether in the Philippines or abroad is a ground for legal
1) The drug addiction must amount to psychological separation under Article 55(7) of the Family Code. Whether
incapacity to comply with the essential obligations the second marriage is valid or not, Ariel having converted
of marriage; into Islam, is immaterial.
2) It must be antecedent (existing at the time of SUGGESTED ANSWER:
marriage), grave and incurable: 2) No. Under Article 57 of the Family Code, the
aggrieved spouse must file the action within five (5) years
3) The case must be filed before August 1, 1998.
Because if they got married before August 3, 1998, from the occurrence of the cause. The subsequent marriage
of Ariel could not have occurred earlier than 1990, the time
it must be filed before August 1, 1998.
he went to Saudi Arabia. Hence, Rosa has until 1995 to
(b) Annulment of the Marriage Contract: bring the action under the Family Code.
1) The drug addiction must be concealed;
2) It must exist at the time of marriage; Marriage; Legal Separation; Mutual guilt (2006)
3) There should be no cohabitation with full Saul, a married man, had an adulterous relation with Tessie.
knowledge of the drug addiction; In one of the trysts, Saul's wife, Cecile, caught them in
flagrante. Armed with a gun, Cecile shot Saul in a fit of
4) The case is filed within five (5) years from
extreme jealousy, nearly killing him. Four (4) years after the
discovery.
incident, Saul filed an action for legal separation against
(c) Legal Separation; Cecile on the ground that she attempted to kill him.
1) There should be no condonation or consent to the (1) If you were Saul's counsel, how will you argue his
drug addiction; case? (2.5%)
SUGGESTED ANSWER:
2) The action must be filed within five (5) years from As the counsel of Saul, I will argue that an attempt by the
the occurrence of the cause. wife against the life of the husband is one of the grounds
3) Drug addiction arises during the marriage and not enumerated by the Family Code for legal separation and
at the time of marriage. there is no need for criminal conviction for the ground to
be invoked (Art. 55, par. 9, Family Code).
Marriage; Legal Separation; Declaration of Nullity (2002)
If drug addiction, habitual alcoholism, lesbianism or (2) If you were the lawyer of Cecile, what will be your
homosexuality should occur only during the marriage, defense? (2.5%)
would this constitute grounds for a declaration of nullity or SUGGESTED ANSWER:
for legal separation, or would they render the marriage As the counsel of Cecile, I will invoke the adultery of Saul.
voidable? (1%). Mutual guilt is a ground for the dismissal of an action for
SUGGESTED ANSWER: legal separation (Art. 56, par. 4, Family Code). The rule is
In accordance with law, if drug addiction, habitual anchored on a well-established principle that one must
alcoholism, lesbianism or homosexuality should occur only
come to court with clean hands.
during the marriage, they:
a) Will not constitute as ground for declaration of nullity (3) If you were the judge, how will you decide the
(Art. 36, Family Code); case? (5%)
b) Will constitute as grounds for legal separation (Art. 56, SUGGESTED ANSWER:
FC) and If I were the judge, I will dismiss the action on the ground
c) will not constitute as grounds to render the marriage of mutual guilt of the parties. The Philippine Constitution
voidable (Art.45and 46, FC) protects marriage as an inviolable social institution (Art.
XV, Sec. 2, 1987 Constitution). An action for legal
Marriage; Legal Separation; Grounds; Prescriptive Period separation involves public interest and no such decree
(1994) should be issued if any legal obstacle thereto appears on
Rosa and Ariel were married in the Catholic Church of
record. This is in line with the policy that in case of doubt,
Tarlac, Tarlac on January 5. 1988. In 1990, Ariel went to
Page 29 of 119
the court shall uphold the validity and sanctity of marriage the preceding Article, only the properties acquired by both
(Brown v. Yambao, G.R. No. L-10699, October 18, 1957). of the parties through their actual joint contribution of
money, property, or industry shall be owned by them in
Marriage; Non-Bigamous Marriages (2006) common in proportion to their respective contributions. In
Marvin, a Filipino, and Shelley, an American, both residents the absence, of proof to the contrary, their contributions
of California, decided to get married in their local parish. and corresponding shares are presumed to be equal. The
Two years after their marriage, Shelley obtained a divorce in same rule and presumption shall apply to joint deposits of
California. While in Boracay, Marvin met Manel, a Filipina, money and evidences of credit.
who was vacationing there. Marvin fell in love with her.
After a brief courtship and complying with all the SUGGESTED ANSWER:
requirements, they got married in Hongkong to avoid C. It should be distinguished when the property was
publicity, it being Marvin's second marriage. Is his marriage acquired.
to Manel valid? Explain. (5%) • If it was acquired before Mary's death, the estate
SUGGESTED ANSWER: of Mary is entitled to 1/2 of the share of James.
Yes. The marriage will not fall under Art. 35(4) of the • If it was acquired after Mary's death, there will
Family Code on bigamous marriages, provided that Shelley
be no share at all for the estate of Mary.
obtained an absolute divorce, capacitating her to remarry
under her national law. Consequently, the marriage between Marriage; Psychological Incapacity (1996)
Marvin and Manel may be valid as long as it was solemnized On April 15, 1983, Jose, an engineer, and Marina, a nurse,
and valid in accordance with the laws of Hongkong [Art. 26, were married to each other in a civil ceremony in Boac.
paragraphs 1 and 2, Family Code]. Marinduque. Six months after their marriage, Jose was
employed in an oil refinery in Saudi Arabia for a period of
Marriage; Property Relations; Void Marriages (1991) three years. When he returned to the Philippines, Marina
In June 1985, James married Mary. In September 1988, he was no longer living in their house, but in Zamboanga City,
also married Ophelia with whom he begot two (2) children, working in a hospital. He asked her to come home, but she
A and B. In July 1989, Mary died. In July 1990, he married refused to do so, unless he agreed not to work overseas
Shirley and abandoned Ophelia, During their union. James anymore because she cannot stand living alone. He could
and Ophelia acquired a residential lot worth P300,000.00. not agree as in fact, he had signed another three year
contract. When he returned in 1989, he could not locate
Ophelia sues James for bigamy and prays that his marriage Marina anymore. In 1992, Jose filed an action served by
with Shirley be declared null and void. James, on the other publication in a newspaper of general circulation. Marina
hand, claims that since his marriage to Ophelia was did not file any answer, a possible collusion between the
contracted during the existence of his marriage with Mary, parties was ruled out by the Public Prosecutor. Trial was
the former is not binding upon him, the same being void ab conducted and Marina neither appeared nor presented
initio he further claims that his marriage to Shirley is valid evidence in her favor.
and binding as he was already legally capacitated at the time If you were the judge, will you grant the annulment.
he married her. Explain.
a) Is the contention of James correct? SUGGESTED ANSWER:
b) What property Relations governed the union of James As judge, I will not grant the annulment. The facts do not
and Ophelia? show any taint of personality disorder on the part of the
c) Is the estate of Mary entitled to a share in the wife Marina so as to lend substance to her husband's
residential lot acquired by James and Ophelia? averment of psychological incapacity within the meaning of
SUGGESTED ANSWER: Art 36 of the Family Code. In Santos vs. CA (240 SCRA 20),
A. Yes. His marriage to Ophelia is void ab initio because of this particular ground for nullity of marriage was held to be
his subsisting prior marriage to Mary. His marriage to limited only to the most serious cases of personality
Shirley, after Mary's death, is valid and binding. disorders (clearly demonstrative of utter sensitivity or
ALTERNATIVE ANSWER: James is not correct. inability to give meaning and significance to the marriage.
A. No. The contention of
Marina's refusal to come home to her husband unless he
Art. 40, Family Code, provides that the "absolute nullity of a
agreed not to work overseas, far from being indicative of an
previous marriage may be invoked for purposes of
insensitivity to the meaning of marriage, or of a personality
remarriage on the basis solely of a final judgment declaring
disorder, actually shows a sensitive awareness on her part of
such previous marriage void." It can be said, therefore, that
the marital duty to live together as husband and wife. Mere
the marriage of James to Shirley is void since his previous
refusal to rejoin her husband when he did not accept the
marriage to Ophelia, although itself void, had not yet been
condition imposed by her does not furnish any basis for
judicially declared void,
concluding that she was suffering from psychological
ALTERNATIVE ANSWER:
A. No. The contention of James is not correct. He incapacity to discharge the essential marital obligations.
cannot set up as a defense his own criminal act or
Mere intention to live apart does not fall under Art. 36, FC.
wrongdoing-
Furthermore, there is no proof that the alleged
SUGGESTED ANSWER: psychological incapacity existed at the time of the marriage.
B. The provisions of Art 148 of the Family Code, shall
govern: Art. 148. In cases of cohabitation not falling under
Page 30 of 119
Marriage; Psychological Incapacity (2006) ALTERNATIVE ANSWER:
Gemma filed a petition for the declaration of nullity of her None of them are necessarily psychologically incapacitated.
marriage with Arnell on the ground of psychological Being a nagger, etc. are at best only physical manifestations
incapacity. She alleged that after 2 months of their marriage, indicative of psychological incapacity. More than just
Arnell showed signs of disinterest in her, neglected her and showing the manifestations of incapacity, the petitioner
went abroad. He returned to the Philippines after 3 years must show that the respondent is incapacitated to comply
but did not even get in touch with her. Worse, they met with the essential marital obligations of marriage and that it is
several times in social functions but he snubbed her. When also essential that he must be shown to be incapable of doing
she got sick, he did not visit her even if he knew of her so due to some psychological, not physical illness
confinement in the hospital. Meanwhile, Arnell met an (Republic v. Quintero-Hamano, G.R. No. 149498, May
accident which disabled him from reporting for work and 20, 2004).
ALTERNATIVE ANSWER:
earning a living to support himself.
A congenital sexual pervert may be psychologically incapaci-
Will Gemma's suit prosper? Explain. (5%)
SUGGESTED ANSWER:
tated if his perversion incapacitates him from
No, Gemma's suit will not prosper. Even if taken as true, discharging his marital obligations. For instance, if his
the grounds, singly or collectively, do not constitute perversion is of such a nature as to preclude any normal
"psychological incapacity." In Santos v. CA, G.R. No. 112019, sexual activity with his spouse.
January 4, 1995, the Supreme Court clearly explained that
Marriage; Requisites (1995)
"psychological incapacity must be characterized by (a)
gravity, (b) juridical antecedence, and (c) incurability" Isidro and Irma, Filipinos, both 18 years of age, were
(Ferraris v. Ferraris, G.R. No. 162368, July 17, 2006; Choa v. passengers of Flight No. 317 of Oriental Airlines. The plane
Choa, G.R. No. 143376, November 26, 2002). The illness they boarded was of Philippine registry. While en route
must be shown as downright incapacity or inability to from Manila to Greece some passengers hijacked the plane,
perform one's marital obligations, not a mere refusal, held the chief pilot hostage at the cockpit and ordered him
neglect, difficulty or much less, ill will. Moreover, as ruled in to fly instead to Libya. During the hijacking Isidro suffered
Republic v. Molina, GR No. 108763, February 13, 1997, it is a heart attack and was on the verge of death. Since Irma was
essential that the husband is capable of meeting his marital already eight months pregnant by Isidro, she pleaded to the
responsibilities due to psychological and not physical illness hijackers to allow the assistant pilot to solemnize
(Antonio v. Reyes, G.R. No. 155800, March 10, 2006; Republic her marriage with Isidro. Soon after the marriage,
v. Quintero-Hamano, G.R. No. 149498, May 20, Isidro expired. As the plane landed in Libya Irma gave
2004). Furthermore, the condition complained of did not birth. However, the baby died a few minutes after
exist at the time of the celebration of marriage. complete delivery.
Back in the Philippines Irma immediately filed a claim for
Marriage; Psychological Incapacity (2006) inheritance. The parents of Isidro opposed her
Article 36 of the Family Code provides that a marriage claim contending that the marriage between her and
contracted by any party who, at the time of the celebration, Isidro was void ab initio on the following grounds: (a)
was psychologically incapacitated to comply with they had not given their consent to the marriage of
the essential marital obligations of marriage, shall be void. their son; (b) there was no marriage license; (c) the
Choose the spouse listed below who is psychologically solemnizing officer had no authority to perform the
incapacitated. Explain. (2.5%) marriage; and, (d) the solemnizing officer did not file an
a) Nagger affidavit of marriage with the proper civil registrar.
b) Gay or Lesbian 1. Resolve each of the contentions ([a] to [d]) raised by the
c) Congenital sexual pervert parents of Isidro. Discuss fully.
d) Gambler SUGGESTED ANSWER:
e) Alcoholic 1. (a) The fact that the parents of Isidro and of Irma did
SUGGESTED ANSWER: The best answers are B and C. To be not give their consent to the marriage did not make
sure, the existence and concealment of these conditions at the the marriage void ab initio. The marriage is merely
inception of marriage renders the marriage contract voidable under Art 45 of the FC.
voidable (Art. 46, Family Code). They may serve as indicia of
psychological incapacity, depending on the degree and (b) Absence of marriage license did not make the marriage
severity of the disorder (Santos v. CA, G.R. No. 112019, Jan. void ab initio. Since the marriage was solemnized in articulo
4, 1995). Hence, if mortis, it was exempt from the license requirement
the condition of homosexuality, lesbianism or sexual under Art. 31 of the FC.
perversion, existing at the inception of the marriage, is of such
a degree as to prevent any form of sexual intimacy, any of (c) On the assumption that the assistant pilot was acting for
them may qualify as a ground for psychological incapacity. and in behalf of the airplane chief who was under disability,
The law provides that the husband and wife are obliged to live and by reason of the extraordinary and exceptional
together, observe mutual love, respect and fidelity (Art. 68, circumstances of the case [ie. hostage situation), the
Family Code). The mandate is actually the spontaneous, marriage was solemnized by an authorized officer under
mutual affection between the spouses. In the natural Art. 7 (3) and Art. 31. of the FC.
order it is sexual intimacy which (Chi Ming Tsoi
brings the spouses wholeness and oneness
v. CA, G.R. No. 119190, January 16,1997).
Page 31 of 119
(d) Failure of the solemnizing officer to file the affidavit of ALTERNATIVE ANSWER:
marriage did not affect the validity of the marriage. It is If the two Filipinos believed in good faith that the Notary
merely an irregularity which may subject the solemnizing Public is authorized to solemnize marriage, then the
officer to sanctions. marriage is valid.
ALTERNATIVE ANSWER:
Considering that the solemnizing officer has no authority to SUGGESTED ANSWER:
perform the marriage because under Art. 7 the law (e) Under the Local Government Code, a town mayor may
authorizes only the airplane chief, the marriage is void, validly solemnize a marriage but said law is silent as to the
territorial limits for the exercise by a town mayor of such
hence, a, c, and d are immaterial.
authority. However, by analogy, with the authority of
Marriage; Requisites (1999) members of the Judiciary to solemnize a marriage, it would
What is the status of the following marriages and why? seem that the mayor did not have the requisite authority to
(a) A marriage between two 19-year olds without parental solemnize a marriage outside of his territorial jurisdiction.
consent, (2%) Hence, the marriage is void, unless it was contracted with
(b) A marriage between two 21-year olds without parental either or both parties believing in good faith that the mayor
advice. (2%) had the legal authority to solemnize this particular marriage
(c) A marriage between two Filipino first cousins in (Art 35, par 2 Family Code).
Spain where such marriage is valid. (2%) ALTERNATIVE ANSWER:
(d) A marriage between two Filipinos in Hongkong The marriage is valid. Under the Local Government Code,
before a notary public. (2%) the authority of a mayor to solemnize marriages is not
(e) A marriage solemnized by a town mayor three towns restricted within his municipality implying that he has the
away from his jurisdiction, (2%) authority even outside the territory thereof. Hence, the
SUGGESTED ANSWER:
marriage he solemnized outside his municipality is valid.
(a) The marriage is voidable. The consent of the parties to And even assuming that his authority is restricted within his
the marriage was defective. Being below 21 years old, the municipality, such marriage will nevertheless, be valid
consent of the parties is not full without the consent of their because solemnizing the marriage outside said municipality
parents. The consent of the parents of the parties to the is a mere irregularity applying by analogy the case of
Navarro v Domagtoy, 259 Scra 129. In this case, the Supreme
marriage is indispensable for its validity.
Court held that the celebration by a judge of a marriage
SUGGESTED ANSWER: outside the jurisdiction of his court is a mere irregularity
(b) Between 21-year olds, the marriage is valid despite that did not affect the validity of the marriage
the absence of parental advice, because such absence is notwithstanding Article 7 of the Family Code which
merely an irregularity affecting a formal requisite i.e., the provides that an incumbent member of the judiciary is
marriage license and does not affect the validity of the authorized to solemnize marriages only within the court’s
marriage itself. This is without prejudice to the civil,
jurisdiction.
criminal, or administrative liability of the party responsible
therefor. Marriage; Requisites; Marriage License (1996)
On Valentine's Day 1996, Ellas and Fely, both single and 25
SUGGESTED ANSWER:
years of age, went to the city hall where they sought out a
(c) By reason of public policy, the marriage between
fixer to help them obtain a quickie marriage. For a fee, the
Filipino first cousins is void [Art. 38, par. (1), Family Code],
fixer produced an ante-dated marriage license for them,
and the fact that it is considered a valid marriage in a foreign
Issued by the Civil Registrar of a small remote municipality.
country in this case, Spain— does not validate it, being an
He then brought them to a licensed minister in a restaurant
exception to the general rule in Art. 96 of said Code which
behind the city hall, and the latter solemnized their marriage
accords validity to all marriage solemnized outside the
right there and then.
Philippine x x x and valid there as such.
ALTERNATIVE ANSWER
1) Is their marriage valid, void or voidable? Explain.
The marriage it void. Under Article 96 of the Family Code, SUGGESTED ANSWER:
The marriage is valid. The irregularity in the issuance of a
a marriage valid where celebrated is valid in the Philippines
valid license does not adversely affect the validity of the
except those marriages enumerated in said Article which
marriage. The marriage license is valid because it was in fact
marriages will remain void even though valid where
issued by a Civil Registrar (Arts. 3 and 4. FC).
solemnized. The marriage between first cousins is one of
ALTERNATIVE ANSWER:
those marriages enumerated therein, hence, it is void even It depends. If both or one of the parties was a member of
though valid in Spain where it was celebrated. the religious sect of the solemnizing officer, the marriage is
valid. If none of the parties is a member of the sect and
By reason of Art. 15 in relation to Article 38 of the Civil both of them were aware of the fact, the marriage is void.
Code, which applies to Filipinos wherever they are, the They cannot claim good faith in believing that the
marriage is void. solemnizing officer was authorized because the scope of the
SUGGESTED ANSWER:
authority of the solemnizing officer is a matter of law. If,
(d) It depends. If the marriage before the notary public is
however, one of the parties believed in good faith that the
valid under Hongkong Law, the marriage is valid in the
Philippines. Otherwise, the marriage that is invalid in other was a member of the sect, then the marriage is valid
Hongkong will be invalid in the Philippines.
Page 32 of 119
under Article 35 (2), FC. In that case, the party in good faith This is different from the case of Ninal V. Bayadog, (328
is acting under a mistake of fact, not a mistake of law, SCRA 122 [2000]). In the said case, the situation occurred
during the Relations of the new Civil Code where Article 76
2) Would your answer be the same if it should turn out that thereof clearly provides that during the five-year
the marriage license was spurious? Explain. cohabitation, the parties must be unmarried. This is not so
SUGGESTED ANSWER: anymore in the Family Code. The Change in the Family
No, the answer would not be the same. The marriage would Code is significant. If the second marriage occurred before
be void because of the absence of a formal requisite. In the effectivity of the Family Code, the answer would that be
such a case, there was actually no valid marriage license.
that the marriage is void.
Marriage; Requisites; Marriage License (2002) B. Does Sotero have the personality to seek the declaration
On May 1, 1978 Facundo married Petra, by whom he had a of nullity of the marriage, especially now that Facundo is
son Sotero. Petra died on July 1, 1996, while Facundo died already deceased? Explain. (3%)
on January 1, 2002. Before his demise, Facundo had SUGGESTED ANSWER:
married, on July 1, 2002, Quercia. Having lived together as B. A void marriage may be questioned by any interested
husband and wife since July 1, 1990, Facundo and Quercia party in any proceeding where the resolution of the issue is
did not secure a marriage license but executed the requisite material. Being a compulsory heir, Soterro has the
affidavit for the purpose. personality to question the validity of the marriage of
To ensure that his inheritance rights are not adversely Facundo and Quercia. Otherwise, his participation in the
affected by his father second marriage, Sotero now brings a estate on Facundo would be affected. (Ninãl V. Bayadog,
suit to seek a declaration of the nullity of the marriage of 328 SCRA 122 [2000] ).
Facundo and Quercia, grounded on the absence of a valid
marriage license. Quercia contends that there was no need Marriage; Requisites; Solemnizing Officers (1994)
for a marriage license in view for her having lived 1} The complete publication of the Family Code was made
continuously with Facundo for five years before their on August 4, 1987. On September 4, 1987, Junior Cruz and
marriage and that has Sotero has no legal personality to seek Gemma Reyes were married before a municipal mayor. Was
a declaration of nullity of the marriage since Facundo is now the marriage valid?
deceased. 2) Suppose the couple got married on September 1, 1994 at
A. Is the marriage of Facundo and Quercia valid, the Manila Hotel before the Philippine Consul General to
despite the absence of a marriage license? Explain. (2%) Hongkong, who was on vacation in Manila. The couple
SUGGESTED ANSWER: executed an affidavit consenting to the celebration of the
A. The marriage with Quercia is void. The exemption marriage at the Manila Hotel. Is the marriage valid?
from the requirement of a marriage license under Art, 34, SUGGESTED ANSWER:
Family Code, requires that the man and woman must have 1) a) Yes, the marriage is valid. The Family Code took
lived together as husband and wife for at least five years and effect on August 3, 1988. At the time of the marriage on
without any legal impediment to marry each other during September 4, 1987, municipal mayors were empowered to
those five years. The cohabitation of Facundo and Quercia solemnize marriage under the Civil Code of 1950.
for six years from 1990 to July 1, 1996 when Petra died was
one with a legal impediment hence, not in compliance with 2) a) The marriage is not valid. Consuls and vice-consuls
the requirement of law. On other hand, the cohabitation are empowered to solemnize marriages between Philippine
thereafter until the marriage on July 1, 2000, although free citizens abroad in the consular office of the foreign country
from legal impediment, did not meet the 5-year cohabitation to which they were assigned and have no power to
requirement. solemnize marriage on Philippine soil.
ALTERNATIVE ANSWER:
The marriage of Facundo and Quercia is VALID. The b) A Philippine consul is authorized by law to solemnize
second marriage was solemnized on July 1, 2000, when the marriages abroad between Filipino citizens. He has no
Family code was already affective. The family code took authority to solemnize a marriage in the Philippines.
effect on August 3, 1988. Under the Family Code, no Consequently, the marriage in question is void, unless either
marriage license is required if the parties have been or both of the contracting parties believed in good faith that
cohabiting for the period of five years and there is no legal the consul general had authority to solemnize their marriage
impediment. There must no legal impediment ONLY AT in which case the marriage is valid.
THE TIME OF THE SOLEMNIZATION OF THE
MARRIAGE, and not the whole five years period. This is Marriage; Requisites; Void Marriage (1993)
clearly the intent of the code framers (see Minutes of the A and B, both 18 years old, were sweethearts studying in
150th joint Civil Code of the Family Law Committees held on Manila. On August 3, 1988, while in first year college, they
August 9, 1986). Also, in Manzano V. Sanchez, AM NO. MT eloped. They stayed in the house of a mutual friend in town
–00-129, March 8, 2001, the Supreme Court said that, as one X, where they were able to obtain a marriage license. On
of the requisites for the exception to apply, there must be August 30, 1988, their marriage was solemnized by the town
no legal impediment at the time of the marriage. The mayor of X in his office. Thereafter, they returned to Manila
Supreme Court did not say that the legal impediment must and continued to live separately in their respective boarding
exist all throughout the five-year period. houses, concealing from their parents, who were living in
the province what they had done. In 1992, after graduation
Page 33 of 119
from college, A and B decided to break their relation and Philippine Law, his marriage to Anne is void because of a
parted ways. Both went home to their respective towns to prior existing marriage which was not dissolved by the
live and work. divorce decreed in Oslo. Divorce obtained abroad by a
1) Was the marriage of A and B solemnized on August 30, Filipino is not recognized.
1988 by the town mayor of X in his office a valid marriage?
Explain your answer. If Boni was no longer a Filipino citizen, the divorce is valid.
2) Can either or both of them contract marriage with Hence, his marriage to Anne is valid if celebrated in
another person without committing bigamy? Explain your accordance with the law of the place where it was
answer. celebrated. Since the marriage was celebrated aboard a
SUGGESTED ANSWER: vessel of Norwegian registry, Norwegian law applies. If the
1) The marriage of A and B is void because the solemnizing Ship Captain has authority to solemnize the marriage aboard
officer had no legal authority to solemnize the marriage. But his ship, the marriage is valid and shall be recognized in the
if either or both parties believed in good faith that the Philippines.
solemnizing officer had the legal authority to do so, the
marriage is voidable because the marriage between the As to the second question, if Boni is still a Filipino, Anne
parties, both below 21 years of age, was solemnized without can file an action for declaration of nullity of her marriage
the consent of the parents. (Art. 35, par. (2) and Art. 45 par. to him.
(1), Family Code)
Marriage; Void Marriages (2006)
2) Either or both of the parties cannot contract marriage in Gigi and Ric, Catholics, got married when they were 18
the Philippines with another person without committing years old. Their marriage was solemnized on August 2, 1989
bigamy, unless there is compliance with the requirements of by Ric's uncle, a Baptist Minister, in Calamba, Laguna. He
Article 52 Family Code, namely: there must be a judgment overlooked the fact that his license to solemnize marriage
of annulment or absolute nullity of the marriage, partition expired the month before and that the parties do not belong
and distribution of the properties of the spouses and the to his congregation. After 5 years of married life and blessed
delivery of their children's presumptive legitimes, which with 2 children, the spouses developed irreconcilable
shall be recorded in the appropriate Civil Registry and differences, so they parted ways.
Registry of Property, otherwise the same shall not affect While separated, Ric fell in love with Juliet, a 16 year-old
third persons and the subsequent marriage shall be null and sophomore in a local college and a Seventh-Day Adventist.
void. (Arts. 52 and 53. Family Code) They decided to get married with the consent of Juliet's
ALTERNATIVE ANSWER: parents. She presented to him a birth certificate showing she
2) Yes, they can. The subsequent marriage contracted by is 18 years old. Ric never doubted her age much less the
one of the parties will not give rise to bigamy even in the authenticity of her birth certificate. They got married in a
absence of a court declaration of nullity of the first Catholic church in Manila. A year after, Juliet gave birth to
marriage. The subsistence of a prior valid marriage is an twins, Aissa and Aretha.
indispensable element of the crime of bigamy. The prior (1) What is the status of the marriage between Gigi
court declaration of nullity of the first marriage is required and Ric — valid, voidable or void? Explain. (2.5%)
by the Family Code only for the purpose of the validity of SUGGESTED ANSWER: Even if the Minister's license
the subsequent marriage, not as an element of the crime of expired, the marriage is valid if either or both Gigi and Ric
bigamy. believed in good faith that he had the legal authority to
solemnize marriage. While the authority of the solemnizing
Marriage; Void Marriages (2004) officer is a formal requisite of marriage, and at least one of
A. BONI and ANNE met while working overseas. They the parties must belong to the solemnizing officer's church,
became sweethearts and got engaged to be married on New the law provides that the good faith of the parties cures the
Year’s Eve aboard a cruise ship in the Caribbean. They defect in the lack of authority of the solemnizing officer
took the proper license to marry in New York City, where (Art. 35 par. 2, Family Code; Sempio-Diy, p. 34; Rabuya, The
there is a Filipino consulate. But as planned the wedding Law on Persons and Family Relations, p. 208).
ceremony was officiated by the captain of the Norwegian-
registered vessel in a private suite among selected friends. The absence of parental consent despite their having
married at the age of 18 is deemed cured by their continued
Back in Manila, Anne discovered that Boni had been cohabitation beyond the age of 21. At this point, their
married in Bacolod City 5 years earlier but divorced in Oslo marriage is valid (See Art. 45, Family Code).
only last year. His first wife was also a Filipina but now
based in Sweden. Boni himself is a resident of Norway (2) What is the status of the marriage between Ric
where he and Anne plan to live permanently. and Juliet — valid, voidable or void? (2.5%)
SUGGESTED ANSWER: The marriage between Juliet and Ric
Anne retains your services to advise her on whether her is void. First of all, the marriage is a bigamous marriage not
marriage to Boni is valid under Philippine law? Is there falling under Article 41 [Art. 35(4)Family Code], A
anything else she should do under the circumstances? (5%) subsisting marriage constitutes a legal impediment to re-
SUGGESTED ANSWER: marriage. Secondly, Juliet is below eighteen years of age.
If Boni is still a Filipino citizen, his legal capacity is The marriage is void even if consented to by her parents
governed by Philippine Law (Art. 15 Civil Code). Under
Page 34 of 119
[Art. 35(1), Family Code]. The fact that Ric was not aware Under Article 213 of the Family Code, no child under 7
of her real age is immaterial. years of age shall be separated from the mother unless the
court finds compelling reasons to order otherwise.
(3) Suppose Ric himself procured the falsified birth (1) Explain the rationale of this provision. (2.5%)
certificate to persuade Juliet to marry him despite her SUGGESTED ANSWER:
minority and assured her that everything is in order. The rationale of the 2nd paragraph of Article 213 of the
He did not divulge to her his prior marriage with Gigi. Family Code is to avoid the tragedy of a mother who sees
What action, if any, can Juliet take against him? her baby torn away from her. It is said that the maternal
Explain. (2.5%) affection and care during the early years of the child are
SUGGESTED ANSWER: Juliet can file an action for the generally needed by the child more than paternal care
declaration of nullity of the marriage on the ground that he (Hontiveros v. IAC, G.R. No. 64982, October 23, 1984;
willfully caused loss or injury to her in a manner that is Tolentino, Commentaries and Jurisprudence on the Civil
contrary to morals, good customs and public policy [Art. 21, Code, Volume One, pp. 718-719). The general rule is that a
New Civil Code]. She may also bring criminal actions for child below 7 years old shall not be separated from his
seduction, falsification, illegal marriage and bigamy against mother due to his basic need for her loving care (Espiritu v.
Ric. C.A., G.R. No. 115640, March 15,1995).
(2) Give at least 3 examples of "compelling reasons"
(4) If you were the counsel for Gigi, what action/s will
which justify the taking away from the mother's
you take to enforce and protect her interests? Explain.
custody of her child under 7 years of age. (2.5%)
(2.5%)
SUGGESTED ANSWER:
SUGGESTED ANSWER: I would file an action to declare the a. The mother is insane (Sempio-Diy, Handbook on
marriage between Juliet and Ric null and void ab initio and the Family Code of the Philippines, pp. 296-297);
for Ric's share in the co-ownership of that marriage to be b. The mother is sick with a disease that is com-
forfeited in favor and considered part of the absolute municable and might endanger the health and life
community in the marriage between Gigi and Ric [Arts. 148 of the child;
& 147, Family Code]. I would also file an action for c. The mother has been maltreating the child;
damages against Ric on the grounds that his acts constitute d. The mother is engaged in prostitution;
an abuse of right and they are contrary to law and morals, e. The mother is engaged in adulterous relationship;
causing damages to Gigi (See Arts 19, 20, 21, New Civil f. The mother is a drug addict;
Code). g. The mother is a habitual drunk or an alcoholic;
h. The mother is in jail or serving sentence.
Marriage; Void Marriages; Psychological Incapacity (2002) Parental Authority; Special Parental Authority; Liability of
A. Give a brief definition or explanation of the term Teachers (2003)
“psychological incapacity” as a ground for the declaration of If during class hours, while the teacher was chatting with
nullity of a marriage. (2%) other teachers in the school corridor, a 7 year old male pupil
B. If existing at the inception of marriage, would the stabs the eye of another boy with a ball pen during a fight,
state of being of unsound mind or the concealment of drug causing permanent blindness to the victim, who could be
addiction, habitual alcoholism, homosexuality or lesbianism liable for damages for the boy’s injury: the teacher, the
be considered indicia of psychological incapacity? Explain. school authorities, or the guilty boy’s parents? Explain.
(2%). SUGGESTED ANSWER:
SUGGESTED ANSWER: The school, its administrators, and teachers have special
A.” PSYCHOLOGICAL INCAPACITY” is a mental parental authority and responsibility over the minor child
disorder of the most serious type showing the incapability while under their supervision, instruction or custody (Article
of one or both spouses to comply the essential marital 218, FC). They are principally and solidarily liable for the
obligations of love, respect, cohabitation, mutual help and damages caused by the acts or omissions of the
support, trust and commitment. It must be characterized by unemancipated minor unless they exercised the proper
Juridical antecedence, gravity and incurability and its root diligence required under the circumstances (Article 219,
causes must be clinically identified or examined. (Santos v. FC). In the problem, the TEACHER and the SCHOOL
CA, 240 SCRA 20 [1995]). AUTHORITIES are liable for the blindness of the victim,
because the student who cause it was under their special
B. In the case of Santos v. Court of Appeals, 240 SCRA 20 parental authority and they were negligent. They were
(1995), the Supreme Court held that being of unsound mind, negligent because they were chatting in the corridor during
drug addiction, habitual alcoholism, lesbianism or the class period when the stabbing incident occurred. The
homosexuality may be indicia of psychological incapacity, incident could have been prevented had the teacher been
depending on the degree of severity of the disorder. inside the classroom at that time. The guilty boy’s
However, the concealment of drug addiction, habitual PARENTS are subsidiarily liable under Article 219 of the
alcoholism, lesbianism or homosexuality is a ground of
Family Code.
annulment of marriage.
Parental Authority; Substitute vs. Special (2004)
Parental Authority; Child under 7 years of age (2006)
Page 35 of 119
Distinguish briefly but clearly between: Substitute parental sperm. After a series of test, Andy's sperm was medically
authority and special parental authority. introduced into Beth's ovary. She became pregnant and 9
SUGGESTED ANSWER: months later, gave birth to a baby boy, named Alvin.
In substitute parental authority, the parents lose their (1) Who is the Father of Alvin? Explain. (2.5%)
parental authority in favor of the substitute who acquires it SUGGESTED ANSWER:
to the exclusion of the parents. Andy is the biological father of Alvin being the source of
the sperm. Andy is the legal father of Alvin because there
In special parental authority, the parents or anyone was neither consent nor ratification to the artificial
exercising parental authority does not lose parental insemination. Under the law, children conceived by artificial
authority. Those who are charged with special parental insemination are legitimate children of the spouses,
authority exercise such authority only during the time that provided, that both of them authorized or ratified the
the child is in their custody or supervision. insemination in a written instrument executed and signed by
both of them before the birth of the child (Art. 164, Family
Substitute parental authority displaces parental authority Code).
while special parental authority concurs with parental
authority. (2) What are the requirements, if any, in order for Ed
to establish his paternity over Alvin. (2.5%)
Paternity & Filiation (1999) SUGGESTED ANSWER:
(a) Two (2) months after the death of her husband who was The following are the requirements for Ed to establish his
shot by unknown criminal elements on his way home from paternity over Alvin:
office, Rose married her childhood boyfriend, and seven (7) a. The artificial insemination has been authorized or
months after said marriage, she delivered a baby. In the ratified by the spouses in a written instrument
absence of any evidence from Rose as to who is her child's executed and signed by them before the birth of the
father, what status does the law give to said child? Explain. child; and
(2%) b. The written instrument is recorded in the civil registry
SUGGESTED ANSWER: together with the birth certificate of the child (Art.
(a) The child is legitimate of the second marriage under 164, 2nd paragraph, Family Code).
Article 168(2) of the Family Code which provides that a
"child born after one hundred eighty days following the Paternity & Filiation; Common-Law Union (2004)
celebration of the subsequent marriage is considered to A. RN and DM, without any impediment to marry each
have been conceived during such marriage, even though it other, had been living together without benefit of church
be born within three hundred days after the termination of blessings. Their common-law union resulted in the birth of
the former marriage." ZMN. Two years later, they got married in a civil
ceremony. Could ZMN be legitimated? Reason. (5%)
Paternity & Filiation; Proofs (1999) SUGGESTED ANSWER:
(b) Nestor is the illegitimate son of Dr. Perez. When Dr. ZMN was legitimated by the subsequent marriage of RN
Perez died, Nestor intervened in the settlement of his and DM because at the time he was conceived, RN and DM
father's estate, claiming that he is the illegitimate son of said could have validly married each other. Under the Family
deceased, but the legitimate family of Dr. Perez is denying Code children conceived and born outside of wedlock of
Nestor's claim. What evidence or evidences should Nestor parents who, at the time of the former's conception, were
present so that he may receive his rightful share in his not disqualified by any impediment to marry each other are
father's estate? (3%) legitimated by the subsequent marriage of the parents.
SUGGESTED ANSWER:
(b) To be able to inherit, the illegitimate filiation of Paternity & Filiation; Proofs; Limitations; Adopted Child
Nestor must have been admitted by his father in any of the (1995)
following: Abraham died intestate on 7 January 1994 survived by his
(1) the record of birth appearing in the civil register, son Braulio. Abraham's older son Carlos died on 14
(2) a final judgment, February 1990.
(3) a public document signed by the father, or Danilo who claims to be an adulterous child of Carlos
(4) a private handwritten document signed by the lather intervenes in the proceedings for the settlement of the
(Article 17S in relation to Article 172 of the Family estate of Abraham in representation of Carlos. Danilo was
Code). legally adopted on 17 March 1970 by Carlos with the
consent of the " latter's wife.
Paternity & Filiation; Artificial Insemination; Formalities 1. Under the Family Code, how may an illegitimate filiation
(2006) be proved? Explain.
Ed and Beth have been married for 20 years without 2. As lawyer for Danilo, do you have to prove Danilo's
children. Desirous to have a baby, they consulted Dr. Jun illegitimate filiation? Explain.
Canlas, a , prominent medical specialist on human fertility. 3. Can Danilo inherit from Abraham in representation of
He advised Beth to undergo artificial insemination. It was his father Carlos? Explain.
found that Ed’s sperm count was inadequate to induce SUGGESTED ANSWER:
pregnancy Hence, the couple looked for a willing donor. 1. Under Art. 172 in relation to Art. 173 andArt. 175 of the
Andy the brother of Ed, readily consented to donate his FC, the filiation of illegitimate children may be established
Page 36 of 119
in the same way and by the same evidence as legitimate recognition of an illegitimate child can be brought at any
children. Art. 172 provides that the filiation of legitimate time during the lifetime of the child. However, if the action
children is established by any of the following: (1) the is based on "open and continuous possession of the status
record of birth appearing in the civil register or a final of an illegitimate child, the same can be filed during the
Judgment; or (2) an admission of legitimate filiation in a lifetime of the putative father."
public document or a private handwritten instrument and
signed by the parent concerned. In the absence of the In the present case, the action for compulsory recognition
foregoing evidence, the legitimate filiation shall be proved was filed by Joey's mother, Dina, on May 16,1994, after the
by: (1) the open and continuous possession of the status of death of Steve, the putative father. The action will prosper if
a legitimate child; or (2) any other means allowed by the Joey can present his birth certificate that bears the signature
Rules of Court and special laws. of his putative father. However, the facts clearly state that
SUGGESTED ANSWER: the birth certificate of Joey did not indicate the father's
2. No. Since Danilo has already been adopted by Carlos, name. A birth certificate not signed by the alleged father
he ceased to be an illegitimate child. An adopted child cannot be taken as a record of birth to prove recognition of
acquires all the rights of a legitimate child under Art, 189 of the child, nor can said birth certificate be taken as a
the FC. recognition in a public instrument. (Reyes v. Court of
SUGGESTED ANSWER: Appeals, G.R. No. 39537, March 19, 1985) Consequently, the
3. No, he cannot. Danilo cannot represent Carlos as the
action filed by Joey's mother has already prescribed.
latter's adopted child in the inheritance of Abraham because
adoption did not make Danilo a legitimate grandchild of b) Are the defenses set up by Tintin tenable?
Abraham. Adoption is personal between Carlos and Danilo. Explain. (2%)
He cannot also represent Carlos as the latter's illegitimate SUGGESTED ANSWER:
child because in such case he is barred by Art. 992 of the Yes, the defenses of Tintin are tenable. In Tayag v. Court of
NCC from inheriting from his illegitimate grandfather Appeals (G.R. No. 95229, June 9,1992), a complaint to
Abraham. compel recognition of an illegitimate child was brought
ALTERNATIVE ANSWER: before effectivity of the Family Code by the mother of a
An adopted child's successional rights do not include the minor child based on "open and continuous possession of
right to represent his deceased adopter in the inheritance of the status of an illegitimate child." The Supreme Court held
the latter's legitimate parent, in view of Art. 973 which that the right of action of the minor child has been vested
provides that in order that representation may take place, by the filing of the complaint in court under the regime of
the representative must himself be capable of succeeding the Civil Code and prior to the effectivity of the Family
the decedent. Adoption by itself did not render Danilo an Code. The ruling in Tayag v. Court of Appeals finds no
heir of the adopter's legitimate parent. Neither does his application in the instant case. Although the child was born
being a grandchild of Abraham render him an heir of the before the effectivity of the Family Code, the complaint was
latter because as an illegitimate child of Carlos, who was a filed after its effectivity. Hence, Article 175 of the Family
legitimate child of Abraham, Danilo is incapable of
Code should apply and not Article 285 of the Civil Code.
succeeding Abraham under Art. 992 of the Code.
c) Supposing that Joey died during the pendency of
Paternity & Filiation; Recognition of illegitimate Child (2005) the action, should the action be dismissed? Explain.
Steve was married to Linda, with whom he had a daughter, (2%)
Tintin. Steve fathered a son with Dina, his secretary of 20 SUGGESTED ANSWER:
years, whom Dina named Joey, born on September 20, If Joey died during the pendency of the action, the action
1981. Joey's birth certificate did not indicate the father's should still be dismissed because the right of Joey or his
name. Steve died on August 13, 1993, while Linda died on heirs to file the action has already prescribed. (Art. 175,
December 3, 1993, leaving their legitimate daughter, Tintin, Family Code)
as sole heir. On May 16, 1994, Dina filed a case on behalf of
Joey, praying that the latter be declared an acknowledged Paternity & Filiation; Rights of Legitimate Children (1990)
illegitimate son of Steve and that Joey be given his share in B and G (college students, both single and not disqualified
Steve's estate, which is now being solely held by Tintin. to marry each other) had a romantic affair, G was seven
Tintin put up the defense that an action for recognition months in the family way as of the graduation of B. Right
shall only be filed during the lifetime of the presumed after graduation B went home to Cebu City. Unknown to
parents and that the exceptions under Article 285 of the G, B had a commitment to C (his childhood sweetheart) to
Civil Code do not apply to him since the said article has marry her after getting his college degree. Two weeks after
been repealed by the Family Code. In any case, according to B marriage in Cebu City, G gave birth to a son E in Metro
Tintin, Joey's birth certificate does not show that Steve is his Manila.
father. After ten years of married life in Cebu, B became a widower
a) Does Joey have a cause of action against Tintin for by the sudden death of C in a plane crash. Out of the union
recognition and partition? Explain. (2%) of B and C, two children, X and Y were born. Unknown to
SUGGESTED ANSWER: C while on weekend trips to Manila during the last 5 years
No, Joey does not have a cause of action against Tintin for of their marriage, B invariably visited G and lived at her
recognition and partition. Under Article 175 of the Family residence and as a result of which, they renewed their
Code, as a general rule, an action for compulsory relationship. A baby girl F was born to B and G two years
Page 37 of 119
before the death of C. Bringing his family later to Manila, B Paulita left the conjugal home because of the excessive
finally married G. Recently. G died. drinking of her husband, Alberto. Paulita, out of her own
What are the rights of B's four children: X and Y of his first endeavor, was able to buy a parcel of land which she was
marriage; and E and F, his children with G? Explain your able to register under her name with the addendum
answer. "widow." She also acquired stocks in a listed corporation
SUGGESTED ANSWER: registered in her name. Paulita sold the parcel of land to
Under the facts stated, X and Y are legitimate children of B Rafael, who first examined the original of the transfer
and C. E is the legitimate children of B and G. E is the certificate of title.
legitimated child of B&G. F is the illegitimate child of B and 1) Has Alberto the right to share in the shares of stock
C. As legitimate children of B and C, X and Y have the acquired by Paulita?
following rights: 2) Can Alberto recover the land from Rafael?
1) To bear the surnames of the father and the mother, in SUGGESTED ANSWER:
conformity with the provisions of the Civil Code on 1. a) Yes. The Family Code provides that all property
Surnames; acquired during the marriage, whether the acquisition
2) To receive support from their parents, their ascendants, appears to have been made, contracted or registered in the
and in proper cases, their brothers and sisters, in- name of one or both spouses, is presumed to be absolute
conformity with the provisions of the Family Code on community property unless the contrary is proved.
Support; and
3) To be entitled to the legitime and other successional b) Yes. The shares are presumed to be absolute community
rights granted to them by the Civil Code. (Article 174, property having been acquired during the marriage despite
Family Code). the fact that those shares were registered only in her name.
Alberto's right to claim his share will only arise, however, at
E is the legitimated child of B and G. Under Art. 177 of the dissolution.
Family Code, only children conceived and born outside of
wedlock of parents who, at the time of the conception of c) The presumption is still that the shares of stock are
the former, were not disqualified by any impediment to owned in common. Hence, they will form part of the
marry each other may be legitimated. E will have the same absolute community or the conjugal partnership depending
rights as X and Y. on what the property Relations is.
F is the illegitimate child of B and G. F has the right to use d) Since Paulita acquired the shares of stock by onerous
the surname of G, her mother, and is entitled to support as title during the marriage, these are part of the conjugal or
well as the legitime consisting of 1/2 of that of each of X, Y absolute community property, as the case maybe (depending
and E. (Article 176, Family Code) on whether the marriage was celebrated prior to. or after,
the effectivity of the Family Code). Her physical separation
Presumptive Legitime (1999) from her husband did not dissolve the community of
What do you understand by "presumptive legitime", in what property. Hence, the husband has a right to share in the
case or cases must the parent deliver such legitime to the shares of stock.
children, and what are the legal effects in each case if the
parent fails to do so? (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: 2) a) Under a community of property, whether absolute or
PRESUMPTIVE LEGITIME is not defined in the law. Its relative, the disposition of property belonging to such
definition must have been taken from Act 2710, the Old community is void if done by just one spouse without the
Divorce Law, which required the delivery to the legitimate consent of the other or authority of the proper court.
children of "the equivalent of what would have been due to However, the land was registered in the name of Paulita as
them as their legal portion if said spouse had died intestate "widow". Hence, the buyer has the right to rely upon what
immediately after the dissolution of the community of appears in the record of the Register of Deeds and should,
property." As used in the Family Code, presumptive consequently, be protected. Alberto cannot recover the land
legitime is understood as the equivalent of the legitimate from Rafael but would have the right of recourse against his
children's legitimes assuming that the spouses had died wife
immediately after the dissolution of the community of
property. b) The parcel of land is absolute community property
having been acquired during the marriage and through
Presumptive legitime is required to be delivered to the Paulita's industry despite the registration being only in the
common children of the spouses when the marriage is name of Paulita. The land being community property, its
annulled or declared void ab initio and possibly, when the sale to Rafael without the consent of Alberto is void.
conjugal partnership or absolute community is dissolved as However, since the land is registered in the name of Paulita
in the case of legal separation. Failure of the parents to as widow, there is nothing in the title which would raise a
deliver the presumptive legitime will make their subsequent suspicion for Rafael to make inquiry. He, therefore, is an
marriage null and void under Article 53 of the Family Code. innocent purchaser for value from whom the land may no
longer be recovered.
Property Relations; Absolute Community (1994)
Page 38 of 119
c) No. Rafael is an innocent purchaser in good faith who, 1. Since Bob and Sofia got married In 1970, then the law
upon relying on the correctness of the certificate of title, that governs is the New Civil Code (Persons), in which case,
acquires rights which are to be protected by the courts. the property relations that should be applied as regards the
property of the spouses is the system of relative community
Under the established principles of land registration law, the or conjugal partnership of gains (Article 119, Civil Code).
presumption is that the transferee of registered land is not By conjugal partnership of gains, the husband and the wife
aware of any defect in the title of the property he purchased. place in a common fund the fruits of their separate property
(See Tojonera v. Court of Appeals, 103 SCRA 467). Moreover, and the income from their work or Industry (Article 142,
the person dealing with registered land may safely rely on Civil Code). In this instance, the lot inherited by Bob in
the correctness of its certificate of title and the law will in 1975 is his own separate property, he having acquired the
no way oblige him to go behind the certificate to determine same by lucrative title (par. 2, Art. 148, Civil Code).
the condition of the property. [Director of Lands v. Abache, However, the house constructed from his own savings in
et al. 73 Phil. 606). No strong considerations of public policy 1981 during the subsistence of his marriage with Issa is
have been presented which would lead the Court to reverse conjugal property and not exclusive property in accordance
the established and sound doctrine that the buyer in good with the principle of "reverse accession" provided for in
faith of a registered parcel of land does not have to look Art. 158, Civil Code.
beyond the Torrens Title and search for any hidden defect ANOTHER ANSWER:
or inchoate right which may later invalidate or diminish his 1. Sofia, being her deceased son's legal heir concurring
right to what he purchased. (Lopez v. Court of Appeals. 189 with his surviving spouse (Arts. 985, 986 and 997, Civil
SCRA 271) Code), may rightfully claim that the house and lot are not
conjugal but belong to the hereditary estate of Bob. The
d) The parcel of land is absolute community property value of the land being more than the cost of the
having been acquired during the marriage and through improvement (Art. 120, Family Code).
Paulita's industry despite registration only in the name of
Paulita. The land being community property, its sale to SUGGESTED ANSWER:
2. Yes, the answer would still be the same. Since Bob and
Rafael without the consent of Alberto is void.
Issa contracted their marriage way back in 1970, then the
Property Relations; Ante Nuptial Agreement (1995) property relations that will govern is still the relative
Suppose Tirso and Tessie were married on 2 August 1988 community or conjugal partnership of gains (Article 119,
without executing any ante nuptial agreement. One year Civil Code). It will not matter if Bob died before or after
after their marriage, Tirso while supervising the clearing of August 3. 1988 (effectivity date of the Family Code], what
Tessie's inherited land upon the latter's request, accidentally matters is the date when the marriage was contracted. As
found the treasure not in the new river bed but on the Bob and Issa contracted their marriage way back in 1970.
property of Tessie. To whom shall the treasure belong? the property relation that governs them is still the conjugal
Explain. partnership of gains. (Art. 158, Civil Code)
SUGGESTED ANSWER: ANOTHER ANSWER:
Since Tirso and Tessie were married before the effectivity of 2. If Bob died be fore August 3, 1988. which is the date
the Family Code, their property relation is governed by the Family Code took effect, the answer will not be the
conjugal partnership of gains. Under Art. 54 of the Civil same. Art. 158. Civil Code, would then apply. The land
Code, the share of the hidden treasure which the law awards would then be deemed conjugal, along with the house, since
to the finder or the proprietor belongs to the conjugal conjugal funds were used in constructing it. The husband's
partnership of gains. The one-half share pertaining to Tessie estate would be entitled to a reimbursement of the value of
as owner of the land, and the one-half share pertaining to the land from conjugal partnership funds.
Tirso as finder of the treasure, belong to the conjugal
Property Relations; Marriage Settlement; Conjugal
partnership of gains.
Partnership of Gains (2005)
Property Relations; Conjugal Partnership of Gains (1998) Gabby and Mila got married at Lourdes Church in Quezon
In 1970, Bob and Issa got married without executing a City on July 10, 1990. Prior thereto, they executed a
marriage settlement. In 1975, Bob inherited from his father marriage settlement whereby they agreed on the regime of
a residential lot upon which, in 1981, he constructed a two- conjugal partnership of gains. The marriage settlement was
room bungalow with savings from his own earnings. At that registered in the Register of Deeds of Manila, where Mila is
time, the lot was worth P800.000.00 while the house, when a resident. In 1992, they jointly acquired a residential house
finished cost P600,000.00. In 1989 Bob died, survived only and lot, as well as a condominium unit in Makati. In 1995,
by his wife, Issa and his mother, Sofia. Assuming that the they decided to change their property relations to the
relative values of both assets remained at the same regime of complete separation of property. Mila consented,
proportion: as she was then engaged in a lucrative business. The spouses
1. State whether Sofia can rightfully claim that the house then signed a private document dissolving their conjugal
and lot are not conjugal but exclusive property of her partnership and agreeing on a complete separation of
deceased son. [3%] property.
2. Will your answer be the same if Bob died before
August 3, 1988? [2%]
SUGGESTED ANSWER:
Page 39 of 119
Thereafter, Gabby acquired a mansion in Baguio City, and a Bar Candidates Patricio Mahigugmaon and Rowena Amor
5-hectare agricultural land in Oriental Mindoro, which he decided to marry each other before the last day of the 1991
registered exclusively in his name. Bar Examinations. They agreed to execute a Marriage
In the year 2000, Mila's business venture failed, and her Settlement. Rowena herself prepared the document in her
creditors sued her for P10,000,000.00. After obtaining a own handwriting. They agreed on the following: (1) a
favorable judgment, the creditors sought to execute on the conjugal partnership of gains; (2) each donates to the other
spouses' house and lot and condominium unit, as well as fifty percent (50%) of his/her present property, (3) Rowena
Gabby's mansion and agricultural land. shall administer the conjugal partnership property; and (4)
a) Discuss the status of the first and the amended neither may bring an action for the annulment or
marriage settlements. (2%) declaration of nullity of their marriage. Both signed the
SUGGESTED ANSWER: agreement in the presence of two (2) witnesses. They did
The marriage settlement between Gabby and Mila adopting not, however, acknowledge it before a notary public.
the regime of conjugal partnership of gains still subsists. It is A. As to form, is the Marriage Settlement valid? May it be
not dissolved by the mere agreement of the spouses during registered in the registry of property? If not, what steps
the marriage. It is clear from Article 134 of the Family Code must be taken to make it registerable?
that in the absence of an express declaration in the marriage B. Are the stipulations valid?
settlement, the separation of property between the spouses C. If the Marriage Settlement is valid as to form and the
during the marriage shall not take place except by judicial above stipulations are likewise valid, does it now follow
order. that said Marriage Settlement is valid and enforceable?
SUGGESTED ANSWER:
b) Discuss the effects of the said settlements on the A. Yes, it is valid as to form because it is in writing.
properties acquired by the spouses. (2%) No, it cannot be registered in the registry of property
SUGGESTED ANSWER: because it is not a public document. To make it registerable,
The regime of conjugal partnership of gains governs the
it must be reformed and has to be notarized.
properties acquired by the spouses. All the properties
acquired by the spouses after the marriage belong to the SUGGESTED ANSWER:
conjugal partnership. Under Article 116 of the Family Code, B. Stipulations (1) and (3) are valid because they are not
even if Gabby registered the mansion and 5-hectare contrary to law. Stipulation (4) is void because it is
agricultural land exclusively in his name, still they are contrary to law. Stipulation (2) is valid up to 1/5 of their
presumed to be conjugal properties, unless the contrary is respective present properties but void as to the excess (Art
84, Family Code).
proved.
c) What properties may be held answerable for SUGGESTED ANSWER:

Mila's obligations? Explain. (2%) C. No. on September 15, 1991, the marriage settlement is
ALTERNATIVE ANSWER: not yet valid and enforceable until the celebration of the
Since all the properties are conjugal, they can be held marriage, to take place before the last day of the 1991 bar
answerable for Mila's obligation if the obligation redounded Examinations.
to the benefit of the family. (Art. 121 [3], Family Code)
However, the burden of proof lies with the creditor Property Relations; Marriage Settlements (1995)
claiming against the properties. (Ayala Investment v. Court On 10 September 1988 Kevin, a 26-year old businessman,
of Appeals, G.R. No. 118305, February 12,1998, reiterated in married Karla, a winsome lass of 18. Without the
Homeowners Savings & Loan Bank v. Dailo, G.R. No. knowledge of their parents or legal guardians, Kevin and
153802, March 11, 2005) Karla entered into an ante-nuptial contract the day before
ALTERNATIVE ANSWER: their marriage stipulating that conjugal partnership of gains
Except for the residential house which is the family home, shall govern their marriage. At the time of their marriage
all other properties of Gabby and Mila may be held Kevin's estate was worth 50 Million while Karla's was
answerable for Mila's obligation. Since the said properties valued at 2 Million.
are conjugal in nature, they can be held liable for debts and A month after their marriage Kevin died in a freak
obligations contracted during the marriage to the extent that helicopter accident. He left no will, no debts, no obligations.
the family was benefited or where the debts were contracted Surviving Kevin, aside from Karla, are his only relatives: his
by both spouses, or by one of them, with the consent of the brother Luis and first cousin Lilia.
other. 1) What property Relations governed the marriage of
Kevin and Karla? Explain.
A family home is a dwelling place of a person and his 2) Determine the value of the estate of Kevin,
family. It confers upon a family the right to enjoy such 3) Who are Kevin's heirs?
property, which must remain with the person constituting it 4) How much is each of Kevin's heirs entitled to
as a family home and his heirs. It cannot be seized by inherit?
creditors except in special cases. (Taneo, Jr. v. Court of SUGGESTED ANSWER:
Appeals, G.R. No. 108532, March 9, 1999) 1. Since the marriage settlement was entered into without
the consent and without the participation of the parents
Property Relations; Marriage Settlements (1991) (they did not sign the document), the marriage settlement is
invalid applying Art. 78, F.C. which provides that a minor
Page 40 of 119
who according to law may contract marriage may also enter together, Rico was a salaried employee and Mabel kept
into marriage settlements but they shall be valid only if the house for Rico and did full-time household chores for him.
person who may give consent to the marriage are made During their cohabitation, a parcel of coconut land was
parties to the agreement. (Karla was still a minor at the time acquired by Rico from his savings.
the marriage settlement was executed in September 1988
because the law, R.A. 6809, reducing the age of majority to After living together for one (1) year, Rico and Mabel
18 years took effect on 18 December 1989). The marriage separated. Rico then met and married Letty, a single woman
settlement being void, the property Relations governing the twenty-six (26) years of age. During the marriage of Rico
marriage is, therefore, absolute community of property, and Letty, Letty bought a mango orchard out of her own
under Art. 75 of the FC. personal earnings.
a) Who would own the riceland, and what property
2. All the properties which Kevin and Karla owned at the Relations governs the ownership? Explain.
time of marriage became community property which shall b) Who would own the coconut land, and what property
be divided equally between them at dissolution. Since Kevin Relations governs the ownership? Explain.
owned 50 Million and Karla. 2 Million, at the time of the c) Who would own the mango orchard, and what
marriage, 52 Million constituted their community property. property Relations governs the ownership? Explain.
Upon the death of Kevin, the community was dissolved and SUGGESTED ANSWER:
half of the 52 Million or 26 Million is his share in the (a) Rico and Cora are the co-owners of the riceland. The
Relations is that of co-ownership (Art. 147, Family Code,
community. This 26 Million therefore is his estate.
first paragraph).
(Optional Addendum: However, after Rico's marriage to Letty,
3. Karla and Luis are the Intestate heirs of Kevin.
the half interest of Rico in the riceland will then become absolute
4. They are entitled to share the estate equally under community property of Rico and Letty.)
Article 1001 of the NCC. Therefore. Karla gets 13 Million
(b) Rico is the exclusive owner of the coconut land. The
and Luis gets 13 Million.
Relations is a sole/single proprietorship (Art. 148. Family
Code, first paragraph is applicable, and not Art. 147 Family
Property Relations; Obligations; Benefit of the Family Code).
(2000) (Optional Addendum: However, after Rico's marriage to Letty,
As finance officer of K and Co., Victorino arranged a loan the coconut land of Rico will then become absolute community
of P5 Million from PNB for the corporation. However, he property of Rico and Letty.)
was required by the bank to sign a Continuing Surety
Agreement to secure the repayment of the loan. The (c) Rico and Letty are the co-owners. The Relations is the
corporation failed to pay the loan, and the bank obtained a Absolute Community of Property (Arts, 75,90and9l, Family
judgment against it and Victorino, jointly and severally. To Code).
enforce the judgment, the sheriff levied on a farm owned by
the conjugal partnership of Victorino and his wife Elsa. Is Property Relations; Unions without Marriage (1997)
the levy proper or not? (3%) Luis and Rizza, both 26 years of age and single, live
SUGGESTED ANSWER: exclusively with each other as husband and wife without the
The levy is not proper there being no showing that the benefit of marriage, Luis is gainfully employed, Rizza is not
surety agreement executed by the husband redounded to the employed, stays at home, and takes charge of the household
benefit of the family. An obligation contracted by the chores.
husband alone is chargeable against the conjugal partnership After living together for a little over twenty years, Luis was
only when it was contracted for the benefit of the family. able to save from his salary earnings during that period the
When the obligation was contracted on behalf of the family amount of P200,000.00 presently deposited in a bank. A
business the law presumes that such obligation will redound house and lot worth P500,000.00 was recently purchased for
to the benefit of the family. However, when the obligation the same amount by the couple. Of the P500.000.00 used by
was to guarantee the debt of a third party, as in the the common-law spouses to purchase the property,
problem, the obligation is presumed for the benefit of the P200.000.00 had come from the sale of palay harvested
third party, not the family. Hence, for the obligation under from the hacienda owned by Luis and P300,000.00 from the
the surety agreement to be chargeable against the rentals of a building belonging to Rizza. In fine, the sum of
partnership it must be proven that the family was benefited P500.000.00 had been part of the fruits received during the
and that the benefit was a direct result of such agreement, period of cohabitation from their separate property, a car
(Ayala Investment v. Ching, 286 SCRA 272)
worth P100.000.00. being used by the common-law
spouses, was donated Just months ago to Rizza by her
Property Relations; Unions without Marriage (1992) parents.
In 1989, Rico, then a widower forty (40) years of age, Luis and Rizza now decide to terminate their cohabitation,
cohabited with Cora, a widow thirty (30) years of age. While
and they ask you to give them your legal advice on the
living together, they acquired from their combined earnings
following:
a parcel of riceland. (a) How, under the law should the bank deposit of
P200,000.00 the house and lot valued at P500.000.00 and
After Rico and Cora separated, Rico lived together with
the car worth P100.000.00 be allocated to them?
Mabel, a maiden sixteen (16) years of age. While living
Page 41 of 119
(b) What would your answer be (to the above question) had a) Who will be entitled to the house and lot? (3%)
Luis and Rizza been living together all the time, ie., since SUGGESTED ANSWER:
twenty years ago, under a valid marriage? Tony and Susan are entitled to the house and lot as co-
SUGGESTED ANSWER: owners in equal shares. Under Article 147 of the Family
a) Art. 147 of the Family Code provides in part that when a Code, when a man and a woman who are capacitated to
man and a woman who are capacitated to marry each other, marry each other lived exclusively with each other as
live exclusively with each other as husband and wife without husband and wife, the property acquired during their
the benefit of marriage or under a void marriage, their cohabitation are presumed to have been obtained by their
wages and salaries shall be owned by them in equal shares joint efforts, work or industry and shall be owned by them
and the property acquired by both of them through their in equal shares. This is true even though the efforts of one
work or industry shall be governed by the rules of co- of them consisted merely in his or her care and maintenance
ownership. of the family and of the household.
In the absence of proof to the contrary, properties acquired
while they lived together shall be presumed to have been b) Would it make any difference if Tony could not marry
obtained by their Joint efforts, worker Industry, and shall be Susan because he was previously married to Alice from
owned by them in equal shares. A party who did not whom he is legally separated? (2%)
participate in the acquisition by the other party of any SUGGESTED ANSWER:
property shall be deemed to have contributed jointly in the Yes, it would make a difference. Under Article 148 of the
acquisition thereof if the former's efforts consisted in the Family Code, when the parties to the cohabitation could not
care and maintenance of the family and of the household. marry each other because of an impediment, only those
Thus: properties acquired by both of them through their actual
1) the wages and salaries of Luis in the amount of joint contribution of money, property, or Industry shall be
P200,000.00 shall be divided equally between Luis and owned by them in common in proportion to their
Rizza. respective contributions. The efforts of one of the parties in
2) the house and lot valued at P500.000.00 having been maintaining the family and household are not considered
acquired by both of them through work or industry shall be adequate contribution in the acquisition of the properties.
divided between them in proportion to their respective
contribution, in consonance with the rules on co-ownership. Since Susan did not contribute to the acquisition of the
Hence, Luis gets 2\5 while Rizza gets 3\5 of P500.000.00. house and lot, she has no share therein. If Tony cohabited
3) the car worth P100,000.00 shall be exclusively owned by with Susan after his legal separation from Alice, the house
and lot is his exclusive property. If he cohabited with Susan
Rizza, the same having been donated to her by her parents.
before his legal separation from Alice, the house and lot
SUGGESTED ANSWER: belongs to his community or partnership with Alice.
(b) The property relations between Luis and Rizza, their
marriage having been celebrated 20 years ago (under the
Civil Code) shall be governed by the conjugal partnership of SUCCESSION
gains, under which the husband and wife place in a
common fund the proceeds, products, fruits and income Amount of Successional Rights (2004)
from their separate properties and those acquired by either Mr. XT and Mrs. YT have been married for 20 years.
or both spouses through their efforts or by chance, and Suppose the wife, YT, died childless, survived only by her
upon dissolution of the marriage or of the partnership, the husband, XT. What would be the share of XT from her
net gains or benefits obtained by either or both spouse shall estate as inheritance? Why? Explain. (5%)
be divided equally between them (Art. 142. Civil Code). SUGGESTED ANSWER:
Thus: Under the Civil Code, the widow or widower is a legal and
1) The salary of Luis deposited in the bank in the amount compulsory heir of the deceased spouse. If the widow is the
of P200.000.00 and the house and lot valued at P500,000.00 only surviving heir, there being no legitimate ascendants,
shall be divided equally between Luis and Rizza. descendants, brothers, and sisters, nephews and nieces, she
2) However, the car worth P100.000,00 donated to Rizza gets the entire estate.
by her parents shall be considered to her own paraphernal
property, having been acquired by lucrative title (par. 2, Art. Barrier between illegitimate & legitimate relatives (1993)
148, Civil Code). A is the acknowledged natural child of B who died when A
was already 22 years old. When B's full blood brother, C,
Property Relations; Unions without Marriage (2000) died he (C) was survived by his widow and four children of
For five years since 1989, Tony, a bank Vice-president, and his other brother D. Claiming that he is entitled to inherit
Susan, an entertainer, lived together as husband and wife from his father's brother C. A brought suit to obtain his
without the benefit of marriage although they were share in the estate of C.
capacitated to many each other. Since Tony's salary was Will his action prosper?
more than enough for their needs, Susan stopped working SUGGESTED ANSWER:
and merely "kept house". During that period, Tony was able No, the action of A will not prosper. On the premise that B,
to buy a lot and house in a plush subdivision. However, C and D are legitimate brothers, as an illegitimate child of B,
A cannot inherit in intestacy from C who is a legitimate
after five years, Tony and Susan decided to separate.
brother of B. Only the wife of C in her own right and the
Page 42 of 119
legitimate relatives of C (i.e. the children of D as C's How will you rule on Jorge's opposition to the probate of
legitimate nephews inheriting as collateral relatives) can Maria's will. If you were the Judge?
inherit in intestacy. (Arts. 992, 1001, 1OO5 and 975, Civil SUGGESTED ANSWER:
Code) As Judge, I shall rule as follows: Jorge's opposition should
ALTERNATIVE ANSWER: be sustained in part and denied in part. Jorge's omission as
The action of A will not prosper. Being an illegitimate, he is spouse of Maria is not preterition of a compulsory heir in
barred by Article 992 of the Civil Code from inheriting ab the direct line. Hence, Art. 854 of the Civil Code does not
intestato from the legitimate relatives of his father. apply, and the institution of Miguela as heir is valid, but only
to the extent of the free portion of one-half. Jorge is still
Barrier between illegitimate & legitimate relatives (1996) entitled to one-half of the estate as his legitime. (Art. 1001,
Cristina the illegitimate daughter of Jose and Maria, died Civil Code)
intestate, without any descendant or ascendant. Her valuable ALTERNATIVE ANSWERS:
estate is being claimed by Ana, the legitimate daughter of a) As Judge, I shall rule as follows: Jorge's opposition should
Jose, and Eduardo, the legitimate son of Maria. be sustained in part and denied in part. This is a case of
Is either, both, or neither of them entitled to inherit? ineffective disinheritance under Art, 918 of the Civil Code,
Explain. because the omission of the compulsory heir Jorge by Maria
SUGGESTED ANSWER: was intentional. Consequently, the institution of Miguela as
Neither Ana nor Eduardo is entitled to inherit of ab heir is void only insofar as the legitime of Jorge is
intestato from Cristina. Both are legitimate relatives of prejudiced. Accordingly, Jorge is entitled to his legitime of
Cristina's illegitimate parents and therefore they fall under one-half of the estate, and Miguela gets the other half.
the prohibition prescribed by Art. 992, NCC (Manuel v.
Ferrer, 242 SCRA 477; Diaz v. Court of Appeals, 182 SCRA b) As Judge, I shall rule as follows: Jorge's opposition
427). should be sustained. This is a case of preterition under
Article 854 Civil Code, the result of the omission of Jorge as
Collation (1993) compulsory heir having the same right equivalent to a
Joaquin Reyes bought from Julio Cruz a residential lot of legitimate child "in the direct line" is that total intestacy will
300 square meters in Quezon City for which Joaquin paid arise, and Jorge will inherit the entire estate.
Julio the amount of P300,000.00, When the deed was about
to be prepared Joaquin told Julio that it be drawn in the c) As Judge, I shall rule as follows: the opposition should
name of Joaquina Roxas, his acknowledged natural child. be denied since it is predicated upon causes not recognized
Thus, the deed was so prepared and executed by Julio. by law as grounds for disallowance of a wll, to wit:
Joaquina then built a house on the lot where she, her 1. that the will was made without his knowledge;
husband and children resided. Upon Joaquin's death, his 2. that the will was made without his consent; and
legitimate children sought to recover possession and 3. that it has the effect of depriving him of his
ownership of the lot, claiming that Joaquina Roxas was but legitime, which is a ground that goes into the
a trustee of their father. intrinsic validity of the will and need not be
Will the action against Joaquina Roxas prosper? resolved during the probate proceedings.
SUGGESTED ANSWER: However, the opposition may be entertained for,
Yes, because there is a presumed donation in favor of the purpose of securing to the husband his right to
Joaquina under Art. 1448 of the Civil Code (De los Santos the legitime on the theory that the will constitutes
v. Reyes, 27 January 1992, 206 SCRA 437). However, the an ineffective disinheritance under Art. 918 of the
donation should be collated to the hereditary estate and the Civil Code,
legitime of the other heirs should be preserved.
ALTERNATIVE ANSWER:
d) As Judge, I shall rule as follows: Jorge is entitled to
Yes, the action against Joaquina Roxas will prosper, but only
receive his legitime from the estate of his wife. He was not
to the extent of the aliquot hereditary rights of the
disinherited in the will even assuming that he gave ground
legitimate children as heirs. Joaquina will be entitled to
for disinheritance, hence, he is still entitled to his legitime.
retain her own share as an illegitimate child, (Arts. 1440 and
Jorge, however, cannot receive anything from the free
1453. Civil Code; Art. 176, F. C.)
portion. He cannot claim preterition as he is not a
compulsory heir in the direct line. There being no
Disinheritance vs. Preterition (1993)
preterition, the institution of the sister was valid and the
Maria, to spite her husband Jorge, whom she suspected was
only right of Jorge is to claim his legitime.
having an affair with another woman, executed a will,
unknown to him, bequeathing all the properties she
inherited from her parents, to her sister Miguela. Upon her Disinheritance; Ineffective (1999)
Mr. Palma, widower, has three daughters D, D-l and D-2.
death, the will was presented for probate. Jorge opposed
He executes a Will disinheriting D because she married a
probate of the will on the ground that the will was executed
man he did not like, and instituting daughters D-1 and D-2
by his wife without his knowledge, much less consent, and
as his heirs to his entire estate of P 1,000,000.00, Upon Mr,
that it deprived him of his legitime. After all, he had given
Palma's death, how should his estate be divided? Explain.
her no cause for disinheritance, added Jorge in his
(5%)
opposition. SUGGESTED ANSWER:
Page 43 of 119
This is a case of ineffective disinheritance because marrying 1028 for being in consideration of her adulterous relation
a man that the father did not approve of is not a ground for with the testator. She is, therefore, disqualified to receive
disinheriting D. Therefore, the institution of D-l and D-2 the legacy. Ernie will receive the legacy in his favor because
shall be annulled insofar as it prejudices the legitime of D, it is not inofficious. The institution of Baldo, which applies
and the institution of D-l and D-2 shall only apply on the only to the free portion, will be respected. In sum, the estate
free portion in the amount of P500,000.00. Therefore, D, of Lamberto shall be distributed as follows:
D-l and D-2 will get their legitimes of P500.000.00 divided
into three equal parts and D-l and D-2 will get a reduced Heir Legitime Legacy Institution TOTAL
testamentary disposition of P250,000.00 each. Hence, the
shares will be: Baldo 500,000 200.000 700,000
D P166,666.66 Elvira 250,000 250,000
Ernie 50,000 50,000
D-l P166,666.66 + P250.000.00 TOTAL 750,000 50,000 200,000 1,000,000
D-2 P166,666.66 + P250,000.00
ANOTHER ALTERNATIVE ANSWER:
Disinheritance; Ineffective; Preterition (2000) Same answer as the first Alternative Answer except as to
In his last will and testament, Lamberto 1) disinherits his distribution. Justice Jurado solved this problem differently.
daughter Wilma because "she is disrespectful towards me In his opinion, the legitime of the heir who was disinherited
and raises her voice talking to me", 2) omits entirely his is distributed among the other compulsory heirs in
spouse Elvira, 3) leaves a legacy of P100,000.00 to his proportion to their respective legitimes, while his share in
mistress Rosa and P50,000.00 to his driver Ernie and 4) the intestate portion. If any, is distributed among the other
institutes his son Baldo as his sole heir. How will you legal heirs by accretion under Article 1018 of the NCC in
distribute his estate of P1,000,000.00? (5%) proportion to their respective intestate shares. In sum the
SUGGESTED ANSWER:
distribution shall be as follows:
The disinheritance of Wilma was ineffective because the
ground relied upon by the testator does not constitute Heir Legitime Distribution
maltreatment under Article 919(6) of the New Civil Code. of Wilma’s Legacy Institution TOTAL
Hence, the testamentary provisions in the will shall be Legitime
annulled but only to the extent that her legitime was Baldo 250,0000 125,000 200,000 575,000
impaired. Wilma (250.000)
Elvira 250,000 125.000 375.000
The total omission of Elvira does not constitute preterition Ernie 50,000 50.000
because she is not a compulsory heir in the direct line. Only
TOTAL 500,000 250,000 50,000 200,000 1,000,000
compulsory heirs in the direct line may be the subject of
preterition. Not having been preterited, she will be entitled Heirs; Intestate Heirs; Reserva Troncal (1995)
only to her legitime. Isidro and Irma, Filipinos, both 18 years of age, were
passengers of Flight No. 317 of Oriental Airlines. The plane
The legacy in favor of Rosa is void under Article 1028 for they boarded was of Philippine registry. While en route
being in consideration of her adulterous relation with the from Manila to Greece some passengers hijacked the plane,
testator. She is, therefore, disqualified to receive the legacy held the chief pilot hostage at the cockpit and ordered him
of 100,000 pesos. The legacy of 50,000 pesos in favor of to fly instead to Libya. During the hijacking Isidro suffered
Ernie is not inofficious not having exceeded the free a heart attack and was on the verge of death. Since Irma was
portion. Hence, he shall be entitled to receive it. already eight months pregnant by Isidro, she pleaded to the
hijackers to allow the assistant pilot to solemnize her
The institution of Baldo, which applies only to the free marriage with Isidro. Soon after the marriage, Isidro
portion, shall be respected. In sum, the estate of Lamberto expired. As the plane landed in Libya Irma gave birth.
will be distributed as follows: However, the baby died a few minutes after complete
delivery.
Baldo---------------- - 450,000 Back in the Philippines Irma Immediately filed a claim for
Wilma-------------- - 250,000 inheritance. The parents of Isidro opposed her claim
Elvira---------------- - 250,000 contending that the marriage between her and Isidro was
Ernie---------------- - 50,000 void ab initio on the following grounds: (a) they had not
1,000,000 given their consent to the marriage of their son; (b) there
was no marriage license; (c) the solemnizing officer had no
ALTERNATIVE ANSWER:
The disinheritance of Wilma was effective because authority to perform the marriage; and, (d) the solemnizing
disrespect of, and raising of voice to, her father constitute officer did not file an affidavit of marriage with the proper
maltreatment under Article 919(6) of the New Civil Code. civil registrar.
She is, therefore, not entitled to inherit anything. Her 2. Does Irma have any successional rights at all? Discuss
inheritance will go to the other legal heirs. The total fully.
SUGGESTED ANSWER:
omission of Elvira is not preterition because she is not a 2. Irma succeeded to the estate of Isidro as his surviving
compulsory heir in the direct line. She will receive only her spouse to the estate of her legitimate child. When Isidro
legitime. The legacy in favor of Rosa is void under Article
Page 44 of 119
died, he was succeeded by his surviving wife Irma, and his (c) X = 1/2 by representation of B C=l/2 Y = 1/4
legitimate unborn child. They divided the estate equally by representation of C
between them, the child excluding the parents of Isidro. An
unborn child is considered born for all purposes favorable (d) X - 1/3 in his own right Y- 1/3 in his own right 2 - 1/3
to it provided it is born later. The child was considered born in his own right
because, having an intra-uterine life of more than seven
months, it lived for a few minutes after its complete Article 977 of the Civil Code provides that heirs who
delivery. It was legitimate because it was born within the repudiate their share cannot be represented.
valid marriage of the parents. Succession is favorable to it.
When the child died, Irma inherited the share of the child. Intestate Succession (1997)
However, the share of the child in the hands of Irma is "T" died intestate on 1 September 1997.He was survived by
subject to reserva troncal for the benefit of the relatives of M (his mother), W (his widow), A and B (his legitimate
the child within the third degree of consanguinity and who children), C (his grandson, being the legitimate son of B), D
belong to the line of Isidro. (his other grandson, being the son of E who was a
ALTERNATIVE ANSWER: legitimate son of, and who predeceased, "T"), and F (his
If the marriage is void. Irma has no successional rights with grandson, being the son of G, a legitimate son who
respect to Isidro but she would have successional rights repudiated the inheritance from "T"). His distributable net
with respect to the child. estate is P120.000.00.
How should this amount be shared in intestacy among the
Heirs; Intestate Heirs; Shares (2003) surviving heirs?
Luis was survived by two legitimate children, two SUGGESTED ANSWER:
illegitimate children, his parents, and two brothers. He left The legal heirs are A, B, D, and W. C is excluded by B who
an estate of P1 million. Luis died intestate. Who are his is still alive. D inherits in representation of E who
intestate heirs, and how much is the share of each in his predeceased. F is excluded because of the repudiation of G,
estate? the predecessor. M is excluded by the legitimate children of
SUGGESTED ANSWER: T. The answer may be premised on two theories: the
The intestate heirs are the two (2) legitimate children and Theory of Exclusion and the Theory of Concurrence.
the two (2) illegitimate children. In intestacy the estate of
the decedent is divided among the legitimate and illegitimate Under the Theory of Exclusion the legitimes of the heirs
children such that the share of each illegitimate child is one are accorded them and the free portion will be given
- half the share of each legitimate child. exclusively to the legitimate descendants. Hence under the
Their share are : Exclusion Theory:
For each legitimate child – P333,333.33 A will get P20.000.00. and P 13.333.33 (1/3 of the free portion)
For each illegitimate child – P166,666.66 B will get P 20,000.00. and P13. 333.33 (1/3 of the free portion)
D will get P20.000.00. and P13. 333.33 (1/3 of the free portion)
(Article 983, New Civil Code; Article 176, Family Code)
Intestate Succession (1992) W, the widow is limited to the legitime of P20.000.00

F had three (3) legitimate children: A, B, and C. B has one Under the Theory of Concurrence. In addition to their
(1) legitimate child X. C has two (2) legitimate children: Y legitimes, the heirs of A, B, D and W will be given equal
and Z. shares in the free portions:
F and A rode together in a car and perished together at the A: P20.000.00 plus P10.000.00 (1 /4 of the free portion)
same time in a vehicular accident, F and A died, each of B: P20,000.00 plus P10.000.00 (l/4 of the free portlon)
them leaving substantial estates in intestacy. C: P20,000.00 plus P10.000.00 (1/4 of the free portion)
a) Who are the intestate heirs of F? What are their W: P20,000.00 plus P10,000.00 (l/4 of the free portion)
respective fractional shares? Alternative Answer: Shares in Intestacy
b) Who are the intestate heirs of A? What are their T - decedent Estate: P120.000.00
respective fractional shares? Survived by:
c) If B and C both predeceased F, who are F’s intestate M - Mother............................None
W - Widow.............................P 30,000.00
heirs? What are their respective fractional shares? Do
A - Son.................................P 30,000.00
they inherit in their own right or by representation? B - Son.................................P30.000.00
Explain your answer. C - Grandson (son of B).............None
d) If B and C both repudiated their shares in the estate D - Grandson (son of E who predeceased T)................P 30,000.00
of F who are F's intestate heirs? What are their F - Grandson (son of G who repudiated the Inheritance
respective fractional shares? Do they inherit in their from"T").......................None
own right or by representation? Explain your answer, Explanation:
SUGGESTED ANSWER: a) The mother (M) cannot inherit from T because under
(a) B = 1/2 Art. 985 the ascendants shall inherit in default of
legitimate children and descendants of the deceased.
(b) B = 1/2 Z = 1/4 by representation of C C= 1/2
b) The widow's share is P30.000.00 because under Art,
Article 982 of the Civil Code provides that grandchildren
996 it states that if the widow or widower and
inherit by right of representation.
legitimate children or descendants are left, the surviving
Page 45 of 119
spouse has in the succession the same share as that of be set aside as Mario's conjugal share from the community
each of the children, property. The other half, amounting to one million pesos, is
c) C has no share because his father is still alive hence her conjugal share (net estate), and should be distributed to
succession by representation shall not apply (Art. 975). her intestate heirs. Applying the above provision of law,
d) D inherits P30.000 which is the share of his father E Michelle and Jorelle, Tessie's nieces, are entitled to one-half
who predeceased T by virtue of Art. 981 on the right of of her conjugal share worth one million pesos, or 500,000
representation. pesos, while the other one-half amounting to P500,000 will
e) F has no share because his father G repudiated the go to Mario, Tessie's surviving spouse. Michelle and Jorelle
inheritance. Under Article 977 heirs who repudiate are then entitled to P250,000 pesos each as their hereditary
their share may not be represented. share.
Intestate Succession (1998) Intestate Succession (1999)

Enrique died, leaving a net hereditary estate of P1.2 million. Mr. and Mrs. Cruz, who are childless, met with a serious
He is survived by his widow, three legitimate children, two motor vehicle accident with Mr. Cruz at the wheel and Mrs.
legitimate grandchildren sired by a legitimate child who Cruz seated beside him, resulting in the instant death of Mr.
predeceased him, and two recognized illegitimate children. Cruz. Mrs. Cruz was still alive when help came but she also
Distribute the estate in intestacy. [5%] died on the way to the hospital. The couple acquired
SUGGESTED ANSWER: properties worth One Million (P1,000,000.00) Pesos during
Under the theory of Concurrence, the shares are as follows: their marriage, which are being claimed by the parents of
A (legitimate child) = P200,000 both spouses in equal shares. Is the claim of both sets of
B (legitimate child) = P200,000 parents valid and why? (3%)
C (legitimate child) = P200,000 SUGGESTED ANSWER:
D (legitimate child) = O (predeceased] (a) No, the claim of both parents is not valid. When Mr.
E (legitimate child of D) = P100,000 - by right of representation Cruz died, he was succeeded by his wife and his parents as
F (legitimate child of D) = P100,000 - by right of representation his intestate heirs who will share his estate equally. His
G (illegitimate child) = P100,000 - 1/2 share of the legitimate child estate was 0.5 Million pesos which is his half share in the
H (illegitimate child) = P100,000 - 1/2 share of the legitimate child absolute community amounting to 1 Million Pesos. His
W (Widow) = P200.000 - same share as legitimate child
wife, will, therefore, inherit O.25 Million Pesos and his
ANOTHER ANSWER:
Under the theory of Exclusion the free portion (P300,000) parents will inherit 0.25 Million Pesos.
is distributed only among the legitimate children and is
given to them in addition to their legitime. All other When Mrs. Cruz died, she was succeeded by her parents as
Intestate heirs are entitled only to their respective legitimes. her intestate heirs. They will inherit all of her estate
The distribution is as follows: consisting of her 0.5 Million half share in the absolute
Legitime Free Portion Total community and her 0.25 Million inheritance from her
A [legitimate child) P150.000 + P 75,000 - P225.000 husband, or a total of 0.750 Million Pesos.
B {legitimate child) P150.000 + P150.000 - P225.000
C (legitimate child) P150.000 + P 75.000 - P225.000 In sum, the parents of Mr. Cruz will inherit 250,000 Pesos
D (legitimate child) 0 0 0
E (legitimate child of D) P 75,000 + P35.500 - P112,500 while the parents of Mrs. Cruz will inherit 750,000 Pesos.
F (legitimate child of D) P 75.000 + P 37.500 - P112,500
G (illegitimate child) P 75.000 0 -P 75,500 Intestate Succession (2000)
H (illegitimate child) P 75.000 0 - P 75,500 Eugenio died without issue, leaving several parcels of land
W (Widow) P150,000 0 -P150.000
in Bataan. He was survived by Antonio, his legitimate
brother; Martina, the only daughter of his predeceased sister
Intestate Succession (1998) Mercedes; and five legitimate children of Joaquin, another
Tessie died survived by her husband Mario, and two nieces, predeceased brother. Shortly after Eugenio's death, Antonio
Michelle and Jorelle, who are the legitimate children of an also died, leaving three legitimate children. Subsequently,
elder sister who had predeceased her. The only property she Martina, the children of Joaquin and the children of
left behind was a house and lot worth two million pesos, Antonio executed an extrajudicial settlement of the estate of
which Tessie and her husband had acquired with the use of Eugenio, dividing it among themselves. The succeeding
Mario's savings from his income as a doctor. How much of year, a petition to annul the extrajudicial settlement was filed
the property or its value, if any, may Michelle and Jorelle by Antero, an illegitimate son of Antonio, who claims he is
claim as their hereditary shares? [5%] entitled to share in the estate of Eugenio. The defendants
SUGGESTED ANSWER:
filed a motion to dismiss on the ground that Antero is
Article 1001 of the Civil Code provides, "Should brothers barred by Article 992 of the Civil Code from inheriting
and sisters or their children survive with the widow or from the legitimate brother of his father. How will you
widower, the latter shall be entitled to one-half of the resolve the motion? (5%)
inheritance and the brothers and sisters or their children to SUGGESTED ANSWER:
the other half." The motion to dismiss should be granted. Article 992 does
Tessie's gross estate consists of a house and lot acquired not apply. Antero is not claiming any inheritance from
during her marriage, making it part of the community Eugenio. He is claiming his share in the inheritance of his
property. Thus, one-half of the said property would have to father consisting of his father's share in the inheritance of
Page 46 of 119
Eugenio (Dela Merced v. Dela Merced, Gr No. 126707, 25 5M inherited by Mrs. Luna from Mr. Luna will be inherited
February 1999). from her by her parents.
ALTERNATIVE ANSWER:
It depends. If Antero was not acknowledged by Antonio, However, if the child had intra-uterine life of less than 7
the motion to dismiss should be granted because Antero is months, half of the estate of Mr. Luna, or 5M, will be
not a legal heir of Antonio. If Antero was acknowledged, inherited by the widow (Mrs. Luna), while the other half, or
the motion should be denied because Article 992 is not 5M, will be inherited by the parents of Mr. Luna. Upon the
applicable. This is because Antero is claiming his inheritance death of Mrs. Luna, her estate of 5M will be inherited by her
from his illegitimate father, not from Eugenio.
own parents.
Intestate Succession; Reserva Troncal (1999) Legitime (1997)
Mr. Luna died, leaving an estate of Ten Million (P1 "X", the decedent, was survived by W (his widow). A (his
0,000,000.00) Pesos. His widow gave birth to a child four son), B (a granddaughter, being the daughter of A) and C
months after Mr, Luna's death, but the child died five hours and D (the two acknowledged illegitimate children of the
after birth. Two days after the child's death, the widow of decedent). "X" died this year (1997) leaving a net estate of
Mr. Luna also died because she had suffered from difficult P180,000.00. All were willing to succeed, except A who
childbirth. The estate of Mr. Luna is now being claimed by repudiated the inheritance from his father, and they seek
his parents, and the parents of his widow. Who is entitled to your legal advice on how much each can expect to receive
Mr. Luna'a estate and why? (5%) as their respective shares in the distribution of the estate.
SUGGESTED ANSWER: Give your answer.
Half of the estate of Mr. Luna will go to the parents of Mrs. SUGGESTED ANSWER:
Luna as their inheritance from Mrs. Luna, while the other The heirs are B, W, C and D. A inherits nothing because of
half will be inherited by the parents of Mr. Luna as the his renunciation. B inherits a legitime of P90.000.00 as the
reservatarios of the reserved property inherited by Mrs. nearest and only legitimate descendant, inheriting in his own
Luna from her child. right not by representation because of A's renunciation. W
gets a legitime equivalent to one-half (1 / 2) that of B
When Mr. Luna died, his heirs were his wife and the unborn amounting to P45.000. C and D each gets a legitime
child. The unborn child inherited because the inheritance equivalent to one-half (1/2) that of B amounting to
was favorable to it and it was born alive later though it lived P45.000.00 each. But since the total exceeds the entire
only for five hours. Mrs. Luna inherited half of the 10 estate, their legitimes would have to be reduced
Million estate while the unborn child inherited the other corresponding to P22.500.00 each (Art. 895. CC). The total
half. When the child died, it was survived by its mother, of all of these amounts to P180.000.00.
Mrs. Luna. As the only heir, Mrs. Luna inherited, by ALTERNATIVE ANSWER:
operation of law, the estate of the child consisting of its 5 INTESTATE SUCCESSION
Million inheritance from Mr. Luna. In the hands of Mrs. ESTATE: P180,000.00
Luna, what she inherited from her child was subject to W- (widow gets 1/2 share) P90.000.00 (Art. 998)
reserva troncal for the benefit of the relatives of the child A- (son who repudiated his inheritance) None Art. 977)
within the third degree of consanguinity and who belong to B - (Granddaughter) None
the family of Mr. Luna, the line where the property came C - (Acknowledged illegitimate child) P45.000.00 (Art.998)
from. D - (Acknowledged illegitimate child) P45,000.00 (Art. 998)
The acknowledged illegitimate child gets 1/2 of the share of each
legitimate child.
When Mrs. Luna died, she was survived by her parents as
her only heirs. Her parents will inherit her estate consisting Legitime; Compulsory Heirs (2003)
of the 5 Million she inherited from Mr. Luna. The other 5 Luis was survived by two legitimate children, two
Million she inherited from her child will be delivered to the illegitimate children, his parents, and two brothers. He left
parents of Mr. Luna as beneficiaries of the reserved an estate of P1 million. Who are the compulsory heirs of
property. Luis, how much is the legitime of each, and how much is
the free portion of his estate, if any?
In sum, 5 Million Pesos of Mr. Luna's estate will go to the SUGGESTED ANSWER:
parents of Mrs. Luna, while the other 5 Million Pesos will The compulsory heirs are the two legitimate children and
go to the parents of Mr. Luna as reservatarios. the two illegitimate children. The parents are excluded by
ALTERNATIVE ANSWER: the legitimate children, while the brothers are not
If the child had an intra-uterine life of not less than 7 compulsory heirs at all.
months, it inherited from the father. In which case, the Their respective legitimate are:
estate of 10M will be divided equally between the child and a) The legitime of the two (2) legitimate children is one
the widow as legal heirs. Upon the death of the child, its
half (1/2) of the estate (P500,000.00) to be divided
share of 5M shall go by operation of law to the mother,
between them equally, or P250,000.00 each.
which shall be subject to reserva troncal. Under Art. 891,
b) The legitimate of each illegitimate child is one-half
the reserva is in favor of relatives belonging to the paternal (1/2) the legitime of each legitimate child or
line and who are within 3 degrees from the child. The
P125,000.00.
parents of Mr, Luna are entitled to the reserved portion
which is 5M as they are 2 degrees related from child. The
Page 47 of 119
c) Since the total legitime of the compulsory heirs is legitime of the legitimate children and it follows that the
P750,000.00, the balance of P250,000.00 is the free legitime of one legitimate child is P100,000. The legitime,
portion. therefore, of the oldest son is P100,000. However, since the
donation given him was P100,000, he has already received
Legitime; Compulsory Heirs vs. Secondary Compulsory in full his legitime and he will not receive anything anymore
Heirs (2005) from the decedent. The remaining P900,000, therefore, shall
Emil, the testator, has three legitimate children, Tom, Henry go to the four younger children by institution in the will, to
and Warlito; a wife named Adette; parents named Pepe and be divided equally among them. Each will receive P225,000.
Pilar; an illegitimate child, Ramon; brother, Mark; and a ALTERNATIVE ANSWER:
sister, Nanette. Since his wife Adette is well-off, he wants to Assuming that the donation is valid as to form and
leave to his illegitimate child as much of his estate as he can substance, Juan cannot invoke preterition because he
legally do. His estate has an aggregate net amount of actually had received a donation inter vivos from the
Pl,200,000.00, and all the above-named relatives are still testatrix (III Tolentino 188,1992 ed.). He would only have a
living. Emil now comes to you for advice in making a will. right to a completion of his legitime under Art. 906 of the
How will you distribute his estate according to his wishes Civil Code. The estate should be divided equally among the
without violating the law on testamentary succession? (5%) five children who will each receive P225,000.00 because the
SUGGESTED ANSWER: total hereditary estate, after collating the donation to Juan
P600,000.00 — legitime to be divided equally between Tom, (Art. 1061, CC), would be P1 million. In the actual
Henry and Warlito as the legitimate children. Each will be distribution of the net estate, Juan gets nothing while his
entitled to P200,000.00. (Art. 888, Civil Code) siblings will get P225,000.00 each.
P100,000.00 - - share of Ramon the illegitimate child.
Equivalent to 1/2 of the share of each legitimate child. (Art. Preterition; Compulsory Heir (1999)
176, Family Code) (a) Mr, Cruz, widower, has three legitimate children, A, B
P200,000.00 — Adette the wife. Her share is equivalent to and C. He executed a Will instituting as his heirs to his
the share of one legitimate child. (Art. 892, par. 2, Civil estate of One Million (P1,000,000.00) Pesos his two
Code) children A and B, and his friend F. Upon his death, how
should Mr. Cruz's estate be divided? Explain. (3%)
Pepe and Pilar, the parents are only secondary compulsory
heirs and they cannot inherit if the primary compulsory (b) In the preceding question, suppose Mr. Cruz
heirs (legitimate children) are alive. (Art. 887, par. 2, Civil instituted his two children A and B as his heirs in his Will,
Code) but gave a legacy of P 100,000.00 to his friend F. How
should the estate of Mr, Cruz be divided upon his death?
Brother Mark and sister Nanette are not compulsory heirs Explain, (2%)
since they are not included in the enumeration under Article SUGGESTED ANSWER:
(a) Assuming that the institution of A, B and F were to the
887 of the Civil Code.
entire estate, there was preterition of C since C is a
The remaining balance of P300,000.00 is the free portion compulsory heir in the direct line. The preterition will result
which can be given to the illegitimate child Ramon as an in the total annulment of the institution of heirs. Therefore,
instituted heir. (Art. 914, Civil Code) If so given by the the institution of A, B and F will be set aside and Mr. Cuz's
estate will be divided, as in intestacy, equally among A, B
decedent, Ramon would receive a total of P400,000.00.
and C as follows: A - P333,333.33; B - P333.333.33; and C -
Preterition (2001) P333,333.33.
Because her eldest son Juan had been pestering her for
capital to start a business, Josefa gave him P100,000. Five (b) On the same assumption as letter (a), there was
years later, Josefa died, leaving a last will and testament in preterition of C. Therefore, the institution of A and B is
which she instituted only her four younger children as her annulled but the legacy of P100.000.00 to F shall be
sole heirs. At the time of her death, her only properly left respected for not being inofficious. Therefore, the
was P900,000.00 in a bank. Juan opposed the will on the remainder of P900.000.00 will be divided equally among A,
ground of preterition. How should Josefa's estate be divided B and C.
among her heirs? State briefly the reason(s) for your answer.
(5%) Proceedings; Intestate Proceedings; Jurisdiction (2004)
SUGGESTED ANSWER: In his lifetime, a Pakistani citizen, ADIL, married three
There was no preterition of the oldest son because the times under Pakistani law. When he died an old widower,
testatrix donated 100,000 pesos to him. This donation is he left behind six children, two sisters, three homes, and an
considered an advance on the son's inheritance. There being estate worth at least 30 million pesos in the Philippines. He
no preterition, the institutions in the will shall be respected was born in Lahore but last resided in Cebu City, where he
but the legitime of the oldest son has to be completed if he had a mansion and where two of his youngest children now
received less. live and work. Two of his oldest children are farmers in
Sulu, while the two middle-aged children are employees in
After collating the donation of P100.000 to the remaining Zamboanga City. Finding that the deceased left no will, the
property of P900,000, the estate of the testatrix is youngest son wanted to file intestate proceedings before the
P1,000,000. Of this amount, one-half or P500,000, is the Regional Trial Court of Cebu City. Two other siblings
Page 48 of 119
objected, arguing that it should be in Jolo before a Shari’a mother, in favor of another sister, with their mother not
court since his lands are in Sulu. But Adil’s sisters in only giving her authority thereto but even signing said
Pakistan want the proceedings held in Lahore before a deeds, there is a valid partition inter vivos between the
Pakistani court. mother and her children which cannot be revoked by the
Which court has jurisdiction and is the proper venue for the mother. Said deeds of sale are not contracts entered into
intestate proceedings? The law of which country shall with respect to future inheritance.
govern succession to his estate? (5%)
SUGGESTED ANSWER: "It would be unjust for the mother to revoke the sales to a
In so far as the properties of the decedent located in the son and to execute a simulated sale in favor of a daughter
Philippines are concerned, they are governed by Philippine
who already benefited by the partition."
law (Article 16, Civil Code). Under Philippine law, the
proper venue for the settlement of the estate is the domicile SUGGESTED ANSWER:
of the decedent at the time of his death. Since the decedent C. Yes, under Arts. 51 and 52 of the New Family Code. In
last resided in Cebu City, that is the proper venue for the case of legal separation, annulment of marriage, declaration
of nullity of marriage and the automatic termination of a
intestate settlement of his estate.
subsequent marriage by the reappearance of the absent
However, the successional rights to the estate of ADIL are spouse, the common or community property of the spouses
governed by Pakistani law, his national law, under Article 16 shall be dissolved and liquidated.
of the Civil Code.
Art, 51. In said partition, the value of the presumptive
Succession; Death; Presumptive Legitime (1991) legitimes of all common children, computed as of the date
a) For purposes of succession, when is death deemed to of the final judgment of the trial court, shall be delivered in
occur or take place? cash, property or sound securities, unless the parties, by
b) May succession be conferred by contracts or acts inter mutual agreement, judicially approved, had already provided
vivos? Illustrate. for such matters.
c) Is there any law which allows the delivery to
compulsory heirs of their presumptive legitimes during The children of their guardian, or the trustee of their
the lifetime of their parents? If so, in what instances? property, may ask for the enforcement of the judgment.
SUGGESTED ANSWER:
A. Death as a fact is deemed to occur when it actually The delivery of the presumptive legitimes herein prescribed
takes place. Death is presumed to take place in the shall in no way prejudice the ultimate successional rights of
circumstances under Arts. 390-391 of the Civil Code. The the children accruing upon the death of either or both of
time of death is presumed to be at the expiration of the 10- the parents; but the value of the properties already received
year period as prescribed by Article 390 and at the moment under the decree of annulment or absolute nullity shall be
of disappearance under Article 391. considered as advances on their legitime.
B. Under Art. 84 of the Family Code amending Art 130 of Art. 52. The judgment of annulment or of absolute nullity
the Civil Code, contractual succession is no longer possible of the marriage, the partition and distribution of the
since the law now requires that donations of future property properties of the spouses, and the delivery of the children's
be governed by the provisions on the testamentary presumptive legitimes shall be recorded in the appropriate
succession and formalities of wills. civil registry and registries of property; otherwise, the same
ALTERNATIVE ANSWER:
shall not affect third persons.
B. In the case of Coronado vs.CA(l91 SCRA81), it was ruled
that no property passes under a will without its being Wills; Codicil; Institution of Heirs; Substitution of Heirs
probated, but may under Article 1058 of the Civil Code of (2002)
1898, be sustained as a partition by an act inter vivos By virtue of a Codicil appended to his will, Theodore
[Many-Oy vs. CA 144SCRA33). devised to Divino a tract of sugar land, with the obligation
on the part of Divino or his heirs to deliver to Betina a
And in the case of Chavez vs, IAC 1191 SCRA211), it was specified volume of sugar per harvest during Betina’s
ruled that while the law prohibits contracts upon future lifetime. It is also stated in the Codicil that in the event the
inheritance, the partition by the parent, as provided in Art. obligation is not fulfilled, Betina should immediately seize
1080 is a case expressly authorized by law. A person has two the property from Divino or latter’s heirs and turn it over to
options in making a partition of his estate: either by an act Theodore’s compulsory heirs. Divino failed to fulfill the
inter vivos or by will. If the partition is by will, it is obligation under the Codicil. Betina brings suit against
imperative that such partition must be executed in Divino for the reversion of the tract of land.
accordance with the provisions of the law on wills; if by an a) Distinguish between modal institution and substation
act inter vivos, such partition may even be oral or written, of heirs. (3%)
and need not be in the form of a will, provided the legitime b) Distinguish between simple and fideicommissary
is not prejudiced. substitution of heirs. (2%)
c) Does Betina have a cause of action against Divino?
"Where several sisters execute deeds of sale over their 1 /6 Explain (5%)
undivided share of the paraphernal property of their SUGGESTED ANSWER:
Page 49 of 119
A. A MODAL INSTITUTION is the institution of
an heir made for a certain purpose or cause (Arts. 871 and b. In the case of a foreigner, his national law shall govern
882, NCC). SUBSTITUTION is the appointment of substantive validity whether he executes his will in the
another heir so that he may enter into the inheritance in Philippines or in a foreign country.
default of the heir originality instituted. (Art. 857, NCC).
Wills; Holographic Wills; Insertions & Cancellations (1996)
B. In a SIMPLE SUBSTITUTION of heirs, the Vanessa died on April 14, 1980, leaving behind a
testator designates one or more persons to substitute the holographic will which is entirely written, dated and signed
heirs instituted in case such heir or heirs should die before in her own handwriting. However, it contains insertions and
him, or should not wish or should be incapacitated to cancellations which are not authenticated by her signature.
accept the inheritance. In a FIDEICOMMISSARY For this reason, the probate of Vanessa's will was opposed
SUBSTITUTION, the testator institutes a first heir and by her relatives who stood to inherit by her intestacy.
charges him to preserve and transmit the whole or part of May Vanessa's holographic will be probated? Explain.
the inheritance to a second heir. In a simple substitution, SUGGESTED ANSWER:
only one heir inherits. In a fideicommissary substitution, Yes, the will as originally written may be probated. The
both the first and second heirs inherit. (Art. 859 and 869, insertions and alterations were void since they were not
NCC) authenticated by the full signature of Vanessa, under Art.
814, NCC. The original will, however, remains valid because
C. Betina has a cause of action against Divino. This is a holographic will is not invalidated by the unauthenticated
a case of a testamentary disposition subject to a mode and insertions or alterations (Ajero v. CA, 236 SCRA 468].
the will itself provides for the consequence if the mode is ALTERNATIVE ANSWER:
not complied with. To enforce the mode, the will itself gives It depends. As a rule, a holographic will is not adversely
Betina the right to compel the return of the property to the affected by Insertions or cancellations which were not
heirs of Theodore. (Rabadilla v. Conscoluella, 334 SCRA 522 authenticated by the full signature of the testator (Ajero v.
CA, 236 SCRA 468). However, when the insertion or
[2000] GR 113725, 29 June 2000).
cancellation amounts to revocation of the will, Art.814 of
Wills; Formalities (1990) the NCC does not apply but Art. 830. NCC. Art. 830 of the
(1) If a will is executed by a testator who is a Filipino NCC does not require the testator to authenticate his
citizen, what law will govern if the will is executed in the cancellation for the effectivity of a revocation effected
Philippines? What law will govern if the will is executed in through such cancellation (Kalaw v. Relova, 132 SCRA 237).
In the Kalaw case, the original holographic will designated
another country? Explain your answers.
only one heir as the only substantial provision which was
(2) If a will is executed by a foreigner, for instance, a altered by substituting the original heir with another heir.
Japanese, residing in the Philippines, what law will govern if Hence, if the unauthenticated cancellation amounted to a
the will is executed in the Philippines? And what law will revocation of the will, the will may not be probated because
govern if the will is executed in Japan, or some other it had already been revoked.
country, for instance, the U.S.A.? Explain your answers.
SUGGESTED ANSWER: Wills; Holographic Wills; Witnesses (1994)
(1) a. If the testator who is a Filipino citizen executes his On his deathbed, Vicente was executing a will. In the room
will in the Philippines, Philippine law will govern the were Carissa, Carmela, Comelio and Atty. Cimpo, a notary
formalities. public. Suddenly, there was a street brawl which caught
b. If said Filipino testator executes his will in another Comelio's attention, prompting him to look out the
country, the law of the country where he maybe or window. Cornelio did not see Vicente sign a will. Is the will
Philippine law will govern the formalities. (Article 815, Civil valid?
Code} SUGGESTED ANSWERS:
a) Yes, The will is valid. The law does not require a witness
SUGGESTED ANSWER: to actually see the testator sign the will. It is sufficient if
(2) a. If the testator is a foreigner residing in the Philippines the witness could have seen the act of signing had he
and he executes his will in the Philippines, the law of the chosen to do so by casting his eyes to the proper direction.
country of which he is a citizen or Philippine law will
govern the formalities. b) Yes, the will is valid. Applying the "test of position",
although Comelio did not actually see Vicente sign the will,
b. If the testator is a foreigner and executes his will in a Cornelio was in the proper position to see Vicente sign if
foreign country, the law of his place of residence or the law Cornelio so wished.
of the country of which he is a citizen or the law of the
place of execution, or Philippine law will govern the Wills; Joint Wills (2000)
formalities (Articles 17. 816. 817. Civil Code). Manuel, a Filipino, and his American wife Eleanor, executed
a Joint Will in Boston, Massachusetts when they were
POSSIBLE ADDITIONAL ANSWERS: residing in said city. The law of Massachusetts allows the
a. In the case of a Filipino citizen, Philippine law shall execution of joint wills. Shortly thereafter, Eleanor died.
govern substantive validity whether he executes his will in Can the said Will be probated in the Philippines for the
the Philippines or in a foreign country. settlement of her estate? (3%)
Page 50 of 119
SUGGESTED ANSWER:
Yes, the will may be probated in the Philippines insofar as the Wills; Probate; Notarial and Holographic Wills (1997)
estate of Eleanor is concerned. While the Civil Code Johnny, with no known living relatives, executed a notarial will
prohibits the execution of Joint wills here and abroad, such giving all his estate to his sweetheart. One day, he had a serious
prohibition applies only to Filipinos. Hence, the joint will altercation with his sweetheart. A few days later, he was
which is valid where executed is valid in the Philippines but introduced to a charming lady who later became a dear friend.
only with respect to Eleanor. Under Article 819, it is void with Soon after, he executed a holographic will expressly revoking
respect to Manuel whose joint will remains void in the the notarial will and so designating his new friend as sole heir.
Philippines despite being valid where executed. One day when he was clearing up his desk, Johnny
ALTERNATIVE ANSWER: mistakenly burned, along with other papers, the only copy of
The will cannot be probated in the Philippines, even though his holographic will. His business associate, Eduardo
valid where executed, because it is prohibited under Article knew well the contents of the will which was shown to
818 of the Civil Code and declared void under Article 819, him by Johnny the day it was executed. A few days after
The prohibition should apply even to the American the burning incident, Johnny died. Both wills were sought
wife because the Joint will is offensive to public to be probated in two separate petitions.
policy. Moreover, it is a single juridical act which cannot be Will either or both petitions prosper?
valid as to one testator and void as to the other. SUGGESTED ANSWER:
The probate of the notarial will will prosper. The
Wills; Probate; Intrinsic Validity (1990) holographic will cannot be admitted to probate because a
H died leaving a last will and testament wherein it is stated that holographic will can only be probated upon evidence of the
he was legally married to W by whom he had two will itself unless there is a photographic copy. But since the
legitimate children A and B. H devised to his said forced holographic will was lost and there was no other copy, it
heirs the entire estate except the free portion which he gave to cannot be probated and therefore the notarial will will be
X who was living with him at the time of his death. admitted to probate because there is no revoking will.
ADDITIONAL ANSWERS:
In said will he explained that he had been estranged 1. In the case of Gan vs. Yap (104 Phil 509), the execution and
from his wife W for more than 20 years and he has been the contents of a lost or destroyed holographic will may not be
living with X as man and wife since his separation proved by the bare testimony of witnesses who have seen or
from his legitimate family. read such will. The will itself must be presented otherwise
it shall produce no effect. The law regards the document
In the probate proceedings, X asked for the issuance itself as material proof of authenticity. Moreover, in order that
of letters testamentary in accordance with the will wherein a will may be revoked by a subsequent will, it is necessary that
she is named sole executor. This was opposed by W the latter will be valid and executed with the formalities
and her children. required for the making of a will. The latter should
(a) Should the will be admitted in said probate proceedings? possess all the requisites of a valid will whether it be ordinary
(b) Is the said devise to X valid? or a holographic will, and should be probated in order
(c) Was it proper for the trial court to consider the intrinsic that the revocatory clause thereof may produce effect. In the
validity of the provisions of said will? Explain your answers, case at bar, since the holographic will itself cannot be
SUGGESTED ANSWER: presented, it cannot therefore be probated. Since it cannot be
(a) Yes, the will may be probated if executed according to probated, it cannot revoke the notarial will previously
the formalities prescribed by law. written by the decedent.
(b) The institution giving X the free portion is not 2. On the basis of the Rules of Court, Rule 76, Sec. 6,
valid, because the prohibitions under Art. 739 of the Civil provides that no will shall be proved as a lost or destroyed will
Code on donations also apply to testamentary unless its provisions are clearly and distinctly proved by at least
dispositions (Article 1028, Civil Code), Among two (2) credible witnesses. Hence, if we abide strictly by the
donations which are considered void are those made two-witness rule to prove a lost or destroyed will, the
between persons who were guilty of adultery or holographic will which Johnny allegedly mistakenly burned,
concubinage at the time of the donation. cannot be probated, since there is only one witness,
Eduardo, who can be called to testify as to the existence of the
(c) As a general rule, the will should be admitted in probate will. If the holographic will, which purportedly, revoked the
proceedings if all the necessary requirements for its extrinsic earlier notarial will cannot be proved because of the
validity have been met and the court should not consider absence of the required witness, then the petition for the
the intrinsic validity of the provisions of said will. However,
probate of the notarial will should prosper.
the exception arises when the will in effect contains only
one testamentary disposition. In effect, the only Wills; Revocation of Wills; Dependent Relative Revocation
testamentary disposition under the will is the giving of the free (2003)
portion to X, since legitimes are provided by law. Hence, Mr. Reyes executed a will completely valid as to form. A
the trial court may consider the intrinsic validity of week later, however, he executed another will which
the provisions of said will. (Nuguid v. Nuguid, etal.. No. L- expressly revoked his first will, which he tore his first will to
23445, June 23, 1966, 17 SCRA; Nepomuceno v. CA, L-62952, pieces. Upon the death of Mr. Reyes, his second will was
9 October 1985. 139 SCRA 206).
presented for probate by his heirs, but it was denied probate
Page 51 of 119
due to formal defects. Assuming that a copy of the first will excluded by a legitimate son of the decedent [Art. 887, New
is available, may it now be admitted to probate and given Civil Code]. This follows the principle that the descendants
effect? Why? exclude the ascendants from inheritance.
SUGGESTED ANSWER:
Yes, the first will may be admitted to probate and given
effect. When the testator tore first will, he was under the Wills; Testamentary Intent (1996)
mistaken belief that the second will was perfectly valid and Alfonso, a bachelor without any descendant or ascendant,
he would not have destroyed the first will had he known wrote a last will and testament in which he devised." all the
that the second will is not valid. The revocation by properties of which I may be possessed at the time of my
destruction therefore is dependent on the validity of the death" to his favorite brother Manuel. At the time he wrote
second will. Since it turned out that the second will was the will, he owned only one parcel of land. But by the time
invalid, the tearing of the first will did not produce the he died, he owned twenty parcels of land. His other
effect of revocation. This is known as the doctrine of brothers and sisters insist that his will should pass only the
dependent relative revocation (Molo v. Molo, 90 Phil 37.) parcel of land he owned at the time it was written, and did
ALTERNATIVE ANSWERS: not cover his properties acquired, which should be by
No, the first will cannot be admitted to probate. While it is intestate succession. Manuel claims otherwise.
true that the first will was successfully revoked by the Who is correct? Explain.
second will because the second will was later denied SUGGESTED ANSWER:
probate, the first will was, nevertheless, revoked when the Manuel is correct because under Art. 793, NCC, property
testator destroyed it after executing the second invalid will. acquired after the making of a will shall only pass thereby, as
(Diaz v. De Leon, 43 Phil 413 [1922]). if the testator had possessed it at the time of making the
will, should it expressly appear by the will that such was his
Wills; Testamentary Disposition (2006) intention. Since Alfonso's intention to devise all properties
Don died after executing a Last Will and Testament leaving he owned at the time of his death expressly appears on the
his estate valued at P12 Million to his common-law wife will, then all the 20 parcels of land are included in the
Roshelle. He is survived by his brother Ronie and his half-
devise.
sister Michelle.
(1) Was Don's testamentary disposition of his estate in
accordance with the law on succession? Whether you agree DONATION
or not, explain your answer. Explain.
SUGGESTED ANSWER: Yes, Don's testamentary disposition Donation vs. Sale (2003)
of his estate is in accordance with the law on succession. a) May a person sell something that does not belong to
Don has no compulsory heirs not having ascendants, him? Explain.
descendants nor a spouse [Art. 887, New Civil Code]. b) May a person donate something that does not belong
Brothers and sisters are not compulsory heirs. Thus, he can to him? Explain. 5%
SUGGESTED ANSWER:
bequeath his entire estate to anyone who is not otherwise
(a) Yes, a person may sell something which does not
incapacitated to inherit from him. A common-law wife is
belong to him. For the sale to be valid, the law does not
not incapacitated under the law, as Don is not married to
require the seller to be the owner of the property at the time
anyone. of the sale. (Article 1434, NCC). If the seller cannot transfer
ownership over the thing sold at the time of delivery
(2) If Don failed to execute a will during his lifetime, as his
lawyer, how will you distribute his estate? Explain. (2.5%)
because he was not the owner thereof, he shall be liable for
SUGGESTED ANSWER: After paying the legal obligations of breach of contact.
the estate, I will give Ronie, as full-blood brother of Don, (b) As a general rule, a person cannot donate
2/3 of the net estate, twice the share of Michelle, the half- something which he cannot dispose of at the time of the
sister who shall receive 1/3. Roshelle will not receive donation (Article 751, New Civil Code).
anything as she is not a legal heir [Art. 1006 New Civil
Donations; Condition; Capacity to Sue (1996)
Code].
Sometime in 1955, Tomas donated a parcel of land to his
(3) Assuming he died intestate survived by his brother stepdaughter Irene, subject to the condition that she may
Ronie, his half-sister Michelle, and his legitimate son Jayson, not sell, transfer or cede the same for twenty years. Shortly
how will you distribute his estate? Explain. (2.5%) thereafter, he died. In 1965, because she needed money for
SUGGESTED ANSWER: Jayson will be entitled to the entire medical expenses, Irene sold the land to Conrado. The
P12 Million as the brother and sister will be excluded by a following year, Irene died, leaving as her sole heir a son by
legitimate son of the decedent. This follows the principle of the name of Armando. When Armando learned that the
proximity, where "the nearer excludes the farther." land which he expected to inherit had been sold by Irene to
Conrado, he filed an action against the latter for annulment
(4) Assuming further he died intestate, survived by his father of the sale, on the ground that it violated the restriction
Juan, his brother Ronie, his half-sister Michelle, and his imposed by Tomas. Conrado filed a motion to dismiss, on
legitimate son Jayson, how will you distribute his estate? the ground that Armando did not have the legal capacity to
Explain. (2.5%) sue.
SUGGESTED ANSWER: Jayson will still be entitled to the If you were the Judge, how will you rule on this motion to
entire P12 Million as the father, brother and sister will be dismiss? Explain.
Page 52 of 119
SUGGESTED ANSWER: Considering the failure of the donee to comply with the
As judge, I will grant the motion to dismiss. Armando has no condition of the donation, the donor-spouses sold the
personality to bring the action for annulment of the sale to
Conrado. Only an aggrieved party to the contract may
bring the action for annulment thereof (Art. 1397. NCC).
While Armando is heir and successor-in-interest of his
mother (Art. 1311, NCC), he [standing in place of his
mother) has no personality to annul the contract. Both are not
aggrieved parties on account of their own violation of the
condition of, or restriction on, their ownership imposed by the
donation. Only the donor or his heirs would have the
personality to bring an action to revoke a donation for
violation of a condition thereof or a restriction thereon.
(Garrido u. CA, 236 SCRA 450). Consequently, while the
donor or his heirs were not parties to the sale, they have the
right to annul the contract of sale because their rights are
prejudiced by one of the contracting parties thereof [DBP v.
CA, 96 SCRA 342; Teves vs. PHHC. 23 SCRA 114]. Since
Armando is neither the donor nor heir of the donor, he has no
personality to bring the action for annulment.
ALTERNATIVE ANSWER:
As judge, I will grant the motion to dismiss. Compliance
with a condition imposed by a donor gives rise to an action to
revoke the donation under Art. 764, NCC. However, the right
of action belongs to the donor. Is transmissible to his heirs,
and may be exercised against the donee's heirs. Since Armando
is an heir of the donee, not of the donor, he has no legal
capacity to sue for revocation of the donation. Although
he is not seeking such revocation but an annulment
of the sale which his mother, the donee, had executed in
violation of the condition imposed by the donor, an
action for annulment of a contract may be brought only
by those who are principally or subsidiarily obliged
thereby (Art. 1397, NCC). As an exception to the rule, it
has been held that a person not so obliged may
nevertheless ask for annulment if he is prejudiced in his
rights regarding one of the contracting parties (DBP us. CA.
96 SCRA 342 and other cases) and can show the detriment
which would result
to him from the (Teves vs. PHHC, 23 SCRA 1141).
contract in which
he
had no intervention,
Such detriment or prejudice cannot be shown by Armando.

As a forced heir, Armando's interest in the property was, at
best, a mere expectancy. The sale of the land by his mother
did not impair any vested right. The fact remains that
the premature sale made by his mother (premature because
only half of the period of the ban had elapsed) was not
voidable at all, none of the vices of consent under
Art. 139 of the NCC being present. Hence, the
motion to dismiss should be granted.
Donations; Conditions; Revocation (1991)

Spouses Michael and Linda donated a 3-hectare residential
land to the City of Baguio on the condition that the city
government would build thereon a public park with a
boxing arena, the construction of which shall commence
within six (6) months from the date the parties ratify the
donation. The donee accepted the donation and the title to the
property was transferred in its name. Five years elapsed but
the public park with the boxing arena was never started.
property to Ferdinand who then sued to recover the
land from the city government.
Will the suit prosper?
SUGGESTED ANSWER:
Ferdinand has no right to recover the land. It is true that the
donation was revocable because of breach of
the conditions. But until and unless the donation was
revoked, it remained valid. Hence, Spouses Michael and
Linda had no right to sell the land to Ferdinand. One
cannot give what he does not have. What the donors
should have done first was to have the donation annulled
or revoked. And after that was done, they could
validly have disposed of the land in favor of Ferdinand.
ALTERNATIVE ANSWER:
A. Until the contract of donation has been resolved or
rescinded under Article 1191 of the Civil Code or revoked
under Art. 764 of the Civil Code, the donation stands
effective and valid. Accordingly, the sale made by the
donor to Ferdinand cannot be said to have conveyed title to
Ferdinand, who, thereby, has no cause of action for
recovery of the land acting for and in his behalf.
B. The donation is onerous, And being onerous, what

applies is the law on contracts, and not the law on donation
(De Luna us. Abrigo, 81 SCRA 150). Accordingly, the
prescriptive period for the filing of such an action would be
the ordinary prescriptive period for contacts which may
either be six or ten depending upon whether it is verbal or
written. The filing of the case five years later is within the
prescriptive period and, therefore, the action can prosper,
Alternative Answer:
The law on donation lays down a special prescriptive period
in the case of breach of condition, which is four years from
non-compliance thereof (Article 764 Civil Code). Since the
action has prescribed, the suit will not prosper,
Donations; Effect; illegal & immoral conditions (1997)

Are the effects of illegal and immoral conditions on simple
donations the same as those effects that would follow when
such conditions are imposed on donations con
causa onerosa?
SUGGESTED ANSWER:
No, they don't have the same effect. Illegal or impossible
conditions in simple and remuneratory donations shall
be considered as not imposed. Hence the donation is
valid. The donation will be considered as simple or
pure. The condition or mode is merely an accessory
disposition, and its nullity does not affect the donation,
unless it clearly appears that the donor would not have
made the donation without the mode or condition.
Donations con causa onerosa is governed by law on

obligations and contracts, under which an impossible or
Illicit condition annuls the obligation dependent upon the
condition where the condition is positive and suspensive. If
the impossible or illicit condition is negative, it is simply
considered as not written, and the obligation is converted
into a pure and simple one. However, in order that an illegal
condition may annul a contract, the impossibility must exist at
the time of the creation of the obligation; a supervening
impossibility does not affect the existence of the obligation.
ADDITIONAL ANSWER:
Page 53 of 119
No. In simple or pure donation, only the illegal or irrevocable, the latter is revocable. In the problem given, all
impossible condition is considered not written but the the clauses or conditions mentioned in the deed of
donation remains valid and becomes free from conditions. donation, except one, are consistent with the rule of
The condition or mode being a mere accessory disposition. irrevocability and would have sustained the view that the
Its nullity does not affect the donation unless it clearly donation is inter vivos and therefore valid. The lone
appears that the donor would not have made the donation exception is the clause which reserves the donor's right to
without the mode or condition. On the other hand, onerous sell the property at any time before his death. Such a
donation is governed by the rules on contracts. Under reservation has been held to render the donation revocable
Article 1183, Impossible or illegal conditions shall annul the and, therefore, becomes a donation mortis causa (Puig vs.
obligation which depends upon them. In these cases, both Penqflorida, 15 SCRA 276, at p. 286). That the right was not
the obligation and the condition are void. exercised is immaterial; its reservation was an implied
recognition of the donor's power to nullify the donation
Donations; Formalities; Mortis Causa (1990) anytime he wished to do so. Consequently, it should have
B donated to M a parcel of land in 1980. B made the deed been embodied in a last will and testament. The suit for
of donation, entitled “Donation Inter Vivos,” in a public nullity will thus prosper.
instrument and M accepted the donation in the same
document. It was provided in the deed that the land Donations; Inter Vivos; Acceptance (1993)
donated shall be immediately delivered to M and that M On January 21, 1986, A executed a deed of donation inter
shall have the right to enjoy the fruits fully. The deed also vivos of a parcel of land to Dr. B who had earlier
provided that B was reserving the right to dispose of said constructed thereon a building in which researches on the
land during his (B’s) lifetime, and that M shall not register dreaded disease AIDS were being conducted. The deed,
the deed of donation until after B’s death. Upon B’s death, acknowledged before a notary public, was handed over by A
W, B’s widow and sole heir, filed an action for the recovery to Dr. B who received it. A few days after, A flew to Davao
of the donated land, contending that the donation made by City. Unfortunately, the airplane he was riding crashed on
B is a donation mortis causa and not a donation inter vivos. landing killing him. Two days after the unfortunate accident.
Will said action prosper? Explain your answer. Dr. B, upon advice of a lawyer, executed a deed
SUGGESTED ANSWER: acknowledged before a notary public accepting the
Yes, the action will prosper. The donation is a donation donation.
mortis causa because the reservation is to dispose of all the Is the donation effective? Explain your answer.
property donated and, therefore, the donation is revocable SUGGESTED ANSWER:
at will. Accordingly, the donation requires the execution of a No, the donation is not effective. The law requires that the
valid will, either notarial or holographic (Arts 755, 728 separate acceptance of the donee of an immovable must be
NCC). done in a public document during the lifetime of the donor
(Art. 746 & 749, Civil Code) In this case, B executed the
Donations; Formalities; Mortis Causa (1998) deed of acceptance before a notary public after the donor
Ernesto donated in a public instrument a parcel of land to had already died.
Demetrio, who accepted it in the same document. It is there
declared that the donation shall take effect immediately, Donations; Perfection (1998)
with the donee having the right to take possession of the On July 27, 1997, Pedro mailed in Manila a letter to his
land and receive its fruits but not to dispose of the land brother, Jose, a resident of Ilollo City, offering to donate a
while Ernesto is alive as well as for ten years following his vintage sports car which the latter had long been wanting to
death. Moreover, Ernesto also reserved in the same deed his buy from the former. On August 5, 1997, Jose called Pedro
right to sell the property should he decide to dispose of it at by cellular phone to thank him for his generosity and to
any time - a right which he did not exercise at all. After his inform him that he was sending by mail his letter of
death, Ernesto's heirs seasonably brought an action to acceptance. Pedro never received that letter because it was
recover the property, alleging that the donation was void as never mailed. On August 14, 1997, Pedro received a
it did not comply with the formalities of a will. Will the suit telegram from Iloilo informing him that Jose had been
prosper? [5%] killed in a road accident the day before (August 13, 1997)
SUGGESTED ANSWER: 1. Is there a perfected donation? [2%]
Yes, the suit will prosper as the donation did not comply 2. Will your answer be the same if Jose did mail his
with the formalities of a will. In this instance, the fact that acceptance letter but it was received by Pedro in Manila
the donor did not intend to transfer ownership or days after Jose's death? [3%]
possession of the donated property to the donee until the SUGGESTED ANSWER:
donor's death, would result in a donation mortis causa and 1. None. There is no perfected donation. Under Article 748
in this kind of disposition, the formalities of a will should be of the Civil Code, the donation of a movable may be made
complied with, otherwise, the donation is void. In this orally or in writing. If the value of the personal property
Instance, donation mortis causa embodied only in a public donated exceeds five thousand pesos, the donation and the
instrument without the formalities of a will could not have acceptance shall be made in writing. Assuming that the
transferred ownership of disputed property to another. value of the thing donated, a vintage sports car, exceeds
ALTERNATIVE ANSWER: P5,000.00 then the donation and the acceptance must be in
One of the essential distinctions between a donation inter writing. In this instance, the acceptance of Jose was not in
vivos and a donation mortis causa is that while the former is writing, therefore, the donation is void. Upon the other
Page 54 of 119
hand, assuming that the sports car costs less than P5,000.00 Code which requires the donation and the acceptance
then the donation maybe oral, but still, the simultaneous thereof to be in a public instrument in order to be valid.
delivery of the car is needed and there being none, the The acceptance not being in a public instrument, the part
donation was never perfected. which is not onerous is void and Rosa may recover it from
Amanda.
SUGGESTED ANSWER:
2. Yes, the answer is the same. If Jose's mail containing his Donations; Unregistered; Effects; Non-Compliance;
acceptance of the donation was received by Pedro after the
Resolutory Condition (2006)
former's death, then the donation is still void because under Spouses Alfredo and Racquel were active members of a
Article 734 of the Civil Code, the donation is perfected the religious congregation. They donated a parcel of land in
moment the donor knows of the acceptance by the donee. favor of that congregation in a duly notarized Deed of
The death of Jose before Pedro could receive the Donation, subject to the condition that the Minister shall
acceptance indicates that the donation was never perfected. construct thereon a place of worship within 1 year from the
Under Article 746 acceptance must be made during the acceptance of the donation. In an affidavit he executed on
lifetime of both the donor and the donee. behalf of the congregation, the Minister accepted the
donation. The Deed of Donation was not registered with
Donations; Requisites; Immovable Property
the Registry of Deeds.
Anastacia purchased a house and lot on installments at a
housing project in Quezon City. Subsequently, she was However, instead of constructing a place of worship, the
employed in California and a year later, she executed a deed Minister constructed a bungalow on the property he used as
of donation, duly authenticated by the Philippine Consulate his residence. Disappointed with the Minister, the spouses
in Los Angeles, California, donating the house and lot to revoked the donation and demanded that he vacate the
her friend Amanda. The latter brought the deed of donation premises immediately. But the Minister refused to leave,
to the owner of the project and discovered that Anastacia claiming that aside from using the bungalow as his
left unpaid installments and real estate taxes. Amanda paid residence, he is also using it as a place for worship on
these so that the donation in her favor can be registered in special occasions. Under the circumstances, can Alfredo
the project owner's office. Two months later, Anastacia and Racquel evict the Minister and recover possession
died, leaving her mother Rosa as her sole heir. Rosa filed an of the property?
action to annul the donation on the ground that Amanda If you were the couple's counsel, what action you take
did not give her consent in the deed of donation or in a to protect the interest of your clients? (5%)
separate public instrument. Amanda replied that the ALTERNATIVE ANSWER:
donation was an onerous one because she had to pay Yes, Alfredo and Racquel can bring an action for ejectment
unpaid installments and taxes; hence her acceptance may be against the Minister for recovery of possession of the
implied. Who is correct? (2%) property evict the Minister and recover possession of the
SUGGESTED ANSWER: property. An action for annulment of the donation,
Rosa is correct because the donation is void. The property reconveyance and damages should be filed to protect the
donated was an immovable. For such donation to be valid, interests of my client. The donation is an onerous donation
Article 749 of the New Civil Code requires both the and therefore shall be governed by the rules on contracts.
donation and the acceptance to be in a public instrument. Because there was no fulfillment or compliance with the
There being no showing that Amanda's acceptance was condition which is resolutory in character, the donation may
made in a public instrument, the donation is void. The now be revoked and all rights which the donee may have
contention that the donation is onerous and, therefore, need acquired under it shall be deemed lost and extinguished
not comply with Article 749 for validity is without merit. (Central Philippine University, G.R. No. 112127, July 17,1995).
The donation is not onerous because it did not impose on ALTERNATIVE ANSWER:
Amanda the obligation to pay the balance on the purchase No, an action for ejectment will not prosper. I would advice
price or the arrears in real estate taxes. Amanda took it upon Alfredo and Racquel that the Minister, by constructing a
herself to pay those amounts voluntarily. For a donation to structure which also serves as a place of worship, has
be onerous, the burden must be imposed by the donor on pursued the objective of the donation. His taking up
the donee. In the problem, there is no such burden imposed residence in the bungalow may be regarded as a casual
by the donor on the donee. The donation not being breach and will not warrant revocation of the donation.
onerous, it must comply with the formalities of Article 749. Similarily, therefore, an action for revocation of the
ALTERNATIVE ANSWER: donation will be denied (C. J. Yulo & Sons, Inc. v. Roman
Neither Rosa nor Amanda is correct. The donation is Catholic Bishop, G.R. No. 133705, March 31, 2005; Heirs
onerous only as to the portion of the property ofRozendo Sevilla v. De Leon, G.R. No. 149570, March 12,
corresponding to the value of the installments and taxes 2004).
paid by Amanda.
The portion in excess thereof is not onerous. The onerous Donations; Validity; Effectivity; for Unborn Child (1999)
portion is governed by the rules on contracts which do not Elated that her sister who had been married for five years
require the acceptance by the donee to be in any form. The was pregnant for the first time, Alma donated P100,000.00
onerous part, therefore, is valid. The portion which is not to the unborn child. Unfortunately, the baby died one hour
onerous must comply with Article 749 of the New Civil after delivery. May Alma recover the P100.000.00 that she
Page 55 of 119
had donated to said baby before it was born considering not been fixed in the Deed of Donation, the donee is not
that the baby died? Stated otherwise, is the donation valid yet default in his obligation until the period is fixed by order
and binding? Explain. (5%) of the court under Article 1197 of the New Civil Code.
SUGGESTED ANSWER: Since the period has not been fixed as yet, the donee is not
The donation is valid and binding, being an act favorable to yet default, and therefore the donor has no cause of action
the unborn child, but only if the baby had an intra-uterine to revoke the donation. (Dissenting opinion of Davide, CJ,
life of not less than seven months and provided there was Central Philippine University v. Court of Appeals, 246 SCRA
due acceptance of the donation by the proper person 511 [1995])
representing said child. If the child had less than seven
months of intra-uterine life, it is not deemed born since it
died less than 24 hours following its delivery, in which ease PROPERTY
the donation never became effective since the donee never
became a person, birth being determinative of personality. Accretion; Alluvion (2001)
ALTERNATIVE ANSWER: For many years, the Rio Grande river deposited soil along
Even if the baby had an intra-uterine life of more than its bank, beside the titled land of Jose. In time, such deposit
seven months and the donation was properly accepted, it reached an area of one thousand square meters. With the
would be void for not having conformed with the proper permission of Jose, Vicente cultivated the said area. Ten
form. In order to be valid, the donation and acceptance of years later, a big flood occurred in the river and transferred
personal property exceeding five thousand pesos should be the 1000 square meters to the opposite bank, beside the
in writing. (Article 748, par. 3) land of Agustin. The land transferred is now contested by
Jose and Agustin as riparian owners and by Vicente who
Donations; with Resolutory Condition (2003) claims ownership by prescription. Who should prevail,?
In 1950, Dr. Alba donated a parcel of land to Central Why? (5%)
University on condition that the latter must establish a SUGGESTED ANSWER:
medical college on the land to be named after him. In the Jose should prevail. The disputed area, which is an alluvion,
year 2000, the heirs of Dr. Alba filed an action to annul the belongs by right of accretion to Jose, the riparian owner
donation and for the reconveyance of the property donated (Art. 457 CC). When, as given in the problem, the very
to them for the failure, after 50 years, of the University to same area" was "transferred" by flood waters to the
established on the property a medical school named after opposite bank, it became an avulsion and ownership thereof
their father. The University opposed the action on the is retained by Jose who has two years to remove it (Art. 459,
ground of prescription and also because it had not used the CC). Vicente's claim based on prescription is baseless since
property for some purpose other than that stated in the his possession was by mere tolerance of Jose and, therefore,
donation. Should the opposition of the University to the did not adversely affect Jose's possession and ownership
action of Dr. Alba’s heirs be sustained? Explain. (Art. 537, CC). Inasmuch as his possession is merely that of
SUGGESTED ANSWER: a holder, he cannot acquire the disputed area by
The donation may be revoked. The non-established of the prescription.
medical college on the donated property was a resolutory
condition imposed on the donation by the donor. Although Accretion; Avulsion (2003)
the Deed of Donation did not fix the time for the Andres is a riparian owner of a parcel of registered land. His
established of the medical college, the failure of the donee land, however, has gradually diminished in area due to the
to establish the medical college after fifty (50) years from current of the river, while the registered land of Mario on
the making of the donation should be considered as the opposite bank has gradually increased in area by 200-
occurrence of the resolutory condition, and the donation square meters.
may now be revoked. While the general rule is that in case (a) Who has the better right over the 200-square
the period is not fixed in the agreement of the parties, the meter area that has been added to Mario’s registered land,
period must be fixed first by the court before the obligation Mario or Andres?
may be demanded, the period of fifty (50) years was more (b) May a third person acquire said 200-square meter
than enough time for the donee to comply with the land by prescription?
condition. Hence, in this case, there is no more need for the SUGGESTED ANSWER:
court to fix the period because such procedure with the a. Mario has a better right over the 200 square meters
condition. (Central Philippine University v. CA. 246 SCRA increase in area by reason of accretion, applying Article 457
511). of the New Civil Code, which provides that “to the owners
ANOTHER SUGGESTED ANSWER: of lands adjoining the banks of rivers belong the accretion
The donation may not as yet revoked. The establishment of which they gradually received from the effects of the
a medical college is not a resolutory or suspensive condition current of the waters”.
but a “charge”, obligation”, or a “mode”. The non- Andres cannot claim that the increase in Mario’s
compliance with the charge or mode will give the donor the land is his own, because such is an accretion and not result
right to revoke the donation within four (4) years from the of the sudden detachment of a known portion of his land
time the charge was supposed to have been complied with, and its attachment to Mario’s land, a process called
or to enforce the charge by specific performance within ten “avulsion”. He can no longer claim ownership of the
(10) years from the time the cause of action accrued. portion of his registered land which was gradually and
Inasmuch as the time to established the medical college has naturally eroded due to the current of the river, because he
Page 56 of 119
had lost it by operation of law. That portion of the land has reasonable rent, if the owner of the land does not choose to
become part of the public domain. appropriate the building after proper indemnity. The parties
shall agree upon the terms of the lease and in case of
SUGGESTED ANSWER:
disagreement, the court fix the terms thereof.
b. Yes, a third party may acquire by prescription the 200
square meters, increase in area, because it is not included in Builder; Good Faith vs. Bad Faith (1999)
the Torrens Title of the riparian owner. Hence, this does (a) Because of confusion as to the boundaries of the
not involve the imprescriptibility conferred by Section 47, adjoining lots that they bought from the same subdivision
P.D. No. 1529. The fact that the riparian land is registered company, X constructed a house on the adjoining lot of Y
does not automatically make the accretion thereto a in the honest belief that it is the land that he bought from
registered land. (Grande v. CA, 115 521 (1962); Jagualing v. the subdivision company. What are the respective rights of
CA, 194 SCRA 607 (1991).
X and Y with respect to X's house? (3%)
Builder; Good Faith (1992)
A owns a parcel of residential land worth P500,000.00 (b) Suppose X was in good faith but Y knew that X was
unknown to A, a residential house costing P 100,000.00 is
constructing on his (Y's) land but simply kept quiet about it,
built on the entire parcel by B who claims ownership of the
thinking perhaps that he could get X's house later. What are
land. Answer all the following questions based on the
the respective rights of the parties over X's house in this
premise that B is a builder in good faith and A is a
case? (2%)
landowner in good faith.
SUGGESTED ANSWER:
a) May A acquire the house built by B? If so, how? (a) The rights of Y, as owner of the lot, and of X, as builder
b) If the land increased in value to P500,000.00 by reason of a house thereon, are governed by Art. 448 of the Civil
of the building of the house thereon, what amount Code which grants to Y the right to choose between two
should be paid by A in order to acquire the house from remedies: (a) appropriate the house by indemnifying X for
B? its value plus whatever necessary expenses the latter may
c) Assuming that the cost of the house was P90,000.00 have incurred for the preservation of the land, or (b)
and not P100,000.00, may A require B to buy the land? compel X to buy the land if the price of the land is not
d) If B voluntarily buys the land as desired by A, under considerably more than the value of the house. If it is, then
what circumstances may A nevertheless be entitled to X cannot be obliged to buy the land but he shall pay
have the house removed? reasonable rent, and in case of disagreement, the court shall
e) In what situation may a "forced lease" arise between A
fix the terms of the lease.
and B. and what terms and conditions would govern
the lease? SUGGESTED ANSWER:
Give reasons for your answers. (b) Since the lot owner Y is deemed to be in bad faith (Art
SUGGESTED ANSWER: 453), X as the party in good faith may (a) remove the house
(a) Yes, A may acquire the house build by B by paying and demand indemnification for damages suffered by him,
indemnity to B. Article 448 of the Civil Code provides that or (b) demand payment of the value of the house plus
the owner of the land on which anything has been built, reparation for damages (Art 447, in relation to Art 454). Y
sown or planted in good faith, shall have the right to continues as owner of the lot and becomes, under the
appropriate as his own the works, sowing or planting, after second option, owner of the house as well, after he pays the
payment of the indemnity provided for in Articles 546 and
sums demanded.
546 of the Civil Code.
Builder; Good Faith vs. Bad Faith (2000)
(b) A should pay B the sum of P50,000. Article 548 of the In good faith, Pedro constructed a five-door commercial
Civil Code provides that useful expenses shall be refunded building on the land of Pablo who was also in good faith.
to the possessor in good faith with the right of retention, When Pablo discovered the construction, he opted to
the person who has defeated him in the possession having appropriate the building by paying Pedro the cost thereof.
the option of refunding the amount of the expenses or of However, Pedro insists that he should be paid the current
paying the increase in value which the thing may have market value of the building, which was much higher
acquired by reason thereof. The increase in value amounts because of inflation.
to P50,000.00. 1) Who is correct Pedro or Pablo?(1%)
2) In the meantime that Pedro is not yet paid, who is
(c) Yes, A may require B to buy the land. Article 448 of the entitled to the rentals of the building, Pedro or Pablo? (1%)
Civil Code provides that the owner of the land on which SUGGESTED ANSWER:
anything has been built in good faith shall have the right to Pablo is correct. Under Article 448 of the New Civil Code
oblige the one who built to pay the price of the land if its in relation to Article 546, the builder in good faith is entitled
value is not considerably more than that of the building, to a refund of the necessary and useful expenses incurred by
(d) If B agrees to buy land but fails to pay, A can have the him, or the increase in value which the land may have
house removed ( Depra vs. Dumlao, 136 SCRA 475). acquired by reason of the improvement, at the option of the
landowner. The builder is entitled to a refund of the
(e) Article 448 of the Civil Code provides that the builder expenses he incurred, and not to the market value of the
cannot be obliged to buy the land if its value is considerably improvement
more than that of the building. In such case, he shall pay
Page 57 of 119
The case of Pecson v. CA, 244 SCRA 407, is not applicable to square meters. Jose claims that Mike is a builder in bad faith
the problem. In the Pecson case, the builder was the owner because he should know the boundaries of his lot, and
of the land who later lost the property at a public sale due to demands that the portion of the house which encroached
non-payment of taxes. The Court ruled that Article 448 on his land should be destroyed or removed. Mike replies
does not apply to the case where the owner of the land is that he is a builder in good faith and offers to buy the land
the builder but who later lost the land; not being applicable, occupied by the building instead.
the indemnity that should be paid to the buyer must be the 1) Is Mike a builder in good faith or bad faith? Why? (3%)
fair market value of the building and not just the cost of 2) Whose preference should be followed? Why? (2%)
construction thereof. The Court opined in that case that to SUGGESTED ANSWER:
do otherwise would unjustly enrich the new owner of the 1) Yes, Mike is a builder in good faith. There is no showing
land. that when he built his house, he knew that a portion thereof
ALTERNATIVE ANSWER: encroached on Jose's lot. Unless one is versed in the science
Pedro is correct. In Pecson vs. CA, it was held that Article of surveying, he cannot determine the precise boundaries or
546 of the New Civil Code does not specifically state how location of his property by merely examining his title. In the
the value of useful improvements should be determined in absence of contrary proof, the law presumes that the
fixing the amount of indemnity that the owner of the land encroachment was done in good faith [Technogas Phils, v.
should pay to the builder in good faith. Since the objective CA, 268 SCRA 5, 15 (1997)].
of the law is to adjust the rights of the parties in such
manner as "to administer complete justice to both of them 2} None of the preferences shall be followed. The
in such a way as neither one nor the other may enrich preference of Mike cannot prevail because under Article 448
himself of that which does not belong to him", the Court of the Civil Code, it is the owner of the land who has the
ruled that the basis of reimbursement should be the fair option or choice, not the builder. On the other hand, the
market value of the building. option belongs to Jose, he cannot demand that the portion
SUGGESTED ANSWER: of the house encroaching on his land be destroyed or
2) Pablo is entitled to the rentals of the building. As the removed because this is not one of the options given by law
owner of the land, Pablo is also the owner of the building to the owner of the land. The owner may choose between
being an accession thereto. However, Pedro who is entitled the appropriation of what was built after payment of
to retain the building is also entitled to retain the rentals. indemnity, or to compel the builder to pay for the land if
He, however, shall apply the rentals to the indemnity the value of the land is not considerably more than that of
payable to him after deducting reasonable cost of repair and the building. Otherwise, the builder shall pay rent for the
maintenance. portion of the land encroached.
ALTERNATIVE ANSWER: ALTERNATIVE ANSWER:
Pablo is entitled to the rentals. Pedro became a possessor in 1) Mike cannot be considered a builder in good faith
bad faith from the time he learned that the land belongs to because he built his house without first determining the
Pablo. As such, he loses his right to the building, including corners and boundaries of his lot to make sure that his
the fruits thereof, except the right of retention. construction was within the perimeter of his property. He
could have done this with the help of a geodetic engineer as
Builder; Good Faith vs. Bad Faith; Accession (2000) an ordinary prudent and reasonable man would do under
a) Demetrio knew that a piece of land bordering the beach the circumstances.
belonged to Ernesto. However, since the latter was studying
in Europe and no one was taking care of the land, Demetrio 2) Jose's preference should be followed. He may have the
occupied the same and constructed thereon nipa sheds with building removed at the expense of Mike, appropriate the
tables and benches which he rented out to people who want building as his own, oblige Mike to buy the land and ask for
to have a picnic by the beach. When Ernesto returned, he damages in addition to any of the three options. (Articles
demanded the return of the land. Demetrio agreed to do so 449, 450, 451, CC)
after he has removed the nipa sheds. Ernesto refused to let
Demetrio remove the nipa sheds on the ground that these Chattel Mortgage vs. Pledge (1999)
already belonged to him by right of accession. Who is Distinguish a contract of chattel mortgage from a contract
correct? (3%) of pledge. (2%)
Ernesto is correct, Demetrio is a builder in bad faith In a contract of CHATTEL MORTGAGE possession
because he knew beforehand that the land belonged to belongs to the creditor, while in a contract of PLEDGE
Ernesto, under Article 449 of the New Civil Code, one who possession belongs to the debtor.
builds on the land of another loses what is built without
right to indemnity. Ernesto becomes the owner of the nipa A chattel mortgage is a formal contract while a pledge is a
sheds by right of accession. Hence, Ernesto is well within real contract.
his right in refusing to allow the removal of the nipa sheds.
A contract of chattel mortgage must be recorded in a public
Builder; Good Faith vs. Bad Faith; Presumption (2001) instrument to bind third persons while a contract of pledge
Mike built a house on his lot in Pasay City. Two years later, must be in a public instrument containing description of the
a survey disclosed that a portion of the building actually thing pledged and the date thereof to bind third persons.
stood on the neighboring land of Jose, to the extent of 40
Page 58 of 119
Chattel Mortgage; Immovables (1994) foreclosure sale, foreclosed the mortgage and acquired X’s
Vini constructed a building on a parcel of land he leased house and lot. Learning of the proceedings conducted by
from Andrea. He chattel mortgaged the land to Felicia. the bank, Z is now demanding that the bank reconvey to
When he could not pay Felicia. Felicia initiated foreclosure him X’s house or pay X’s loan to him plus interests. Is Z’s
proceedings. Vini claimed that the building he had demand against the bank valid and sustainable? Why? 5%
constructed on the leased land cannot be validly foreclosed SUGGESTED ANSWER:
because the building was, by law, an immovable. No, Z’s demand is not valid. A building is immovable or
Is Vini correct? real property whether it is erected by the owner of the land,
SUGGESTED ANSWERS: by a usufructuary, or by a lessee. It may be treated as a
a) The Chattel Mortgage is void and cannot be foreclosed movable by the parties to chattel mortgage but such is
because the building is an immovable and cannot be an binding only between them and not on third parties
object of a chattel mortgage. (Evangelista v. Alto Surety Col, inc. 103 Phil. 401 [1958]). In
this case, since the bank is not a party to the chattel
b) It depends. If the building was intended and is built of mortgage, it is not bound by it, as far as the Bank is
light materials, the chattel mortgage may be considered as concerned, the chattel mortgage, does not exist. Moreover,
valid as between the parties and it may be considered in the chattel mortgage does not exist. Moreover, the chattel
respect to them as movable property, since it can be mortgage is void because it was not registered. Assuming
removed from one place to another. But if the building is of that it is valid, it does not bind the Bank because it was not
strong material and is not capable of being removed or annotated on the title of the land mortgaged to the bank. Z
transferred without being destroyed, the chattel mortgage is cannot demand that the Bank pay him the loan Z extended
void and cannot be foreclosed. to X, because the Bank was not privy to such loan
transaction.
c) If it was the land which Vini chattel mortgaged, such ANOTHER SUGGESTED ANSWER:
mortgage would be void, or at least unenforceable, since he No, Z’s demand against the bank is not valid. His demand
was not the owner of the land. that the bank reconvey to him X’s house presupposes that
If what was mortgaged as a chattel is the building, he has a real right over the house. All that Z has is a
the chattel mortgage is valid as between the parties only, on personal right against X for damages for breach of the
grounds of estoppel which would preclude the mortgagor contract of loan.
from assailing the contract on the ground that its subject-
matter is an immovable. Therefore Vini's defense is The treatment of a house, even if built on rented land, as
untenable, and Felicia can foreclose the mortgage over the movable property is void insofar as third persons, such as
building, observing, however, the procedure prescribed for the bank, are concerned. On the other hand, the Bank
the execution of sale of a judgment debtor's immovable already had a real right over the house and lot when the
under Rule 39, Rules of Court, specifically, that the notice mortgage was annotated at the back of the Torrens title.
of auction sale should be published in a newspaper of The bank later became the owner in the foreclosure sale. Z
cannot ask the bank to pay for X’s loan plus interest. There
general circulation.
is no privity of contract between Z and the bank.
d) The problem that Vini mortgaged the land by way of a ALTERNATIVE ANSWER:
chattel mortgage is untenable. Land can only be the subject The answer hinges on whether or not the bank is an
matter of a real estate mortgage and only an absolute owner innocent mortgagee in good faith or a mortgagee in bad
of real property may mortgage a parcel of land. (Article faith. In the former case, Z’s demand is not valid. In the
latter case, Z’s demand against the bank is valid and
2085 (2) Civil Code). Hence, there can be no foreclosure.
sustainable.
But on the assumption that what was mortgaged by way of
chattel mortgage was the building on leased land, then the Under the Torrens system of land registration, every person
parties are treating the building as chattel. A building that is dealing with registered land may rely on the correctness of
not merely superimposed on the ground is an immovable the certificate of title and the law will not in any way oblige
property and a chattel mortgage on said building is legally to him to look behind or beyond the certificate in order to
void but the parties cannot be allowed to disavow their determine the condition of the title. He is not bound by
contract on account of estoppel by deed. However, if third anything not annotated or reflected in the certificate. If he
parties are involved such chattel mortgage is void and has proceeds to buy the land or accept it as a collateral relying
on the certificate, he is considered a buyer or a mortgagee in
no effect.
good faith. On this ground, the Bank acquires a clean title
Chattel Mortgage; Immovables (2003) to the land and the house.
X constructed a house on a lot which he was leasing from
Y. Later, X executed a chattel mortgage over said house in However, a bank is not an ordinary mortgagee. Unlike
private individuals, a bank is expected to exercise greater
favor of Z as security for a loan obtained from the latter.
Still later, X acquired ownership of the land where his house care and prudence in its dealings. The ascertainment of the
was constructed, after which he mortgaged both house and condition of a property offered as collateral for a loan must
land in favor of a bank, which mortgage was annotated on be a standard and indispensable part of its operation. The
the Torrens Certificate of Title. When X failed to pay his bank should have conducted further inquiry regarding the
house standing on the land considering that it was already
loan to the bank, the latter, being the highest bidder at the
Page 59 of 119
standing there before X acquired the title to the land. The was then valued only at P1 Million. Lawrence was declared
bank cannot be considered as a mortgagee in good faith. On insolvent.
this ground, Z’s demand against the Bank is valid and
sustainable. Assuming that the aircraft was sold for Pl Million, give the
order of preference of the creditors of Lawrence and
Chattel Mortgage; Possession (1993) distribute the amount of P1 Million.
A, about to leave the country on a foreign assignment, SUGGESTED ANSWER:
entrusted to B his brand new car and its certificate of Assuming that the aircraft was sold for P1 Million, there is
registration. Falsifying A's signature. B sold A's car to C for no order of preference. The P1 Million will all go to the
P200,000.00. C then registered the car in his name. To bank as a chattel mortgagee because a chattel mortgage
complete the needed amount, C borrowed P100.000.00 under Art. 2241 (4) NCC defeats Art. 2244 (12) and (14}.
from the savings and loan association in his office, Art. 2241 (3) and (5) are not applicable because the aircraft
constituting a chattel mortgage on the car. For failure of C is no longer in the possession of the creditor.
to pay the amount owed, the savings and loan association
filed in the RTC a complaint for collection with application Easement vs. Usufruct (1995)
for issuance of a writ of replevin to obtain possession of the 1. What is easement? Distinguish easement from usufruct.
vehicle so that the chattel mortgage could be foreclosed. 2. Can there be (a) an easement over a usufruct? (b) a
The RTC issued the writ of replevin. The car was then usufruct over an easement? (c) an easement over another
seized from C and sold by the sheriff at public auction at easement? Explain.
which the savings and loan association was the lone bidder. SUGGESTED ANSWER:
Accordingly, the car was sold to it. A few days later, A 1. An EASEMENT or servitude is an encumbrance
arrived from his foreign assignment. Learning of what imposed upon an immovable for the benefit of another
happened to his car, A sought to recover possession and immovable belonging to a different owner. (Art. 613, NCC)
ownership of it from the savings and loan association.
Can A recover his car from the savings and loan USUFRUCT gives a right to enjoy the property of another
association? Explain your answer. with the obligation of preserving its form and substance,
SUGGESTED ANSWER: unless the title constituting it or the law otherwise provides.
Under the prevailing rulings of the Supreme Court, A can (Art. 562, NCC).
recover the car from the Savings and Loan Association
provided he pays the price at which the Association bought ALTERNATIVE ANSWER:
the car at a public auction. Under that doctrine, there has Easement is an encumbrance imposed upon an immovable
been an unlawful deprivation by B of A of his car and, for the benefit of another immovable belonging to a
therefore, A can recover it from any person in possession different owner in which case it is called real or predial
thereof. But since it was bought at a public auction in good easement, or for the benefit of a community or group of
faith by the Savings and Loan Association, he must persons in which case it is known as a personal easement.
reimburse the Association at the price for which the car was
bought. The distinctions between usufruct and easement are:
ALTERNATIVE ANSWER: a) Usufruct includes all uses of the property and for all
Yes, A can recover his car from the Savings and Loan purposes, including jus fruendi. Easement is limited to
Association. In a Chattel Mortgage, the mortgagor must be a specific use.
the absolute owner of the thing mortgaged. Furthermore, b) Usufruct may be constituted on immovable or movable
the person constituting the mortgage must have the free property. Easement may be constituted only on an
disposal of the property, and in the absence thereof, must immovable property.
be legally authorized for the purpose. In the case at bar, c) Easement is not extinguished by the death of the
these essential requisites did not apply to the mortgagor B, owner of the dominant estate while usufruct is
extinguished by the death of the usufructuary unless a
hence the Chattel Mortgage was not valid.
contrary intention appears.
Chattel Mortgage; Preference of Creditors (1995) d) An easement contemplates two (2) estates belonging to
Lawrence, a retired air force captain, decided to go into the two (2) different owners; a usufruct contemplates only
air transport business. He purchased an aircraft in cash one property (real or personal) whereby the
except for an outstanding balance of P500,000.00. He usufructuary uses and enjoys the property as well as its
incurred an indebtedness of P300,000.00 for repairs with an fruits, while another owns the naked title during the
aircraft repair company. He also borrowed P1 Million from period of the usufruct.
a bank for additional capital and constituted a chattel e) A usufruct may be alienated separately from the
property to which it attaches, while an easement cannot
mortgage on the aircraft to secure the loan.
be alienated separately from the property to which it
While on a test flight the aircraft crashed causing physical attaches.
injuries to a third party who was awarded damages of NOTE: It is recommended by the Committee that
any two (2) distinctions should be given full credit.
P200,000.00.
SUGGESTED ANSWER:
Lawrence's insurance claim for damage to the aircraft was
denied thus leaving him nothing else but the aircraft which
Page 60 of 119
2. (a) There can be no easement over a usufruct. Since an there is a degree of regularity to indicate continuity of
easement may be constituted only on a corporeal possession and that if coupled with an apparent sign, such
immovable property, no easement may be constituted on a easement of way may be acquired by prescription.
usufruct which is not a corporeal right ALTERNATIVE ANSWER:
(b) There can be no usufruct over an easement. While a Yes, Ernie could close the pathway on his land. Don has
usufruct maybe created over a right, such right must have an not acquired an easement of right of way either by
existence of its own independent of the property. A agreement or by judicial grant. Neither did the buyers. Thus,
servitude cannot be the object of a usufruct because it has establishment of a road or unlawful use of the land of Ernie
no existence independent of the property to which It would constitute an invasion of possessory rights of the
attaches. owner, which under Article 429 of the Civil Code may be
ALTERNATIVE ANSWERS: repelled or prevented. Ernie has the right to exclude any
There cannot be a usufruct over an easement since an person from the enjoyment and disposal of the land. This is
easement presupposes two (2) tenements belonging to an attribute of ownership that Ernie enjoys.
different persons and the right attaches to the tenement and ALTERNATIVE ANSWER:
not to the owner. While a usufruct gives the usufructuary a Yes, Ernie may close the pathway, subject however, to the
right to use, right to enjoy, right to the fruits, and right to rights of the lot buyers. Since there is no access to the
possess, an easement gives only a limited use of the servient public road, this results in the creation of a legal easement.
estate. The lot buyers have the right to demand that Ernie grant
However, a usufruct can be constituted over a them a right of way. In turn, they have the obligation to pay
property that has in its favor an easement or one burdened the value of the portion used as a right of way, plus
with servitude. The usufructuary will exercise the easement damages.
during the period of usufruct.
c) What are the rights of the lot buyers, if any?
(c) There can be no easement over another easement for the Explain. (2%)
same reason as in (a). An easement, although it is a real right SUGGESTED ANSWER:
over an immovable, is not a corporeal right. There is a Prior to the grant of an easement, the buyers of the
Roman maxim which says that: There can be no servitude dominant estate have no other right than to compel grant of
easement of right of way.
over another servitude.
Since the properties of the buyers are surrounded by other
Easement; Effects; Discontinuous Easements; Permissive immovables and has no adequate outlet to a public highway
and the isolation is not due to their acts, buyers may
Use (2005)
Don was the owner of an agricultural land with no access to demand an easement of a right of way provided proper
a public road. He had been passing through the land of indemnity is paid and the right of way demanded is the
Ernie with the latter's acquiescence for over 20 years. shortest and least prejudicial to Ernie. (Villanueva v.
Velasco, G.R. No. 130845, November 27, 2000).
Subsequently, Don subdivided his property into 20
residential lots and sold them to different persons. Ernie
blocked the pathway and refused to let the buyers pass Easement; Nuisance; Abatement (2002)
Lauro owns an agricultural land planted mostly with fruit
through his land.
trees. Hernando owns an adjacent land devoted to his
a) Did Don acquire an easement of right of way?
piggery business, which is two (2) meters higher in
Explain. (2%)
elevation. Although Hernando has constructed a waste
ALTERNATIVE ANSWER:
No, Don did not acquire an easement of right of way. An disposal lagoon for his piggery, it is inadequate to contain
easement of right of way is discontinuous in nature — it is the waste water containing pig manure, and it often
exercised only if a man passes over somebody's land. Under overflows and inundates Lauro’s plantation. This has
Article 622 of the Civil Code, discontinuous easements, increased the acidity of the soil in the plantation, causing the
whether apparent or not, may only be acquired by virtue of trees to wither and die. Lauro sues for damages caused to
a title. The Supreme Court, in Abellana, Sr. v. Court of his plantation. Hernando invokes his right to the benefit of
Appeals (G.R. No. 97039, April 24, 1992), ruled that an a natural easement in favor of his higher estate, which
easement of right of way being discontinuous in nature is imposes upon the lower estate of Lauro the obligation to
receive the waters descending from the higher estate. Is
not acquirable by prescription.
Hernando correct? (5%)
Further, possession of the easement by Don is only SUGGESTED ANSWER:
Hernando is wrong. It is true that Lauro’s land is burdened
permissive, tolerated or with the acquiescence of Ernie. It is
with the natural easement to accept or receive the water
settled in the case of Cuaycong v. Benedicto (G.R. No. 9989,
which naturally and without interruption of man descends
March 13, 1918) that a permissive use of a road over the land
from a higher estate to a lower estate. However, Hernando
of another, no matter how long continued, will not create
has constructed a waste disposal lagoon for his piggery and
an easement of way by prescription.
it is this waste water that flows downward to Lauro’s land.
ALTERNATIVE ANSWER:
Yes, Don acquired an easement of right of way. An Hernando has, thus, interrupted the flow of water and has
easement that is continuous and apparent can be acquired created and is maintaining a nuisance. Under Act. 697 NCC,
by prescription and title. According to Professor Tolentino, abatement of a nuisance does not preclude recovery of
an easement of right of way may have a continuous nature if damages by Lauro even for the past existence of a nuisance.
Page 61 of 119
The claim for damages may also be premised in Art. 2191 to time. As Tomas' business grows, the need for use of
(4) NCC. modern conveyances requires widening of the easement.
ANOTHER ANSWER: ALTERNATIVE ANSWER:
Hernando is not correct. Article 637 of the New Civil Code The facts show that the need for a wider right of way arose
provides that the owner of the higher estate cannot make from the increased production owing to the acquisition by
works which will increase the burden on the servient estate. Tomas of an additional area. Under Art. 626 of the Civil
(Remman Enterprises, Inc. v. CA, 330 SCRA 145 [2000]). The Code, the easement can be used only for the immovable
owner of the higher estate may be compelled to pay originally contemplated. Hence, the increase in width is
damages to the owner of the lower estate. justified and should have been granted.
Easements; Classification (1998) Easements; Right of Way (2000)

Distinguish between: The coconut farm of Federico is surrounded by the lands of
1. Continuous and discontinuous easements; |2%] Romulo. Federico seeks a right of way through a portion of
2. Apparent and non-apparent easements; and [2%] the land of Romulo to bring his coconut products to the
3. Positive and negative easements. [1%] market. He has chosen a point where he will pass through a
SUGGESTED ANSWER: housing project of Romulo. The latter wants him to pass
1. CONTINUOUS EASEMENTS are those the use of another way which is one kilometer longer. Who should
which is or may be incessant, without the intervention of prevail? (5%)
any act of man, while DISCONTINUOUS EASEMENTS SUGGESTED ANSWER:
are those which are used at intervals and depend upon the Romulo will prevail. Under Article 650 of the New Civil
acts of man. (Art. 615, Civil Code) Code, the easement of right of way shall be established at
the point least prejudicial to the servient estate and where
SUGGESTED ANSWER: the distance from the dominant estate to a public highway is
2. APPARENT EASEMENTS are those which are made the shortest. In case of conflict, the criterion of least prejudice prevails
known and are continually kept in view by external signs over the criterion of shortest distance. Since the route chosen by
that reveal the use and enjoyment of the same, while NON- Federico will prejudice the housing project of Romulo,
APPARENT EASEMENTS are those which show no Romulo has the right to demand that Federico pass another
external indication of their existence. (Art. 615, Civil Code)
way even though it will be longer.
SUGGESTED ANSWER:
3. POSITIVE EASEMENTS are those which impose Easements; Right of Way; Inseparability (2001)
Emma bought a parcel of land from Equitable-PCI Bank,
upon the owner of the servient estate the obligation of
which acquired the same from Felisa, the original owner.
allowing something to be done or of doing it himself, while
NEGATIVE EASEMENTS are those which prohibit the
Thereafter, Emma discovered that Felisa had granted a right
of way over the land in favor of the land of Georgina,
owner of the servient estate from doing something which
he could lawfully do if the easement did not exist. (Art. 615. which had no outlet to a public highway, but the easement
was not annotated when the servient estate was registered
Civil Code)
under the Torrens system. Emma then filed a complaint for
cancellation of the right of way, on the ground that it had
Easements; Right of Way (1993)
been extinguished by such failure to annotate. How would
Tomas Encarnacion's 3,000 square meter parcel of land,
where he has a plant nursery, is located just behind Aniceta you decide the controversy? (5%)
SUGGESTED ANSWER:
Magsino's two hectare parcel land. To enable Tomas to The complaint for cancellation of easement of right of way
have access to the highway, Aniceta agreed to grant him a must fail. The failure to annotate the easement upon the
road right of way a meter wide through which he could title of the servient estate is not among the grounds for
pass. Through the years Tomas' business flourished which extinguishing an easement under Art. 631 of the Civil Code.
enabled him to buy another portion which enlarged the area Under Article 617, easements are inseparable from the
of his plant nursery. But he was still landlocked. He could estate to which they actively or passively belong. Once it
not bring in and out of his plant nursery a jeep or delivery attaches, it can only be extinguished under Art. 631, and
panel much less a truck that he needed to transport his they exist even if they are not stated or annotated as an
seedlings. He now asked Aniceta to grant him a wider encumbrance on the Torrens title of the servient estate. (II
portion of her property, the price of which he was willing to Tolentino 326, 1987 ed.)
pay, to enable him to construct a road to have access to his ALTERNATIVE ANSWER:
plant nursery. Aniceta refused claiming that she had already Under Section 44, PD No. 1529, every registered owner
allowed him a previous road right of way. receiving a certificate of title pursuant to a decree of
Is Tomas entitled to the easement he now demands from registration, and every subsequent innocent purchaser for
Aniceta? value, shall hold the same free from all encumbrances
SUGGESTED ANSWER: except those noted on said certificate. This rule, however,
Art. 651 of the Civil Code provides that the width of the
admits of exceptions.
easement must be sufficient to meet the needs of the
dominant estate, and may accordingly change from time to Under Act 496, as amended by Act No. 2011, and Section 4,
time. It is the need of the dominant estate which determines Act 3621, an easement if not registered shall remain and
the width of the passage. These needs may vary from time shall be held to pass with the land until cutoff or
Page 62 of 119
extinguished by the registration of the servient estate. consistent with this rule, where the distance to the street or
However, this provision has been suppressed in Section 44, highway is shortest.
PD No. 1529. In other words, the registration of the
servient estate did not operate to cut-off or extinguish the 2) Is David entitled to a right of way in this case? Why or
right of way. Therefore, the complaint for the cancellation why not?
SUGGESTED ANSWER:
of the right of way should be dismissed.
No, David is not entitled to the right of way being claimed.
Easements; Right of Way; Requisites (1996) The isolation of his subdivision was due to his own act or
David is the owner of the subdivision in Sta. Rosa, Laguna, omission because he did not develop into an access road the
without an access to the highway. When he applied for a rice field which he was supposed to purchase according to
license to establish the subdivision, David represented that his own representation when he applied for a license to
he will purchase a rice field located between his land and the establish the subdivision (Floro us. Llenado, 244 SCRA713).
highway, and develop it into an access road. But. when the
license was already granted, he did not bother to buy the Ejectment Suit vs. Cancellation of Title (2005)
rice field, which remains unutilized until the present. In an ejectment case filed by Don against Cesar, can the
Instead, he chose to connect his subdivision with the latter ask for the cancellation of Don's title considering that
neighboring subdivision of Nestor, which has an access to he (Cesar) is the rightful owner of the lot? Explain. (2%)
the highway. Nestor allowed him to do this, pending SUGGESTED ANSWER:
negotiations on the compensation to be paid. When they Cesar cannot ask for the cancellation of Don's title even if
failed to arrive at an agreement, Nestor built a wall across he is the rightful owner of the lot. In an action for
the road connecting with David's subdivision. David filed a ejectment, the only issue involved is one of possession de
complaint in court, for the establishment of an easement of facto, the purpose of which is merely to protect the owner
right of way through the subdivision of Nestor which he from any physical encroachment from without. The title of
claims to be the most adequate and practical outlet to the the land or its ownership is not involved, for if a person is
highway. in actual possession thereof, he is entitled to be maintained
1) What are the requisites for the establishment of a and respected in it even against the owner himself. (Garcia
v. Anas, G.R. No. L-20617, May 31, 1965)
compulsory easement of a right of way?
SUGGESTED ANSWER:
Art, 649, NCC. The owner, or any person who by virtue of Since the case filed by Don against Cesar is an ejectment
a real right may cultivate or use any immovable which is case, the latter cannot ask for the cancellation of Don's title.
surrounded by other immovables pertaining to other He has to file the proper action where the issue of
persons and without adequate outlet to a public highway, is ownership over the property can be raised.
entitled to demand a right of way through the neighboring
Ejectment Suit; Commodatum (2006)
estates, after payment of the property indemnity.
Alberto and Janine migrated to the United States of
Should this easement be established in such a manner that America, leaving behind their 4 children, one of whom is
its use may be continuous for all the needs of the dominant Manny. They own a duplex apartment and allowed Manny
estate, establishing a permanent passage, the indemnity shall to live in one of the units. While in the United States,
consist of the value of the land occupied and the amount of Alberto died. His widow and all his children executed an
Extrajudicial Settlement of Alberto's estate wherein the 2-
the damage caused to the servient estate.
door apartment was assigned by all the children to their
In case the right of way is limited to the necessary passage mother, Janine. Subsequently, she sold the property to
for the cultivation of the estate surrounded by others and George. The latter required Manny to sign a prepared Lease
for the gathering of its crops through the servient estate Contract so that he and his family could continue occupying
without a permanent way, the indemnity shall consist in the the unit. Manny refused to sign the contract alleging that his
parents allowed him and his family to continue occupying
payment of the damage cause by such encumbrance.
the premises.
This easement is not compulsory if the isolation of the If you were George's counsel, what legal steps will you
immovable is due to the proprietor's own acts. (564a). take? Explain. (5%)
The easement of right of way shall be established at the SUGGESTED ANSWER:
point least prejudicial to the servient estate, and insofar as If I were George's counsel, I would first demand that
Manny vacate the apartment. If Manny refuses, I will file an
consistent with this rule, where the distance from the
ejectment suit. When Manny was allowed by his parents to
dominant estate to a public highway may be the shortest
occupy the premises, without compensation, the contract of
(Art. 650, NCC: Vda. de Baltazar v. CA. 245 SCRA 333}
ALTERNATIVE ANSWER:
commodatum was created. Upon the death of the father,
The requisites for a compulsory easement of right of way the contract was extinguished as it is a purely personal
are: (a) the dominant estate is surrounded by other contract. As the new owner of the apartment George is
immovables and is without an adequate outlet to a public entitled to exercise his right of possession over the same.
street or highway; (b) proper indemnity must be paid; (c) the
isolation must not be due to the acts of the owner of the Extra-Judicial Partition; Fraud (1990)
dominant estate; and (d) the right of way claimed is at a X was the owner of a 10,000 square meter property. X
point least prejudicial to the servient estate and, insofar as is married Y and out of their union. A, B and C were born.
Page 63 of 119
After the death of Y, X married Z and they begot as share allotted by law to the finder since the phrase "by
children, D, E and F. After the death of X, the children of chance" means "by accident", meaning an unexpected
the first and second marriages executed an extrajudicial discovery. The liberal view, however, would sustain Tim's
partition of the aforestated property on May 1, 1970. D, E right to the allocated share interpreting the phrase in
and F were given a one thousand square meter portion of question as meaning "by a stroke of good fortune", which
the property. They were minors at the time of the execution does not rule out deliberate or intentional search. It is
of the document. D was 17 years old, E was 14 and F was submitted that the liberal view should prevail since in
12; and they were made to believe by A, B and C that unless practical reality, hidden treasure is hardly ever found
they sign the document they will not get any share. Z was without conscious effort to find it, and the strict view would
not present then. In January 1974, D, E and F filed an tend to render the codal provision in question illusory.
action in court to nullify the suit alleging they discovered the
fraud only in 1973. Hidden Treasures (1997)
(a) Can the minority of D, E and F be a basis to nullify the Marcelino, a treasure hunter as just a hobby, has found a
partition? Explain your answer. map which appears to indicate the location of hidden
(b) How about fraud? Explain your answer. treasure. He has an idea of the land where the treasure
SUGGESTED ANSWER: might possibly be found. Upon inquiry, Marcelino learns
(a) Yes, minority can be a basis to nullify the partition that the owner of the land, Leopoldo, is a permanent
because D, E and F were not properly represented by their resident of Canada, Nobody, however, could give him
parents or guardians at the time they contracted the extra- Leopoldo's exact address. Ultimately, anyway, he enters the
judicial partition. (Articles 1327. 1391, Civil Code).
land and conducts a search. He succeeds.
(b) In the case of fraud, when through insidious words or Leopoldo learning of Marcelino's "find", seeks to recover
machinations of one party the other is induced to enter into the treasure from Marcelino but the latter is not willing to
the contract without which he would not have agreed to, part with it. Failing to reach an agreement, Leopoldo sues
the action still prosper because under Art, 1391 of the Civil Marcelino for the recovery of the property. Marcelino
Code, in case of fraud, the action for annulment may be contests the action.
brought within four years from the discovery of the fraud. How would you decide the case?
SUGGESTED ANSWER:
I would decide in favor of Marcelino since he is considered
Hidden Treasure (1995) a finder by chance of the hidden treasure, hence, he is
Tim came into possession of an old map showing where a entitled to one-half (1/2) of the hidden treasure. While
purported cache of gold bullion was hidden. Without any Marcelino may have had the intention to look for the
authority from the government Tim conducted a relentless hidden treasure, still he is a finder by chance since it is
search and finally found the treasure buried in a new river enough that he tried to look for it. By chance in the law
bed formerly part of a parcel of land owned by spouses does not mean sheer luck such that the finder should have
Tirso and Tessie. The old river which used to cut through no intention at all to look for the treasure. By chance means
the land of spouses Ursula and Urbito changed its course good luck, implying that one who intentionally looks for the
through natural causes. treasure is embraced in the provision. The reason is that it is
To whom shall the treasure belong? Explain. extremely difficult to find hidden treasure without looking
SUGGESTED ANSWER: for it deliberately.
The treasure was found in a property of public dominion, Marcelino is not a trespasser since there is no prohibition
the new river bed. Since Tim did not have authority from for him to enter the premises, hence, he is entitled to half of
the government and, therefore, was a trespasser, he is not the treasure.
entitled to the one-half share allotted to a finder of hidden ALTERNATIVE ANSWERS:
treasure. All of it will go to the State. In addition, under 1. Marcelino did not find the treasure by chance because
Art. 438 of the NCC in order that the finder be entitled to he had a map, he knew the location of the hidden treasure
the 1/2 share, the treasure must be found by chance, that is and he intentionally looked for the treasure, hence, he is not
by sheer luck. In this case, since Tim found the treasure not entitled to any part of the treasure.
by chance but because he relentlessly searched for it, he is
not entitled to any share in the hidden treasure. 2. Marcelino appears to be a trespasser and although there
ALTERNATIVE ANSWER: may be a question of whether he found it by chance or not,
The law grants a one-half share to a finder of hidden as he has found the hidden treasure by means of a treasure
treasure provided he is not a trespasser and the finding is by map, he will not be entitled to a finder's share. The hidden
chance. It is submitted that Tim is not a trespasser despite
treasure shall belong to the owner.
his not getting authority from the government, because the
new river bed where he found the treasure is property for 3. The main rule is that hidden treasure belongs to the
public use (Art. 420 NCC), to which the public has owner of the land, building or other property on which it is
legitimate access. The question, therefore, boils down to found. If it is found by chance by a third person and he is
whether or not the finding was by chance in view of the fact not a trespasser, he is entitled to one-half (1/2). If he is a
that Tim "conducted a relentless search" before finding the
trespasser, he loses everything.
treasure. The strict or literal view holds that deliberate or
intentional search precludes entitlement to the one-half Mortgage; Pactum Commissorium (1999)
Page 64 of 119
(a) X borrowed money from Y and gave a piece of land Are the right of redemption and the equity of redemption
as security by way of mortgage. It was expressly given by law to a mortgagor the same? Explain. (2%)
agreed between the parties in the mortgage contract SUGGESTED ANSWER:
that upon nonpayment of the debt on time by X, the The equity of redemption is different from the right of
mortgaged land would already belong to Y. If X redemption. EQUITY OF REDEMPTION is the right of
defaulted in paying, would Y now become the owner the mortgagor after judgment in a judicial foreclosure to
redeem the property by paying to the court the amount of
of the mortgaged land? Why? (3%)
the judgment debt before the sale or confirmation of the
(b) Suppose in the preceding question, the agreement sale. On the other hand, RIGHT OF REDEMPTION is
between X and Y was that if X failed to pay the the right of the mortgagor to redeem the property sold at an
mortgage debt on time, the debt shall be paid with the extra-judicial foreclosure by paying to the buyer in the
land mortgaged by X to Y. Would your answer be the foreclosure sale the amount paid by the buyer within one
same as in the preceding question? Explain. (3%) year from such sale.
SUGGESTED ANSWER:
(a) No, Y would not become the owner of the land. The Nuisance; Family House; Not Nuisance per se (2006)
stipulation is in the nature of pactum commissorium which A drug lord and his family reside in a small bungalow where
is prohibited by law. The property should be sold at public they sell shabu and other prohibited drugs. When the police
auction and the proceeds thereof applied to the found the illegal trade, they immediately demolished the
indebtedness. Any excess shall be given to the mortgagor. house because according to them, it was a nuisance per se
that should be abated. Can this demolition be sustained?
SUGGESTED ANSWER: Explain. (5%)
(d) No, the answer would not be the same. This is a valid SUGGESTED ANSWER:
stipulation and does not constitute pactum commissorium. No, the demolition cannot be sustained. The house is not a
In pactum commissorium, the acquisition is automatic nuisance per se or at law as it is not an act, occupation, or
without need of any further action. In the instant problem structure which is a nuisance at all times and under any
another act is required to be performed, namely, the circumstances, regardless of location or surroundings. A
conveyance of the property as payment (dacion en pago). nuisance per se is a nuisance in and of itself, without regard
to circumstances [Tolentino, p. 695, citing Wheeler v. River
Mortgage; Pactum Commissorium (2001) Falls Power Co., 215 Ala. 655, 111 So. 907].
To secure a loan obtained from a rural bank, Purita assigned
her leasehold rights over a stall in the public market in favor Nuisance; Public Nuisance vs. Private Nuisance (2005)
of the bank. The deed of assignment provides that in case State with reason whether each of the following is a
of default in the payment of the loan, the bank shall have nuisance, and if so, give its classification, whether public or
the right to sell Purita's rights over the market stall as her private: Article 694 of the Civil Code defines nuisance as
attorney-in-fact, and to apply the proceeds to the payment any act, omission, establishment, business, condition or
of the loan. property, or anything else which injures or endangers the
1) Was the assignment of leasehold rights a mortgage or a health or safety of others, or annoys or offends the senses,
cession? Why? (3%) or shocks, defies or disregards decency or morality or
2) Assuming the assignment to be a mortgage, does the obstructs or interferes with the free passage of any public
provision giving the bank the power to sell Purita's highway or street or any body of water or hinders or impairs
rights constitute pactum commissorium or not? Why? the use of property.
(2%)
SUGGESTED ANSWER: It is a public nuisance if it affects a community or
1) The assignment was a mortgage, not a cession, of the neighborhood or any considerable number of persons. It is
leasehold rights. A cession would have transferred a direct encroachment upon public rights or property which
ownership to the bank. However, the grant of authority to results injuriously to the public. It is a private nuisance, if it
the bank to sell the leasehold rights in case of default is affects only a person or small number of persons. It violates
proof that no such ownership was transferred and that a only private rights.
mere encumbrance was constituted. There would have been a) A squatter's hut (1%)
no need for such authority had there been a cession. If constructed on public streets or riverbeds, it is a public
nuisance because it obstructs the free use by the public of
SUGGESTED ANSWER: said places. (City of Manila v. Garcia, G.R. No. L-26053,
2) No, the clause in question is not a pactum February 21,1967) If constructed on private land, it is a
commissorium. It is pactum commissorium when default in the private nuisance because it hinders or impairs the use of the
payment of the loan automatically vests ownership of the encumbered
property by the owner.
property in the bank. In the problem given, the bank does not
automatically become owner of the property upon default b) A swimming pool (1%)
of the mortgagor. The bank has to sell the property and This is not a nuisance in the absence of any unusual
apply the proceeds to the indebtedness. condition or artificial feature other than the mere water. In
Hidalgo Enterprises v. Balandan (G.R. No. L-3422, June 13,
Mortgage; Right of Redemption vs. Equity of Redemption 1952), the Supreme Court ruled that a swimming pool is but
(1999)
Page 65 of 119
a duplication of nature — thus, could not be considered as a (b) The mortgage shall not bind the 1/3 right and interest
nuisance. of A and shall be deemed to cover only the rights and
interests of B and C in the house and lot. The mortgage
c) A house of prostitution (1%) shall be limited to the portion (2/3) which may be allotted
Irrespective of its location and how its business is to B and C in the partition (Art. 493, Civil Code).
conducted, it is a nuisance since it defies, shocks and
disregards decency and morality. It is a public nuisance SUGGESTED ANSWER:
(c) B's sole decision to build the concrete fence is not
because of its injury to the public.
binding upon A and C. Expenses to improve the thing
d) A noisy or dangerous factory in a private land (1%) owned in common must be decided upon by a majority of
If the noise injuriously affects the health and comfort of the co-owners who represent the controlling interest (Arts.
ordinary people in the vicinity to an unreasonable extent, it 489 and 492. Civil Code).
is a nuisance. It is a public nuisance because there is a
tendency to annoy the public. (Velasco v. Manila Electric SUGGESTED ANSWER:
(d) C's sole decision to build the grotto is not binding upon
Co., G.R. No. L-18390, August 6, 1971)
A and B who cannot be required to contribute to the
e) Uncollected garbage (1%) expenses for the embellishment of the thing owned in
It will become a nuisance if it substantially impairs the common if not decided upon by the majority of the co-
comfort and enjoyment of the adjacent occupants. The owners who represent the controlling interest (Arts. 489 and
annoyance and the smell must be substantial as to interfere 492, Civil Code).
sensibly with the use and enjoyment by persons of ordinary
sensibilities. It is a public nuisance because of its injury to SUGGESTED ANSWER:
(e) The sale to X shall not bind the 1/3 share of B and shall
the public.
be deemed to cover only the 2/3 share of A and C in the
land (Art. 493, Civil Code). B shall have the right to redeem
Ownership; Co-Ownership (1992)
the 2/3 share sold to X by A and C since X is a third person
A, B and C are the co-owners in equal shares of a residential
house and lot. During their co-ownership, the following acts (Art. 1620, Civil Code).
were respectively done by the co-owners:
1) A undertook the repair of the foundation of the house, Ownership; Co-Ownership; Prescription (2000)
then tilting to one side, to prevent the house from
In 1955, Ramon and his sister Rosario inherited a parcel of
land in Albay from their parents. Since Rosario was gainfully
collapsing.
employed in Manila, she left Ramon alone to possess and
2) B and C mortgaged the house and lot to secure a loan.
cultivate the land. However, Ramon never shared the
3) B engaged a contractor to build a concrete fence all
around the lot.
harvest with Rosario and was even able to sell one-half of
the land in 1985 by claiming to be the sole heir of his
4) C built a beautiful grotto in the garden.
parents. Having reached retirement age in 1990 Rosario
5) A and C sold the land to X for a very good price.
returned to the province and upon learning what had
(a) Is A's sole decision to repair the foundation of transpired, demanded that the remaining half of the land be
given to her as her share. Ramon opposed, asserting that he
the house binding on B and C? May A require B
has already acquired ownership of the land by prescription,
and C to contribute their 2/3 share of the
and that Rosario is barred by laches from demanding
expense? Reasons.
partition and reconveyance. Decide the conflicting claims.
(b) What is the legal effect of the mortgage contract
(5%)
executed by B and C? Reasons.
SUGGESTED ANSWER:
(c) Is B's sole decision to build the fence binding Ramon is wrong on both counts: prescription and laches.
upon A and C? May B require A and C to His possession as co-owner did not give rise to acquisitive
contribute their 2/ 3 share of the expense? prescription. Possession by a co-owner is deemed not
Reasons. adverse to the other co-owners but is, on the contrary,
(d) Is C's sole decision to build the grotto binding deemed beneficial to them (Pongon v. GA, 166 SCRA 375).
upon A and B? May C require A and B to Ramon's possession will become adverse only when he has
contribute their 2/ 3 share of the expense? repudiated the co-ownership and such repudiation was
Reasons. made known to Rosario. Assuming that the sale in 1985
(e) What are the legal effects of the contract of sale where Ramon claimed he was the sole heir of his parents
executed by A. C and X? Reasons. amounted to a repudiation of the co-ownership, the
SUGGESTED ANSWER:
prescriptive period began to run only from that time. Not
(a) Yes. A's sole decision to repair the foundation is
more than 30 years having lapsed since then, the claim of
binding upon B and C. B and C must contribute 2/3 of the
Rosario has not as yet prescribed. The claim of laches is not
expense. Each co-owner has the right to compel the other
also meritorious. Until the repudiation of the co-ownership
co-owners to contribute to the expense of preservation of
was made known to the other co-owners, no right has been
the thing (the house) owned in common in proportion to
violated for the said co-owners to vindicate. Mere delay in
their respective interests (Arts. 485 and 488, Civil Code).
vindicating the right, standing alone, does not constitute
SUGGESTED ANSWER: laches.
Page 66 of 119
ALTERNATIVE ANSWER: thereof and offering to reimburse B for whatever he
Ramon has acquired the land by acquisitive had paid in purchasing the property from the bank.
prescription, and because of laches on the part of In brief, how will you answer the complaint of C and D, if
Rosario. Ramon's possession of the land was adverse you were engaged by D as his counsel?
because he asserted sole ownership thereof and never SUGGESTED ANSWER:
shared the harvest therefrom. His adverse possession As counsel of B, I shall answer the complaint as
having been continuous and uninterrupted for more follows: When B bought the property, it was not by a
than 30 years, Ramon has acquired the land by prescription. right of redemption since the period therefore had already
Rosario is also guilty of laches not having asserted her expired. Hence, B bought the property in an
right to the harvest for more than 40 years. independent unconditional sale. C and D are not co-
owners with B of the property. Therefore, the suit
Ownership; Co-Ownership; Prescription (2002) of C and D cannot prosper.
Senen and Peter are brothers. Senen migrated to Canada ALTERNATIVE ANSWER:
early while still a teenager. Peter stayed in Bulacan to take care As counsel of B, I shall answer the complaint as
of their widowed mother and continued to work on the follows: From the facts described, it would appear
Family farm even after her death. Returning to the country that the Certificate of sale has not been registered.
some thirty years after he had left, Senen seeks a partition of The one-year period of redemption begins to run from
the farm to get his share as the only co-heir of Peter. Peter registration. In this case, it has not yet even commenced.
interposes his opposition, contending that acquisitive Under the Rules of Court, the property may be released
prescription has already set in and that estoppel lies to bar the by the Judgment debtor or his successor in interest. (Sec.
action for partition, citing his continuous possession of the 29, Rule 27). It has been held that this includes a joint
property for at least 10 years, for almost 30 years in fact. It owner. (Ref. Magno vs.Ciola, 61 Phil. 80).
is undisputed that Peter has never openly claimed sole
ownership of the property. If he ever had the intention to do Ownership; Co-Ownership; Redemption (2000)
so, Senen was completely ignorant of it. Will Senen’s action Ambrosio died, leaving his three daughters, Belen, Rosario and
prosper? Explain. (5%). Sylvia a hacienda which was mortgaged to the
SUGGESTED ANSWER: Philippine National Bank due to the failure of the daughters to
Senen’s action will prosper. Article 494 of the New pay the bank, the latter foreclosed the mortgage and the
Civil Code provides that “no prescription shall run in favor hacienda was sold to it as the highest bidder. Six months
of a co-owner or co-heir against his co-owners or co- later, Sylvia won the grand prize at the lotto and used part of it
heirs so long as he expressly or impliedly to redeem the hacienda from the bank. Thereafter, she took
recognizes the co- ownership nor notified Senen of his possession of the hacienda and refused to share its fruits
having repudiated the same. with her sisters, contending that it was owned
ALTERNATIVE ANSWER: exclusively by her, having bought it from the bank with her
Senen’s action will prosper. This is a case of implied trust. own money. Is she correct or not? (3%)
(Art 1441, NCC) For purposes of prescription under SUGGESTED ANSWER:
the concept of an owner (Art. 540, NCC). There is no Sylvia is not correct. The 3 daughters are the co-owners of
such concept here. Peter was a co-owner, he never claimed the hacienda being the only heirs of Ambrosio. When
sole ownership of the property. He is therefore estopped the property was foreclosed, the right of redemption
under Art. 1431, NCC. belongs also to the 3 daughters. When Sylvia redeemed
the entire property before the lapse of the redemption
Ownership; Co-Ownership; Redemption (1993) period, she also exercised the right of redemption of her
In 1937, A obtained a loan of P20,000.00 from the National co-owners on their behalf. As such she is holding the shares
City Bank of New York, an American-owned bank doing of her two sisters in the property, and all the fruits
business in the Philippines. To guarantee payment of his corresponding thereto, in trust for them. Redemption by
obligation, A constituted a real estate mortgage on his 30- one co-owner inures to the benefit of all (Adille v. CA.157
hectare parcel of agricultural land. In 1939, before he could SCRA 455). Sylvia, however, is entitled to be reimbursed the
pay his obligation. A died intestate leaving three children. B, a shares of her two sisters in the redemption price.
son by a first marriage, and C and D, daughters by a
second marriage. In 1940, the bank foreclosed the mortgage Ownership; Co-Ownership; Redemption (2002)
for non-payment of the principal obligation. As the only Antonio, Bart, and Carlos are brothers. They purchased
bidder at the extrajudicial foreclosure sale, the bank bought from their parents specific portions of a parcel of land as
the property and was later issued a certificate of sale. The evidenced by three separates deeds of sale, each deed
war supervened in 1941 without the bank having been able to referring to a particular lot in meter and bounds. When the
obtain actual possession of the property which remained with deeds were presented for registration, the Register of Deeds
A's three children who appropriated for themselves the could not issue separate certificates of Title had to be
income from it. In 1948, B bought the property from the issued, therefore, in the names of three brothers as co-
bank using the money he received as back pay from the U. S. owners of the entire property. The situation has not
Government, and utilized the same in agribusiness. In changed up to now, but each of the brothers has been
1960, as B's business flourished, C and D sued B for receiving rentals exclusively from the lot actually purchased by
partition and accounting of the income of the property, him. Antonio sells his lot to a third person, with notice to his
claiming that as heirs of their father they were co-owners brothers. To enable the buyer to secure a new title in
Page 67 of 119
his name, the deed of sale was made to refer to undivided Salvador, a timber concessionaire, built on his lot a
interest in the property of the seller (Antonio), with the warehouse where he processes and stores his timber for
metes and bounds of the lot sold being stated. Bart and shipment. Adjoining the warehouse is a furniture factory
Carlos reacted by signifying their exercise of their right of owned by NARRAMIX of which Salvador is a majority
redemption as co owners. Antonio in his behalf and in stockholder. NARRAMIX leased space in the warehouse
behalf of his buyer, contends that they are no longer co- where it placed its furniture-making machinery.
owners, although the title covering the property has 1. How would you classify the furniture-making machinery
remained in their names as such. as property under the Civil Code? Explain.
May Bart and Carlos still redeem the lot sold by Antonio? 2. Suppose the lease contract between Salvador and
Explain. (5%) NARRAMIX stipulates that at the end of the lease the
SUGGESTED ANSWER: machinery shall become the property of the lessor, will your
No, they may not redeem because there was no Co- answer be the same? Explain.
ownership among Antonio, Bart, and Carlos to start with. SUGGESTED ANSWER:
Their parents already partitioned the land in selling separate 1. The furniture-making machinery is movable property
portions to them. The situation is the same as in the case Si because it was not installed by the owner of the
v. Court of Appeals, (342 SCRA 653 [2000]). tenement. To become immovable under Art. 415 (5) of the
NCC, the machinery must be installed by the owner of the
Possession (1998) tenement.
Using a falsified manager's check, Justine, as the buyer, was ALTERNATIVE ANSWER:
able to take delivery of a second hand car which she had It depends on the circumstances of the case. If the
just bought from United Car Sales Inc. The sale was machinery was attached in a fixed manner, in such a way
registered with the Land Transportation Office. A week that it cannot be separated from the tenement without
later, the seller learned that the check had been dishonored, breaking the material or causing deterioration thereof, it is
but by that time, Justine was nowhere to be seen. It turned immovable property [Art. 415 (3), NCC]. However, if the
out that Justine had sold the car to Jerico, the present machinery can be transported from place to place without
possessor who knew nothing about the falsified check. In a impairment of the tenement to which they were fixed, then
suit by United Car Sales, Inc. against Jerico for recovery of it is movable property. [Art. 416 (4), NCC]
the car, plaintiff alleges it had been unlawfully deprived of
its property through fraud and should, consequently, be SUGGESTED ANSWER:
allowed to recover it without having to reimburse the 2. It is immovable property. When there is a provision in
defendant for the price the latter had paid. Should the suit the lease contract making the lessor, at the end of the lease,
prosper? [5%] owner of the machinery installed by the lessee, the said
SUGGESTED ANSWER: machinery is considered to have been installed by the lessor
The suit should prosper as to the recovery of the car. through the lessee who acted merely as his agent. Having
However, since Jerico was not guilty of any fraud and been installed by the owner of the tenement, the machinery
appears to be an innocent purchaser for value, he should be became immovable .under Art. 415 of the NCC. (Davao
reimbursed for the price he paid. This is without prejudice Sawmill v. Castillo 61 Phil. 709)
to United Car Sales, Inc. right of action against Justine. As
between two innocent parties, the party causing the injury Property; Real vs. Personal Property (1997)
should suffer the loss. Therefore, United Car Sales, Inc. Pedro is the registered owner of a parcel of land situated in
should suffer the loss. Malolos, Bulacan. In 1973, he mortgaged the land to the
ALTERNATIVE ANSWER: Philippine National Bank (PNB) to secure a loan of
Yes, the suit will prosper because the criminal act of estafa P100.000.00. For Pedro's failure to pay the loan, the PNB
should be deemed to come within the meaning of unlawful foreclosed on the mortgage in 1980, and the land was sold
deprivation under Art. 559, Civil Code, as without it at public auction to PNB for being the highest bidder. PNB
plaintiff would not have parted with the possession of its secured title thereto in 1987.
car.
ANOTHER ANSWER: In the meanwhile, Pedro, who was still in possession of the
No, the suit will not prosper. The sale is valid and Jerico is a land, constructed a warehouse on the property. In 1988, the
buyer in good faith. PNB sold the land to Pablo, the Deed of Sale was amended
ANOTHER ANSWER:
in 1989 to include the warehouse.
Under the law on Sales, when the thing sold is delivered by
the seller to the buyer without reservation of ownership, the Pedro, claiming ownership of the warehouse, files a
ownership is transferred to the buyer. Therefore in the suit complaint to annul the amended Deed of Sale before the
of United Car Sales, Inc. against Jerico for the recovery of Regional Trial Court of Quezon City, where he resides,
the car, the plaintiff should not be allowed to recover the against both the PNB and Pablo. The PNB filed a motion
car without reimbursing the defendant for the price that the to dismiss the complaint for improper venue contending
latter paid. (EDCA Publishing and Distributing Corp. vs. that the warehouse is real property under Article 415(1) of
Santos, 184 SCRA 614, April 26, 1990)
the Civil Code and therefore the action should have instead
been filed in Malolos, Bulacan. Pedro claims otherwise. The
Property; Real vs. Personal Property (1995) question arose as to whether the warehouse should be
considered as real or as personal property.
Page 68 of 119
If consulted, what would your legal advice be? latter vacate the premises and deliver the same to the
SUGGESTED ANSWER: former. Petronila refused to vacate the place on the ground
The warehouse which is a construction adhered to the soil is that the usufruct in her favor would expire only on 1 June
an immovable by nature under Art. 415 (1) and the proper 1998 when Manuel would have reached his 30th birthday
venue of any case to recover ownership of the same, which and that the death of Manuel before his 30th birthday did
is what the purpose of the complaint to annul the amended not extinguish the usufruct.
Deed of Sale amounts to, should be the place where the Whose contention should be accepted?
property is located, or the RTC of Bulacan. SUGGESTED ANSWER:
ADDITIONAL ANSWERS: Petronila's contention is correct. Under Article 606 of the
1. Buildings are always immovable property, and even in Civil Code, a usufruct granted for the time that may elapse
the instances where the parties to a contract seem to have before a third person reaches a certain age shall subsist for
dealt with it separate and apart from the land on which it the number of years specified even if the third person
stood in no wise does it change its character as immovable should die unless there is an express stipulation in the
property. A building is an immovable even if not erected by contract that states otherwise. In the case at bar, there is no
the owner of the land. The only criterion is union or express stipulation that the consideration for the usufruct is
incorporation with the soil. (Ladera vs. Hodges (CA) 48 the existence of Petronila's son. Thus, the general rule and
O.G. 4374) (Reyes and Puno, Outline of Philippine Civil Law, not the exception should apply in this case.
Vol. 2. p.7) ALTERNATIVE ANSWER:
This is a usufruct which is clearly intended for the benefit of
2. The warehouse built by Pedro on the mortgaged Manuel until he reaches 30 yrs. of age with Petronila serving
property is real property within the context of Article 415 of only as a conduit, holding the property in trust for his
the New Civil Code, although it was built by Pedro after the benefit. The death of Manuel at the age of 26 therefore,
foreclosure sale without the knowledge and consent of the
terminated the usufruct.
new owner which makes him a builder in bad faith, this
does not alter the character of the warehouse as a real
property by incorporation. It is a structure which cannot be LAND TRANSFER &
removed without causing injury to the land. So, my advice DEEDS
to Pedro is to file the case with the RTC of Bulacan, the
situs of the property,
(Note: If the examinee does not mention that the structure was Acquisition of Lands; Citizenship Requirement (2003)
built by a builder in bad faith, it should be given full credit). In 1970, the spouses Juan and Juana de la Cruz, then
Filipinos, bought the parcel of unregistered land in the
Sower; Good Faith/ Bad Faith (2000) Philippines on which they built a house which became their
Felix cultivated a parcel of land and planted it to sugar cane, residence. In 1986, they migrated to Canada and became
believing it to be his own. When the crop was eight months Canadian citizens.
old, and harvestable after two more months, a resurvey of Thereafter, in 1990, they applied, opposed by the Republic,
the land showed that it really belonged to Fred. What are
for the registration of the aforesaid land in their names.
the options available to Fred? (2%) Should the application of the spouses de la Cruz be granted
SUGGESTED ANSWER:
As to the pending crops planted by Felix in good faith, Fred over the Republic’s opposition? Why? 5%
SUGGESTED ANSWER:
has the option of allowing Felix to continue the cultivation Yes, the application should be granted. As a rule, the
and to harvest the crops, or to continue the cultivation and Constitution prohibits aliens from owning private lands in
harvest the crops himself. In the latter option, however, the Philippines. This rule, however, does not apply to the
Felix shall have the right to a part of the expenses of spouses Juan and Juana de la Cruz because at the time they
cultivation and to a part of the net harvest, both in acquired ownership over the land, albeit imperfect, they
proportion to the time of possession. (Art. 545 NCC), were still Filipino citizens. The application for registration is
ALTERNATIVE ANSWER:
Since sugarcane is not a perennial crop. Felix is considered a a mere confirmation of the imperfect title which the
sower in good faith. Being so, Art. 448 applies. The options spouses have already acquired before they became Canadian
available to Fred are: (a) to appropriate the crop after paying citizens. (Republic v. CA, 235 SCRA 567 [1994]).
Felix the indemnity under Art. 546, or (b) to require Felix to
pay rent. Adverse Claims; Notice of Levy (1998)
Section 70 of Presidential Decree No. 1529, concerning
Usufruct (1997) adverse claims on registered land, provides a 30-day period
On 1 January 1980, Minerva, the owner of a building, of effectivity of an adverse claim, counted from the date of
granted Petronila a usufruct over the property until 01 June its registration. Suppose a notice of adverse claim based
1998 when Manuel, a son of Petronila, would have reached upon a contract to sell was registered on March 1, 1997 at
his 30th birthday. Manuel, however, died on 1 June 1990 the instance of the BUYER, but on June 1, 1997, or after
the lapse of the 30-day period, a notice of levy on execution
when he was only 26 years old.
in favor of a JUDGMENT CREDITOR was also registered
Minerva notified Petronila that the usufruct had been to enforce a final judgment for money against the registered
owner. Then, on June 15, 1997 there having been no formal
extinguished by the death of Manuel and demanded that the
cancellation of his notice of adverse claim, the BUYER pays
Page 69 of 119
to the seller-owner the agreed purchase price in full and residential, commercial, industrial, or similar productive
registers the corresponding deed of sale. Because the purposes, and only by lease when not needed by the
annotation of the notice of levy is carried over to the new government for public service.
title in his name, the BUYER brings an action against the
JUDGMENT CREDITOR to cancel such annotation, but (2) If the land is suited or actually used for fishpond or
the latter claims that his lien is superior because it was aquaculture purposes, it comes under the Jurisdiction of the
annotated after the adverse claim of the BUYER had ipso Bureau of Fisheries and Aquatic Resources (BFAR) and can
facto ceased to be effective. Will the suit prosper? [5%] only be acquired by lease. (P.D. 705)
SUGGESTED ANSWER:
The suit will prosper. While an adverse claim duly annotated (3) Free Patent is a mode of concession under Section 41,
at the back of a title under Section 7O of P.D. 1529 is good Chapter VII of the Public Land Act, which is applicable
only for 30 days, cancellation thereof is still necessary to
only for agricultural lands.
render it ineffective, otherwise, the inscription thereof will
remain annotated as a lien on the property. While the life of (4) The certificate of the district forester that the land is
adverse claim is 3O days under P.D. 1529, it continuous to already "alienable and disposable" simply means that the
be effective until it is canceled by formal petition filed with land is no longer needed for forest purposes, but the Bureau
the Register of Deeds. of Lands could no longer dispose of it by free patent
because it is already covered by a lease contract between
The cancellation of the notice of levy is justified under BFAR and Regina. That contract must be respected.
Section 108 of P.D. 1529 considering that the levy on
execution can not be enforced against the buyer whose (5) The free patent of Jorge is highly irregular and void ab
adverse claim against the registered owner was recorded initio, not only because the Bureau has no statutory
ahead of the notice of levy on execution. authority to issue a free patent over a foreshore area, but
also because of the false statements made in his sworn
Annotation of Lis Pendens; When Proper (2001) application that he has occupied and cultivated the land
Mario sold his house and lot to Carmen for P1 million since July 4, 1945, as required by the free patent law. Under
payable in five (5) equal annual installments. The sale was Section 91 of the Public Land Act, any patent concession or
registered and title was issued in Carmen's name. Carmen title obtained thru false representation is void ab initio. In
failed to pay the last three installments and Mario filed an. cases of this nature, it is the government that shall institute
action for collection, damages and attorneys fees against annulment proceedings considering that the suit carries with
her. Upon filing of the complaint, he caused a notice of lis it a prayer for the reversion of the land to the state.
pendens to be annotated on Carmen's title. Is the notice of However, Regina is a party in interest and the case will
lis pendens proper or not? Why? (5%) prosper because she has a lease contract for the same land
SUGGESTED ANSWER:
with the government.
The notice of lis pendens is not proper for the reason that
the case filed by Mario against Carmen is only for collection, Forgery; Innocent Purchaser; Holder in Bad Faith (2005)
damages, and attorney's fees. Rod, the owner of an FX taxi, found in his vehicle an
envelope containing TCT No. 65432 over a lot registered in
Annotation of a lis pendens can only be done in cases Cesar's name. Posing as Cesar, Rod forged Cesar's signature
involving recovery of possession of real property, or to on a Deed of Sale in Rod's favor. Rod registered the said
quiet title or to remove cloud thereon, or for partition or document with the Register of Deeds, and obtained a new
any other proceeding affecting title to the land or the use or title in his name. After a year, he sold the lot to Don, a
occupation thereof. The action filed by Mario does not fall buyer in good faith and for value, who also registered the lot
on anyone of these. in his name.
a) Did Rod acquire title to the land? Explain. (2%)
Foreshore Lands (2000) SUGGESTED ANSWER:
Regina has been leasing foreshore land from the Bureau of No, Rod did not acquire title to the land. The inscription in
Fisheries and Aquatic Resources for the past 15 years. the registry, to be effective, must be made in good faith.
Recently, she learned that Jorge was able to obtain a free The defense of indefeasibility of a Torrens Title does not
patent from the Bureau of Agriculture, covering the same extend to a transferee who takes the certificate of title with
land, on the basis of a certification by the District Forester notice of a flaw. A holder in bad faith of a certificate of title
that the same is already "alienable and disposable". is not entitled to the protection of the law, for the law
Moreover, Jorge had already registered the patent with the cannot be used as a shield for frauds. (Samonte v. Court of
Register of Deeds of the province, and he was issued an Appeals, G.R. No. 104223, July 12, 2001)
Original Certificate of Title for the same. Regina filed an
action for annulment of Jorge's title on the ground that it In the case at bar, Rod only forged Cesar's signature on the
was obtained fraudulently. Will the action prosper? (2%) -Deed of Sale. It is very apparent that there was bad faith on
SUGGESTED ANSWER: the part of Rod from the very beginning. As such, he is not
An action for the annulment of Jorge's Original Certificate entitled to the protection of the Land Registration Act.
of Title will prosper on the following grounds: b) Discuss the rights of Don, if any, over the
(1) Under Chapter IX of C .A, No. 141, otherwise known property. (2%)
as the Public Land Act, foreshore lands are disposable for SUGGESTED ANSWER:
Page 70 of 119
It is a well-known rule in this jurisdiction that persons
dealing with registered land have the legal right to rely on The mortgage to Desiderio should be cancelled without
the face of the Torrens Certificate of Title and to dispense prejudice to his right to go after Catalino and/or the
with the need to inquire further, except when the party government for compensation from the assurance fund.
concerned has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such Fraud; Procurement of Patent; Effect (2000)
inquiry. (Naawan Community Rural Bank v. Court of In 1979, Nestor applied for and was granted a Free Patent
Appeals, G.R. No. 128573, January 13, 2003) over a parcel of agricultural land with an area of 30 hectares,
located in General Santos City. He presented the Free
In the given problem, the property was already registered in Patent to the Register of Deeds, and he was issued a
the name of Rod when he bought the same from the latter. corresponding Original Certificate of Title (OCT) No. 375,
Thus, Don could be considered as a buyer in good faith and Subsequently, Nestor sold the land to Eddie. The deed of
for value. However, since Rod did not actually sell any sale was submitted to the Register of Deeds and on the
property to him, Don has no right to retain ownership over basis thereof, OCT No, 375 was cancelled and Transfer
the property. He has only the right to recover the purchase Certificate of Title (TCT) No. 4576 was issued in the name
price plus damages. of Eddie. In 1986, the Director of Lands filed a complaint
for annulment of OCT No, 375 and TCT No. 4576 on the
Forgery; Innocent Purchaser; Mirror Principle (1991) ground that Nestor obtained the Free Patent through fraud.
Bruce is the registered owner, of a parcel of land with a Eddie filed a motion to dismiss on the ground that he was
building thereon and is in peaceful possession thereof. He an innocent purchaser for value and in good faith and as
pays the real estate taxes and collects the rentals therefrom. such, he has acquired a title to the property which is valid,
Later, Catalino, the only brother of Bruce, filed a petition unassailable and indefeasible. Decide the motion. (5%)
where he, misrepresenting to be the attorney-in-fact of SUGGESTED ANSWER:
Bruce and falsely alleging that the certificate of title was lost, The motion of Nestor to dismiss the complaint for
succeeded in obtaining a second owner's duplicate copy of annulment of O.C.T. No. 375 and T.C.T. No. 4576 should
the title and then had the same transferred in his name be denied for the following reasons:
through a simulated deed of sale in his favor. Catalino then 1) Eddie cannot claim protection as an innocent
mortgaged the property to Desiderio who had the mortgage purchaser for value nor can he interpose the defense of
annotated on the title. Upon learning of the fraudulent indefeasibility of his title, because his TCT is rooted on
transaction, Bruce filed a complaint against Catalino and a void title. Under Section 91 of CA No. 141, as
Desiderio to have the title of Catalino and the mortgage in amended, otherwise known as the Public Land Act,
favor of Desiderio declared null and void. statements of material facts in the applications for
Will the complaint prosper, or will the title of Catalino and public land must be under oath. Section 91 of the same
the mortgage to Desiderio be sustained? act provides that such statements shall be considered as
SUGGESTED ANSWER: essential conditions and parts of the concession, title,
The complaint for the annulment of Catalino's Title will or permit issued, any false statement therein, or
prosper. In the first place, the second owner's copy of the omission of facts shall ipso facto produce the
title secured by him from the Land Registration Court is cancellation of the concession. The patent issued to
void ab initio, the owner's copy thereof having never been Nestor in this case is void ab initio not only because it
lost, let alone the fact that said second owner's copy of the was obtained by fraud but also because it covers 30
title was fraudulently procured and improvidently issued by hectares which is far beyond the maximum of 24
the Court. In the second place, the Transfer Certificate of hectares provided by the free patent law.
Title procured by Catalino is equally null and void, it having 2) The government can seek annulment of the original
been issued on the basis of a simulated or forged Deed of and transfer certificates of title and the reversion of the
Sale. A forged deed is an absolute nullity and conveys no land to the state. Eddie's defense is untenable. The
title. protection afforded by the Torrens System to an
The mortgage in favor of Desiderio is likewise null and void innocent purchaser for value can be availed of only if
because the mortgagor is not the owner of the mortgaged the land has been titled thru judicial proceedings where
property. While it may be true that under the "Mirror the issue of fraud becomes academic after the lapse of
Principle" of the Torrens System of Land Registration, a one (1) year from the issuance of the decree of
buyer or mortgagee has the right to rely on what appears on registration. In public land grants, the action of the
the Certificate of Title, and in the absence of anything to government to annul a title fraudulently obtained does
excite suspicion, is under no obligation to look beyond the not prescribe such action and will not be barred by the
certificate and investigate the mortgagor's title, this rule transfer of the title to an innocent purchaser for value.
does not find application in the case at hand because here.
Catalino's title suffers from two fatal infirmities, namely: Homestead Patents; Void Sale (1999)
a) The fact that it emanated from a forged deed of a In 1950, the Bureau of Lands issued a Homestead patent to
simulated sale; A. Three years later, A sold the homestead to B. A died in
b) The fact that it was derived from a fraudulently 1990, and his heirs filed an action to recover the homestead
procured or improvidently issued second owner's copy, from B on the ground that its sale by their father to the
the real owner's copy being still intact and in the latter is void under Section 118 of the Public Land Law. B
possession of the true owner, Bruce. contends, however, that the heirs of A cannot recover the
Page 71 of 119
homestead from him anymore because their action has Cesar bought a residential condominium unit from High
prescribed and that furthermore, A was in pari delicto. Rise Co. and paid the price in full. He moved into the unit,
Decide. (5%) but somehow he was not given the Condominium
SUGGESTED ANSWER: Certificate of Title covering the property. Unknown to him,
The sale of the land by A to B 3 years after issuance of the High Rise Co. subsequently mortgaged the entire
homestead patent, being in violation of Section 118 of the condominium building to Metrobank as security for a loan
Public Land Act, is void from its inception. of P500 million. High Rise Co. failed to pay the loan and
the bank foreclosed the mortgage. At the foreclosure sale,
The action filed by the heirs of B to declare the nullity or the bank acquired the building, being the highest bidder.
inexistence of the contract and to recover the land should When Cesar learned about this, he filed an action to annul
be given due course. the foreclosure sale insofar as his unit was concerned. The
bank put up the defense that it relied on the condominium
B's defense of prescription is untenable because an action certificates of title presented by High Rise Co., which were
which seeks to declare the nullity or inexistence of A clean. Hence, it was a mortgagee and buyer in good faith. Is
contract does not prescribe. (Article 1410; Banaga vs. Soler, 2 this defense tenable or not? Why? (5%.)
8CRA 765) SUGGESTED ANSWER:
Metrobank's defense is untenable. As a rule, an innocent
On the other hand, B's defense of pari delicto is equally purchaser for value acquires a good and a clean title to the
untenable. While as a rule, parties who are in pari delicto property. However, it is settled that one who closes his eyes
have no recourse against each other on the principle that a to facts that should put a reasonable man on guard is not an
transgressor cannot profit from his own wrongdoing, such innocent purchaser for value. In the present problem the
rule does not apply to violations of Section 118 of the bank is expected, as a matter of standard operating
Public Land Act because of the underlying public policy in procedure, to have conducted an ocular inspection, of the
the said Act "to conserve the land which a homesteader has acquired promises before granting any loan. Apparently, Metrobank
by gratuitous grant from the government for himself and his family". did not follow this procedure. Otherwise, it should have
In keeping with this policy, it has been held that one who discovered that the condominium unit in question was
purchases a homestead within the five-year prohibitory occupied by Cesar and that fact should have led it to make
period can only recover the price which he has paid by filing further inquiry. Under the circumstances, Metrobank cannot
a claim against the estate of the deceased seller (Labrador vs. be considered a mortgagee and buyer in good faith.
Delos Santos 66 Phil. 579) under the principle that no one
shall enrich himself at the expense of another. Applying the Mirror Principle (1990)
pari delicto rule to violation of Section 118 of the Public Land In 1950's, the Government acquired a big landed estate in
Act, the Court of Appeals has ruled that "the homesteader Central Luzon from the registered owner for subdivision
suffers the loss of the fruits realized by the vendee who in into small farms and redistribution of bonafide occupants, F
turn forfeits the improvement that he has introduced into was a former lessee of a parcel of land, five hectares in area.
the land." (Obot vs. SandadiUas, 69 OG, April 35, 1966} After completion of the resurvey and subdivision, F applied
FIRST ALTERNATIVE ANSWER: to buy the said land in accordance with the guidelines of the
The action to declare the nullity of the sale did not prescribe implementing agency. Upon full payment of the price in
(Art. 1410}, such sale being one expressly prohibited and 1957, the corresponding deed of absolute sale was executed
declared void by the Public Lands Act [Art. 1409, par. (7)]. in his favor and was registered, and in 1961, a new title was
The prohibition of the law is clearly for the protection of issued in his name. In 1963, F sold the said land to X; and in
the heirs of A such that their recovering the property would 1965 X sold it to Y, new titles were successively issued in
enhance the public policy regarding ownership of lands
the names of the said purchasers.
acquired by homestead patent (Art. 1416). The defense of
pari delicto is not applicable either, since the law itself In 1977, C filed an action to annul the deeds of sale to F, X
allows the homesteader to reacquire the land even if it has and Y and their titles, on the ground that he (C) had been in
been sold. actual physical possession of the land, and that the sale to F
SECOND ALTERNATIVE ANSWER:
and the subsequent sales should be set aside on the ground
Prescription does not arise with respect to actions to declare
of fraud. Upon motion of defendants, the trial court
a void contract a nullity (Article 1410). Neither is the
dismissed the complaint, upholding their defenses of their
doctrine of pari delicto applicable because of public policy.
being innocent purchasers for value, prescription and
The law is designed for the protection of the plaintiff so as
laches. Plaintiff appealed.
to enhance the public policy of the Public Land Act to give
(a) Is the said appeal meritorious? Explain your answer
land to the landless.
(b) Suppose the government agency concerned joined C in
filing the said action against the defendants, would that
If the heirs are not allowed to recover, it could be on the
change the result of the litigation? Explain.
ground of laches inasmuch as 40 years had elapsed and the
SUGGESTED ANSWER:
owner had not brought any action against B especially if the (a) The appeal is not meritorious. The trial court ruled
latter had improved the land. It would be detrimental to B if correctly in granting defendant's motion to dismiss for the
the plaintiff is allowed to recover. following reasons:
1. While there is the possibility that F, a former lessee of the
Innocent Purchaser for Value (2001) land was aware of the fact that C was the bona fide
Page 72 of 119
occupant thereof and for this reason his transfer certificate required to explore beyond what the record in the registry
of title may be vulnerable, the transfer of the same land and indicates on its face in quest for any hidden defect or
the issuance of new TCTs to X and Y who are innocent inchoate right which may subsequently defeat his right
purchasers for value render the latter's titles indefeasible. A thereto. This is the "mirror principle' of the Torrens
person dealing with registered land may safely rely on the system which makes it possible for a forged deed to be the
correctness of the certificate of title and the law will not in root of a good title.
any way oblige him to go behind the certificate to determine
the condition of the property in search for any hidden Besides, it appears that spouses X and Y are guilty of
defect or inchoate right which may later invalidate or contributory negligence when they delivered this OCT to
diminish the right to the land. This is the mirror principle of the mortgagee without annotating the mortgage thereon.
the Torrens System of land registration. Between them and the innocent purchaser for value, they
should bear the loss.
2. The action to annul the sale was instituted in 1977 or ALTERNATIVE ANSWER:
more than (10) years from the date of execution thereof in If the buyer B, who relied on the teller A's title, was not
aware of the adverse possession of the land by the spouses
1957, hence, it has long prescribed.
X and Y, then the latter cannot recover the property from
3. Under Sec 45 of Act 496, “the entry of a certificate of B. B has in his favor the presumption of good faith which
title shall be regarded as an agreement running with the can only be overthrown by adequate proof of bad faith.
land, and binding upon the applicant and all his successors However, nobody buys land without seeing the property,
in title that the land shall be and always remain registered hence, B could not have been unaware of such adverse
land. A title under Act 496 is indefeasible and to preserve possession. If after learning of such possession, B simply
that character, the title is cleansed anew with every transfer closed his eyes and did nothing about it, then the suit for
for value (De Jesus v City of Manila; 29 Phil. 73; Laperal v reconveyance will prosper as the buyer's bad faith will have
become evident.
City of Manila, 62 Phil 313; Penullar v PNB 120 S 111).
SUGGESTED ANSWER: Notice of Lis Pendens (1995)

(b) Even if the government joins C, this will not alter the Rommel was issued a certificate of title over a parcel of land
outcome of the case so much because of estoppel as an in Quezon City. One year later Rachelle, the legitimate
express provision in Sec 45 of Act 496 and Sec 31 of PD owner of the land, discovered the fraudulent registration
1529 that a decree of registration and the certificate of title obtained by Rommel. She filed a complaint against Rommel
issued in pursuance thereof “shall be conclusive upon and for reconveyance and caused the annotation of a notice of
against all persons, including the national government and lis pendens on the certificate of title issued to Rommel.
all branches thereof, whether mentioned by name in the Rommel now invokes the indefeasibility of his title
application or not.” considering that one year has already elapsed from its
issuance. He also seeks the cancellation of the notice of Lis
Mirror Principle; Forgery; Innocent Purchaser (1999) pendens.
The spouses X and Y mortgaged a piece of registered land May the court cancel the notice of lis pendens even before
to A, delivering as well the OCT to the latter, but they final judgment is rendered? Explain.
continued to possess and cultivate the land, giving 1/2 of SUGGESTED ANSWER:
each harvest to A in partial payment of their loan to the A Notice of Lis Pendens may be canceled even before
latter, A, however, without the knowledge of X and Y, final Judgment upon proper showing that the notice is for
forged a deed of sale of the aforesaid land in favor of the purpose of molesting or harassing the adverse party or
himself, got a TCT in his name, and then sold the land to B, that the notice of lis pendens is not necessary to protect the
who bought the land relying on A's title, and who thereafter right of the party who caused it to be registered. (Section 77,
also got a TCT in his name. It was only then that the P.D. No. 1529)
spouses X and Y learned that their land had been titled in
B's name. May said spouses file an action for reconveyance In this case, it is given that Rachelle is the legitimate owner
of the land in question against b? Reason. (5%) of the land in question. It can be said, therefore, that when
SUGGESTED ANSWER: she filed her notice of lis pendens her purpose was to
The action of X and Y against B for reconveyance of the protect her interest in the land and not just to molest
land will not prosper because B has acquired a clean title to Rommel. It is necessary to record the Lis pendens to
the property being an innocent purchaser for value. protect her interest because if she did not do it, there is a
possibility that the land will fall into the hands of an
A forged deed is an absolute nullity and conveys no title. innocent purchaser for value and in that event, the court
The fact that the forged deed was registered and a certificate loses control over the land making any favorable judgment
of title was issued in his name, did not operate to vest upon thereon moot and academic. For these reasons, the notice
an ownership over the property of X and Y. The of lis pendens may not be canceled.
registration of the forged deed will not cure the infirmity.
However, once the title to the land is registered in the name Notice of Lis Pendens; Transferee Pendente Lite (2002)
of the forger and title to the land thereafter falls into the Sancho and Pacifico are co-owners of a parcel of land.
hands of an innocent purchaser for value, the latter acquires Sancho sold the property to Bart. Pacifico sued Sancho and
a clean title thereto. A buyer of a registered land is not Bart for annulment of the sale and reconveyance of the
Page 73 of 119
property based on the fact that the sale included his one- the obligation. However, the action was brought within the
half pro-indiviso share. Pacifico had a notice of lis pendens ten-year prescriptive period provided by law wherein actions
annotated on the title covering the property and ordered the based on written contracts can be instituted.
cancellation of the notice of lis pendens. The notice of lis a) Will the defense prosper? Reason. (3%)
pendens could not be cancelled immediately because the b) What are the essential elements of laches? (2%)
title over the property was with a bank to which the SUGGESTED ANSWER:
property had been mortgaged by Bart. Pacifico appealed the No, the defense will not prosper. The problem did not give
case. While the appeal was pending and with the notice of facts from which laches may be inferred. Mere delay in filing
lis pendens still uncancelled, Bart sold the property to an action, standing alone, does not constitute laches (Agra v.
Carlos, who immediately caused the cancellation of the PNB. 309 SCRA 509).
notice of lis pendens, as well as the issuance of a new title in SUGGESTED ANSWER:
b) The four basic elements of laches are; (1) conduct on the
his name.
part of the defendant or of one under whom he claims,
Is Carlos (a) a purchaser in good faith, or (b) a transferee
giving rise to the situation of which complainant seeks a
pendente lite? If your answer is (a), how can the right of
remedy; (2) delay in asserting the complainant's rights, the
Pacifico as co-owner be protected? Explain. (5%)
SUGGESTED ANSWER:
complainant having had knowledge or notice of the
A. Carlos is a buyer in bad faith. The notice of lis defendant's conduct and having been afforded an
pendens was still annotated at the back of the title at the opportunity to institute suit; (3) lack of knowledge on the
time he bought the land from Bart. The uncancelled notice part of the defendant that the complainant would assert the
of lis pendens operates as constructive notice of its contents right on which he bases his suit; and (4) injury or prejudice
as well as interests, legal or equitable, included therein. All to the defendant in the event relief is accorded to the
persons are charged with the knowledge of what it contains. complainant, or the suit is not held to be barred.
In an earlier case, it was held that a notice of an adverse
claim remains effective and binding notwithstanding the Prescription & Laches; Indefeasibility Rule of Torrens Title
lapse of the 30 days from its inscription in the registry. This (2002)
Way back in 1948, Winda’s husband sold in favor of Verde
ruling is even more applicable in a lis pendens.
Sports Center Corp. (Verde) a 10-hectare property
Carlos is a transferee pendente lite insofar as Sancho’s share belonging to their conjugal partnership. The sale was made
in the co-ownership in the land is concerned because the without Winda’s knowledge, much less consent. In 1950,
land was transferred to him during the pendency of the Winda learned of the sale, when she discovered the deed of
appeal. sale among the documents in her husband’s vault after his
B. Pacifico can protect his right as a co-owner by demise. Soon after, she noticed that the construction of the
pursuing his appeal; asking the Court of Appeals to order sports complex had started. Upon completion of the
the re-annotation of the lis pendens on the title of Carlos; construction in 1952, she tried but failed to get free
and by invoking his right of redemption of Bart’s share membership privileges in Verde.
under Articles 1620 of the New Civil Code.
ALTERNATIVE ANSWER: Winda now files a suit against Verde for the annulment of
A. Carlos is a purchaser in good faith. A possessor in the sale on the ground that she did not consent to the sale.
good faith has been defined as “one who is unaware that In answer, Verde contends that, in accordance with the
there exists a flaw which invalidates his acquisition of the Spanish Civil Code which was then in force, the sale in 1948
thing” (Art. 526, NCC). Good faith consists in the of the property did not need her concurrence. Verde
possessor’s belief that the person from whom he received contends that in any case the action has prescribed or is
the thing was the owner of the same and could convey his barred by laches. Winda rejoins that her Torrens title
title. In the case [at bar], in question, while Carlos bought covering the property is indefeasible, and imprescriptible.
the subject property from Bart while a notice of lis pendens A. Define or explain the term “laches”. (2%)
was still annotated thereon, there was also an existing court B. Decide the case, stating your reasons for your decision.
order canceling the same. Hence, Carlos cannot be (3%)
considered as being “aware of a flaw which invalidates SUGGESTED ANSWER:
[their] the acquisition of the thing” since the alleged flaw, A. LACHES means failure or neglect, for an
the notice of lis pendens, was already being ordered unreasonable and unexplained length of time, to do what,
cancelled at the time of the purchase. On this ground alone, by exercising due diligence, could or should have been done
Carlos can already be considered a buyer in good faith. (Po earlier. It is negligence or omission to assert a right within a
Lam v. Court of Appeals, 347 SCRA 86, [2000]). reasonable time. (De Vera v. CA, 305 SCRA 624 [1999])
B. To protect his right over the subject property, B. While Article 1413 of the Spanish Civil Code did
Pacifico should have timely filed an action for reconveyance not require the consent of the wife for the validity of the
and reinstated the notice of lis pendens. sale, an alienation by the husband in fraud of the wife is
void as held in Uy Coque v. Navas, 45 Phil. 430 (1923).
Prescription & Laches; Elements of Laches (2000) Assuming that the alienation in 1948 was in fraud of Winda
In an action brought to collect a sum of money based on a and, therefore, makes the sale to Verde void, the action to
surety agreement, the defense of laches was raised as the set aside the sale, nonetheless, is already barred by
claim was filed more than seven years from the maturity of
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prescription and laches. More than 52 years have already (a) The mortgage contract executed by O, if at all, is only a
elapsed from her discovery of the sale in 1950. voidable contract since it involves a conjugal partnership
ALTERNATIVE ANSWER: property. The action to annul the same instituted in 1977, or
B. Winda’s claim that her Torrens Title covering the eleven years after the execution of the sheriff's final sale, has
property is indefeasible and imprescriptible [does not hold obviously prescribed because:
water] is not tenable. The rule of indefeasibility of a 1) An action to annul a contract on the ground of fraud
Torrens Title means that after one year from the date of must be brought within four (4) years from the date of
issue of the decree of registration or if the land has fallen discovery of the fraud. Since this is in essence an action
into the hands of an innocent purchaser for value, the title to recover ownership, it must be reckoned from the
becomes incontestable and incontrovertible. date of execution of the contract or from the
registration of the alleged fraudulent document with
IMPRESCRIPTIBILITY, on the other hand, means that no the assessor's office for the purpose of transferring the
title to the land in derogation of that of the registered owner tax declaration, this being unregistered land, (Bael u.
may be acquired by adverse possession or acquisitive Intermediate Appellate Court G. R. L-74423 Jan.30, 1989
prescription or that the registered owner does not lose by 169 SCRA 617).
extinctive prescription his right to recover ownership and 2) If the action is to be treated as an action to recover
possession of the land. ownership of land, it would have prescribed just the
same because more than 10 years have already elapsed
The action in this case is for annulment of the sale executed since the date of the execution of the sale.
by the husband over a conjugal partnership property SECOND ALTERNATIVE ANSWER:
covered by a Torrens Title. Action on contracts are (a) The action to recover has been barred by acquisitive
subject to prescription. prescription in favor of M considering that M has possessed
the land under a claim of ownership for ten (10) years with
Prescription (1990) a just title.
In 1960, an unregistered parcel of land was mortgaged by
owner O to M, a family friend, as collateral for a loan. O (b) If M had secured a Torrens Title to the land, all the
acted through his attorney-in-fact, son S, who was duly more S and P could not recover because if at all their
authorized by way of a special power of attorney, wherein O remedies would be:
declared that he was the absolute owner of the land, that the 1. A Petition to Review the Decree of Registration. This
tax declarations/receipts were all issued in his name, and can be availed of within one (1) year from-the entry thereof,
that he has been in open, continuous and adverse but only upon the basis of "actual fraud." There is no
showing that M committed actual fraud in securing his title
possession in the concept of owner.
to the land; or
As O was unable to pay back the loan plus interest for the
past five [5) years, M had to foreclose the mortgage. At the 2. An action in personam against M for the reconveyance of
foreclosure sale, M was the highest bidder. Upon issuance the title in their favor. Again, this remedy is available within
of the sheriff’s final deed of sale and registration in January, four years from the date of the discovery of the fraud but
1966, the mortgage property was turned over to M's not later than ten (10) years from the date of registration of
possession and control M has since then developed the said the title in the name of M.
property. In 1967, O died, survived by sons S and P.
Prescription; Real Rights (1992)
In 1977, after the tenth (10th) death anniversary of his A owned a parcel of unregistered land located on the Tarlac
father O. son P filed a suit to annul the mortgage deed and side of the boundary between Tarlac and Pangasinan. His
subsequent sale of the property, etc., on the ground of brother B owned the adjoining parcel of unregistered land
fraud. He asserted that the property in question was on the Pangasinan side.
conjugal in nature actually belonging, at the time of the
mortgage, to O and his wife, W, whose conjugal share went A sold the Tarlac parcel to X in a deed of sale executed as a
to their sons (S and P) and to O. public instrument by A and X. After X paid in full the, price
(a) Is the suit filed by P barred by prescription? Explain of the sale, X took possession of the Pangasinan parcel in
your answer. the belief that it was the Tarlac parcel covered by the deed
(b) After the issuance of the sheriff's final deed of sale in of sale executed by A and X.
1966 in this case, assuming that M applied for registration
under the Torrens System and was issued a Torrens Title to After twelve (12) years, a controversy arose between B and
the said property in question, would that added fact have X on the issue of the ownership of the Pangasinan parcel, B
any significant effect on your conclusion? State your reason. claims a vested right of ownership over the Pangasinan
SUGGESTED ANSWER: parcel because B never sold that parcel to X or to anyone
(a) Under Art. 173 of the Civil Code, the action is barred by else.
prescription because the wife had only ten (10) years from
the transaction and during the marriage to file a suit for the On the other hand, X claims a vested right of ownership
annulment of the mortgage deed. over the Pangasinan parcel by acquisitive prescription,
Alternative Answers to (a) first Alternative Answer: because X possessed this parcel for over ten (10] years
under claim of ownership.
Page 75 of 119
Decide on these claims, giving your reasons. The right to recover possession of registered land likewise
SUGGESTED ANSWER: does not prescribe because possession is just a necessary
At this point in time, X cannot claim the right of vested
incident of ownership.
ownership over the Pangasinan parcel by acquisitive
prescription. In addition to the requisites common to SUGGESTED ANSWER:
ordinary and extraordinary acquisitive prescription b) Mikaelo's defense of laches, however, appears to be
consisting of uninterrupted, peaceful, public, adverse and more sustainable. Renren bought the land and had the sale
actual possession in the concept of owner, ordinary registered way back in 1965. From the facts, it appears that
acquisitive prescription for ten (10) years requires (1) it was only in 1998 or after an inexplicable delay of 33 years
possession in good faith and (2) just title. "Just title" means that he took the first step asserting his right to the land. It
that the adverse claimant came into possession of the was not even an action to recover ownership but only
property through one of the modes recognized by law for possession of the land. By ordinary standards, 33 years of
the acquisition of ownership but the grantor was not the neglect or inaction is too long and maybe considered
owner or could not transmit any right (Art. 1129. Civil unreasonable. As often held by the Supreme Court, the
Code). In this case, there is no "just title" and no "mode" principle of imprescriptibility sometimes has to yield to the
that can be invoked by X for the acquisition of the equitable principle of laches which can convert even a
Pangasinan parcel. There was no constructive delivery of registered land owner's claim into a stale demand.
the Pangasinan parcel because it was not the subject-matter
of the deed of sale. Hence, B retains ownership of the Mikaelo's claim of laches, however, is weak insofar as the
Pangasinan parcel of land. element of equity is concerned, there being no showing in
the facts how he entered into the ownership and possession
Primary Entry Book; Acquisitive Prescription; Laches of the land.
(1998)
In 1965, Renren bought from Robyn a parcel of registered Reclamation of Foreshore Lands; Limitations (2000)
land evidenced by a duly executed deed of sale. The owner Republic Act 1899 authorizes municipalities and chartered
presented the deed of sale and the owner's certificate of title cities to reclaim foreshore lands bordering them and to
to the Register of Deeds. The entry was made in the construct thereon adequate docking and harbor facilities.
daybook and corresponding fees were paid as evidenced by Pursuant thereto, the City of Cavite entered into an
official receipt. However, no transfer of certificate of title agreement with the Fil-Estate Realty Company, authorizing
was issued to Renren because the original certificate of title the latter to reclaim 300 hectares of land from the sea
in Robyn's name was temporarily misplaced after fire partly bordering the city, with 30% of the land to be reclaimed to
gutted the Office of the Register of Deeds. Meanwhile, the be owned by Fil-Estate as compensation for its services.
land had been possessed by Robyn's distant cousin, The Solicitor General questioned the validity of the
Mikaelo, openly, adversely and continuously in the concept agreement on the ground that it will mean reclaiming land
of owner since 1960. It was only in April 1998 that Renren under the sea which is beyond the commerce of man. The
sued Mikaelo to recover possession. Mikaelo invoked a) City replies that this is authorized by RA. 1899 because it
acquisitive prescription and b) laches, asking that he be authorizes the construction of docks and harbors. Who is
declared owner of the land. Decide the case by evaluating correct? (3%)
these defenses, [5%] SUGGESTED ANSWER:
SUGGESTED ANSWER: The Solicitor General is correct. The authority of the City of
a) Renren's action to recover possession of the land will Cavite under RA 1899 to reclaim land is limited to
prosper. In 1965, after buying the land from Robyn, he foreshore lands. The Act did not authorize it to reclaim land
submitted the Deed of Sale to the Registry of Deeds for from the sea. "The reclamation being unauthorized, the City
registration together with the owner's duplicate copy of the of Cavite did not acquire ownership over the reclaimed
title, and paid the corresponding registration fees. Under land. Not being the owner, it could not have conveyed any
Section 56 of PD No. 1529, the Deed of Sale to Renren is portion thereof to the contractor.
considered registered from the time the sale was entered in ALTERNATIVE ANSWER:
It depends. If the reclamation of the land from the sea is
the Day Book (now called the Primary Entry Book).
necessary in the construction of the docks and the harbors,
For all legal intents and purposes, Renren is considered the the City of Cavite is correct. Otherwise, it is not. Since RA
registered owner of the land. After all, it was not his fault 1899 authorized the city to construct docks and harbors, all
that the Registry of Deeds could not issue the works that are necessary for such construction are deemed
authorized. Including the reclamation of land from the sea.
corresponding transfer certificate of title.
The reclamation being authorized, the city is the owner of
Mikaelo's defense of prescription can not be sustained. A the reclaimed land and it may convey a portion thereof as
Torrens title is imprescriptible. No title to registered land in payment for the services of the contractor.
derogation of the title of the registered owner shall be ANOTHER ALTERNATIVE ANSWER:
acquired by prescription or adverse possession. (Section 47, On the assumption that the reclamation contract was
entered into before RA 1899 was repealed by PD 3-A, the
P.D. No, 1529)
City of Cavite is correct. Lands under the sea are "beyond
the commerce of man" in the sense that they are not
susceptible of private appropriation, ownership or
Page 76 of 119
alienation. The contract in question merely calls for the answer or show up on the date of initial hearing, does not
reclamation of 300 hectares of land within the coastal guarantee the success of the application. It is still incumbent
waters of the city. Per se, it does not vest, alienate or upon the applicant to prove with well nigh incontrovertible
transfer ownership of land under the sea. The city merely evidence that he has acquired a title to the land that is fit for
engaged the services of Fil-Estate to reclaim the land for the registration. Absent such registrable title, it is the clear duty
city. of the Land Registration Court to dismiss the application
and declare the land as public land.
Registration; Deed of Mortgage (1994)
How do you register now a deed of mortgage of a parcel of An application for land registration is a proceeding in rem.
land originally registered under the Spanish Mortgage Law? Its main objective is to establish the status of the res
SUGGESTED ANSWER: whether it is still part of our public domain as presumed
a) After the Spanish Mortgage Law was abrogated by P.D. under the Regalian doctrine or has acquired the character of
892 on February 16, 1976, all lands covered by Spanish titles a private property. It is the duty of the applicant to
that were not brought under the Torrens system within six overcome that presumption with sufficient evidence.
16] months from the date thereof have been considered as
"unregistered private lands." Remedies; Judicial Reconstitution of Title (1996)
In 1989, the heirs of Gavino, who died on August 10, 1987,
Thus, a deed of mortgage affecting land originally registered filed a petition for reconstitution of his lost or destroyed
under the Spanish Mortgage Law is now governed by the Torrens Title to a parcel of land in Ermita, Manila. This was
system of registration of transactions or instruments opposed by Marilou who claimed ownership of the said
affecting unregistered land under Section 194 of the Revised land by a series of sales. She claimed that Gavino had sold
Administrative Code as amended by Act No. 3344. Under the property to Bernardo way back in 1941 and as evidence
this law, the instrument or transaction affecting unregistered thereof, she presented a Tax Declaration in 1948 in the
land is entered in a book provided for the purpose but the name of Bernardo, which cancelled the previous Tax
registration thereof is purely voluntary and does not Declaration in the name of Gavino. Then she presented two
adversely affect third persons who have a better right. deeds of sale duly registered with the Register of Deeds, the
first one executed by Bernardo in 1954 selling the same
b) By recording and registering with the Register of Deeds property to Carlos, and the second one executed by Carlos
of the place where the land is located, in accordance with in 1963, selling the same property to her. She also claimed
Act 3344. However, P.D. 892 required holders of Spanish that she and her predecessors in interest have been in
title to bring the same under the Torrens System within 6 possession of the property since 1948.
months from its effectivity on February 16, 1976. If you were the judge, how will you decide the petition?
Remedies; Judicial Confirmation; Imperfect Title (1993) Explain.
On June 30, 1986, A filed in the RTC of Abra an SUGGESTED ANSWER:
application for registration of title to a parcel of land under If I were the judge, I will give due course to the petition of
P. D. No. 1529, claiming that since June 12, 1945, he has the heirs of Gavino despite the opposition of Marilou for
been in open, continuous, exclusive and notorious the following reasons:
possession and occupation of said parcel of land of the a) Judicial reconstitution of a certificate of title under RA.
public domain which was alienable and disposable, under a No. 26 partakes of a land registration proceeding and is
bona fide claim of ownership. After issuance of the notice perforce a proceeding in rem. It denotes restoration of
of initial hearing and publication, as required by law, the an existing instrument which has been lost or destroyed
petition was heard on July 29, 1987. On the day of the in its original form and condition. The purpose of
hearing nobody but the applicant appeared. Neither was reconstitution of title or any document is to have the
there anyone who opposed the application. Thereupon, on same reproduced, after proceedings. In the same form
motion of the applicant, the RTC issued an order of general they were when the loss or destruction occurred.
default and allowed the applicant to present his evidence. b) If the Court goes beyond that purpose, it acts without
That he did. On September 30, 1989, the RTC dismissed or in excess of jurisdiction. Thus, where the Torrens
A's application for lack of sufficient evidence. A appealed to Title sought to be reconstituted is in the name of
the Court of Appeals. Gavino, the court cannot receive evidence proving that
Marilou is the owner of the land. Marilou's dominical
The appellant urged that the RTC erred in dismissing his claim to the land should be ventilated in a separate civil
application for registration and in not ordering registration action before the Regional Trial Court in its capacity as
of his title to the parcel of land in question despite the fact a court of general jurisdiction.
that there was no opposition filed by anybody to his REFERENCES: Heirs of Pedro Pinate vs. Dulay. 187 SCRA 12-20
application. (1990); Bunagan vs. CF1 Cebu Branch VI. 97 SCRA 72 (1980);
Republic vs. IAC. 157 SCRA 62,66 (1988); Margolles vs. CA, 230
Did the RTC commit the error attributed to it?
SCRA 709; Republic us, Feliciano, 148 SCRA 924.
SUGGESTED ANSWER:
No, the RTC did not commit the error attributed to it. In an Remedies; Procedure; Consulta (1994)
application for Judicial confirmation of imperfect or What is the procedure of consulta when an instrument is
incomplete title to public agricultural land under Section 48 denied registration?
of the Public Land Act, the lack of opposition and the SUGGESTED ANSWER:
consequent order of default against those who did not
Page 77 of 119
1) The Register of Deeds shall notify the interested party (a) An action for reconveyance against Huey is not
in writing, setting forth the defects of the instrument or the proper remedy, because Huey is an innocent purchaser
the legal ground relied upon for denying the for value. The proper recourse is for Louie to go after
registration, and advising that if he is not agreeable to Dewey for damages by reason of the fraudulent registration
such ruling, he may, without withdrawing the and subsequent sale of the land. If Dewey is insolvent,
documents from the Registry, elevate the matter by Louie may file a claim against the Assurance Fund (Heirs of
Consulta to the Administrator of the Land Registration Pedro Lopez v. De Castro 324 SCRA 591 [2000] citing Sps.
Authority (LRA). Eduarte v. CA, 323 Phil. 462, 467 [1996]).
2) Within five {5) days from receipt of notice of denial,
the party-in-interest shall file his Consulta with the (b) Yes, the remedy will prosper because the action
Register of Deeds concerned and pay the consulta fee. prescribes in ten (10) years, not within one (1) year when a
3) After receipt of the Consulta and payment of the petition for the reopening of the registration decree may be
corresponding fee the Register of Deeds makes an filed. The action for reconveyance is distinct from the
annotation of the pending consulta at the back of the petition to reopen the decree of registration (Grey Alba v.
certificate of title. De la Cruz, 17 Phil. 49 [1910}). There is no need to reopen
4) The Register of Deeds then elevates the case to the the registration proceedings, but the property should just be
LRA Administrator with certified records thereof and a reconveyed to the real owner.
summary of the facts and issues involved.
5) The LRA Administrator then conducts hearings after The action for reconveyance is based on implied or
due notice or may just require parties to submit their constructive trust, which prescribes in ten (10) years from
memoranda. the date of issuance of the original certificate of title. This
6) After hearing, the LRA Administrator issues an order rule assumes that the defendant is in possession of the land.
prescribing the step to be taken or the memorandum to Where it is the plaintiff who is in possession of the land, the
be made. His resolution in consulta shall be conclusive action for reconveyance would be in the nature of a suit for
and binding upon all Registers of Deeds unless quieting for the title which action is imprescriptible (David
reversed on appeal by the Court of Appeals or by the v. Malay, 318 SCRA 711 [1999]).
Supreme Court. (Section 117, P.D. 1529).
Remedies; Reconveyance; Elements (1995)
• The procedure of consulta is a mode of appeal from Rommel was issued a certificate of title over a parcel of land
denial by the Register of Deeds of the registration of in Quezon City. One year later Rachelle, the legitimate
the instrument to the Commissioner of Land owner of the land, discovered the fraudulent registration
obtained by Rommel. She filed a complaint against Rommel
Registration.
for reconveyance and caused the annotation of a notice of
• lis pendens on the certificate of title issued to Rommel.
Within five days from receipt of the notice of denial,
Rommel now invokes the indefeasibility of his title
the interested party may elevate the matter by consulta considering that one year has already elapsed from its
to the Commissioner of Land Registration who shall
issuance. He also seeks the cancellation of the notice of Lis
enter an order prescribing the step to be taken or
pendens.
memorandum to be made. Resolution in consulta shall
Will Rachelle's suit for reconveyance prosper? Explain.
be binding upon all Registers of Deeds provided that SUGGESTED ANSWER:
the party in interest may appeal to the Court of Appeals Yes, Rachelle's suit will prosper because all elements for an
within the period prescribed (Sec. 117, P.D. 1529). action for reconveyance are present, namely:
a) Rachelle is claiming dominical rights over the same
Remedies; Reconveyance vs. Reopening of a Decree; land.
Prescriptive Period (2003) b) Rommel procured his title to the land by fraud.
Louie, before leaving the country to train as a chef in a five- c) The action was brought within the statutory period of
star hotel in New York, U.S.A., entrusted to his first-degree four (4) years from discovery of the fraud and not later
cousin Dewey an application for registration, under the than ten (10} years from the date of registration of
Land Registration Act, of a parcel of land located in Rommel's title.
Bacolod City. A year later, Louie returned to the Philippines d) Title to the land has not passed into the hands of an
and discovered that Dewey registered the land and obtained
innocent purchaser for value.
an Original Certificate of Title over the property in his
Dewey’s name. Compounding the matter, Dewey sold the Rommel can invoke the indefeasibility of his title if Rachelle
land to Huey, an innocent purchaser for value. Louie had filed a petition to reopen or review the decree of
promptly filed an action for reconveyance of the parcel of registration. But Rachelle instead filed an ordinary action in
land against Huey. personam for reconveyance. In the latter action,
(a) Is the action pursued by Louie the proper remedy? indefeasibility is not a valid defense because, in filing such
(b) Assuming that reconveyance is the proper remedy, action, Rachelle is not seeking to nullify nor to impugn the
will the action prosper if the case was filed beyond one year, indefeasibility of Rommel's title. She is only asking the court
but within ten years, from the entry of the decree of to compel Rommel to reconvey the title to her as the
registration? 5% legitimate owner of the land.
SUGGESTED ANSWER: ALTERNATIVE ANSWER:
Page 78 of 119
Yes. The property registered is deemed to be held in trust This action does not prescribe. With respect to Percival's
for the real owner by the person in whose name it is action for reconveyance, it would have prescribed, having
registered. The Torrens system was not designed to shield been filed more than ten (10) years after registration and
one who had committed fraud or misrepresentation and issuance of an O.C.T. in the name of Melvin, were it not for
thus holds the title in bad faith. (Walstrom v. Mapa Jr., (G .R the inherent infirmity of the latter's title. Under the facts,
38387, 29 Jan. 1990) as cited in Martinez, D., Summary of SC the statute of limitations will not apply to Percival because
Decisions, January to June, 1990, p. 359], Melvin knew that a part of the land covered by his title
actually belonged to Percival. So, instead of nullifying in
Remedies; Reconveyance; Prescriptive Period (1997) toto the title of Melvin, the court, in the exercise of equity
On 10 September 1965, Melvin applied for a free patent and jurisdiction, may grant prayer for the reconveyance of
covering two lots - Lot A and Lot B - situated in Santiago, Lot B to Percival who has actually possessed the land under
Isabela. Upon certification by the Public Land Inspector a claim of ownership since 1947. After all, if Melvin's title is
that Melvin had been in actual, continuous, open, notorious, declared void ab initio and the land is reverted to the public
exclusive and adverse possession of the lots since 1925, the domain, Percival would just the same be entitled to
Director of Land approved Melvin's application on 04 June preference right to acquire the land from the government.
1967. On 26 December 1967, Original Certificate of Title Besides, well settled is the rule that once public land has
(OCT) No. P-2277 was issued in the name of Melvln. been in open, continuous, exclusive and notorious
possession under a bonafide claim of acquisition of
On 7 September 1971, Percival filed a protest alleging that ownership for the period prescribed by Section 48 of the
Lot B which he had been occupying and cultivating since Public Land Act, the same ipso jure ceases to be public and
1947 was included in the Free Patent issued in the name of in contemplation of law acquired the character of private
Melvin. The Director of Lands ordered the investigation of land. Thus, reconveyance of the land from Melvin to
Percival's protest. The Special Investigator who conducted Percival would be the better procedure, (Vitale vs. Anore, 90
the investigation found that Percival had been in actual Phil. 855; Pena, Land Titles and Deeds, 1982, Page 427)
cultivation of Lot B since 1947. ALTERNATIVE ANSWER:
The action of the Solicitor General should prosper,
On 28 November 1986, the Solicitor General filed in behalf considering that the doctrine of indefeasibility of title does
of the Republic of the Philippines a complaint for not apply to free patent secured through fraud. A certificate
cancellation of the free patent and the OCT issued in the of title cannot be used as shield to perpetuate fraud. The
name of Melvin and the reversion of the land to public State is not bound by the period of prescription stated in
domain on the ground of fraud and misrepresentation in Sec. 38 of Act 496. (Director of Lands vs. Abanilla, 124
obtaining the free patent. On the same date, Percival sued SCRA 358)
Martin for the reconveyance of Lot B.
The action for reconveyance filed by Percival may still
Melvin filed his answers interposing the sole defense in prosper provided that the property has not passed to an
both cases that the Certificate of Title issued in his name innocent third party for value (Dablo us. Court of Appeals.
became incontrovertible and indefeasible upon the lapse of 226 SCRA 618), and provided that the action is filed within
the prescriptive period of ten years (Tale vs. Court of
one year from the issuance of the free patent.
Appeals. 208 SCRA 266). Since the action was filed by
Given the circumstances, can the action of the Solicitor Percival 19 years after the issuance of Melvin's title, it is
General and the case for reconveyance filed by Percival submitted that the same is already barred by prescription.
possibly prosper? ALTERNATIVE ANSWER (to second part of question)
SUGGESTED ANSWER: The action for reconveyance filed by Percival will prosper,
"If fraud be discovered in the application which led to the because the land has ceased to be public land and has
issuance of the patent and Certificate of Title, this Title become private land by open, continuous, public, exclusive
becomes ipso facto null and void. Thus, in a case where a possession under a bona fide claim of ownership for more
person who obtained a free patent, knowingly made a false than thirty years, and Percival is still in possession of the
statement of material and essential facts in his application property at present. His action for reconveyance can be
for the same, by stating therein that the lot in question was considered as an action to quiet title, which does not
part of the public domain not occupied or claimed by any prescribe if the plaintiff is in possession of the property.
other person, his title becomes ipso facto canceled and (Olviga v. CA. GR 1048013. October 21, 1993)
consequently rendered null and void."
"It is to the public interest that one who succeeds In Remedies; Reopening of a Decree; Elements (1992)
fraudulently acquiring title to public land should not be What are the essential requisites or elements for the
allowed to benefit therefrom and the State, through the allowance of the reopening or review of a decree of
Solicitor General, may file the corresponding action for registration?
annulment of the patent and the reversion of the land SUGGESTED ANSWER:
involved to the public domain" (Dinero us. Director of The essential elements are: (1) that the petitioner has a real
Lands; Kayaban vs. Republic L-33307,8-20-73; Director of or dominical right; (2) that he has been deprived thereof
Lands us. Hon. Pedro Samson Animas, L-37682, 3-29-74.) through fraud; (3) that the petition is filed within one (1)
year from the issuance of the decree; and (4) that the
property has not yet been transferred to an innocent
Page 79 of 119
purchaser {Rublico vs. Orellana 30 SCRA 511; Ubudan vs. Gil Administrative Code of 1987 which prohibits officers and
45 SCRA 17). employees of the government from purchasing directly or
OPTIONAL EXTENDED ANSWER: indirectly any property sold by the government for
Petition for review of the Decree of Registration. A remedy nonpayment of any tax, fee or other public charge.
expressly provided in Section 32 of P. D. No. 1529 (a) Is the sale to Juan valid? If so, what is the effect of the
(formerly Section 38. Act 496), this remedy has the Issuance of the Certificate of Title to Maria?
following elements: (b) If the sale is void, may Juan recover the P10,000.00? If
a) The petition must be filed by a person claiming not, why not?
dominical or other real rights to the land registered in (c) If the sale is void, did it not nevertheless, operate to
the name of respondent. divert Maria of her ownership? If it did, who then is the
b) The registration of the land in the name of respondent owner of the property?
was procured by means of actual, (not just SUGGESTED ANSWER:
constructive) fraud, which must be extrinsic. Fraud is A. The sale of the land to Juan is not valid, being contrary
actual if the registration was made through deceit or to law. Therefore, no transfer of ownership of the land was
any other intentional act of downright dishonesty to effected from the delinquent taxpayer to him. The original
enrich oneself at the expense of another. It is extrinsic certificates of title obtained by Maria thru a free patent grant
when it is something that was not raised, litigated and from the Bureau of Lands under Chapter VII, CA 141 is
passed upon in the main proceedings. valid but in view of her delinquency, the said title is subject
c) The petition must be filed within one (1) year from the to the right of the City Government to sell the land at
date of the issuance of the decree. public auction. The issuance of the OCT did not exempt
d) Title to the land has not passed to an Innocent the land from the tax sales. Section 44 of P.O. No. 1529
purchaser for value (Libudan vs. Gil, 45_ SCRA 27, provides that every registered owner receiving a Certificate
1972), Rublico vs. Orrelana. 30 SCRA 511, 1969); RP of Title shall hold the same free from an encumbrances,
vs. CA, 57 G. R No. 40402. March 16, 1987). subject to certain exemptions.
Torrens System vs. Recording of Evidence of Title (1994) B. Juan may recover because he was not a party to the
Distinguish the Torrens system of land registration from the violation of the law.
system of recording of evidence of title.
SUGGESTED ANSWER: C. No, the sale did not divest Maria of her title precisely
a) The TORRENS SYSTEM OF LAND because the sale is void. It is as good as if no sale ever took
REGISTRATION is a system for the registration of title to place.
the land. Thus, under this system what is entered in the In tax sales, the owner is divested of his land initially upon
Registry of Deeds, is a record of the owner's estate or award and issuance of a Certificate of Sale, and finally after
interest in the land, unlike the system under the Spanish the lapse of the 1 year period from date of registration, to
Mortgage Law or the system under Section 194 of the redeem, upon execution by the treasurer of an instrument
Revised Administrative Code as amended by Act 3344 sufficient in form and effects to convey the property. Maria
where only the evidence of such title is recorded. In the remained owner of the land until another tax sale is to be
latter system, what is recorded is the deed of conveyance
performed in favor of a qualified buyer.
from hence the owner's title emanated—and not the title
itself.
CONTRACTS
b) Torrens system of land registration is that which is
prescribed in Act 496 (now PD 1529), which is either Consensual vs. Real Contracts; Kinds of Real Contracts
Judicial or quasi-judicial. System or recording of evidence of (1998)
title is merely the registration of evidence of acquisitions of Distinguish consensual from real contracts and name at
land with the Register of Deeds, who annotates the same on least four (4) kinds of real contracts under the present law.
the existing title, cancels the old one and issues a new title [3%]
based on the document presented for registration. SUGGESTED ANSWER:
CONSENSUAL CONTRACTS are those which are
Unregistered Land (1991) perfected by mere consent (Art. 1315. Civil Code). REAL
Maria Enriquez failed to pay the realty taxes on her CONTRACTS are those which are perfected by the delivery
unregistered agricultural land located in Magdugo, Toledo of the object of the obligation. (Art. 1316, Civil Code)
City. In 1989, to satisfy the taxes due, the City sold it at Examples of real contracts are deposit, pledge,
public auction to Juan Miranda, an employee at the commodatum and simple loan (mutuum).
Treasurer's Office of said City, whose bid at P10,000.00 was
the highest. In due time, a final bill of sale was executed in Consideration; Validity (2000)
his favor. Lolita was employed in a finance company. Because she
Maria refused to turn-over the possession of the property to could not account for the funds entrusted to her, she was
Juan alleging that (1) she had been, in the meantime, granted charged with estafa and ordered arrested. In order to secure
a free patent and on the basis thereof an Original Certificate her release from jail, her parents executed a promissory note
of Title was issued to her, and (2) the sale in favor of Juan is to pay the finance company the amount allegedly
void from the beginning in view of the provision in the misappropriated by their daughter. The finance company
Page 80 of 119
2006) then executed an affidavit of desistance which led to the
withdrawal of the information against Lolita and her release My answer will not be the same as to damages. Marvin will
from jail. The parents failed to comply with their be liable for damages for breach of contract of option. With
promissory note and the finance company sued them for the payment of the consideration for the option given, and
specific performance. Will the action prosper or not? (3%) with the consent of the parties and the object of contract
SUGGESTED ANSWER: being present, a perfected contract of option was created.
The action will prosper. The promissory note executed by (San Miguel, Inc. v. Huang, G.R. No. 137290, July 31,
Lolita's parents is valid and binding, the consideration being 2000) Under Article 1170 of the Civil Code, those who in
the extinguishment of Lolita's civil liability and not the the performance of their obligation are guilty of
stifling of the criminal prosecution. contravention thereof, as in this case, when Marvin did not
ALTERNATIVE ANSWER: give Carlos the agreed period of ten days, are liable for
The action will not prosper because the consideration for damages.
the promissory note was the non-prosecution of the ALTERNATIVE ANSWER:
criminal case for estafa. This cannot be done anymore My answer will not be the same if Carlos paid Marvin
because the information has already been filed in court and P10,000.00 because an option contract was perfected. Thus,
to do it is illegal. That the consideration for the promissory if Marvin withdrew the offer prior to the expiration of the
note is the stifling of the criminal prosecution is evident 10-day period, he breached the option contract. (Article
from the execution by the finance company of the affidavit 1324, Civil Code)
of desistance immediately after the execution by Lolita's
parents of the promissory note. The consideration being c) Supposing that Carlos accepted the offer before
illegal, the promissory note is invalid and may not be Marvin could communicate his withdrawal thereof?
enforced by court action. Discuss the legal consequences. (2%)
SUGGESTED ANSWER:
Contract of Option; Elements (2005) A contract to construct the house of Carlos is perfected.
Marvin offered to construct the house of Carlos for a very Contracts are perfected by mere consent manifested by the
reasonable price of P900,000.00, giving the latter 10 days meeting of the offer and the acceptance upon the thing and
within which to accept or reject the offer. On the fifth day, the cause which are to constitute the contract. (Gomez v.
before Carlos could make up his mind, Marvin withdrew his Court of Appeals, G.R. No. 120747, September 21, 2000)
offer.
a) What is the effect of the withdrawal of Marvin's Under Article 1315 of the Civil Code, Carlos and Marvin are
offer? (2%) bound to fulfill what has been expressly stipulated and all
SUGGESTED ANSWER: consequences thereof. Under Article 1167, if Marvin would
The withdrawal of Marvin's offer will cause the offer to refuse to construct the house, Carlos is entitled to have the
cease in law. Hence, even if subsequently accepted, there construction be done by a third person at the expense of
could be no concurrence of the offer and the acceptance. In Marvin. Marvin in that case will be liable for damages under
the absence of concurrence of offer and acceptance, there Article 1170.
can be no consent. (Laudico v. Arias Rodriguez, G.R.
No. 16530, March 31, 1922) Without consent, there is no Inexistent Contracts vs. Annullable Contracts (2004)
perfected contract for the construction of the house of Distinguish briefly but clearly between Inexistent contracts
Carlos. (Salonga v. Farrales, G.R. No. L-47088, July 10, and annullable contracts.
1981) Article 1318 of the Civil Code provides that there can SUGGESTED ANSWER:
be no contract unless the following requisites concur: (1) INEXISTENT CONTRACTS are considered as not having
consent of the parties; (2) object certain which is the subject been entered into and, therefore, void ob initio. They do
matter of the contract; and (3) cause of the obligation. not create any obligation and cannot be ratified or validated,
as there is no agreement to ratify or validate. On the other
Marvin will not be liable to pay Carlos any damages for hand, ANNULLABLE or VOIDABLE CONTRACTS are
withdrawing the offer before the lapse of the period valid until invalidated by the court but may be ratified. In
granted. In this case, no consideration was given by Carlos inexistent contracts, one or more requisites of a valid
for the option given, thus there is no perfected contract of contract are absent. In anullable contracts, all the elements
option for lack of cause of obligation. Marvin cannot be of a contract are present except that the consent of one of
held to have breached the contract. Thus, he cannot be held the contracting parties was vitiated or one of them has no
liable for damages. capacity to give consent.
b) Will your answer be the same if Carlos paid Marvin Nature of Contracts; Obligatoriness (1991)
P10,000.00 as consideration for that option? Explain. Roland, a basketball star, was under contract for one year to
(2%) play-for-play exclusively for Lady Love, Inc. However, even
ALTERNATIVE ANSWER: before the basketball season could open, he was offered a
My answer will be the same as to the perfection of the more attractive pay plus fringes benefits by Sweet Taste,
contract for the construction of the house of Carlos. No Inc. Roland accepted the offer and transferred to Sweet
perfected contract arises because of lack of consent. With Taste. Lady Love sues Roland and Sweet Taste for breach
the withdrawal of the offer, there could be no concurrence of contract. Defendants claim that the restriction to play for
of offer and acceptance. Lady Love alone is void, hence, unenforceable, as it
Page 81 of 119
constitutes an undue interference with the right of Roland any payment at all. Printado has also a standing contract
to enter into contracts and the impairment of his freedom with publisher Publico for the printing of 10,000 volumes
to play and enjoy basketball. of school textbooks. Suplico was aware of said printing
contract. After printing 1,000 volumes, Printado also fails to
Can Roland be bound by the contract he entered into with perform under its printing contract with Publico. Suplico
Lady Love or can he disregard the same? Is he liable at all? sues Printado for the value of the unpaid deliveries under
How about Sweet Taste? Is it liable to Lady Love? their order agreement. At the same time Publico sues
SUGGESTED ANSWER: Printado for damages for breach of contract with respect to
Roland is bound by the contract he entered into with Lady their own printing agreement. In the suit filed by Suplico,
Love and he cannot disregard the same, under the principles Printado counters that: (a) Suplico cannot demand payment
of obligatoriness of contracts. Obligations arising from for deliveries made under their order agreement until
contracts have the force of law between the parties. Suplico has completed performance under said contract; (b)
SUGGESTED ANSWER: Suplico should pay damages for breach of contract; and (c)
Yes, Roland is liable under the contract as far as Lady Love with Publico should be liable for Printado’s breach of his
is concerned. He is liable for damages under Article 1170 of contract with Publico because the order agreement between
the Civil Code since he contravened the tenor of his Suplico and Printado was for the benefit of Publico. Are the
obligation. Not being a contracting party, Sweet Taste is not contentions of Printado tenable? Explain your answers as to
bound by the contract but it can be held liable under Art. each contention. (5%)
1314. The basis of its liability is not prescribed by contract SUGGESTED ANSWER:
but is founded on quasi-delict, assuming that Sweet Taste No, the contentions of Printado are untenable. Printado
knew of the contract. Article 1314 of the Civil Code having failed to pay for the printing paper covered by the
provides that any third person who induces another to delivery invoices on time, Suplico has the right to cease
violate his contract shall be liable for damages to the other making further delivery. And the latter did not violate the
contracting party. order agreement (Integrated Packaging Corporation v. Court
ALTERNATIVE ANSWER:
of Appeals, (333 SCRA 170, G.R. No. 115117, June 8, [2000]).
It is assumed that Lady Love knew of the contract. Neither
Roland nor Sweet Taste would be liable, because the Suplico cannot be held liable for damages, for breach of
restriction in the contract is violative of Article 1306 as contract, as it was not he who violated the order agreement,
being contrary to law morals, good customs, public order or but Printado.
public policy. Suplico cannot be held liable for Printado’s breach of
contract with Publico. He is not a party to the agreement
Nature of Contracts; Privity of Contract (1996) entered into by and between Printado and Publico. Theirs is
Baldomero leased his house with a telephone to Jose. The not a stipulation pour atrui. [Aforesaid] Such contracts do
lease contract provided that Jose shall pay for all electricity, could not affect third persons like Suplico because of the
water and telephone services in the leased premises during basic civil law principle of relativity of contracts which
the period of the lease. Six months later. Jose surreptitiously provides that contracts can only bind the parties who
vacated the premises. He left behind unpaid telephone bills entered into it, and it cannot favor or prejudice a third
for overseas telephone calls amounting to over P20,000.00. person, even if he is aware of such contract and has acted
Baldomero refused to pay the said bills on the ground that with knowledge thereof. (Integrated Packaging Corporation
Jose had already substituted him as the customer of the v. CA, supra.)
telephone company. The latter maintained that Baldomero
remained as his customer as far as their service contract was Rescission of Contracts; Proper Party (1996)
concerned, notwithstanding the lease contract between In December 1985, Salvador and the Star Semiconductor
Baldomero and Jose. Who is correct, Baldomero or the Company (SSC) executed a Deed of Conditional Sale
telephone company? Explain. wherein the former agreed to sell his 2,000 square meter lot
SUGGESTED ANSWER: in Cainta, Rizal, to the latter for the price of P1,000,000.00,
The telephone company is correct because as far as it is payable P100,000.00 down, and the balance 60 days after
concerned, the only person it contracted with was the squatters in the property have been removed. If the
Baldomero. The telephone company has no contract with squatters are not removed within six months, the
Jose. Baldomero cannot substitute Jose in his stead without P100,000.00 down payment shall be returned by the vendor
the consent of the telephone company (Art. 1293, NCC). to the vendee,
Baldomero is, therefore, liable under the contract. Salvador filed ejectment suits against the squatters, but in
spite of the decisions in his favor, the squatters still would
Nature of Contracts; Relativity of Contracts (2002) not leave. In August, 1986, Salvador offered to return the
Printado is engaged in the printing business. Suplico P100,000.00 down payment to the vendee, on the ground
supplies printing paper to Printado pursuant to an order that he is unable to remove the squatters on the property.
agreement under which Suplico binds himself to deliver the SSC refused to accept the money and demanded that
same volume of paper every month for a period of 18 Salvador execute a deed of absolute sale of the property in
months, with Printado in turn agreeing to pay within 60 its favor, at which time it will pay the balance of the price.
days after each delivery. Suplico has been faithfully
Incidentally, the value of the land had doubled by that time.
delivering under the order agreement for 10 months but
thereafter stopped doing so, because Printado has not made
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Salvador consigned the P 100,000.00 in court, and filed an property of ZY, his wife may also sue to recover it under
action for rescission of the deed of conditional sale, plus Article 2016 of the Civil Code if she and the family needed
damages. Will the action prosper? Explain. the money for support.
SUGGESTED ANSWER: ALTERNATIVE ANSWER (2):
No, the action will not prosper. The action for rescission A. (2). Mrs. ZY cannot file a suit to recover what her
may be brought only by the aggrieved party to the contract. husband lost. Art 2014 of the Civil Code provides that any
Since it was Salvador who failed to comply with his loser in a game of chance may recover his loss from the
conditional obligation, he is not the aggrieved party who winner, with legal interest from the time he paid the amount
may file the action for rescission but the Star lost. This means that only he can file the suit. Mrs. ZY
Semiconductor Company. The company, however, is not cannot recover as a spouse who has interest in the absolute
opting to rescind the contract but has chosen to waive community property or conjugal partnership of gains,
Salvador's compliance with the condition which it can do because under Art. 117(7} of the Family Code, losses are
under Art. 1545, NCC. borne exclusively by the loser-spouse. Therefore, these
ALTERNATIVE ANSWER: cannot be charged against absolute community property or
The action for rescission will not prosper. The buyer has conjugal partnership of gains. This being so, Mrs. ZY has
not committed any breach, let alone a substantial or serious no interest in law to prosecute and recover as she has no
one, to warrant the rescission/resolution sought by the legal standing in court to do so.
vendor. On the contrary, it is the vendor who appears to
have failed to comply with the condition imposed by the Conditional Obligations (2000)
contract the fulfillment of which would have rendered the Pedro promised to give his grandson a car if the latter will
obligation to pay the balance of the purchase price pass the bar examinations. When his grandson passed the
demandable. Further, far from being unable to comply with said examinations, Pedro refused to give the car on the
what is incumbent upon it, ie., pay the balance of the price - ground that the condition was a purely potestative one. Is
the buyer has offered to pay it even without the vendor he correct or not? (2%)
having complied with the suspensive condition attached to SUGGESTED ANSWER:
the payment of the price, thus waiving such condition as No, he is not correct. First of all, the condition is not purely
well as the 60-day term in its favor The stipulation that the potestative, because it does not depend on the sole will of
P100,000.00 down payment shall be returned by the vendor one of the parties. Secondly, even if it were, it would be
to the vendee if the squatters are not removed within six valid because it depends on the sole will of the creditor (the
months, is also a covenant for the benefit of the vendee, donee) and not of the debtor (the donor).
which the latter has validly waived by implication when it
offered to pay the balance of the purchase price upon the Conditional Obligations (2003)
execution of a deed of absolute sale by the vendor. (Art. Are the following obligations valid, why, and if they are
1545, NCC) valid, when is the obligation demandable in each case?
a) If the debtor promises to pay as soon as he has the
OBLIGATIONS b) means to pay;
If the debtor promises to pay when he likes;
c) If the debtor promises to pay when he becomes a
Aleatory Contracts; Gambling (2004) lawyer;
A. Mr. ZY lost P100,000 in a card game called Russian d) If the debtor promises to pay if his son, who is sick
poker, but he had no more cash to pay in full the winner at with cancer, does not die within one year. 5%
the time the session ended. He promised to pay PX, the SUGGESTED ANSWER:
winner, two weeks thereafter. But he failed to do so despite (a) The obligation is valid. It is an obligation subject
the lapse of two months, so PX filed in court a suit to to an indefinite period because the debtor binds himself to
collect the amount of P50,000 that he won but remained pay when his means permit him to do so (Article 1180,
unpaid. Will the collection suit against ZY prosper? Could NCC). When the creditor knows that the debtor already has
Mrs. ZY file in turn a suit against PX to recover the the means to pay, he must file an action in court to fix the
P100,000 that her husband lost? Reason. (5%) period, and when the definite period as set by the court
SUGGESTED ANSWER: arrives, the obligation to pay becomes demandable 9Article
A. 1. The suit by PX to collect the balance of what he won 1197, NCC).
from ZY will not prosper. Under Article 2014 of the Civil
Code, no action can be maintained by the winner for the SUGGESTED ANSWER:
collection of what he has won in a game of chance. (b) The obligation “to pay when he likes” is a
Although poker may depend in part on ability, it is suspensive condition the fulfillment of which is subject to
the sole will of the debtor and, therefore the conditional
fundamentally a game of chance.
obligation is void. (Article 1182, NCC).
2) If the money paid by ZY to PX was conjugal or
community property, the wife of ZY could sue to recover it SUGGESTED ANSWER:
because Article 117(7) of the Family Code provides that (c) The obligation is valid. It is subject to a suspensive
losses in gambling or betting are borne exclusively by the condition, i.e. the future and uncertain event of his
loser-spouse. Hence, conjugal or community funds may not becoming a lawyer. The performance of this obligation does
be used to pay for such losses. If the money were exclusive
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not depend solely on the will of the debtor but also on condition of Eva passing the 1998 Bar Examinations.
other factors outside the debtor’s control. Hence, upon Eva's passing the Bar, the rights of the other
buyer terminated and Eva acquired ownership of the
SUGGESTED ANSWER: property.
(d) The obligation is valid. The death of the son of SECOND ALTERNATIVE ANSWER:
cancer within one year is made a negative suspensive The sale to another person before Eva could buy it from
condition to his making the payment. The obligation is Manuel is valid, as the contract between Manuel and Eva is
demandable if the son does not die within one year (Article a mere promise to sell and Eva has not acquired a real right
1185, NCC). over the land assuming that there is a price stipulated in the
contract for the contract to be considered a sale and there
Conditional Obligations; Promise (1997) was delivery or tradition of the thing sold.
In two separate documents signed by him, Juan Valentino
"obligated" himself each to Maria and to Perla, thus - SUGGESTED ANSWER:
'To Maria, my true love, I obligate myself to give you my (b) No, she is not entitled to the rentals collected by Manuel
one and only horse when I feel like It." because at the time they accrued and were collected, Eva
- and - was not yet the owner of the property.
'To Perla, my true sweetheart, I obligate myself to pay you FIRST ALTERNATIVE ANSWER:
the P500.00 I owe you when I feel like it." Assuming that Eva is the one entitled to buy the house and
Months passed but Juan never bothered to make good his lot, she is not entitled to the rentals collected by Manuel
promises. Maria and Perla came to consult you on whether before she passed the bar examinations. Whether it is a
or not they could recover on the basis of the foregoing contract of sale or a contract to sell, reciprocal prestations
settings. What would your legal advice be? are deemed imposed A for the seller to deliver the object
SUGGESTED ANSWER:
sold and for the buyer to pay the price. Before the
I would advise Maria not to bother running after Juan for happening of the condition, the fruits of the thing and the
the latter to make good his promise. [This is because a interests on the money are deemed to have been mutually
promise is not an actionable wrong that allows a party to compensated under Article 1187.
recover especially when she has not suffered damages SECOND ALTERNATIVE ANSWER:
resulting from such promise. A promise does not create an Under Art. 1164, there is no obligation on the part of
obligation on the part of Juan because it is not something Manuel to deliver the fruits (rentals) of the thing until the
which arises from a contract, law, quasi-contracts or quasi- obligation to deliver the thing arises. As the suspensive
delicts (Art, 1157)]. Under Art. 1182, Juan's promise to condition has not been fulfilled, the obligation to sell does
Maria is void because a conditional obligation depends upon not arise.
the sole will of the obligor.
Extinguishment; Assignment of Rights (2001)
As regards Perla, the document is an express The sugar cane planters of Batangas entered into a long-
acknowledgment of a debt, and the promise to pay what he term milling contract with the Central Azucarera de Don
owes her when he feels like it is equivalent to a promise to Pedro Inc. Ten years later, the Central assigned its rights to
pay when his means permits him to do so, and is deemed to the said milling contract to a Taiwanese group which would
be one with an indefinite period under Art. 1180. Hence the take over the operations of the sugar mill. The planters filed
amount is recoverable after Perla asks the court to set the an action to annul the said assignment on the ground that
the Taiwanese group was not registered with the Board of
period as provided by Art. 1197, par. 2.
Investments. Will the action prosper or not? Explain briefly.
Conditional Obligations; Resolutory Condition (1999) (5%)
(Note: The question presupposes knowledge and requires the
In 1997, Manuel bound himself to sell Eva a house and lot application of the provisions of the Omnibus Investment Code,
which is being rented by another person, if Eva passes the which properly belongs to Commercial law)
1998 bar examinations. Luckily for Eva, she passed said SUGGESTED ANSWER:
examinations. The action will prosper not on the ground invoked but on
(a) Suppose Manuel had sold the same house and lot to the ground that the farmers have not given their consent to
another before Eva passed the 1998 bar examinations, is the assignment. The milling contract imposes reciprocal
such sale valid? Why? (2%) obligations on the parties. The sugar central has the
(b) Assuming that it is Eva who is entitled to buy said obligation to mill the sugar cane of the farmers while the
house and lot, is she entitled to the rentals collected by latter have the obligation to deliver their sugar cane to the
Manuel before she passed the 1998 bar examinations? Why? sugar central. As to the obligation to mill the sugar cane, the
(3%) sugar central is a debtor of the farmers. In assigning its
SUGGESTED ANSWER: rights under the contract, the sugar central will also transfer
(a) Yes, the sale to the other person is valid as a sale with a to the Taiwanese its obligation to mill the sugar cane of the
resolutory condition because what operates as a suspensive farmers. This will amount to a novation of the contract by
condition for Eva operates a resolutory condition for the substituting the debtor with a third party. Under Article
buyer. 1293 of the Civil Code, such substitution cannot take effect
FIRST ALTERNATIVE ANS WER:
without the consent of the creditor. The formers, who are
Yes, the sale to the other person is valid. However, the
buyer acquired the property subject to a resolutory creditors as far as the obligation to mill their sugar cane is
Page 84 of 119
concerned, may annul such assignment for not having given Even [if] assuming that there was a perfect right of first
their consent thereto. refusal, compensation did not take place because the claim
ALTERNATIVE ANSWER:
is unliquidated.
The assignment is valid because there is absolute freedom
to transfer the credit and the creditor need not get the Extinguishment; Compensation vs. Payment (1998)
consent of the debtor. He only needs to notify him. Define compensation as a mode of extinguishing an
obligation, and distinguish it from payment. [2%]
Extinguishment; Cause of Action (2004) SUGGESTED ANSWER:
TX filed a suit for ejectment against BD for non-payment COMPENSATION is a mode of extinguishing to the
of condominium rentals amounting to P150,000. During the concurrent amount, the obligations of those persons who in
pendency of the case, BD offered and TX accepted the full their own right are reciprocally debtors and creditors of
amount due as rentals from BD, who then filed a motion to each other (Tolentino, 1991 ed., p. 365, citing 2 Castan 560
dismiss the ejectment suit on the ground that the action is and Francia vs. IAC. 162 SCRA 753). It involves the
already extinguished. Is BD’s contention correct? Why or simultaneous balancing of two obligations in order to
why not? Reason. (5%) extinguish them to the extent in which the amount of one is
SUGGESTED ANSWER: covered by that of the other. (De Leon, 1992 ed., p. 221,
BD's contention is not correct. TX can still maintain the citing 8 Manresa 401).
suit for ejectment. The acceptance by the lessor of the
payment by the lessee of the rentals in arrears even during PAYMENT means not only delivery of money but also
the pendency of the ejectment case does not constitute a performance of an obligation (Article 1232, Civil Code). In
waiver or abandonment of the ejectment case. (Spouses payment, capacity to dispose of the thing paid and capacity
Clutario v. CA, 216 SCRA 341 [1992]). to receive payment are required for debtor and creditor,
respectively: in compensation, such capacity is not
Extinguishment; Compensation (2002) necessary, because the compensation operates by law and
Stockton is a stockholder of Core Corp. He desires to sell not by the act of the parties. In payment, the performance
his shares in Core Corp. In view of a court suit that Core must be complete; while in compensation there may be
Corp. has filed against him for damages in the amount of P partial extinguishment of an obligation (Tolentino, supra)
10 million, plus attorney’s fees of P 1 million, as a result of
statements published by Stockton which are allegedly Extinguishment; Compensation/Set-Off; Banks (1998)
defamatory because it was calculated to injure and damage X, who has a savings deposit with Y Bank in the sum of
the corporation’s reputation and goodwill. P1,000,000.00 incurs a loan obligation with the said Bank in
The articles of incorporation of Core Corp. provide for a the sum of P800.000.00 which has become due. When X
right of first refusal in favor of the corporation. tries to withdraw his deposit, Y Bank allows only
Accordingly, Stockton gave written notice to the P200.000.00 to be withdrawn, less service charges, claiming
corporation of his offer to sell his shares of P 10 million. that compensation has extinguished its obligation under the
The response of Core corp. was an acceptance of the offer savings account to the concurrent amount of X's debt. X
in the exercise of its rights of first refusal, offering for the contends that compensation is improper when one of the
purpose payment in form of compensation or set-off debts, as here, arises from a contract of deposit. Assuming
against the amount of damages it is claiming against him, that the promissory note signed by X to evidence the loan
exclusive of the claim for attorney’s fees. Stockton rejected does not provide for compensation between said loan and
the offer of the corporation, arguing that compensation his savings deposit, who is correct? [3%]
between the value of the shares and the amount of damages SUGGESTED ANSWER:
demanded by the corporation cannot legally take effect. Is Y bank is correct. An. 1287, Civil Code, does not apply. All
Stockton correct? Give reason for your answer. (5%) the requisites of Art. 1279, Civil Code are present. In the
SUGGESTED ANSWERS: case of Gullas vs. PNB [62 Phil. 519), the Supreme Court
Stockton is correct. There is no right of compensation held: "The Civil Code contains provisions regarding
between his price of P10 million and Core Corp.’s compensation (set off) and deposit. These portions of
unliquidated claim for damages. In order that compensation Philippine law provide that compensation shall take place
may be proper, the two debts must be liquidated and when two persons are reciprocally creditor and debtor of
demandable. The case for the P 10million damages being each other. In this connection, it has been held that the
still pending in court, the corporation has as yet no claim relation existing between a depositor and a bank is that of
which is due and demandable against Stockton. creditor and debtor, x x x As a general rule, a bank has a
ANOTHER MAIN ANSWER: right of set off of the deposits in its hands for the payment
The right of first refusal was not perfected as a right for the of any indebtedness to it on the part of a depositor." Hence,
reason that there was a conditional acceptance equivalent to compensation took place between the mutual obligations of
a counter-offer consisting in the amount of damages as X and Y bank.
being credited on the purchase price. Therefore,
compensation did not result since there was no valid right Extinguishment; Condonation (2000)
of first refusal (Art. 1475 & 1319, NCC) Arturo borrowed P500,000.00 from his father. After he had
ANOTHER MAIN ANSWER: paid P300,000.00, his father died. When the administrator
of his father's estate requested payment of the balance of
P200,000.00. Arturo replied that the same had been
Page 85 of 119
condoned by his father as evidenced by a notation at the The action will not prosper. The existence of inflation or
back of his check payment for the P300,000.00 reading: "In deflation requires an official declaration by the Bangko
full payment of the loan". Will this be a valid defense in an Sentral ng Pilipinas.
action for collection? (3%) ALTERNATIVE ANSWER:
SUGGESTED ANSWER: The unlawful detainer action will prosper. It is a given fact
It depends. If the notation "in full payment of the loan" was in the problem, that there was inflation, which caused the
written by Arturo's father, there was an implied exchange rate to double. Since the contract itself authorizes
condonation of the balance that discharges the obligation. the increase in rental in the event of an inflation or
In such case, the notation is an act of the father from which devaluation of the Philippine peso, the doubling of the
condonation may be inferred. The condonation being monthly rent is reasonable and is therefore a valid act under
implied, it need not comply with the formalities of a the very terms of the contract. Brian's refusal to pay is thus
donation to be effective. The defense of full payment will, a ground for ejectment.
therefore, be valid.
Extinguishment; Loss (1994)
When, however, the notation was written by Arturo himself. Dino sued Ben for damages because the latter had failed to
It merely proves his intention in making that payment but in deliver the antique Marcedes Benz car Dino had purchased
no way does it bind his father (Yam v. CA, G.R No. 104726. from Ben, which was— by agreement—due for delivery on
11 February 1999). In such case, the notation was not the act December 31, 1993. Ben, in his answer to Dino's complaint,
of his father from which condonation may be inferred. said Dino's claim has no basis for the suit, because as the
There being no condonation at all the defense of full car was being driven to be delivered to Dino on January 1,
payment will not be valid. 1994, a reckless truck driver had rammed into the Mercedes
ALTERNATIVE ANSWER: Benz. The trial court dismissed Dino's complaint, saying
If the notation was written by Arturo's father, it amounted Ben's obligation had indeed, been extinguished by force
to an express condonation of the balance which must majeure.
comply with the formalities of a donation to be valid under Is the trial court correct?
the 2nd paragraph of Article 1270 of the New Civil Code. SUGGESTED ANSWER:
Since the amount of the balance is more than 5,000 pesos, a) No. Article 1262, New Civil Code provides, "An
the acceptance by Arturo of the condonation must also be obligation which consists in the delivery of a determinate
in writing under Article 748. There being no acceptance in thing shall be extinguished if it should be lost or destroyed
writing by Arturo, the condonation is void and the without the fault of the debtor, and before he has incurred
obligation to pay the balance subsists. The defense of full in delay.
payment is, therefore, not valid. In case the notation was b) The judgment of the trial court is incorrect. Loss of the
not written by Arturo's father, the answer is the same as the thing due by fortuitous events or force majeure is a valid
answers above. defense for a debtor only when the debtor has not incurred
delay. Extinguishment of liability for fortuitous event
Extinguishment; Extraordinary Inflation or Deflation (2001) requires that the debtor has not yet incurred any delay. In
On July 1, 1998, Brian leased an office space in a building the present case, the debtor was in delay when the car was
for a period of five years at a rental rate of P1,000.00 a destroyed on January 1, 1993 since it was due for delivery
month. The contract of lease contained the proviso that "in on December 31, 1993. (Art. 1262 Civil Code)
case of inflation or devaluation of the Philippine peso, the
monthly rental will automatically be increased or decreased c) It depends whether or not Ben the seller, was already in
depending on the devaluation or inflation of the peso to the default at the time of the accident because a demand for
dollar." Starting March 1, 2001, the lessor increased the him to deliver on due date was not complied with by him.
rental to P2,000 a month, on the ground of inflation proven That fact not having been given in the problem, the trial
by the fact that the exchange rate of the Philippine peso to court erred in dismissing Dino's complaint. Reason: There
the dollar had increased from P25.00=$1.00 to is default making him responsible for fortuitous events
P50.00=$1.00. Brian refused to pay the increased rate and including the assumption of risk or loss.
an action for unlawful detainer was filed against him. Will
the action prosper? Why? (5%) If on the other hand Ben was not in default as no demand
SUGGESTED ANSWER: has been sent to him prior to the accident, then we must
The unlawful detainer action will not prosper. Extraordinary distinguish whether the price has been paid or not. If it has
inflation or deflation is defined as the sharp decrease in the been paid, the suit for damages should prosper but only to
purchasing power of the peso. It does not necessarily refer enable the buyer to recover the price paid. It should be
to the exchange rate of the peso to the dollar. Whether or noted that Ben, the seller, must bear the loss on the
not there exists an extraordinary inflation or deflation is for principle of res perit domino. He cannot be held answerable
the courts to decide. There being no showing that the for damages as the loss of the car was not imputable to his
purchasing power of the peso had been reduced fault or fraud. In any case, he can recover the value of the
tremendously, there could be no inflation that would justify car from the party whose negligence caused the accident. If
the increase in the amount of rental to be paid. Hence, no price has been paid at all, the trial court acted correctly in
Brian could refuse to pay the increased rate.
dismissing the complaint.
ALTERNATIVE ANSWER:
Extinguishment; Loss; Impossible Service (1993)
Page 86 of 119
In 1971, Able Construction, Inc. entered into a contract has been extinguished by the novation or extinction of the
with Tropical Home Developers, Inc. whereby the former principal obligation insofar as third parties are concerned.
would build for the latter the houses within its subdivision.
The cost of each house, labor and materials included, was Extinguishment; Payment (1995)
P100,000.00. Four hundred units were to be constructed In 1983 PHILCREDIT extended loans to Rivett-Strom
within five years. In 1973, Able found that it could no Machineries, Inc. (RIVETTT-STROM), consisting of
longer continue with the job due to the increase in the price US$10 Million for the cost of machineries imported and
of oil and its derivatives and the concomitant worldwide directly paid by PHTLCREDIT, and 5 Million in cash
spiraling of prices of all commodities, including basic raw payable in installments over a period of ten (10) years on the
materials required for the construction of the houses. The basis of the value thereof computed at the rate of exchange
cost of development had risen to unanticipated levels and to of the U.S. dollar vis-à-vis the Philippine peso at the time of
such a degree that the conditions and factors which formed payment.
the original basis of the contract had been totally changed.
Able brought suit against Tropical Homes praying that the RIVETT-STROM made payments on both loans which if
Court relieve it of its obligation. based on the rate of exchange in 1983 would have fully
Is Able Construction entitled to the relief sought? settled the loans.
SUGGESTED ANSWER:
Yes, the Able Construction. Inc. is entitled to the relief PHILCREDIT contends that the payments on both loans
sought under Article 1267, Civil Code. The law provides: should be based on the rate of exchange existing at the time
"When the service has become so difficult as to be of payment, which rate of exchange has been consistently
manifestly beyond the contemplation of the parties, the increasing, and for which reason there would still be a
obligor may also be released therefrom, in whole or in part." considerable balance on each loan.
Is the contention of PHILCREDIT correct? Discuss fully.
Extinguishment; Novation (1994) SUGGESTED ANSWER:
In 1978, Bobby borrowed Pl,000,000.00 from Chito payable As regards the loan consisting of dollars, the contention of
in two years. The loan, which was evidenced by a PHILCREDIT is correct. It has to be paid in Philippine
promissory note, was secured by a mortgage on real currency computed on the basis of the exchange rate at the
property. No action was filed by Chito to collect the loan or TIME OF PAYMENT of each installment, as held in
to foreclose the mortgage. But in 1991, Bobby, without Kalalo v. Luz, 34 SCRA 337. As regards the P5 Million loan
receiving any amount from Chito, executed another in Philippine pesos, PHILCREDIT is wrong. The payment
promissory note which was worded exactly as the 1978 thereof cannot be measured by the peso-dollar exchange
promissory note, except for the date thereof, which was the rate. That will be violative of the Uniform Currency Act
date of its execution. (RA, 529] which prohibits the payment of an obligation
1) Can Chito demand payment on the 1991 promissory which, although to be paid in Philippine currency, is
note in 1994? measured by a foreign currency. (Palanca v. CA, 238 SCRA
2) Can Chito foreclose the real estate mortgage if Bobby 593).
fails to make good his obligation under the 1991 promissory
note? Liability; Lease; Joint Liability (2001)
SUGGESTED ANSWER: Four foreign medical students rented the apartment of
1) Yes, Chito can demand payment on the 1991 promissory Thelma for a period of one year. After one semester, three
note in 1994. Although the 1978 promissory note for P1 of them returned to their home country and the fourth
million payable two years later or in 1980 became a natural transferred to a boarding house. Thelma discovered that
obligation after the lapse of ten (10) years, such natural they left unpaid telephone bills in the total amount of
obligation can be a valid consideration of a novated P80,000.00. The lease contract provided that the lessees
promissory note dated in 1991 and payable two years later, shall pay for the telephone services in the leased premises.
or in 1993. Thelma demanded that the fourth student pay the entire
All the elements of an implied real novation are present: amount of the unpaid telephone bills, but the latter is willing
a) an old valid obligation; to pay only one fourth of it. Who is correct? Why? (5%)
b) a new valid obligation; SUGGESTED ANSWER:
c) capacity of the parties; The fourth student is correct. His liability is only joint,
d) animus novandi or intention to novate; and hence, pro rata. There is solidary liability only when the
e) The old and the new obligation should be incompatible obligation expressly so states or when the law or nature of
with each other on all material points (Article 1292). The the obligation requires solidarity (Art. 1207, CC). The
two promissory notes cannot stand together, hence, the contract of lease in the problem does not, in any way,
period of prescription of ten (10) years has not yet lapsed. stipulate solidarity.
SUGGESTED ANSWER: Liability; Solidary Liability (1998)
2) No. The mortgage being an accessory contract prescribed Joey, Jovy and Jojo are solidary debtors under a loan
with the loan. The novation of the loan, however, did not obligation of P300,000.00 which has fallen due. The creditor
expressly include the mortgage, hence, the mortgage is has, however, condoned Jojo's entire share in the debt.
extinguished under Article 1296 of the NCC. The contract Since Jovy has become insolvent, the creditor makes a
demand on Joey to pay the debt.
Page 87 of 119
1) How much, if any, may Joey be compelled to pay? promissory note as a result of the foreclosure of the chattel
[2%] mortgage.
2) To what extent, if at all, can Jojo be compelled by Joey
to contribute to such payment? [3%] (c) The third defense of Y is untenable. Y is a surety of X
SUGGESTED ANSWER: and the extrajudicial demand against the principal debtor is
1. Joey can be compelled to pay only the remaining balance not inconsistent with a judicial demand against the surety. A
of P200.000, in view of the remission of Jojo's share by the suretyship may co-exist with a mortgage.
creditor. (Art. 1219, Civil Code)
(d) The fourth defense of Y is untenable. Y is liable for the
2. Jojo can be compelled by Joey to contribute P50.000 Art. entire prestation since Y incurred a solidary obligation with
1217. par. 3, Civil Code provides. "When one of the solidary X.
debtors cannot, because of his insolvency, reimburse his (Arts. 1207, 1216. 1252 and 2047 Civil Code; Bicol Savings and Loan
share to the debtor paying the obligation, such share shall Associates vs. Guinhawa 188 SCRA 642)
be borne by all his co-debtors, in proportion to the debt of
each." Liability; Solidary Obligation; Mutual Guaranty (2003)
A,B,C,D, and E made themselves solidarity indebted to X
Since the insolvent debtor's share which Joey paid was for the amount of P50,000.00. When X demanded payment
P100,000, and there are only two remaining debtors - from A, the latter refused to pay on the following grounds.
namely Joey and Jojo - these two shall share equally the a) B is only 16 years old.
burden of reimbursement. Jojo may thus be compelled by b) C has already been condoned by X
c) D is insolvent.
Joey to contribute P50.000.00.
d) E was given by X an extension of 6 months without
Liability; Solidary Obligation (1992) the consent of the other four co-debtors.
In June 1988, X obtained a loan from A and executed with State the effect of each of the above defenses put up by A
Y as solidary co-maker a promissory note in favor of A for on his obligation to pay X, if such defenses are found to be
the sum of P200,000.00. The loan was payable at true.
P20,000.00 with interest monthly within the first week of SUGGESTED ANSWERS:
each month beginning July 1988 until maturity in April (a) A may avail the minority of B as a defense, but
1989. To secure the payment of the loan. X put up as only for B’s share of P 10,000.00. A solidary debtor may
security a chattel mortgage on his car, a Toyota Corolla avail himself of any defense which personally belongs to a
sedan. Because of failure of X and Y to pay the principal
solidary co-debtor, but only as to the share of that co-
amount of the loan, the car was extrajudicially foreclosed. A debtor.
acquired the car at A's highest bid of P120,000.00 during the
(b) A may avail of the condonation by X of C’s share
auction sale.
of P 10, 000.00. A solidary debtor may, in actions filed by
After several fruitless letters of demand against X and Y, A the creditor, avail himself of all defenses which are derived
sued Y alone for the recovery of P80.000.00 constituting the from the nature of the obligation and of those which are
deficiency. Y resisted the suit raising the following defenses: personal to him or pertain to his own share. With respect to
a) That Y should not be liable at all because X was not those which personally belong to others, he may avail
sued together with Y. himself thereof only as regards that part of the debt for
b) That the obligation has been paid completely by A's which the latter are responsible. (Article 1222, NCC).
acquisition of the car through "dacion en pago" or
payment by cession. (c) A may not interpose the defense of insolvency of
c) That Y should not be held liable for the deficiency of D as a defense. Applying the principle of mutual guaranty
P80,000.00 because he was not a co-mortgagor in the among solidary debtors, A guaranteed the payment of D’s
chattel mortgage of the car which contract was share and of all the other co-debtors. Hence, A cannot avail
executed by X alone as owner and mortgagor. of the defense of D’s insolvency.
d) That assuming that Y is liable, he should only pay the
proportionate sum of P40,000.00. (d) The extension of six (6) months given by X to E
Decide each defense with reasons. may be availed of by A as a partial defense but only for the
SUGGESTED ANSWER:
share of E, there is no novation of the obligation but only
(a) This first defense of Y is untenable. Y is still liable as an act of liberality granted to E alone.
solidary debtor. The creditor may proceed against any one
of the solidary debtors. The demand against one does not Loss of the thing due; Force Majeure (2000)
preclude further demand against the others so long as the Kristina brought her diamond ring to a jewelry shop for
cleaning. The jewelry shop undertook to return the ring by
debt is not fully paid.
February 1, 1999." When the said date arrived, the jewelry
(b) The second defense of Y is untenable. Y is still liable. shop informed Kristina that the Job was not yet finished.
The chattel mortgage is only given as a security and not as They asked her to return five days later. On February 6,
payment for the debt in case of failure to pay. Y as a 1999, Kristina went to the shop to claim the ring, but she
was informed that the same was stolen by a thief who
solidary co-maker is not relieved of further liability on the
entered the shop the night before. Kristina filed an action
Page 88 of 119
for damages against the jewelry shop which put up the Bernie 50% of the total payments made. (Rillo v. Court of
defense of force majeure. Will the action prosper or not? Appeals, G.R. No. 125347, June 19,1997)
(5%)
SUGGESTED ANSWER:
The action will prosper. Since the defendant was already in Period; Suspensive Period (1991)
default not having delivered the ring when delivery was In a deed of sale of a realty, it was stipulated that the buyer
demanded by plaintiff at due date, the defendant is liable for would construct a commercial building on the lot while the
the loss of the thing and even when the loss was due to seller would construct a private passageway bordering the
force majeure. lot. The building was eventually finished but the seller failed
to complete the passageway as some of the squatters, who
Non-Payment of Amortizations; Subdivision Buyer; When were already known to be there at the time they entered into
justified (2005) the contract, refused to vacate the premises. In fact, prior to
Bernie bought on installment a residential subdivision lot its execution, the seller filed ejectment cases against the
from DEVLAND. After having faithfully paid the squatters.
installments for 48 months, Bernie discovered that The buyer now sues the seller for specific performance with
DEVLAND had failed to develop the subdivision in damages. The defense is that the obligation to construct the
accordance with the approved plans and specifications passageway should be with a period which, incidentally, had
within the time frame in the plan. He thus wrote a letter to not been fixed by them, hence, the need for fixing a judicial
DEVLAND informing it that he was stopping payment. period. Will the action for specific performance of the buyer
Consequently, DEVLAND cancelled the sale and wrote against the seller prosper?
Bernie, informing him that his payments are forfeited in its SUGGESTED ANSWER:
favor. No. the action for specific performance filed by the buyer is
a) Was the action of DEVLAND proper? Explain. premature under Art. 1197 of the Civil Code. If a period has
(2%) not been fixed although contemplated by the parties, the
SUGGESTED ANSWER: parties themselves should fix that period, failing in which,
No, the action of DEVLAND is not proper. Under Section the Court maybe asked to fix it taking into consideration the
23 of Presidential Decree No. 957, otherwise known as the probable contemplation of the parties. Before the period is
Subdivision and Condominium Buyer's Protection Decree, fixed, an action for specific performance is premature.
non-payment of amortizations by the buyer is justified if ALTERNATIVE ANSWER:
non-payment is due to the failure of the subdivision owner It has been held in Borromeo vs. CA (47 SCRA 69), that the
to develop the subdivision project according to the Supreme Court allowed the simultaneous filing of action to
approved plans and within the limit for complying. fix the probable contemplated period of the parties where
(Eugenio v. Drilon, G.R. No. 109404, January 22, 1996) none is fixed in the agreement if this would avoid
multiplicity of suits. In addition, technicalities must be
b) Discuss the rights of Bernie under the circums- subordinated to substantial justice.
tances. (2%) ALTERNATIVE ANSWER:
SUGGESTED ANSWER: The action for specific performance will not prosper. The
Under P.D. No. 957, a cancellation option is available to filing of the ejectment suit by the seller was precisely in
Bernie. If Bernie opts to cancel the contract, DEVLAND compliance with his obligations and should not, therefore,
must reimburse Bernie the total amount paid and the be faulted if no decision has yet been reached by the Court
amortizations interest, excluding delinquency interest, plus on the matter.
interest at legal rate. (Eugenio v. Drilon, G.R. No. 109404,
January 22, 1996) TRUST

c) Supposing DEVLAND had fully developed the
subdivision but Bernie failed to pay further Express Trust; Prescription (1997)
installments after 4 years due to business reverses. On 01 January 1980, Redentor and Remedies entered into
Discuss the rights and obligations of the parties. (2%) an agreement by virtue of which the former was to register a
SUGGESTED ANSWER: parcel of land in the name of Remedies under the explicit
In this case, pursuant to Section 24 of P.D. No. 957, R.A. covenant to reconvey the land to Remigio, son of Redentor,
No. 6552 otherwise known as the Realty Installment Buyer upon the son's graduation from college. In 1981, the land
Protection Act, shall govern. Under Section 3 thereof,
was registered in the name of Remedies.
Bernie is entitled: 1) to pay without additional interest the
unpaid installments due within a grace period of four (4) Redentor died a year later or in 1982. In March 1983,
months or one month for every year of installment paid; 2) Remigio graduated from college. In February 1992, Remigio
if the contract is cancelled, Bernie is entitled to the refund accidentally found a copy of the document so constituting
of the cash surrender value equal to 50% of the total Remedies as the trustee of the land. In May 1994, Remigio
payments made. filed a case against Remedies for the reconveyance of the
land to him. Remedies, in her answer, averred that the
DEVLAND on the other hand has the right to cancel the action already prescribed. How should the matter be
contract after 30 days from receipt by Bernie of notice of decided?
cancellation. DEVLAND is however obliged to refund to SUGGESTED ANSWER:
Page 89 of 119
The matter should be decided in favor of Remigio (trustee) 1. Juana has the right of action to recover (a) her one-half
because the action has not prescribed. The case at bar share in the proceeds of the sale with legal interest thereof,
involves an express trust which does not prescribe as long and (b) such damages as she may be able to prove as having
as they have not been repudiated by the trustee (Diaz vs. been suffered by her, which may include actual or
Gorricho. 103 Phil, 261). compensatory damages as well as moral and exemplary
damages due to the breach of trust and bad faith (Imperial
Implied Trust (1998) vs. CA, 259 SCRA 65). Of course, if the buyer knew of the
Juan and his sister Juana inherited from their mother two co-ownership over the lot he was buying, Juana can seek (c)
parcels of farmland with exactly the same areas. For reconvenyance of her one-half share instead but she must
convenience, the Torrens certificates of title covering both implead the buyer as co-defendant and allege his bad faith
lots were placed in Juan's name alone. In 1996, Juan sold to in purchasing the entire lot. Finally, consistent with the
an innocent purchaser one parcel in its entirety without the ruling in Imperial us. CA. Juana may seek instead (d) a
knowledge and consent of Juana, and wrongfully kept for declaration that she is now the sole owner of the entire
himself the entire price paid. remaining lot on the theory that Juan has forfeited his one-
1. What rights of action, if any, does Juana have against half share therein.
and/or the buyer? |3%] ADDITIONAL ANSWER:
2. Since the two lots have the same area, suppose Juana 1. Juana can file an action for damages against Juan for
flies a complaint to have herself declared sole owner of the having fraudulently sold one of the two parcels which he
entire remaining second lot, contending that her brother partly held in trust for Juana's benefit. Juana may claim
had forfeited his share thereof by wrongfully disposing of actual or compensatory damage for the loss of her share in
her undivided share in the first lot. Will the suit prosper? the land; moral damages for the mental anguish, anxiety,
[2%] moral shock and wounded feelings she had suffered;
SUGGESTED ANSWER: exemplary damage by way of example for the common
1. When, for convenience, the Torrens title to the two good, and attorney's fees.
parcels of land were placed in Joan's name alone, there was Juana has no cause of action against the buyer who acquired
created an implied trust (a resulting trust) for the benefit of the land for value and in good faith, relying on the transfer
Juana with Juan as trustee of one-half undivided or ideal certificate showing that Juan is the registered owner of the
portion of each of the two lots. Therefore, Juana can file an land.
action for damages against Joan for having fraudulently sold
one of the two parcels which he partly held in trust for SUGGESTED ANSWER:
Juana's benefit. Juana may claim actual or compensatory 2. Juana's suit to have herself declared as sole owner of
damage for the loss of her share in the land; moral damages the entire remaining area will not prosper because while
for the mental anguish, anxiety, moral shock and wounded Juan's act in selling the other lot was wrongful. It did not
feelings she had suffered; exemplary damage by way of have the legal effect of forfeiting his share in the remaining
lot. However, Juana can file an action against Juan for
example for the common good, and attorney's fees.
partition or termination of the co-ownership with a prayer
Juana has no cause of action against the buyer who acquired that the lot sold be adjudicated to Juan, and the remaining
the land for value and in good faith, relying on the transfer lot be adjudicated and reconveyed to her.
certificate of title showing that Juan is the registered owner ANOTHER ANSWER:
2. The suit will prosper, applying the ruling in Imperial vs.
of the land.
ANOTHER ANSWER:
CA cited above. Both law and equity authorize such a result,
1. Under Article 476 of the Civil Code, Juana can file an said the Supreme Court.
action for quieting of title as there is a cloud in the title to
the subject real property. Second, Juana can also file an Strictly speaking, Juana's contention that her brother had
action for damages against Juan, because the settled rule is forfeited his share in the second lot is incorrect. Even if the
that the proper recourse of the true owner of the property two lots have the same area, it does not follow that they
who was prejudiced and fraudulently dispossessed of the have the same value. Since the sale of the first lot on the
same is to bring an action for damages against those who Torrens title in the name of Juan was valid, all that Juana
caused or employed the same. Third, since Juana had the may recover is the value of her undivided interest therein,
right to her share in the property by way of inheritance, she plus damages. In addition, she can ask for partition or
can demand the partition of the thing owned in common, reconveyance of her undivided interest in the second lot,
under Article 494 of the Civil Code, and ask that the title to without prejudice to any agreement between them that in
lieu of the payment of the value of Juana's share in the first
the remaining property be declared as exclusively hers.
lot and damages, the second lot be reconveyed to her.
However, since the farmland was sold to an innocent ALTERNATIVE ANSWER:
2. The suit will not prosper, since Juan's wrongful act of
purchaser for value, then Juana has no cause of action
pocketing the entire proceeds of the sale of the first lot is
against the buyer consistent with the established rule that
not a ground for divesting him of his rights as a co-owner
the rights of an innocent purchaser for value must be
of the second lot. Indeed, such wrongdoing by Juan does
respected and protected notwithstanding the fraud
not constitute, for the benefit of Juana, any of the modes of
employed by the seller in securing his title. (Eduarte vs. CA,
253 SCRA 391) acquiring ownership under Art. 712, Civil Code.
ADDITIONAL ANSWER:
Page 90 of 119
Trust; Implied Resulting Trust (1995) (Art. 1624; 1475. CC; Rodriguez v. CA, et al, G. R No. 84220,
In 1960, Maureen purchased two lots in a plush subdivision March 25. 1992 207 SCRA 553).
registering Lot 1 in her name and Lot 2 in the name of her ALTERNATIVE ANSWER:
brother Walter with the latter's consent. The idea was to No, the defense of Peter Co will not prosper. Hadji
circumvent a subdivision policy against the acquisition of Butu validly acquired his right by an assignment of credit
more than one lot by one buyer. Maureen constructed a under Article 1624 of the Civil Code. However, the
house on Lot 1 with an extension on Lot 2 to serve as a provisions on the contract of sale (Article 1475 Civil Code)
guest house. In 1987, Walter who had suffered serious will apply, and the transaction is covered by the Statute
business losses demanded that Maureen remove the of Frauds. (Art. 1403 par. (2) Civil Code)
extension house since the lot on which the extension was
built was his property. In 1992, Maureen sued for the Conditional Sale vs. Absolute Sale (1997)
reconveyance to her of Lot 2 asserting that a resulting trust was Distinguish between a conditional sale, on the one
created when she had the lot registered in Walter's name hand, and an absolute sale, on the other hand.
even if she paid the purchase price. Walter opposed the suit SUGGESTED ANSWER:
arguing that assuming the existence of a resulting trust the A CONDITIONAL SALE is one where the vendor is
action of Maureen has already prescribed since ten years have granted the right to unilaterally rescind the contract
already elapsed from the registration of the title in his name. predicated on the fulfillment or non-fulfillment, as the case
Decide. Discuss fully. may be, of the prescribed condition. An ABSOLUTE
SUGGESTED ANSWER: SALE is one where the title to the property is not reserved to
This is a case of an implied resulting trust. If Walter claims to the vendor or if the vendor is not granted the right to
have acquired ownership of the land by prescription or if he rescind the contract based on the fulfillment or non-
anchors his defense on extinctive prescription, the ten year fulfillment, as the case may be, of the prescribed condition.
period must be reckoned from 1987 when he
demanded that Maureen remove the extension house on Contract of Sale vs. Agency to Sell (1999)
Lot No. 2 because such demand amounts to an express A granted B the exclusive right to sell his brand of Maong
repudiation of the trust and it was made known to Maureen. pants in Isabela, the price for his merchandise payable
The action for reconveyance filed in 1992 is not yet barred by within 60 days from delivery, and promising B a
prescription. (Spouses Huang v. Court of Appeals, Sept. commission of 20% on all sales. After the delivery of
13, 1994). the merchandise to B but before he could sell any of them,
B’s store in Isabela was completely burned without his
fault, together with all of A's pants. Must B pay A for
SALES his lost pants? Why? (5%)
SUGGESTED ANSWER:
Assignment of Credit vs. Subrogation (1993) The contract between A and B is a sale not an agency to sell
Peter Co, a trader from Manila, has dealt business with because the price is payable by B upon 60 days from
Allied Commodities in Hongkong for five years. All delivery even if B is unable to resell it. If B were an agent,
through the years, Peter Co accumulated an indebtedness of he is not bound to pay the price if he is unable to resell it.
P500,000.00 with Allied Commodities. Upon demand by its
As a buyer, ownership passed to B upon delivery and, under
agent in Manila, Peter Co paid Allied Commodities by check
the amount owed. Upon deposit in the payee's account in Art. 1504 of the Civil Code, the thing perishes for the
Manila, the check was dishonored for insufficiency of funds. owner. Hence, B must still pay the price.
For and in consideration of P1.00, Allied Commodities
assigned the credit to Hadji Butu who brought suit against Peter Contract of Sale; Marital Community Property;
Co in the RTC of Manila for recovery of the amount owed. Formalities (2006)
Peter Co moved to dismiss the complaint against him on the Spouses Biong and Linda wanted to sell their house. They
ground that Hadji Butu was not a real party in interest found a prospective buyer, Ray. Linda negotiated with Ray for
and, therefore, without legal capacity to sue and that he had not the sale of the property. They agreed on a fair price of P2
agreed to a subrogation of creditor. Million. Ray sent Linda a letter confirming his intention to
Will Peter Co's defense of absence of agreement to a buy the property. Later, another couple, Bernie and Elena,
subrogation of creditor prosper? offered a similar house at a lower price of P 1.5 Million.
SUGGESTED ANSWER: But Ray insisted on buying the house of Biong and Linda for
No, Co's defense will not prosper. This is not a case of sentimental reasons. Ray prepared a deed of sale to be signed
subrogation, but an assignment of credit. ASSIGNMENT by the couple and a manager's check for P2 Million.
OF CREDIT is the process of transferring the right of the After receiving the P2 Million, Biong signed the deed of
assignor to the assignee. The assignment may be done either sale. However, Linda was not able to sign it because she was
gratuitously or onerously, in which case, the assignment has an abroad. On her return, she refused to sign the document
effect similar to that of a sale (Nyco Sales Corp.v.BA saying she changed her mind. Linda filed suit for nullification
Finance Corp. G.R No.71694. Aug.16, 1991 200 SCRA 637). As a of the deed of sale and for moral and exemplary
result of the assignment, the plaintiff acquired all the rights damages against Ray.
of the assignor including the right to sue in his own name as Will the suit prosper? Explain. (2.5%)
the legal assignee. In assignment, the debtor's consent is ALTERNATIVE ANSWER:
not essential for the validity of the assignment
Page 91 of 119
No, the suit will not prosper. The contract of sale was In a CONTRACT OF SALE, ownership is transferred to
perfected when Linda and Ray agreed on the object of the the buyer upon delivery of the object to him while in a
sale and the price [Art. 1475, New Civil Code]. The consent CONTRACT TO SELL, ownership is retained by the seller
of Linda has already been given, as shown by her agreement until the purchase price is fully paid. In a contract to sell,
to the price of the sale. There is therefore consent on her delivery of the object does not confer ownership upon the
part as the consent need not be given in any specific form. buyer. In a contract of sale, there is only one contract
Hence, her consent may be given by implication, especially executed between the seller and the buyer, while in a
since she was aware of, and participated in the sale of the contract to sell, there are two contracts, first the contract to
property (Pelayo v. CA, G.R. No. 141323, June 8, 2005). Her sell (which is a conditional or preparatory sale) and a
action for moral and exemplary damages will also not second, the final deed of sale or the principal contract which
prosper because the case does not fall under any of those is executed after full payment of the purchase price.
mentioned in Art. 2219 and 2232 of the Civil Code.
ALTERNATIVE ANSWER: Contract to Sell; Acceptance; Right of First Refusal (1991)
The suit will prosper. Sale of community property requires A is the lessee of an apartment owned by Y. A allowed his
written consent of both spouses. The failure or refusal of married but employed daughter B, whose husband works in
Linda to affix her signature on the deed of sale, coupled Kuwait, to occupy it. The relationship between Y and A
with her express declaration of opposing the sale negates soured. Since he has no reason at all to eject A, Y, in
any valid consent on her part. The consent of Biong by connivance with the City Engineer, secured from the latter
himself is insufficient to effect a valid sale of community an order for the demolition of the building. A immediately
property (Art. 96, Family Code; Abalos v. Macatangay, G.R. filed an action in the Regional Trial Court to annul the order
No. 155043, September 30, 2004). and to enjoin its enforcement. Y and A were able to forge a
compromise agreement under which A agreed to a twenty
Does Ray have any cause of action against Biong and percent (20%) increase in the monthly rentals. They further
Linda? Can he also recover damages from the spouses? agreed that the lease will expire two (2) years later and that
Explain. (2.5%) in the event that Y would sell the property, either A or his
Considering that the contract has already been perfected daughter B shall have the right of first refusal. The
and taken out of the operation of the statute of frauds, Ray Compromise Agreement was approved by the court. Six (6)
can compel Linda and Biong to observe the form required months before the expiration of the lease, A died. Y sold
by law in order for the property to be registered in the name the property to the Visorro Realty Corp. without notifying
of Ray which can be filed together with the action for the B. B then filed an action to rescind the sale in favor of the
recovery of house [Art. 1357 New Civil Code]. In the corporation and to compel Y to sell the property to her
alternative, he can recover the amount of Two million pesos since under the Compromise Agreement, she was given the
(P2,000,000.00) that he paid. Otherwise, it would result in right of first refusal which, she maintains is a stipulation
solutio indebiti or unjust enrichment. pour atrui under Article 1311 of the Civil Code. Is she
correct?
Ray can recover moral damages on the ground that the SUGGESTED ANSWER:
action filed by Linda is clearly an unfounded civil suit which B is not correct. Her action cannot prosper. Article 1311
falls under malicious prosecution {Ponce v. Legaspi, G.R. requires that the third person intended to be benefited must
No. 79184, May 6,1992). communicate his acceptance to the obligor before the
revocation. There is no showing that B manifested her
Contract to Sell (2001) acceptance to Y at any time before the death of A and
Arturo gave Richard a receipt which states: before the sale. Hence, B cannot enforce any right under
Receipt
the alleged stipulation pour atrui.
Received from Richard as down payment for my 1995
Toyota Corolla with plate No. XYZ-1 23.............. Double Sales (2001)
P50.000.00 On June 15, 1995, Jesus sold a parcel of registered land to
Jaime. On June 30, 1995, he sold the same land to Jose.
Balance payable: 12/30/01........ P50 000.00 Who has a better right if:
a) the first sale is registered ahead of the second sale,
September 15, 2001. with knowledge of the latter. Why? (3%)
b) the second sale is registered ahead of the first sale,
(Sgd.) Arturo with knowledge of the latter? Why? (5%)
Does this receipt evidence a contract to sell? Why? (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: (a) The first buyer has the better right if his sale was first
It is a contract of sale because the seller did not reserve to be registered, even though the first buyer knew of the
ownership until he was fully paid. second sale. The fact that he knew of the second sale at the
time of his registration does not make him as acting in bad
Contract to Sell vs. Contract of Sale (1997) faith because the sale to him was ahead in time, hence, has a
State the basic difference (only in their legal effects) - priority in right. What creates bad faith in the case of double
Between a contract to sell, on the one hand, and a contract
sale of land is knowledge of a previous sale.
of sale, on the other.
SUGGESTED ANSWER:
Page 92 of 119
b) The first buyer is still to be preferred, where the second (2) years, or until 3 June 1973. It is further stated therein
sale is registered ahead of the first sale but with knowledge that should the Vendor (Juliet) fail to exercise her right to
of the latter. This is because the second buyer, who at the redeem within the said period, the conveyance shall be
time he registered his sale knew that the property had deemed absolute and irrevocable. Romeo did not take
already been sold to someone else, acted in bad faith. possession of the property. He did not pay the taxes
(Article 1544, C.C.) thereon.
Double Sales (2004) Juliet died in January I973 without having repurchased the
JV, owner of a parcel of land, sold it to PP. But the deed of property. Her only surviving heir, her son X, failed to
sale was not registered. One year later, JV sold the parcel repurchase the property on or before 3 June 1973. In 1975,
again to RR, who succeeded to register the deed and to Romeo sold the property to Y for P50,000.00. Upon
obtain a transfer certificate of title over the property in his learning of the sale, X filed an action for the nullification of
own name. the sale and for the recovery of the property on the ground
Who has a better right over the parcel of land, RR or PP? that the so-called deed of absolute sale executed by his
Why? Explain the legal basis for your answer. (5%) mother was merely an equitable mortgage, taking into
SUGGESTED ANSWER: account the inadequacy of the price and the failure of
It depends on whether or not RR is an innocent purchaser Romeo to take possession of the property and to pay the
for value. taxes thereon. Romeo and Y maintain that there was a valid
Under the Torrens System, a deed or instrument operated absolute sale and that the document signed by the former
only as a contract between the parties and as evidence of on 3 June 1973 was merely a promise to sell.
authority to the Register of Deeds to make the registration. a) If you were the Judge, would you uphold the theory of
It is the registration of the deed or the instrument that is the X?
operative act that conveys or affects the land. (Sec. 51, P.D. b) If you decide in favor of Romeo and Y, would you
No. 1529). uphold the validity of the promise to sell?
SUGGESTED ANSWER:
In cases of double sale of titled land, it is a well-settled rule A. I will not uphold the theory of X for the nullification of
that the buyer who first registers the sale in good faith the sale and for the recovery of the property on the ground
acquires a better right to the land. (Art. 1544, Civil Code). that the so-called sale was only an equitable mortgage. An
equitable mortgage may arise only if, in truth, the sale was
Persons dealing with property covered by Torrens title are one with the right of repurchase. The facts of the case state
not required to go beyond what appears on its face. that the right to repurchase was granted after the absolute
(Orquiola v. CA 386, SCRA 301, [2002]; Domingo v. Races 401 deed of sale was executed. Following the rule in Cruzo vs.
SCRA 197, [2003]). Thus, absent any showing that RR knew Carriaga (174 SCRA 330), a deed of repurchase executed
about, or ought to have known the prior sale of the land to independently of the deed of sale where the two stipulations
PP or that he acted in bad faith, and being first to register are found in two instruments instead of one document, the
the sale, RR acquired a good and a clean title to the property right of repurchase would amount only to one option
as against PP. granted by the buyer to the seller. Since the contract
cannot be upheld as a contract of sale with the right to
Equitable Mortgage (1991) repurchase, Art. 1602 of the Civil Code on equitable
On 20 December 1970, Juliet, a widow, borrowed from mortgage will not apply. The rule could have been different
Romeo P4,000.00 and, as security therefore, she executed a if both deeds were executed on the same occasion or date,
deed of mortgage over one of her two (2) registered lots in which case, under the ruling in spouses Claravall v. CA
which has a market value of P15,000.00. The document and (190 SCRA 439), the contract may still be sustained as an
the certificate of title of the property were delivered to equitable mortgage, given the circumstances expressed in
Romeo. Art. 1602. The reserved right to repurchase is then deemed
an original intention.
On 2 June 1971, Juliet obtained an additional sum of P3,000
from Romeo. On this date, however, Romeo caused the B. If I were to decide in favor of Romeo and Y, I would
preparation of a deed of absolute sale of the above not uphold the validity of the promise to sell, so as to
property, to which Juliet affixed her signature without first enforce it by an action for specific performance. The
reading the document. The consideration indicated is promise to sell would only amount to a mere offer and,
P7,000.00. She thought that this document was similar to therefore, it is not enforceable unless it was sought to be
the first she signed. When she reached home, her son X, exercised before a withdrawal or denial thereof.
after reading the duplicate copy of the deed, informed her
that what she signed was not a mortgage but a deed of Even assuming the facts given at the end of the case, there
absolute sale. On the following day, 3 June 1971, Juliet, would have been no separate consideration for such
accompanied by X, went back to Romeo and demanded the promise to sell. The contract would at most amount to an
reformation it, Romeo prepared and signed a document option which again may not be the basis for an action for
wherein, as vendee in the deed of sale above mentioned, he specific performance.
obligated and bound himself to resell the land to Juliet or Equitable Mortgage vs. Sale (2005)
her heirs and successors for the same consideration as On July 14, 2004, Pedro executed in favor of Juan a Deed
reflected in the deed of sale (P7,000) within a period of two of Absolute Sale over a parcel of land covered by TCT No.
Page 93 of 119
6245. It appears in the Deed of Sale that Pedro received X sold a parcel of land to Y on 01 January 2002, payment
from Juan P120,000.00 as purchase price. However, Pedro and delivery to be made on 01 February 2002. It was
retained the owner's duplicate of said title. Thereafter, Juan, stipulated that if payment were not to be made by Y on 01
as lessor, and Pedro, as lessee, executed a contract of lease February 2002, the sale between the parties would
over the property for a period of one (1) year with a automatically be rescinded. Y failed to pay on 01 February
monthly rental of Pl,000.00. Pedro, as lessee, was also 2002, but offered to pay three days later, which payment X
obligated to pay the realty taxes on the property during the refused to accept, claiming that their contract of sale had
period of lease. already been rescinded. Is X’s contention correct? Why? 5%
SUGGESTED ANSWER:
Subsequently, Pedro filed a complaint against Juan for the No, X is not correct. In the sale of immovable property,
reformation of the Deed of Absolute Sale, alleging that the even though it may have been stipulated, as in this case, that
transaction covered by the deed was an equitable mortgage. upon failure to pay the price at the time agreed upon the
In his verified answer to the complaint, Juan alleged that the rescission of the contract shall of right take place, the
property was sold to him under the Deed of Absolute Sale, vendee may pay, even after the expiration of the period, as
and interposed counterclaims to recover possession of the long as no demand for rescission of the contract has been
property and to compel Pedro to turn over to him the made upon him either judicially or by a notarial act (Article
owner's duplicate of title. 1592, New Civil code). Since no demand for rescission was
Resolve the case with reasons. (6%) made on Y, either judicially or by a notarial act, X cannot
SUGGESTED ANSWER: refuse to accept the payment offered by Y three (3) days
The complaint of Pedro against Juan should be dismissed. after the expiration of the period.
The instances when a contract — regardless of its ANOTHER SUGGESTED ANSWER:
nomenclature — may be presumed to be an equitable This is a contract to sell and not a contract of absolute sale,
mortgage are enumerated in Article 1602 of the Civil Code: since as there has been no delivery of the land. Article 1592
"Art. 1602. The contract shall be presumed to be an of the New Civil code is not applicable. Instead, Article
equitable mortgage, in any of the following cases: 1595 of the New Civil Code applies. The seller has two
1. When the price of a sale with right to repurchase is alternative remedies: (1) specific performance, or (2)
unusually inadequate: rescission or resolution under Article 1191 of the New Civil
2. When the vendor remains in possession as lessee or code. In both remedies, damages are due because of default.
otherwise; ALTERNATIVE ANSWER:
3. When upon or after the expiration of the right to Yes, the contract was automatically rescinded upon Y’s
repurchase another instrument extending the period of failure to pay on 01 February 2002. By the express terms of
redemption or granting a new period is executed; the contract, there is no need for X to make a demand in
4. When the purchaser retains for himself a part of the order for rescission to take place. (Article 1191, New Civil
purchase price; Code, Suria v. IAC 151 SCRA 661 [1987]; U.P. v. de los
Angeles 35 SCRA 102 [1970]).
5. When the vendor binds himself to pay the taxes on the
thing sold;
Maceda Law (2000)
6. In any other case where it may be fairly inferred that
Priscilla purchased a condominium unit in Makati City from
the real intention of the parties is that the transaction
the Citiland Corporation for a price of P10 Million, payable
shall secure the payment of a debt or the performance P3 Million down and the balance with interest thereon at
of any other obligation. 14% per annum payable in sixty (60) equal monthly
installments of P198,333.33. They executed a Deed of
"In any of the foregoing cases, any money, fruits, or other
Conditional Sale in which it is stipulated that should the
benefit to be received by the vendee as rent or otherwise
vendee fail to pay three (3) successive installments, the sale
shall be considered as interest which shall be subject to the
shall be deemed automatically rescinded without the
usury laws." necessity of judicial action and all payments made by the
vendee shall be forfeited in favor of the vendor by way of
Article 1604 states that "the provisions of article 1602 shall
rental for the use and occupancy of the unit and as
also apply to a contract purporting to be an absolute sale."
liquidated damages. For 46 months, Priscilla paid the
monthly installments religiously, but on the 47th and 48th
For Articles 1602 and 1604 to apply, two requisites must
months, she failed to pay. On the 49th month, she tried to
concur: 1) the parties entered into a contract denominated
pay the installments due but the vendor refused to receive
as a contract of sale; and 2) their intention was to secure an the payments tendered by her. The following month, the
existing debt by way of mortgage. (Heirs of Balite v. Lim, vendor sent her a notice that it was rescinding the Deed of
G.R. No. 152168, December 10, 2004)
Conditional Sale pursuant to the stipulation for automatic
In the given case, although Pedro retained possession of the rescission, and demanded that she vacate the premises. She
replied that the contract cannot be rescinded without
property as lessee after the execution of the Deed of Sale,
there is no showing that the intention of the parties was to judicial demand or notarial act pursuant to Article 1592 of
the Civil Code.
secure an existing debt by way of mortgage. Hence, the
a) Is Article 1592 applicable? (3%)
complaint of Pedro should be dismissed.
b) Can the vendor rescind the contract? (2%)
Immovable Property; Rescission of Contract (2003) SUGGESTED ANSWER:
Page 94 of 119
a) Article 1592 of the Civil Code does not apply to a
conditional sale. In Valarao v. CA, 304 SCRA 155, the Option Contract (2002)
Supreme Court held that Article 1592 applies only to a Explain the nature of an option contract. (2%)
contract of sale and not to a Deed of Conditional Sale SUGGESTED ANSWER:
where the seller has reserved title to the property until full An OPTION CONTRACT is one granting a privilege to
payment of the purchase price. The law applicable is the buy or sell within an agreed time and at a determined price.
Maceda Law. It must be supported by a consideration distinct from the
SUGGESTED ANSWER: price. (Art. 1479 and 1482, NCC)
b) No, the vendor cannot rescind the contract under the
circumstances. Under the Maceda Law, which is the law Option Contract; Earnest Money (1993)
applicable, the seller on installment may not rescind the LT applied with BPI to purchase a house and lot in Quezon
contract till after the lapse of the mandatory grace period of City, one of its acquired assets. The amount offered was
30 days for every one year of installment payments, and Pl,000,000.00 payable, as follows: P200,000.00 down
only after 30 days from notice of cancellation or demand for payment, the balance of P800,000.00 payable within 90 days
rescission by a notarial act. In this case, the refusal of the from June 1, 1985. BPI accepted the offer, whereupon LT
seller to accept payment from the buyer on the 49th month drew a check for P200,000.00 in favor of BPI which the
was not justified because the buyer was entitled to 60 days latter thereafter deposited in its account. On September 5,
grace period and the payment was tendered within that 1985, LT wrote BPI requesting extension until October 10,
period. Moreover, the notice of rescission served by the 1985 within which to pay the balance, to which BPI agreed.
seller on the buyer was not effective because the notice was On October 5, 1985, due to the expected delay in the
not by a notarial act. Besides, the seller may still pay within remittance of the needed amount by his financier from the
30 days from such notarial notice before rescission may be United States, LT wrote BPI requesting a last extension
effected. All these requirements for a valid rescission were until October 30, 1985, within which to pay the balance.
not complied with by the seller. Hence, the rescission is BPI denied LTs request because another had offered to buy
invalid. the same property for P1,500,000.00. BPI cancelled its
agreement with LT and offered to return to him the amount
Maceda Law; Recto Law (1999) of P200,000.00 that LT had paid to it. On October 20,
What are the so-called "Maceda" and "Recto" laws in 1985, upon receipt of the amount of P800,000.00 from his
connection with sales on installments? Give the most US financier, LT offered to pay the amount by tendering a
important features of each law. (5%) cashier's check therefor but which BPI refused to accept.
SUGGESTED ANSWER: LT then filed a complaint against BPI in the RTC for
The MACEDA LAW (R.A. 655) is applicable to sales of specific performance and deposited in court the amount of
immovable property on installments. The most important P800,000.00. Is BPI legally correct in canceling its contract
features are (Rillo v. CA, 247 SCRA 461): with LT?
(1) After having paid installments for at least two years, the SUGGESTED ANSWER:
buyer is entitled to a mandatory grace period of one month BPI is not correct in canceling the contract with LT. In Lina
for every year of installment payments made, to pay the Topacio v Court of Appeals and BPI Investment (G. R No.
unpaid installments without interest. 102606, July 3. 1993, 211 SCRA 291) the Supreme Court held
that the earnest money is part of the purchase price and is
If the contract is cancelled, the seller shall refund to the proof of the perfection of the contract. Secondly, notarial or
buyer the cash surrender value equivalent to fifty percent judicial rescission under Art. 1592 and 1991 of the Civil
(50%) of the total payments made, and after five years of Code is necessary (Taguba v. de Leon, 132 SCRA 722.)
installments, an additional five percent (5%) every year but ALTERNATIVE ANSWER:
not to exceed ninety percent (90%) of the total payments BPI is correct in canceling its contract with LT but BPI
must do so by way of judicial rescission under Article 1191
made.
Civil Code. The law requires a judicial action, and mere
(2) In case the installments paid were less than 2 years, the notice of rescission is insufficient if it is resisted. The law
seller shall give the buyer a grace period of not less than 60 also provides that slight breach is not a ground for
days. If the buyer fails to pay the installments due at the rescission (Song Fo & Co, vs, Hawaiian Phil Co., 47 Phils.
expiration of the grace period, the seller may cancel the 821), Delay in the fulfillment of the obligation (Art. 1169,
contract after 30 days from receipt by the buyer of the Civil Code) is a ground to rescind, only if time is of the
notice of cancellation or demand for rescission by notarial essence. Otherwise, the court may refuse the rescission if
act. there is a just cause for the fixing of a period.
The RECTO LAW (Art. 1484} refers to sale of movables
payable in installments and limiting the right of seller, in Perfected Sale; Acceptance of Earnest Money (2002)
case of default by the buyer, to one of three remedies: Bert offers to buy Simeon’s property under the following
a) exact fulfillment; terms and conditions: P1 million purchase price, 10%
b) cancel the sale if two or more installments have not option money, the balance payable in cash upon the
been paid; clearance of the property of all illegal occupants. The option
c) foreclose the chattel mortgage on the things sold, also money is promptly paid and Simeon clears the property of
in case of default of two or more installments, with no illegal occupants in no time at all. However, when Bert
further action against the purchaser. tenders payment of the balance and ask Simeon for the deed
Page 95 of 119
for absolute sale, Simeon suddenly has a change of heart, May Adela still exercise her right of redemption? Explain.
claiming that the deal is disadvantageous to him as he has (5%)
found out that the property can fetch three time the agreed SUGGESTED ANSWER:
purchase price. Bert seeks specific performance but Simeon Yes, Adela may still exercise her right of redemption
contends that he has merely given Bert an option to buy notwithstanding the lapse of more than 30 days from notice
and nothing more, and offers to return the option money of the sale given to her because Article 1623 of the New
which Bert refuses to accept. Civil Code requires that the notice in writing of the sale
B. Will Bert’s action for specific performance must come from the prospective vendor or vendor as the
prosper? Explain. (4%) case may be. In this case, the notice of the sale was given by
C. May Simeon justify his refusal to proceed with the the vendee and the Register of Deeds. The period of 30
sale by the fact that the deal is financially disadvantageous to days never tolled. She can still avail of that right.
him? Explain. (4%) ALTERNATIVE ANSWER:
SUGGESTED ANSWER:
Adela can no longer exercise her right of redemption. As
B. Bert’s action for specific performance will prosper co-owner, she had only 30 days from the time she received
because there was a binding agreement of sale, not just an written notice of the sale which in this case took the form
option contract. The sale was perfected upon acceptance by of a copy of the deed of sale being given to her (Conejero v.
Simeon of 10% of the agreed price. This amount is in really CA, 16 SCRA 775 [1966]). The law does not prescribe any
earnest money which, under Art. 1482, “shall be considered particular form of written notice, nor any distinctive method
as part of the price and as proof of the perfection of the for notifying the redemptioner (Etcuban v. CA, 148 SCRA
contract.” (Topacio v. CA, 211 SCRA 291 [1992]; Villongco 507 [1987]). So long as the redemptioner was informed in
Realty v. Bormaheco, 65 SCRA 352 [1975]). writing, he has no cause to complain (Distrito v. CA, 197
SCRA 606, 609 [1991]). In fact, in Distrito, a written notice
C. Simeon cannot justify his refusal to proceed with was held unnecessary where the co-owner had actual
the sale by the fact that the deal is financially knowledge of the sale, having acted as middleman and being
disadvantageous to him. Having made a bad bargain is not a present when the vendor signed the deed of sale.
legal ground for pulling out a biding contract of sale, in the
absence of some actionable wrong by the other party (Vales Right of First Refusal; Lessee; Effect (1996)
v. Villa, 35 Phil 769 [1916]), and no such wrong has been Ubaldo is the owner of a building which has been leased by
committed by Bert. Remigio for the past 20 years. Ubaldo has repeatedly
assured Remigio that if he should decide to sell the building,
Redemption; Legal; Formalities (2001) he will give Remigio the right of first refusal. On June 30,
Betty and Lydia were co-owners of a parcel of land. Last 1994, Ubaldo informed Remigio that he was willing to sell
January 31, 2001, when she paid her real estate tax, Betty the building for P5 Million. The following day, Remigio sent
discovered that Lydia had sold her share to Emma on a letter to Ubaldo offering to buy the building at P4.5
November 10, 2000. The following day, Betty offered to Million. Ubaldo did not reply. One week later, Remigio
redeem her share from Emma, but the latter replied that received a letter from Santos informing him that the
Betty's right to redeem has already prescribed. Is Emma building has been sold to him by Ubaldo for P5 Million, and
correct or not? Why? (5%) that he will not renew Remigio's lease when it expires.
SUGGESTED ANSWER: Remigio filed an action against Ubaldo and Santos for
Emma, the buyer, is not correct. Betty can still enforce her cancellation of the sale, and to compel Ubaldo to execute a
right of legal redemption as a co-owner. Article 1623 of the deed of absolute sale in his favor, based on his right of first
Civil Code gives a co-owner 30 days from written notice of refusal.
the sale by the vendor to exercise his right of legal a) Will the action prosper? Explain.
redemption. In the present problem, the 30-day period for b) If Ubaldo had given Remigio an option to purchase the
the exercise by Betty of her right of redemption had not building instead of a right of first refusal, will your
even begun to run because no notice in writing of the sale answer be the same? Explain.
appears to have been given to her by Lydia.
SUGGESTED ANSWER:
Redemption; Legal; Formalities (2002) No, the action to compel Ubaldo to execute the deed of
Adela and Beth are co-owners of a parcel of land. Beth sold absolute sale will not prosper. According to Ang Yu v. Court
her undivided share of the property to Xandro, who of Appeals (238 SCRA 602), the right of first refusal is not
promptly notified Adela of the sale and furnished the latter based on contract but is predicated on the provisions of
a copy of the deed of absolute sale. When Xandro presented human relations and, therefore, its violation is predicated on
the deed for registration, the register of deeds also notified quasi-delict. Secondly, the right of first refusal implies that
Adela of the sale, enclosing a copy of the deed with the the offer of the person in whose favor that right was given
notice. However, Adela ignored the notices. A year later, must conform with the same terms and conditions as those
Xandro filed a petition for the partition of the property. given to the offeree. In this case, however, Remigio was
Upon receipt of summons, Adela immediately tendered the offering only P4.5 Million instead of P5 Million.
requisite amount for the redemption. Xandro contends that ALTERNATIVE ANSWER:
Adela lost her right of redemption after the expiration of 30 No, the action will not prosper. The lessee's right of first
refusal does not go so far as to give him the power to
days from her receipt of the notice of the sale given by him.
dictate on the lessor the price at which the latter should sell
Page 96 of 119
his property. Upon the facts given, the lessor had SUGGESTED ANSWER:
sufficiently complied with his commitment to give the lessee 1) A can exercise his right of repurchase within four (4)
a right of first refusal when he offered to sell the property to years from the date of the contract (Art. 1606, Civil Code).
the lessee for P5 Million, which was the same price he got in
selling it to Santos. He certainly had the right to treat the SUGGESTED ANSWER:
lessee's counter-offer of a lesser amount as a rejection of his 2} I would advise B to file an action for consolidation of
offer to sell at P5 Million. Thus, he was free to find another title and obtain a judicial order of consolidation which must
buyer upon receipt of such unacceptable counter-offer (Art. be recorded in the Registry of Property (Art. 1607. Civil
Code).
1319. NCC).
SUGGESTED ANSWER: Transfer of Ownership; Non-Payment of the Price (1991)

Yes, the answer will be the same. The action will not Pablo sold his car to Alfonso who issued a postdated check
prosper because an option must be supported by a in full payment therefor. Before the maturity of the check,
consideration separate and distinct from the purchase price. Alfonso sold the car to Gregorio who later sold it to
In this case there is no separate consideration. Therefore, Gabriel. When presented for payment, the check issued by
the option may be withdrawn by Ubaldo at any time. (Art. Alfonso was dishonored by the drawee bank for the reason
1324, NCC) that he, Alfonso, had already closed his account even before
he issued his check.
Right of First Refusal; Lessee; Effect (1998) Pablo sued to recover the car from Gabriel alleging that he
In a 20-year lease contract over a building, the lessee is (Pablo) had been unlawfully deprived of it by reason of
expressly granted a right of first refusal should the lessor Alfonso's deception. Will the suit prosper?
decide to sell both the land and building. However, the SUGGESTED ANSWER:
lessor sold the property to a third person who knew about No. The suit will not prosper because Pablo was not
the lease and in fact agreed to respect it. Consequently, the unlawfully deprived of the car although he was unlawfully
lessee brings an action against both the lessor-seller and the deprived of the price. The perfection of the sale and the
buyer (a) to rescind the sale and (b) to compel specific delivery of the car was enough to allow Alfonso to have a
performance of his right of first refusal in the sense that the right of ownership over the car, which can be lawfully
lessor should be ordered to execute a deed of absolute sale transferred to Gregorio. Art. 559 applies only to a person
in favor of the lessee at the same price. The defendants who is in possession in good faith of the property, and not
contend that the plaintiff can neither seek rescission of the to the owner thereof. Alfonso, in the problem, was the
sale nor compel specific performance of a "mere" right of owner, and, hence, Gabriel acquired the title to the car.
first refusal. Decide the case. [5%]
SUGGESTED ANSWER:
Non-payment of the price in a contract of sale does not
The action filed by the lessee, for both rescission of the render ineffective the obligation to deliver. The obligation
offending sale and specific performance of the right of first to deliver a thing is different from the obligation to pay its
refusal which was violated, should prosper. The ruling in price. EDCA Publishing Co. v. Santos (1990)
Equatorial Realty Development, Inc. vs. Mayfair Theater,
Inc. (264 SCRA 483), a case with similar facts, sustains both Transfer of Ownership; Risk of Loss (1990)
rights of action because the buyer in the subsequent sale D sold a second-hand car to E for P150,000.00 The
knew the existence of right of first refusal, hence in bad agreement between D and E was that half of the purchase
faith. price, or P75,000.00, shall be paid upon delivery of the car
ANOTHER ANSWER: to E and the balance of P75,000.00 shall be paid in five
The action to rescind the sale and to compel the right to equal monthly installments of P15,000.00 each. The car was
first refusal will not prosper. (Ang Yu Asuncion vs. CA, 238 delivered to E, and E paid the amount of P75.000.00 to D.
SCRA 602). The Court ruled in a unanimous en banc Less than one month thereafter, the car was stolen from E's
decision that the right of first refusal is not founded upon garage with no fault on E's part and was never recovered. Is
contract but on a quasi-delictual relationship covered by the E legally bound to pay the said unpaid balance of
principles of human relations and unjust enrichment (Art. P75.000.00? Explain your answer.
19, et seq. Civil Code). Hence the only action that will SUGGESTED ANSWER:
prosper according to the Supreme Court is an "action for Yes, E is legally bound to pay the balance of P75,000.00.
damages in a proper forum for the purpose." The ownership of the car sold was acquired by E from the
moment it was delivered to him. Having acquired
Right of Repurchase (1993) ownership, E bears the risk of the loss of the thing under
On January 2, 1980, A and B entered into a contract the doctrine of res perit domino. [Articles 1496. 1497, Civil
whereby A sold to B a parcel of land for and in Code).
consideration of P10.000.00. A reserving to himself the
right to repurchase the same. Because they were friends, no LEASE
period was agreed upon for the repurchase of the property.
1) Until when must A exercise his right of repurchase?
2) If A fails to redeem the property within the allowable Extinguishment; Total Distruction; Leased Property (1993)
period, what would you advise B to do for his better A is the owner of a lot on which he constructed a building
protection? in the total cost of P10,000,000.00. Of that amount B
Page 97 of 119
contributed P5,000,000.00 provided that the building as a phenomenon are still unpredictable despite the advances in
whole would be leased to him (B) for a period of ten years science, the phenomenon is considered unforeseen.
from January 1. 1985 to December 31, 1995 at a rental of
P100,000.00 a year. To such condition, A agreed. On Leasee & Lessor; Rights and Obligations (1990)
December 20, 1990, the building was totally burned. Soon A vacant lot several blocks from the center of the town was
thereafter, A's workers cleared the debris and started leased by its owner to a young businessman B for a term of
construction of a new building. B then served notice upon fifteen (15) years renewal upon agreement of the parties.
A that he would occupy the building being constructed After taking possession of the lot, the lessee built thereon a
upon completion, for the unexpired portion of the lease building of mixed materials and a store. As the years passed,
term, explaining that he had spent partly for the he expanded his business, earning more profits. By the
construction of the building that was burned. A rejected B's tenth (10th) year of his possession, he was able to build a
demand. Did A has a right in rejecting B's demand? three (3)-story building worth at least P300,000.00. Before
SUGGESTED ANSWER: the end of the term of the lease, B negotiated with the
Yes. A was correct in rejecting the demand of B. As a result landowner for its renewal, but despite their attempts to do
of the total destruction of the building by fortuitous event, so, they could not agree on the new conditions for the
the lease was extinguished. (Art. 1655, Civil Code.) renewal. Upon the expiration of the term of the lease, the
landowner asked B to vacate the premises and remove his
Implied New Lease (1999) building and other improvements. B refused unless he was
Under what circumstances would an implied new lease or a reimbursed for necessary and useful expenses. B claimed
tacita reconduccion arise? (2%) that he was a possessor and builder in good faith, with right
SUGGESTED ANSWER: of retention. This issue is now before the court for
An implied new lease or tacita reconduccion arises if at the resolution in a pending litigation.
end of the contract the lessee should continue enjoying the a) What are the rights of B?
thing leased for 15 days with the acquiescence of the lessor, b) What are the rights of the landowner?
and unless a notice to the contrary by either parties has SUGGESTED ANSWER:
previously been given (Art. 1670). In short, in order that a) B has the right to remove the building and other
there may be tacita reconduccion there must be expiration improvements unless the landowner decides to retain the
of the contract; there must be continuation of possession building at the time of the termination of the lease and pay
for 15 days or more; and there must be no prior demand to the lessee one-half of the value of the improvements at that
vacate. time. The lessee may remove the building even though the
principal thing may suffer damage but B should not cause
Lease of Rural Lands (2000) any more impairment upon the property leased than is
In 1995, Mark leased the rice land of Narding in Nueva necessary. The claim of B that he was a possessor and
Ecija for an annual rental of P1,000.00 per hectare. In 1998, builder in good faith with the right of retention is not
due to the El Nino phenomenon, the rice harvest fell to tenable. B is not a builder in good faith because as lessee he
only 40% of the average harvest for the previous years. does not claim ownership over the property leased.
Mark asked Narding for a reduction of the rental to P500.00 SUGGESTED ANSWER:
per hectare for that year but the latter refused. Is Mark b) The landowner/lessor may refuse to reimburse 1/2 of
legally entitled to such reduction? (2%) the value of the improvements and require the lessee to
SUGGESTED ANSWER: remove the improvements. [Article 1678, Civil Code),
No, Mark is not entitled to a reduction. Under Article 1680
of the Civil Code, the lessee of a rural land is entitled to a Leasee; Death Thereof; Effects (1997)
reduction of the rent only in case of loss of more than 1/2 Stating briefly the thesis to support your answer to each of
of the fruits through extraordinary and unforeseen the following cases, will the death - a) of the lessee
fortuitous events. While the drought brought about by the extinguish the lease agreement?
"El Nino" phenomenon may be classified as extraordinary, SUGGESTED ANSWER:
it is not considered as unforeseen. No. The death of the lessee will not extinguish the lease
ALTERNATIVE ANSWER: agreement, since lease is not personal in character and the
Yes, Mark is entitled to a reduction of the rent. His loss was right is transmissible to the heirs. (Heirs of Dimaculangan
more than 1/2 of the fruits and the loss was due to an vs. IAC, 170 SCRA 393).
extraordinary and unforeseen fortuitous event. The "El
Nino" phenomenon is extraordinary because it is Option to Buy; Expired (2001)
uncommon; it does not occur with regularity. And neither On January 1, 1980, Nestor leased the fishpond of Mario
could the parties have foreseen its occurrence. The event for a period of three years at a monthly rental of P1,000.00,
should be foreseeable by the parties so that the lessee can with an option to purchase the same during the period of
change the time for his planting, or refrain from planting, or the lease for the price of P500,000.00. After the expiration
take steps to avoid the loss. To be foreseeable, the time and of the three-year period, Mario allowed Nestor to remain in
the place of the occurrence, as well as the magnitude of the the leased premises at the same rental rate. On June 15,
adverse effects of the fortuitous event must be capable of 1983, Nestor tendered the amount of P500,000.00 to Mario
being predicted. Since the exact place, the exact time, and and demanded that the latter execute a deed of absolute sale
the exact magnitude of the adverse effects of the "El Nino" of the fishpond in his favor. Mario refused, on the ground
that Nestor no longer had an option to buy the fishpond.
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Nestor filed an action for specific performance. Will the sublessee can invoke no right superior to that of his
action prosper or not? Why? (5%) sublessor, the moment the sublessor is duly ousted from the
SUGGESTED ANSWER: premises, the sublessee has no leg to stand on. The
No, the action will not prosper. The implied renewal of the sublessee's right, if any, is to demand reparation for
lease on a month-to-month basis did not have the effect of damages from his sublessor, should the latter be at fault.
extending the life of the option to purchase which expired (Heirs ofSevilla v. Court of Appeals G.R. No. 49823, February
at the end of the original lease period. The lessor is correct 26, 1992).
in refusing to sell on the ground that the option had
expired.
Sublease; Delay in Payment of Rentals (1994)
Sublease vs. Assignment of Lease; Rescission of Contract In January 1993, Four-Gives Corporation leased the entire
(2005) twelve floors of the GQS Towers Complex, for a period of
Under a written contract dated December 1, 1989, Victor ten years at a monthly rental of P3,000,000.00. There is a
leased his land to Joel for a period of five (5) years at a provision in the contract that the monthly rentals should be
monthly rental of Pl,000.00, to be increased to Pl,200.00 paid within the first five days of the month. For the month
and Pl,500.00 on the third and fifth year, respectively. On of March, May, June, October and December 1993, the
January 1, 1991, Joel subleased the land to Conrad for a rentals were not paid on time with some rentals being
period of two (2) years at a monthly rental of Pl,500.00. delayed up to ten days. The delay was due to the heavy
paper work involved in processing the checks.
On December 31, 1992, Joel assigned the lease to his
compadre, Ernie, who acted on the belief that Joel was the Four-Gives Corporation also subleased five of the twelve
rightful owner and possessor of the said lot. Joel has been floors to wholly-owned subsidiaries. The lease contract
faithfully paying the stipulated rentals to Victor. When expressly prohibits the assignment of the lease contract or
Victor learned on May 18, 1992 about the sublease and any portion thereof. The rental value of the building has
assignment, he sued Joel, Conrad and Ernie for rescission of increased by 50% since its lease to Four-Gives Corporation.
the contract of lease and for damages. 1) Can the building owner eject Four-Gives Corporation on
a) Will the action prosper? If so, against whom? grounds of the repeated delays in the payment of the rent?
Explain. (2%) 2} Can the building owner ask for the cancellation of the
SUGGESTED ANSWER: contract for violation of the provision against assignment?
Yes, the action of for rescission of the contract of lease and SUGGESTED ANSWERS:
for damages will prosper. Under Article 1659 of the Civil 1) a) The "repeated delays" in the payment of rentals would,
Code, "if the lessor or the lessee should not comply with the at best, be a slight or casual breach which does not furnish a
obligations set forth in Articles 1654 and 1657, the ground for ejectment especially because the delays were
aggrieved party may ask for rescission of the contract and only due to heavy paper work. Note that there was not even
indemnification for damages, or only the latter, allowing the a demand for payment obviously because the delay lasted
contract to remain in force." Article 1649 of the same Code for only a few days (10 days being the longest), at the end of
provides that "the lessee cannot assign the lease without the which time payments were presumably made and were
consent of the lessor, unless there is a stipulation to the accepted. There was, therefore, no default. Note also that
contrary." Consent is necessary because assignment would there was no demand made upon the lessee to vacate the
cause novation by the substitution of one of the parties. premises for non-payment of the monthly rent. There is,
(Bangayan v. Court of Appeals, G.R. No. 123581, August 29, therefore, no cause of action for ejectment arising from the
1997) However, the rule is different in the case of "repeated delays".
subleasing. When there is no express prohibition in the
Contract of Lease, the lessee may sublet the thing leased. b) The building owner cannot eject Four-Gives
(Art. 1650, Civil Code) Corporation on the ground of repeated delays in the
payment of rentals. The delay in the payment of the rentals
In the given case, when Joel assigned the lease to Ernie, the is minimal and cannot be made the basis of an ejectment
same was done without the consent of Victor. The suit. The delay was due to the heavy paperwork involved in
assignment is void. However, there is no indication that in processing the checks. It would be otherwise if the lease
the written contract of lease between Victor and Joel, that contract stated that in the payment of rentals within the first
subleasing the premises is prohibited. Hence, the sublease five days of the month, time is of the essence or that the
of Joel with Conrad is valid. In view of the foregoing, lessee will be in delay if he falls to pay within the agreed
Victor can file the case of rescission and damages only period without need of demand. In this case he can
against Joel and Ernie but he cannot include Conrad. judicially eject the tenant on the ground of lack of payment
of the price stipulated after a demand to vacate, (Article
b) In case of rescission, discuss the rights and 1673(2), New Civil Code),
obligations of the parties. (2%)
SUGGESTED ANSWER: c) No. Resolution of a contract will not be permitted for a
Rescission of the lease necessarily requires the return of the slight or casual breach, but only for such substantial and
thing to the lessor. Hence, the judgment granting rescission fundamental breach as would defeat the very object of the
of the contract should also order the lessee to vacate and parties in making the agreement.(Zepeda v. CA, 216 SCRA
return the leased premises to the lessor. However, since the 293]. The delay of ten (10)) days is not such a substantial
Page 99 of 119
and fundamental breach to warrant the resolution of the A, and that he has not been remiss in the payment of rent.
contract of lease specially so when the delay was due to the Will the action prosper? (3%)
SUGGESTED ANSWER:
heavy paperwork in processing the checks.
Yes, the action will prosper. Under Article 1651 of the Civil
SUGGESTED ANSWER: Code, the sublessee is bound to the lessor for all acts which
2) a) No. Sublease is different from assignment of lease. refer to the use and preservation of the thing leased in the
Sublease, not being prohibited by the contract of lease is manner stipulated between the lessor and the lessee.
therefore allowed and cannot be invoked as a ground to
cancel the lease, Sublease; Validity; Assignment of Sublease (1990)
A leased a parcel of land to B for a period of two years. The
b) No, the lessor cannot have the lease cancelled for alleged lease contract did not contain any express prohibition
violation of the provision against assignment. The lessee did against the assignment of the leasehold or the subleasing of
not assign the lease, or any portion thereof, to the the leased premises. During the third year of the lease, B
subsidiaries. It merely subleased some floors to its subleased the land to C. In turn, C, without A's consent,
subsidiaries. Since the problem does not state that the assigned the sublease to D. A then filed an action for the
contract of lease contains a prohibition against sublease, the rescission of the contract of lease on the ground that B has
sublease is lawful, the rule being that in the absence of an violated the terms and conditions of the lease agreement. If
express prohibition a lessee may sublet the thing leased, in you were the judge, how would you decide the case,
whole or in part, without prejudice to his/its responsibility particularly with respect to the validity of:
to the lessor for the performance of the contract. (a) B's sublease to C? and
(b) C's assignment of the sublease to D?
Sublease; Sublessee; Liability (1999) SUGGESTED ANSWER:
May a lessee sublease the property leased without the (a) B's sublease to C is valid. Although the original period
consent of the lessor, and what are the respective liabilities of two years for the lease contract has expired, the lease
of the lessee and sub-lessee to the lessor in case of such continued with the acquiescence of the lessor during the
sublease? (3%) third year. Hence, there has been an implied renewal of the
SUGGESTED ANSWER: contract of lease. Under Art. 1650 of the Civil Code, the
Yes, provided that there is no express prohibition against lessee may sublet the thing leased, in whole or in part, when
subleasing. Under the law, when in the contract of lease of the contract of lease does not contain any express
things there is no express prohibition, the lessee may sublet prohibition. [Articles 1650, 1670 Civil Code). A's
the thing leased without prejudice to his responsibility for action for rescission should not prosper on this ground.
the performance of the contract toward the lessor. [Art,
1650) SUGGESTED ANSWER:
In case there is a sublease of the premises being leased, the (b) C's assignment of the sublease to D is not valid. Under
sublessee is bound to the lessor for all the acts which refer Art. 1649, of the Civil Code, the lessee cannot assign the
to the use and preservation of the thing leased in the lease without the consent of the lessor, unless there is a
manner stipulated between the lessor and the lessee. (Art. stipulation to the contrary. There is no such stipulation in
1651} the contract. If the law prohibits assignment of the lease
The sublessee is subsidiarily liable to the lessor for any rent without the consent of the lessor, all the more would the
due from the lessee. However, the sublessee shall not be assignment of a sublease be prohibited without such
responsible beyond the amount of the rent due from him. consent. This is a violation of the contract and is a valid
(Art. 1652) ground for rescission by A.
As to the lessee, the latter shall still be responsible to the
lessor for the rents; bring to the knowledge of the lessor
every usurpation or untoward act which any third person COMMON CARRIERS
may have committed or may be openly preparing to carry
out upon the thing leased; advise the owner the need for all Extraordinary Diligence (2000)
repairs; to return the thing leased upon the termination of Despite a warning from the police that an attempt to hijack
the lease just as he received it, save what has been lost or a PAL plane will be made in the following week, the airline
impaired by the lapse of time or by ordinary wear and tear did not take extra precautions, such as frisking of
or from an inevitable cause; responsible for the passengers, for fear of being accused of violating human
deterioration or loss of the thing leased, unless he proves rights. Two days later, an armed hijacker did attempt to
that it took place without his fault.
hijack a PAL flight to Cebu. Although he was subdued by
the other passengers, he managed to fire a shot which hit
Sublease; Sublessee; Liability (2000) and killed a female passenger. The victim's parents sued the
A leased his house to B with a condition that the leased airline for breach of contract, and the airline raised the
premises shall be used for residential purposes only. B defense of force majeure. Is the airline liable or not? (2%)
subleased the house to C who used it as a warehouse for SUGGESTED ANSWER:
fabrics. Upon learning this, A demanded that C stop using The airline is liable. In case of death of a passenger,
the house as a warehouse, but C ignored the demand, A common carriers are presumed to have been at fault or to
then filed an action for ejectment against C, who raised the have acted negligently, unless they prove that they observed
defense that there is no privity of contract between him and extraordinary diligence (Article 1756, Civil Code). The
Page 100 of 119

failure of the airline to take extra precautions despite a negate sale because they indicate that ownership over the
police warning that an attempt to hijack the plane would be units was never intended to transfer to the distributor.
made, was negligence on the part of the airline. Being
negligent, it is liable for the death of the passenger. The Agency; coupled with an interest (2001)
defense of force majeure is not tenable since the shooting Richard sold a large parcel of land in Cebu to Leo for P100
incident would not have happened had the airline taken million payable in annual installments over a period of ten
steps that could have prevented the hijacker from boarding years, but title will remain with Richard until the purchase
the plane. price is fully paid. To enable Leo to pay the price, Richard
ALTERNATIVE ANSWER: gave him a power-of-attorney authorizing him to subdivide
Under Article 1763 of the Civil Code, the common carrier is the land, sell the individual lots, and deliver the proceeds to
not required to observe extraordinary diligence in Richard, to be applied to the purchase price. Five years later,
preventing injury to its passengers on account of the willful Richard revoked the power of attorney and took over the
acts or negligence of other passengers or of strangers. The sale of the subdivision lots himself. Is the revocation valid
common carrier, in that case, is required to exercise only the or not? Why? (5%)
diligence of a good father of a family; hence, the failure of SUGGESTED ANSWER:
the airline to take EXTRA precautions in frisking the The revocation is not valid. The power of attorney given to
passengers and by leaving that matter to the security the buyer is irrevocable because it is coupled with an
personnel of the airport, does not constitute a breach of interest: the agency is the means of fulfilling the obligation
that duty so as to make the airline liable. Besides, the use of of the buyer to pay the price of the land (Article 1927, CC).
irresistible force by the hijackers was farce majeure that In other words, a bilateral contract (contract to buy and sell
could not have been prevented even by the observance of the land) is dependent on the agency.
extraordinary diligence.
Agency; Guarantee Commission (2004)
As an agent, AL was given a guarantee commission, in
AGENCY addition to his regular commission, after he sold 20 units of
Agency (2003) refrigerators to a customer, HT Hotel. The customer,
Jo-Ann asked her close friend, Aissa, to buy some groceries however, failed to pay for the units sold. AL’s principal,
for her in the supermarket. Was there a nominate contract DRBI, demanded from AL payment for the customer’s
entered into between Jo-Ann and Aissa? In the affirmative, accountability. AL objected, on the ground that his job was
what was it? Explain. 5% only to sell and not to collect payment for units bought by
SUGGESTED ANSWER: the customer.
Yes, there was a nominate contract. On the assumption Is AL’s objection valid? Can DRBI collect from him or
that Aissa accepted the request of her close friend Jo-Ann not? Reason. (5%)
to but some groceries for her in the supermarket, what they SUGGESTED ANSWER:
entered into was a nominate contract of Agency. Article No, AL's objection is not valid and DRBI can collect from
1868 of the New Civil Code provides that by the contract of AL. Since AL accepted a guarantee commission, in addition
agency a person binds himself to render some service or to to his regular commission, he agreed to bear the risk of
do something in representation or on behalf of another, collection and to pay the principal the proceeds of the sale
with the consent or authority of the latter. on the same terms agreed upon with the purchaser (Article
ALTERNATIVE ANSWER:
1907, Civil Code)
Yes, they entered into a nominate contract of lease to
service in the absence of a relation of principal and agent Agency; Real Estate Mortgage (2004)
between them (Article 1644, New Civil Code). CX executed a special power of attorney authorizing DY to
secure a loan from any bank and to mortgage his property
Agency vs. Sale (2000) covered by the owner’s certificate of title. In securing a loan
A foreign manufacturer of computers and a Philippine from MBank, DY did not specify that he was acting for CX
distributor entered into a contract whereby the distributor in the transaction with said bank.
agreed to order 1,000 units of the manufacturer's computers Is CX liable for the bank loan? Why or why not? Justify
every month and to resell them in the Philippines at the your answer. (5%)
manufacturer's suggested prices plus 10%. All unsold units SUGGESTED ANSWER:
at the end of the year shall be bought back by the CX is liable for the bank loan because he authorized the
manufacturer at the same price they were ordered. The mortgage on his property to secure the loan contracted by
manufacturer shall hold the distributor free and harmless DY. If DY later defaults and fails to pay the loan, CX is
from any claim for defects in the units. Is the agreement liable to pay. However, his liability is limited to the extent of
one for sale or agency? (5%) the value of the said property.
The contract is one of agency, not sale. The notion of sale is CX is not personally liable to the bank loan because it was
negated by the following indicia: (1) the price is fixed by the contracted by DY in his personal capacity. Only the
manufacturer with the 10% mark-up constituting the property of CX is liable. Hence, while CX has authorized
commission; (2) the manufacturer reacquires the unsold the mortgage on his property to secure the loan of DY, the
units at exactly the same price; and (3) warranty for the units bank cannot sue CX to collect the loan in case DY defaults
was borne by the manufacturer. The foregoing indicia thereon. The bank can only foreclose the property of CX.
Page 101 of 119

And if the proceeds of the foreclosure are not sufficient to All those contracts were executed by B while A was
pay the loan in full, the bank cannot run after CX for the confined due to illness in the Makati Medical Center. Rule
deficiency. on the validity and binding effect of each of the above
ALTERNATIVE ANSWER: contracts upon A the principal. Explain your answers,
While as a general rule the principal is not liable for the SUGGESTED ANSWER:
contract entered into by his agent in case the agent acted in The agency couched in general terms comprised only acts of
his own name without disclosing his principal, such rule administration (Art. 1877, Civil Code). The lease contract
does not apply if the contract involves a thing belonging to on the Manila parcel is not valid, not enforceable and not
the principal. In such case, the principal is liable under binding upon A. For B to lease the property to C, for more
Article 1883 of the Civil Code. The contract is deemed than one (1) year, A must provide B with a special power of
made on his behalf (Sy-juco v. Sy-juco 40 Phil. 634 [1920]). attorney (Art. 1878. Civil Code).
ALTERNATIVE ANSWER:
CX would not be liable for the bank loan. CX's property The lease of the Caloocan City property to D is valid and
would also not be liable on the mortgage. Since DY did not binding upon A. Since the lease is without a fixed term, it is
specify that he was acting for CX in the transaction with the understood to be from month to month, since the rental is
bank, DY in effect acted in his own name. In the case of
payable monthly (Art. 1687, Civil Code).
Rural Bank of Bombon v. CA, 212 SCRA, (1992), the Supreme
Court, under the same facts, ruled that "in order to bind the The sale of the Quezon City parcel to E is not valid and not
principal by a mortgage on real property executed by an binding upon A. B needed a special power of attorney to
agent, it must upon its face purport to be made, signed and validly sell the land (Arts. 1877 and 1878, Civil Code). The
sealed in the name of the principal, otherwise, it will bind sale of the land at a very good price does not cure the defect
the agent only. It is not enough merely that the agent was in of the contract arising from lack of authority
fact authorized to make the mortgage, if he, has not acted in
the name of the principal. Neither is it ordinarily sufficient Powers of the Agent (1994)
that in the mortgage the agent describes himself as acting by Prime Realty Corporation appointed Nestor the exclusive
virtue of a power of attorney, if in fact the agent has acted agent in the sale of lots of its newly developed subdivision.
in his own name and has set his own hand and seal to the Prime Realty told Nestor that he could not collect or receive
mortgage. There is no principle of law by which a person payments from the buyers. Nestor was able to sell ten lots
can become liable on a real estate mortgage which she never to Jesus and to collect the down payments for said lots. He
executed in person or by attorney in fact". did not turn over the collections to Prime Realty. Who shall
bear the loss for Nestor's defalcation, Prime Realty or Jesus?
Appointment of Sub-Agent (1999) SUGGESTED ANSWER:
X appoints Y as his agent to sell his products in Cebu City. a) The general rule is that a person dealing with an agent
Can Y appoint a sub-agent and if he does, what are the must inquire into the authority of that agent. In the present
effects of such appointment? (5%) case, if Jesus did not inquire into that authority, he is liable
SUGGESTED ANSWER: for the loss due to Nestor's defalcation unless Article 1900,
Yes, the agent may appoint a substitute or sub-agent if the Civil Code governs, in which case the developer corporation
principal has not prohibited him from doing so, but he shall bears the loss.
be responsible for the acts of the substitute:
(1) when he was not given the power to appoint one; Art. 1900 Civil Code provides: "So far as third persons are
(2) when he was given such power, but without designating concerned, an act is deemed to have been performed within
the person, and the person appointed was notoriously the scope of the agent's authority, if such act is within the
incompetent or insolvent. terms of the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority according to
General Agency vs. Special Agency (1992) an understanding between the principal and the agent.
A as principal appointed B as his agent granting him general
and unlimited management over A's properties, stating that However, if Jesus made due inquiry and he was not
A withholds no power from B and that the agent may informed by the principal Prime Realty of the limits of
execute such acts as he may consider appropriate. Nestor's authority. Prime Realty shall bear the loss.
Accordingly, B leased A's parcel of land in Manila to C for b) Considering that Prime Realty Corporation only "told"
four (4) years at P60,000.00 per year, payable annually in Nestor that he could not receive or collect payments, it
advance. appears that the limitation does not appear in his written
authority or power of attorney. In this case, insofar as Jesus,
B leased another parcel of land of A in Caloocan City to D who is a third person is concerned, Nestor's acts of
without a fixed term at P3,000.00 per month payable collecting payments is deemed to have been performed
monthly. within the scope of his authority {Article 1900. Civil Code).
Hence, the principal is liable.
B sold to E a third parcel of land belonging to A located in
Quezon City for three (3) times the price that was listed in However, if Jesus was aware of the limitation of Nestor's
the inventory by A to B.
power as an agent, and Prime Realty Corporation does not
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ratify the sale contract, then Jesus shall be liable (Article allowing the other general partner to bind the corporation
1898. Civil Code). will violate the corporation law principle that only the board
of directors may bind the corporation.
Termination; Effect of Death of Agent (1997)
Stating briefly the thesis to support your answer to each of SUGGESTED ANSWER:
the following cases, will the death - (c) of an agent end an 3) No, for the same reasons given in the Answer to Number
agency? 2 above.
SUGGESTED ANSWER:
Yes. The death of an agent extinguishes the agency, by Conveyance of a Partner’s Share Dissolution (1998)
express provision of par. 3, Art 1919 of the Civil Code. Dielle, Karlo and Una are general partners in a
merchandising firm. Having contributed equal amounts to
the capital, they also agree on equal distribution of whatever
PARTNERSHIP net profit is realized per fiscal period. After two years of
operation, however, Una conveys her whole interest in the
Composition of Partnerships; Spouses; Corporations partnership to Justine, without the knowledge and consent
(1994) of Dielle and Karlo.
1) Can a husband and wife form a limited partnership to 1. Is the partnership dissolved? 12%]
engage in real estate business, with the wife being a 2. What are the rights of Justine, if any, should she desire
limited partner? to participate in the management of the partnership and in
2) Can two corporations organize a general partnership the distribution of a net profit of P360.000.00 which was
under the Civil Code of the Philippines? realized after her purchase of Una's interest? [3%]
3) Can a corporation and an individual form a general SUGGESTED ANSWER:
partnership? 1. No, a conveyance by a partner of his whole interest in
SUGGESTED ANSWER: a partnership does not of itself dissolve the partnership in
1) a) Yes. The Civil Code prohibits a husband and wife the absence of an agreement. (Art. 1813. Civil Code)
from constituting a universal partnership. Since a limited
partnership is not a universal partnership, a husband and SUGGESTED ANSWER:
o
wife may validly form one. 2. Justine cannot interfere r participate in the
b) Yes. While spouses cannot enter into a universal management or administration of the partnership business
partnership, they can enter into a limited partnership or be or affairs. She may, however, receive the net profits to
which Una would have otherwise been entitled. In this case,
members thereof (CIR u. Suter, etal. 27 SCRA 152).
P120.000 (Art. 1813, Civil Code)
SUGGESTED ANSWER:
2) a) No, A corporation is managed by its board of Dissolution of Partnership (1995)
directors. If the corporation were to become a partner, Pauline, Patricia and Priscilla formed a business partnership
co-partners would have the power to make the corporation for the purpose of engaging in neon advertising for a term
party to transactions in an irregular manner since the of five (5) years. Pauline subsequently assigned to Philip her
partners are not agents subject to the control of the Board interest in the partnership. When Patricia and Priscilla
of Directors. But a corporation may enter into a joint learned of the assignment, they decided to dissolve the
venture with another corporation as long as the nature of partnership before the expiration of its term as they had an
the venture is in line with the business authorized by its unproductive business relationship with Philip in the past.
charter. (Tuason & Co., Inc. v. Bolano, 95 Phil. 106). On the other hand, unaware of the move of Patricia and
Priscilla but sensing their negative reaction to his acquisition
b) As a general rule a corporation may not form a general of Pauline's interest, Philip simultaneously petitioned for the
partnership with another corporation or an individual dissolution of the partnership.
because a corporation may not be bound by persons who 1. Is the dissolution done by Patricia and Priscilla without
are neither directors nor officers of the corporation. the consent of Pauline or Philip valid? Explain.
2. Does Philip have any right to petition for the dissolution
However, a corporation may form a general partnership of the partnership before the expiration of its specified
with another corporation or an individual provided the term? Explain.
following conditions are met: SUGGESTED ANSWER:
1) The Articles of Incorporation of the corporation 1, Under Art. 1830 (1) (c) of the NCC, the dissolution by
expressly allows the corporation to enter into Patricia and Priscilla is valid and did not violate the contract
partnerships; of partnership even though Pauline and Philip did not
2) The Articles of Partnership must provide that all consent thereto. The consent of Pauline is not necessary
partners will manage the partnership, and they because she had already assigned her interest to Philip. The
shall be jointly and severally liable; and consent of Philip is not also necessary because the
3) In case of a foreign corporation, it must be assignment to him of Pauline's interest did not make him a
partner, under Art, 1813 of the NCC.
licensed to do business in the Philippines.
ALTERNATIVE ANSWER:
c) No. A corporation may not be a general partner because Interpreting Art. 1830 (1) (c) to mean that if one of the
the principle of mutual agency in general partnership partners had assigned his interest on the partnership to
Page 103 of 119

another the remaining partners may not dissolve the A should be hired as Secretary. The decision for the hiring
partnership, the dissolution by Patricia and Priscilla without of A prevails because it is an act of administration which
the consent of Pauline or Philip is not valid. can be performed by the duly appointed managing partners,
W and X.
SUGGESTED ANSWER:
2. No, Philip has no right to petition for dissolution B cannot be hired, because in case of a tie in the decision of
because he does not have the standing of a partner (Art. the managing partners, the deadlock must be decided by the
1813 NCC). partners owning the controlling interest. In this case, the
opposition of X and Y prevails because Y owns the
Dissolution of Partnership; Termination (1993)
controlling Interest (Art. 1801, Civil Code).
A, B and C formed a partnership for the purpose of
contracting with the Government in the construction of one Obligations of a Partner; Industrial Partner (2001)
of its bridges. On June 30, 1992, after completion of the Joe and Rudy formed a partnership to operate a car repair
project, the bridge was turned over by the partners to the shop in Quezon City. Joe provided the capital while Rudy
Government. On August 30, 1992, D, a supplier of contributed his labor and industry. On one side of their
materials used in the project sued A for collection of the shop, Joe opened and operated a coffee shop, while on the
indebtedness to him. A moved to dismiss the complaint other side, Rudy put up a car accessories store. May they
against him on the ground that it was the ABC partnership engage in such separate businesses? Why? [5%]
that is liable for the debt. D replied that ABC partnership SUGGESTED ANSWER:
was dissolved upon completion of the project for which Joe, the capitalist partner, may engage in the restaurant
purpose the partnership was formed. business because it is not the same kind of business the
Will you dismiss the complaint against A If you were the partnership is engaged in. On the other hand, Rudy may not
Judge? engage in any other business unless their partnership
SUGGESTED ANSWER: expressly permits him to do so because as an industrial
As Judge, I would not dismiss the complaint against A. partner he has to devote his full time to the business of the
because A is still liable as a general partner for his pro rata
partnership [Art. 1789, CC).
share of 1/3 (Art. 1816, C. C.J. Dissolution of a partnership
caused by the termination of the particular undertaking
specified in the agreement does not extinguish obligations,
Commodatum & Mutuum
which must be liquidated during the "winding up" of the
partnership affairs (Articles 1829 and 1830. par. 1-a, Civil
Commodatum (1993)
Code). A, upon request, loaned his passenger Jeepney to B to
enable B to bring his sick wife from Paniqui. Tarlac to the
Effect of Death of Partner (1997) Philippine General Hospital in Manila for treatment. On the
Stating briefly the thesis to support your answer to each of way back to Paniqui, after leaving his wife at the hospital,
the following cases, will the death - of a partner terminate people stopped the passenger Jeepney. B stopped for them
the partnership? and allowed them to ride on board, accepting payment from
SUGGESTED ANSWER:
them just as in the case of ordinary passenger Jeepneys
Yes. The death of a partner will terminate the partnership,
plying their route. As B was crossing Bamban, there was an
by express provision of par. 5, Art. 1830 of the Civil Code.
onrush of Lahar from Mt Pinatubo, the Jeep that was
loaned to him was wrecked.
Obligations of a Partner (1992)
1) What do you call the contract that was entered into by
W, X, Y and Z organized a general partnership with W and
A and B with respect to the passenger Jeepney that was
X as industrial partners and Y and Z as capitalist partners. Y
loaned by A to B to transport the latter's sick wife to
contributed P50,000.00 and Z contributed P20,000.00 to
Manila?
the common fund. By a unanimous vote of the partners, W
2) Is B obliged to pay A for the use of the passenger
and X were appointed managing partners, without any
jeepney?
specification of their respective powers and duties.
3) Is B liable to A for the loss of the Jeepney?
SUGGESTED ANSWER:
A applied for the position of Secretary and B applied for the 1) The contract is called "commodatum". [Art. 1933. Civil
position of Accountant of the partnership. Code). COMMODATUM is a contract by which one of the
parties (bailor) delivers to another (bailee) something not
The hiring of A was decided upon by W and X, but was consumable so that the latter may use it for a certain time
opposed by Y and Z.
and return it.
The hiring of B was decided upon by W and Z, but was 2) No, B is not obliged to pay A for the use of the
opposed by X and Y. passenger Jeepney because commodatum is essentially
gratuitous. (Art. 1933. Civil Code]
Who of the applicants should be hired by the partnership?
Explain and give your reasons. 3) Yes, because B devoted the thing to a purpose different
SUGGESTED ANSWER:
from that for which it has been loaned (Art. 1942, par. 2,
Civil Code)
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ALTERNATIVE ANSWER: Tito must also pay for the ordinary expenses for the use and
No, because an obligation which consists in the delivery of preservation of the thing loaned. He must pay for the
a determinate thing shall be extinguished if it should be lost gasoline, oil, greasing and spraying. He cannot ask for
or destroyed without the fault of the debtor, and before he reimbursement because he has the obligation to return the
has incurred in delay. (Art. 1262. Civil Code) identical thing to the bailor. Under Article 1941 of the Civil
Code, the bailee is obliged to pay for the ordinary expenses
Commodatum (2005) for the use and preservation of the thing loaned.
Before he left for Riyadh to work as a mechanic, Pedro left his
Adventure van with Tito, with the understanding that the c) Does Pedro have the right to retrieve the van even
latter could use it for one year for his personal or family use before the lapse of one year? Explain. (2%)
while Pedro works in Riyadh. He did not tell Tito that the ALTERNATIVE ANSWER:
brakes of the van were faulty. Tito had the van tuned up and No, Pedro does not have the right to retrieve the van before
the brakes repaired. He spent a total amount of the lapse of one year. The parties are mutually bound by the
P15,000.00. After using the vehicle for two weeks, Tito terms of the contract. Under the Civil Code, there are only 3
discovered that it consumed too much fuel. To make up for instances when the bailor could validly ask for the return of
the expenses, he leased it to Annabelle. the thing loaned even before the expiration of the
period. These are when: (1) a precarium contract was
Two months later, Pedro returned to the Philippines entered (Article 1947); (2) if the bailor urgently needs
and asked Tito to return the van. Unfortunately, while the thing (Article 1946); and (3) if the bailee
being driven by Tito, the van was accidentally damaged by commits acts of ingratitude (Article 1948). Not one of
a cargo truck without his fault. the situations is present in this case.
a) Who shall bear the P15,000.00 spent for the repair of
the van? Explain. (2%) The fact that Tito had leased the thing loaned to Annabelle
ALTERNATIVE ANSWER: would not justify the demand for the return of the
Tito must bear the P15,000.00 expenses for the thing loaned before expiration of the period. Under Article
van. Generally, extraordinary expenses for the 1942 of the Civil Code, leasing of the thing loaned to
preservation of the thing loaned are paid by the bailor, he a third person not member of the household of the bailee,
being the owner of the thing loaned. In this case however, will only entitle bailor to hold bailee liable for the loss of
Tito should bear the expenses because he incurred the the thing loaned.
expenses without first informing Pedro about it. Neither ALTERNATIVE ANSWER:
was the repair shown to be urgent. Under Article 1949 As a rule, Pedro does not have the right to retrieve the van
of the Civil Code, bailor generally bears the before the lapse of one year. Article 1946 of the Code
extraordinary expenses for the preservation of the provides that "the bailor cannot demand the return of the
thing and should refund the said expenses if made by thing loaned till after the expiration of the period stipulated,
the bailee; Provided, The bailee brings the same to the or after the accomplishment of the use for which the
attention of the bailor before incurring them, except commodatum has been constituted. However, if in the
only if the repair is urgent that reply cannot be awaited. meantime, he should have urgent need of the thing, he may
ALTERNATIVE ANSWER: demand its return or temporary use."
The P15,000.00 spent for the repair of the van should be In the given problem, Pedro allowed Tito to use the van for
borne by Pedro. Where the bailor delivers to the bailee a one year. Thus, he should be bound by the said agreement
non-consummable thing so that the latter may use it for a and he cannot ask for the return of the car before
certain time and return the identical thing, the contract the expiration of the one year period. However, if
perfected is a Contract of Commodatum. (Art. 1933, Civil Pedro has urgent need of the van, he may demand
Code) The bailor shall refund the extraordinary expenses for its return or temporary use.
during the contract for the preservation of the thing loaned
provided the bailee brings the same to the knowledge of the d) Who shall bear the expenses for the accidental
bailor before incurring the same, except when they are so damage caused by the cargo truck, granting that
urgent that the reply to the notification cannot be awaited the truck driver and truck owner are insolvent?
without danger. (Art. 1949 of the Civil Code) Explain. (2%)
SUGGESTED ANSWER:
In the given problem, Pedro left his Adventure van with Generally, extraordinary expenses arising on the occasion of
Tito so that the latter could use it for one year while he was in the actual use of the thing loaned by the bailee, even
Riyadh. There was no mention of a consideration. Thus, the if incurred without fault of the bailee, shall be
contract perfected was commodatum. The amount of shouldered equally by the bailor and the bailee. (Art. 1949
P15,000.00 was spent by Tito to tune up the van and to of the Civil Code). However, if Pedro had an urgent
repair its brakes. Such expenses are extra-ordinary expenses need for the vehicle, Tito would be in delay for failure
because they are necessary for the preservation of the van to immediately return the same, then Tito would be
Thus, the same should be borne by the bailor, Pedro. held liable for the extraordinary expenses.
b) Who shall bear the costs for the van's fuel, oil and
other materials while it was with Tito? Explain. (2%) Commodatum vs. Usufruct (1998)
SUGGESTED ANSWER:
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Distinguish usufruct from commodatum and state whether
these may be constituted over consumable goods. [2%] Mutuum; Interests (2001)
SUGGESTED ANSWER: Samuel borrowed P300,000.00 housing loan from the bank
1. USUFRUCT is a right given to a person (usufructuary) to at 18% per annum interest. However, the promissory note
enjoy the property of another with the obligation of contained a proviso that the bank "reserves the right to
preserving its form and substance. (Art. 562. Civil Code) increase interest within the limits allowed by law," By virtue
of such proviso, over the objections of Samuel, the bank
On the other hand, COMMODATUM is a contract by increased the interest rate periodically until it reached 48%
which one of the parties (bailor) delivers to another (bailee) per annum. Finally, Samuel filed an action questioning the
something not consumable so that the latter may use it for a right of the bank to increase the interest rate up to 48%.
certain time and return it. The bank raised the defense that the Central Bank of the
Philippines had already suspended the Usury Law. Will the
In usufruct the usufructuary gets the right to the use and to action prosper or not? Why? (5%)
the fruits of the same, while in commodatum, the bailee SUGGESTED ANSWER:
only acquires the use of the thing loaned but not its fruits. The action will prosper. While it is true that the interest
ceilings set by the Usury Law are no longer in force, it has
Usufruct may be constituted on the whole or a part of the been held that PD No. 1684 and CB Circular No. 905
fruits of the thing. (Art. 564. Civil Code). It may even be merely allow contracting parties to stipulate freely on any
constituted over consumables like money (Alunan v. Veloso, adjustment in the interest rate on a loan or forbearance of
52 Phil. 545). On the other hand, in commodatum, money but do not authorize a unilateral increase of the
consumable goods may be subject thereof only when the interest rate by one party without the other's consent (PNB
purpose of the contract is not the consumption of the v. CA, 238 SCRA 2O [1994]]). To say otherwise will violate
object, as when it is merely for exhibition. (Art. 1936, Civil the principle of mutuality of contracts under Article 1308 of
Code) the Civil Code. To be valid, therefore, any change of interest
ANOTHER ANSWER: must be mutually agreed upon by the parties (Dizon v,
1. There are several points of distinction between Magsaysay, 57 SCRA 25O [1974]). In the present problem,
usufruct and commodatum. Usufruct is constituted by law, the debtor not having given his consent to the increase in
by contract, by testamentary succession, or by prescription
interest, the increase is void.
(Art. 1933. Civil Code). Usufruct creates a real right to the
fruits of another's property, while commodatum creates Mutuum; Interests (2002)
only a purely personal right to use another's property, and Carlos sues Dino for (a) collection on a promissory note for
requires a stipulation to enable the bailee to "make use" of a loan, with no agreement on interest, on which Dino
the fruits (Arts. 1939& 1940, Civil Code). Usufruct maybe defaulted, and (b) damages caused by Dino on his (Carlos’)
onerous while commodatum is always or essentially priceless Michaelangelo painting on which Dino is liable on
gratuitous (Arts. 1933 & 1935, Civil Code). The contract the promissory note and awards damages to Carlos for the
constituting usufruct is consensual, while commodatum is a damaged painting, with interests for both awards. What
real contract (perfected only by delivery of the subject rates of interest may the court impose with respect to both
matter thereof). However, both involve the enjoyment by a awards? Explain. (5%)
person of the property of another, differing only as to the SUGGESTED ANSWER:
extent and scope of such enjoyment [jus fruendi in one and With respect to the collection of money or promissory note,
Jus utendi in the other); both may have as subject matter it being a forbearance of money, the legal rate of interest for
either an immovable or a movable; and, both maybe having defaulted on the payment of 12% will apply. With
constituted over consumable goods (Arts. 574 & 1936, Civil respect to the damages to the painting, it is 6% from the
Code). time of the final demand up to the time of finality of
A consumable thing may be the subject-matter of an judgment until judgment credit is fully paid. The court
abnormal usufruct but in a normal usufruct, the subject- considers the latter as a forbearance of money. (Eastern
matter may be used only for exhibition. A commodatum of Shipping Lines, Inc. v. CA, 234 SCRA 78 [1994]; Art 2210 and
a consumable thing may be only for the purpose of 2211, CC)
exhibiting, not consuming it.
Mutuum; Interests (2004)
Mutuum vs. Commodatum (2004) The parties in a contract of loan of money agreed that the
Distinguish briefly but clearly between Mutuum and yearly interest rate is 12% and it can be increased if there is
commodatum. a law that would authorize the increase of interest rates.
SUGGESTED ANSWER: Suppose OB, the lender, would increase by 5% the rate of
In MUTUUM, the object borrowed must be a consumable interest to be paid by TY, the borrower, without a law
thing the ownership of which is transferred to the borrower authorizing such increase, would OB’s action be just and
who incurs the obligation to return the same consumable to valid? Why? Has TY a remedy against the imposition of
the lender in an equal amount, and of the same kind and the rate increase? Explain. (5%)
quality. In COMMODATUM, the object borrowed is SUGGESTED ANSWER:
usually a non-consumable thing the ownership of which is OB's action is not just and valid. The debtor cannot be
not transferred to the borrower who incurs the obligation to required to pay the increase in interest there being no law
return the very thing to the lender. authorizing it, as stipulated in the contract. Increasing the
Page 106 of 119

2006) rate in the absence of such law violates the principle of
mutuality of contracts. To whom should a deliver the bag of money? Decide with
ALTERNATIVE ANSWER: reasons.
Even if there was a law authorizing the increase in interest SUGGESTED ANSWER:
rate, the stipulation is still void because there is no B would have no right to claim the money. Article 1990 of
corresponding stipulation to decrease the interest due when the Civil Code is not applicable. The law refers to another
the law reduces the rate of interest. thing received in substitution of the object deposited and is
predicated upon something exchanged.
DEPOSIT The Mayor of Manila cannot invoke. Article 719 of the Civil
Code which requires the finder to deposit the thing with the
Compensation; Bank Loan (1997) Mayor only when the previous possessor is unknown.
In order to secure a bank loan, XYZ Corporation
surrendered its deposit certificate, with a maturity date of 01 In this case , a must return the bag of money to the bank as
September 1997 to the bank. The corporation defaulted on the previous possessor and known owner (Arts. 719 and
the due repayment of the loan, prompting the bank to 1990. Civil Code.)
encash the deposit certificate. XYZ Corporation questioned
the above action taken by the bank as being a case of
pactum commissorium. The bank disagrees. SURETY
What is your opinion?
SUGGESTED ANSWER: Recovery of Deficiency (1997)
We submit that there is no pactum commissorium here. AB sold to CD a motor vehicle for and in consideration of
Deposits of money in banks and similar institutions are P120,000.00 to be paid in twelve monthly equal installments
governed by the provisions on simple loans (Art. 1980. Civil of P10,000,00, each installment being due and payable on
Code). The relationship between the depositor and a bank is
the 15th day of each month starting January 1997.
one of creditor and debtor. Basically this is a matter of
compensation as all the elements of compensation are To secure the promissory note, CD (a) executed a chattel
present in this case (BPI vs. CA, 232 SCRA 302). mortgage on the subject motor vehicle, and (b) furnished a
ADDITIONAL ANSWER: surety bond issued by Philam life, CD failed to pay more
Where the security for the debt is also money deposited in a than two (2) installments, AB went after the surety but he
bank, it is not illegal for the creditor to encash the time was only able to obtain three-fourths (3/4) of the total
deposit certificates to pay the debtor's overdue obligation. amount still due and owing from CD. AB seeks your advice
(Chu us. CA, et al., G.R 78519, September 26, 1989).
on how he might, if at all, recover the deficiency.
How would you counsel AB?
Deposit; Exchange (1992) SUGGESTED ANSWER:
X and Y staged a daring bank robbery in Manila at 10:30 Yes, he can recover the deficiency. The action of AB to go
AM in the morning of a regular business day, and escaped after the surety bond cannot be taken to mean a waiver of
with their loot of two (2) bags, each bag containing his right to demand payment for the whole debt, The
P50,000,00. amount received from the surety is only payment pro tanto,
During their flight to elude the police, X and Y entered the
and an action may be maintained for a deficiency debt.
nearby locked house of A, then working in his Quezon City
office. From A's house, X and Y stole a box containing cash
totaling P50,000.00 which box A had been keeping in ANTICHRESIS
deposit for his friend B.
Antichresis (1995)
In their hurry, X and Y left in A's bedroom one (1) of the Olivia owns a vast mango plantation which she can no
bags which they had taken from the bank. longer properly manage due to a lingering illness. Since she
is indebted to Peter in the amount of P500.000.00 she asks
With X and Y now at large and nowhere to be found, the Peter to manage the plantation and apply the harvest to the
bag containing P50.000.00 is now claimed by B, by the payment of her obligation to him, principal and interest,
Mayor of Manila, and by the bank. until her indebtedness shall have been fully paid. Peter
agrees.
B claims that the depository. A, by force majeure had 1) What kind of contract is entered into between Olivia
obtained the bag of money in place of the box of money and Peter? Explain.
deposited by B. 2) What specific obligations are imposed by law on Peter
as a consequence of their contract?
The Mayor of Manila, on the other hand, claims that the 3) Does the law require any specific form for the validity
bag of money should be deposited with the Office of the of their contract? Explain
Mayor as required of the finder by the provisions of the 4) May Olivia re-acquire the plantation before her entire
Civil Code. indebtedness shall have been fully paid? Explain.
SUGGESTED ANSWER:
The bank resists the claims of B and the Mayor of Manila.
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1. A contract of antichresis was entered into between payment of the loan. However, the loan was not paid on
Olivia and Peter. Under Article 2132 of the New Civil time.
Code, by a contract of antichresis the creditor acquires the A month after 4 years, may the shares of stock pledged be
right to receive the fruits of an immovable of his debtor, deemed owned by ABC or not? Reason. (5%)
with the obligation to apply them to the payment of the SUGGESTED ANSWER:
The shares of stock cannot be deemed owned by ABC upon
interest, and thereafter to the principal of his credit.
default of MNO. They have to be foreclosed. Under Article
SUGGESTED ANSWER: 2088 of the Civil Code, the creditor cannot appropriate the
2. Peter must pay taxes and charges upon the land and things given by way of pledge. And even if the parties have
bear the necessary expenses for preservation and repair stipulated that ABC becomes the owner of the shares in
which he may deduct from the fruits. (Art, 2135, NCC) case MNO defaults on the loan, such stipulation is void for
being a pactum commissorium.
SUGGESTED ANSWER:
3. The amount of the principal and interest must be Pledge; Mortgage; Antichresis (1996)
specified in writing, otherwise the antichresis will be void. In the province, a farmer couple borrowed money from the
(Art. 2134, NCC) local merchant. To guarantee payment, they left the Torrens
Title of their land with the merchant, for him to hold until
SUGGESTED ANSWER: they pay the loan. Is there a -
4. No. Art. 2136 specifically provides that the debtor a) contract of pledge,
cannot re-acquire the enjoyment of the immovable without b) contract of mortgage,
first having totally paid what he owes the creditor. c) contract of antichresis, or
However, it is potestative on the part of the creditor to do d) none of the above?
so in order to exempt him from his obligation under Art. Explain.
2135, NCC, The debtor cannot re-acquire the enjoyment SUGGESTED ANSWER:
unless Peter compels Olivia to enter again the enjoyment of None of the above. There is no pledge because only
the property. movable property may be pledged (Art. 2094. NCC). If at
all, there was a pledge of the paper or document
PLEDGE constituting the Torrens Title, as a movable by itself, but
not of the land which the title represents.
Pledge (1994) There is no mortgage because no deed or contract was
In 1982, Steve borrowed P400.000.00 from Danny, executed in the manner required by law for a mortgage
collateralized by a pledge of shares of stock of Concepcion (Arts. 2085 to 2092, NCC; 2124 to 2131, NCC).
Corporation worth P800,000,00. In 1983, because of the
economic crisis, the value of the shares pledged fell to only There is no contract of antichresis because no right to the
P100,000.00. Can Danny demand that Steve surrender the fruits of the property was given to the creditor (Art. 2132
other shares worth P700,000.00? NCC).
SUGGESTED ANSWER:
a) No. Bilateral contracts cannot be changed unilaterally. A A contract of simple loan was entered into with security
pledge is only a subsidiary contract, and Steve is still arrangement agreed upon by the parties which is not one of
indebted to Danny for the amount of P400,000.00 despite
those mentioned above.
the fall in the value of the stocks pledged.
ALTERNATIVE ANSWER:
b) No. Danny's right as pledgee is to sell the pledged There is a contract of mortgage constituted over the land.
shares at a public sale and keep the proceeds as collateral for There is no particular form required for the validity of a
the loan. There is no showing that the fall in the value of mortgage of real property. It is not covered by the statute of
the pledged property was attributable to the pledger's fault frauds in Art. 1403, NCC and even assuming that it is
or fraud. On the contrary, the economic crisis was the covered, the delivery of the title to the creditor has taken it
culprit. Had the pledgee been deceived as to the substance out of the coverage thereof. A contract of mortgage of real
or quality of the pledged shares of stock, he would have had property is consensual and is binding on the parties despite
the right to claim another thing in their place or to the absence of writing. However, third parties are not bound
immediate payment of the obligation. This is not the case because of the absence of a written instrument evidencing
here. the mortgage and, therefore the absence of registration. But
this does not affect the validity of the mortgage between the
Pledge (2004) parties (Art. 2125, NCC), The creditor may compel the
ABC loaned to MNO P40,000 for which the latter pledged debtor to execute the mortgage in a public document in
400 shares of stock in XYZ Inc. It was agreed that if the order to allow its registration (Art. 1357.NCC in relation to
pledgor failed to pay the loan with 10% yearly interest Art. 1358. NCC).
within four years, the pledgee is authorized to foreclose on
the shares of stock. As required, MNO delivered
possession of the shares to ABC with the understanding QUASI-CONTRACT
that the shares would be returned to MNO upon the
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Quasi-Contracts; Negotiorium Gestio (1992) house under the principle of negotiorum gestio. He was not
In fear of reprisals from lawless elements besieging his liable as the burning of the house is a fortuitous event.
barangay, X abandoned his fishpond, fled to Manila and left Is B liable to A for damages under the foregoing
for Europe. Seeking that the fish in the fishpond were ready circumstances?
for harvest, Y, who is in the business of managing SUGGESTED ANSWER:
fishponds on a commission basis, took possession of the No. B is not liable for damages, because he is a gestor in
property, harvested the fish and sold the entire harvest to Z. negotiorum gestio (Art. 2144, Civil Code) Furthermore, B is
Thereafter, Y borrowed money from W and used the not liable to A because Article 2147 of the Civil Code is not
money to buy new supplies of fish fry and to prepare the applicable.
fishpond for the next crop.
a) What is the Juridical relation between X and Y during B did not undertake risky operations which the owner was
X's absence? not accustomed to embark upon:
b) Upon the return of X to the barangay, what are the a) he has not preferred his own interest to that of the
obligations of Y to X as regards the contract with Z? owner;
c) Upon X's return, what are the obligations of X as b) he has not failed to return the property or business after
regards Y's contract with W? demand by the owner; and
d) What legal effects will result if X expressly ratifies Y's c) he has not assumed the management in bad faith.
management and what would be the obligations of X in ALTERNATIVE ANSWER:
favor of Y? He would be liable under Art. 2147 (1) of the Civil Code,
Explain all your answers. because he used the property for an operation which the
SUGGESTED ANSWER:
operator is not accustomed to, and in so doing, he exposed
(a) The juridical relation is that of the quasi-contract of the house to increased risk, namely the operation of a
"negotiorum gestio". Y is the "gestor" or "officious pension house on the second floor and stores on the first
floor
manager" and X is the "owner" (Art. 2144, Civil Code).
(b) Y must render an account of his operations and deliver Quasi-Contracts; Negotiorium Gestio (1995)
to X the price he received for the sale of the harvested fish Armando owns a row of residential apartments in San Juan,
Metro Manila, which he rents out to tenants. On 1 April
(Art, 2145, Civil Code).
1991 he left for the United States without appointing any
(c) X must pay the loan obtained by Y from W because X administrator to manage his apartments such that
must answer for obligations contracted with third persons uncollected rentals accumulated for three (3) years. Amparo,
a niece of Armando, concerned with the interest of her
in the interest of the owner (Art. 2150, Civil Code),
uncle, took it upon herself to administer the property. As a
(d) Express ratification by X provides the effects of an consequence, she incurred expenses in collecting the rents
express agency and X is liable to pay the commissions and in some instances even spent for necessary repairs to
habitually received by the gestor as manager (Art. 2149, preserve the property.
Civil Code). 1. What Juridical relation between Amparo and Armando,
if any, has resulted from Amparo's unilateral act of
Quasi-Contracts; Negotiorium Gestio (1993) assuming the administration of Armando's apartments?
In September, 1972, upon declaration of martial rule in the Explain.
Philippines. A, together with his wife and children. 2. What rights and obligations, if any, does Amparo have
disappeared from his residence along A. Mabini Street. under the circumstances? Explain.
Ermita, Manila. B, his immediate neighbor, noticing that SUGGESTED ANSWER:
mysterious disappearance of A and his family, closed the 1. Negotiorum gestio existed between Amparo and
doors and windows of his house to prevent it from being Armando, She voluntarily took charge of the agency or
burglarized. Years passed without B hearing from A and his management of the business or property of her uncle
family, B continued taking care of A's house, even causing without any power from her uncle whose property was
minor repairs to be done at his house to preserve it. In neglected. She is called the gestor negotiorum or officious
1976, when business began to perk up in the area, an manager, (Art. 2144, NCC)
enterprising man. C, approached B and proposed that they
build stores at the ground floor of the house and convert its 2. It is recommended by the Committee that an
second floor into a pension house. B agreed to Cs proposal enumeration of any two (2) obligations and two (2) rights as
and together they spent for the construction of stores at the enumerated in Arts. 2145 to 2152, NCC, would entitle the
ground floor and the conversion of the second floor into a examinee to full credit.
pension house. While construction was going on, fire
occurred at a nearby house. The houses at the entire block, Art. 2145. The officious manager shall perform his duties
including A's were burned. After the EDSA revolution in with all the diligence of a good father of a family, and pay
February 1986, A and his family returned from the United the damages which through his fault or negligence may be
States where they took refuge in 1972. Upon learning of suffered by the owner of the property or business under
what happened to his house. A sued B for damages, B management.
pleaded as a defense that he merely took charge of his
Page 109 of 119

The courts may, however, increase or moderate the (2) When the contract refers to things pertaining to the
indemnity according to the circumstances of each case. owner of the business,
(NOTE: It is recommended by the Committee that an enumeration of any
Art. 2146. If the officious manager delegates to another two (2) obligations and any two (2) rights as enumerated la Arts. 2145 to
2152, NCC would entitle the examinee to full credit.)
person all or some of his duties, he shall be liable for the
acts of the delegate, without prejudice to the direct
Quasi-Contracts; Solutio Indebiti (2004)
obligation of the latter toward the owner of the business. DPO went to a store to buy a pack of cigarettes worth
P225.00 only. He gave the vendor, RRA, a P500-peso bill.
The responsibility of two or more officious managers shall The vendor gave him the pack plus P375.00 change. Was
be solidary, unless management was assumed to save the
there a discount, an oversight, or an error in the amount
thing or business from imminent danger. given? What would be DPO’s duty, if any, in case of an
excess in the amount of change given by the vendor? How
Art. 2147. The officious manager shall be liable for any is this situational relationship between DPO and RRA
fortuitous event: denominated? Explain. (5%)
(1) If he undertakes risky operations which the owner was SUGGESTED ANSWER:
not accustomed to embark upon; There was error in the amount of change given by RRA.
(2) If he has preferred his own interest to that of the This is a case of solutio indebiti in that DPO received
owner; something that is not due him. He has the obligation to
(3) If he fails to return the property or business after return the P100.00; otherwise, he will unjustly enrich
demand by the owner, himself at the expense of RRA. (Art. 2154, Civil Code)
(4) If he assumed the management in bad faith. ALTERNATIVE ANSWER:
DPO has the duty to return to RRA the excess P100 as
Art. 2148. Except when the management was assumed to trustee under Article 1456 of the Civil Code which provides:
save the property or business from imminent danger, the If property is acquired through mistake or fraud, the person
officious manager shall be liable for fortuitous events obtaining it is, by force of law, considered a trustee of an
(1) If he is manifestly unfit to carry on the management; implied trust for the benefit of the person from whom the
(2) If by his Intervention h e prevented a more competent property comes. There is, in this case, an implied or
person from taking up the management. constructive trust in favor of RRA.
Art. 2149. The ratification of the management by the owner
of the business produces the effects of an express agency, TORTS & DAMAGES
even if the business may not have been successful.
Collapse of Structures; Last Clear Chance (1990)
Art. 2150, Although the officious management may not Mr and Mrs R own a burned-out building, the firewall of
have been expressly ratified, the owner of the property or which collapsed and destroyed the shop occupied by the
business who enjoys the advantages of the same shall be family of Mr and Mrs S, which resulted in injuries to said
liable for obligations incurred in his interest, and shall couple and the death of their daughter. Mr and Mrs S had
reimburse the officious manager for the necessary and been warned by Mr & Mrs R to vacate the shop in view of
useful expenses and for the damages which the latter may its proximity to the weakened wall but the former failed to
have suffered in the performance of his duties. do so.
Mr & Mrs S filed against Mr and Mrs R an action for
The same obligation shall be incumbent upon him when the recovery of damages the former suffered as a result of the
management had for its purpose the prevention of an collapse of the firewall. In defense, Mr and Mrs R rely on
imminent and manifest loss, although no benefit may have the doctrine of last clear chance alleging that Mr and Mrs S
been derived. had the last clear chance to avoid the accident if only they
heeded the former’s warning to vacate the shop, and
Art. 2151. Even though the owner did not derive any therefore Mr and Mrs R’s prior negligence should be
benefit and there has been no imminent and manifest disregarded.
danger to the property or business, the owner is liable as If you were the judge, how would you decide the case? State
under the first paragraph of the preceding article, provided: your reasons.
(1) The officious manager has acted in good faith, and SUGGESTED ANSWER:
(2) The property or business is intact, ready to be returned I would decide in favor of Mr & Mrs S. The proprietor of a
to the owner. building or structure is responsible for the damages
resulting from its total or partial collapse, if it should be due
Art. 2152. The officious manager is personally liable for to the lack of necessary repairs (Art 2190 Civil Code)
contracts which he has entered into with third persons, even
though he acted in the name of the owner, and there shall As regards the defense of “last clear chance,” the same is
be no right of action between the owner and third persons. not tenable because according to the SC in one case (De
These provisions shall not apply: Roy v CA L-80718, Jan 29, 1988, 157 S 757) the doctrine of last
(1) If the owner has expressly or tacitly ratified the clear chance is not applicable to instances covered by Art
management, or 2190 of the Civil Code.
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Further, in Phoenix Construction, Inc. v. Intermediate Availing of that portion of Section 12 of Article II of the
Appellate Court (G.R. L-65295, March 10, 1987. 148 SCRA 1987 Constitution which reads;
353) the Supreme Court held that the role of the common The State x xx shall equally protect the life of the mother
law "last clear chance" doctrine in relation to Article 2179 of and the life of the unborn from conception, "xxx" which
the Civil Code is merely to mitigate damages within the he claims confers a civil personality on the unborn from
context of contributory negligence. the moment of conception.
Damages (1994) Boy filed a case for damages against the abortionist, praying
On January 5, 1992, Nonoy obtained a loan of therein that the latter be ordered to pay him: (a) P30,000.00
Pl,000,000.00 from his friend Raffy. The promissory note as indemnity for the death of the fetus, (b) P100.000.00 as
did not stipulate any payment for Interest. The note was moral damages for the mental anguish and anxiety he
due on January 5, 1993 but before this date the two became suffered, (c) P50,000.00 as exemplary damages, (d)
political enemies. Nonoy, out of spite, deliberately defaulted P20,000.00 as nominal damages, and (e) P25,000.00 as
in paying the note, thus forcing Raffy to sue him. attorney's fees.
1) What actual damages can Raffy recover? May actual damages be also recovered? If so, what facts
2) Can Raffy ask for moral damages from Nonoy? should be alleged and proved?
3) Can Raffy ask for nominal damages? SUGGESTED ANSWER:
4) Can Raffy ask for temperate damages? Yes, provided that the pecuniary loss suffered should be
5) Can Raffy ask for attorney's fees? substantiated and duly proved.
SUGGESTED ANSWER:
1) Raffy may recover the amount of the promissory note Damages arising from Death of Unborn Child (2003)
of P1 million, together with interest at the legal rate from If a pregnant woman passenger of a bus were to suffer an
the date of judicial or extrajudicial demand. In addition, abortion following a vehicular accident due to the gross
however, inasmuch as the debtor is in bad faith, he is liable negligence of the bus driver, may she and her husband
for all damages which may be reasonably attributed to the claim damages from the bus company for the death of their
non-performance of the obligation. (Art. 2201(2). NCC). unborn child? Explain. 5%
SUGGESTED ANSWER:
2) Yes, under Article 2220, NCC moral damages are No, the spouses cannot recover actual damages in the form
recoverable in case of breach of contract where the of indemnity for the loss of life of the unborn child. This is
defendant acted fraudulently or in bad faith. because the unborn child is not yet considered a person and
the law allows indemnity only for loss of life of person. The
3) Nominal damages may not be recoverable in this case mother, however may recover damages for the bodily injury
because Raffy may already be indemnified of his losses with she suffered from the loss of the fetus which is considered
the award of actual and compensatory damages. part of her internal organ. The parents may also recover
NOMINAL DAMAGES are adjudicated only in order that damages for injuries that are inflicted directly upon them,
a right of the plaintiff, which has been violated or invaded e.g., moral damages for mental anguish that attended the
by the defendant may be vindicated or recognized, and not loss of the unborn child. Since there is gross negligence,
for the purpose of indemnifying the plaintiff for any loss exemplary damages can also be recovered. (Gelus v. CA, 2
suffered by him. (Article 2231. Civil Code) SCRA 801 [1961])
4) Raffy may ask for, but would most likely not be Death Indemnity (1994)
awarded temperate damages, for the reason that his actual Johnny Maton's conviction for homicide was affirmed by
damages may already be compensated upon proof thereof the Court of Appeals and in addition, although the
with the promissory note. TEMPERATE DAMAGES prosecution had not appealed at all. The appellate court
may be awarded only when the court finds that some increased the indemnity for death from P30,000.00 to
pecuniary loss has been suffered but its amount cannot, P50,000.00. On his appeal to the Supreme Court, among
from the nature of the case, be proved with certainty. the other things Johnny Maton brought to the high court's
attention, was the increase of indemnity imposed by the
(Article 2224, Civil Code)
Court of Appeals despite the clear fact that the People had
5) Yes, under paragraph 2, Article 2208 of the Civil Code, not appealed from the appellate court's judgment.
considering that Nonoy's act or omission has compelled Is Johnny Maton correct?
Raffy to litigate to protect his interests. Furthermore. SUGGESTED ANSWER:
attorneys' fees may be awarded by the court when it is just a) In Abejam v. Court of Appeals, the Supreme Court said
that even if the issue of damages were not raised by the
and equitable. (Article 2208(110) Civil Code).
appellant in the Court of Appeals but the Court of Appeals
Damages arising from Death of Unborn Child (1991) in its findings increased the damages, the Supreme Court
On her third month of pregnancy, Rosemarie, married to will not disturb the findings of the Court of Appeals.
Boy, for reasons known only to her, and without informing
Boy, went to the clinic of X, a known abortionist, who for a b) No, the contention of the accused is not correct because
fee, removed and expelled the fetus from her womb, Boy upon appeal to the Appellate Court, the court acquired
jurisdiction over the entire case, criminal as well as civil.
learned of the abortion six (6) months later.
Since the conviction of homicide had been appealed, there
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is no finality in the amount of indemnity because the civil A van owned by Orlando and driven by Diego, while
liability arising from the crime and the judgment on the negotiating a downhill slope of a city road, suddenly gained
crime has not yet become final speed, obviously beyond the authorized limit in the area,
and bumped a car in front of it, causing severed damage to
c) Yes. Since the civil indemnity is an award in the civil the care and serious injuries to its passengers. Orlando was
action arising from the criminal offense, the rule that a party not in the car at the time of the incident. The car owner and
cannot be granted affirmative relief unless he himself has the injured passengers sued Orlando and Diego for damages
appealed should apply. Therefore, it was error for the Court caused by Diego’s negligence. In their defense, Diego claims
of Appeals to have expanded the indemnity since the that the downhill slope caused the van to gain speed and
judgment on the civil liability had become final. that, as he stepped on the brakes to check the acceleration,
the brakes locked, causing the van to go even faster and
d) No. Courts can review matters not assigned as errors. eventually to hit the car in front of it. Orlando and Diego
(Hydro Resource vs. CA . 204 SCRA 309). contend that the sudden malfunction of the van’s brake
system is a fortuitous even and that, therefore, they are
Defense; Due Diligence in Selection (2003) exempt from any liability.
As a result of a collision between the taxicab owned by A Is this contention tenable? Explain. (2%)
and another taxicab owned by B, X, a passenger of the first SUGGESTED ANSWER:
taxicab, was seriously injured. X later filed a criminal action No. Mechanical defects of a motor vehicle do not constitute
against both drivers. fortuitous event, since the presence of such defects would
have been readily detected by diligent maintenance check.
May both taxicab owners raise the defense of due diligence The failure to maintain the vehicle in safe running condition
in the selection and supervision of their drivers to be constitutes negligence.
absolved from liability for damages to X? Reason. 5%
SUGGESTED ANSWER: Liability; Airline Company; Non-Performance of an
It depends. If the civil action is based on a quasi-delict the Obligation (2004)
taxicab owners may raise the defense of diligence of a good DT and MT were prominent members of the frequent
father of a family in the selection and supervision of the travelers’ club of FX Airlines. In Hongkong, the couple
driver; if the action against them is based on culpa were assigned seats in Business Class for which they had
contractual or civil liability arising from a crime, they cannot bought tickets. On checking in, however, they were told
raise the defense. they were upgraded by computer to First Class for the flight
to Manila because the Business Section was overbooked.
Filing of Separate Civil Action; Need for Reservation (2003)
As a result of a collision between the taxicab owned by A Both refused to transfer despite better seats, food, beverage
and another taxicab owned by B, X, a passenger of the first and other services in First Class. They said they had guests
taxicab, was seriously injured. X later filed a criminal action in Business Class they should attend to. They felt
against both drivers. humiliated, embarrassed and vexed, however, when the
stewardess allegedly threatened to offload them if they did
Is it necessary for X to reserve his right to institute a civil not avail of the upgrade. Thus they gave in, but during the
action for damages against both taxicab owners before he transfer of luggage DT suffered pain in his arm and wrist.
can file a civil action for damages against them? Why After arrival in Manila, they demanded an apology from
SUGGESTED ANSWER: FX’s management as well as indemnity payment. When
It depends. If the separate civil action is to recover damages none was forthcoming, they sued the airline for a million
arising from the criminal act, reservation is necessary. If the pesos in damages.
civil action against the taxicab owners is based on culpa Is the airline liable for actual and moral damages? Why or
contractual, or on quasi-delict, there is no need for why not? Explain briefly. (5%)
reservation. SUGGESTED ANSWER:
ALTERNATIVE ANSWER: FX Airlines committed breach of contract when it upgraded
No, such reservation is not necessary. Under Section 1 of DT and MT, over their objections, to First Class because
Rule 111 of the 2000 Rules on Criminal Procedure, what is they had contracted for Business Class passage. However,
“deemed instituted” with the criminal action is only the although there is a breach of contract, DT and MT are
action to recover civil liability arising from the crime or ex entitled to actual damages only for such pecuniary losses
delicto. All the other civil actions under Articles 32, 33, 34 suffered by them as a result of such breach. There seems to
and 2176 of the New Civil Code are no longer “deemed be no showing that they incurred such pecuniary loss. There
instituted”, and may be filed separately and prosecuted is no showing that the pain in DT's arm and wrist resulted
independently even without any reservation in the criminal directly from the carrier's acts complained of. Hence, they
action (Section 3, Rule 111, Ibid). The failure to make a are not entitled to actual damages. Moreover, DT could
reservation in the criminal action is not a waiver of the right have avoided the alleged injury by requesting the airline staff
to file a separate and independent civil action based on to do the luggage transfer as a matter of duty on their part.
these articles of the New Civil Code (Casupanan v. Laroya There is also no basis to award moral damages for such
GR No. 145391, August 26, 2002). breach of contract because the facts of the problem do not
show bad faith or fraud on the part of the airline. (Cathay
Fortuitous Event; Mechanical Defects (2002) Pacific v. Vazquez, 399 SCRA 207 [2003]). However, they
Page 112 of 119

may recover moral damages if the cause of action is based The action may or may not prosper. Moral damages include
on Article 21 of the Civil Code for the humiliation and physical suffering, mental anguish, fright, serious anxiety,
embarrassment they felt when the stewardess threatened to besmirched reputation, wounded feelings, moral shock,
offload them if they did not avail of the upgrade. social humiliation, and similar injury. Although incapable of
ALTERNATIVE ANSWER: pecuniary computation, moral damages may be recovered if
If it can be proved that DT's pain in his arm and wrist they are the proximate result of the defendant's wrongful
occasioned by the transfer of luggage was caused by fault or act or omission. Moral damages predicated upon a breach
negligence on the part of the airline's stewardess, actual of contract of carriage are recoverable only in instances
damages may be recovered. where the carrier is guilty of fraud or bad faith or where the
mishap resulted in the death of a passenger. (Cathay Pacific
The airline may be liable for moral damages pursuant to Art. Airways, Ltd. v. Court of Appeals, G.R. No. 60501, March 5,
2219 (10) if the cause of action is based on Article 21 or an 1993) Where there is no showing that the airline acted
act contrary to morals in view of the humiliation suffered by fraudulently or in bad faith, liability for damages is limited
DT and MT when they were separated from their guests to the natural and probable consequences of the breach of
and were threatened to be offloaded. the contract of carriage which the parties had foreseen or
could have reasonably foreseen. In such a case the liability
Liability; Airline Company; Non-Performance of an does not include moral and exemplary damages.
Obligation (2005)
Dr. and Mrs. Almeda are prominent citizens of the country In the instant case, if the involuntary upgrading of the
and are frequent travelers abroad. In 1996, they booked Almedas' seat accommodation was not attended by fraud or
round-trip business class tickets for the Manila-Hong Kong- bad faith, the award of moral damages has no leg to stand
Manila route of the Pinoy Airlines, where they are holders on.
of Gold Mabalos Class Frequent Flier cards. On their return
flight, Pinoy Airlines upgraded their tickets to first class Thus, spouses would not also be entitled to exemplary
without their consent and, inspite of their protestations to damages. It is a requisite in the grant of exemplary damages
be allowed to remain in the business class so that they could that the act of the offender must be accompanied by bad
be with their friends, they were told that the business class faith or done in wanton, fraudulent or malevolent manner.
was already fully booked, and that they were given priority (Morris v. Court of Appeals, G.R. No. 127957, February 21,
in upgrading because they are elite members/holders of 2001) Moreover, to be entitled thereto, the claimant must
Gold Mabalos Class cards. Since they were embarrassed at first establish his right to moral, temperate, or
the discussions with the flight attendants, they were forced compensatory damages. (Art. 2234, Civil Code) Since the
to take the flight at the first class section apart from their Almedas are not entitled to any of these damages, the award
friends who were in the business class. Upon their return to for exemplary damages has no legal basis. Where the awards
Manila, they demanded a written apology from Pinoy for moral and exemplary damages are eliminated, so must
Airlines. When it went unheeded, the couple sued Pinoy the award for attorney's fees be eliminated. (Orosa v. Court
Airlines for breach of contract claiming moral and of Appeals, G.R. No. 111080, April 5, 2000; Morris v. Court of
exemplary damages, as well as attorney's fees. Appeals, G.R. No. 127957, February 21, 2001) The most that
Will the action prosper? Give reasons. (5%) can be adjudged in their favor for Pinoy Airlines' breach of
ALTERNATIVE ANSWER: contract is an award for nominal damages under Article
Yes, the action will prosper. Article 2201 of the Civil Code 2221 of the Civil Code. (Cathay Pacific Airways v. Sps.
entitles the person to recover damages which may be Daniel & Maria Luisa Vasquez, G.R. No. 150843, March 14,
attributed to non-performance of an obligation. In Alitalia 2003)
Airways v. Court of Appeals (G.R. No. 77011, July 24, 1990),
when an airline issues ticket to a passenger confirmed on a However, if spouses Almeda could prove that there was bad
particular flight, a contract of carriage arises and the faith on the part of Pinoy Airlines when it breached the
passenger expects that he would fly on that day. When the contract of carriage, it could be liable for moral, exemplary
airline deliberately overbooked, it took the risk of having to as well as attorney's fees.
deprive some passengers of their seat in case all of them
would show up. For the indignity and inconvenience of Liability; Employer; Damage caused by Employees (1997)
being refused the confirmed seat, said passenger is entitled a) When would an employer's liability for damage, caused
by an employee in the performance of his assigned
to moral damages.
tasks, be primary and when would it be subsidiary in
In the given problem, spouses Almeda had a booked nature?
roundtrip business class ticket with Pinoy Airlines. When b) Would the defense of due diligence in the selection and
their tickets were upgraded to first class without their supervision of the employee be available to the
consent, Pinoy Airlines breached the contract. As ruled in employer in both instances?
Zulueta v. Pan American (G.R. No. L-28589, January 8, 1973), SUGGESTED ANSWER::
in case of overbooking, airline is in bad faith. Therefore, (a) The employer's liability for damage based on culpa
spouses Almeda are entitled to damages. aquiliana under Art, 2176 and 2180 of the Civil Code is
primary; while that under Art. 103 of the Revised Penal
ALTERNATIVE ANSWER:
Code is subsidiary.
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(b) The defense of diligence in the selection and the vehicle at the time of the accident, be held solidarily
supervision of the employee under Article 2180 of the Civil liable with his driver, John? (5%)
Code is available only to those primarily liable thereunder, SUGGESTED ANSWER:
but not to those subsidiarily liable under Article 103 of the Yes. Art may be held solidary liable with John, if it was
proven that the former could have prevented the
Revised Penal Code (Yumul vs. Juliano, 72 Phil. 94).
misfortune with the use of due diligence. Article 2184 of the
Liability; owner who was in the vehicle (1996) Civil Code states: "In motor mishaps, the owner is solidary
Marcial, who does not know how to drive, has always been liable with his driver, if the former, who was in the vehicle,
driven by Ben, his driver of ten years whom he had chosen could have, by the use of due diligence, prevented the
carefully and has never figured in a vehicular mishap. One misfortune, x x x"
day, Marcial was riding at the back seat of his Mercedes ALTERNATIVE ANSWER:
Benz being driven along EDSA by Ben. Absorbed in 1. It depends. The Supreme Court in Chapman vs,
reading a book, Marcial did not notice that they were Underwood (27 Phil 374), held: "An owner who sits in his
approaching the corner of Quezon Avenue, when the traffic automobile, or other vehicle, and permits his driver to
light had just turned yellow. Ben suddenly stepped on the continue in a violation of law by the performance of
gas to cross the intersection before the traffic light could negligent acts, after he has had a reasonable opportunity to
turn red. But, too late. Midway in the intersection, the traffic observe them and to direct that the driver cease therefrom,
light changed, and a Jeepney full of passengers suddenly becomes himself responsible for such acts, x x x On the
crossed the car's path. A collision between the two vehicles other hand, if the driver, by a sudden act of negligence, and
was inevitable. As a result, several jeepney passengers were without the owner having a reasonable opportunity to
seriously injured. A suit for damages based on culpa prevent the act or its continuance, injures a person or
aquiliana was filed against Marcial and Ben, seeking to hold violates the criminal law, the owner of the automobile,
them jointly and severally liable for such injuries. although present therein at the time the act was committed
May Marcial be held liable? Explain. is not responsible, either civilly or criminally, therefor. The
SUGGESTED ANSWER:
act complained of must be continued in the presence of the
Marcial may not be liable because under Art. 2184, NCC, owner for such a length of time that the owner, by his
the owner who is in the vehicle is not liable with the driver acquiescence, makes his driver's act his own."
if by the exercise of due diligence he could have prevented
the injury. The law does not require the owner to supervise Liability; owner who was in the vehicle (2002)
the driver every minute that he was driving. Only when Does the presence of the owner inside the vehicle causing
through his negligence, the owner has lost an opportunity to damage to a third party affect his liability for his driver’s
prevent the accident would he be liable (Caedo v. Ytt Khe negligence? Explain (2%)
Thai, 26 SCRA 410 citing Chapman v. Underwood and SUGGESTED ANSWER:
Manlangit v. Mauler, 250 SCRA 560). In this case, the fact In motor vehicle mishaps, the owner is made solidarily
that the owner was absorbed in reading a book does not liable with his driver if he (the owner) was in the vehicle and
conclusively show that he lost the opportunity to prevent could have, by the use of due diligence, prevented the
the accident through his negligence. mishap. (Caedo v. Yu Khe Thai, 26 SCRA 410 [1968]).
ALTERNATIVE ANSWER:
Yes, Marcial should be held liable. Art. 2164. NCC makes Moral Damages & Atty Fees (2002)
an owner of a motor vehicle solidarily liable with the driver Ortillo contracts Fabricato, Inc. to supply and install tile
if, being in the vehicle at the time of the mishap, he could materials in a building he is donating to his province. Ortillo
have prevented it by the exercise of due diligence. The pays 50% of the contract price as per agreement. It is also
traffic conditions along EDSA at any time of day or night agreed that the balance would be payable periodically after
are such as to require the observance of utmost care and every 10% performance until completed. After performing
total alertness in view of the large number of vehicles about 93% of the contract, for which it has been paid an
running at great speed. Marcial was negligent in that he additional 40% as per agreement, Fabricato, Inc. did not
rendered himself oblivious to the traffic hazards by reading complete the project due to its sudden cessation of
a book instead of focusing his attention on the road and operations. Instead, Fabricato, Inc. demands payment of the
supervising the manner in which his car was being driven. last 10% of the contract despite its non-completion of the
Thus he failed to prevent his driver from attempting to beat project. Ortillo refuses to pay, invoking the stipulation that
the traffic light at the junction of Quezon Avenue and payment of the last amount 10% shall be upon completion.
EDSA, which Marcial, without being a driver himself could Fabricato, Inc. brings suit for the entire 10%. Plus damages,
have easily perceived as a reckless course of conduct. Ortillo counters with claims for (a) moral damages for
Fabricato, Inc.’s unfounded suit which has damaged his
Liability; owner who was in the vehicle (1998) reputation as a philanthropist and respect businessman in
A Gallant driven by John and owned by Art, and a Corolla his community, and (b) attorney’s fees.
driven by its owner, Gina, collided somewhere along A. Does Ortillo have a legal basis for his claim for moral
Adriatico Street. As a result of the accident, Gina had a damages? (2%)
concussion. Subsequently. Gina brought an action for B. How about his claim for attorney’s fees, having hired a
damages against John and Art. There is no doubt that the lawyer to defend him? (3%)
collision is due to John's negligence. Can Art, who was in SUGGESTED ANSWER:
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A. There is no legal basis to Ortillo’s claim for moral a) When a 7-year old boy injures his playmate while
damages. It does not fall under the coverage of Article 2219 playing with his father's rifle. Explain. (2%)
SUGGESTED ANSWER:
of the New Civil Code.
The parents of the 7-year old boy who caused injury to his
B. Ortillo is entitled to attorney’s fees because Fabricato’s playmate are liable under Article 219 of the Family Code, in
complaint is a case of malicious prosecution or a clearly relation to Article 2180 of the Civil Code since they exercise
parental authority over the person of the boy. (Tamargo v.
unfounded civil action. (Art. 2208 [4] and [11], NCC).
Court of Appeals, G.R. No. 85044, June 3, 1992; Elcano v.
Hill, G.R. No. L-24803, May 26, 1977)
Moral Damages; Non-Recovery Thereof (2006)
Under Article 2219 of the Civil Code, moral damages may
be recovered in the cases specified therein several of which b) When a domestic helper, while haggling for a
are enumerated below. lower price with a fish vendor in the course of buying
Choose the case wherein you cannot recover moral foodstuffs for her employer's family, slaps the fish
damages. Explain. (2.5%) vendor, causing her to fall and sustain injuries.
a) A criminal offense resulting in physical injuries Explain. (2%)
SUGGESTED ANSWER:
b) Quasi-delicts causing physical injuries Employer of the domestic helper who slapped a fish
c) Immorality or dishonesty vendor. Under Article 2180, par. 5 of the Civil Code,
d) Illegal search "employers shall be liable for the damages caused by their
e) Malicious prosecution employees and household helpers acting within the scope of
SUGGESTED ANSWER: Immorality and dishonesty, per se,
their assigned tasks, even though the former are not
are not among those cases enumerated in Article 2219
engaged in any business or industry."
which can be the basis of an action for moral damages. The
law specifically mentions adultery or concubinage, etc. but c) A carpenter in a construction company
not any and every immoral act. accidentally hits the right foot of his co-worker with a
hammer. Explain. (2%)
SUGGESTED ANSWER:
Quasi-Delict (1992) The owner of the construction company. Article 2180,
As the result of a collision between a public service paragraph 4 states that "the owners and managers of an
passenger bus and a cargo truck owned by D, X sustained establishment or enterprise are likewise responsible for
physical injuries and Y died. Both X and Y were passengers damages caused by their employees in the service of the
of the bus. Both drivers were at fault, and so X and Z, the branches in which the latter are employed or on the
only heir and legitimate child of the deceased Y, sued the
occasion of their functions."
owners of both vehicles.
a) May the owner of the bus raise the defense of having d) A 15-year old high school student stabs his
exercised the diligence of a good father of a family? classmate who is his rival for a girl while they were
b) May D raise the same defense? going out of the classroom after their last class.
c) May X claim moral damages from both defendants? Explain. (2%)
d) May Z claim moral damages from both defendants? Give SUGGESTED ANSWER:
reasons for all your answers, The school, teacher and administrator as they exercise
SUGGESTED ANSWER: special parental authority. (Art. 2180, par. 7 in relation to
(a) No. The owner of the bus cannot raise the defense
Art. 218 and Art. 219 of the Family Code)
because the carrier's liability is based on breach of contract
e) What defense, if any, is available to them? (2%)
(b) Yes. D can raise the defense because his liability is SUGGESTED ANSWER:
based on a quasi-delict. The defense that might be available to them is the
observance of a good father of the family to prevent the
(c) Because X suffered physical injuries, X can claim moral damage. (Last par., Art. 2180, Civil Code)
damages against D, but as against the owner of the bus. X
can claim moral damages only if X proves reckless Quasi-Delict; Acts contrary to morals (1996)
negligence of the carrier amounting to fraud. Rosa was leasing an apartment in the city. Because of the
Rent Control Law, her landlord could not increase the
(d) Z can claim moral damages against both defendants rental as much as he wanted to, nor terminate her lease as
because the rules on damages arising from death due to a long as she was paying her rent. In order to force her to
quasi-delict are also applicable to death of a passenger leave the premises, the landlord stopped making repairs on
caused by breach of contract by a common carrier (Arts. the apartment, and caused the water and electricity services
1755. 1756, 1764, 2206 and 2219. Civil Code). to be disconnected. The difficulty of living without
electricity and running water resulted in Rosa's suffering a
Quasi-Delict (2005) nervous breakdown. She sued the landlord for actual and
Under the law on quasi-delict, aside from the persons who moral damages.
caused injury to persons, who else are liable under the Will the action prosper? Explain.
following circumstances: SUGGESTED ANSWER:
Page 115 of 119

Yes, based on quasi-delict under the human relations for quasi-delict may nonetheless prosper. The Supreme
provisions of the New Civil Code (Articles 19, 20 and 21) Court has consistently ruled that the act that breaks the
because the act committed by the lessor is contrary to contract may also be a tort. There is a fiduciary relationship
morals. Moral damages are recoverable under Article 2219 between the bank and the depositor, imposing utmost
(10) in relation to Article 21. Although the action is based diligence in managing the accounts of the depositor. The
on quasi-delict and not on contract, actual damages may be dishonor of the check adversely affected the credit standing
recovered if the lessee is able to prove the losses and of Tony, hence, he is entitled to damages (Singson v. BPI,
expenses she suffered. G.R. No. L-24932, June 27, 1968; American Express
ALTERNATIVE ANSWERS: International, Inc. v. IAC, G.R. No. 72383, November 9, 1988;
a) Yes, based on breach of contract. The lessor has the Consolidated Bank and Trust v. CA, G.R. No. L-70766
obligation to undertake repairs to make the apartment November 9,1998).
habitable and to maintain the lessee in the peaceful and
adequate enjoyment of the lease for the entire duration of Vicarious Liability (1991)
the contract (Article 1654. NCC). Since there was willful Romano was bumped by a minivan owned by the Solomon
breach of contract by the lessor, the lessee is entitled to School of Practical Arts (SSPA). The minivan was driven by
moral damages under Article 3220, NCC. She is also Peter, a student assistant whose assignment was to clean the
entitled to actual damages, e. g. loss of income, medical school passageways daily one hour before and one hour
after regular classes, in exchange for free tuition. Peter was
expenses, etc., which she can prove at the trial.
able to drive the school vehicle after persuading the regular
b) Yes, based on contract and/or on tort. The lessor driver, Paul, to turn over the wheel to him (Peter). Romano
willfully breached his obligations under Article 1654. NCC, suffered serious physical injuries. The accident happened at
hence, he is liable for breach of contract. For such breach, night when only one headlight of the vehicle was
the lessee may recover moral damages under Art. 2220 of functioning and Peter only had a student driver's permit.
the NCC, and actual damages that she may have suffered on As a consequence, Peter was convicted in the criminal case.
account thereof. And since the conduct of the lessor was Thereafter, Romano sued for damages against Peter and
contrary to morals, he may also be held liable for quasi- SSPA.
delict. The lessee may recover moral damages under Article a) Will the action for damages against Peter and SSPA
2219 (10) in relation to Article 21, and all actual damages prosper?
which she may have suffered by reason of such conduct b) Will your answer be the same if, Paul, the regular
driver, was impleaded as party defendant for allowing
under Articles 9, 20 and 21.
Peter to drive the minivan without a regular driver's
c) Yes, the action should prosper for both actual and moral license.
damages. In fact, even exemplary damages and attorney's c) Is the exercise of due diligence in the selection and
fees can be claimed by Rosa, on the authority of Magbanua supervision of Peter and Paul a material issue to be
vs. IAC (137 SCRA 328), considering that, as given, the resolved in this case?
lessor's willful and illegal act of disconnecting the water and SUGGESTED ANSWER:
electric services resulted in Rosa's suffering a nervous A. Yes. It will prosper (Art, 2180) because at the time he
breakdown. Art. 20 NCC and Art, 21, NCC authorize the drove the vehicle, he was not performing his assigned tasks
as provided for by Art. 2180. With respect to SSPA, it is not
award of damages for such willful and illegal conduct.
liable for the acts of Peter because the latter was not an
Quasi-Delict; Mismanagement of Depositor’s Account employee as held by Supreme Court in Filamer Christian
Institute vs. CA. (190 SCRA 485). Peter belongs to a special
(2006)
category of students who render service to the school in
Tony bought a Ford Expedition from a car dealer in
Muntinlupa City. As payment, Tony issued a check drawn exchange for free tuition fees.
against his current account with Premium Bank. Since he
has a good reputation, the car dealer allowed him to B. I would maintain the same answer because the incident
immediately drive home the vehicle merely on his assurance did not occur while the employee was in the performance of
that his check is sufficiently funded. When the car dealer his duty as such employee. The incident occurred at night
deposited the check, it was dishonored on the ground of time, and in any case, there was no indication in the
"Account Closed." After an investigation, it was found that problem that he was performing his duties as a driver.
an employee of the bank misplaced Tony's account ledger.
Thus, the bank erroneously assumed that his account no C. In the case of Peter, if he were to be considered as
longer exists. Later it turned out that Tony's account has employee, the exercise of due diligence in the selection and
more than sufficient funds to cover the check. The dealer supervision of peter would not be a material issue since the
however, immediately filed an action for recovery of conviction of Peter would result in a subsidiary liability
possession of the vehicle against Tony for which he was where the defense would not be available by the employer.
terribly humiliated and embarrassed. Does Tony have a
cause of action against Premium Bank? Explain. (5%) In the case of Paul, since the basis of subsidiary liability is
SUGGESTED ANSWER:
the pater familias rule under Art. 2180, the defense of
Yes, Tony may file an action against Premium Bank for selection and supervision of the employee would be a valid
damages under Art. 2176. Even if there exists a contractual defense.
relationship between Tony and Premium Bank, an action ALTERNATIVE ANSWER:
Page 116 of 119

C. In the case of Peter, if he were to be considered an The doctrine of VICARIOUS LIABILITY is that which
employee, the exercise of due diligence in the selection and renders a person liable for the negligence of others for
supervision of Peter would not be a material issue since the whose acts or omission the law makes him responsible on
conviction of Peter would result in a subsidiary liability the theory that they are under his control and supervision.
where the defense would not be available by the employer.
Vicarious Liability (2004)
In the case of Paul, since he was in the performance of his OJ was employed as professional driver of MM Transit bus
work at the time the incident occurred, the school may be owned by Mr. BT. In the course of his work, OJ hit a
held subsidiarily liable not because of the conviction of pedestrian who was seriously injured and later died in the
Peter, but because of the negligence of Paul under Art. hospital as a result of the accident. The victim’s heirs sued
2180. the driver and the owner of the bus for damages.
Is there a presumption in this case that Mr. BT, the owner,
Vicarious Liability (2001) had been negligent? If so, is the presumption absolute or
After working overtime up to midnight, Alberto, an not? Explain. (5%)
executive of an insurance company drove a company SUGGESTED ANSWER:
vehicle to a favorite Videoke bar where he had some drinks Yes, there is a presumption of negligence on the part of the
and sang some songs with friends to "unwind". At 2:00 employer. However, such presumption is rebuttable. The
a.m., he drove home, but in doing so, he bumped a tricycle, liability of the employer shall cease when they prove that
resulting in the death of its driver. May the insurance they observed the diligence of a good father of a family to
company be held liable for the negligent act of Alberto? prevent damage (Article 2180, Civil Code).
Why?
SUGGESTED ANSWER: When the employee causes damage due to his own
The insurance company is not liable because when the negligence while performing his own duties, there arises the
accident occurred, Alberto was not acting within the juris tantum presumption that the employer is negligent,
assigned tasks of his employment. rebuttable only by proof of observance of the diligence of a
good father of a family (Metro Manila Transit v. CA, 223
It is true that under Art. 2180 (par. 5), employers are liable SCRA 521 [1993]; Delsan Transport Lines v, C&tA
for damages caused by their employees who were acting Construction, 412 SCRA 524 2003).
within the scope of their assigned tasks. However, the mere
fact that Alberto was using a service vehicle of the employer Likewise, if the driver is charged and convicted in a criminal
at the time of the injurious accident does not necessarily case for criminal negligence, BT is subsidiarily liable for the
mean that he was operating the vehicle within the scope of damages arising from the criminal act.
his employment. In Castilex Industrial Corp. v. Vasquez Jr
(321 SCRA393 [1999]). the Supreme Court held that Vicarious Liability (2006)
notwithstanding the fact that the employee did some Arturo sold his Pajero to Benjamin for P1 Million. Ben-
overtime work for the company, the former was, jamin took the vehicle but did not register the sale with the
nevertheless, engaged in his own affairs or carrying out a Land Transportation Office. He allowed his son Carlos, a
personal purpose when he went to a restaurant at 2:00 a.m. minor who did not have a driver's license, to drive the car to
after coming out from work. The time of the accident (also buy pan de sal in a bakery. On the way, Carlos driving in a
2:00 a. m.) was outside normal working hours. reckless manner, sideswiped Dennis, then riding a bicycle.
ALTERNATIVE ANSWER: As a result, he suffered serious physical injuries. Dennis
The insurance company is liable if Alberto was negligent in filed a criminal complaint against Carlos for reckless
the operation of the car and the car was assigned to him for imprudence resulting in serious physical injuries.
the benefit of the insurance company, and even though he 1. Can Dennis file an independent civil action against Carlos
was not within the scope of his assigned tasks when the and his father Benjamin for damages based on quasi-delict?
accident happened. In one case decided by the Supreme Explain. (2,5%)
Court, where an executive of a pharmaceutical company was SUGGESTED ANSWER: Yes, Dennis can file an independent
given the use of a company car, and after office hours, the civil action against Carlos and his father for damages based
executive made personal use of the car and met an accident, on quasi-delict there being an act or omission causing
the employer was also made liable under Art. 2180 of the damage to another without contractual obligation. Under
Civil Code for the injury caused by the negligent operation Section 1 of Rule 111 of the 2000 Rules on Criminal
of the car by the executive, on the ground that the car Procedure, what is deemed instituted with the criminal
which caused the injury was assigned to the executive by the action is only the action to recover civil liability arising from
employer for the prestige of the company. The insurance the act or omission punished by law. An action based on
company was held liable even though the employee was not quasi-delict is no longer deemed instituted and may be filed
performing within the scope of his assigned tasks when the separately [Section 3, Rule 111, Rules of Criminal
Procedure].
accident happened [Valenzuela v. CA, 253 SCRA 3O3 (1996)].
2. Assuming Dennis' action is tenable, can Benjamin raise
Vicarious Liability (2002)
the defense that he is not liable because the vehicle is not
Explain the concept of vicarious liability in quasi-delicts.
registered in his name? Explain. (2.5%)
(1%)
SUGGESTED ANSWER:
Page 117 of 119
SUGGESTED ANSWER: No, Benjamin cannot raise the called “oncomouse” in Manila? What will be your advice to
defense that the vehicle is not registered in his name. His him? (5%)
liability, vicarious in character, is based on Article 2180 SUGGESTED ANSWER:
because he is the father of a minor who caused damage due (1) The reciprocity principle in private international law may
to negligence. While the suit will prosper against the be applied in our jurisdiction. Section 3 of R.A. 8293, the
registered owner, it is the actual owner of the private vehicle Intellectual Property Code, provides for reciprocity, as
who is ultimately liable (See Duavit v. CA, G.R. No. L-29759, follows: "Any person who is a national, or who is domiciled,
May 18, 1989). The purpose of car registration is to reduce or has a real and effective industrial establishment in a
difficulty in identifying the party liable in case of accidents country which is a party to any convention, treaty or
(Villanueva v. Domingo, G.R. No. 144274, September 14, agreement relating to intellectual property rights or the
2004). repression of
unfair competition, to which the Philippines is also a party,
Vicarious Liability; Public Utility (2000) or extends reciprocal rights to nationals of the Philippines
Silvestre leased a car from Avis-Rent-A-Car Co. at the by law, shall be entitled to benefits to the extent necessary
Mactan International Airport. No sooner had he driven the to give effect to any provision of such convention, treaty or
car outside the airport when, due to his negligence, he reciprocal law, in addition to the rights to which any owner
bumped an FX taxi owned and driven by Victor, causing of an intellectual property right is otherwise entitled by this
damage to the latter in the amount of P100,000.00. Victor Act. (n)" To illustrate: the Philippines may refrain from
filed an action for damages against both Silvestre and Avis, imposing a requirement of local incorporation or
based on quasi-delict. Avis filed a motion to dismiss the establishment of a local domicile for the protection of
complaint against it on the ground of failure to state a cause industrial property rights of foreign nationals (citizens of
of action. Resolve the motion. (3%) Canada, Switzerland, U.S.) if the countries of said foreign
SUGGESTED ANSWER: nationals refrain from imposing said requirement on
The motion to dismiss should be granted, AVIS is not the Filipino citizens.
employer of Silvestre; hence, there is no right of action ALTERNATIVE ANSWER:
against AVIS under Article 2180 of the Civil Code. Not Reciprocity principle cannot be applied in our jurisdiction
being the employer, AVIS has no duty to supervise because the Philippines is a party to the TRIPS agreement
Silvestre. Neither has AVIS the duty to observe due and the WTO. The principle involved is the most-favored
diligence in the selection of its customers. Besides, it was nation clause which is the principle of non-discrimination.
given in the problem that the cause of the accident was the The protection afforded to intellectual property protection
negligence of Silvestre. in the Philippines also applies to other members of the
ALTERNATIVE ANSWER: WTO. Thus, it is not really reciprocity principle in private
The motion should be denied. Under the Public Service international law that applies, but the most-favored nation
Law, the registered owner of a public utility is liable for the clause under public international law.
damages suffered by third persons through the use of such
public utility. Hence, the cause of action is based in law, the (2) There is no legal reason why "oncomouse" cannot be
Public Service Law. protected under the law. Among those excluded from
patent protection are "plant varieties or animal breeds, or
essentially biological process for the production of plants
INTELLECTUAL PROPERTY and animals" (Section 22.4 Intellectual Property Code, R.A.
No. 8293). The "oncomouse" in the problem is not an
Intellectual Creation (2004) essentially biological process for the production of animals.
Dr. ALX is a scientist honored for work related to the It is a real invention because its body cells do not naturally
human genome project. Among his pioneering efforts occur in nature but are the product of man's ingenuity,
concern stem cell research for the cure of Alzheimer’s
intellect and industry.
disease. Under corporate sponsorship, he helped develop a
microbe that ate and digested oil spills in the sea. The breeding of oncomouse has novelty, inventive step and
industrial application. These are the three requisites of
Now he leads a college team for cancer research in MSS
patentability. (Sec. 29, IPC)
State. The team has experimented on a mouse whose body
cells replicate and bear cancerous tumor. Called There are no ethical reasons why Dr. ADX and his college
“oncomouse”, it is a life-form useful for medical research team cannot be given exclusive ownership over their
and it is a novel creation. Its body cells do not naturally
invention. The use of such genetically modified mouse,
occur in nature but are the product of man’s intellect, useful for cancer research, outweighs considerations for
industry and ingenuity. However, there is a doubt whether
animal rights.
local property laws and ethics would allow rights of
exclusive ownership on any life-form. Dr. ALX needs your There are no legal and ethical reasons that would frustrate
advice: (1) whether the reciprocity principle in private Dr. ALX's claim of exclusive ownership over "oncomouse".
international law could be applied in our jurisdiction; and (2) Animals are property capable of being appropriated and
whether there are legal and ethical reasons that could owned'. In fact, one can own pet dogs or cats, or any other
frustrate his claim of exclusive ownership over the life-form animal. If wild animals are capable of being owned, with
more reason animals technologically enhanced or corrupted
Page 118 of 119

CIVIL LAW Answers to the BAR as Arranged by Topics
(Year 1990-2006)
by man's invention or industry are susceptible to exclusive
ownership by the inventor.
ALTERNATIVE ANSWER:
The oncomouse is a higher life form
which does not fall within the definition of
the term "invention". Neither may it fall
within the ambit of the term
"manufacture" which usually implies a non-
living mechanistic product.
The oncomouse is better regarded as a
"discovery" which is the common patrimony
of man.
ALTERNATIVE ANSWER:
The "oncomouse" is a non-patentable
invention. Hence, cannot be owned
exclusively by its inventor. It is a method for
the treatment of the human or animal body by
surgery or therapy and diagnostic methods
practiced on said bodies are not patentable
under Sec. 22 of the IPC.
Page 119 of 119

Criminal Law Bar Examination Q & A (1994-2006) 1 of 86
ANSWERS TO BAR
EXAMINATION
QUESTIONS IN
CRIMINAL LAW
ARRANGED BY TOPIC
(1994 – 2006)
Version 1973 – 2003
Edited and Arranged by:
Janette Laggui-Icao and
Alex Andrew P. Icao
Updated by:
Dondee
ReTake BarOps 2007
From the ANSWERS TO BAR EXAMINATION QUESTIONS IN

CRIMINAL LAW by the UP LAW COMPLEX and PHILIPPINE
ASSOCIATION OF LAW SCHOOLS
July 3, 2007
Version 1994-2006 Updated by Dondee

FORWARD
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freely copied and distributed. It is primarily intended for all those who
desire to have a deeper understanding of the issues touched by the Philippine
Bar Examinations and its trend. It is specially intended for law students from
the provinces who, very often, are recipients of deliberately distorted notes
from other unscrupulous law schools and students. Share to others this work
and you will be richly rewarded by God in heaven. It is also very good karma.
We would like to seek the indulgence of the reader for some Bar Questions
which are improperly classified under a topic and for some topics which are
improperly or ignorantly phrased, for the authors are just Bar Reviewees who
have prepared this work while reviewing for the Bar Exams under time
constraints and within their limited knowledge of the law. We would like to seek
the reader’s indulgence for a lot of typographical errors in this work.
The Authors
July 26, 2005
Updated by;
July 3, 2007

Table of Contents
GENERAL PRINCIPLES 10
General Principles; Schools of thought in Criminal Law (1996) 10
General Principles; Territoriality (1994) 10
General Principles; Territoriality; Jurisdiction over Vessel (2000) 10
Use of Aliases; When Allowed (2006) 10
FELONIES 10
Conspiracy (1997) 10
Conspiracy; Avoidance of Greater Evil (2004) 11
Conspiracy; Co-Conspirator (1998) 11
Conspiracy; Common Felonious Purpose (1994) 11
Conspiracy; Complex Crime with Rape (1996) 11
Conspiracy; Flight to Evade Apprehension (2003) 12
Conspiracy; Flight to Evade Apprehension (2003) 12
Conspiracy; Implied Conspiracy (1998) 13
Conspiracy; Implied Conspiracy; Effects (2003) 13
Criminal Liability: Destructive Arson (2000) 13
Criminal Liability: Felonious Act of Scaring (1996) 13
Criminal Liability: Felonious Act; Proximate Cause (1996) 13
Criminal Liability: Impossible Crimes (2000) 14
Criminal Liability; Felonious Act of Scaring (2001) 14
Criminal Liability; Felonious Act of Scaring (2005) 14
Criminal Liability; Felonious Act; Immediate Cause (2003) 14
Criminal Liability; Felonious Act; Proximate Cause (1994) 15
Criminal Liability; Impossible Crime (2004) 16
Criminal Liability; Impossible Crimes (1994) 16
Criminal Liability; Impossible Crimes; Kidnapping (2000) 17
Mala in Se vs. Mala Prohibita (1997) 17
Mala Prohibita; Actual Injury Required (2000) 18
Malum in Se vs. Malum Prohibitum (2005) 18
Motive vs. Intent (1996) 18
Motive; Proof thereof; Not Essential; Conviction (2006) 19
JUSTIFYING & EXEMPTING CIRCUMSTANCES 19

Exempting Circumstances; Coverage (2000) 19
Exempting Circumstances; Minority (1998) 19
Exempting; Minority; 11 yrs Old; Absence of Discernment (2000) 19
Justifying vs. Exempting Circumstances (2004) 20
Justifying; Defense of Honor; Requisites (2002) 20
Justifying; Defense of Stranger (2002) 20
Justifying; Fulfillment of Duty; Requisites (2000) 20
Justifying; SD; Defense of Honor; Requisites (1998) 21
Justifying; Defense of Honor; Elements (2000) 21
Justifying; SD; Defense of Property; Requisites (1996) 21
Justifying; SD; Defense of Property; Requisites (2003) 21
Qualifying; Elements of a Crime (2003) 22
MITIGATING CIRCUMSTANCES 22
Mitigating; Non-Intoxication (2000) 22
Mitigating; Plea of Guilty (1999) 22
Mitigating; Plea of Guilty; Requisites (1999) 22
Mitigating; Plea of Guilty; Voluntary Surrender (1997) 22
Mitigating; Voluntary Surrender (1996) 23
Mitigating; Voluntary Surrender; Elements (1999) 23
AGGRAVATING CIRCUMSTANCES 23
Aggravating Circumstances (1996) 23
Aggravating Circumstances; Generis vs. Qualifying (1999) 24
Aggravating Circumstances; Kinds & Penalties (1999) 24
Aggravating; Cruelty; Relationship (1994) 24
Aggravating; Must be alleged in the information (2000) 24
Aggravating; Nighttime; Band (1994) 24
Aggravating; Recidivism (2001) 24
Aggravating; Recidivism vs. Quasi-Recidivism (1998) 25
Aggravating; Treachery & Unlawful Entry (1997) 25
ALTERNATIVE CIRCUMSTANCES 25
Alternative Circumstances; Intoxication (2002) 25
PERSONS CRIMINALLY LIABLE FOR FELONIES 25

Anti-Fencing Law; Fencing (1996) 25
Anti-Fencing Law; Fencing vs. Theft or Robbery (1995) 26
Anti-Fencing Law; Fencing; Elements (1995) 26
Criminal Liability; Accessories & Fence (1998) 26
Criminal Liability; Non-Exemption as Accessory (2004) 26
Criminal Liability; Principal by Direct Participation; Co-Principal by Indispensable Cooperation (2000) 27
Criminal Liability; Principal by Inducement (2002) 27
Criminal Liability; Principal; Inducement & Participation (1994) 27
Destructive Arson (1994) 27
PENALTIES 27
Complex Crime vs. Compound Crime (2004) 27
Complex Crime vs. Special Complex Crime vs. Delito Continuado (2005) 28
Complex Crime; Aberratio ictus vs. error in personae (1994) 28
Complex Crime; Aberratio Ictus, Error In Personae & Praeter Intentionem (1999) 28
Complex Crime; Aberratio Ictus; Attempted Murder with Homicide (2000) 28
Complex Crime; Doctrine of Aberratio Ictus; Not Applicable (1996) 29
Complex Crimes; Coup d’etat & rebellion & sedition (2003) 29
Complex Crimes; Determination of the Crime (1999) 29
Complex Crimes; Nature & Penalty Involved (1999) 30
Complex Crimes; Ordinary Complex Crime vs. Special Complex Crime (2003) 30
Continuing Offense vs. Delito Continuado (1994) 30
Death Penalty (2004) 30
Death Penalty; Qualified Rape; Requisites (2004) 31
Habitual Delinquency & Recidivism (2001) 31
Indeterminate Sentence Law (1994) 31
Indeterminate Sentence Law; Exceptions (1999) 32
Indeterminate Sentence Law; Exceptions (2003) 33
Penalties: Fine or Imprisonment vs. Subsidiary Imprisonment (2005) 33
Penalties: Pecuniary Penalties vs. Pecuniary Liabilities (2005) 33
Penalties; Complex Crime of Estafa (1997) 33
Penalties; Factors to Consider (1991) 33
Penalties; Homicide w/ Modifying Circumstance (1995) 34
Penalties; Mitigating Circumstances w/out Aggravating Circumstance (1997) 34
Penalties; Parricide w/ Mitigating Circumstance (1997) 34
Penalties; Preventive Imprisonment (1994) 34
Penalties; Reclusion Perpetua (RA) No. 7959 (2005) 35
Penalties; Reclusion Perpetua vs. Life Imprisonment (1994) 35
Penalties; Reclusion Perpetua vs. Life Imprisonment (2001) 35
Probation Law: Proper Period (2005) 35
Probation Law; Barred by Appeal (1994) 35
Probation Law; Barred by Appeal (2001) 36
Probation Law; Maximum Term vs. Total Term (1997) 36
Probation Law; Order Denying Probation; Not Appealable (2002) 36
Probation Law; Period Covered (2004) 36
Probation Law; Right; Barred by Appeal (1995) 36
Probation Law; Right; Barred by Appeal (2003) 37
Suspension of Sentence; Adults/Minors (2006) 37
Suspension of Sentence; Minors (2003) 37
Suspension of Sentence; Youthful Offender (1995) 38
EXTINCTION OF CRIMINAL LIABILITY 38

Amnesty vs. PD 1160 (2006) 38
Amnesty; Crimes Covered (2006) 38
Extinction; Criminal & Civil Liabilities; Effects; Death of accused pending appeal (2004) 38
Extinction; Criminal & Civil Liabilities; Effects; Death of Offended Party (2000) 38
Pardon vs. Amnesty (2006) 39
Pardon; Effect; Civil Interdiction (2004) 39
Pardon; Effect; Reinstatement (1994) 39
Prescription of Crimes; Bigamy (1995) 40
Prescription of Crimes; Commencement (2000) 40
Prescription of Crimes; Commencement (2004) 40
Prescription of Crimes; Concubinage (2001) 40
Prescription of Crimes; False Testimony (1994) 41
Prescription of Crimes; Simple Slander (1997) 41
CIVIL LIABILITY 41
Civil liability; Effect of Acquittal (2000) 41
Civil liability; Effect of Acquittal (2000) 41
Civil Liability; Subsidiary; Employers (1998) 42
Civil Liability; When Mandatory; Criminal Liability (2005) 42
Damages; Homicide; Temperate Damages (2006) 42
CRIMES AGAINST NATIONAL SECURITY AND THE LAW OF NATIONS 42

Piracy in the High Seas & Qualified Piracy (2006) 42
CRIMES AGAINST THE FUNDAMENTAL LAW OF THE STATE 43

Violation of Domicile vs. Trespass to Dwelling (2002) 43
CRIMES AGAINST PUBLIC ORDER 43

Art 134; Rebellion; Politically Motivated; Committed by NPA Members (1998) 43
Art 134-A: Coup d’ etat & Rape; Frustrated (2005) 44
Art 134-A; Coup d’etat (2002) 44
Art 134-A; Coup d’etat; New Firearms Law (1998) 44
Art 136; Conspiracy to Commit Rebellion (1994) 44
Art 148; Direct Assault vs. Resistance & Disobedience (2001) 44
Art 148; Direct Assault; Teachers & Professors (2002) 45
Art 148; Persons in Authority/Agents of Persons in Authority (2000) 45
Art 156; Delivery of Prisoners from Jail (2002) 45
Art 157; Evasion of Service of Sentence (1998) 46
Art. 134; Rebellion vs. Coup d'etat (2004) 46
Complex Crime; Direct Assault with murder (2000) 46
CRIMES AGAINST PUBLIC INTEREST 47

False Notes; Illegal Possession (1999) 47
False Testimony (1994) 47
Falsification; Presumption of Falsification (1999) 47
Forgery & Falsification (1999) 47
Grave Scandal (1996) 48
Perjury (1996) 48
Perjury (1997) 48
Perjury (2005) 49
CRIMES COMMITTED BY PUBLIC OFFICERS 49

Bribery & Corruption of Public Official (2001) 49
Direct Bribery: Infidelity in the Custody of Documents (2005) 49
Jurisdiction; Impeachable Public Officers (2006) 50
Malversation (1994) 50
Malversation vs. Estafa (1999) 51
Malversation; Properties; Custodia Legis (2001) 52
Malversation; Technical Malversation (1996) 52
Public Officers; definition (1999) 52
Public Officers; Infidelity in Custody of Prisoners (1996) 52
Public Officers; Infidelity in Custody of Prisoners (1997) 53
CRIMES AGAINST PERSONS 53

Complex Crime; Homicide w/ Assault-Authority (1995) 53
Complex Crime; Parricide w/ unintentional abortion (1994) 53
Criminal Liabilities; Rape; Homicide & Theft (1998 No) 53
Criminal Liability; Tumultous Affray (1997) 54
Criminal Liability; Tumultuous Affray (2003) 54
Death under Exceptional Circumstances (2001) 54
Death under Exceptional Circumstances (2005) 54
Homicide; Fraustrated; Physical Injuries (1994) 55
Infanticide (2006) 55
Murder & Sec. 25, R.A. No. 9165 (2005) 55
Murder (1999) 55
Murder; Definition & Elements (1999) 56
Murder; Evident Premeditation (1996) 56
Murder; Homicide; Infanticide; Parricide (1999) 56
Murder; Reckles Imprudence (2001) 56
Murder; Treachery (1995) 57
Murder; Use of Illegal Firearms (2004) 57
Parricide (1999) 57
Parricide (1999) 57
Parricide; Multiple Parricide; Homicide (1997) 57
Rape (1995) 58
Rape; Absence of Force & Intimidation (1995) 58
Rape; Anti-Rape Law of 1997 (2002) 58
Rape; Anti-Rape Law of 1997 (2002) 58
Rape; Consented Abduction (2002) 59
Rape; Effect; Affidavit of Desistance (1993) 59
Rape; Male Victim (2002) 59
Rape; Multiple Rapes; Forcible Abduction (2000) 59
Rape; Proper Party (1993) 59
Rape; Statutory Rape; Mental Retardate Victim (1996) 60
CRIMES AGAINST PERSONAL LIBERTY AND SECURITY 60

Arbitrary Detention; Elements; Grounds (2006) 60
Grave Coercion (1998) 60
Grave Coercion vs. Maltreatment of Prisoner (1999) 61
Illegal Detention vs. Grave Coercion (1999) 61
Kidnapping (2002) 61
Kidnapping (2006) 61
Kidnapping w/ Homicide (2005) 62
Kidnapping; Effects; Voluntary Release (2004) 62
Kidnapping; Illegal Detention; Minority (2006) 62
Kidnapping; Proposal to Kidnap (1996) 63
Kidnapping; Serious Illegal Detention (1997) 63
Trespass to Dwelling; Private Persons (2006) 63
Tresspass to Dwelling; Rule of Absorption (1994) 64
Unjust Vexation vs Acts of Lasciviousness (1994) 64
CRIMES AGAINST PROPERTY 64

Arson; Destructive Arson (1994) 64
Arson; Destructive Arson (2000) 64
Arson; New Arson Law (2004) 64
BP 22; Memorandum Check (1994) 65
BP 22; Memorandum Check (1995) 65
BP 22; Presumption of Knowledge (2002) 65
Estafa & Trust Receipt Law (1995) 65
Estafa (1999) 66
Estafa vs. BP 22 (1996) 66
Estafa vs. BP 22 (2003) 66
Estafa vs. Money Market Placement (1996) 67
Estafa vs. Theft (2005) 67
Estafa; Elements (2005) 67
Estafa; Falsification of Commercial Document (2000) 67
Estafa; Falsification of Commercial Documents (1997) 68
Estafa; Swindling (1998) 68
Robbery (1996) 68
Robbery under RPC (2000) 68
Robbery under RPC (2001) 68
Robbery vs. Highway Robbery (2000) 69
Robbery w/ force upon things (2000) 69
Robbery w/ Homicide - R.A. No. 7659 (2005) 69
Robbery w/ Homicide (1996) 70
Robbery w/ Homicide; Special Complex Crime (1995) 71
Robbery w/ Intimidation vs. Theft (2002) 71
Robbery w/ Rape (1999) 71
Robbery w/ Rape; Conspiracy (2004) 71
Robbery; Homicide; Arson (1995) 72
Robbery; Rape (1997) 72
Theft (1998) 72
Theft (2001) 73
Theft; Qualified Theft (2002) 73
Theft; Stages of Execution (1998) 73
Theft; Stages of Execution (2000) 74
Usurpation of Real Rights (1996) 74
CRIMES AGAINST CHASTITY 74

Acts of Lasciviousness vs. Unjust Vexation (1994) 74
Adultery (2002) 74
Concubinage (1994) 74
Concubinage (2002) 75
Unjust Vexation vs. Act of Lasciviousness (2006) 75
CRIMES AGAINST THE CIVIL STATUS OF PERSONS 75

Bigamy (1994) 75
Bigamy (1996) 75
Bigamy (2004) 75
Bigamy; Prescriptive Period (1995) 76
Simulation of Birth & Child Trafficking (2002) 76
CRIMES AGAINST HONOR 76

Libel (2002) 76
Libel (2003) 76
Libel (2005) 77
Slander (1988) 77
Slander (1996) 77
Slander by Deed vs. Maltreatment (1994 ) 77
Slander vs. Criminal Conversation (2004) 77
MISCELLANEOUS 78
Corpus Delicti (2001) 78
Corpus Delicti; Definition & Elements (2000) 78
Entrapment vs. Instigation (1995) 78
Entrapment vs. Instigation (2003) 78
SPECIAL PENAL LAWS 79

Anti-Carnapping Act; Carnapping w/ Homicide (1998) 79
Anti-Graft & Corrupt Practices - RA 3019 (1997) 79
Anti-Hazing law – RA 8049 (2002) 80
CHILD ABUSE; RA 7610 (2004) 80
Child Abuse; RA 7610 (2006) 80
Dangerous Drug Act: Plea-Bargaining (2005) 80
Dangerous Drugs Act (1998) 80
Dangerous Drugs Act (2006) 81
Dangerous Drugs Act (6425); Marked Money (2000) 81
Dangerous Drugs Act (6425); Plea Bargaining (1998) 81
Dangerous Drugs Act; Consummation of Sale (1996) 82
Dangerous Drugs Act; Criminal Intent to Posses (2002) 82
Dangerous Drugs Act; Plea-Bargaining (2004) 82
Highway Robbery (2001) 82
Illegal Fishing - PD 704 (1996) 82
Illegal Possession of Firearms – RA 8294 (1998) 83
Illegal Possession of Firearms & Ammunitions (2000) 83
PD 46 & RA 6713 & Indirect Bribery (2006) 83
PD 46 (1994) 83
PD 46 (1997) 84
Plunder under RA 7080; Prescriptive Period (1993) ........................................................................................84
R.A. No. 9160 Anti-Money Laundering Act (2005) ..........................................................................................84
Ra 3019; Preventive Suspension (1999)......................................................................................................84
RA 3019; Preventive Suspension (2000) .....................................................................................................84
RA 3019; Public Officer (2003) .................................................................................................................85
Ra 6713; Coverage (2001)......................................................................................................................85
RA 7438-Economic Sabotage; Illegal Recruitment (2004) .................................................................................85
RA 7610 – Child Exploitation (2006)...........................................................................................................86

GENERAL PRINCIPLES Yes, the Motion to Quash the Information should
be granted. The Philippine court has no jurisdiction over
General Principles; Schools of thought in Criminal Law the crime committed since it was committed on the high
(1996) seas or outside of Philippine territory and on board
a vessel not registered or licensed in the Philippines
1} What are the different schools of thought or theories
(US vs. Fowler, 1 Phil 614)
in Criminal Law and describe each briefly.
2) To what theory does our Revised Penal Code belong? It is the registration of the vessel in accordance with the
SUGGESTED ANSWER:
1. There are two schools of thought in Criminal Law, laws of the Philippines, not the citizenship of her owner,
and these are (a) the CLASSICAL THEORY, which which makes it a Philippine ship. The vessel being
simply means that the basis of criminal liabilities is registered in Panama, the laws of Panama govern while it
human free will, and the purpose of the penalty is is in the high seas.
retribution which must be proportional to the
gravity of the offense; and (b) the POSITIVIST Use of Aliases; When Allowed (2006)
THEORY, which considers man as a social being When can a Filipino citizen residing in this country use
and his acts are attributable not just to his will but to an alias legally? Give 3 instances. (2.5%)
SUGGESTED ANSWER:
other forces of society. As such, punishment is not the
1. Pseudonym for literary purposes.
solution, as he is not entirely to be blamed; law and
2. Use of aliases in cinema and
jurisprudence should not be the yardstick in the
television entertainment.
imposition of sanction, instead the underlying
3. In athletics and sports activities (RA. 6085).
reasons would be inquired into.
4. Under the witness protection program a person may
2. We follow the classical school of thought adopt a different identity (RA. 6981).
although some provisions of eminently 5. When he has been baptized or customarily
known by such alias.
positivist in tendencies, like punishment of
6. When authorized by a competent court (CA.
impossible crime, Juvenile circumstances, are
No. 142, as amended by RA. 6085).
incorporated in our Code. 7. When properly indicated in a Certificate
General Principles; Territoriality (1994) of Candidacy (Omnibus Election Code).
Abe, married to Liza, contracted another marriage
with Connie in Singapore. Thereafter, Abe and FELONIES
Connie returned to the Philippines and lived as husband
and wife in the hometown of Abe in Calamba, Laguna. Conspiracy (1997)
1) Can Abe be prosecuted for bigamy? A had a grudge against F. Deciding to kill F, A and his
SUGGESTED ANSWER: friends, B, C, and D, armed themselves with knives and
1) No, Abe may not be prosecuted for bigamy since the proceeded to the house of F, taking a taxicab for the
bigamous marriage was contracted or solemnized in purpose. About 20 meters from their destination, the
Singapore, hence such violation is not one of those group alighted and after instructing E, the driver, to wait,
where the Revised Penal Code, under Art. 2 thereof, may traveled on foot to the house of F. B positioned himself at a
be applied extraterritorially. The general rule on distance as the group's lookout. C and D stood guard
territoriality of criminal law governs the situation. outside the house. Before A could enter the house, D left
the scene without the knowledge of the others. A
General Principles; Territoriality; Jurisdiction stealthily entered the house and stabbed F. F ran to the
over Vessel (2000) street but was blocked by C, forcing him to flee towards
After drinking one (1) case of San Miguel beer and taking another direction. Immediately after A had stabbed F, A
two plates of "pulutan", Binoy, a Filipino also stabbed G who was visiting F. Thereafter, A exiled
seaman, stabbed to death Sio My, a Singaporean seaman, from the house and, together with B and C, returned to the
aboard M/V "Princess of the Pacific", an overseas vessel waiting taxicab and motored away.
which was sailing in the South China Sea. The vessel, G died. F survived.
although Panamanian registered, is owned by Lucio Who are liable for the death of G and the physical
Sy, a rich Filipino businessman. When M/V injuries of F?
"Princess of the Pacific" reached a Philippine Port SUGGESTED ANSWER:
at Cebu City, the Captain of the vessel turned over the A alone should be held liable for the death of G. The
assailant Binoy to the Philippine authorities. An object of the conspiracy of A. B, C, and D was to kill F
information for homicide was filed against Binoy in only. Since B, C, and D did not know of the stabbing of G
the Regional Trial Court of Cebu City. He moved to by A, they cannot be held criminally therefor. E, the driver,
quash the information for lack of jurisdiction. If you cannot be also held liable for the death of G since the
were the Judge, will you grant the motion? Why? (5%) former was completely unaware of said killing.
SUGGESTED ANSWER:

For the physical injuries of F, A, B and C. should be held Arturo, being one of the two who devised the plan to
liable therefore. Even if it was only A who actually murder Joel, thereby becomes a co-principal by direct
stabbed and caused physical injuries to G, B and C conspiracy. What is needed only is an overt act and both
are nonetheless liable for conspiring with A and will incur criminal liability. Arturo's liability as a
for contributing positive acts which led to the realization of conspirator arose from his participation in jointly
a common criminal intent. B positioned himself as devising the criminal plan with Juan, to kill Jose. And it was
a lookout, while C blocked F's escape. D, pursuant to that conspiracy that Juan killed Joel. The
however, although part of the conspiracy, cannot be conspiracy here is actual, not by inference only. The
held liable because he left the scene before A could enter overt act was done pursuant to that conspiracy whereof
the house where the stabbing occurred. Although he Arturo is co-conspirator. There being a conspiracy, the
was earlier part of the conspiracy, he did not personally act of one is the act of all. Arturo, therefore, should be
participate in the execution of the crime by acts which liable as a co-conspirator but the penalty on him may be
directly tended toward the same end (People vs. Tomoro, that of an accomplice only (People vs. Nierra, 96 SCRA 1;
et al 44 Phil. 38), People us. Medrano, 114 SCRA 335) because he was not
able to actually participate in the shooting of Joel, having
In the same breath, E, the driver, cannot be also been apprehended before reaching the place where the
held liable for the infliction of physical injuries crime was committed.
upon F because there is no showing that he had ALTERNATIVE ANSWER:
knowledge of the plan to kill F. Arturo is not liable because he was not able to participate
in the killing of Joel. Conspiracy itself is not punishable
Conspiracy; Avoidance of Greater Evil (2004) unless expressly provided by law and this is not true
BB and CC, both armed with knives, attacked FT. in the case of Murder. A co-conspirator must
The victim's son, ST, upon seeing the attack, drew his perform an overt act pursuant to the conspiracy.
gun but was prevented from shooting the attackers by
AA, who grappled with him for possession of the Conspiracy; Common Felonious Purpose (1994)
gun. FT died from knife wounds. AA, BB and CC were At about 9:30 in the evening, while Dino and Raffy were
charged with murder. walking along Padre Faura Street, Manila. Johnny hit
them with a rock injuring Dino at the back. Raffy
In his defense, AA invoked the justifying circumstance of approached Dino, but suddenly, Bobby, Steve,
avoidance of greater evil or injury, contending that Danny and Nonoy surrounded the duo. Then Bobby
by preventing ST from shooting BB and CC, he stabbed Dino. Steve, Danny, Nonoy and Johnny kept on
merely avoided a greater evil. hitting Dino and Raffy with rocks. As a result. Dino
Will AA's defense prosper? Reason briefly. (5%) died, Bobby, Steve, Danny, Nonoy and Johnny were
SUGGESTED ANSWER: charged with homicide.
No, AA's defense will not prosper because obviously Is there conspiracy in this case?
there was a conspiracy among BB, CC and AA, such that SUGGESTED ANSWER:
the principle that when there is a conspiracy, the act of one Yes, there is conspiracy among the offenders, as
is the act of all, shall govern. The act of ST, the manifested by their concerted actions against the victims,
victim's son, appears to be a legitimate defense of demonstrating a common felonious purpose of assaulting
relatives; hence, justified as a defense of his father against the victims. The existence of the conspiracy can be
the unlawful aggression by BB and CC. ST's act to inferred or deduced from the manner the offenders acted
defend his father's life, cannot be regarded as an evil in commonly attacking Dino and Raffy with
inasmuch as it is, in the eyes of the law, a lawful act. rocks, thereby demonstrating a unity of criminal design
to inflict harm on their victims.
What AA did was to stop a lawful defense, not
greater evil, to allow BB and CC achieve their criminal Conspiracy; Complex Crime with Rape (1996)
objective of stabbing FT. Jose, Domingo, Manolo, and Fernando, armed
with bolos, at about one o'clock in the morning,
Conspiracy; Co-Conspirator (1998) robbed a house at a desolate place where Danilo,
Juan and Arturo devised a plan to murder Joel. In his wife, and three daughters were living. While the
a narrow alley near Joel's house, Juan will hide behind four were in the process of ransacking Danilo's house,
the big lamppost and shoot Joel when the latter Fernando, noticing that one of Danilo's daughters was
passes through on his way to work. Arturo will come trying to get away, ran after her and finally caught up
from the other end of the alley and simultaneously shoot with her in a thicket somewhat distant from the
Joel from behind. On the appointed day, Arturo was house. Fernando, before bringing back the daughter to
apprehended by the authorities before reaching the the house, raped her first. Thereafter, the four carted
alley. When Juan shot Joel as planned, he was away the belongings of Danilo and his family.
unaware that Arturo was arrested earlier. Discuss the a) What crime did Jose, Domingo, Manolo and
criminal liability of Arturo, if any. [5%] Fernando commit? Explain.
SUGGESTED ANSWER:

b) Suppose, after the robbery, the four took turns in A shall incur full criminal liability for the crime of
raping the three daughters of Danilo inside the robbery with homicide, but B shall not incur
latter's house, but before they left, they killed the criminal liability because he desisted. B's spontaneous
whole family to prevent identification, what crime desistance, made before all acts of execution are
did the four commit? Explain. performed, is exculpatory. Conspiracy to rob and kill
SUGGESTED ANSWER: is not per se punishable.
(a) Jose, Domingo, and Manolo committed Robbery,
while Fernando committed complex crime of Robbery The desistance need not be actuated by remorse or good
with Rape, Conspiracy can be inferred from the manner the motive. It is enough that the discontinuance comes from
offenders committed the robbery but the rape was the person who has begun the commission of the crime
committed by Fernando at a place "distant from the but before all acts of execution are performed. A person
house" where the robbery was committed, not in the who has began the commission of a crime but desisted, is
presence of the other conspirators. Hence, Fernando absolved from criminal liability as a reward to one, who
alone should answer for the rape, rendering him liable for having set foot on the verge of crime, heeds the call of
the special complex crime. (People vs. Canturia et. al, G.R. his conscience and returns to the path of righteousness.
108490, 22 June 1995}
Conspiracy; Flight to Evade Apprehension (2003)
b) The crime would be Robbery with Homicide ... A and B, both store janitors, planned to kill
(implied: there is still conspiracy) their employer C at midnight and take the money kept in
the cash register. A and B together drew the sketch
Conspiracy; Flight to Evade Apprehension (2003) of the store, where they knew C would be sleeping, and
A and B, both store janitors, planned to kill planned the sequence of their attack. Shortly before
their employer C at midnight and take the money kept in midnight, A and B were ready to carry out the plan.
the cash register. A and B together drew the sketch When A was about to lift C's mosquito net to
of the store, where they knew C would be sleeping, and thrust his dagger, a police car with sirens blaring
planned the sequence of their attack. Shortly before passed by. Scared, B ran out of the store and fled, while
midnight, A and B were ready to carry out the plan. A went on to stab C to death, put the money in the bag,
When A was about to lift C's mosquito net to and ran outside to look for B. The latter was nowhere in
thrust his dagger, a police car with sirens blaring sight. Unknown to him, B had already left the place.
passed by. Scared, B ran out of the store and fled, while What was the participation and corresponding
A went on to stab C to death, put the money in the bag, criminal liability of each, if any? Reasons. 8%
and ran outside to look for B. The latter was nowhere in SUGGESTED ANSWER:
sight. Unknown to him, B had already left the place. There was an expressed conspiracy between A and B to
What was the participation and corresponding kill C and take the latter's money. The planned killing and
criminal liability of each, if any? Reasons. 8% taking of the money appears to be intimately related
SUGGESTED ANSWER: as component crimes, hence a special complex crime
There was an expressed conspiracy between A and B to of robbery with homicide. The conspiracy being
kill C and take the latter's money. The planned killing and expressed, not just implied, A and B are bound as
taking of the money appears to be intimately related co-conspirators after they have planned and agreed
as component crimes, hence a special complex crime on the sequence of their attack even before they
of robbery with homicide. The conspiracy being committed the crime. Therefore, the principle in
expressed, not just implied, A and B are bound as law that when there is a conspiracy, the act of one is
co-conspirators after they have planned and agreed the act of all, already governs them. In fact, A and B
on the sequence of their attack even before they were already in the store to carry out their criminal plan.
committed the crime. Therefore, the principle in
law that when there is a conspiracy, the act of one is That B ran out of the store and fled upon hearing the
the act of all, already governs them. In fact, A and B sirens of the police car, is not spontaneous desistance but
were already in the store to carry out their criminal plan. flight to evade apprehension. It would be different if B
then tried to stop A from continuing with the
That B ran out of the store and fled upon hearing the commission of the crime; he did not. So the act of A in
sirens of the police car, is not spontaneous desistance but pursuing the commission of the crime which both he and B
flight to evade apprehension. It would be different if B designed, planned, and commenced to commit, would also
then tried to stop A from continuing with the be the act of B because of their expressed
commission of the crime; he did not. So the act of A in conspiracy. Both are liable for the composite crime of
pursuing the commission of the crime which both he and B robbery with homicide.
designed, planned, and commenced to commit, would also ALTERNATIVE ANSWER:
be the act of B because of their expressed A shall incur full criminal liability for the crime of
conspiracy. Both are liable for the composite crime of robbery with homicide, but B shall not incur criminal
robbery with homicide. liability because he desisted. B's spontaneous desistance,
ALTERNATIVE ANSWER: made before all acts of execution are performed, is
exculpatory. Conspiracy to rob and kill is not per se SUGGESTED ANSWER:
punishable. Yes. A, B. C and D are liable for destructive arson
because of the destruction of the room of X with the use of
The desistance need not be actuated by remorse or good an explosive, the hand grenade. Liability for an
motive. It is enough that the discontinuance comes from impossible crime is to be imposed only if the act
the person who has begun the commission of the crime committed would not constitute any other crime under
but before all acts of execution are performed. A person the Revised Penal Code. Although the facts involved are
who has began the commission of a crime but desisted, is parallel to the case of Intod vs. Court of Appeals (215 SCRA
absolved from criminal liability as a reward to one, who 52), where it was ruled that the liability of the offender
having set foot on the verge of crime, heeds the call of was for an impossible crime, no hand grenade was used in
his conscience and returns to the path of righteousness. said case, which constitutes a more serious crime
though different from what was intended,
Conspiracy; Implied Conspiracy (1998)
What is the doctrine of implied conspiracy? [3%] Criminal Liability: Felonious Act of Scaring (1996)
SUGGESTED ANSWER: Alexander, an escaped convict, ran amuck on board
The doctrine of implied conspiracy holds two or more a Superlines Bus bound for Manila from Bicol and
persons participating in the commission of a crime killed ten (10) persons. Terrified by the incident,
collectively responsible and liable as co-conspirators Carol and Benjamin who are passengers of the bus,
although absent any agreement to that effect, when they act jumped out of the window and while lying unconscious
in concert, demonstrating unity of criminal intent and a after hitting the pavement of the road, were ran over
common purpose or objective. The existence of a and crushed to death by a fast moving Desert Fox
conspiracy shall be inferred or deduced from their bus tailing the Superlines Bus.
criminal participation in pursuing the crime and thus the act
of one shall be deemed the act of all. Can Alexander be held liable for the death of Carol and
Benjamin although he was completely unaware that
Conspiracy; Implied Conspiracy; Effects (2003) the two jumped out of the bus? Explain.
State the concept of "implied conspiracy" and give SUGGESTED ANSWER:
its legal effects. 4% Yes, Alexander can be held liable for the death of Carol and
SUGGESTED ANSWER: Benjamin because of felonious act of running was the
An "IMPLIED CONSPIRACY" is one which is only proximate cause of the victim's death. The rule is that when
inferred or deduced from the manner the participants in the a person, by a felonious act, generates in the mind of
commission of crime carried out its execution. Where the another a sense of imminent danger, prompting the
offenders acted in concert in the commission of the crime, latter to escape from or avoid such danger and in the
meaning that their acts are coordinated or process, sustains injuries or dies, the person committing the
synchronized in a way indicative that they are pursuing a felonious act is responsible for such injuries or death.
common criminal objective, they shall be deemed to be (US vs. Valdez, 41 Phil, 1497; People vs. Apra, 27 SCRA 1037.)
acting in conspiracy and their criminal liability shall be
collective, not individual. Criminal Liability: Felonious Act; Proximate Cause (1996)
Vicente hacked Anacleto with a bolo but the latter was
The legal effects of an "implied conspiracy" are: able to parry it with his hand, causing upon him a two- inch
a) Not all those who are present at the scene of wound on his right palm. Vicente was not able to
the crime will be considered conspirators; hack Anacleto further because three policemen arrived
b) Only those who participated by criminal acts in the and threatened to shoot Vicente if he did not drop his
commission of the crime will be considered as bolo. Vicente was accordingly charged by the police at
co- conspirators; and the prosecutor's office for attempted homicide. Twenty-
c) Mere acquiescence to or approval of the five days later, while the preliminary investigation was in
commission of the crime, without any act progress, Anacleto was rushed to the hospital because of
of criminal participation, shall not render one symptoms of tetanus infection on the two-inch wound
criminally liable as co-conspirator. inflicted by Vicente. Anacleto died the following day.
Can Vicente be eventually charged with homicide for the
Criminal Liability: Destructive Arson (2000) death of Anacleto? Explain.
A, B, C and D, all armed with armalites, proceeded to the SUGGESTED ANSWER:
house of X. Y, a neighbor of X, who happened to be Yes, Vicente may be charged of homicide for the death of
passing by, pointed to the four culprits the room that X Anacleto, unless the tetanus infection which
occupied. The four culprits peppered the room with developed twenty five days later, was brought about by
bullets. Unsatisfied, A even threw a hand grenade that an efficient supervening cause. Vicente's felonious act of
totally destroyed X's room. However, unknown to the causing a two-inch wound on Anacleto's right palm may
four culprits, X was not inside the room and nobody was still be regarded as the proximate cause of the latter's
hit or injured during the Incident. Are A, B, C and D death because without such wound, no tetanus infection
liable for any crime? Explain. (3%) could develop from the victim's right palm, and without

Criminal Law Bar Examination Q & A (1994-2006) 14 of 86 caused the
such tetanus infection the victim would not have death of Cesar is not a crime, no criminal liability
died with it. may arise therefrom.
Criminal Liability: Impossible Crimes (2000) Criminal Liability; Felonious Act of Scaring (2005)
a. What is an impossible crime? (2%) Belle saw Gaston stealing the prized cock of a neighbor
b. Is an impossible crime really a crime? (2%) and reported him to the police. Thereafter, Gaston, while
SUGGESTED ANSWER: driving a car saw Belle crossing the street. Incensed that
1. An impossible crime is an act which would be an Belle had reported him, Gaston decided to scare her by
offense against person or property, were if not for trying to make it appear that he was about to run
the inherent impossibility of its accomplishment or her over. He revved the engine of his car and drove
on account of the employment of inadequate or towards her but he applied the brakes. Since the road
ineffectual means (Art. 4, par. 2, RPC) was slippery at that time, the vehicle skidded and hit
Belle causing her death.
2. No, an impossible crime is not really a crime. It Was gaston criminally liable?
is only so-called because the act gives rise to criminal What is the liability of Gaston? Why? (4%)
liability. But actually, no felony is committed. The SUGGESTED ANSWER:
accused is to be punished for his criminal tendency or Yes, Gaston is liable for Belle's death because even
propensity although no crime was committed. though Gaston has no intent to kill Belle rather just to
scare Belle. "To scare" does not indicate intent to kill.
Criminal Liability; Felonious Act of Scaring (2001) However, under Art. 4 of the Revised Penal Code,
Maryjane had two suitors - Felipe and Cesar. She did not provides in part that criminal liability shall be incurred by
openly show her preference but on two occasions, any person committing a felony although the wrongful
accepted Cesar's invitation to concerts by Regine and act done be different from that which he intended. In
Pops. Felipe was a working student and could only ask other words, the rule is that when a person, by a
Mary to see a movie which was declined. Felipe felt felonious act, generates in the mind of another a sense of
insulted and made plans to get even with Cesar by scaring imminent danger, prompting the latter to escape from or
him off somehow. One day, he entered Cesar's room in avoid such danger and in the process, sustains injuries or
their boarding house and placed a rubber snake which dies, the person committing the felonious act is
appeared to be real in Cesar's backpack. Because Cesar responsible for such injuries or death. (US vs. Valdez, 41
had a weak heart, he suffered a heart attack upon Phil, 1497; People vs. Apra, 27 SCRA 1037.)
opening his backpack and seeing the snake. Cesar died ALTERNATIVE ANSWER:
without regaining consciousness. The police investigation Yes, Gaston is liable for Belle's death because by his acts of
resulted in pinpointing Felipe as the culprit and he was revving the engine of his car and driving towards Belle is
charged with Homicide for Cesar's death. In his defense, felonious, and such felonious act was the proximate
Felipe claimed that he did not know about Cesar's weak cause of the vehicle to skid and hit Belle, resulting in the
heart and that he only intended to play a practical joke on latter's death. Stated otherwise, the death of Belle was the
Cesar. direct, natural and logical consequence of Gaston's
Is Felipe liable for the death of Cesar or will his defense felonious act. (People v. Arpa, 27 SCRA 1037).
prosper? Why? (5%}
SUGGESTED ANSWER: Criminal Liability; Felonious Act; Immediate
Yes, Felipe is liable for the death of Cesar but he shall be Cause (2003)
given the benefit of the mitigating circumstance that he The conduct of wife A aroused the ire of her husband B.
did not intend to commit so grave a wrong as that which Incensed with anger almost beyond his control, B could
was committed (Art. 13, par. 3, RPC). not help but inflict physical injuries on A. Moments after
B started hitting A with his fists, A suddenly complained
When Felipe intruded into Cesar's room without the of severe chest pains. B, realizing that A was indeed
latter's consent and took liberty with the letter's backpack in serious trouble, immediately brought her to the
where he placed the rubber snake. Felipe was already hospital. Despite efforts to alleviate A's pains, she
committing a felony. And any act done by him while died of heart attack. It turned out that she had been
committing a felony is no less wrongful, considering that suffering from a lingering heart ailment. What crime,
they were part of "plans to get even with Cesar". if any, could B be held guilty of? 8%
SUGGESTED ANSWER:
Felipe's claim that he intended only "to play a practical B could be held liable for parricide because his act of
joke on Cesar" does not persuade, considering that they are hitting his wife with fist blows and therewith inflicting
not friends but in fact rivals in courting Maryjane. This physical injuries on her, is felonious. A person
case is parallel to the case of People vs. Pugay, et al. committing a felonious act incurs criminal liability
ALTERNATIVE ANSWER: although the wrongful consequence is different from
No, Felipe is not liable because the act of frightening what he intended (Art. 4, par. 1, Revised Penal Code).
another is not a crime. What he did may be wrong, but not
all wrongs amount to a crime. Because the act which

Although A died of heart attack, the said attack was of the strong current or because he did not know how to
generated by B's felonious act of hitting her with his fists. swim, he drowned, the Supreme Court affirmed the
Such felonious act was the immediate cause of the heart conviction for homicide of the accused because, if a
attack, having materially contributed to and hastened A's person against whom a criminal assault is
death. Even though B may have acted without intent to directed believes himself to be in danger of death or
kill his wife, lack of such intent is of no moment when great bodily harm and in order to escape jumps into
the victim dies. However, B may be given the mitigating the water, impelled by the instinct of self-preservation,
circumstance of having acted without intention the assailant is responsible for the homicide in case
to commit so grave a wrong as that committed (Art. 13, death results by drowning.
par. 3, Revised Penal Code).
Criminal Liability; Felonious Act; Proximate Cause (1999)
Criminal Liability; Felonious Act; Proximate Cause (1994) During the robbery in a dwelling house, one of the
Bhey eloped with Scott. Whereupon, Bhey's father, culprits happened to fire his gun upward in the ceiling
Robin, and brother, Rustom, went to Scott's house. without meaning to kill anyone. The owner of the house
Upon reaching the house, Rustom inquired from Scott who was hiding thereat was hit and killed as a result.
about his sister's whereabouts, while Robin shouted and
threatened to kill Scott. The latter then went downstairs but The defense theorized that the killing was a
Rustom held his (Scott's) waist. Meanwhile Olive, the elder mere accident and was not perpetrated in connection
sister of Scott, carrying her two-month old child, with, or for purposes of, the robbery.
approached Rustom and Scott to pacify them. Olive Will you sustain the defense? Why? (4%)
attempted to remove Rustom's hand from Scott's waist. But SUGGESTED ANSWER:
Rustom pulled Olive's hand causing her to fall over her No, I will not sustain the defense. The act being
baby. The baby then died moments later. felonious and the proximate cause of the victim's death, the
Is Rustom criminally liable for the death of the child? offender is liable therefore although it may not be
SUGGESTED ANSWER: intended or different from what he intended.
Yes, Rustom is criminally liable for the death of the child The offender shall be prosecuted for the composite
because his felonious act was the proximate cause of crime of robbery with homicide, whether the killing was
such death. It was Rustom's act of pulling Olive's hand intentional or accidental, as long as the killing was
which caused the latter to fall on her baby. Had It on occasion of the robbery.
not been for said act of Rustom, which is undoubtedly
felonious (at least slight coercion) there was no cause for Criminal Liability; Felonious Act; Proximate Cause (2001)
Olive to fall over her baby. In short, Rustom's felonious act Luis Cruz was deeply hurt when his offer of love was
is the cause of the evil caused. Any person rejected by his girlfriend Marivella one afternoon when
performing a felonious act is criminally liable for the he visited her. When he left her house, he walked as if he
direct, natural and logical consequence thereof although was sleepwalking so much so that a teenage snatcher was
different from what he intended (Art. 4, par. 1, RFC; able to grab his cell phone and flee without being chased by
People vs, Pugay, et al, GR No. 74324, Nov. 18, 1988). Luis. At the next LRT station, he boarded one of the
coaches bound for Baclaran. While seated, he happened to
Criminal Liability; Felonious Act; Proximate Cause (1997) read a newspaper left on the seat and noticed that the
While the crew of a steamer prepared to raise anchor at headlines were about the sinking of the Super Ferry while
the Pasig River, A, evidently impatient with the progress on its way to Cebu. He went over the list of missing
of work, began to use abusive language against the men. passengers who were presumed dead and came across
B, one of the members of the crew, remonstrated saying the name of his grandfather who had raised him from
that they could work best if they were not insulted. childhood after he was orphaned. He was shocked and
A took B's attitude as a display of insubordination his mind went blank for a few minutes, after which he
and, rising in a rage, moved towards B wielding a ran amuck and, using his balisong, started stabbing at the
big knife and threatening to stab B. At the instant passengers who then scampered away, with three of them
when A was only a few feet from B, the latter, Jumping out of the train and landing on the road below. All
apparently believing himself to be in great and the three passengers died later of their injuries at the
immediate peril, threw himself into the water, hospital.
disappeared beneath the surface, and drowned. Is Luis liable for the death of the three passengers who
May A be held criminally liable for the death of B? jumped out of the moving train? State your reasons. (5%)
Yes. A can be held criminally liable for the death of B, Yes, Luis is liable for their deaths because he was
Article 4 of the Revised Penal Code provides in part that committing a felony when he started stabbing at the
criminal liability shall be incurred by any person passengers and such wrongful act was the proximate
committing a felony although the wrongful act done be cause of said passengers' jumping out of the train; hence
different from that which he intended. In U.S. vs. Valdez 41 their deaths.
Phil. 497. where the victim who was threatened by the
accused with a knife, jumped into the river but because
Under Article 4, Revised Penal Code, any person JP, Aries and Randal planned to kill Elsa, a resident
committing a felony shall incur criminal liability although of Barangay Pula, Laurel, Batangas. They asked
the wrongful act done be different from that which he the assistance of Ella, who is familiar with the place.
intended. In this case, the death of the three passengers was
the direct, natural and logical consequence of Luis' On April 3, 1992, at about 10:00 in the evening, JP, Aries
felonious act which created an immediate sense of danger and Randal, all armed with automatic weapons, went to
in the minds of said passengers who tried to avoid or Barangay Pula. Ella, being the guide, directed
escape from it by jumping out of the train. (People vs. Arpa, 27 her companions to the room in the house of
SCRA 1O37; U.S. vs. Valdez, 41 Phil. 497} Elsa. Whereupon, JP, Aries and Randal fired their guns
at her room. Fortunately, Elsa was not around as she
Criminal Liability; Felonious Act; Proximate Cause (2004) attended a prayer meeting that evening in another
On his way home from office, ZZ rode in a jeepney. barangay in Laurel.
Subsequently, XX boarded the same jeepney. Upon
reaching a secluded spot in QC, XX pulled out a grenade JP, et al, were charged and convicted of attempted
from his bag and announced a hold-up. He told ZZ to murder by the Regional Trial Court at Tanauan,
surrender his watch, wallet and cellphone. Fearing for his Batangas.
life, ZZ jumped out of the vehicle. But as he fell, his
head hit the pavement, causing his instant death . Is XX On appeal to the Court of Appeals, all the accused
liable for ZZ's death? Explain briefly. (5%) ascribed to the trial court the sole error of finding them
SUGGESTED ANSWER: guilty of attempted murder.
Yes, XX is liable for ZZ's death because his acts of If you were the ponente, how will you decide the appeal?
pulling out a grenade and announcing a hold-up, coupled SUGGESTED ANSWER:
with a demand for the watch, wallet and cellphone of ZZ is If I were the ponente, I will set aside the judgment
felonious, and such felonious act was the proximate convicting the accused of attempted murder and instead
cause of ZZ's jumping out of the jeepney, resulting in the find them guilty of impossible crime under Art. 4, par. 2,
latter's death. Stated otherwise, the death of ZZ was the RPC, in relation to Art. 59, RPC. Liability for impossible
direct, natural and logical consequence of XX's felonious crime arises not only when the impossibility is legal, but
act which created an immediate sense of danger in the likewise when it is factual or physical impossibility, as in
mind of ZZ who tried to avoid such danger by jumping out the case at bar. Elsa's absence from the house is a
of the jeepney (People v. Arpa, 27 SCRA 1037). physical impossibility which renders the crime
intended Inherently incapable of accomplishment. To
Criminal Liability; Impossible Crime (2004) convict the accused of attempted murder would make
OZ and YO were both courting their co-employee, SUE. Art. 4, par. 2 practically useless as all circumstances
Because of their bitter rivalry, OZ decided to get rid of which prevented the consummation of the offense
YO by poisoning him. OZ poured a substance into YO's will be treated as an incident independent of the
coffee thinking it was arsenic. It turned out that the actor's will which is an element of attempted or
substance was white sugar substitute known as frustrated felony (Intod vs. CA, 215 SCRA 52).
Equal. Nothing happened to YO after he drank the
coffee. What criminal liability did OZ incur, if any? Criminal Liability: Impossible Crimes (1998)
Explain briefly. (5%) Buddy always resented his classmate, Jun. One day.
SUGGESTED ANSWER: Buddy planned to kill Jun by mixing poison in his lunch.
OZ incurred criminal liability for an impossible crime of Not knowing where he can get poison, he
murder. Criminal liability shall be incurred by any person approached another classmate, Jerry to whom he
performing an act which would be an offense disclosed his evil plan. Because he himself harbored
against persons or property, were it not for the resentment towards Jun, Jerry gave Buddy a poison,
inherent impossibility of its accomplishment or on which Buddy placed on Jun's food. However, Jun did
account of the employment of inadequate or not die because, unknown to both Buddy and Jerry,
ineffectual means (Art. 4, par. 2, RFC). the poison was actually powdered milk.
1, What crime or crimes, if any, did Jerry and
In the problem given, the impossibility of accomplishing Buddy commit? [3%]
the crime of murder, a crime against persons, was due to 2. Suppose that, because of his severe allergy
the employment of ineffectual means which OZ thought to powdered milk, Jun had to be hospitalized for
was poison. The law imputes criminal liability to the 10 days for ingesting it. Would your answer to the first
offender although no crime resulted, only to suppress his question be the same? [2%]
criminal propensity because subjectively, he is a criminal SUGGESTED ANSWER:
though objectively, no crime was committed. 1. Jerry and Buddy are liable for the so-called "impossible
crime" because, with intent to kill, they tried to poison
Criminal Liability; Impossible Crimes (1994) Jun and thus perpetrate Murder, a crime against persons.
Jun was not poisoned only because the would-be killers
were unaware that what they mixed with the food of Jun
Criminal Law Bar Examination Q & A (1994-2006) was 17 of 86 registry
powdered milk, not poison. In short, the act done list of voters is wrong per se because it
with criminal intent by Jerry and Buddy, would have disenfranchises a voter of his right to vote. In this regard
constituted a crime against persons were it not for the it is considered as malum in se. Since it is punished under
inherent inefficacy of the means employed. Criminal a special law (Sec. 101 and 103, Revised Election Code),
liability is incurred by them although no crime resulted, it is considered malum prohibitum.
because their act of trying to poison Jun is criminal.
Mala in Se vs. Mala Prohibita (1999)
2. No, the answer would not be the same as above. Jerry Distinguish " mala in se" from " mala prohibita"(3%)
and Buddy would be liable instead for less SUGGESTED ANSWER:
serious physical injuries for causing the In "mala in se", the acts constituting the crimes are
hospitalization and medical attendance for 10 days inherently evil, bad or wrong, and hence involves the
to Jun. Their act of mixing with the food eaten by moral traits of the offender; while in "mala prohibita",
Jun the matter which required such medical the acts constituting the crimes are not inherently bad,
attendance, committed with criminal intent, renders evil or wrong but prohibited and made punishable only
them liable for the resulting injury. for public good. And because the moral trait of the
offender is Involved in "mala in se". Modifying
Criminal Liability; Impossible Crimes; Kidnapping (2000) circumstances, the offender's extent of participation in
Carla, 4 years old, was kidnapped by Enrique, the tricycle the crime, and the degree of accomplishment of the
driver paid by her parents to bring and fetch her to and crime are taken into account in imposing the penalty:
from school. Enrique wrote a ransom note demanding these are not so in "mala prohibita" where criminal
P500,000.00 from Carla's parents in exchange for Carla's liability arises only when the acts are consummated.
freedom. Enrique sent the ransom note by mail.
However, before the ransom note was received by Carla's Mala in Se vs. Mala Prohibita (2001)
parents, Enrique's hideout was discovered by the police. Briefly state what essentially distinguishes a crime
Carla was rescued while Enrique was arrested and mala prohibita from a crime mala in se. (2%)
incarcerated. Considering that the ransom note was not SUGGESTED ANSWER:
received by Carla's parents, the investigating prosecutor In crimes mala prohibita, the acts are not by nature
merely filed a case of "Impossible Crime to Commit wrong, evil or bad. They are punished only because there
Kidnapping" against Enrique. Is the prosecutor correct? is a law prohibiting them for public good, and thus good
Why? (3%) faith or lack of criminal intent in doing the prohibited act
SUGGESTED ANSWER: is not a defense.
No, the prosecutor is not correct in filing a case
for "impossible crime to commit kidnapping" In crimes mala in se, the acts are by nature wrong, evil or
against Enrique. Impossible crimes are limited only to bad, and so generally condemned. The moral trait of the
acts which when performed would be a crime against offender is involved; thus, good faith or lack of criminal
persons or property. As kidnapping is a crime Intent on the part of the offender is a defense, unless the
against personal security and not against persons or crime is the result of criminal negligence.
property, Enrique could not have incurred an Correspondingly, modifying circumstances
"impossible crime" to commit kidnapping. There is are considered in punishing the offender.
thus no impossible crime of kidnapping.
Mala in Se vs. Mala Prohibita (2003)
Mala in Se vs. Mala Prohibita (1997) Distinguish, in their respective concepts and legal
1. Distinguish between crimes mala in se and implications, between crimes mala in se and crimes mala
crimes mala prohibita. prohibits. 4%
2. May an act be malum in se and be, at the same time, SUGGESTED ANSWER:
malum prohibitum? In concept: Crimes mala in se are those where the acts
SUGGESTED ANSWER: or omissions penalized are inherently bad, evil, or wrong
Crimes mala in se are felonious acts committed by dolo or that they are almost universally condemned.
culpa as defined in the Revised Penal Code. Lack of
criminal intent is a valid defense, except when the crime Crimes mala prohibita are those where the acts penalized
results from criminal negligence. On the other hand, are not inherently bad, evil, or wrong but prohibited by
crimes mala prohibita are those considered wrong only law for public good, public welfare or interest
because they are prohibited by statute. They constitute and whoever violates the prohibition are penalized.
violations of mere rules of convenience designed to
secure a more orderly regulation of the affairs of society. In legal implications: In crimes mala in se, good faith
SUGGESTED ANSWER: or lack of criminal intent/ negligence is a defense, while
Yes, an act may be malum in se and malum prohibitum at in crimes mala prohibita, good faith or lack of
the same time. In People v. Sunico, et aL. (CA 50 OG 5880) it criminal intent or malice is not a defense; it is
was held that the omission or failure of election enough that the prohibition was voluntarily violated.
inspectors and poll clerks to include a voter's name in the

Criminal Law Bar Examination Q & A (1994-2006) 18 of 86 violation of
Also, criminal liability is generally incurred in crimes mala in a special law is not punished. Actual injury is required.
se even when the crime is only attempted or frustrated,
while in crimes mala prohibita, criminal liability is Yes, both are liable for attempted estafa thru falsification
generally incurred only when the crime is consummated. of commercial documents, a complex crime. ...
Also in crimes mala in se, mitigating and aggravating Malum in Se vs. Malum Prohibitum (2005)
circumstances are appreciated in imposing the penalties, Distinguish malum in se from malum prohibitum. (2%)
while in crimes mala prohibita, such circumstances SUGGESTED ANSWER:
are not appreciated unless the special law has In crimes malum in se, an act is by nature wrong, evil or
adopted the scheme or scale of penalties under the bad, and so generally condemned. The moral trait of the
Revised Penal Code. offender is involved; thus, good faith or lack of criminal
Intent on the part of the offender is a defense, unless the
Mala Prohibita; Actual Injury Required (2000) crime is the result of criminal negligence.
Mr. Carlos Gabisi, a customs guard, and Mr. Rico Yto, a Correspondingly, modifying circumstances
private Individual, went to the office of Mr. Diether are considered in punishing the offender.
Ocuarto, a customs broker, and represented themselves
as agents of Moonglow Commercial Trading, an In crimes mala prohibitum, an act is not by nature
Importer of children's clothes and toys. Mr. Gabisi and wrong, evil or bad. Yet, it is punished because there
Mr. Yto engaged Mr. Ocuarto to prepare and file with is a law prohibiting them for public good, and thus
the Bureau of Customs the necessary Import Entry and good faith or lack of criminal intent in doing the
Internal Revenue Declaration covering Moonglow's prohibited act is not a defense.
shipment. Mr. Gabisi and Mr. Yto submitted to Mr.
Ocuarto a packing list, a commercial invoice, a bill of Motive vs. Intent (1996)
lading and a Sworn Import Duty Declaration which 1. Distinguish intent from motive in Criminal Law.
declared the shipment as children's toys, the taxes and 2. May crime be committed without criminal intent?
duties of which were computed at P60,000.00. Mr. SUGGESTED ANSWER:
Ocuarto filed the aforementioned documents with the 1. Motive is the moving power which impels one
Manila International Container Port. However, before to action for a definite result; whereas intent is
the shipment was released, a spot check was conducted the purpose to use a particular means to effect
by Customs Senior Agent James Bandido, who such results. Motive is not an essential element of a
discovered that the contents of the van (shipment) were felony and need not be proved for purpose of
not children's toys as declared in the shipping documents conviction, while intent is an essential element
but 1,000 units of video cassette recorders with taxes and of felonies by dolo.
duties computed at P600,000.00. A hold order and
warrant of seizure and detention were then issued by the 2. Yes, a crime may be committed without criminal
District Collector of Customs. Further investigation intent if such is a culpable felony, wherein Intent is
showed that Moonglow is non-existent. Consequently, substituted by negligence or imprudence, and also in
Mr. Gabisi and Mr. Yto were charged with and convicted a malum prohibitum or if an act is punishable
for violation of Section 3(e) of R.A. 3019 which makes it by special law.
unlawful among others, for public officers to cause any
undue Injury to any party, including the Government. In Motive vs. Intent (1999)
the discharge of official functions through manifest 1. Distinguish "motive" from "intent".
partiality, evident bad faith or gross inexcusable 2. When is motive relevant to prove a case? When is it
negligence. In their motion for reconsideration, the not necessary to be established? Explain. (3%)
SUGGESTED ANSWER:
accused alleged that the decision was erroneous because the
crime was not consummated but was only at an 1. "Motive " is the moving power which impels a
attempted stage, and that in fact the Government did not person to do an act for a definite result; while
suffer any undue injury. "intent" is the purpose for using a particular means
to bring about a desired result. Motive is not
a) Is the contention of both accused correct? Explain.
an element of a crime but intent is an element
(3%)
b) Assuming that the attempted or frustrated stage of of intentional crimes. Motive, if attending a
the violation charged is not punishable, may the accused be crime, always precede the intent.
nevertheless convicted for an offense punished by the
2. Motive is relevant to prove a case when there
Revised Penal Code under the facts of the case? Explain.
is doubt as to the identity of the offender or when
(3%)
SUGGESTED ANSWER:
the act committed gives rise to variant crimes and
Yes, the contention of the accused that the crime was not there is the need to determine the proper crime
consummated is correct, RA. 3019 is a special law to be imputed to the offender.
punishing acts mala prohibita. As a rule, attempted

It is not necessary to prove motive when Exempting Circumstances; Minority (1998)
the offender is positively identified or the John, an eight-year old boy, is fond of watching the
criminal act did not give rise to variant crimes. television program "Zeo Rangers." One evening while he
was engrossed watching his favorite television show,
Motive vs. Intent (2004) Petra, a maid changed the channel to enable her to watch
Distinguish clearly but briefly between intent and motive "Home Along the Riles." This enraged John who got his
in the commission of an offense. father's revolver, and without warning, shot Petra at the
SUGGESTED ANSWER: back of her head causing her instantaneous death. Is
Intent is the purpose for using a particular means John criminally liable? [2%]
to achieve the desired result; while motive is the SUGGESTED ANSWER:
moving power which impels a person to act for a No, John is not criminally liable for killing Petra because
definite result. Intent is an ingredient of dolo or he is only 8 years old when he committed the killing. A
malice and thus an element of deliberate felonies; minor below nine (9) years old is absolutely exempt from
while motive is not an element of a crime but only criminal liability although not from civil liability. (Art.
considered when the identity of the offender is in doubt. 12, par. 2, RPC).
Motive; Proof thereof; Not Essential; Conviction (2006) Exempting; Minority; 11 yrs Old; Absence of
Motive is essential in the determination of the commis- Discernment (2000)
sion of a crime and the liabilities of the perpetrators. While they were standing in line awaiting their
What are the instances where proof of motive is vaccination at the school clinic, Pomping repeatedly
not essential or required to justify conviction of an pulled the ponytail of Katreena, his 11 years, 2 months
accused? Give at least 3 instances. (5%) and 13 days old classmate in Grade 5 at the Sampaloc
SUGGESTED ANSWER: Elementary School. Irritated, Katreena turned around
1. When there is an eyewitness or positive and swung at Pomping with a ball pen. The top of the
identification of the accused. ball pen hit the right eye of Pomping which bled
2. When the accused admitted or confessed to the profusely. Realizing what she had caused. Katreena
commission of the crime. immediately helped Pomping. When investigated, she
3. In crimes mala prohibita. freely admitted to the school principal that she was
4. In direct assault, when the victim, who is a person responsible for the injury to Pomping's eye. After the
in authority or agent of a person in authority incident, she executed a statement admitting her
was attacked in the actual performance of his duty culpability. Due to the injury. Pomping lost his right eye.
(Art. 148, Revised Penal Code). a) Is Katreena criminally liable? Why? (3%)
5. In crimes committed through reckless imprudence. b) Discuss the attendant circumstances and effects
thereof. (2%)
SUGGESTED ANSWER:
JUSTIFYING & EXEMPTING a) No, Katreena is not criminally liable although she is
civilly liable. Being a minor less than fifteen (15) years old
CIRCUMSTANCES although over nine (9) years of age, she is generally
exempt from criminal liability. The exception is where
Exempting Circumstances; Coverage (2000) the prosecution proved that the act was committed with
A, brother of B, with the intention of having a night out discernment. The burden is upon the prosecution to
with his friends, took the coconut shell which is prove that the accused acted with discernment.
being used by B as a bank for coins from inside
their locked cabinet using their common key. The presumption is that such minor acted
Forthwith, A broke the coconut shell outside of their without discernment, and this is strengthened by the
home in the presence of his friends. fact that Katreena only reacted with a ballpen which she
a. What is the criminal liability of A, if any? must be using in class at the time, and only to stop
Explain. (3%) Pomping's vexatious act of repeatedly pulling her
b. Is A exempted from criminal liability under Article ponytail. In other words, the injury was accidental.
332 of the Revised Penal Code for being a brother
of B? Explain. (2%) b) The attendant circumstances which may be considered
SUGGESTED ANSWER: are:
a) A is criminally liable for Robbery with force upon 1. Minority of the accused as an exempting
things..... circumstance under Article 12. paragraph 3, Rev.
Penal Code, where she shall be exempt from
b) No, A is not exempt from criminal liability under Art. criminal liability, unless it was proved that she acted
332 because said Article applies only to theft, swindling with discernment. She is however civilly liable;
or malicious mischief. Here, the crime committed is 2. If found criminally liable, the minority of the
robbery. accused as a privileged mitigating circumstance. A
discretionary penalty lower by at least two (2)
degrees than that prescribed for the A may, however, invoke the benefit of the mitigating
crime committed shall be imposed in accordance circumstance of having acted in immediate vindication of a
with Article 68. paragraph 1, Rev. Penal Code. grave offense to a descendant, his daughter, under par. 5,
The sentence, however, should Article 13 of the Revised Penal Code, as amended.
automatically be suspended in accordance with
Section 5(a) of Rep. Act No. 8369 otherwise Justifying; Defense of Stranger (2002)
known as the "Family Courts Act of 1997"; A chanced upon three men who were attacking B
3. Also if found criminally liable, the ordinary with fist blows. C, one of the men, was about to stab B
mitigating circumstance of not Intending to commit so with a knife. Not knowing that B was actually the
grave a wrong as that committed, under Article aggressor because he had earlier challenged the three
13, paragraph 3, Rev. Penal Code; and men to a fight, A shot C as the latter was about to stab
4. The ordinary mitigating circumstance of B. May A invoke the defense of a stranger as a
sufficient provocation on the part of the justifying circumstance in his favor? Why? (2%)
offended party immediately preceded the act. SUGGESTED ANSWER:
Justifying vs. Exempting Circumstances (2004) Yes. A may invoke the justifying circumstance of defense
Distinguish clearly but briefly: Between justifying and of stranger since he was not involved in the fight and he
exempting circumstances in criminal law. shot C when the latter was about to stab B. There being
SUGGESTED ANSWER: no indication that A was induced by revenge, resentment
Justifying circumstance affects the act, not the actor; or any other evil motive in shooting C, his act is justified
while exempting circumstance affects the actor, not under par 3, Article 11 of the Revised Penal Code,
the act. In justifying circumstance, no criminal and, as amended.
generally, no civil liability is incurred; while
in exempting circumstance, civil liability is generally Justifying; Fulfillment of Duty; Requisites (2000)
incurred although there is no criminal liability. Lucresia, a store owner, was robbed of her bracelet in her
home. The following day, at about 5 o'clock in the
Justifying vs. Exempting Circumstances (1998) afternoon, a neighbor, 22-year old Jun-Jun, who had an
Distinguish between justifying and unsavory reputation, came to her store to buy bottles of
exempting circumstances. [3%] beer. Lucresia noticed her bracelet wound around the
SUGGESTED ANSWER: right arm of Jun-Jun. As soon as the latter left, Lucresia
1. In Justifying Circumstances: went to a nearby police station and sought the help of a
a. The circumstance affects the act, not the actor; policeman on duty, Pat. Willie Reyes. He went with
b. The act is done within legal bounds, hence Lucresia to the house of Jun-Jun to confront the latter.
considered as not a crime; Pat. Reyes introduced himself as a policeman and tried to
c. Since the act is not a crime, there is no criminal; get hold of Jun-Jun who resisted and ran away. Pat.
d. There being no crime nor criminal, there is no Reyes chased him and fired two warning shots in the air.
criminal nor civil liability. Whereas, Jun-Jun continued to run and when he was about 7
in an Exempting Circumstances: meters away, Pat, Reyes shot him in the right leg. Jun-Jun
a. The circumstance affects the actor, not the act; was hit and he fell down but he crawled towards a fence,
b. The act is felonious and hence a crime but the intending to pass through an opening underneath. When
actor acted without voluntariness; Pat. Reyes was about 5 meters away, he fired another
c. Although there is a crime, there is no shot at Jun-Jun hitting him at the right lower hip. Pat.
criminal because the actor is regarded Reyes brought Jun-Jun to the hospital, but because of
only as an instrument of the crime; profuse bleeding, he eventually died. Pat Reyes was
d. There being a wrong done but no criminal. subsequently charged with homicide. During the trial, Pat
Reyes raised the defense, by way of exoneration, that he
Justifying; Defense of Honor; Requisites (2002) acted in the fulfillment of a duty. Is the defense tenable?
When A arrived home, he found B raping his daughter. Explain. (3%)
Upon seeing A, B ran away. A took his gun and shot B, SUGGESTED ANSWER:
killing him. Charged with homicide, A claimed he acted No, the defense of Pat. Reyes is not tenable. The defense
in defense of his daughter's honor. Is A correct? If not, of having acted in the fulfillment of a duty requires as a
can A claim the benefit of any mitigating circumstance or condition, inter alia, that the injury or offense committed
circumstances? (3%) be the unavoidable or necessary consequence of the due
SUGGESTED ANSWER: performance of the duty (People vs. Oanis, et.al., 74 Phil. 257).
No, A cannot validly invoke defense of his It is not enough that the accused acted in fulfillment of a
daughter's honor in having killed B since the rape duty.
was already consummated; moreover, B already ran
away, hence, there was no aggression to defend against After Jun-Jun was shot in the right leg and was already
and no defense to speak of. crawling, there was no need for Pat, Reyes to shoot him
further. Clearly, Pat. Reyes acted beyond the call of duty
which brought about the cause of death of the victim.
Criminal Law Bar Examination Q & A (1994-2006) 21 of 86 killed the
latter. Upon investigation by the police who thereafter
Justifying; SD; Defense of Honor; Requisites (1998) arrived at the scene of the shooting, it was
One night, Una, a young married woman, was sound discovered that the victim was unarmed. When
asleep in her bedroom when she felt a man on top of her. prosecuted for homicide, the security guard claimed that
Thinking it was her husband Tito, who came home a day early he merely acted in self-defense of property and in
from his business trip, Una let him have sex with her. the performance of his duty as a security guard.
After the act, the man said, "I hope you enjoyed it as much as If you were the judge, would you convict him
I did." Not recognizing the voice, it dawned upon Lina of homicide? Explain.
that the man was not Tito, her husband. Furious, Una SUGGESTED ANSWER:
took out Tito's gun and shot the man. Charged with Yes. I would convict the security guard for Homicide if I
homicide Una denies culpability on the ground of defense were the Judge, because his claim of having acted in
of honor. Is her claim tenable? [5%] defense of property and in performance of a duty cannot
SUGGESTED ANSWER: fully be justified. Even assuming that the victim was
No, Una's claim that she acted in defense of honor, is scaling the wall of the factory compound to commit a
not tenable because the unlawful aggression on her crime inside the same, shooting him is never justifiable,
honor had already ceased. Defense of honor as included even admitting that such act is considered unlawful
in self- defense, must have been done to prevent or aggression on property rights. In People vs. Narvaes, 121
repel an unlawful aggression. There is no defense to SCRA 329, a person is justified to defend his property
speak of where the unlawful aggression no longer exists. rights, but all the elements of self-defense under Art. 11,
must be present. In the instant case, just like in Narvaes, the
Justifying; Defense of Honor; Elements (2000) second element (reasonable necessity of the means
Osang, a married woman in her early twenties, was employed) is absent. Hence, he should be convicted of
sleeping on a banig on the floor of their nipa hut beside homicide but entitled to incomplete self-defense.
the seashore when she was awakened by the act of a man
mounting her. Thinking that it was her husband, Justifying; SD; Defense of Property; Requisites (2003)
Gardo,who had returned from fishing in the sea, Osang The accused lived with his family in a neighborhood that
continued her sleep but allowed the man, who was often was the scene of frequent robberies. At one time, past
actually their neighbor, Julio, to have sexual midnight, the accused went downstairs with a loaded gun to
intercourse with her. After Julio satisfied himself, he investigate what he thought were footsteps of an uninvited
said "Salamat Osang" as he turned to leave. Only guest. After seeing what appeared to him an armed
then did Osang realize that the man was not her stranger looking around and out to rob the house, he fired
husband. Enraged, Osang grabbed a balisong from his gun seriously injuring the man. When the lights
the wall and stabbed Julio to death. When tried for were turned on, the unfortunate victim turned out to be a
homicide, Osang claimed defense of honor. Should the brother-in-law on his way to the kitchen to get some
claim be sustained? Why? (5%) light snacks. The accused was indicted for serious physical
SUGGESTED ANSWER: injuries. Should the accused, given the
No, Osang"s claim of defense of honor should not be circumstances, be convicted or acquitted? Why? 4%
sustained because the aggression on her honor had SUGGESTED ANSWER:
ceased when she stabbed the aggressor. In defense of The accused should be convicted because, even assuming
rights under paragraph 1, Art. 11 of the RPC, It is the facts to be true in his belief, his act of shooting a
required inter alia that there be (1) unlawful aggression, burglar when there is no unlawful aggression on his
and (2) reasonable necessity of the means employed to person is not justified. Defense of property or property
prevent or repel it. The unlawful aggression must be right does not justify the act of firing a gun at a burglar
continuing when the aggressor was injured or disabled by unless the life and limb of the accused is already in
the person making a defense. imminent and immediate danger. Although the accused
acted out of a misapprehension of the facts, he is not
But if the aggression that was begun by the injured absolved from criminal liability.
or disabled party already ceased to exist when the ALTERNATIVE ANSWER:
accused attacked him, as in the case at bar, the attack Considering the given circumstances, namely;
made is a retaliation, and not a defense. Paragraph 1, the frequent robberies in the neighborhood, the time
Article 11 of the Code does not govern. was past midnight, and the victim appeared to be
an armed burglar in the dark and inside his house,
Hence, Osang's act of stabbing Julio to death after the accused could have entertained an honest belief that
the sexual intercourse was finished, is not defense of his life and limb or those of his family are already in
honor but an immediate vindication of a grave immediate and imminent danger. Hence, it may be
offense committed against her, which is only mitigating. reasonable to accept that he acted out of an honest
mistake of fact and therefore without criminal intent.
Justifying; SD; Defense of Property; Requisites (1996) An honest mistake of fact negatives criminal intent
A security guard, upon seeing a man scale the wall of a and thus absolves the accused from criminal liability.
factory compound which he was guarding, shot and
Qualifying; Elements of a Crime (2003) a) Jonas and Jaja, can be charged with the complex crime
When would qualifying circumstances be deemed, if of attempted murder with homicide because a single act
at all, elements of a crime? 4% caused a less grave and a grave felony (Art. 48. RPC)....
SUGGESTED ANSWER:
A qualifying circumstance would be deemed an element b) If I were Jonas' and Jaja's lawyer, I will use
of a crime when - the following defenses:
a. it changes the nature of the crime, bringing about a a. That the accused had no intention to commit so
more serious crime and a heavier penalty; grave a wrong as that committed as they merely
b. it is essential to the crime involved, otherwise some intended to frighten Jepoy;
other crime is committed; and b. That Jonas committed the crime in a state
c. it is specifically alleged in the Information and of intoxication thereby impairing his will power
proven during the trial. or capacity to understand the wrongfulness of
ALTERNATIVE ANSWER:
his act. Non-intentional intoxication is a
A qualifying circumstance is deemed an element of mitigating circumstance (People us. Fortich, 281
a crime when it is specifically stated by law as included SCRA 600 (1997); Art. 15, RPC.).
in the definition of a crime, like treachery in the
crime of murder. Mitigating; Plea of Guilty (1999)
An accused charged with the crime of homicide pleaded
"not guilty" during the preliminary investigation before
MITIGATING CIRCUMSTANCES the Municipal Court. Upon the elevation of the case to the
Regional Trial Court the Court of competent
Mitigating; Non-Intoxication (2000) jurisdiction, he pleaded guilty freely and voluntarily upon
Despite the massive advertising campaign in media arraignment. Can his plea of guilty before the RTC be
against firecrackers and gun-firing during the New Year's considered spontaneous and thus entitle him to the
celebrations, Jonas and Jaja bought ten boxes of super mitigating circumstance of spontaneous plea of guilty
lolo and pla-pla in Bocaue, Bulacan. Before midnight of under Art. 13(7), RPC? (3%)
December 31, 1999, Jonas and Jaja started their SUGGESTED ANSWER:
celebration by having a drinking spree at Jona's place by Yes, his plea of guilty before the Regional Trial Court can
exploding their high-powered firecrackers in their be considered spontaneous, for which he is entitled
neighborhood. In the course of their conversation, Jonas to the mitigating circumstance of plea of guilty. His plea
confided to Jaja that he has been keeping a long-time of not guilty before the Municipal Court is immaterial as
grudge against his neighbor Jepoy in view of the latter's it was made during preliminary investigation only
refusal to lend him some money. While under the and before a court not competent to render judgment.
influence of liquor, Jonas started throwing lighted super
lolos inside Jepoy's fence to irritate him and the same Mitigating; Plea of Guilty; Requisites (1999)
exploded inside the latter's yard. Upon knowing that the In order that the plea of guilty may be mitigating, what
throwing of the super lolo was deliberate, Jepoy became requisites must be complied with? (2%)
SUGGESTED ANSWER:
furious and sternly warned Jonas to stop his malicious act
For plea of guilty to be mitigating, the requisites are:
or he would get what he wanted. A heated argument
between Jonas and Jepoy ensued but Jaja tried to calm a. That the accused spontaneously pleaded guilty to the
down his friend. At midnight, Jonas convinced Jaja to crime charged;
lend him his .45 caliber pistol so that he could use it to b. That such plea was made before the court
knock down Jepoy and to end his arrogance. Jonas
competent to try the case and render judgment; and
thought that after all, explosions were everywhere and c. That such plea was made prior to the presentation
nobody would know who shot Jepoy. After Jaja lent his of evidence for the prosecution.
firearm to Jonas, the latter again started started throwing
Mitigating; Plea of Guilty; Voluntary Surrender (1997)
lighted super lolos and pla-plas at Jepoy's yard in order to
provoke him so that he would come out of his house. After killing the victim, the accused absconded. He
When Jepoy came out, Jonas immediately shot him with succeeded in eluding the police until he surfaced and
Jaja's .45 caliber gun but missed his target. Instead, the surrendered to the authorities about two years later.
bullet hit Jepoy's five year old son who was following Charged with murder, he pleaded not guilty but, after the
behind him, killing the boy instantaneously, prosecution had presented two witnesses implicating him
to the crime, he changed his plea to that of guilty.
a) What crime or crimes can Jonas and Jaja be charged
Should the mitigating circumstances of
with? Explain. (2%)
voluntary surrender and plea of guilty be considered in
b) If you were Jonas' and Jaja's lawyer, what
favor of the accused?
possible defenses would you set up in favor of your SUGGESTED ANSWER:
clients? Explain. (2%) Voluntary surrender should be considered as a mitigating
c) If you were the Judge, how would you decide the circumstance. After two years, the police were still
case? Explain. (1%) unaware of the whereabouts of the accused and the latter
SUGGESTED ANSWER:
Criminal Law Bar Examination Q & A (1994-2006) could 23 of 86
have continued to elude arrest. Accordingly, the a. spontaneous, i.e., indicative of acknowledgment
surrender of the accused should be considered mitigating of guilt and not for convenience nor conditional;
because it was done spontaneously, indicative of the b. made before the government incurs expenses,
remorse or repentance on the part of said accused and time and effort in tracking down the
therefore, by his surrender, the accused saved the offender's whereabouts; and
Government expenses, efforts, and time. c. made to a person in authority or the latter's agents.
ALTERNATIVE ANSWER:
Voluntary surrender may not be appreciated in favor of AGGRAVATING
the accused. Two years is too long a time to consider the
surrender as spontaneous (People us. Ablao, 183 SCRA CIRCUMSTANCES
658). For sure the government had already
incurred considerable efforts and expenses in looking Aggravating Circumstances (1996)
for the accused. Jose, Domingo, Manolo, and Fernando, armed
with bolos, at about one o'clock in the morning,
Plea of guilty can no longer be appreciated as a mitigating robbed a house at a desolate place where Danilo,
circumstance because the prosecution had already started his wife, and three daughters were living. While the
with the presentation of its evidence (Art. 13, par. four were in the process of ransacking Danilo's house,
7. Revised Penal Code). Fernando, noticing that one of Danilo's daughters was
trying to get away, ran after her and finally caught up
Mitigating; Voluntary Surrender (1996) with her in a thicket somewhat distant from the
Hilario, upon seeing his son engaged in a scuffle with house. Fernando, before bringing back the daughter to
Rene, stabbed and killed the latter. After the stabbing, he the house, raped her first. Thereafter, the four carted
brought his son home. The Chief of Police of the town, away the belongings of Danilo and his family.
accompanied by several policemen, went to Hilario's a. What crime did Jose, Domingo, Manolo and
house, Hilario, upon seeing the approaching policemen, Fernando commit? Explain.
came down from his house to meet them and voluntarily b. Suppose, after the robbery, the four took turns
went with them to the Police Station to be investigated in in raping the three daughters of Danilo inside
connection with the killing. When eventually charged the latter's house, but before they left, they
with and convicted of homicide, Hilario, on appeal, killed the whole family to prevent identification,
faulted the trial court for not appreciating in his favor the what crime did the four commit? Explain.
mitigating circumstance of voluntary surrender. Is he c. Under the facts of the case, what aggravating
entitled to such a mitigating circumstance? Explain. circumstances may be appreciated against the four?
SUGGESTED ANSWER: Explain.
Yes, Hilario is entitled to the mitigating circumstance of SUGGESTED ANSWER:
voluntary surrender. The crux of the issue is whether the a) Jose, Domingo, and Manolo committed Robbery,
fact that Hilario went home after the incident, but came while Fernando committed complex crime of
down and met the police officers and went with them is Robbery with Rape...
considered "Voluntary surrender," The voluntariness of
surrender is tested if the same is spontaneous showing b) The crime would be Robbery with Homicide because
the intent of the accused to submit himself the killings were by reason (to prevent identification) and
unconditionally to the authorities. This must be either (a) on the occasion of the robbery. The multiple rapes
because he acknowledges his guilt, or (b) because he committed and the fact that several persons were
wishes to save them the trouble and expenses necessarily killed [homicide), would be considered as
incurred in his search and capture. (Reyes' Commentaries, p. aggravating circumstances. The rapes are
303). Thus, the act of the synonymous with Ignominy and the additional killing
accused in hiding after synonymous with cruelty, (People vs. Solis, 182 SCRA;
commission of the crime, but voluntarily went with the People vs. Plaga, 202 SCRA 531)
policemen who had gone to his hiding place to
investigate, was held to be mitigating circumstance.(People vs. c) The aggravating circumstances which may
Dayrit, cited in Reyes' Commentaries, p. 299) be considered in the premises are:
1. Band because all the four offenders are armed;
Mitigating; Voluntary Surrender; Elements (1999) 2. Noctumity because evidently the offenders took
When is surrender by an accused considered advantage of nighttime;
voluntary, and constitutive of the mitigating 3. dwelling; and
circumstance of voluntary surrender? (3%) 4. Uninhabited place because the house where the
SUGGESTED ANSWER: crimes were committed was "at a
A surrender by an offender is considered voluntary when desolate place" and obviously the
it is spontaneous, indicative of an intent to submit offenders took advantage of this
unconditionally to the authorities. circumstance in committing the crime.
To be mitigating, the surrender must be:
Aggravating Circumstances; Generis vs. Qualifying Aggravating; Must be alleged in the information (2000)
(1999) Rico, a member of the Alpha Rho fraternity, was
Distinguish generic aggravating circumstance killed by Pocholo, a member of the rival group,
from qualifying aggravating circumstance. Sigma Phi Omega. Pocholo was prosecuted for
SUGGESTED ANSWER: homicide before the Regional Trial Court in Binan,
Generic Aggravating Circumstances: Laguna. During the trial, the prosecution was able to
a. affects only the imposition of the penalty prescribed, prove that the killing was committed by means of
but not the nature of the crime committed; poison in consideration of a promise or reward and
b. can be offset by ordinary mitigating circumstances; with cruelty. If you were the Judge, with what
c. need not be alleged in the Information as long crime will you convict Pocholo? Explain. (2%)
as proven during the trial, the same shall be SUGGESTED ANSWER:
considered in imposing the sentence. Pocholo should be convicted of the crime of
homicide only because the aggravating circumstances
Qualifying Aggravating Circumstances: which should qualify the crime to murder were not
a. must be alleged in the Information and proven alleged in the Information.
during trial;
b. cannot be offset by mitigating circumstances; The circumstances of using poison, in consideration of a
c. affects the nature of the crime or brings about promise or reward, and cruelty which attended the killing of
a penalty higher in degree than that Rico could only be appreciated as generic aggravating
ordinarily prescribed. circumstances since none of them have been alleged in
the information to qualify the killing to murder. A
Aggravating Circumstances; Kinds & Penalties (1999) qualifying circumstance must be alleged in the
Name the four (4) kinds of aggravating Information and proven beyond reasonable doubt during
circumstances and state their effect on the penalty of the trial to be appreciated as such.
crimes and nature thereof. (3%)
SUGGESTED ANSWER: Aggravating; Nighttime; Band (1994)
The four (4) kinds of aggravating circumstances are: At about 9:30 in the evening, while Dino and Raffy were
1) GENERIC AGGRAVATING or those that can walking along Padre Faura Street, Manila. Johnny hit
generally apply to all crimes, and can be offset them with a rock injuring Dino at the back. Raffy
by mitigating circumstances, but if not offset, approached Dino, but suddenly, Bobby, Steve,
would affect only the maximum of the penalty Danny and Nonoy surrounded the duo. Then Bobby
prescribed by law; stabbed Dino. Steve, Danny, Nonoy and Johnny kept on
2) SPECIFIC AGGRAVATING or those that hitting Dino and Raffy with rocks. As a result.
apply only to particular crimes and cannot be Dino died, Bobby, Steve, Danny, Nonoy and Johnny
offset by mitigating circumstances: were charged with homicide.
3) QUALIFYING CIRCUMSTANCES or those that Can the court appreciate the aggravating
change the nature of the crime to a graver one, circumstances of nighttime and band?
or brings about a penalty next higher in degree, SUGGESTED ANSWER:
and cannot be offset by mitigating circumstances; No, nighttime cannot be appreciated as an aggravating
4) INHERENT AGGRAVATING or those circumstance because there is no indication that the
that essentially accompany the commission of the offenders deliberately sought the cover of darkness to
crime and does not affect the penalty whatsoever. facilitate the commission of the crime or that they took
advantage of nighttime (People vs. De los Reyes, 203 SCRA
Aggravating; Cruelty; Relationship (1994) 707). Besides, judicial notice can be taken of the fact that
Ben, a widower, driven by bestial desire, poked a gun on his Padre Faura Street is well-lighted.
daughter Zeny, forcibly undressed her and tied her legs
to the bed. He also burned her face with a lighted However, band should be considered as the crime
cigarrete. Like a madman, he laughed while raping her. was committed by more than three armed
What aggravating circumstances are present in this case? malefactors; in a recent Supreme Court decision,
SUGGESTED ANSWER: stones or rocks are considered deadly weapons.
a) Cruelty, for burning the victim's face with a lighted
cigarrete, thereby deliberately augmenting the victim's Aggravating; Recidivism (2001)
suffering by acts clearly unnecessary to the rape, while Juan de Castro already had three (3) previous convictions by
the offender delighted and enjoyed seeing the victim final judgment for theft when he was found guilty of
suffer in pain (People vs. Lucas, 181 SCRA 316). Robbery with Homicide. In the last case, the trial Judge
considered against the accused both recidivism and
b) Relationship, because the offended party is a habitual delinquency. The accused appealed and
descendant (daughter) of the offender and contended that in his last conviction, the trial court
considering that the crime is one against chastity. cannot consider against him a finding of recidivism and,

again, of habitual delinquency. Is the appeal meritorious?
Explain. (5%) Would you say that the killing was attended by the
SUGGESTED ANSWER: qualifying or aggravating circumstances of evident
No, the appeal is not meritorious. Recidivism premeditation, treachery, nighttime and unlawful entry?
and habitual delinquency are correctly considered in this SUGGESTED ANSWER:
case because the basis of recidivism is different from 1. Evident premeditation cannot be considered against
that of habitual delinquency. the accused because he resolved to kill the victim "later in
the night" and there was no sufficient lapse of time
Juan is a recidivist because he had been previously between the determination and execution, to allow his
convicted by final judgment for theft and again found conscience to overcome the resolution of his will.
guilty for Robbery with Homicide, which are both crimes
against property, embraced under the same Title (Title 2. TREACHERY may be present because the accused
Ten, Book Two] of the Revised Penal Code. The stabbed the victim while the latter was sound asleep.
implication is that he is specializing in the commission of Accordingly, he employed means and methods which
crimes against property, hence aggravating in the directly and specially insured the execution of the
conviction for Robbery with Homicide. act without risk himself arising from the defense which
the victim might have made (People vs. Dequina. 60 Phil. 279
Habitual delinquency, which brings about an additional People vs. Miranda, et at. 90 Phil. 91).
penalty when an offender is convicted a third time or
more for specified crimes, is correctly considered ... 3. Nighttime cannot be appreciated because there is no
showing that the accused deliberately sought or availed of
Aggravating; Recidivism vs. Quasi-Recidivism (1998) nighttime to insure the success of his act. The Intention
Distinguish between recidivism and quasi- to commit the crime was conceived shortly before
recidivism. [2%] its commission (People vs Pardo. 79 Phil, 568).
SUGGESTED ANSWER: Moreover, nighttime is absorbed in treachery.
In recidivism -
1. The convictions of the offender are for crimes 4. UNLAWFUL ENTRY may be appreciated as an
embraced in the same Title of the Revised aggravating circumstance, inasmuch as the accused
Penal Code; and entered the room of the victim through the window,
2. This circumstance is generic aggravating which is not the proper place for entrance into the house
and therefore can be effect by an ordinary (Art. 14. par. 18. Revised Penal Code, People vs. Baruga 61 Phil. 318).
mitigating circumstance.
Whereas in quasi-recidivlsm -
ALTERNATIVE
1. The convictions are not for crimes embraced in the CIRCUMSTANCES
same Title of the Revised Penal Code, provided that
it is a felony that was committed by the Alternative Circumstances; Intoxication (2002)
offender before serving sentence by final A was invited to a drinking spree by friends. After having
judgment for another crime or while serving had a drink too many, A and B had a heated argument,
sentence for another crime; and during which A stabbed B. As a result, B suffered serious
2. This circumstance is a special physical injuries. May the intoxication of A be considered
aggravating circumstance which cannot be aggravating or mitigating? (5%)
SUGGESTED ANSWER:
offset by any mitigating circumstance.
The intoxication of A may be prima facie considered
mitigating since it was merely incidental to the
Aggravating; Treachery & Unlawful Entry (1997) commission of the crime. It may not be considered
The accused and the victim occupied adjacent aggravating as there is no clear indication from the facts of
apartments, each being a separate dwelling unit of one big the case that it was habitual or intentional on the part of A.
house. The accused suspected his wife of having an illicit Aggravating circumstances are not to be presumed; they
relation with the victim. One afternoon, he saw the victim and should be proved beyond reasonable doubt
his wife together on board a vehicle. In the evening of
that day, the accused went to bed early and tried to sleep, PERSONS Criminally Liable for
but being so annoyed over the suspected relation between
his wife and the victim, he could not sleep. Later in the FELONIES
night, he resolved to kill victim. He rose from bed and
Anti-Fencing Law; Fencing (1996)
took hold of a knife. He entered the apartment of the victim
through an unlocked window. Inside, he saw the victim
Flora, who was engaged in the purchase and sale of
jewelry, was prosecuted for the violation of P.D. 1612,
soundly asleep. He thereupon stabbed the victim,
otherwise known as the Anti-Fencing Law, for having
inflicting several wounds, which caused his death within a
few hours.
been found to be in possession of recently stolen Jewelry
valued at P100,000.00 at her jewelry shop at Zapote
Road, Las Pinas, Metro Manila. She testified during the b. accused, who is not a principal or accomplice in the
trial that she merely bought the same from one named crime, buys, receives, possesses, keeps,
Cecilino and even produced a receipt covering the sale. acquires, conceals, or disposes, or buys and sells,
Cecilino, in the past, used to deliver to her jewelries for sale or in any manner deals in any article, item , object
but is presently nowhere to be found. Convicted by the trial or anything of value, which has been derived from
court for violation of the Anti-Fencing Law, she argued (or the proceeds of said crime;
her acquittal on appeal, contending that the prosecution c. the accused knows or should have known that said
failed to prove that she knew or should have known that article, item, object or anything of value has
the Jewelries recovered from her were the proceeds of been derived from the from the proceeds of the
the crime of robbery or theft. crime of robbery or theft; and
SUGGESTED ANSWER: d. there is on the part of the accused, intent to gain for
No, Flora's defense is not well-taken because mere himself or for another.
possession of any article of value which has been the
subject of theft or robbery shall be prima facie evidence of Criminal Liability; Accessories & Fence (1998)
fencing (P.D.No. 1612). The burden is upon the King went to the house of Laura who was alone. Laura
accused to prove that she acquired the jewelry offered him a drink and after consuming three bottles of
legitimately. Her defense of having bought the Jewelry beer. King made advances to her and with force
from someone whose whereabouts is unknown, does not and violence, ravished her. Then King killed Laura and
overcome the presumption of fencing against her took her jewelry.
(Pamintuan vs People, G.R 111426, 11 July 1994). Buying
personal property puts the buyer on caveat because of Doming, King's adopted brother, learned about the
the phrases that he should have known or ought to know incident. He went to Laura's house, hid her body, cleaned
that it is the proceed from robbery or theft. Besides, she everything and washed the bloodstains inside the room.
should have followed the administrative procedure under
the decree that of getting a clearance from the authorities in Later, King gave Jose, his legitimate brother, one piece of
case the dealer is unlicensed in order to escape liability. jewelry belonging to Laura. Jose knew that the
jewelry was taken from Laura but nonetheless he
Anti-Fencing Law; Fencing vs. Theft or Robbery (1995) sold it for P2,000.
What is the difference between a fence and an accessory
to theft or robbery? Explain. What crime or crimes did King, Doming and
Is there any similarity between them? Jose commit? Discuss their criminal liabilities. [10%]
One difference between a fence and an accessory to theft King committed the composite crime of Rape with
or robbery is the penalty involved; a fence is punished as homicide as a single indivisible offense, not a
a principal under P.D. No. 1612 and the penalty is complex crime, and Theft. ...
higher, whereas an accessory to robbery or theft
under the Revised Penal Code is punished two Doming's acts, having been done with knowledge of the
degrees lower than the principal, unless he bought or commission of the crime and obviously to conceal the
profited from the proceeds of theft or robbery body of the crime to prevent its discovery, makes him an
arising from robbery in Philippine highways under accessory to the crime of rape with homicide under Art. 19,
P.D. No. 532 where he is punished as an par. 2 of the Rev. Penal Code, but he is exempt from
accomplice, hence the penalty is one degree lower. criminal liability therefor under Article 20 of the Code,
being an adopted brother of the principal.
Also, fencing is a malum prohibitum and therefore there
is no need to prove criminal intent of the accused; this is Jose incurs criminal liability either as an accessory to the
not so in violations of Revised Penal Code. crime of theft committed by King, or as fence. Although
SUGGESTED ANSWER: he is a legitimate brother of King, the exemption under
Yes, there is a similarity in the sense that all the acts of Article 20 does not include the participation he did,
one who is an accessory to the crimes of robbery or theft because he profited from the effects of such theft
are included in the acts defined as fencing. In fact, by selling the jewelry knowing that the same was taken
the accessory in the crimes of robbery or theft from Laura. Or Jose may be prosecuted for fencing
could be prosecuted as such under the Revised Penal under the Anti-Fencing Law of 1979 (PD No. 1612)
Code or as a fence under P.D. No. 1612. (Dizon-Pamintuan since the jewelry was the proceeds of theft and with
vs. People, 234 SCRA 63]
intent to gain, he received it from King and sold it.
Anti-Fencing Law; Fencing; Elements (1995)
Criminal Liability; Non-Exemption as Accessory (2004)
What are the elements of fencing? DCB, the daughter of MCB, stole the earrings of XYZ, a
SUGGESTED ANSWER:
The elements of fencing are: stranger. MCB pawned the earrings with TBI Pawnshop
a. a crime of robbery or theft has been committed; as a pledge for P500 loan. During the trial, MCB raised
the defense that being the mother of DCB, she cannot be
Criminal Law Bar Examination Q & A (1994-2006) held 27 of 86 because he
liable as an accessory. Will MCB's defense prosper? also had his own long-standing grudge against C, who
Reason briefly. (5%) had wronged him in the past. If C is killed by B, would A
SUGGESTED ANSWER: be liable as a principal by inducement? (5%)
No, MCB's defense will not prosper because the SUGGESTED ANSWER:
exemption from criminal liability of an accessory by No. A would not be liable as a principal by inducement
virtue of relationship with the principal does not because the reward he promised B is not the
cover accessories who themselves profited from or sole impelling reason which made B to kill C. To bring
assisted the offender to profit by the effects or proceeds about criminal liability of a co-principal, the inducement
of the crime. This non-exemption of an accessory, made by the inducer must be the sole consideration
though related to the principal of the crime, is which caused the person induced to commit the
expressly provided in Art. 20 of the Revised Penal Code. crime and without which the crime would not
have been committed. The facts of the case
Criminal Liability; Principal by Direct Participation; Co- indicate that B, the killer supposedly induced by A, had
Principal by Indispensable Cooperation (2000) his own reason to kill C out of a long standing grudge.
Despite the massive advertising campaign in media
against firecrackers and gun-firing during the New Year's Criminal Liability; Principal; Inducement &
celebrations, Jonas and Jaja bought ten boxes of super Participation (1994)
lolo and pla-pla in Bocaue, Bulacan. Before midnight of Tata owns a three-storey building located at No. 3
December 31, 1999, Jonas and Jaja started their Herran Street. Paco, Manila. She wanted to construct a
celebration by having a drinking spree at Jona's place by new building but had no money to finance the
exploding their high-powered firecrackers in their construction. So, she insured the building for
neighborhood. In the course of their conversation, Jonas P3,000,000.00. She then urged Yoboy and Yongsi, for
confided to Jaja that he has been keeping a long-time monetary consideration, to burn her building so she
grudge against his neighbor Jepoy in view of the latter's could collect the insurance proceeds. Yoboy and Yongsi
refusal to lend him some money. While under the burned the said building resulting to its total loss.
influence of liquor, Jonas started throwing lighted super What is their respective criminal liability?
lolos inside Jepoy's fence to irritate him and the same SUGGESTED ANSWER:
exploded inside the latter's yard. Upon knowing that the Tata is a principal by inducement because she
throwing of the super lolo was deliberate, Jepoy became directly induced Yoboy and Yongsi, for a price or
furious and sternly warned Jonas to stop his malicious act monetary consideration, to commit arson which the
or he would get what he wanted. A heated argument latter would not have committed were it not for such
between Jonas and Jepoy ensued but Jaja tried to calm reason. Yoboy and Yongsi are principals by direct
down his friend. At midnight, Jonas convinced Jaja to participation (Art. 17, pars. 21 and 3, RPC).
lend him his .45 caliber pistol so that he could use it to
knock down Jepoy and to end his arrogance. Jonas Destructive Arson (1994)
thought that after all, explosions were everywhere and Tata owns a three-storey building located at No. 3
nobody would know who shot Jepoy. After Jaja lent his Herran Street. Paco, Manila. She wanted to construct a
firearm to Jonas, the latter again started started throwing new building but had no money to finance the
lighted super lolos and pla-plas at Jepoy's yard in order to construction. So, she insured the building for
provoke him so that he would come out of his house. P3,000,000.00. She then urged Yoboy and Yongsi, for
When Jepoy came out, Jonas immediately shot him with monetary consideration, to burn her building so she
Jaja's .45 caliber gun but missed his target. Instead, the could collect the insurance proceeds. Yoboy and Yongsi
bullet hit Jepoy's five year old son who was following burned the said building resulting to its total loss.
behind him, killing the boy instantaneously, What crime did Tata, Yoboy and Yongsi commit?
SUGGESTED ANSWER:
If you were the Judge, how would you decide the case?
Tata, Yoboy and Yongsi committed the crime of
Explain. (1%)
SUGGESTED ANSWER: destructive arson because they collectively caused the
I would convict Jonas as principal by direct participation destruction of property by means of fire under the
and Jaja as co-principal by Indispensable cooperation for circumstances which exposed to danger the life
the complex crime of murder with homicide. Jaja should or property of others (Art, 320, par. 5, RPC. as amended
be held liable as co-principal and not only as by RA No. 7659).
an accomplice because he knew of Jonas' criminal
design even before he lent his firearm to Jonas and PENALTIES
still he concurred in that criminal design by
providing the firearm. Complex Crime vs. Compound Crime (2004)
Distinguish clearly but briefly: Between compound
Criminal Liability; Principal by Inducement (2002) and complex crimes as concepts in the Penal Code.
A asked B to kill C because of a grave injustice done to A SUGGESTED ANSWER:
by C. A promised B a reward. B was willing to kill C, not so COMPOUND CRIMES result when the offender
much because of the reward promised to him but committed only a single felonious act from which two or
Criminal Law Bar Examination Q & A (1994-2006) more 28 of 86
crimes resulted. This is provided for in modified form Aberratio ictus or mistake in the blow occurs when a
in the first part of Article 48, Revised Penal Code, limiting felonious act missed the person against whom it was
the resulting crimes to only grave and/or less grave directed and hit instead somebody who was not the
felonies. Hence, light felonies are excluded even though intended victim. Error in personae, or mistake in identity
resulting from the same single act. occurs when the felonious act was directed at the person
intended, but who turned out to be somebody else.
COMPLEX CRIMES result when the offender has Aberratio ictus brings about at least two (2) felonious
to commit an offense as a necessary means for consequence, ie. the attempted felony on the intended
committing another offense. Only one information shall victim who was not hit and the felony on the unintended
be filed and if proven, the penalty for the more serious victim who was hit. A complex crime of the first form
crime shall be imposed. under Art. 48, RPC generally result. In error in personae
only one crime is committed
Complex Crime vs. Special Complex Crime vs.
Delito Continuado (2005) Complex Crime; Aberratio Ictus, Error In Personae &
Distinguish the following from each other: Praeter Intentionem (1999)
SUGGESTED ANSWER: What do you understand by aberratio ictus: error in
An ORDINARY COMPLEX CRIME is made up of personae; and praeter intentionem? Do they alter the
two or more crimes being punished in distinct criminal liability of an accused? Explain. (4%)
provisions of the Revised Penal Code but alleged in SUGGESTED ANSWER:
one information either because they were brought ABERRATIO ICTUS or mistake in the blow occurs
about by a single felonious act or because one offense when the offender delivered the blow at his intended
is a necessary means for committing the other offense victim but missed, and instead such blow landed on an
or offenses. They are alleged in one information so unintended victim. The situation generally brings about
that only one penalty shall be imposed. As to penalties, complex crimes where from a single act, two or more
ordinary complex crime, the penalty for the most serious grave or less grave felonies resulted, namely the attempt
crime shall be imposed and in its maximum period against the intended victim and the consequence on the
unintended victim. As complex crimes, the penalty for
A SPECIAL COMPLEX CRIME, on the other hand, is the more serious crime shall be the one imposed and in the
made up of two or more crimes which are considered maximum period. It is only when the resulting felonies
only as components of a single indivisible offense being are only light that complex crimes do not result and the
punished in one provision of the Revised Penal Code. As to penalties are to be imposed distinctly for each resulting
penalties, special complex crime, only one penalty is crime.
specifically prescribed for all the component crimes
which are regarded as one indivisible offense. The ERROR IN PERSONAE or mistake in identity
component crimes are not regarded as distinct crimes occurs when the offender actually hit the person to
and so the penalty for the most serious crime is not the whom the blow was directed but turned out to be
penalty to be imposed nor in its maximum period. It is the different from and not the victim intended. The
penalty specifically provided for the special complex crime criminal liability of the offender is not affected, unless
that shall be applied according to the rules on the mistake in identity resulted to a crime different
imposition of the penalty. from what the offender intended to commit, in
which case the lesser penalty between the crime
DELITO CONTINUADO, or CONTINUOUS intended and the crime committed shall be imposed
CRIME, is a term used to denote as only one crime a but in the maximum period (Art. 49, RFC).
series of felonious acts arising from a single criminal
resolution, not susceptible of division, which are carried out PRAETER INTENTIONEM or where the consequence
in the same place and at about the same time, and went beyond that intended or expected. This is
violating one and the same penal provision. The acts a mitigating circumstance (Art. 13. par. 3, RPC) when
done must be impelled by one criminal intent or purpose, there is a notorious disparity between the act or
such that each act merely constitutes a partial execution of means employed by the offender and the resulting
a particular crime, violating one and the same penal felony, i,e., the resulting felony could not be
provision. It involves a concurrence of felonious acts reasonably anticipated or foreseen by the of fender
violating a common right, a common penal provision, from the act or means employed by him.
and Impelled by a single criminal impulse (People vs.
Ledesma, 73 SCRA 77). Complex Crime; Aberratio Ictus; Attempted Murder with
Homicide (2000)
Complex Crime; Aberratio ictus vs. error in Despite the massive advertising campaign in media
personae (1994) against firecrackers and gun-firing during the New Year's
Distinguish aberratio ictus from error in personae. celebrations, Jonas and Jaja bought ten boxes of super
SUGGESTED ANSWER: lolo and pla-pla in Bocaue, Bulacan. Before midnight of
December 31, 1999, Jonas and Jaja started their
celebration by having a drinking spree at Jona's place by Complex Crimes; Coup d’etat & rebellion & sedition
exploding their high-powered firecrackers in their (2003)
neighborhood. In the course of their conversation, Jonas 1) Can there be a complex crime of coup d'etat
confided to Jaja that he has been keeping a long-time with rebellion? 2%
grudge against his neighbor Jepoy in view of the latter's 2) Can there be a complex crime of coup d'etat with
refusal to lend him some money. While under the sedition? 2%
influence of liquor, Jonas started throwing lighted super SUGGESTED ANSWER:
lolos inside Jepoy's fence to irritate him and the same 1) Yes, if there was conspiracy between the offender/
exploded inside the latter's yard. Upon knowing that the offenders committing the coup d'etat and the
throwing of the super lolo was deliberate, Jepoy became offenders committing the rebellion. By conspiracy,
furious and sternly warned Jonas to stop his malicious act the crime of one would be the crime of the other
or he would get what he wanted. A heated argument and vice versa. This is possible because the
between Jonas and Jepoy ensued but Jaja tried to calm offender in coup d'etat may be any person or
down his friend. At midnight, Jonas convinced Jaja to persons belonging to the military or the national
lend him his .45 caliber pistol so that he could use it to police or a public officer, whereas rebellion does not
knock down Jepoy and to end his arrogance. Jonas so require. Moreover, the crime of coup d'etat may be
thought that after all, explosions were everywhere and committed singly, whereas rebellion requires a
nobody would know who shot Jepoy. After Jaja lent his public uprising and taking up arms to overthrow the
firearm to Jonas, the latter again started throwing lighted duly constituted government. Since the two crimes
super lolos and pla-plas at Jepoy's yard in order to are essentially different and punished with distinct
provoke him so that he would come out of his house. penalties, there is no legal impediment to the
When Jepoy came out, Jonas immediately shot him with application of Art. 48 of the Revised Penal Code.
Jaja's .45 caliber gun but missed his target. Instead, the
bullet hit Jepoy's five year old son who was following 2) Yes, coup d'etat can be complexed with sedition
behind him, killing the boy instantaneously, because the two crimes are essentially different and
a) What crime or crimes can Jonas and Jaja be charged distinctly punished under the Revised Penal Code.
with? Explain. (2%) Sedition may not be directed against the
SUGGESTED ANSWER: Government or non-political in objective, whereas
Jonas and Jaja, can be charged with the complex crime of coup d'etat is always political in objective as it is
attempted murder with homicide because a single act directed against the Government and led by persons or
caused a less grave and a grave felony (Art. 48. RPC). public officer holding public office belonging to
the military or national police. Art. 48 of the Code
Attempted murder is a less grave felony, may apply under the conditions therein provided.
while consummated homicide is a grave felony: ALTERNATIVE ANSWER:
both are punishable by afflictive penalties. The crime of coup d'etat cannot be complexed with the
crime of rebellion because both crimes are directed
Complex Crime; Doctrine of Aberratio Ictus; against the Government or for political purposes,
Not Applicable (1996) although the principal offenders are different.
At the height of an altercation, Pedrito shot Paulo The essence may be the same and thus constitute
but missed, hitting Tiburcio instead, resulting in the only one crime. In this situation, the two crimes are
death of the latter. Pedrito, invoking the doctrine of not distinct and therefore, may not be proper to apply
aberratio ictus, claims exemption from criminal liability. Article 48 of the Code.
If you were the judge, how would you decide the case?
SUGGESTED ANSWER: Complex Crimes; Determination of the Crime (1999)
If I were the Judge, I will convict Pedrito and find him A, actuated by malice and with the use of a
guilty of the complex crime of Homicide with Attempted fully automatic M-14 sub-machine gun, shot a
Homicide. The single act of firing at Paulo resulted in the group of persons who were seated in a cockpit with
commission of two felonies, one grave (homicide) and one burst of successive, continuous, automatic fire.
the other less grave (attempted homicide) thus falling Four (4) persons were killed thereby, each having hit
squarely under Art. 48, RPC; hence, the penalty would be by different bullets coming from the sub-machine gun
for the more serious crime (homicide} in its maximum of A. Four (4) cases of murder were filed against A.
period (17 years 4 months and 1 day to 20 years). The trial court ruled that there was only one crime
committed by A for the reason that, since A performed
Aberratio ictus (mistake in the blow) could not be used only one act, he having pressed the trigger of his
as a defense as it is not an exempting circumstance. gun only once, the crime committed was
Pedrito is liable under the principle of Art. 4, RPC, which murder. Consequently, the trial judge sentenced A to
makes a person criminally liable for all the natural just one penalty of reclusion perpetua.
and logical consequences of his felonious act Was the decision of the trial judge correct? Explain. (4%)
SUGGESTED ANSWER:

Criminal Law Bar Examination Q & A (1994-2006) 30 of 86 the penalty
The decision of the trial judge is not correct. When the specifically provided for the special complex crime that
offender made use of an automatic firearm, the acts shall be applied according to the rules on imposition
committed are determined by the number of bullets of the penalty.
discharged inasmuch as the firearm being automatic, the
offender need only press the trigger once and it Continuing Offense vs. Delito Continuado (1994)
would fire continually. For each death caused by a Differentiate delito continuado from a continuing
distinct and separate bullet, the accused incurs offense.
distinct criminal liability. Hence, it is not the act of SUGGESTED ANSWER:
pressing the trigger which should be considered as DELITO CONTINUADO, or CONTINUOUS
producing the several felonies, but the number of CRIME, is a term used to denote as only one crime a
bullets which actually produced them. series of felonious acts arising from a single criminal
resolution, not susceptible of division, which are carried out
Complex Crimes; Nature & Penalty Involved (1999) in the same place and at about the same time, and
What constitutes a complex crime? How many violating one and the same penal provision. The acts
crimes maybe involved in a complex crime? What is done must be impelled by one criminal intent or purpose,
the penalty therefor? (4%) such that each act merely constitutes a partial execution of
SUGGESTED ANSWER: a particular crime, violating one and the same penal
A complex crime is constituted when a single act caused provision. It involves a concurrence of felonious acts
two or more grave or less grave felonies or when violating a common right, a common penal provision,
an offense is committed as a necessary means to and impelled by a single criminal impulse (People vs. Le-
commit another offense (Art. 48, RPC). At least desma, 73 SCRA 77).
two (2) crimes are involved in a complex crime;
either two or more grave or less grave felonies resulted On the other hand, a CONTINUING OFFENSE is one
from a single act, or an offense is committed as a whose essential ingredients took place in more than one
necessary means for committing another. The municipality or city, so much so that the criminal
penalty for the more serious crime shall be imposed prosecution may be instituted and the case tried in the
and in its maximum period. (Art. 48, RPC) competent court of any one of such municipality or city.
Complex Crimes; Ordinary Complex Crime vs. The term "CONTINUED CRIME" or delito continuado
Special Complex Crime (2003) mandates that only one information should be filed
Distinguish between an ordinary complex crime and against the offender although a series of felonious
a special complex crime as to their concepts and as to acts were performed; the term "continuing crime" is
the imposition of penalties. 2% more pertinently used with reference to the venue
SUGGESTED ANSWER: where the criminal action may be instituted.
IN CONCEPT -
An ORDINARY COMPLEX CRIME is made up of Death Penalty (2004)
two or more crimes being punished in distinct A. The death penalty cannot be inflicted under which
provisions of the Revised Penal Code but alleged in of the following circumstances:
one Information either because they were brought 1) When the guilty person is at least 18 years of age at
about by a single felonious act or because one offense the time of the commission of the crime.
is a necessary means for committing the other offense 2) When the guilty person is more than 70 years of age.
or offenses. They are alleged in one Information so 3) When, upon appeal to or automatic review by
that only one penalty shall be imposed. the Supreme Court, the required majority for
the imposition of the death penalty is not obtained.
A SPECIAL COMPLEX CRIME, on the other hand, is 4) When the person is convicted of a capital crime but
made up of two or more crimes which are considered before execution becomes insane.
only as components of a single indivisible offense being 5) When the accused is a woman while she is pregnant
punished in one provision of the Revised Penal Code. or within one year after delivery.
Explain your answer or choice briefly. (5%)
AS TO PENALTIES - SUGGESTED ANSWER:
In ORDINARY COMPLEX CRIME, the penalty A. Understanding the word "inflicted" to mean the
for the most serious crime shall be imposed and in imposition of the death penalty, not its execution, the
its maximum period. circumstance in which the death penalty cannot be
inflicted is no. 2: "when the guilty person is more than 70
In SPECIAL COMPLEX CRIME, only one penalty is years of age" (Art. 47, Revised Penal Code). Instead, the
specifically prescribed for all the component crimes penalty shall be commuted to reclusion perpetua, with
which are regarded as one indivisible offense. The the accessory penalties provided in Article 40, RFC.
component crimes are not regarded as distinct crimes
and so the penalty for the most serious crime is not the In circumstance no. 1 when the guilty person is at least 18
penalty to be imposed nor in its maximum period. It is years of age at the time of the commission of the
crime, the death penalty can be imposed since or date of birth of the offended party pursuant to
the offender is already of legal age when he Section 40, Rule 130 of the Rules on Evidence shall be
committed the crime. sufficient but only under the following
circumstances: (a) If the victim is alleged to be
Circumstance no. 3 no longer operates, considering below 3 years of age and what is sought to be
the decision of the Supreme Court in People vs. Efren Mateo proved is that she is less than 7 years old; (b) If the
(G.R. 147678-87, July 7, 2004) providing an intermediate victim is alleged to be below 7 years of age and what is
review for such cases where the penalty imposed is sought to be proved is that she is less than 12
death, reclusion perpetua or life imprisonment before years old; (c) If the victim is alleged to be below 12
they are elevated to the Supreme Court. years of age and what is sought to be proved is that she
is less than 18 years old.
In circumtances nos. 4 & 5, the death penalty can be 4) In the absence of a certificate of live birth, authentic
imposed if prescribed by the law violated although its document, or the testimony of the victim's mother
execution shall be suspended when the convict becomes or relatives concerning the victim's age under the
insane before it could be executed and while he is insane. circumstances above-stated, complainant's sole
testimony can suffice, provided that it is expressly
Likewise, the death penalty can be imposed upon a and clearly admitted by the accused (People us. Pruna,
woman but its execution shall be suspended during 390 SCRA 577 [2002]).
her pregnancy and for one year after her delivery.
ALTERNATIVE ANSWER: Habitual Delinquency & Recidivism (2001)
The word "INFLICTED" is found only in Art. 83 to the Juan de Castro already had three (3) previous convictions
effect that the death penalty may not be "INFLICTED" by final judgment for theft when he was found guilty of
upon a pregnant woman, such penalty is to be Robbery with Homicide. In the last case, the trial Judge
suspended. If "INFLICTED" is to be construed as considered against the accused both recidivism
"EXECUTION", then No. 5 is the choice. and habitual delinquency. The accused appealed
and contended that in his last conviction, the trial
Death Penalty; Qualified Rape; Requisites (2004) court cannot consider against him a finding of recidivism
GV was convicted of raping TC, his niece, and he and, again, of habitual delinquency. Is the appeal
was sentenced to death. It was alleged in the information meritorious? Explain. (5%)
that the victim was a minor below seven years old, SUGGESTED ANSWER:
and her mother testified that she was only six years No, the appeal is not meritorious. Recidivism
and ten months old, which her aunt corroborated on the and habitual delinquency are correctly considered in this
witness stand. The information also alleged that the accused case because the basis of recidivism is different from
was the victim's uncle, a fact proved by the prosecution. that of habitual delinquency.
Juan is a recidivist ...
On automatic review before the Supreme Court, Habitual delinquency, which brings about an additional
accused-appellant contends that capital punishment penalty when an offender is convicted a third time or
could not be imposed on him because of the inadequacy more for specified crimes, is correctly considered because
of the charges and the insufficiency of the evidence Juan had already three (3) previous convictions by final
to prove all the elements of the heinous crime of judgment for theft and again convicted for Robbery With
rape beyond reasonable doubt. Is appellant's Homicide. And the crimes specified as basis for habitual
contention correct? Reason briefly. (5%) delinquency includes, inter alia, theft and robbery.
SUGGESTED ANSWER:
Yes, appellant's contention is correct insofar as the age of Indeterminate Sentence Law (1994)
the victim is concerned. The age of the victim raped has Itos was convicted of an offense penalized by a
not been proved beyond reasonable doubt to constitute the special law. The penalty prescribed is not less than six
crime as qualified rape and deserving of the death years but not more than twelve years. No modifying
penalty. The guidelines in appreciating age as a qualifying circumstance attended the commission of the crime.
circumstance in rape cases have not been met, to wit: If you were the judge, will you apply the
1) The primary evidence of the age of the victim is her Indeterminate Sentence Law?
birth certificate; If so, how will you apply it?
2) In the absence of the birth certificate, age of the SUGGESTED ANSWER:
victim maybe proven by authentic document, such If I were the judge, I will apply the provisions of
as baptismal certificate and school records; the Indeterminate Sentence Law, as the last sentence
3) If the aforesaid documents are shown to have been of Section 1 Act 4103, specifically provides the
lost or destroyed or otherwise unavailable, the application thereof for violations of special laws.
testimony, if clear and credible of the victim's
mother or any member of the family, by Under the same provision, the minimum must not be less
consanguinity or affinity, who is qualified to testify than the minimum provided therein (six years and one
on matters respecting pedigree such as the exact age day) and the maximum shall not be more than the
maximum provided therein, i.e. twelve years. (People The purpose of the law in fixing the minimum term
vs. Rosalina Reyes, 186 SCRA 184) of the sentence is to set the grace period at which
the convict may be released on parole from
Indeterminate Sentence Law (1999) imprisonment, unless by his conduct he is not deserving
Andres is charged with an offense defined by a of parole and thus he shall continue serving his prison
special law. The penalty prescribed for the term in Jail but in no case to go beyond the maximum
offense is imprisonment of not less than five (5) years term fixed in the sentence.
but not more than ten [10) years. Upon arraignment, he
entered a plea of guilty. In the imposition of the proper Indeterminate Sentence Law (2005)
penalty, should the Indeterminate Sentence Law be Harold was convicted of a crime defined and penalized
applied? If you were the Judge trying the case, what by a special penal law where the imposable penalty is
penalty would you impose on Andres? (4%) from 6 months, as minimum, to 3 years, as maximum.
SUGGESTED ANSWER:
Yes, the Indeterminate Sentence Law should be applied State with reasons whether the court may
because the minimum imprisonment is more than one correctly impose the following penalties:
(1) year. a) a straight penalty of 10 months;
SUGGESTED ANSWER:
If I were the Judge, I will impose an indeterminate Yes, because the penalty is less than one year, a straight
sentence, the maximum of which shall not exceed penalty may be imposed. (People v. Arellano, G.R. No,
the maximum fixed by law and the minimum shall not 46501, October 5, 1939)
be less than the minimum penalty prescribed by the ALTERNATIVE ANSWER:
same. I have the discretion to impose the penalty Under the Indeterminate Sentence Law, the minimum
within the said minimum and maximum. imposable penalty shall be imposed but the maximum
shall not exceed the maximum imposable by law.
Indeterminate Sentence Law (1999)
A was convicted of illegal possession of grease guns and b) 6 months, as minimum, to 11 months, as
two Thompson sub-machine guns punishable under the maximum;
SUGGESTED ANSWER:
old law [RA No,4] with imprisonment of from five (5) to
ten (10) years. The trial court sentenced the accused No, because Indeterminate Sentence Law does not apply
to suffer imprisonment of five (5) years and one (1) day. when the penalty imposed is less than one year (Sec.
Is the penalty thus imposed correct? Explain. (3%) 2, Art. 4103, as amended).
SUGGESTED ANSWER:
Indeterminate Sentence Law does not apply to: The c) a straight penalty of 2 years. (5%)
SUGGESTED ANSWER:
penalty imposed, being only a straight penalty, is not
correct because it does not comply with the No, because the Indeterminate Sentence Law will apply
Indeterminate Sentence Law which applies to this case. when the minimum of the penalty exceeds one year.
ALTERNATIVE ANSWER.
Said law requires that if the offense is punished by
If the imposition of straight penalty which consists of the
any law other than the Revised Penal Code, the court
minimum period of the penalty prescribed by law, then it
shall sentence the accused to an indeterminate sentence,
may be allowed because it favors the accused.
the maximum term of which shall not exceed the maximum
penalty fixed by the law and the minimum shall not be Indeterminate Sentence Law; Exceptions (1999)
less than the minimum penalty prescribed by the same. Under what circumstances is the Indeterminate Sentence
Law not applicable? (2%)
Indeterminate Sentence Law (2002) SUGGESTED ANSWER:
How are the maximum and the minimum terms of 1) Persons convicted of offenses punished with
the indeterminate sentence for offenses punishable death penalty or life imprisonment;
under the Revised Penal Code determined? (3%) 2) Those convicted of treason, conspiracy or proposal
SUGGESTED ANSWER:
to commit treason;
For crimes punished under the Revised Penal Code, the
3) Those convicted of misprision of treason, rebellion,
maximum term of the Indeterminate sentence shall be
sedition or espionage;
the penalty properly imposable under the same Code
4) Those convicted of piracy;
after considering the attending mitigating and/or
5) Those who are habitual delinquents;
aggravating circumstances according to Art, 64 of said
6) Those who shall have escaped from confinement or
Code. The minimum term of the same sentence shall be
evaded sentence;
fixed within the range of the penalty next lower in degree to 7) Those who violated the terms of conditional pardon
that prescribed for the crime under the said Code. granted to them by the Chief Executive;
8) Those whose maximum term of imprisonment does
Under the law, what is the purpose for fixing
not exceed one year;
the maximum and the minimum terms of
the indeterminate sentence? (2%)
SUGGESTED ANSWER:
9) Those who, upon the approval of the No. A fine, whether imposed as a single or as an
law (December 5, 1933). had been sentenced by alternative penalty, should not and cannot be reduced or
final Judgment; converted into a prison term. There is no rule for
10) Those sentenced to the penalty of destierro transmutation of the amount of a fine into a term
or suspension. of imprisonment. (People v. Dacuycuy, G.R. No. L-45127
May 5, 1989)
Indeterminate Sentence Law; Exceptions (2003)
When would the Indeterminate Sentence Law be Penalties: Pecuniary Penalties vs. Pecuniary
inapplicable? 4% Liabilities (2005)
SUGGESTED ANSWER: Distinguish pecuniary penalties from pecuniary liabilities.
The Indeterminate Sentence Law is not applicable to: (2%)
1) those persons convicted of offenses punished SUGGESTED ANSWER:
with death penalty or life-imprisonment or Pecuniary liabilities do not include restitution, but include
reclusion perpetua; reparation of damages caused, the indemnification
2) those convicted of treason, conspiracy or for consequential damages, as well as fines and cost
proposal to commit treason; of the proceedings.
3) those convicted of misprision of treason,
rebellion, sedition or espionage; Pecuniary penalties include fines and cost of the
4) those convicted of piracy; proceedings.
5) those who are habitual delinquents;
6) those who shall have escaped from confinement or Penalties; Complex Crime of Estafa (1997)
evaded sentence; A was convicted of the complex crime of estafa through
7) those who having been granted conditional falsification of public document. Since the amount
pardon by the Chief Executive shall have violated Involved did not exceed P200.00, the penalty prescribed by
the terms thereof; law for estafa is arresto mayor in its medium and
8) those whose maximum term of imprisonment does maximum periods. The penalty prescribed by law for
not exceed one year; falsification of public document is prision mayor plus
9) those already sentenced by final judgment at the fine not to exceed P5,000.00.
time of approval of this Act; and Impose the proper prison penalty.
10) those whose sentence imposes penalties which SUGGESTED ANSWER:
do not involve imprisonment, like destierro. The proper penalty is ANY RANGE WITHIN prision
correccional (six (6) months and one (1) day to six (6)
Penalties: Fine or Imprisonment vs. Subsidiary years) as MINIMUM, to ANY RANGE within prision
Imprisonment (2005) mayor maximum (ten (10) years and one (1) day to
E and M are convicted of a penal law that imposes twelve (12) years) as MAXIMUM. This is in accordance
a penalty of fine or imprisonment or both fine with People us, Gonzales, 73 Phil, 549, where It was
and imprisonment. The judge sentenced them to pay the ruled that for the purpose of determining the penalty
fine, jointly and severally, with subsidiary next lower in degree, the penalty that should be
imprisonment in case of insolvency. considered as a starting point is the whole of prision
Is the penalty proper? Explain. mayor, it being the penalty prescribed by law, and not
SUGGESTED ANSWER: prision mayor in its maximum period, which is only the
The penalty is not proper. The two accused penalty actually applied because of Article 48 of the
must separately pay the fine, which is their penalty. Revised Penal Code. The penalty next lower in degree
Solidary liability applies only to civil liabilities. therefor is prision correccional and it is within the range of
ALTERNATIVE ANSWER: this penalty that the minimum should be taken.
NO, because in penal law when there are several
offenders, the court in the exercise of its discretion shall Penalties; Factors to Consider (1991)
determine what shall be the share of each offender Imagine that you are a Judge trying a case, and based on the
depending upon the degree of participation – as evidence presented and the applicable law, you have
principal, accomplice or accessory. If within each class of decided on the guilt of two (2) accused. Indicate the five (5)
offender, there are more of them, such as more than one steps you would follow to determine the exact penalty to
principal or more than one accomplice or accessory, the be imposed. Stated differently, what are the factors you
liability in each class of offender shall be subsidiary. Anyone must consider to arrive at the correct penalty?
of the may be required to pay the civil liability pertaining SUGGESTED ANSWER:
to such offender without prejudice to recovery from those 1. the crime committed;
whose share have been paid by another. 2. Stage of execution and degree of participation;
3. Determine the penalty;
May the judge impose an alternative penalty of fine 4. Consider the modifying circumstances;
or imprisonment? Explain. (4%) 5. Determine whether Indeterminate Sentence Law
SUGGESTED ANSWER:
is applicable or not.
two or more mitigating circumstances and no aggravating
Penalties; Homicide w/ Modifying Circumstance (1995) circumstances, the penalty next lower in degree should be
Homer was convicted of homicide. The trial court imposed. For purposes of the Indeterminate
appreciated the following modifying circumstances: the Sentence Law, the penalty next lower in degree
aggravating circumstance of nocturnity, and the should be determined without regard as to
mitigating circumstances of passion and obfuscation, no whether the basic penalty provided by the Revised
intent to commit so grave a wrong, illiteracy and Penal Code should be applied in its maximum
voluntary surrender. The imposable penalty for homicide is or minimum period as circumstances modifying
reclusion temporal the range of which is twelve (12) liability may require. The penalty next lower in
years and one (1) day to twenty (20) years. degree to prision correccional. Therefore, as previously
Taking into account the attendant aggravating stated, the minimum should be within the range of
and mitigating circumstances, and applying the arresto mayor and the maximum is within the range
Indeterminate Sentence Law, determine the proper of prision correctional in its maximum period.
penalty to be imposed on the accused.
SUGGESTED ANSWER: Penalties; Parricide w/ Mitigating Circumstance (1997)
It appears that there is one aggravating circumstance A and B pleaded guilty to the crime of parricide. The
(nocturnity), and four mitigating circumstances court found three mitigating circumstances, namely, plea of
(passion and obfuscation, no intent to commit so grave guilty, lack of Instruction and lack of intent to commit so
a wrong as that committed and voluntary surrender). grave a wrong as that committed. The prescribed
Par. 4, Art. 64 should be applied. Hence there will be penalty for parricide is reclusion perpetua to death.
off-setting of modifying circumstances, which will Impose the proper principal penalty.
now result in the excess of three mitigating SUGGESTED ANSWER:
circumstances. This will therefore justify in reducing The proper penalty is reclusion perpetua. Even if there
the penalty to the minimum period. are two or more mitigating circumstances, a court cannot
lower the penalty by one degree (Art. 63. par. 3, Revised
The existence of an aggravating circumstance, albeit there Penal Code; People vs. Formigones, 87 Phil. 685). In U.S.
are four aggravating, will not justify the lowering of the vs. Relador 60 Phil. 593, where the crime committed was
penalty to the next lower degree under paragraph 5 of parricide with the two (2) mitigating circumstances of
said Article, as this is applicable only if THERE IS NO illiteracy and lack of intention to commit so grave a
AGGRAVATING CIRCUMSTANCE present. wrong, and with no aggravating circumstance, the
Since the crime committed is Homicide and the penalty Supreme Court held that the proper, penalty to be
therefor is reclusion temporal, the MAXIMUM sentence imposed is reclusion perpetua.
under the Indeterminate Sentence Law should be the
minimum of the penalty, which is 12 years and 1 day to 14 Penalties; Preventive Imprisonment (1994)
years and 8 months. The MINIMUM penalty will thus be 1) When is there preventive imprisonment?
the penalty next lower in degree, which is prision 2) When is the accused credited with the full time of his
mayor in its full extent (6 years and 1 day to 12 years). preventive imprisonment, and when is he credited
Ergo, the proper penalty would be 6 years and 1 day, as with 4/5 thereof?
minimum, to 12 years and 1 day, as maximum. I believe SUGGESTED ANSWER:
that because of the remaining mitigating circumstances 1) There is preventive imprisonment when [a) an
after the off-setting it would be very logical to impose the offender is detained while the criminal case against him is
minimum of the MINIMUM sentence under the ISL and being heard, either because the crime committed is a
the minimum of the MAXIMUM sentence. capital offense and not bailable, or even if the crime
committed was bailable, the offender could not post the
Penalties; Mitigating Circumstances w/out Aggravating required bail for his provisional liberty.
Circumstance (1997)
Assume in the preceding problem that there were two 2) An accused is credited with the full time of
mitigating circumstances and no aggravating his preventive imprisonment if he voluntarily
circumstance. Impose the proper prison penalty. agreed in writing to abide by the rules of the
SUGGESTED ANSWER: institution imposed upon its prisoners, provided that:
There being two (2) mitigating circumstances without any a) the penalty imposed on him for the crime
aggravating circumstance, the proper prison penalty is committed consists of a deprivation of liberty;
arresto mayor (in any of its periods, ie. ranging from one (1) b) he is not disqualified from such credit for being
month and one (1) day to six (6) months) as a recidivist, or for having been
MINIMUM to prision correccional in its maximum previously convicted for two or more times of
period four (4) years, two (2) months, and one (1) day to six any crime, or for having failed to surrender
(6) years as MAXIMUM. Under Art. 64, par. 5 of the voluntarily for the execution of the sentence
Revised Penal Code, when a penalty contains three upon being so summoned (Art. 29, RPC).
periods, each one of which forms a period in accordance
with Article 76 and 77 of the same Code, and there are
Where the accused however did not agree he would only SUGGESTED ANSWER:
be credited with 4/5 of the time he had undergone The penalty of reclusion perpetua and the penalty of life
preventive imprisonment. Imprisonment are totally different from each other and
therefore, should not be used interchangeably.
Penalties; Reclusion Perpetua (RA) No. 7959 (2005)
Under Article 27 of the Revised Penal Code, as amended Reclusion perpetua is a penalty prescribed by the Revised
by Republic Act (RA) No. 7959, reclusion perpetua shall Penal Code, with a fixed duration of imprisonment from
be from 20 years and 1 day to 40 years. Does this mean 20 years and 1 day to 40 years, and carries it with
that reclusion perpetua is now a divisible accessory penalties.
penalty? Explain. (2%)
SUGGESTED ANSWER: Life imprisonment, on the other hand, is a penalty
No, because the Supreme Court has repeatedly called the prescribed by special laws, with no fixed duration of
attention of the Bench and the Bar to the fact that the imprisonment and without any accessory penalty.
penalties of reclusion perpetua and life imprisonment are
not synonymous and should be applied correctly and as Probation Law: Proper Period (2005)
may be specified by the applicable law. Reclusion Maganda was charged with violation of the Bouncing
perpetua has a specific duration of 20 years and 1 day to 40 Checks Law (BP 22) punishable by imprisonment of not
years (Art. 27) and accessory penalties (Art. 41), while life less than 30 days but not more than 1 year or a fine of not
imprisonment has no definite term or accessory less than but not more than double the amount of the
penalties. Also, life imprisonment is imposable on crimes check, which fine shall not exceed P200,000.00, or
punished by special laws, and not on felonies in the Code both. The court convicted her of the crime and
(People vs. De Guzman, G.R. Nos. 51385-86, Jan. 22, 1993; People vs. sentenced her to pay a fine of P50,000.00 with subsidiary
Estrella, G.R. Nos. 92506-07, April 28, 1993; People vs. Alvero, G.R. No. imprisonment in case of insolvency, and to pay the
72319, June 30,1993; People vs. Lapiroso, G.R. No. 122507, Feb. private complainant the amount of the check. Maganda
25, 1999).[see Criminal Law Conspectus, page 156] was unable to pay the fine but filed a petition for
probation. The court granted the petition subject to the
Penalties; Reclusion Perpetua vs. Life Imprisonment
condition, among others, that she should not change her
(1994) residence without the court’s prior approval.
Differentiate reclusion perpetua from life imprisonment.
SUGGESTED ANSWER:
a) What is the proper period of probation?
RECLUSION PERPETUA is that penalty provided for in
SUGGESTED ANSWER:
the Revised Penal Code for crimes defined in and The period shall not be less than twice the total number
penalized therein except for some crimes defined by
of days of subsidiary imprisonment. Under Act No.
special laws which impose reclusion perpetua, such as 1732, subsidiary imprisonment for violations of
violations of Republic Act 6425, as amended by Republic
special laws shall not exceed 6 months at the rate
Act 7659 or of PD 1860; while LIFE IMPRISONMENT is of one day of imprisonment for every F2.50. Hence,
a penalty usually provided for in special laws. Reclusion the proper period of probation should not be less than
perpetua has a duration of twenty (20) years and one (1) day (6 months nor more than 12 months. Since P50,000.00
to forty [40] years under Republic Act 7659, while life fine is more than the maximum subsidiary imprisonment
imprisonment has no duration; reclusion perpetua may of 6 months at P2.50 a day.
be reduced by one or two degrees; reclusion perpetuates
accessory penalties while life imprisonment does not b) Supposing before the Order of Discharge was issued
have any accessory penalties (People vs. Baguio, 196 SCRA by the court but after the lapse of the period
459, People vs. Panellos, 205 SCRA 546). of probation, Maganda transferred residence without
prior approval of the court. May the court revoke the
Penalties; Reclusion Perpetua vs. Life Imprisonment
Order of Probation and order her to serve the
(2001)
subsidiary imprisonment? Explain.
After trial, Judge Juan Laya of the Manila RTC found SUGGESTED ANSWER:
Benjamin Garcia guilty of Murder, the victim having Yes. The Court may revoke her probation. Probation is
sustained several bullet wounds in his body so that he not coterminous with its period. There must first be
died despite medical assistance given in the Ospital ng issued by the court an order of final discharge based on
Manila. Because the weapon used by Benjamin was the report and recommendation of the probation officer.
unlicensed and the qualifying circumstance of treachery Only then can the case of the probationer be terminated.
was found to be present. Judge Laya rendered his (Bala v. Martinez, G.R. No. 67301, January 29, 1990, citing Sec. 16
decision convicting Benjamin and sentencing him to of P.D. No. 968)
"reclusion perpetua or life imprisonment".
Probation Law; Barred by Appeal (1994)
Are "reclusion perpetua" and life imprisonment the same On February 3, 1986, Roberto was convicted of arson
and can be imposed interchangeably as in the foregoing through reckless imprudence and sentenced to pay a fine of
sentence? Or are they totally different? State P15,000.00, with subsidiary imprisonment in case of
your reasons. (3%) insolvency by the Regional Trial Court of Quezon City.
Criminal Law Bar Examination Q & A (1994-2006) 36 of 86 probation.
On February 10, 1986, he appealed to the Court of The law uses the word "maximum term", and not total
Appeals. Several months later, he filed a motion to term. It is enough that each of the prison terms does
withdraw the appeal on the ground that he is applying not exceed six years. The number of offenses is
for probation. On May 7, 1987, the Court of immaterial for as long as the penalties imposed,
Appeals granted the motion and considered when taken individually and separately, are
the appeal withdrawn. within the probationable period.
On June 10, 1987, the records of the case were remanded Probation Law; Order Denying Probation; Not
to the trial court. Roberto filed a "Motion for Probation" Appealable (2002)
praying that execution of his sentence be suspended, and A was charged with homicide. After trial, he was found
that a probation officer be ordered to conduct an guilty and sentenced to six (6) years and one (1)
Investigation and to submit a report on his probation. day in prision mayor, as minimum, to twelve (12) years
and one (1) day of reclusion temporal, as maximum.
The judge denied the motion on the ground that Prior to his conviction, he had been found guilty of
pursuant to Presidential Decree No. 1990, which took vagrancy and imprisoned for ten (10) days of arresto
effect on July 16,1986, no application for probation shall be manor and fined fifty pesos (P50.00). Is he eligible
entertained or granted if the defendant has perfected an for probation? Why? (3%)
appeal from the judgment of conviction. SUGGESTED ANSWER:
Is the denial of Roberto's motion correct? No, he is not entitled to the benefits of the
SUGGESTED ANSWER: Probation Law (PD 968, as amended) does not
Yes. Even if at the time of his conviction Roberto was extend to those sentenced to serve a maximum term of
qualified for probation but that at the time of his imprisonment of more than six years (Sec. 9a).
application for probation, he is no longer qualified, he is
not entitled to probation. The qualification for probation It is of no moment that in his previous conviction A was
must be determined as of the time the application is filed in given a penalty of only ten (10) days of arresto mayor
Court (Bernardo vs. Judge, etal. GRNo. L86561,Nov, 10. 1992; Edwin and a fine of P50.00.
de la Cruz vs. Judge Callejo. et al, SP-19655, April 18, 1990, citing
Llamado vs. CA, et al, GR No. 84859, June 28, 1989; Bernardo us. Judge B. May a probationer appeal from the decision revoking
Balagot, etal, GR 86561, Nov. 10, 1992). the grant of probation or modifying the terms and
conditions thereof? (2%)
Probation Law; Barred by Appeal (2001) SUGGESTED ANSWER:
A, a subdivision developer, was convicted by the RTC of No. Under Section 4 of the Probation Law, as amended,
Makati for failure to issue the subdivision title to a lot an order granting or denying probation is not appealable.
buyer despite full payment of the lot, and sentenced to
suffer one year Imprisonment. A appealed the decision Probation Law; Period Covered (2004)
of the RTC to the Court of Appeals but his appeal was PX was convicted and sentenced to imprisonment of
dismissed. May A still apply for probation? Explain. (5%) thirty days and a fine of one hundred pesos. Previously, PX
SUGGESTED ANSWER: was convicted of another crime for which the penalty
No, A is no longer qualified to apply for probation after imposed on him was thirty days only. Is PX entitled to
he appealed from the judgment of conviction by the probation? Explain briefly. (5%)
RTC. The probation law (PD 968, as amended SUGGESTED ANSWER:
by PD1990) now provides that no application for Yes, PX may apply for probation. His previous
probation shall be entertained or granted if the conviction for another crime with a penalty of thirty days
accused has perfected an appeal from the judgment imprisonment or not exceeding one (1) month does not
of conviction (Sec. 4, PD 968). disqualify him from applying for probation; the penalty
for his present conviction does not disqualify him either
Probation Law; Maximum Term vs. Total Term (1997) from applying for probation, since the imprisonment
The accused was found guilty of grave oral defamation in does not exceed six (6) years (Sec. 9, Pres. Decree No. 968).
sixteen (16) informations which were tried jointly and
was sentenced in one decision to suffer in each case a Probation Law; Right; Barred by Appeal (1995)
prison term of one (1) year and one (1) day to one In a case for violation of Sec. 8, RA 6425, otherwise
(1) year and eight (8) months of prision correccional. known as the Dangerous Drugs Act, accused Vincent
Within the period to appeal, he filed an application for was given the benefit of the mitigating circumstances of
probation under the Probation Law of 1976, as amended. voluntary plea of guilt and drunkenness not otherwise
Could he possibly qualify for probation? habitual. He was sentenced to suffer a penalty of six (6)
SUGGESTED ANSWER: years and one (1) day and to pay a fine of P6,000.00 with
Yes. In Francisco vs. Court of Appeals, 243 SCRA 384, the the accessory penalties provided by law, plus costs.
Supreme Court held that in case of one decision Vincent applied for probation. The probation officer
imposing multiple prison terms, the totality of the prison favorably recommended his application.
terms should not be taken into account for the purposes of
determining the eligibility of the accused for the
Criminal Law Bar Examination Q & A (1994-2006) 37 of 86 mandates
1. If you were the Judge, what action will you take on that no application for probation shall be entertained
the application? Discuss fully. or granted if the accused has perfected an appeal
2. Suppose that Vincent was convicted of a crime for from the judgment of conviction.
which he was sentenced to a maximum penalty of
ten (10) years. Under the law, he is not eligible for Suspension of Sentence; Adults/Minors (2006)
probation. He seasonably appealed his conviction. There are at least 7 instances or situations in criminal
While affirming the judgment of conviction, the cases wherein the accused, either as an adult or as a
appellate court reduced the penalty to a maximum of minor, can apply for and/or be granted a suspended
four (4) years and four (4) months taking into sentence. Enumerate at least 5 of them. (5%)
consideration certain modifying circumstances. SUGGESTED ANSWER:
Vincent now applies for probation. How will you 1. Suspension of sentence of minor under P.D. 603 as
rule on his application? Discuss fully. amended by R.A. 9344.
SUGGESTED ANSWER: 2. Suspension of sentence of minor above 15 but
1. If I were the judge, I will deny the application below 18 years of age at the time of trial under R.A.
for probation. The accused is not entitled to probation 9344.
as Sec. 9 of the Probation Law, PD NO. 968, as amended, 3. Suspension of sentence of minor above 15 but
specifically mentions that those who "are sentenced to below 18 years of age at the commission of
serve a maximum term of imprisonment of more than six the offense, while acting with discernment.
years" are not entitled to the benefits of the law. 4. Suspension of sentence by reason of insanity
(Art. 79, Revised Penal Code).
2. The law and jurisprudence are to the effect 5. Suspension of sentence for first offense of a minor
that appeal by the accused from a sentence of violating RJV. 9165. (Sec. 32)
conviction forfeits his right to probation .(Sec. 4, PD No. 6. Suspension of sentence under the probation
968. as amended by PD 1990; Bernardo us. Balagot; Francisco vs. CA: law. (P.D. 968)
Llamado vs. CA; De la Cruz vs. Judge Callejo, CA case). 7. Suspension of death sentence of a pregnant woman.
This is the second consecutive year that this question was (Art. 83, Revised Penal Code)
asked. It is the sincere belief of the Committee that there is a (NOTA BENE: R.A. 9344 is outside the coverage of the
need to re-examine the doctrine. Firstly, much as the accused examination)
wanted to apply for probation he is proscribed from
doing so as the maximum penalty is NOT Suspension of Sentence; Minors (2003)
PROBATIONABLE. Secondly, when the maximum A was 2 months below 18 years of age when
penalty was reduced to one which allows probation it is he committed the crime. He was charged with the
but fair and just to grant him that right because it is crime 3 months later. He was 23 when he was finally
apparent that the trial judge committed an error and for which convicted and sentenced. Instead of preparing to serve
the accused should not be made to suffer. Judicial tribunals in a jail term, he sought a suspension of the sentence
this jurisdiction are not only courts of law but also of on the ground that he was a juvenile offender Should
equity. Thirdly, the judgment of the appellate court should be he be entitled to a suspension of sentence? Reasons. 4%
considered a new decision as the trial court's decision SUGGESTED ANSWER:
was vacated; hence, he could take advantage of the No, A is not entitled to a suspension of the sentence
law when the decision is remanded to the trial court because he is no longer a minor at the time of
for execution (Please see Dissenting opinion in promulgation of the sentence. For purposes of
Francisco vs. CA). suspension of sentence, the offender's age at the time of
It is suggested, therefore, that an examinee answering in promulgation of the sentence is the one considered, not his
this tenor should be credited with some points. age when he committed the crime. So although A was
below 18 years old when he committed the crime, but
Probation Law; Right; Barred by Appeal (2003) he was already 23 years old when sentenced, he is no longer
Juan was convicted of the Regional Trial Court of a eligible for suspension of the sentence.
crime and sentenced to suffer the penalty
of imprisonment for a minimum of eight years. He Can juvenile offenders, who are recidivists, validly
appealed both his conviction and the penalty imposed ask for suspension of sentence? Explain. 4%
SUGGESTED ANSWER:
upon him to the Court of Appeals. The appellate
court ultimately sustained Juan's conviction but reduced Yes, so long as the offender is still a minor at the time of
his sentence to a maximum of four years and eight the promulgation of the sentence. The law establishing
months imprisonment. Could Juan forthwith file an Family Courts, Rep. Act 8369, provides to this effect:
application for probation? Explain. 8% that if the minor is found guilty, the court should
SUGGESTED ANSWER: promulgate the sentence and ascertain any civil liability
No, Juan can no longer avail of the probation because he which the accused may have incurred. However, the
appealed from the judgment of conviction of the trial sentence shall be suspended without the need of
court, and therefore, cannot apply for probation application pursuant to PD 603, otherwise known as the
anymore. Section 4 of the Probation Law, as amended, "Child and Youth Welfare Code" (RA 8369, Sec. 5a), It is
under PD 603 that an application for suspension of the
sentence is required and thereunder it is one of the Proclamation 1160, which amended Proclamation
conditions for suspension of sentence that the 724, applies only to offenses committed prior to 1999.
offender be a first time convict: this has been Thus, their applications shall be ineffectual and useless.
displaced by RA 8369.
Amnesty; Crimes Covered (2006)
Suspension of Sentence; Youthful Offender (1995) Under Presidential Proclamation No. 724,
Victor, Ricky, Rod and Ronnie went to the store of Mang amending Presidential Proclamation No. 347, certain
Pandoy. Victor and Ricky entered the store while Rod crimes are covered by the grant of amnesty. Name at
and Ronnie posted themselves at the door. After least 5 of these crimes. (2.5%)
ordering beer Ricky complained that he was SUGGESTED ANSWER:
shortchanged although Mang Pandoy vehemently denied it. Crimes covered under Presidential Proclamation No.
Suddenly Ricky whipped out a knife as he announced 724:
"Hold-up ito!" and stabbed Mang Pandoy to death. Rod 1. Coup d'etat,
boxed the store's salesgirl Lucy to prevent her from 2. Rebellion or insurrection;
helping Mang Pandoy. When Lucy ran out of the store to 3. Disloyalty of public officers or employees;
seek help from people next door she was chased by 4. Inciting to rebellion or insurrection;
Ronnie. As soon as Ricky had stabbed Mang Pandoy, 5. Conspiracy to commit rebellion or insurrection;
Victor scooped up the money from the cash box. Then 6. Proposal to commit rebellion or insurrection;
Victor and Ricky dashed to the street and shouted, 7. Sedition;
"Tumakbo na kayo!" Rod was 14 and Ronnie was 17. 8. Conspiracy to commit sedition;
The money and other articles looted from the store of 9. Inciting to sedition;
Mang Pandoy were later found in the houses of Victor 10. Illegal Assembly;
and Ricky. 11. Illegal Association;
1. Discuss fully the criminal liability of Victor, 12. Direct Assault;
Ricky, Rod and Ronnie. 13. Indirect Assault;
2. Are the minors Rod and Ronnie entitled to 14. Resistance and disobedience to a person in authority;
suspended sentence under The Child and Youth 15. Tumults and other disturbances;
Welfare Code? Explain. 16. Unlawful use of means of publications and unlawful
SUGGESTED ANSWER: utterrances;
1 . All are liable for the special complex crime of robbery 17. Alarm and scandal;
with homicide.... 18. Illegal Possession of firearms.
2. No, because the benefits of suspension of sentence is Extinction; Criminal & Civil Liabilities; Effects; Death of
not available where the youthful offender has accused pending appeal (2004)
been convicted of an offense punishable by life AX was convicted of reckless imprudence resulting
imprisonment or death, pursuant to P.D. No. 603, in homicide. The trial court sentenced him to a prison
Art. 192, The complex crime of robbery with homicide term as well as to pay P150,000 as civil
is punishable by reclusion perpetua to death under indemnity and damages. While his appeal was pending,
Art. 294 (1), RFC [People vs. Galit. 230 SCRA 486). AX met a fatal accident. He left a young widow, 2
children, and a million-peso estate. What is the effect, if
any, of his death on his criminal as well as civil
EXTINCTION OF CRIMINAL liability? Explain briefly. (5%)
SUGGESTED ANSWER:
LIABILITY The death of AX while his appeal from the judgment of the
Amnesty vs. PD 1160 (2006) trial court is pending, extinguishes his criminal
liability. The civil liability insofar as it arises from the
Can former DSWD Secretary Dinky Soliman apply
crime and recoverable under the Revised Penal Code is
for amnesty? How about columnist Randy David? (You
also extinguished; but indemnity and damages may be
are supposed to know the crimes or offenses
recovered in a civil action if predicated on a source of
ascribed to them as published in almost all newspapers
obligation under Art. 1157, Civil Code, such as law,
for the past several months.) (2.5%)
SUGGESTED ANSWER: contracts, quasi-contracts and quasi-delicts, but not on
Proclamation 1160, which amended Proclamation the basis of delicts. (People v. Bayotas, 236 SCRA 239 ).
724, applies only to offenses committed prior to 1999.
Civil indemnity and damages under the Revised
Thus, their applications shall be ineffectual and useless.
Penal Code are recoverable only if the accused had
General Lim and General Querubin of the Scout Rangers been convicted with finality before he died.
and Philippine Marines, respectively, were changed with
conduct unbecoming an officer and a gentleman under Extinction; Criminal & Civil Liabilities; Effects; Death of
the Articles of War. Can they apply for amnesty? (2.5%) Offended Party (2000)
SUGGESTED ANSWER:

For defrauding Lorna, Alma was charged before the
Municipal Trial Court of Malolos, Bulacan. After Pardon; Effect; Civil Interdiction (2004)
a protracted trial, Alma was convicted. While the case TRY was sentenced to death by final judgment. But
was pending appeal in the Regional Trial Court of the subsequently he was granted pardon by the President.
same province, Lorna who was then suffering from The pardon was silent on the perpetual disqualification of
breast cancer, died. Alma manifested to the court TRY to hold any public office. After his pardon, TRY
that with Lorna's death, her (Alma's) criminal and civil ran for office as Mayor of APP, his hometown. His
liabilities are now extinguished. Is Alma's contention opponent sought to disqualify him. TRY contended he is
correct? What if it were Alma who died, would it affect not disqualified because he was already pardoned by the
her criminal and civil liabilities? Explain. (3%) President unconditionally. Is TRY'S contention correct?
SUGGESTED ANSWER: Reason briefly. (5%)
No. Alma's contention is not correct. The death of SUGGESTED ANSWER:
the offended party does not extinguish the criminal No, TRY's contention is not correct. Article 40 of the
liability of the offender, because the offense is Revised Penal Code expressly provides that when the
committed against the State [People vs. Misola, 87 Phil. death penalty is not executed by reason of commutation or
830, 833). Hence, it follows that the civil liability of pardon, the accessory penalties of perpetual absolute
Alma based on the offense committed by her is not disqualification and civil interdiction during thirty (30)
extinguished. The estate of Lorna can continue the case. years from the date of the sentence shall remain as
effects thereof, unless such accessory penalties have been
On the other hand, if it were Alma who died expressly remitted in the pardon. This is because pardon
pending appeal of her conviction, her criminal only excuses the convict from serving the sentence but
liability shall be extinguished and therewith the civil does not relieve him of the effects of the conviction
liability under the Revised Penal Code (Art. 89, par. 1, unless expressly remitted in the pardon.
RPC). However, the claim for civil indemnity may be
instituted under the Civil Code (Art. 1157) if predicated Pardon; Effect; Reinstatement (1994)
on a source of obligation other than delict, such as law, Linda was convicted by the Sandiganbayan of estafa,
contracts, quasi-contracts and quasi-delicts (People vs. through falsification of public document. She was
Bayotas 236 SCRA 239, G.R. 152007, September 2. 1994) sentenced accordingly and ordered to pay, among others,
P5,000.00 representing the balance of the amount
Pardon vs. Amnesty (2006) defrauded.
Enumerate the differences between pardon and amnesty.
(2.5%) The case reached the Supreme Court which affirmed the
SUGGESTED ANSWER: judgment of conviction. During the pendency of Linda's
a) PARDON includes any crime and is exercised motion for reconsideration in the said Court,
individually by the President, while AMNESTY the President extended to her an absolute pardon which
applies to classes of persons or communities who she accepted.
may be guilty of political offenses.
b) PARDON is exercised when the person is already By reason of such pardon, she wrote the Department of
convicted, while AMNESTY may be exercised Finance requesting that she be restored to her former
even before trial or investigation. post as assistant treasurer, which is still vacant. The
c) PARDON looks forward and relieves the offender Department ruled that Linda may be reinstated to her
of the penalty of the offense for which he former position without the necessity of a new
has been convicted; it does not work for appointment and directed the City Treasurer to see to it that
the restoration of the rights to hold public the sum of P5,000.00 be satisfied.
office, or the right of suffrage, unless such Claiming that she should not be made to pay P5,000.00,
rights are expressly restored by means of Linda appealed to the Office of the President.
pardon, while AMNESTY looks backward
and abolishes the offense and its effects, as The Office of the President dismissed the appeal
if the person had committed no offense. and held that acquittal, not absolute pardon. Is the
d) PARDON does not alter the fact that the accused is only ground for reinstatement to one's former
criminally liable as it produces only the position and that the absolute pardon does not
extinction of the penalty, while AMNESTY exempt the culprit from payment of civil liability.
removes the criminal liability of the offender Is Linda entitled to reinstatement?
because it obliterates every vestige of the crime. SUGGESTED ANSWER:
e) PARDON being a private act by the President, No, Linda is not entitled to reinstatement to her former
must be pleaded and proved by the person position inasmuch as her right thereto had been
pardoned, while AMNESTY which is a relinquished or forfeited by reason of her conviction. The
Proclamation of the Chief Executive with the absolute pardon merely extinguished her criminal liability,
concurrence of Congress is a public act of which the removed her disqualification, and restored her eligibility
courts should take judicial notice. for appointment to that office. She has to re-apply for
Criminal Law Bar Examination Q & A (1994-2006) such 40 of 86
position and under the usual procedure required for a new Yes, the State can still prosecute Mina for the death of
appointment. Moreover, the pardon does not extinguish Ara despite the lapse of 20 & 1/2 years. Under Article
the civil liability arising from the crime. 91, RPC, the period of prescription commences to run
(Monsanto vs.Factoran, Jr., 170 SCRA 191); see Art. 36, RPC) from the day on which the crime is discovered by the
offended party, the authorities or their agents. In the case at
Prescription of Crimes; Bigamy (1995) bar, the commission of the crime was known only to
Joe and Marcy were married in Batanes in 1955. After Albert, who was not the offended party nor an authority or
two years, Joe left Marcy and settled in Mindanao where he an agent of an authority. It was discovered by the NBI
later met and married Linda on 12 June 1960. The authorities only when Albert revealed to them the
second marriage was registered in the civil registry of commission of the crime. Hence, the period of
Davao City three days after its celebration. On 10 prescription of 20 years for homicide commenced to run
October 1975 Marcy who remained in Batanes only from the time Albert revealed the same to the NBI
discovered the marriage of Joe to Linda. On 1 March authorities.
1976 Marcy filed a complaint for bigamy against Joe.
Prescription of Crimes; Commencement (2004)
The crime of bigamy prescribed in fifteen years OW is a private person engaged in cattle ranching. One
computed from the day the crime is discovered by the night, he saw AM stab CV treacherously, then throw the
offended party, the authorities or their agents. Joe raised dead man's body into a ravine. For 25 years, CVs body
the defense of prescription of the crime, more than was never seen nor found; and OW told no one what he
fifteen years having elapsed from the celebration of the had witnessed. Yesterday after consulting the
bigamous marriage up to the filing of Marcy's complaint. parish priest, OW decided to tell the authorities
He contended that the registration of his second what he witnessed, and revealed that AM had killed CV
marriage in the civil registry of Davao City was 25 years ago. Can AM be prosecuted for murder despite
constructive notice to the whole world of the celebration the lapse of 25 years? Reason briefly. (5%)
thereof thus binding upon Marcy. SUGGESTED ANSWER:
Yes, AM can be prosecuted for murder despite the lapse
Has the crime of bigamy charged against Joe already of 25 years, because the crime has not yet prescribed and
prescribed? Discuss fully, legally, its prescriptive period has not even
SUGGESTED ANSWER: commenced to run.
No. The prescriptive period for the crime of bigamy is
computed from the time the crime was discovered by the The period of prescription of a crime shall commence to
offended party, the authorities or their agents. The run only from the day on which the crime has been
principle of constructive notice which ordinarily applies discovered by the offended party, the authorities or their
to land or property disputes should not be applied to the agents (Art. 91, Revised Penal Code). OW, a private
crime of bigamy, as marriage is not property. Thus when person who saw the killing but never disclosed it, is not
Marcy filed a complaint for bigamy on 7 March 1976, it was the offended party nor has the crime been discovered by
well within the reglamentary period as it was barely a few the authorities or their agents.
months from the time of discovery on 10 October
1975. (Sermonia vs. CA, 233 SCRA 155) Prescription of Crimes; Concubinage (2001)
On June 1, 1988, a complaint for concubinage
Prescription of Crimes; Commencement (2000) committed in February 1987 was filed against Roberto in
One fateful night in January 1990, while 5-year old Albert the Municipal Trial Court of Tanza, Cavite for purposes of
was urinating at the back of their house, he heard a preliminary investigation. For various reasons, it was
strange noise coming from the kitchen of their neighbor only on July 3, 1998 when the Judge of said court
and playmate, Ara. When he peeped inside, he saw Mina, decided the case by dismissing it for lack of jurisdiction
Ara's stepmother, very angry and strangling the 5-year since the crime was committed in Manila. The case was
old Ara to death. Albert saw Mina carry the dead body of subsequently filed with the City Fiscal of Manila but it
Ara, place it inside the trunk of her car and drive away. The was dismissed on the ground that the crime had already
dead body of Ara was never found. Mina spread the news prescribed. The law provides that the crime of
in the neighborhood that Ara went to live with her concubinage prescribes in ten (10) years.
grandparents in Ormoc City. For fear of his life, Albert did Was the dismissal by the fiscal correct? Explain, (5%)
not tell anyone, even his parents and relatives, about what SUGGESTED ANSWER:
he witnessed. Twenty and a half (20 & 1/2) years after No, the Fiscal's dismissal of the case on alleged
the incident, and right after his graduation in prescription is not correct. The filing of the complaint
Criminology, Albert reported the crime to NBI with the Municipal Trial Court, although only for
authorities. The crime of homicide prescribes in 20 years. preliminary investigation, interrupted and suspended the
Can the state still prosecute Mina for the death of Ara period of prescription in as much as the jurisdiction of a
despite the lapse of 20 & 1/2 years? Explain, (5%) court in a criminal case is determined by the allegations in
SUGGESTED ANSWER: the complaint or information, not by the result of proof.
(People vs. Galano. 75 SCRA 193)

a) The accused cannot be convicted of the offense of
Prescription of Crimes; False Testimony (1994) simple slander although it is necessarily included in
Paolo was charged with homicide before the Regional the offense of grave slander charged in the
Trial Court of Manila. Andrew, a prosecution witness, information, because, the lesser offense had already
testified that he saw Paolo shoot Abby during their prescribed at the time the information was filed (People
heated argument. While the case is still pending, the City us. Rarang, (CA) 62 O.G. 6468; Francisco vs. CA, 122 SCRA
Hall of Manila burned down and the entire records of the 538; Magat vs. People. 201 SCRA 21) otherwise prosecutors
case were destroyed. Later, the records were can easily circumvent the rule of prescription in
reconstituted. Andrew was again called to the witness light offenses by the simple expediment of filing a
stand. This time he testified that his first testimony was graver offense which includes such light offense.
false and the truth was he was abroad when the crime
took place. b) While the general rule is the failure of an accused to file
The judge immediately ordered the prosecution a motion to quash before he pleads to the complaint or
of Andrew for giving a false testimony favorable to information, shall be deemed a waiver of the grounds of a
the defendant in a criminal case. motion to quash, the exceptions to this are: (1) no offense
1. Will the case against Andrew prosper? was charged in the complaint or information; (2) lack of
2. Paolo was acquitted. The decision became final on Jurisdiction; (3) extinction of the offense or penalty;
January 10, 1987. On June 18, 1994 a case of giving and (4) double jeopardy. Since the ground invoked by
false testimony was filed against Andrew. As his the accused in his motion for reconsideration is extinction
lawyer, what legal step will you take? of the offense, then it can be raised even after plea.
SUGGESTED ANSWER: In fact, it may even be invoked on appeal
1) Yes. ... (People vs. Balagtas)
2) As lawyer of Andrew, I will file a motion to quash CIVIL LIABILITY

the Information on the ground of prescription. The
crime of false testimony under Art. 180 has Civil liability; Effect of Acquittal (2000)
prescribed because Paolo, the accused in the
Name at least two exceptions to the general rule that in
principal case, was acquitted on January 10, 1987 and
case of acquittal of the accused in a criminal case, his civil
therefore the penalty prescribed for such crime is liability is likewise extinguished. (2%)
arresto mayor under Art. 180, par. 4, RPC. SUGGESTED ANSWER:
Exceptions to the rule that acquittal from a criminal case
Crimes punishable by arresto mayor prescribes in five (5) extinguishes civil liability, are:
years (Art. 90, par. 3, RPC). But the case against Andrew 1) When the civil action is based on obligations
was filed only on June 18, 1994, whereas the not arising from the act complained of as a felony;
principal criminal case was decided with finality on 2) When acquittal is based on reasonable doubt or
January 10, 1987 and, thence the prescriptive period acquittal is on the ground that guilt has not
of the crime commenced to run. From January 10, been proven beyond reasonable doubt (Art. 29,
1987 to June 18, 1994 is more than five (5) years. New Civil Code);
3) Acquittal due to an exempting circumstance, like
Prescription of Crimes; Simple Slander (1997) Insanity;
A was charged in an information with the crime of grave 4) Where the court states in its Judgment that the case
oral defamation but after trial, the court found him guilty merely involves a civil obligation;
only of the offense of simple slander. He filed a motion 5) Where there was a proper reservation for the filing
for reconsideration contending that, under the law, of a separate civil action;
the crime of simple slander would have prescribed 6) In cases of independent civil actions provided for in
in two months from commission, and since the Arts. 31, 32, 33 and 34 of the New Civil Code;
information against him was filed more than four 7) When the judgment of acquittal includes a
months after the alleged commission of the crime, declaration that the fact from which the civil liability
the same had already prescribed. might arise did not exist (Sapiera vs. CA, 314 SCRA 370);
8) Where the civil liability is not derived or based on
The Solicitor General opposed the motion on the criminal act of which the accused is acquitted
two grounds: first, in determining the prescriptive (Sapiera vs. CA. 314 SCRA 370).
period, the nature of the offense charged in the
Information should be considered, not the crime Civil liability; Effect of Acquittal (2000)
proved; second, assuming that the offense had already A was a 17-year old working student who was earning his
prescribed, the defense was waived by the failure of keep as a cigarette vendor. B was driving a car along busy
A to raise it in a motion to quash. Espana Street at about 7:00 p.m. Beside B was C. The car
Resolve the motion for reconsideration. stopped at an intersection because of the red signal of the
SUGGESTED ANSWER: traffic light. While waiting for the green signal, C
The motion for reconsideration should be granted.- beckoned A to buy some cigarettes. A approached the
Criminal Law Bar Examination Q & A (1994-2006) car 42 of 86 mandates
and handed two sticks of cigarettes to C. While the for such liability and Max is deemed to know it because
transaction was taking place, the traffic light changed to ignorance of the law is never excused. And since his
green and the car immediately sped off. As the car liability is not primary but only subsidiary in case his
continued to speed towards Quiapo, A clung to the employee cannot pay; he need not be impleaded in the in
window of the car but lost his grip and fell down on the the criminal case. It suffices that he was duly notified of
pavement. The car did not stop. A suffered serious the motion for issuance of a subsidiary writ of execution
injuries which eventually caused his death. C was charged and thus given the opportunity to be heard.
with ROBBERY with HOMICIDE. In the end, the
Court was not convinced with moral certainty that Civil Liability; When Mandatory; Criminal Liability (2005)
the guilt of C has been established beyond reasonable The accused was found guilty of 10 counts of rape
doubt and, thus, acquitted him on the ground of for having carnal knowledge with the same
reasonable doubt. woman. In addition to the penalty of imprisonment, he
Can the family of the victim still recover civil damages in was ordered to pay indemnity in the amount of
view of the acquittal of C? Explain. (5%) P50,000.00 for each count. On appeal, the accused
SUGGESTED ANSWER: questions the award of civil indemnity for each
Yes, as against C, A's family can still recover civil count, considering that the victim is the same woman.
damages despite C's acquittal. When the accused in a How would you rule on the contention of the accused?
criminal prosecution is acquitted on the ground that his Explain. (3%)
guilt has not been proved beyond reasonable doubt, a SUGGESTED ANSWER:
civil action for damages for the same act or omission may The contention is unmeritorious. Under the law, every
be instituted. Such action requires only a preponderance of person criminally liable is civilly liable. (Art. 100, Revised
evidence {Art. 29, CC). Penal Code) Since each count charges different felonious
acts and ought to be punished differently, the
If A's family can prove the negligence of B by concomitant civil indemnity ex delicto for every criminal act
preponderance of evidence, the civil action for damages should be adjudged. Said civil indemnity is mandatory upon
against B will prosper based on quasi-delict. Whoever by a finding of the fact of rape; it is distinct from and should
act or omission causes damage to another, there being not be denominated as moral damages which are based on
fault or negligence, is obliged to pay for the damage different jural foundations. (People v. Jalosjos, G.R. Nos. 132875-
done. Such fault or negligence, about pre-existing 76, November 16, 2001)
contractual relation between the parties, is called a quasi-
delict [Art. 2176, CC). This is entirely separate and Damages; Homicide; Temperate Damages (2006)
distinct from civil liability arising from negligence under the In a crime of homicide, the prosecution failed to present
Penal Code [Arts, 31, 2176, 2177, CC}. any receipt to substantiate the heirs' claim for an award
of actual damages, such as expenses for the wake
Civil Liability; Subsidiary; Employers (1998) and burial. What kind of damages may the trial court
Guy, while driving a passenger jeepney owned and award to them and how much? (5%)
operated by Max, bumped Demy, a pedestrian crossing SUGGESTED ANSWER:
the street. Demy sustained injuries which required The court may award temperate damages in the amount
medical attendance for three months. Guy was charged of twenty-five (P25,000.00) thousand pesos. Under
with reckless imprudence resulting to physical injuries. jurisprudence, temperate damages is awarded in homicide
Convicted by the Metropolitan Trial Court. Guy was when no sufficient proof of actual damages is offered or
sentenced to suffer a straight penalty of three months of if the actual damages proven is less than twenty-five
arresto mayor and ordered to indemnify Demy in the thousand (P25,000) (People v. Salona, G.R. No. 151251, May 19,
2004).
sum of P5,000 and to pay P1,000 as attorney's fees.
Upon finality of the decision, a writ of execution Crimes Against National Security
was served upon Guy, but was returned unsatisfied due
to his insolvency. Demy moved for a subsidiary
and the Law of Nations
writ of execution against Max. The latter opposed Piracy in the High Seas & Qualified Piracy (2006)
the motion on-the ground that the decision made no
While the S.S. Nagoya Maru was negotiating the sea
mention of his subsidiary liability and that he was not route from Hongkong towards Manila, and while still 300
impleaded in the case. miles from Aparri, Cagayan, its engines malfunctioned.
How will you resolve the motion? [5%] The Captain ordered the ship to stop for emergency
SUGGESTED ANSWER:
The motion is to be granted. Max as an employer of Guy repairs lasting for almost 15 hours. Due to exhaustion,
and engaged in an industry (transportation business) the officers and crew fell asleep. While the ship was
where said employee is utilized, is subsidiarily civilly liable anchored, a motorboat manned by renegade Ybanags
under Article 103 of the Revised Penal Code. Even from Claveria, Cagayan, passed by and took advantage of
the situation. They cut the ship's engines and took away
though the decision made no mention of his subsidiary
several heavy crates of electrical equipment and loaded
liability, the law violated (Revised Penal Code) itself
them in their motorboat. Then they left hurriedly
Criminal Law Bar Examination Q & A (1994-2006) 43 of 86 they were
towards Aparri. At daybreak, the crew found that a ordered to kill Governor Alegre because of his corrupt
robbery took place. They radioed the Aparri Port practices. If you were the prosecutor, what crime will
Authorities resulting in the apprehension of the culprits. you charge Joselito and Vicente? [5%J
What crime was committed? Explain. (2.5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: If I were the prosecutor, I would charge Joselito and
Piracy in the high seas was committed by the Vicente with the crime of rebellion, considering that the
renegade Ybanags. The culprits, who are neither killers were members of the liquidation squad of the New
members of the complement nor passengers of the People's Army and the killing was upon orders of their
ship, seized part of the equipment of the vessel commander; hence, politically-motivated. This was the
while it was three hundred miles away from Aparri, ruling in People vs. Avila, 207 SCRA 1568 involving
Cagayan (Art. 122, Revised Penal Code). identical facts which is a movement taken judicial notice of
as engaged in rebellion against the Government.
Supposing that while the robbery was taking place, ALTERNATIVE ANSWER:
the culprits stabbed a member of the crew while If I were the prosecutor, I would charge Joselito and
sleeping. Vicente for the crime of murder as the purpose of the
What crime was committed? Explain. (2.5%) killing was because of his "corrupt practices ", which
SUGGESTED ANSWER: does not appear to be politically motivated. There is no
The crime committed is qualified piracy, because it indication as to how the killing would promote or further
was accompanied by physical injuries/homicide. The the objective of the New Peoples Army. The killing is
culprits stabbed a member of the crew while sleeping murder because it was committed with treachery.
(Art. 123, Revised Penal Code). ALTERNATIVE ANSWER:
The crime should be rebellion with murder considering
that Art. 135 of the Revised Penal Code has already been
Crimes Against the Fundamental amended by Rep. Act No. 6968, deleting from said
Law of the State Article, common crimes which used to be punished as
part and parcel of the crime of rebellion. The ruling in
Violation of Domicile vs. Trespass to Dwelling (2002) People vs. Hernandez, 99 Phil. 515 (1994), that rebellion may
What is the difference between violation of domicile and not be completed with common crimes committed
trespass to dwelling? (2%) in furtherance thereof, was because the common
SUGGESTED ANSWER: crimes were then penalized in Art. 135 together
The differences between violation of domicile with the rebellion, with one penalty and Art. 48 of the
and trespass to dwelling are; Rev. Penal Code cannot be applied. Art. 135 of said
1) The offender in violation of domicile is a public Code remained exactly the same when the case of Enrile
officer acting under color of authority; in trespass to vs, Salazar, 186 SCRA 217 (1990) was resolved. Precisely
dwelling, the offender is a private person or public for the reason that Art. 48 cannot apply because the
officer acting in a private capacity. common crimes were punished as part of rebellion in
2) Violation of domicile is committed in 3 different Art. 135, that this Article was amended, deleting the
ways: (1) by entering the dwelling of another against common crimes therefrom. That the common crimes
the will of the latter; (2) searching papers and other were deleted from said Article, demonstrates a clear
effects inside the dwelling without the previous legislative intention to treat the common crimes as
consent of the owner; or (3) refusing to leave the distinct from rebellion and remove the legal
premises which he entered surreptitiously, after impediment to the application of Art. 48.
being required to leave the premises. It is noteworthy that in Enrile vs. Salazar (supra)
3) Trespass to dwelling is committed only in one way; the Supreme Court said these:
that is, by entering the dwelling of another "There is an apparent need to restructure the law on
against the express or implied will of the latter. rebellion, either to raise the penalty therefor or to
clearly define and delimit the other offenses to be
considered as absorbed thereby, so that if it cannot be
Crimes Against Public Order conveniently utilized as the umbrella for every sort
of illegal activity undertaken in its name. The
Art 134; Rebellion; Politically Motivated; Committed Court has no power to effect such change, for it can
by NPA Members (1998) only interpret the law as it stands at any given time,
On May 5, 1992, at about 6:00 a.m., while Governor and what is needed lies beyond interpretation.
Alegre of Laguna was on board his car traveling along the Hopefully, Congress will perceive the need for
National Highway of Laguna, Joselito and Vicente shot promptly seizing the initiative in this matter, which is
him on the head resulting in his instant death. At that purely with in its province,"
time, Joselito and Vicente were members of the
And significantly the said amendment to Art. 135 of
liquidation squad of the New People's Army and they
killed the governor upon orders of their senior officer. the Rev. Penal Code was made at around the time
Commander Tiago. According to Joselito and Vicente, the ruling in Salazar was handled down, obviously to

neutralize the Hernandez and the Salazar rulings. Art 134-A; Coup d’etat; New Firearms Law (1998)
The amendment was sort of a rider to the 1. How is the crime of coup d'etat committed? [3%]
coup d'etat law, Rep. Act No 6968. 2. Supposing a public school teacher participated in a
coup d'etat using an unlicensed firearm. What crime
Art 134-A: Coup d’ etat & Rape; Frustrated (2005) or crimes did he commit? [2%]
Taking into account the nature and elements of the SUGGESTED ANSWER:
felonies of coup d’ etat and rape, may one be criminally 1. The crime of coup d'etat is committed by a swift
liable for frustrated coup d’ etat or frustrated rape? attack, accompanied by violence, intimidation, threat,
Explain. (2%) strategy or stealth against the duly constituted authorities of
SUGGESTED ANSWER: the Republic of the Philippines, military camps and
No, one cannot be criminally liable for frustrated coup d’ installations, communication networks, public utilities
etat or frustrated rape because in coup d’ etat the mere and facilities needed for the exercise and continued
attack directed against the duly constituted authorities of possession of power, carried out singly or simultaneously
the Republic of the Philippines, or any military camp or anywhere in the Philippines by persons belonging to the
installation, communication networks, public utilities military or police or holding public office, with or
or other facilities needed for the exercise and without civilian support or participation, for the purpose of
continued possession of power would consummate the seizing or diminishing state power. (Art 134-A, RPC).
crime. The objective may not be to overthrow the
government but only to destabilize or paralyze the 2. The public school teacher committed only
government through the seizure of facilities and coup d'etat for his participation therein. His use
utilities essential to the continued possession and of an unlicensed firearm is absorbed in the coup
exercise of governmental powers. d'etat under the new firearms law (Rep. Act No. 8294).
On the other hand, in the crime of rape there is no Art 136; Conspiracy to Commit Rebellion (1994)
frustrated rape it is either attempted or consummated VC, JG. GG and JG conspired to overthrow
rape. If the accused who placed himself on top of a the Philippine Government. VG was recognized as the
woman, raising her skirt and unbuttoning his pants, the titular head of the conspiracy. Several meetings were
endeavor to have sex with her very apparent, is guilty of held and the plan was finalized. JJ, bothered by his
Attempted rape. On the other hand, entry on the labia or conscience, confessed to Father Abraham that he, VG,
lips of the female organ by the penis, even without JG and GG have conspired to overthrow the
rupture of the hymen or laceration of the vagina, government. Father Abraham did not report this
consummates the crime of rape. More so, it has long information to the proper authorities.
abandoned its “stray” decision in People vs. Erina 50 Phil Did Father Abraham commit a crime? If so, what crime
998 where the accused was found guilty of Frustrated was committed? What is his criminal liability?
rape. SUGGESTED ANSWER:
No, Father Abraham did not commit a crime because the
Art 134-A; Coup d’etat (2002) conspiracy involved is one to commit rebellion, not
If a group of persons belonging to the armed forces a conspiracy to commit treason which makes a
makes a swift attack, accompanied by violence, person criminally liable under Art 116, RFC. And even
intimidation and threat against a vital military installation assuming that it will fall as misprision of treason, Father
for the purpose of seizing power and taking over such Abraham is exempted from criminal liability under Art.
installation, what crime or crimes are they guilty of? (3%) 12, par. 7, as his failure to report can be considered
SUGGESTED ANSWER: as due to "insuperable cause", as this involves the
The perpetrators, being persons belonging to the Armed sanctity and inviolability of a confession.
Forces, would be guilty of the crime of coup d'etat, under
Article 134-A of the Revised Penal Code, as amended, Conspiracy to commit rebellion results in criminal
because their attack was against vital military installations liability to the co-conspirators, but not to a person who
which are essential to the continued possession and learned of such and did not report to the proper
exercise of governmental powers, and their purpose is to authorities (US vs. Vergara, 3 Phil. 432; People vs. Atienza. 56 Phil. 353).
seize power by taking over such installations.
Art 148; Direct Assault vs. Resistance &
B. If the attack is quelled but the leader is unknown, Disobedience (2001)
who shall be deemed the leader thereof? (2%) A, a teacher at Mapa High School, having gotten mad at X,
SUGGESTED ANSWER: one of his pupils, because of the latter's throwing
The leader being unknown, any person who in fact paper clips at his classmates, twisted his right ear. X went
directed the others, spoke for them, signed receipts and out of the classroom crying and proceeded home located at
other documents issued in their name, or performed the back of the school. He reported to his parents Y and Z
similar acts, on behalf of the group shall be deemed the what A had done to him. Y and Z immediately
leader of said coup d'etat (Art 135, R.P.C.) proceeded to the school building and because they were
running and talking in loud voices, they were seen by the
Criminal Law Bar Examination Q & A (1994-2006) 45 of 86 day, while
barangay chairman, B, who followed them as he the class was going on, the student, B,
suspected that an untoward incident might happen. Upon approached A and, without any warning, slapped her. B
seeing A inside the classroom, X pointed him out to his would have inflicted further injuries on A had not
father, Y, who administered a fist blow on A, causing C, another student, come to A's rescue and
him to fall down. When Y was about to kick A, B rushed prevented B from continuing his attack. B turned
towards Y and pinned both of the latter's arms. Seeing his ire on C and punched the latter. What crime or
his father being held by B, X went near and punched B on crimes, if any, did B commit? Why? (5%)
the face, which caused him to lose his grip on Y. SUGGESTED ANSWER:
Throughout this incident, Z shouted words of B committed two (2) counts of direct assault: one
encouragement at Y, her husband, and also threatened to for slapping the professor, A, who was then
slap A. Some security guards of the school arrived, conducting classes and thus exercising authority; and
intervened and surrounded X, Y and Z so that they could another one for the violence on the student C, who
be investigated in the principal's office. Before leaving, Z came to the aid of the said professor.
passed near A and threw a small flower pot at him but it
was deflected by B. By express provision of Article 152, in relation to Article
a) What, if any, are the respective criminal liability of X 148 of the Revised Penal Code, teachers and professors
Y and Z? (6%) of public or duly recognized private schools, colleges and
b) Would your answer be the same if B were a barangay universities in the actual performance of their
tanod only? (4%) professional duties or on the occasion of
SUGGESTED ANSWER: such performance are deemed persons in
a) X is liable for Direct Assault only, assuming authority for purposes of the crimes of direct assault
the physical injuries inflicted on B, the Barangay and of resistance and disobedience in Articles 148 and
Chairman, to be only slight and hence, would be 151 of said Code. And any person who comes to
absorbed in the direct assault. A Barangay the aid of persons in authority shall be deemed an
Chairman is a person in authority (Art. 152, RPC) agent of a person in authority. Accordingly, the attack
and in this case, was performing his duty of on C is, in the eyes of the law, an attack on an agent of a
maintaining peace and order when attacked. person in authority, not just an attack on a student.
Y is liable for the complex crimes of Direct Assault With Art 148; Persons in Authority/Agents of Persons in
Less Serious Physical Injuries for the fist blow on A, the Authority (2000)
teacher, which caused the latter to fall down. Who are deemed to be persons in authority and agents of
For purposes of the crimes in Arts. 148 and 151 of persons in authority? (3%)
the Revised Penal Code, a teacher is considered a person SUGGESTED ANSWER:
in authority, and having been attacked by Y by reason of Persons in authority are persons directly vested with
his performance of official duty, direct assault is jurisdiction, whether as an individual or as a member of
committed with the resulting less serious physical some court or government corporation, board, or
injuries completed. Z, the mother of X and wife of Y commission. Barrio captains and barangay chairmen are
may only be liable as an accomplice to the complex also deemed persons in authority. (Article 152, RPC)
crimes of direct assault with less serious physical
injuries committed by Y. Her participation should Agents of persons in authority are persons who by
not be considered as that of a co- principal, since direct provision of law or by election or by appointment by
her reactions were only incited by her relationship to competent authority, are charged with maintenance of
X and Y. as the mother of X and the wife of Y. public order, the protection and security of life and
property, such as barrio councilman, barrio policeman,
b) If B were a Barangay Tanod only, the act of X of barangay leader and any person who comes to the aid of
laying hand on him, being an agent of a person in persons in authority (Art. 152, RPC),
authority only, would constitute the crime of Resistance
and Disobedience under Article 151, since X, a high In applying the provisions of Articles 148 and 151 of the
school pupil, could not be considered as having acted out Rev. Penal Code, teachers, professors and
of contempt for authority but more of helping his father persons charged with the supervision of public or duly
get free from the grip of B. Laying hand on an agent of a recognized private schools, colleges and universities, and
person in authority is not ipso facto direct assault, while it lawyers in the actual performance of their professional
would always be direct assault if done to a person in duties or on the occasion of such performance, shall
authority in defiance to the latter is exercise of authority. be deemed persons in authority. (P.D. No. 299, and
Batas Pambansa Blg. 873).
Art 148; Direct Assault; Teachers & Professors (2002)
A, a lady professor, was giving an examination. She Art 156; Delivery of Prisoners from Jail (2002)
noticed B, one of the students, cheating. She called the A, a detention prisoner, was taken to a hospital for
student's attention and confiscated his examination emergency medical treatment. His followers, all of whom
booklet, causing embarrassment to him. The following were armed, went to the hospital to take him away or
Criminal Law Bar Examination Q & A (1994-2006) help 46 of 86
him escape. The prison guards, seeing that they were acting as principal offenders, launched a swift attack thru
outnumbered and that resistance would endanger the strategy, stealth, threat, violence or intimidation
lives of other patients, deckled to allow the prisoner to be against duly constituted authorities of the
taken by his followers. What crime, if any, was Republic of the Philippines, military camp or
committed by A's followers? Why? (3%) installation, communication networks, public facilities
SUGGESTED ANSWER: or utilities needed for the exercise and continued
A's followers shall be liable as principals in the crime of possession of governmental powers, for the purpose
delivery of prisoner from Jail (Art. 156, Revised of seizing or diminishing state powers.
Penal Code).
Unlike rebellion which requires a public uprising,
The felony is committed not only by removing from any coup d'etat may be carried out singly or simultaneously
jail or penal establishment any person confined and the principal offenders must be members of the
therein but also by helping in the escape of such person military, national police or public officer, with or
outside of said establishments by means of without civilian support. The criminal objective need not
violence, intimidation, bribery, or any other means. be to overthrow the existing government but only
to destabilize or paralyze the existing government.
Art 157; Evasion of Service of Sentence (1998)
Manny killed his wife under exceptional Complex Crime; Direct Assault with murder (2000)
circumstances and was sentenced by the Regional Because of the approaching town fiesta in San Miguel,
Trial Court of Dagupan City to suffer the penalty Bulacan, a dance was held in Barangay Camias. A, the
of destierro during which he was not to enter the city. Barangay Captain, was invited to deliver a speech to start
the dance. While A was delivering his speech. B, one of the
While serving sentence, Manny went to Dagupan City to guests, went to the middle of the dance floor making
visit his mother. Later, he was arrested in Manila. obscene dance movements, brandishing a knife and
1. Did Manny commit any crime? [3%] challenging everyone present to a fight. A approached B
2. If so, where should he be prosecuted? [2%] and admonished him to keep quiet and not to disturb the
SUGGESTED ANSWER: dance and peace of the occasion. B, instead of heeding
1. Yes. Manny committed the crime of evasion of service the advice of A, stabbed the latter at his back twice when A
of sentence when he went to Dagupan City, which turned his back to proceed to the microphone to
he was prohibited from entering under his sentence continue his speech. A fell to the ground and died. At the
of destierro. time of the incident A was not armed. What crime was
committed? Explain. (2%)
A sentence imposing the penalty of destierro is evaded SUGGESTED ANSWER:
when the convict enters any of the place/places he is The complex crime of direct assault with murder
prohibited from entering under the sentence or come was committed. A, as a Barangay Captain, is a
within the prohibited radius. Although destierro does not person in authority and was acting in an official capacity
involve imprisonment, it is nonetheless a deprivation of when he tried to maintain peace and order during the
liberty. (People vs. Abilong. 82 Phil. 172). public dance in the Barangay, by admonishing B to keep
quiet and not to disturb the dance and peace of the
2. Manny may be prosecuted in Dagupan City or in occasion. When B, instead of heeding A's advice,
Manila where he was arrested. This is so because evasion attacked the latter, B acted in contempt and lawless
of service of sentence is a continuing offense, as defiance of authority constituting the crime of
the convict is a fugitive from justice in such case. direct assault, which characterized the stabbing of A.
(Parulan vs. Dir. of Prisons, L-28519, 17 Feb. 1968) And since A was stabbed at the back when he was
not in a position to defend himself nor retaliate, there
was treachery in the stabbing. Hence, the death caused
Art. 134; Rebellion vs. Coup d'etat (2004) by such stabbing was murder and having been
Distinguish clearly but briefly: Between rebellion and committed with direct assault, a complex crime
coup d'etat, based on their constitutive elements of direct assault with murder was committed by B.
as criminal offenses.
SUGGESTED ANSWER: Art 148; Direct Assault with murder (1995)
REBELLION is committed when a multitude of persons Pascual operated a rice thresher in Barangay Napnud
rise publicly in arms for the purpose of overthrowing the where he resided. Renato, a resident of the neighboring
duly constituted government, to be replaced by Barangay Guihaman, also operated a mobile rice thresher
a government of the rebels. It is carried out by force and which he often brought to Barangay Napnud to thresh
violence, but need not be participated in by any member the palay of the farmers there. This was bitterly resented by
of the military, national police or any public officer. Pascual, one afternoon Pascual, and his two sons
confronted Renato and his men who were operating their
COUP D'ETAT is committed when members of the mobile rice thresher along a feeder road in Napnud. A
military, Philippine National Police, or public officer, heated argument ensued. A barangay captain who was
fetched by one of Pascual's men tried to appease Pascual The judge immediately ordered the prosecution
and Renato to prevent a violent confrontation. However, of Andrew for giving a false testimony favorable to
Pascual resented the intervention of the barangay captain the defendant in a criminal case.
and hacked him to death. 1.] Will the case against Andrew prosper?
What crime was committed by Pascual? Discuss fully. 2.] Paolo was acquitted. The decision became final
SUGGESTED ANSWER:
on January 10, 1987. On June 18, 1994 a case of
Pascual committed the complex crime of homicide with giving false testimony was filed against Andrew.
assault upon a person in authority (Arts. 148 and 249 in As his lawyer, what legal step will you take?
relation to Art, 48, RPC). A barangay chairman, is in law SUGGESTED ANSWER:
(Art. 152), a person in authority and if he is 1) Yes. For one to be criminally liable under Art. 181,
attacked while in the performance of his official duties RFC, it is not necessary that the criminal case where
or on the occasion thereof the felony of direct Andrew testified is terminated first. It is not even
assault is committed. required of the prosecution to prove which of the two
statements of the witness is false and to prove the
Art. 48, RPC, on the other hand, provides that if a single statement to be false by evidence other than the
act produces two or more grave or less grave felonies, a contradictory statements (People vs. Arazola, 13 Court of
complex crime is committed. Here, the single act of the Appeals Report, 2nd series, p. 808).
offender in hacking the victim to death resulted in
two felonies, homicide which is grave and direct assault 2) As lawyer of Andrew, I will file a motion to quash
which is less grave. the Information on the ground of prescription. The
crime of false testimony under Art. 180 has
Crimes against Public Interest prescribed because Paolo, the accused in the
principal case, was acquitted on January 10, 1987 and
False Notes; Illegal Possession (1999) therefore the penalty prescribed for such crime is
1. Is mere possession of false money bills arresto mayor under Art. 180, par. 4, RPC.
punishable under Article 168 of the Revised
Crimes punishable by arresto mayor prescribes in five (5)
Penal Code? Explain. (3%)
years (Art. 90, par. 3, RPC). But the case against Andrew
2. The accused was caught in possession of 100 was filed only on June 18, 1994, whereas the
counterfeit P20 bills. He could not explain how and why principal criminal case was decided with finality on
he possessed the said bills. Neither could he explain January 10, 1987 and, thence the prescriptive period
what he intended to do with the fake bills. Can he be of the crime commenced to run. From January 10,
held criminally liable for such possession? 1987 to June 18, 1994 is more than five (5) years.
Decide. (3%}
SUGGESTED ANSWER: Falsification; Presumption of Falsification (1999)
1. No. Possession of false treasury or bank note alone A falsified official or public document was found in the
without an intent to use it, is not punishable. But the possession of the accused. No evidence was introduced
circumstances of such possession may to show that the accused was the author of the
indicate intent to utter, sufficient to consummate falsification. As a matter of fact, the trial court convicted
the crime of illegal possession of false notes. the accused of falsification of official or public document
mainly on the proposition that "the only person who
2. Yes. Knowledge that the note is counterfeit and could have made the erasures and the superimposition
intent to use it may be shown by the conduct of the mentioned is the one who will be benefited by the
accused. So, possession of 100 false bills reveal: (a) alterations thus made" and that "he alone could have the
knowledge that the bills are fake; and (b) intent motive for making such alterations".
to utter the same.
Was the conviction of the accused proper although
False Testimony (1994) the conviction was premised merely on the
Paolo was charged with homicide before the Regional aforesaid ratiocination? Explain your answer. (3%)
Trial Court of Manila. Andrew, a prosecution witness, SUGGESTED ANSWER:
testified that he saw Paolo shoot Abby during their Yes, the conviction is proper because there is a
heated argument. While the case is still pending, the City presumption in law that the possessor and user of a
Hall of Manila burned down and the entire records of the falsified document is the one who falsified the same.
case were destroyed. Later, the records were
reconstituted. Andrew was again called to the witness Forgery & Falsification (1999)
stand. This time he testified that his first testimony was How are "forging" and "falsification" committed? (3%)
SUGGESTED ANSWER:
false and the truth was he was abroad when the crime
FORGING or forgery is committed by giving to a
took place.
treasury or bank note or any instrument payable to bearer
or to order the appearance of a true and genuine
document; or by erasing, substituting, counterfeiting, Sisenando purchased the share of the stockholders of
or altering by any means the figures, letters, words or Estrella Corporation in two installments, making him the
signs contained therein. majority stockholder thereof and eventually, its president.
Because the stockholders who sold their stocks failed to
FALSIFICATION, on the other hand, is committed by: comply with their warranties attendant to the sale,
1. Counterfeiting or imitating any handwriting, Sisenando withheld payment of the second installment
signature or rubric; due on the shares and deposited the money in escrow
2. Causing it to appear that persons have instead, subject to release once said stockholders comply
participated in any act or proceeding when they did with their warranties. The stockholders concerned, in
not in fact so participate; turn, rescinded the sale in question and removed
Sisenando from the Presidency of the Estrella
3. Attributing to persons who have participated in
Corporation, Sisenando then filed a verified complaint
an act or proceeding statements other than those in
fact made by them; for damages against said stockholders in his capacity as
president and principal stockholder of Estrella
4. Making untruthful statements in a narration of facts; Corporation. In retaliation, the stockholders concerned,
5. Altering true dates; after petitioning the Securities and Exchange
6. Making any alteration or intercalation in a Commission to declare the rescission valid, further filed a
genuine document which changes its meaning; criminal case for perjury against Sisenando, claiming that
7. Issuing in an authenticated form a document the latter perjured himself when he stated under oath in the
purporting to be a copy of an original verification of his complaint for damages that he is the
document when no such original exists, or President of the Estrella Corporation when in fact he had
including in such copy a statement contrary to, or already been removed as such.
different from, that of the genuine original; or Under the facts of the case, could Sisenando be
8. Intercalating any instrument or note relative to held liable for perjury? Explain.
the issuance thereof in a protocol, registry, or SUGGESTED ANSWER:
official book. No, Sisenando may not be held liable for perjury because
It cannot be reasonably maintained that he willfully and
Grave Scandal (1996) deliberately made an assertion of a falsehood when
Pia, a bold actress living on top floor of a plush he alleged in the complaint that he is the President
condominium in Makati City sunbathed naked at its of the Corporation, obviously, he made the
penthouse every Sunday morning. She was unaware that the allegation on the premise that his removal from the
business executives holding office at the adjoining tall presidency is not valid and that is precisely the issue
buildings reported to office every Sunday morning and, brought about by his complaint to the SEC. It is a fact
with the use of powerful binoculars, kept on gazing at that Sisenando has been the President of the
her while she sunbathed. Eventually, her sunbathing corporation and it is from that position that the
became the talk of the town. stockholders concerned purportedly removed him,
1) What crime, if any, did Pia commit? Explain, whereupon he filed the complaint questioning his
2) What crime, if any, did the business removal. There is no willful and deliberate
executives commit? Explain. assertion of a falsehood which is a requisite of perjury.
SUGGESTED ANSWER:
1) Pia did not commit a crime, the felony closest Perjury (1997)
to making Pia criminally liable is Grave Scandal, but A, a government employee, was administratively charged
then such act is not to be considered as highly with immorality for having an affair with B, a co-
scandalous and offensive against decency and good employee in the same office who believed him to be
customs. In the first place, it was not done in a public single. To exculpate himself, A testified that he was single
place and within public knowledge or view. As a matter and was willing to marry B, He induced C to testify and C
of fact it was discovered by the executives accidentally did testify that B was single. The truth, however, was that A
and they have to use binoculars to have public and had earlier married D, now a neighbor of C.
full view of Pia sunbathing in the nude. Is A guilty of perjury? Are A and C guilty of
subordination of perjury?
2) The business executives did not commit any crime. SUGGESTED ANSWER:
Their acts could not be acts of lasciviousness [as there No. A is not guilty of perjury because the willful
was no overt lustful act), or slander, as the eventual talk of falsehood asserted by him is not material to the charge of
the town, resulting from her sunbathing, is not directly immorality. Whether A is single or married, the charge of
imputed to the business executives, and besides such immorality against him as a government employee could
topic is not intended to defame or put Pia to ridicule. proceed or prosper. In other words, A's civil status is not a
defense to the charge of immorality, hence, not a
material matter that could influence the charge.
Perjury (1996)

There is no crime of subornation of perjury. The crime is consideration" of the prompt enforcement of the writ of
now treated as plain perjury with the one inducing execution which is an official duty of the sheriff to do.
another as the principal inducement, and the latter, as ALTERNATIVE ANSWER;
principal by direct participation (People vs. Podol 66 Phil. 365). a) On the premise that even without the P2,000, Sheriff
Since in this case A cannot be held liable for perjury, the Ben Rivas had to carry out the writ of execution and not
matter that he testified to being immaterial, he cannot that he would be implementing the writ only because of
therefore be held responsible as a principal by the P2,000.00, the receipt of the amount by said sheriff
inducement when he induced C to testify on his status. may be regarded as a gift received by reason of his office
Consequently, C is not liable as principal by direct and not as a "consideration" for the performance of an
participation in perjury, having testified on matters not official duty; hence, only indirect Bribery would be
material to an administrative case. committed by said sheriff.
Perjury (2005) b) On the part of the plaintiff and her lawyer as giver
Al Chua, a Chinese national, filed a petition under oath for of the bribe-money, the crime is Corruption of Public
naturalization, with the Regional Trial Court of Officials under Article 212, Revised Penal Code.
Manila. In his petition, he stated that he is married to
Leni Chua; that he is living with her in Sampaloc, Manila; Direct Bribery: Infidelity in the Custody of
that he is of good moral character; and that he has Documents (2005)
conducted himself in an irreproachable manner during During a PNP buy-bust operation, Cao Shih was arrested
his stay in the Philippines. However, at the time of the for selling 20 grams of methamphetamine hydrochloride
filing of the petition, Leni Chua was already living in (shabu) to a poseur-buyer. Cao Shih, through an
Cebu, while Al was living with Babes Toh in Manila, with intermediary, paid Patrick, the Evidence Custodian of the
whom he has an amorous relationship. After his direct PNP Forensic Chemistry Section, the amount of
testimony, Al Chua withdrew his petition for P500,000.00 in consideration for the destruction
naturalization. by Patrick of the drug. Patrick managed to destroy the
What crime or crimes, if any, did Al Chua commit? drug. State with reasons whether Patrick
Explain. (5%) committed the following crimes: (7%)
SUGGESTED ANSWER: 1.] Direct Bribery;
Al Chua committed perjury. His declaration under SUGGESTED ANSWER:
oath for naturalization that he is of good moral character Patrick committed the crimes of Direct Bribery and
and residing at Sampaloc, Manila are false. This Infidelity in the Custody of Documents. When a public
information is material to his petition for officer is called upon to perform or refrain
naturalization. He committed perjury for this willful from performing an official act in exchange for a gift,
and deliberate assertion of falsehood which is present or consideration given to him (Art. 210,
contained in a verified petition made for a legal Revised Penal Code), the crime committed is direct
purpose. (Choa v. People, G.R. No. 142011, March 14, 2003) bribery. Secondly, he destroyed the shabu which is
an evidence in his official custody, thus,
Crimes Committed by Public constituting infidelity in the custody of documents
under Art. 226 of the Revised Penal Code.
Officers
2.] Indirect bribery;
Bribery & Corruption of Public Official (2001) SUGGESTED ANSWER:
Deputy Sheriff Ben Rivas received from the RTC Clerk Indirect bribery was not committed because he did
of Court a Writ of Execution in the case of not receive the bribe because of his office
Ejectment filed by Mrs. Maria Estrada vs. Luis Ablan. but in consideration of a crime in connection with
The judgment being in favor of Estrada, Rivas went his official duty.
to her lawyer's office where he was given the
necessary amounts constituting the sheriffs fees and 3.] Section 3(e) of RA 3019 (Anti-Graft and Corrupt
expenses for execution in the total amount of P550.00, Practices Act);
aside from P2,000.00 in consideration of prompt SUGGESTED ANSWER:
enforcement of the writ from Estrada and her See. 3(e), R.A. No. 8019 was not committed
lawyer. The writ was successfully enforced. because there was no actual injury to the
a) What crime, if any, did the sheriff commit? (3%) government. When there is no specific quantified
b) Was there any crime committed by Estrada and her injury, violation is not committed. (Garcia-Rueda vs
lawyer and if so, what crime? (2%) Amor, et al., G.R. No. 116938, September 20, 2001)
SUGGESTED ANSWER:
a) The sheriff committed the crime of Direct Bribery 4.] Obstruction of Justice under PD 1829;
under the second paragraph of Article 210, Revised Penal SUGGESTED ANSWER:
Code, since the P2,000 was received by him "in Patrick committed the crime of obstruction of justice
although the feigner penalty imposable on direct bribery

Criminal Law Bar Examination Q & A (1994-2006) or 50 of 86 account
infidelity in the custody of documents shall be for the government property is enough factual basis
imposed. Sec. 1 of P.D. No. 1829 refers merely to for a finding of malversation. Indeed, even his
the imposition of the higher penalty and does not explanation that the guns were stolen is incredible. For if
preclude prosecution for obstruction of justice, even the firearms were actually stolen, he should have reported
if the same not constitute another offense. the matter immediately to the authorities. (People
ALTERNATIVE ANSWER: vs. Baguiran , 20 SCRA 453; Felicilda us. Grospe, GR No. 10294,
Obstruction of Justice is not committed in this case, July 3, 1992)
because the act of destroying the evidence in his custody
is already penalized by another law which imposes a Malversation (1999)
higher penalty. (Sec. 1, P.I). No. 1829) What constitutes the crime of malversation of public
funds or property? (2%)
Jurisdiction; Impeachable Public Officers (2006) SUGGESTED ANSWER:
Judge Rod Reyes was appointed by former President Malversation of public funds or property is committed by
Fidel Ramos as Deputy Ombudsman for the Visayas for any public officer who, by reason of the duties of his
a term of 7 years commencing on July 5,1995. Six office, is accountable for public funds or property, shall
months thereafter, a lady stenographer filed with the take or misappropriate or shall consent, or through
Office of the Ombudsman a complaint for acts of abandonment or negligence, shall permit any other
lasciviousness and with the Supreme Court a petition for person to take such public funds or property, wholly or
disbarment against him. Forthwith, he filed separate partially, or shall otherwise be guilty of the
motions to dismiss the complaint for acts misappropriation or malversation of such funds or
of lasciviousness and petition for disbarment, claiming property, (Art, 217, RPC)
lack of jurisdiction over his person and office.
Malversation (1999)
Are both motions meritorious? (5%)
SUGGESTED ANSWER: A Municipal Treasurer, accountable for public funds or
The motion to dismiss the complaint of the Deputy property, encashed with public funds private checks
Ombudsman for the acts of lasciviousness should be drawn in favor of his wife. The checks bounced, the
denied as only the Ombudsman is included in the list of drawer not having enough cash in the drawee bank. The
impeachable officers found in Article XI of the Municipal Treasurer, in encashing private checks from
1987 Constitution. Therefore, the Sandiganbayan public funds, violated regulations of his office.
has jurisdiction over his prosecution (Office of the Notwithstanding restitution of the amount of the checks,
Ombudsman vs. CA, G.R. 146486, March 4, 2005). can the Municipal Treasurer nevertheless be criminally
Likewise, the Supreme Court has jurisdiction over liable? What crime did he commit? Explain. (2%)
the petition for disbarment, as he is a member of the SUGGESTED ANSWER:
bar. His motion to dismiss should be denied (See Yes, notwithstanding the restitution of the amount of the
Rule 139 and 139 of the Rules of Court). check, the Municipal Treasurer will be criminally liable as
restitution does not negate criminal liability although
Malversation (1994) it may be considered as a mitigating circumstance similar
Randy, an NBI agent, was issued by the NBI an armalite or analogous to voluntary surrender. (People vs. Velasquez,
rifle (Ml6) and a Smith and Wesson Revolver. Cal. 38. 73 Phil 98), He will be criminally liable for
After a year, the NBI Director made an inspection of all the malversation. However, if the restitution was made
firearms issued. Randy, who reported for work that immediately, under vehement protest against an
morning, did not show up during the inspection. He imputation of malversation and without leaving the
went on absence without leave (AWOL). After two years, office, he may not be criminally liable.
he surrendered to the NBI the two firearms issued to
Malversation (2001)
him. He was charged with malversation of government
Alex Reyes, together with Jose Santos, were former
property before the Sandiganbayan.
warehousemen of the Rustan Department Store. In 1986,
Randy put up the defense that he did not appropriate the the PCGG sequestered the assets, fund and properties of
armalite rifle and the revolver for his own use, that the owners-incorporators of the store, alleging that they
the delay in accounting for them does not constitute "Ill-gotten wealth" of the Marcos family. Upon
constitute conversion and that actually the firearms were their application, Reyes and Santos were appointed as
stolen by his friend, Chiting. fiscal agents of the sequestered firm and they were given
Decide the case. custody and possession of the sequestered building and
SUGGESTED ANSWER: its contents, including various vehicles used in the firm's
Randy is guilty as charged under Art. 217, RPC. He is operations. After a few months, an inventory was
accountable for the firearms they issued to him in his conducted and it was discovered that two (2) delivery
official capacity. The failure of Randy to submit the vans were missing. After demand was made upon them,
firearms upon demand created the presumption that he Reyes and Santos failed to give any satisfactory
converted them for his own use. Even if there is no explanation why the vans were missing or to turn them over
direct evidence of misappropriation, his failure to to the PCGG; hence, they were charged with
Malversation of Public Property. During the trial, the two
accused claimed that they are not public accountable Dela Renta may still be suspended pendente lite despite
officers and, if any crime was committed, it should only holding a different public office, the PDIC, when he was
be Estafa under Art. 315, par. l(b) of the Revised Penal charged. The term "office" in Sec. 13 of R.A. 3019
Code. applies to any office which the officer might currently be
What is the proper offense committed? State holding and not necessarily the office or position in
the reason(s) for your answer. (5%) relation to which he is charged (Segovia v. Sandiganbayan, G.R.
SUGGESTED ANSWER: No. 122740, March 30,1998).
The proper offense committed was Malversation of
Public Property, not estafa, considering that Reyes and Malversation vs. Estafa (1999)
Santos, upon their application, were constituted as "fiscal How is malversation distinguished from estafa?
agents" of the sequestered firm and were "given custody SUGGESTED ANSWER:
and possession" of the sequestered properties, including the Malversation differs from estafa in that malversation
delivery vans which later they could not account for. They is committed by an accountable public officer
were thus made the depositary and administrator of involving public funds or property under his
properties deposited by public authority and hence, by custody and accountability; while estafa is
the duties of their office/position, they are accountable committed by non- accountable public officer or
for such properties. Such properties, having been private individual involving funds or property for which
sequestered by the Government through the PCGG, are in he is not accountable to the government.
custodia legis and therefore impressed with the
character of public property, even though the properties Malversation: Anti-Fencing: Carnapping (2005) Allan, the
belong to a private individual (Art. 222, RPC). Municipal Treasurer of the Municipality of Gerona, was
in a hurry to return to his office after a day- long official
The failure of Reyes and Santos to give any satisfactory conference. He alighted from the government car
explanation why the vans were missing, is prima facie which was officially assigned to him, leaving the ignition
evidence that they had put the same to their personal use. key and the car unlocked, and rushed to his office. Jules,
a bystander, drove off with the car and later sold the
Malversation (2006) same to his brother, Danny for P20,000.00, although
1. In 1982, the Philippine National Bank (PNB), then a the car was worth P800,000.00.
government banking institution, hired Henry dela Renta, a What are the respective crimes, if any, committed by
CPA, as Regional Bank Auditor. In 1992, he resigned Allan, Danny and Jules? Explain.
and was employed by the Philippine Deposit Insurance SUGGESTED ANSWER:
Corporation (PDIC), another government-owned and Allan, the municipal treasurer is liable for malversation
controlled corporation. In 1995, after the PNB committed through negligence or culpa. The government
management unearthed many irregularities and violations of car which was assigned to him is public property under his
the bank's rules and regulations, dela Renta was found to accountability by reason of his duties. By his act of
have manipulated certain accounts involving trust funds negligence, he permitted the taking of the car by another
and time deposits of depositors. After person, resulting in malversation, consistent with the
investigation, he was charged with malversation of public language of Art. 217 of the Revised Penal Code.
funds before the Sandiganbayan. He filed a motion to
dismiss contending he was no longer an employee of the Danny violated the Anti-Fencing Law. He is in
PNB but of the PDIC. possession of an item which is the subject of
Is dela Renta's contention tenable? (2.5%) thievery. P.D. No. 1612 (Anti-Fencing Law) under
SUGGESTED ANSWER: Section 5 provides that mere possession of any good,
The contention of Henry dela Renta is not tenable. Dela article, item, object or any thing of value which has been
Renta may be prosecuted for malversation even if he had the subject of robbery or thievery shall be prima
ceased to be an employee of the PNB. At the time of the facie, evidence of fencing.
commission of the offense, PNB was a government
owned and controlled corporation and therefore, any Jules is guilty of carnapping. He took the motor vehicle
crime committed by the Regional Bank Auditor, who is a belonging to another without the latter's consent.
public officer, is subject to the jurisdiction of the (R.A. No. 6539)
Sandiganbayan (See R.A. 7975 as amended by RA. 8249).
What, if any, are their respective civil liabilities?
2. After his arraignment, the prosecution filed a motion Explain. (5%)
for his suspension pendente lite, to which he filed SUGGESTED ANSWER:
an opposition claiming that he can no longer be Allan is under obligation to restitute the vehicle or make
suspended as he is no longer an employee of the PNB reparation if not possible.
but that of the PDIC.
Explain whether he may or may not be suspended. Jules must pay the amount he gained from the sale of the
(2.5%) car which is P20,000.00.
SUGGESTED ANSWER:

Danny must make reparation corresponding to the value Works and Highways, the amount of P100,000.00 known as
of the car which is P800,000.00. the fund for construction, rehabilitation, betterment, and
Improvement (CRBI) for the concreting of Barangay
Malversation; Properties; Custodia Legis (2001) Phanix Road located in Masinloc, Zambales, a project
Accused Juan Santos, a deputy sheriff in a Regional Trial undertaken on proposal of the Barangay Captain.
Court, levied on the personal properties of a defendant in a Informed that the fund was already exhausted while the
civil case before said court, pursuant to a writ of concreting of Barangay Phanix Road remained
execution duly issued by the court. Among the properties unfinished, a representative of the Commission on Audit
levied upon and deposited inside the "evidence room" of conducted a spot audit of Elizabeth who failed to
the Clerk of Court for Multiple RTC Salas were a account for the Pl00,000 CRBI fund. Elizabeth, who was
refrigerator, a stock of cassette tapes, a dining table set of charged with malversation of public funds, was acquitted by
chairs and several lampshades. Upon the defendant's the Sandiganbayan of that charge but was nevertheless
paying off the judgment creditor, he tried to claim his convicted, in the same criminal case, for illegal use of
properties but found out that several items were missing, public funds. On appeal, Elizabeth argued that her
such as the cassette tapes, chairs and lampshades. After conviction was erroneous as she applied the amount of
due and diligent sleuthing by the police detectives P50,000.00 for a public purpose without violating any law
assigned to the case, these missing items were found in or ordinance appropriating the said amount for any
the house of accused Santos, who reasoned out that he specific purpose. The absence of such law or ordinance
only borrowed them temporarily. was, in fact, established.
If you were the fiscal /prosecutor, what would be Is the contention of Elizabeth legally tenable? Explain.
the nature of the information to be filed against the SUGGESTED ANSWER:
accused? Why? (5%) Elizabeth's contention that her conviction for illegal use of
SUGGESTED ANSWER: public funds (technical malversation) was erroneous, is
If I were the fiscal/prosecutor, I would file an legally tenable because she was charged for malversation of
information for Malversation against Juan Santos for the public funds under Art. 217 of the Revised Penal Code
cassette tapes, chain and lampshades which he, as deputy but was convicted for Illegal use of public funds which
sheriff, levied upon and thus under his accountability as a is defined and punished under Art. 220 of said Code.
public officer. Said properties being under levy, are in A public officer charged with malversation may not be
custodia legis and thus impressed with the character of validly convicted of illegal use of public funds
public property, misappropriation of which constitutes (technical malversation) because the latter crime is not
the crime of malversation although said properties necessarily included nor does it necessarily include the
belonged to a private individual (Art. 222, RPC). crime of malversation. The Sandiganbayan should have
followed the procedure provided in Sec. 11, Rule 119 of the
Juan Santos misappropriated such properties when, Rules of Court and order the filing of the proper
in breach of trust, he applied them to his own private Information. (Parungao us. Sandiganbayan. 197 SCRA 173.)
use and benefit. His allegation that he only From the facts, there is no showing that there is a law or
borrowed such properties is a lame excuse, devoid of ordinance appropriating the amount to a specific public
merit as there is no one from whom he borrowed the purpose. As a matter of fact, the problem categorically
same. The fact that it was only "after due and diligent states that the absence of such law or ordinance was, in
sleuthing by the police detectives assigned to the fact, established." So, procedurally and substantially , the
case", that the missing items were found in the Sandiganbayan's decision suffers from serious Infirmity.
house of Santos, negates his pretension.
ALTERNATIVE ANSWER: Public Officers; definition (1999)
An information for Theft may be filed, considering that Who are public officers? (2%)
the sheriff had already deposited the properties SUGGESTED ANSWER:
levied upon in the "evidence room" of the Clerk of Public Officers are persons who, by direct provision of
Court and may have already been relieved of his the law, popular election or appointment by competent
accountability therefor. authority, takes part in the performance of public
functions in the Government of the Philippines, or
If Juan Santos was no longer the public officer who performs in said Government or in any of its branches
should be accountable for the properties levied upon and public duties as an employee, agent or subordinate
found in his house, his taking of such properties would official, of any rank or class (Art. 203, RPC)
no longer constitute Malversation but Theft, as there was
taking with intent to gain, of personal property Public Officers; Infidelity in Custody of Prisoners (1996)
of another without the consent of the latter. A chief of police of a municipality, believing in good
faith that a prisoner serving a ten-day sentence in the
Malversation; Technical Malversation (1996) municipal jail, would not escape, allowed said prisoner to
Elizabeth is the municipal treasurer of Masinloc, sleep at the latter's house because the municipal Jail was so
Zambales. On January 10, 1994, she received, as congested and there was no bed space available.
municipal treasurer, from the Department of Public Accordingly, the prisoner went home to sleep every night
Criminal Law Bar Examination Q & A (1994-2006) but 53 of 86
returned to jail early each morning, until the ten-day SUGGESTED ANSWER:
sentence had been fully served. Pascual committed the complex crime of homicide with
Did the Chief of Police commit any crime? Explain. assault upon a person in authority (Arts. 148 and 249 in
SUGGESTED ANSWER: relation to Art, 48, RPC). A barangay chairman, is in law
The Chief of Police is guilty of violation of Art. (Art. 152), a person in authority and if he is
223, RPC, consenting or conniving to evasion, the attacked while in the performance of his official duties
elements of which are (a) he is a public officer, (b) he is or on the occasion thereof the felony of direct
in charge or custody of a prisoner, detention or assault is committed.
prisoner by final judgment, (c) that the prisoner
escaped, and (d) there must be connivance. Art. 48, RPC, on the other hand, provides that if a single
act produces two or more grave or less grave felonies, a
Relaxation of a prisoner is considered infidelity, thus complex crime is committed. Here, the single act of the
making the penalty ineffectual; although the convict may offender in hacking the victim to death resulted in
not have fled (US vs. Bandino, 9 Phil. 459) it is still violative two felonies, homicide which is grave and direct assault
of the provision. It also includes a case when the guard which is less grave.
allowed the prisoner, who is serving a six-day sentence in
the municipal Jail, to sleep in his house and eat there Complex Crime; Parricide w/ unintentional
(People vs. Revilla). abortion (1994)
Aldrich was dismissed from his Job by his employer.
Public Officers; Infidelity in Custody of Prisoners (1997) Upon reaching home, his pregnant wife, Carmi, nagged
During a town fiesta. A, the chief of police, permitted B, him about money for her medicines. Depressed by his
a detention prisoner and his compadre, to leave the dismissal and angered by the nagging of his wife, Aldrich
municipal jail and entertain visitors in his house struck Carmi with his fist. She fell to the ground. As a
from 10:00 a.m. to 8:00 p.m. B returned to the municipal result, she and her unborn baby died.
jail at 8:30 p.m. Was there any crime committed by A? What crime was committed by Aldrich?
Yes, A committed the crime of infidelity in the custody of a Aldrich committed the crime of parricide with
prisoner. Since B is a detention prisoner. As Chief of unintentional abortion. When Aldrich struck his wife,
Police, A has custody over B. Even if B returned to the Carmi, with his fist, he committed the crime of
municipal Jail at 8:30 p.m. A, as custodian of the maltreatment under Art, 266, par. 3 of the Revised Penal
prisoner, has maliciously failed to perform the duties of his Code, Since Carmi died because of the felonious act of
office, and when he permits said prisoner to obtain a Aldrich, he is criminally liable of parricide under Art. 246,
relaxation of his imprisonment, he consents to the RPC in relation to Art. 4, par. 1 of the same Code. Since the
prisoner escaping the punishment of being deprived of unborn baby of Carmi died in the process, but Aldrich
his liberty which can be considered real and actual had no intention to cause the abortion of his wife,
evasion of service under Article 223 of the Revised Penal Aldrich committed unintentional abortion as defined
Code (People vs. Leon Bandino 29 Phil. 459). in Art. 257, RPC. Inasmuch as the single act of Aldrich
ALTERNATIVE ANSWER: produced two grave or less grave felonies, he falls
No crime was committed by the Chief of Police. It was under Art, 48, RPC, ie. a complex crime (People vs.
only an act of leniency or laxity in the performance of his Salufrancia, 159 SCRA 401).
duty and not in excess of his duty (People vs. Evangelista (CA)
38 O.G. 158). Criminal Liabilities; Rape; Homicide & Theft (1998 No)
King went to the house of Laura who was alone. Laura
Crimes Against Persons offered him a drink and after consuming three bottles of
beer. King made advances to her and with force
Complex Crime; Homicide w/ Assault-Authority (1995) and violence, ravished her. Then King killed Laura and
Pascual operated a rice thresher in Barangay Napnud took her jewelry.
where he resided. Renato, a resident of the neighboring
Barangay Guihaman, also operated a mobile rice thresher Doming, King's adopted brother, learned about the
which he often brought to Barangay Napnud to thresh incident. He went to Laura's house, hid her body, cleaned
the palay of the farmers there. This was bitterly resented by everything and washed the bloodstains inside the room.
Pascual, One afternoon Pascual, and his two sons
confronted Renato and his men who were operating their Later, King gave Jose, his legitimate brother, one piece of
mobile rice thresher along a feeder road in Napnud. A jewelry belonging to Laura. Jose knew that the
heated argument ensued. A barangay captain who was jewelry was taken from Laura but nonetheless he
fetched by one of Pascual's men tried to appease Pascual sold it for P2,000.
and Renato to prevent a violent confrontation. However, What crime or crimes did King, Doming and
Pascual resented the intervention of the barangay captain Jose commit? Discuss their criminal liabilities. [10%]
and hacked him to death. SUGGESTED ANSWER:
What crime was committed by Pascual? Discuss fully.
Criminal Law Bar Examination Q & A (1994-2006) 54 of 86 permission
King committed the composite crime of Rape with from his duty officer. Upon reaching the front yard of
homicide as a single indivisible offense, not a his home, he noticed that the light in the master
complex crime, and Theft. The taking of Laura's jewelry bedroom was on and that the bedroom window was
when she is already dead is only theft. open. Approaching the front door, he was surprised to hear
sighs and giggles inside the bedroom. He opened the door
Criminal Liability; Tumultous Affray (1997) very carefully and peeped inside where he saw his wife B
During a town fiesta, a free-for-all fight erupted in having sexual intercourse with their neighbor C. A rushed
the public plaza. As a result of the tumultuous inside and grabbed C but the latter managed to wrest
affray, A sustained one fatal and three superficial stab himself free and jumped out of the window, A followed suit
wounds. He died a day after. B, C, D and E were and managed to catch C again and after a furious struggle,
proven to be participants in the "rumble", each using a managed also to strangle him to death. A then rushed back
knife against A, but it could not be ascertained who to his bedroom where his wife B was cowering under the
among them inflicted the mortal injury. bed covers. Still enraged, A hit B with fist blows and
Who shall be held criminally liable for the death of A and rendered her unconscious. The police arrived after being
for what? summoned by their neighbors and arrested A who was
SUGGESTED ANSWER: detained, inquested and charged for the death of C and
B, C, D, and E being participants in the tumultuous serious physical Injuries of B.
affray and having been proven to have inflicted serious a) Is A liable for C's death? Why? (5%)
physical injuries, or at least, employed violence upon A, are b) Is A liable for B's injuries? Why? (5%)
criminally liable for the latter's death. And because it cannot SUGGESTED ANSWER:
be ascertained who among them inflicted the mortal a) Yes, A is liable for C's death but under the
injury on A, there being a free-for-all fight or exceptional circumstances in Article 247 of the Revised
tumultuous affray. B, C, D, and E are all liable for Penal Code, where only destierro is prescribed. Article
the crime of death caused in a tumultuous affray 247 governs since A surprised his wife B in the act of
under Article 251 of the Revised Penal Code. having sexual intercourse with C, and the killing of C was
"Immediately thereafter" as the discovery, escape, pursuit
Criminal Liability; Tumultuous Affray (2003) and killing of C form one continuous act. (U.S. vs. Vargas,
In a free-for-all brawl that ensued after some customers 2 Phil. 194)
inside a night club became unruly, guns were fired by a
group, among them A and B, that finally put b) Likewise, A is liable for the serious physical injuries
the customers back to their senses. Unfortunately, he inflicted on his wife B but under the same exceptional
one customer died. Subsequent investigation revealed circumstances in Article 247 of the Revised Penal Code,
that A's gunshot had inflicted on the victim a slight for the same reasons.
wound that did not cause the deceased's death
nor materially contribute to it. It was B's gunshot Death under Exceptional Circumstances (2005)
that inflicted a fatal wound on the deceased. A Pete, a security guard, arrived home late one night after
contended that his liability should, if at all, be limited rendering overtime. He was shocked to see Flor, his wife,
to slight physical injury. Would you agree? Why? 6% and Benjie, his best friend, completely naked having
SUGGESTED ANSWER: sexual intercourse. Pete pulled out his service gun
No, I beg to disagree with A's contention that his liability and shot and killed Benjie. Pete was charged with
should be limited to slight physical injury only. He should murder for the death of Benjie. Pete contended that
be held liable for attempted homicide because he he acted in defense of his honor and that,
inflicted said injury with the use of a firearm which is a therefore, he should be acquitted of the crime.
lethal weapon. Intent to kill is inherent in the use of a
firearm. (Araneta, Jr. v. Court of Appeals, 187 SCRA 123 [1990]) The court found that Benjie died under exceptional
ALTERNATIVE ANSWER: circumstances and exonerated Pete of the crime, but
Yes, I would agree to A's contention that his criminal sentenced him to destierro, conformably with Article 247
liability should be for slight physical injury only, because he of the Revised Penal Code. The court also ordered Pete
fired his gun only to pacify the unruly customers of to pay indemnity to the heirs of the victim in the amount
the night club and therefore, without intent to kill. B's of P50,000.00. (5%)
gunshot that inflicted a fatal wound on the deceased may Is the defense of Pete meritorious? Explain.
not be imputed to A because conspiracy cannot exist SUGGESTED ANSWER:
when there is a free-for-all brawl or tumultuous affray. A No. A person who commits acts penalized under Article
and B are liable only for their respective act 247 of the Revised Penal Code for death or serious
physical injuries inflicted under
Death under Exceptional Circumstances (2001) exceptional circumstances is still criminally liable.
A and B are husband and wife. A is employed as a However, this is merely an exempting circumstance
security guard at Landmark, his shift being from 11:00 when the victim suffers any other kind of physical
p.m. to 7:00 a.m. One night, he felt sick and cold, hence, he injury. In the case at bar, Pete will suffer the penalty
decided to go home around midnight after getting of destierro for the death of Benjie.
Criminal Law Bar Examination Q & A (1994-2006) 55 of 86 execution
ALTERNATIVE ANSWER: which would have produced the intended felony of
No. Pete did not act in defense of his honor. For this homicide were it not for causes independent of the act of
defense to apply under Art. 11, there must be an Dante. Dante had the intent to kill judging from the
unlawful aggression which is defined as an attack or weapon used, the manner of committing the crime and
material aggression that poses a danger to his life or the part of the body stabbed. Dante is guilty of less serious
personal safely. It must be a real aggression characterized physical injuries for the wounds sustained by Mamerto.
by a physical force or with a weapon to cause injury or There appears to be no intent to kill because Dante
damage to one's life. (People v. Nahayra, G.R. Nos. 96368-69, merely assaulted Mamerto without using the knife.
October 17, 1991; People v. Housing, G.R. No. 64965, July 18, 1991)
Infanticide (2006)
Under Article 247 of the Revised Penal Code, is Ana has been a bar girl/GRO at a beer house for more than
destierro a penalty? Explain. 2 years. She fell in love with Oniok, the bartender, who
SUGGESTED ANSWER:
impregnated her. But Ana did not inform him about her
In the case of People v. Abarca, G.R. No. 74433, September condition and instead, went home to Cebu to conceal her
14, 1987, the Court ruled that Article 247 does not define shame. However, her parents drove her away. So she
a felony. However, it went on to state that the penalty is returned to Manila and stayed with Oniok in his boarding
merely banishment of the accused, intended for his house. Upon learning of her pregnancy, already in an
protection. Punishment, therefore, is not inflicted on the advanced state, Oniok tried to persuade her to undergo an
accused. abortion, but she refused. Because of their constant
ALTERNATIVE ANSWER:
and bitter quarrels, she suffered birth pangs and gave
Yes. Article 247 of the Revised Penal Code does birth prematurely to a live baby girl while Oniok was at his
not define and provide for a specific crime but place of work. Upon coming home and learning what
happened, he prevailed upon Ana to conceal her
grants a privilege or benefit to the accused for the
dishonor. Hence, they placed the infant in a shoe box
killing of another or the infliction of Serious
and threw it into a nearby creek. However, an inquisitive
Physical Injuries. Destierro is a punishment whereby a
neighbor saw them and with the help of others, retrieved
convict is banished to a certain place and is
the infant who was already dead from drowning. The
prohibited from entering or coming near that place
incident was reported to the police who arrested Ana and
designated in the sentence, not less than 25 kms.
(People v. Araquel, G.R. No. L-12629, December 9, 1959) Oniok. The 2 were charged with parricide under Article 246
of the Revised Penal Code. After trial, they were
Did the court correctly order Pete to pay indemnity convicted of the crime charged.
despite his exoneration under Article 247 of the Was the conviction correct?
Revised Penal Code? Explain. SUGGESTED ANSWER:
SUGGESTED ANSWER: The conviction of Ana and Oniok is not correct. They
Yes, because the privilege defined under this Article are liable for infanticide because they killed a child less
exempts the offender from criminal liability but not from than three days of age (Art. 255, Revised Penal Code).
civil liability. (People v. Abarca, G.R, No. L-74483, September 14,
1987; Art. 12, Revised Penal Code) Murder & Sec. 25, R.A. No. 9165 (2005)
Candido stabbed an innocent bystander who accidentally
Homicide; Fraustrated; Physical Injuries (1994) bumped him. The innocent bystander died as a result of
At about 11:00 in the evening, Dante forced his way the stabbing. Candido was arrested and was tested to be
inside the house of Mamerto. Jay, Mamerto's son, saw positive for the use of “shabu” at the time he committed
Dante and accosted him, Dante pulled a knife and the stabbing. What should be the proper charge
stabbed Jay on his abdomen. Mamerto heard the against Candido? Explain. (3%)
commotion and went out of his room. Dante, who was SUGGESTED ANSWER:
about to escape, assaulted Mamerto. Jay suffered injuries The killing was not attended by any of the qualifying
which, were it not for the timely medical attendance, circumstances enumerated under Article 248 of the
would have caused his death. Mamerto sustained Injuries Revised Penal Code. The killing, however, constitutes
that incapacitated him for 25 days. murder because the commission of a crime under the
What crime or crimes did Dante commit? influence of prohibited drugs is a qualifying, aggravating
SUGGESTED ANSWER: circumstance. (Sec. 25, R.A. No. 9165)
Dante committed qualified trespass to dwelling,
frustrated homicide for the stabbing of Jay, and less Murder (1999)
serious physical injuries for the assault on Mamerto. The accused, not intending to kill the victim,
treacherously shot the victim while the victim was
The crime of qualified trespass to dwelling should not be turning his back to him. He aimed at and hit the victim only
complexed with frustrated homicide ... on the leg. The victim, however, died because of loss
of blood. Can the accused be liable for homicide or murder,
Dante committed frustrated homicide for the stabbing of considering that treachery was clearly involved
Jay because he had already performed all the acts of
Criminal Law Bar Examination Q & A (1994-2006) but 56 of 86 forcibly
there was no attempt to kill? Explain your answer. brought Jorge to Zambales where they kept him hog-
(3%) tied in a small nipa house located in the middle of a rice
SUGGESTED ANSWER: field. Two days later, they killed Jorge and dumped his
The accused is liable for the death of the victim body into the river.
even though he merely aimed and fired at the latter's leg, What crime or crimes did Fidel and Fred commit?
"not intending to kill the victim", considering that the Explain.
gunshot was felonious and was the proximate cause of SUGGESTED ANSWER:
death. An offender is liable for all the direct, natural, Fidel and Fred committed the crime of Murder under Art
and logical consequences of his felonious act 248, RPC, the killing being qualified by evident
although different from what he intended. premeditation. This is due to the long standing grudge
However, since specific intent to kill is absent, the crime entertained by the two accused occasioned by the victim's
for said death is only homicide and not murder (People vs. refusal to marry their sister after impregnating her.
Pugay and Samson, 167 SCRA 439)
ALTERNATIVE ANSWER: In People vs. Alfeche. 219 SCRA 85, the intention of
The accused is liable for the death of the victim in the accused is determinative of the crime committed.
as much as his act of shooting the victim at the Where the intention is to kill the victim and the latter is
leg is felonious and is the proximate cause of death. A forcibly taken to another place and later killed, it is
person performing a felonious act is criminally liable for murder. There is no indication that the offenders
all the direct, natural, and logical consequences of intended to deprive the victim of his liberty.
such act although different from what he intended. Whereas, if the victim is kidnapped, and taken to
And since such death was attended by treachery, the another situs and killed as an afterthought, it is
same will constitute murder but the accused should kidnapping with homicide under Art. 267, RPC.
be given the benefit of the mitigating circumstance
that he did not intend to commit so grave a wrong Murder; Homicide; Infanticide; Parricide (1999)
as that which was committed (Art. 13(3), RPC) A killed: (1) a woman with whom he lived without
benefit of clergy, (2) their child who was only two days
Murder; Definition & Elements (1999) old, (3) their daughter, and (4) their adopted son.
Define murder. What are the elements of the crime? [3%] What crime or crimes did A commit? (3%)
(a) Murder is the unlawful killing of a person which A committed the following crimes:
otherwise would constitute only homicide, had it not 1.] HOMICIDE or murder as the case may be, for the
been attended by any of the following circumstances: killing of his common-law wife who is not
1. With treachery or taking advantage of legally considered a "spouse"
superior strength, or with the aid of armed men, or 2.] INFANTICIDE for the killing of the child as said
employing means to weaken the defense or of means or child is less than three (3) days old. (Art. 255, RPC)
persons to insure or afford impunity; However, the penalty corresponding to parricide
2. In consideration of a price, reward or promise; shall be imposed since A is related to the child
3. By means or on the occasion of inundation, within the degree defined in the crime of parricide.
fire, poison, explosion, shipwreck, stranding of a
vessel, derailment or assault upon a railroad, fall of an
3.] PARRICIDE for the killing of their
daughter, whether legitimate or illegitimate, as
airship, or by means of motor vehicles, or with the use
long as she is not less than three (3) days old
of any other means involving great waste and ruin;
at the time of the killing.
4. On occasion of an earthquake, eruption of a volcano,
destructive cyclone, epidemic or other public calamity; 4.] MURDER for the killing of their adopted son as the
5. With evident premeditation; relationship between A and the said son must be by
6. With cruelty, by deliberately and inhumanly blood in order for parricide to arise.
augmenting the suffering of the victim, or outraging
Murder; Reckles Imprudence (2001)
or scoffing at his person or corpse.
SUGGESTED ANSWER: Mang Jose, a septuagenarian, was walking with his ten-
(b) The elements of murder are: (1) that a person year old grandson along Paseo de Roxas and decided to
was unlawfully killed; (2) that such a killing was attended cross at the intersection of Makati Avenue but both were
by any of the above-mentioned circumstances; (3) hit by a speeding CRV Honda van and were sent
that the killing is not parricide nor infanticide; and sprawling on the pavement a meter apart. The driver, a
(4) that the accused killed the victim. Chinese mestizo, stopped his car after hitting the two
victims but then reversed his gears and ran over Mang
Murder; Evident Premeditation (1996) Jose's prostrate body anew and third time by advancing his
Fidel and Fred harbored a long standing grudge against car forward. The grandson suffered broken legs only and
Jorge who refused to marry their sister Lorna, after the survived but Mang Jose suffered multiple fractures and
latter got pregnant by Jorge. After weeks of surveillance, broken ribs, causing his instant death. The driver was
they finally cornered Jorge in Ermita, Manila, when the arrested and charged with Murder for the death of Mang
latter was walking home late at night. Fidel and Fred
Criminal Law Bar Examination Q & A (1994-2006) 57 of 86 committed
Jose and Serious Physical Injuries through with the use of an unlicensed firearm, such use shall
Reckless Imprudence with respect to the grandson. be considered as an aggravating circumstance.
Are the charges correct? Explain. (5%)
SUGGESTED ANSWER: PH therefore may only be convicted of murder and the
Yes, the charges are correct. For deliberately running use of an unlicensed firearm in its commission may only
over Mang Jose's prostrate body after having bumped be appreciated as a special aggravating circumstance,
him and his grandson, the driver indeed committed provided that such use is alleged specifically in the
Murder, qualified by treachery. Said driver's deliberate information for Murder.
intent to kill Mang Jose was demonstrated by his running
over the latter's body twice, by backing up the van Parricide (1999)
and driving it forward, whereas the victim was helpless Who may be guilty of the crime of parricide? (3%)
and not in a position to defend himself or to retaliate. SUGGESTED ANSWER:
Any person who kills his father, mother, or
As to the serious physical injuries sustained by Mang child, whether legitimate or illegitimate, or his
Jose's 10-year old grandson, as a result of having been hit ascendants or descendants, or spouse, shall be guilty of
by the speeding vehicle of said driver, the same were the parricide. (Art. 246, RPC)
result of reckless imprudence which is punishable as a
quasi-offense in Article 365 of the Revised Penal Code. The Parricide (1999)
charge of Reckless Imprudence Resulting to Serious In 1975, Pedro, then a resident of Manila, abandoned his
Physical Injuries is correct. The penalty next higher in wife and their son, Ricky, who was then only three years
degree to what ordinarily should be imposed is called for, old. Twenty years later, an affray took place in a bar
since the driver did not lend help on the spot, which help in Olongapo City between Pedro and his
he could have given to the victims. companions, on one hand, and Ricky and his
friends, upon the other, without the father and son
Murder; Treachery (1995) knowing each other. Ricky stabbed and killed Pedro in
On his way to buy a lotto ticket, a policeman the fight, only to find out, a week later, when his mother
suddenly found himself surrounded by four men. One arrived from Manila to visit him in jail, that the man
of them wrestled the police officer to the ground and whom he killed was his own father.
disarmed him while the other three companions who were 1) What crime did Ricky commit? Explain.
armed with a hunting knife, an ice pick, and a 2) Suppose Ricky knew before the killing that Pedro is
balisong, repeatedly stabbed him. The policeman died as a his father, but he nevertheless killed him out of bitterness
result of the multiple stab wounds inflicted by his assailants. for having abandoned him and his mother, what
What crime or crimes were committed? Discuss fully. crime did Ricky commit? Explain.
All the assailants are liable for the crime of murder, 1) Ricky committed parricide because the person killed
qualified by treachery, (which absorbed abuse of superior was his own father, and the law punishing the crime (Art.
strength) as the attack was sudden and unexpected 246, RPC) does not require that the crime
and the victim was totally defenseless. Conspiracy is be "knowingly" committed. Should Ricky be prosecuted
obvious from the concerted acts of the assailants. and found guilty of parricide, the penalty to be
Direct assault would not complex the crime, as there is imposed is Art. 49 of the Revised Penal Code for
no showing that the assailants knew that the victim Homicide (the crime he intended to commit) but in
was a policeman; even if there was knowledge, the fact its maximum period.
is that he was not in the performance of his official ALTERNATIVE ANSWER:
duties, and therefore there is no direct assault. Ricky should be held criminally liable only for homicide
not parricide because the relationship which qualified the
Murder; Use of Illegal Firearms (2004) killing to parricide is virtually absent for a period of
PH killed OJ, his political rival in the election campaign for twenty years already, such that Ricky could not possibly
Mayor of their town. The Information against PH be aware that his adversary was his father. In other
alleged that he used an unlicensed firearm in the killing of words, the moral basis for imposing the higher
the victim, and this was proved beyond reasonable doubt penalty for parricide is absent.
by the prosecution. The trial court convicted PH of two
SUGGESTED ANSWER:
crimes: murder and illegal possession of firearms. Is the
conviction correct? Reason briefly. (5%) 2) The crime committed should be parricide if Ricky
SUGGESTED ANSWER: knew before the killing that Pedro is his father, because the
No, the conviction of PH for two crimes, murder and moral basis for punishing the crime already exists. His
illegal possession of firearm is not correct. Under the having acted out of bitterness for having been
new law on illegal possession of firearms and explosives, abandoned by his father may be considered mitigating.
Rep. Act No. 8294, a person may only be criminally liable
for illegal possession of firearm if no other crime is Parricide; Multiple Parricide; Homicide (1997)
committed therewith; if a homicide or murder is A, a young housewife, and B, her paramour, conspired to
kill C. her husband, to whom she was lawfully married, A
Criminal Law Bar Examination Q & A (1994-2006) and 58 of 86
B bought pancit and mixed it with poison. A gave shall be imposed on the offender. Serious
the food with poison to C, but before C could eat it. D, physical injuries cannot be absorbed in rape; it can
her illegitimate father, and E, her legitimate son, arrived. be so if the injury is slight.
C. D and E shared the food in the presence of A
who merely watched them eating. C, D and E died Rape; Absence of Force & Intimidation (1995)
because of having partaken of the poisoned food. Three policemen conducting routine surveillance of a
What crime or crimes did A and B commit? cogonal area in Antipole chanced upon Ruben, a 15-year
SUGGESTED ANSWER: old tricycle driver, on top of Rowena who was known to be
A committed the crime of multiple parricide for the a child prostitute. Both were naked from the waist
killing of C, her lawful husband, D, her illegitimate down and appeared to be enjoying the sexual activity.
father, and E, her legitimate son. All these killings Ruben was arrested by the policemen despite his
constitute parricide under Article 246 of the Revised protestations that Rowena enticed him to have sex with her
Penal Code because of her relationship with the victims. in advance celebration of her twelfth birthday. The
town physician found no semen nor any bleeding on
B committed the crime of murder as a co-conspirator of Rowena's hymen but for a healed scar. Her hymenal
A in the killing of C because the killing was carried out opening easily admitted two fingers showing that no
by means of poison (Art. 248. par. 3, Revised Penal external force had been employed on her.
Code). But for feloniously causing the death of D Is Ruben liable for any offense? Discuss fully. Answer;
and E, B committed two counts of homicide. The plan SUGGESTED ANSWER:
was only to kill C. Ruben is liable for rape, even if force or intimidation is
not present. The gravamen of the offense is the
Rape (1995) carnal knowledge of a woman below twelve years of age
Gavino boxed his wife Alma for refusing to sleep (People vs. Dela Cruz, 56 SCRA 84) since the law doesn't
with him. He then violently threw her on the floor and consider the consent voluntary and presumes that a
forced her to have sexual intercourse with him. As a girl below twelve years old does not and cannot have a
result Alma suffered serious physical injuries. will of her own. In People us. Perez, CA 37 OG 1762, it
(a) Can Gavino be charged with rape? Explain. was held that sexual intercourse with a prostitute
(b) Can Gavino be charged with serious physical injuries? below twelve years old is rape.
Explain
(c) Will your answers to (a) and (b) be the same if before Similarly, the absence of spermatozoa does not disprove
the incident Gavino and Alma were legally separated? the consummation as the important consideration is not
Explain. the emission but the penetration of the female body by
SUGGESTED ANSWER: the male organ (People vs. Jose 37 SCRA 450; People
(a) No. A husband cannot be charged with the rape vs. Carandang. 52 SCRA 259).
of his wife because of the matrimonial consent
which she gave when she assumed the marriage Rape; Anti-Rape Law of 1997 (2002)
relation, and the law will not permit her to retract in What other acts are considered rape under the Anti-Rape
order to charge her husband with the offense (Sate vs. Law of 1997, amending the Revised Penal Code? (3%)
Haines, 11 La. Ann. 731 So. 372; 441 RA 837). SUGGESTED ANSWER:
The other acts considered rape under the Anti-Rape Law
(b) Yes, he may be guilty of serious physical injuries. This of 1997 are:
offense is specially mentioned in Art. 263 [4], paragraph 1.] having carnal knowledge of a woman by a man
2 which imposes a higher penalty for the crime of by means of fraudulent machination or grave abuse
physical injuries in cases where the offense shall of authority,
have been committed against any of the persons 2.] having carnal knowledge of a demented woman by a
enumerated in Art 246 (the crime of parricide). man even if none of the circumstances required
in rape be present; and
(c) No, my answer will not be the same. If Gavino, and 3.] committing an act of sexual assault by inserting a
Alma were legally separated at the time of the person's penis into the victim's mouth or anal
incident, then Gavino could be held liable for rape. orifice, or by inserting any instrument or object, into
the genital or anal orifice of another person.
A legal separation is a separation of the spouses from
bed and board (U.S. vs. Johnson, 27 Phil. 477, cited in II Reyes, Rape; Anti-Rape Law of 1997 (2002)
RFC, p. 853. 1981 edition),
The Anti-Rape Law of 1997 reclassified rape from a
In the crime of rape, any crime resulting from the crime against honor, a private offense, to that of a crime
infliction of physical injuries suffered by the victim on against persons. Will the subsequent marriage of the
the occasion of the rape, is absorbed by the crime of offender and the offended party extinguish the
criminal action or the penalty imposed? Explain. (2%)
rape. The injuries suffered by the victim may, however, SUGGESTED ANSWER:
be considered in determining the proper penalty which

Yes. By express provision of Article 266-C of the Rape; Male Victim (2002)
Revised Penal Code, as amended, the subsequent valid A, a male, takes B, another male, to a motel and
marriage between the offender and offended party shall there, through threat and intimidation, succeeds in
extinguish the criminal action or the penalty imposed, inserting his penis into the anus of B. What, if any,
although rape has been reclassified from a crime against is A’s criminal liability? Why?
chastity, to that of a crime against persons. SUGGESTED ANSWER:
A shall be criminally liable for rape by committing an act
Rape; Consented Abduction (2002) of sexual assault against B, by inserting his penis into the
A with lewd designs, took a 13-year old girl to a nipa hut in anus of the latter.
his farm and there had sexual intercourse with her.
The girl did not offer any resistance because she was Even a man may be a victim of rape by sexual
infatuated with the man, who was good-looking and assault under par. 2 of Article 266-A of the Revised
belonged to a rich and prominent family in the town. Penal Code, as amended, "when the offender's penis
What crime, if any, was committed by A? Why? (2%) is inserted into his mouth or anal orifice."
SUGGESTED ANSWER:
A committed the crime of consented abduction Rape; Multiple Rapes; Forcible Abduction (2000)
under Article 343 of the Revised Penal Code, as Flordeluna boarded a taxi on her way home to Quezon City
amended. The said Article punishes the abduction of which was driven by Roger, Flordeluna noticed that Roger
a virgin over 12 and under 18 years of age, carried out was always placing his car freshener in front of the car
with her consent and with lewd designs. Although aircon ventilation but did not bother asking Roger why.
the problem did not indicate the victim to be Suddenly, Flordeluna felt dizzy and became
virgin, virginity should not be understood in its unconscious. Instead of bringing her to Quezon City,
material sense, as to exclude a virtuous woman of good Roger brought Flordeluna to his house in Cavite where
reputation, since the essence of the crime is not the she was detained for two (2) weeks. She was raped for
injury to the woman but the outrage and alarm to her the entire duration of her detention. May Roger be
family (Valdepenas vs. People,16 SCRA 871 [1966]). charged and convicted of the crime of rape with serious
ALTERNATIVE ANSWER: illegal detention? Explain. (5%)
A committed "Child Abuse" under Rep. Act No. SUGGESTED ANSWER:
7610. As defined in said law, "child abuse" includes No, Roger may not be charged and convicted of the
sexual abuse or any act which debases, degrades or crime of rape with serious illegal detention. Roger may be
demeans the intrinsic worth and dignity of a child as a charged and convicted of multiple rapes. Each rape is a
human being, whose age is below eighteen (18) years. distinct offense and should be punished separately.
Evidently, his principal intention was to abuse
Rape; Effect; Affidavit of Desistance (1993) Flordeluna; the detention was only incidental to the rape.
1. Ariel intimidated Rachel, a mental retardate, with a ALTERNATIVE ANSWER:
bolo into having sexual Intercourse with him. No, Roger may not be charged and convicted of
Rachel's mother immediately filed a complaint, the crime of rape with serious illegal detention, since
supported by her sworn statement, before the City the detention was incurred in raping the victim
Prosecutor's Office. After the necessary preliminary during the days she was held. At most, Roger may be
investigation, an information was signed by the prosecuted for forcible abduction for taking Flordeluna
prosecutor but did not contain the signature of to Cavite against the latter's will and with lewd
Rachel nor of her mother. Citing Art. 344 of the designs. The forcible abduction should be complexed
RPC (prosecution of the crimes of rape, etc.), Ariel with one of the multiple rapes committed, and the
moves for the dismissal of the case. Resolve with other rapes should be prosecuted and punished
reasons. separately, in as many rapes were charged and proved.
2. After the prosecution had rested its case, Ariel Rape; Proper Party (1993)
presented a sworn affidavit of desistance Ariel intimidated Rachel, a mental retardate, with a bolo
executed by Rachel and her mother stating that into having sexual Intercourse with him. Rachel's mother
they are no longer interested in prosecuting the immediately filed a complaint, supported by her
case and that they have pardoned Ariel. sworn statement, before the City Prosecutor's Office.
What effect would this affidavit of desistance have After the necessary preliminary investigation, an
on the criminal and civil aspects of the case? Explain information was signed by the prosecutor but did
fully. not contain the signature of Rachel nor of her mother.
SUGGESTED ANSWER: Citing Art. 344 of the RPC (prosecution of the crimes
1) The case should not be dismissed. ... of rape, etc.), Ariel moves for the dismissal of
2) The affidavit of desistance will only amount to the case. Resolve with reasons.
the condonation of civil liability but not criminal SUGGESTED ANSWER:
liability hence the case should still proceed. The case should not be dismissed. This is allowed by law
(People us. Ilarde, 125 SCRA 11). It is enough that a

Criminal Law Bar Examination Q & A (1994-2006) 60 of 86 the service
complaint was filed by the offended party or the parents of the notice of such order to said prisoner
in the Fiscal's Office. or the proceedings upon any petition for
the liberation of such person (Art. 126,
Rape; Statutory Rape; Mental Retardate Victim (1996) Revised Penal Code).
The complainant, an eighteen-year old mental
retardate with an intellectual capacity between the ages 2. What are the legal grounds for detention? (2.5%)
of nine and twelve years, when asked during the trial SUGGESTED ANSWER:
how she felt when she was raped by the accused, The commission of a crime, or violent insanity or
replied "Masarap, it gave me much pleasure." any other ailment requiring the compulsory
confinement of the patient in a hospital shall be
With the claim of the accused that the complainant considered legal grounds for the detention of any
consented for a fee to the sexual intercourse, and person (Art. 124[2], Revised Penal Code).
with the foregoing answer of the complainant,
would you convict the accused of rape if you were the 3. When is an arrest by a peace officer or by a private
judge trying the case? Explain. person considered lawful? Explain. (5%)
SUGGESTED ANSWER: 1. When the arrest by a peace officer is made pursuant
Yes, I would convict the accused of rape. Since the to a valid warrant.
victim is a mental retardate with an intellectual 2. A peace officer or a private person may, without a
capacity of a child less than 12 years old, she is legally warrant, arrest a person:
incapable of giving a valid consent to the sexual i. When, in his presence, the person to
Intercourse. The sexual intercourse is tantamount to be arrested has committed, is
a statutory rape because the level of intelligence is that actually committing, or is attempting to
of a child less than twelve years of age. Where the victim commit an offense,
of rape is a mental retardate, violence or Intimidation ii. When an offense has in fact just been
is not essential to constitute rape. (People us. Trimor, committed, and he has personal knowledge
G,R. 106541-42, 31 Mar 95) As a matter of fact, RA of facts indicating that the person to
No. 7659, the Heinous Crimes Law, amended Art. be arrested has committed it, and
335, RPC, by adding the phrase "or is demented." iii. When the person to be arrested is a
prisoner who has escaped from penal
Crimes against Personal Liberty establishment or place where he is serving
final judgment or temporarily confined
and Security while his case is pending, or has escaped
while being transferred from one
Arbitrary Detention; Elements; Grounds (2006) confinement to another (Sec. 5, Rule
1. What are the 3 ways of committing arbitrary 113,1985 Rules on Criminal Procedure).
detention? Explain each. (2.5.%)
SUGGESTED ANSWER:
The 3 ways of arbitrary detention are: Grave Coercion (1998)
a) Arbitrary detention by detaining a person Isagani lost his gold necklace bearing his initials. He saw
without legal ground committed by any public Roy wearing the said necklace. Isagani asked Roy to
officer or employee who, without legal grounds, return to him the necklace as it belongs to him, but Roy
detains a person (Art. 124, Revised Penal Code). refused. Isagani then drew his gun and told Roy, "If you
b) Delay in the delivery of detained persons to the will not give back the necklace to me, I will kill you!" Out
proper judicial authorities which is committed of fear for his life and against his will, Roy gave
by a public officer or employee who shall detain the necklace to Isagani,
any person for some legal ground and shall fail to What offense did Isagani commit? (5%)
deliver such person to the proper judicial SUGGESTED ANSWER:
authorities within the period of: twelve (12) Isagani committed the crime of grave coercion (Art. 286,
hours, for crimes or offense punishable by light RPC) for compelling Roy, by means of serious threats or
penalties, or their equivalent; eighteen hours intimidation, to do something against the latter's will,
(18), for crimes or offenses punishable by whether it be right or wrong. Serious threats or
correctional facilities, or their equivalent; and intimidation approximating violence constitute
thirty-six (36) hours for crimes or offenses grave coercion, not grave threats. Such is the nature
punishable by afflictive or capital penalties, or of the threat in this case because it was committed with
their equivalent (Art. 125, Revised Penal Code). a gun, is a deadly weapon.
c) Delaying release is committed by any public
officer or employee who delays the release for The crime is not robbery because intent to gain, which is
the period of time specified therein the an essential element of robbery, is absent since the
performance of any judicial or executive order necklace belongs to Isagani.
for the release of the prisoner, or unduly delays
Grave Coercion vs. Maltreatment of Prisoner (1999) 270, of the Revised Penal Code, as amended. Article 271
Forcibly brought to the police headquarters, a person expressly penalizes any parent who shall take from
was tortured and maltreated by agents of the law in and deliberately fail to restore his or her minor
order to compel him to confess a crime imputed to child to the parent or guardian to whom custody of
him. The agents failed, however, to draw from him the minor has been placed. Since the custody of C, the
a confession which was their intention to obtain minor, has been given to the mother and B has only the
through the employment of such means. right of monthly visitation, the latter's act of taking C to
What crime was committed by the agents of the the United Slates, to reside there permanently,
law? Explain your answer. (3%) constitutes a violation of said provisions of law.
SUGGESTED ANSWER:
Evidently, the person tortured and maltreated by the Kidnapping (2006)
agents of the law is a suspect and may have been Jaime, Andy and Jimmy, laborers in the noodles factory of
detained by them. If so and he had already been booked Luke Tan, agreed to kill him due to his arrogance and
and put in jail, the crime is maltreatment of prisoner and miserliness. One afternoon, they seized him and loaded
the fact that the suspect was subjected to torture to him in a taxi driven by Mario. They told Mario they will
extort a confession would bring about a higher only teach Luke a lesson in Christian humility. Mario
penalty. In addition to the offender's liability for the drove them to a fishpond in Navotas where Luke was
physical injuries inflicted. entrusted to Emil and Louie, the fishpond caretakers,
asking them to hide Luke in their shack because he was
But if the suspect was forcibly brought to the running from the NBI. The trio then left in Mario's car for
police headquarters to make him admit the crime and Manila where they called up Luke's family and
tortured/ maltreated to make him confess to such crime, threatened them to kill Luke unless they give a ransom
but later released because the agents failed to within 24 hours. Unknown to them, because of a leak,
draw such confession, the crime is grave coercion the kidnapping was announced over the radio and TV.
because of the violence employed to compel such Emil and Louie heard the broadcast and panicked,
confession without the offended party being confined especially when the announcer stated that there is a
in jail. (US vs. Cusi, 10 Phil 143) shoot-to-kill order for the kidnappers. Emil and Louie
took Luke to the seashore of Dagat-dagatan where they
It is noted that the offended party was merely "brought" to smashed his head with a shovel and buried him in the
the police headquarters and is thus not a detention sand. However, they were seen by a barangay kagawad
prisoner. Had he been validly arrested, the crime who arrested them and brought them to the police
committed would be maltreatment of prisoners. station. Upon interrogation, they confessed and pointed to
Jaime, Andy, Jimmy and Mario as those responsible for
Illegal Detention vs. Grave Coercion (1999) the kidnapping. Later, the 4 were arrested and
Distinguish coercion from illegal detention. (3%) charged.
SUGGESTED ANSWER:
What crime or crimes did the 6 suspects commit? (5%)
Coercion may be distinguished from illegal detention as ALTERNATIVE ANSWER:
follows: in coercion, the basis of criminal liability is a) Jaime, Andy and Jimmy committed kidnapping
the employment of violence or serious with homicide. The original intention was to
intimidation approximating violence, without authority demand ransom from the family with the threat of
of law, to prevent a person from doing something not killing. As a consequence of the kidnapping,
prohibited by law or to compel him to do something however, Luke was killed. Thus, the victim was
against his will, whether it be right or wrong; while in deprived of his freedom and the subsequent
Illegal detention, the basis of liability is the actual restraint killing, though committed by another person, was a
or locking up of a person, thereby depriving him of his consequence of the detention. Hence, this
liberty without authority of law. If there was no intent properly qualified the crime as the special complex
to lock up or detain the offended party unlawfully, the crime of kidnapping for ransom with homicide
crime of illegal detention is not committed. (People v. Mamarion, G.R. No. 137554, October 1, 2003;
Art. 267, Revised Penal Code).
Kidnapping (2002) b) Emil and Louie who smashed the head of the
A and B were legally separated. Their child C, a minor, victim and buried the latter in the sand committed
was placed in the custody of A the mother, subject to murder qualified by treachery or abuse of superior
monthly visitations by B, his father. On one occasion, strength. They are not liable for kidnapping
when B had C in his company, B decided not to return C to because they did not conspire, nor are they aware
his mother. Instead, B took C with him to the United States of the intention to detain Luke whom they
where he intended for them to reside permanently. What were informed was hiding from the NBI (Art. 248,
crime, if any, did B commit? Why? (5%) Re- vised Penal Code).
SUGGESTED ANSWER: c) Mario has no liability since he was not aware of the
B committed the crime of kidnapping and failure to criminal intent and design of Jaime, Andy and
return a minor under Article 271, in relation to Article Jimmy. His act of bringing Luke to Navotas for "a
Criminal Law Bar Examination Q & A (1994-2006) 62 of 86 otherwise.
lesson in Christian humility" does not constitute a It is of no moment that the evidence shows the
crime. death of the child took place three minutes after the box
Alternative Answer: was sealed and the demand for the ransom took
a) Jaime, Andy and Jimmy committed kidnapping with place in the afternoon. The intention is controlling here,
ransom. After kidnapping Luke, they demanded that is, ransom was demanded.
ransom with the threat of killing him. However, the ALTERNATIVE ANSWER:
killing of Luke is separate from the kidnapping Murder qualified by treachery because the victim was
having been committed by other persons, who had only one week old. The offense was attended with the
nothing to do with the kidnapping, and who will be aggravating circumstance of lack of respect due to the
liable for a different crime (Penultimate par. of Art. age of the victim, cruelty and abuse of confidence. In
267, Revised Penal Code). People v. Lora (G.R. No, L-49430, March 30, 1982), the
b) Emil and Louie who smashed the head of the victim Court found that a child subjected to similar
and buried the latter in the sand committed murder treatment as the infant in this case would have died
qualified by treachery or abuse of superior strength. instantly, negating any intent to kidnap or detain
They are not liable for kidnapping because they did when ransom was sought. Demand for ransom did
not conspire, nor are they aware of the intention to not convert the offense into kidnapping with murder
detain Luke whom they were informed was hiding because the demand was merely a scheme by the
from the NBI (Art. 248, Revised Penal Code). offender (Paz) to conceal the body of her victim.
c) Mario has no liability since he was not aware of the
criminal intent and design of Jaime, Andy Kidnapping; Effects; Voluntary Release (2004)
and Jimmy. His act of bringing Luke to Navotas for DAN, a private individual, kidnapped CHU, a minor. On
"a lesson in Christian humility" does not the second day, DAN released CHU even before
constitute a crime. any criminal information was filed against him. At the
trial of his case, DAN raised the defense that he
Kidnapping w/ Homicide (2005) did not incur any criminal liability since he released the
Paz Masipag worked as a housemaid and yaya of the one- child before the lapse of the 3-day period and before
week old son of the spouses Martin and Pops Kuripot. criminal proceedings for kidnapping were instituted.
When Paz learned that her 70 year-old mother was Will DAN's defense prosper? Reason briefly. (5%)
seriously ill, she asked Martin for a cash advance of SUGGESTED ANSWER:
P1,000.00 but Martin refused. One morning, Paz gagged No. DAN's defense will not prosper. Voluntary
the mouth of Martin’s son with stockings; placed the release by the offender of the offended party in
child in a box; sealed it with masking tape and placed the kidnapping is not absolutory. Besides, such release is
box in the attic. Later in the afternoon, she demanded irrelevant and immaterial in this case because the victim
P5,000.00 as ransom for the release of his son. Martin being a minor, the crime committed is kidnapping
did not pay the ransom. Subsequently, Paz disappeared. and serious illegal detention under Art. 267, Revised
Penal Code, to which such circumstance does not apply.
After a couple of days, Martin discovered the box in the The circumstance may be appreciated only in the
attic with his child already dead. According to crime of Slight Illegal Detention in Art. 268 (Asistio
the autopsy report, the child died of asphyxiation barely v. San Diego, 10 SCRA 673 [1964])
three minutes after the box was sealed. What crime or
crimes did Paz commit? Explain. (5%) Kidnapping; Illegal Detention; Minority (2006)
SUGGESTED ANSWER: Dang was a beauty queen in a university. Job, a rich
Paz committed the composite crime of kidnapping with classmate, was so enamored with her that he persistently
homicide under Art. 267, RFC as amended by R.A. No. wooed and pursued her. Dang, being in love with
7659. Under the law, any person who shall detain another man, rejected him. This angered Job, Sometime in
another or in any manner deprive him of liberty and September 2003, while Dang and her sister Lyn were on
the victim dies as a consequence is liable for their way home, Job and his minor friend Nonoy
kidnapping with homicide and shall be penalized grabbed them and pushed them inside a white van. They
with the maximum penalty. brought them to an abandoned warehouse where they
forced them to dance naked. Thereafter, they brought
In this case, notwithstanding the fact that the one-week old them to a hill in a nearby barangay where they took turns
child was merely kept in the attic of his house, gagged with raping them. After satisfying their lust, Job ordered
stockings and placed in a box sealed with tape, the Nonoy to push Dang down a ravine, resulting in her
deprivation of liberty and the intention to kill becomes death. Lyn ran away but Job and Nonoy chased her and
apparent. Though it may appear that the means pushed her inside the van. Then the duo drove away. Lyn
employed by Paz was attended by treachery (killing of an was never seen again.
infant), nevertheless, a separate charge of murder will not 1. What crime or crimes were committed by Job and
be proper in view of the amendment. Here, the term Nonoy? (2.5%)
"homicide" is used in its generic sense and covers all SUGGESTED ANSWER:
forms of killing whether in the nature of murder or
Job and Nonoy committed 1) kidnapping and May Edgardo be charged with attempted kidnapping?
serious illegal detention with homicide and rape for Explain.
the subsequent death of Dang, and 2) kidnapping SUGGESTED ANSWER:
with rape against her sister, Lyn. The victims, who were No, Edgardo may not be charged with attempted
kidnapped and detained, were subsequently raped kidnapping inasmuch as no overt act to kidnap or
and killed (as regards Dang) in the course of their restrain the liberty of the girl had been commenced. At
detention. The composite crime is committed regardless most, what Edgardo has done in the premises was a
of whether the subsequent crimes were purposely proposal to Vicente to kidnap the girl, which is only a
sought or merely an afterthought (People v. Larranaga, preparatory act and not an overt act. The attempt to
G.R. Nos. 138874-5, Februarys, 2004). commit a felony commences with the commission of
ALTERNATIVE ANSWER: overt act, not preparatory act. Proposal to commit
Job and Nonoy committed 2 counts of the complex kidnapping is not a crime.
crime of forcible abduction with rape (Art. 342, Revised
Penal Code) and the separate offense of murder against Kidnapping; Serious Illegal Detention (1997)
Dang. The crime committed is abduction because A and B conspiring with each other, kidnapped C
there was lewd design when they took the victims and detained him. The duo then called up C's wife
away and subsequently raped them. The killing informing her that they had her husband and would
thereafter, constitutes the separate offense of murder release him only if she paid a ransom in the amount of
qualified by treachery. P10,000,000 and that, if she were to fail, they would kill
him. The next day, C, who had just recovered from
2. What penalties should be imposed on them? an illness had a relapse. Fearing he might die if not
(2.5%) treated at once by a doctor, A and B released C during
SUGGESTED ANSWER: the early morning of the third day of detention.
Since the death penalty has already been prohibited,
reclusion perpetua is the appropriate penalty (RA. 9346). Charged with kidnapping and serious illegal detention
In the case of the minor Nonoy, his penalty shall be one provided in Article 267, RPC, A and B filed a petition for
degree lower (Art. 68, Revised Penal Code). bail. They contended that since they had voluntarily
released C within three days from commencement of the
3. Will Nonoy's minority exculpate him? (2.5%) detention, without having been paid any amount of the
SUGGESTED ANSWER:
ransom demanded and before the institution of criminal
Under RA. 9344, the Juvenile Justice and Reform
proceedings against them, the crime committed was only
Act, which retroacts to the date that the crime was
slight illegal detention prescribed in Article 268, RPC.
committed, Nonoy will be exculpated if he was 15 years
old or below. However, if he was above 15 years old After hearing, the trial court found the evidence of guilt
but below 18 years of age, he will be liable if to be strong and therefore denied the petition for bail.
he acted with discernment. As the problem shows On appeal, the only issue was: Was the crime committed
that Nonoy acted with discernment, he will be entitled kidnapping and serious detention or slight Illegal
to a suspension of sentence.(NOTABENE: R.A. 9344 is
detention? Decide.
outside the coverage of the examination)
SUGGESTED ANSWER:
The crime committed by A and B is kidnapping and
4. Is the non-recovery of Lyn's body material to
serious illegal detention because they made a demand for
the criminal liability of Job and Nonoy? (2.5%)
SUGGESTED ANSWER: ransom and threatened to kill C if the latter's wife did not
The non-recovery of Lyn's body is not material to pay the same. Without the demand for ransom, the crime
the criminal liability of Job and Nonoy, because the could have been slight illegal detention only.
corpus delicti of the crime which is kidnapping with rape
of Lyn has been duly proven. The contention of A and B that they had voluntary
ALTERNATIVE ANSWER: released C within three days from the commencement of
The non-recovery of Lyn's body is not material to the detention is immaterial as they are charged with
the criminal liability of Job and Nonoy, because the a crime where the penalty prescribed is death (Asistio vs.
corpus delicti of the crime which is forcible abduction San Diego. 10SCRA673).
with rape of Lyn has been duly proven.
They were properly denied bail because the trial court
Kidnapping; Proposal to Kidnap (1996) found that the evidence of guilt in the information for
Edgardo induced his friend Vicente, in consideration of kidnapping and serious Illegal detention is strong.
money, to kidnap a girl he is courting so that he
Trespass to Dwelling; Private Persons (2006)
may succeed to raping her and eventually making her
accede to marry him. Vicente asked for more Under what situations may a private person enter
money which Edgardo failed to put up. Angered any dwelling, residence, or other establishments
because Edgardo did not put up the money he required, without being liable for trespass to dwelling? (2.5%)
SUGGESTED ANSWER:
he reported Edgardo to the police.
P3,000,000.00. She then urged Yoboy and Yongsi, for
Criminal Law Bar Examination Q & A (1994-2006)
Trespass to dwelling is not applicable to any person who
shall enter another's dwelling for the purpose of:
a) Preventing some serious harm to himself,
its occupants, or a third person; and
b) Rendering service to humanity or justice;
Any person who shall enter cafes, taverns, inns, and

other public houses, while the same are open will
likewise not be liable (Art. 280, Revised Penal Code).
Tresspass to Dwelling; Rule of Absorption (1994)

At about 11:00 in the evening, Dante forced his way
inside the house of Mamerto. Jay. Mamerto's son, saw
Dante and accosted him, Dante pulled a knife and
stabbed Jay on his abdomen. Mamerto heard the
commotion and went out of his room. Dante, who was
about to escape, assaulted Mamerto. Jay suffered Injuries
which, were it not for the timely medical attendance,
would have caused his death. Mamerto sustained Injuries
that incapacitated him for 25 days.
What crime or crimes did Dante commit?
SUGGESTED ANSWER:
Dante committed qualified trespass to dwelling,
frustrated homicide for the stabbing of Jay, and less
serious physical injuries for the assault on Mamerto.
The crime of qualified trespass to dwelling should not be

complexed with frustrated homicide because when the
trespass is committed as a means to commit a more
serious offense, trespass to dwelling is absorbed by the
greater crime, and the former constitutes an aggravating
circumstance of dwelling (People vs. Abedoza, 53 Phil.788).
Dante committed frustrated homicide for the stabbing of

Jay.... Dante is guilty of less serious physical injuries for
the wounds sustained by Mamerto...
Unjust Vexation vs Acts of Lasciviousness (1994)

When is embracing, kissing and touching a girl's
breast considered only unjust vexation instead of
acts of lasciviousness?
SUGGESTED ANSWER:
The acts of embracing, kissing of a woman arising either
out of passion or other motive and the touching of her
breast as a mere incident of the embrace without lewd
design constitutes merely unjust vexation (People vs,
Ignacio. CA GRNo. 5119-R, September 30, 1950).
However,
where the kissing, embracing
and the touching of the breast (People vs. Percival Gilo, 10
of a woman are done with lewd
design, the same
constitute acts of lasciviousness
SCRA 753).
Crimes Against Property

Arson; Destructive Arson (1994)
Tata owns a three-storey building located at No. 3
Herran Street. Paco, Manila. She wanted to construct a
new building but had no money to finance the
construction. So, she insured the building for
64 of 86 monetary house or dwelling. The arson is consummated because
consideration, to bum her building so she could the house was in fact already burned although not totally. In
arson, it is not required that the premises be totally
collect the insurance proceeds. Yoboy and Yongsi
burned for the crime to be consummated. It is enough
burned the said building resulting to its total loss. What
that the premises suffer destruction by burning.
crime did Tata, Yoboy and Yongsi commit?
SUGGESTED ANSWER:
Arson; New Arson Law (2004)
Tata, Yoboy and Yongsi committed the crime
CD is the stepfather of FEL. One day, CD got very mad
of destructive arson because they collectively caused
at FEL for failing in his college courses. In his fury, CD
the destruction of property by means of fire under
got the leather suitcase of FEL and burned it
the circumstances which exposed to danger the
together with all its contents.
life or property of others (Art, 320, par. 5, RPC. as
amended by RA No. 7659).
1. What crime was committed by CD?
2. Is CD criminally liable? Explain briefly. (5%)
SUGGESTED ANSWER:
Arson; Destructive Arson (2000)
The crime committed by CD is arson under Pres. Decree
One early evening, there was a fight between Eddie
No. 1613 (the new Arson Law) which punishes any
Gutierrez and Mario Cortez. Later that evening, at about
person who burns or sets fire to the property of another
11 o'clock, Eddie passed by the house of Mario carrying
(Section 1 of Pres. Decree No. 1613).
a plastic bag containing gasoline, threw the bag at
the house of Mario who was inside the house CD is criminally liable although he is the stepfather of
watching television, and then lit it. The front wall FEL whose property he burnt, because such relationship is
of the house started blazing and some neighbors not exempting from criminal liability in the crime of
yelled and shouted. Forthwith, Mario poured water on arson but only in crimes of theft, swindling or estafa, and
the burning portion of the house. Neighbors also rushed malicious mischief (Article 332, Revised Penal Code).
in to help put the fire under control before any great The provision (Art. 323) of the Code to the effect that
damage could be inflicted and before the flames have burning property of small value should be punished as
extensively spread. Only a portion of the house was malicious mischief has long been repealed by Pres.
burned. Discuss Eddie's liability, (3%) Decree 1613; hence, there is no more legal basis to
SUGGESTED ANSWER:
Eddie is liable for destructive arson in the consummated consider burning property of small value as malicious
stage. It is destructive arson because fire was resorted to in mischief.
destroying the house of Mario which is an inhabited
3. The defense of Edmund is NOT valid. A
BP 22; Memorandum Check (1994) memorandum check upon presentment is generally
1. What is a memorandum check? accepted by the bank. It does not matter whether the
2. Is the "bouncing" thereof within the purview of BP check is in the nature of a memorandum as evidence
Blg. 22? of indebtedness. What the law punishes is the mere
SUGGESTED ANSWER: issuance of a bouncing check and not the purpose
1. A "Memorandum Check" is an ordinary check, with for which it was issued nor the terms and conditions
the word "Memorandum", "Memo" or relating thereto. The mere act of issuing a worthless
"Mem" written across its face, signifying that check is a malum prohibitum. The understanding
the maker or drawer engages to pay its holder that the check will not be presented at the bank but
absolutely thus partaking the nature of a will be redeemed by the maker when the loan falls
promissory note. It is drawn on a bank and is a due is a mere private arrangement which may not
bill of exchange within the purview of Section prevail to exempt it from the penal sanction of B.P.
185 of the Negotiable Instruments Law (People Blg. 22. (People vs. Nitafan)
vs. Judge David Nitafan, G.R. No. 75954, October 22, 1992).
BP 22; Presumption of Knowledge (2002)
2. Yes, a memorandum check is covered by Batas A a businessman, borrowed P500,000.00 from B, a
Pambansa No. 22 because the law covers any check friend. To pay the loan, A issued a postdated check to be
whether it is an evidence of Indebtedness, or in presented for payment 30 days after the transaction. Two
payment of a pre-existing obligation or as a deposit days before the maturity date of the check, A called up B
or guarantee (People versus Nita-fan). and told him not to deposit the check on the date stated on
the face thereof, as A had not deposited in the drawee bank
BP 22; Memorandum Check (1995) the amount needed to cover the check.
1. What is a memorandum check ? Nevertheless, B deposited the check in question and the
2. Is a person who issues a memorandum same was dishonored of insufficiency of funds. A failed to
check without sufficient funds necessarily settle the amount with B in spite of the latter's
guilty of violating B.P. Blg. 22? Explain. demands. Is A guilty of violating B.P. Blg. 22, otherwise
3. Jane is a money lender. Edmund is a businessman known as the Bouncing Checks Law? Explain. (5%)
who has been borrowing money from Jane by SUGGESTED ANSWER:
rediscounting his personal checks to pay his loans. Yes, A Is liable for violation of BP. Blg. 22
In March 1989, he borrowed P100,000 from Jane (Bouncing Checks Law), Although knowledge by the
and issued to her a check for the same amount. drawer of insufficiency or lack of funds at the time of
The check was dishonored by the drawee bank for the issuance of the check is an essential element of the
having been drawn against a closed account. When violation, the law presumes prima facie such knowledge,
Edmund was notified of the dishonor of his check unless within five (5) banking days of notice of
he promised to raise the amount within five days. dishonor or non- payment, the drawer pays the holder
He failed. Consequently, Jane sued Edmund for thereof the amount due thereon or makes arrangements
violation of the Bouncing Checks Law (BP. Blg. 22). for payment in full by the drawee of such checks.
The defense of Edmund was that he gave the check to
Jane to serve as a memorandum of his A mere notice by the drawer A to the payee B before the
indebtedness to her and was not supposed to be maturity date of the check will not defeat the
encashed. Is the defense of Edmund valid? Discuss presumption of knowledge created by the law; otherwise,
fully. the purpose and spirit of B.P. 22 will be rendered useless.
SUGGESTED ANSWER:
1. A memorandum check is an ordinary check with the Estafa & Trust Receipt Law (1995)
word "Memorandum", "Memo", or "Mem" written Julio obtained a letter of credit from a local bank in order
across the face, signifying that the maker or drawer to import auto tires from Japan. To secure payment
engages to pay its holder absolutely thus partaking of his letter of credit, Julio executed a trust receipt in
the nature of a promissory note. It is drawn on a favor of the bank. Upon arrival of the tires, Julio sold
bank and is a bill of exchange within the purview of them but did not deliver the proceeds to the bank.
Section 185 of the Negotiable Instruments Law. Julio was charged with estafa under P.D. No. 115 which
(People vs. Nitafan, 215 SCRA 79) makes the violation of a trust receipt agreement
punishable as estafa under Art. 315, par. (1), subpar. (b),
2. Yes, a person who issued a memorandum check
of the Revised Penal Code. Julio contended that
without sufficient funds is guilty of violating
P.D. No. 115 was unconstitutional because it violated
B.P. Blg. 22 as said law covers all checks whether it
the Bill of Rights provision against imprisonment
is an evidence of indebtedness, or in payment of for non- payment of debt.
a pre- existing obligation, or as deposit or Rule on the contention of Julio, Discuss fully.
guarantee. (People vs. Nitafan) SUGGESTED ANSWER:

Such contention is invalid. A trust receipt arrangement misappropriate the jewelry does not make her criminally
doesn't involve merely a simple loan transaction but liable for estafa.
includes likewise a security feature where the creditor
bank extends financial assistance to the debtor-importer in Estafa vs. BP 22 (1996)
return for the collateral or security title as to the goods or The accused was convicted under B.P, Blg. 22 for having
merchandise being purchased or imported. The title of the issued several checks which were dishonored by the
bank to the security is the one sought to be protected and drawee bank on their due date because the accused
not the loan which is a separate and distinct closed her account after the issuance of checks. On
agreement. What is being penalized under P,D. No. 115 is appeal, she argued that she could not be convicted under
the misuse or misappropriation of the goods or B.P. Blg. 22 by reason of the closing of her account
proceeds realized from the sale of the goods, documents or because said law applies solely to checks dishonored by
Instruments which are being held in trust for the reason of insufficiency of funds and that at the time she
entrustee-banks. In other words, the law punishes the issued the checks concerned, she had adequate funds in the
dishonesty and abuse of confidence in the handling of bank. While she admits that she may be held liable for
money or goods to the prejudice of the other, and hence estafa under Article 215 of the Revised Penal Code, she
there is no violation of the right against imprisonment cannot however be found guilty of having violated B.P.
for non-payment of debt. (People vs. Nitafan, 207 SCRA 725) Blg. 22. Is her contention correct? Explain.
SUGGESTED ANSWER:
Estafa (1999) No, the contention of the accused is not correct. As long
Is there such a crime as estafa through negligence? as the checks issued were issued to apply on account or
Explain. (2%) for value, and was dishonored upon presentation for
payment to the drawee bank for lack of insufficient funds
Aurelia introduced Rosa to Victoria, a dealer in jewelry on their due date, such act falls within the ambit of B.P.
who does business in Timog, Quezon City. Rosa, a Blg. 22. Said law expressly punishes any person who may
resident of Cebu City, agreed to sell a diamond ring have insufficient funds in the drawee bank when he
and bracelet to Victoria on a commission basis, on issues the check, but fails to keep sufficient funds
condition that, if these items can not be sold, to cover the full amount of the check when presented to
they may be returned to Victoria forthwith. the drawee bank within ninety (90) days from the
Unable to sell the ring and bracelet, Rosa delivered date appearing thereon.
both items to Aurelia in Cebu City with
the understanding that Aurelia shall, in turn, Estafa vs. BP 22 (2003)
return the items to Victoria in Timog, Quezon A and B agreed to meet at the latter's house to
City. Aurelia dutifully returned the bracelet to discuss B's financial problems. On his way, one of A's
Victoria but sold the ring, kept the cash car tires blew up. Before A left following the meeting, he
proceeds thereof to herself, and issued a check asked B to lend him (A) money to buy a new spare
to Victoria which bounced. Victoria sued Rosa tire. B had temporarily exhausted his bank deposits,
for estafa under Article 315, R.P.C., Victoria leaving a zero balance. Anticipating, however, a
insisting that delivery to a third person of the replenishment of his account soon, B issued A a
thing held in trust is not a defense in estafa. postdated check with which A negotiated for a new tire.
Is Rosa criminally liable for estafa under When presented, the check bounced for lack of funds.
the circumstances? Explain, [4%) The tire company filed a criminal case against A
SUGGESTED ANSWER: and B. What would be the criminal liability, if any,
(a) There is no such crime as estafa through of each of the two accused? Explain. 8%
negligence. In estafa, the profit or gain must be obtained SUGGESTED ANSWER:
by the accused personally, through his own acts, and his A who negotiated the unfunded check of B in buying a
mere negligence in allowing another to take advantage of new tire for his car may only be prosecuted for estafa if
or benefit from the entrusted chattel cannot he was aware at the time of such negotiation that
constitute estafa. (People v. Nepomuceno, CA, 46OG 6135) the check has no sufficient funds in the drawee
bank; otherwise, he is not criminally liable.
(b) No, Rosa cannot be held criminally liable for
estafa. Although she received the jewelry from Victoria B who accommodated A with his check may nevertheless
under an obligation to return the same or deliver the be prosecuted under BP 22 for having issued the check,
proceeds thereof, she did not misappropriate it. In fact, she knowing at the time of issuance that it has no funds in
gave them to Aurelia specifically to be returned to the bank and that A will negotiate it to buy a new
Victoria. The misappropriation was done by Aurelia, and tire, i.e., for value. B may not be prosecuted for estafa
absent the showing of any conspiracy between Aurelia because the facts indicate that he is not actuated by
and Rosa, the latter cannot be held criminally liable for intent to defraud in issuing the check which A
Amelia's acts. Furthermore, as explained above, Rosa's negotiated. Obviously, B issued the postdated check only to
negligence which may have allowed Aurelia to help A: criminal intent or dolo is absent.

Estafa vs. Money Market Placement (1996)
On March 31, 1995, Orpheus Financing Corporation Estafa; Elements (2005)
received from Maricar the sum of P500,000 as money DD purchased a television set for P50,000.00 with
market placement for sixty days at fifteen (15) per cent the use of a counterfeit credit card. The owner of
interest, and the President of said Corporation issued a the establishment had no inkling that the credit card
check covering the amount including the interest due used by DD was counterfeit.
thereon, postdated May 30, 1995. On the maturity date, What crime or crimes did DD commit? Explain. (5%)
however, Orpheus Financing Corporation failed to SUGGESTED ANSWER:
deliver back Maricar's money placement with the DD committed the crime of estafa under Art. 315, par.
corresponding interest earned, notwithstanding repeated 2(a) of the Revised Penal Code by falsely pretending
demands upon said Corporation to comply with its to posses credit. The elements of estafa under this
commitment. penal provision are; (1) the accused defrauded
another by means of deceit; and (2) damage or prejudice
Did the President of Orpheus Financing Corporation capable of pecuniary estimation is caused to the
incur any criminal liability for estafa for reason of the offended party or third party.
nonpayment of the money market placement? Explain.
SUGGESTED ANSWER: The accused also violated R.A. No. 8484, which punishes
No, the President of the financing corporation does not the use or possession of fake or counterfeit credit card.
incur criminal liability for estafa because a money market
transaction partakes of the nature of a loan, such that Estafa; Falsification of Commercial Document (2000)
nonpayment thereof would not give rise to estafa Mr. Carlos Gabisi, a customs guard, and Mr, Rico Yto, a
through misappropriation or conversion. In money private Individual, went to the office of Mr. Diether
market placement, there is transfer of ownership of the Ocuarto, a customs broker, and represented themselves
money to be invested and therefore the liability for its as agents of Moonglow Commercial Trading, an
return is civil in nature (Perez vs. Court of Appeals, 127 SCRA 636; Importer of children's clothes and toys. Mr. Gabisi and
Sebreno vs. Court of Appeals etal, G.R. 84096, 26 Jan 95). Mr. Yto engaged Mr. Ocuarto to prepare and file with
the Bureau of Customs the necessary Import Entry and
Estafa vs. Theft (2005) Internal Revenue Declaration covering Moonglow's
DD was engaged in the warehouse business. Sometime in shipment. Mr. Gabisi and Mr. Yto submitted to Mr.
November 2004, he was in dire need of money. He, thus, Ocuarto a packing list, a commercial invoice, a bill of
sold merchandise deposited in his warehouse to VR for lading and a Sworn Import Duty Declaration which
P500,000.00. DD was charged with theft, as principal, declared the shipment as children's toys, the taxes and
while VR as accessory. The court convicted DD of theft duties of which were computed at P60,000.00. Mr.
but acquitted VR on the ground that he purchased the Ocuarto filed the aforementioned documents with the
merchandise in good faith. However, the court ordered Manila International Container Port. However, before
VR to return the merchandise to the owner thereof and the shipment was released, a spot check was conducted
ordered DD to refund the P500,000.00 to VR. by Customs Senior Agent James Bandido, who
discovered that the contents of the van (shipment) were not
DD moved for the reconsideration of the decision children's toys as declared in the shipping documents but
insisting that he should be acquitted of theft because 1,000 units of video cassette recorders with taxes and duties
being the depositary, he had juridical possession of the computed at P600,000.00. A hold order and warrant
merchandise. VR also moved for the reconsideration of the of seizure and detention were then issued by the District
decision insisting that since he was acquitted of the Collector of Customs. Further investigation showed
crime charged, and that he purchased the merchandise in that Moonglow is non-existent. Consequently, Mr, Gabisi
good faith, he is not obligated to return the merchandise to and Mr. Yto were charged with and convicted for violation
its owner. Rule on the motions with reasons. (5%) of Section 3(e) of R.A. 3019 which makes it unlawful
SUGGESTED ANSWER: among others, for public officers to cause any undue
The motion for reconsideration should be granted. By Injury to any party, including the Government. In the
depositing the merchandise in his warehouse, he discharge of official functions through manifest
transferred not merely physical but also juridical partiality, evident bad faith or gross inexcusable
possession. The element of taking in the crime of theft is negligence. In their motion for reconsideration, the
wanting. At the most, he could be held liable for estafa for accused alleged that the decision was erroneous because the
misappropriation of the merchandise deposited. crime was not consummated but was only at an
attempted stage, and that in fact the Government did not
On the other hand, the motion of VR must also be suffer any undue injury.
denied. His acquittal is of no moment because the thing, Assuming that the attempted or frustrated stage of
subject matter of the offense, shall be restored to the violation charged is not punishable, may the accused
the owner even though it is found in the be nevertheless convicted for an offense punished by
possession of a third person who acquired it by lawful the Revised Penal Code under the facts of the case?
means. (Art. 105, RFC) Explain. (3%)
SUGGESTED ANSWER: lot to her neighbor Dino for P1,000,000. Later
Yes, both are liable for attempted estafa thru falsification Divina sold the same lot to Angel for P2,000,000. In the
of commercial documents, a complex crime. They Deed of Sale, she expressly stated that the property is
tried to defraud the Government with the use free from any lien or encumbrance.
of false commercial and public documents. What crime, if any, did Divina commit? [5%]
Damage is not necessary. SUGGESTED ANSWER:
Divina committed estafa or swindling under Art.
Estafa; Falsification of Commercial Documents (1997) 316, par. 2 of the Revised Penal Code because, knowing
The accused opened a saving account with Bank A with an that the real property being sold is encumbered, she still
initial deposit of P2,000.00. A few days later, he deposited made a misrepresentation in the Deed of Sale that the
in the savings account a Bank B check for P 10,000.00 same is free from any lien or encumbrance. There is thus
drawn and endorsed purportedly by C. Ten days later, he a deceit or fraud causing damage to the buyer of the lot.
withdrew P 10,000.00 from his savings account. C
complained to Bank B when the check was deducted Robbery (1996)
from his account. Two days thereafter, the accused Five robbers robbed, one after the other five houses
deposited another Bank B check of P 10,000.00 signed and occupied by different families located inside a compound
endorsed allegedly by C. A week later, the accused went to enclosed by a six-feet high hollow block fence.
Bank A to withdraw P10,000.00. While withdrawing the How many robberies did the five commit? Explain.
amount, he was arrested. SUGGESTED ANSWER:
The offenders committed only one robbery in the eyes of
Convicted under two informations of estafa and the law because when they entered the compound, they
attempted estafa both through falsification of commercial were impelled only by a single indivisible criminal
documents, he set up the defenses that, except for the resolution to commit a robbery as they were not aware
showing that the signature of C had been forged, no that there were five families inside said compound,
further evidence was presented to establish (a) that he considering that the same was enclosed by a six-feet high
was the forger of the signature of C nor (b), that as to the hollow-block fence. The series of robbery committed in the
second charge C suffered any damage. same compound at about the same time constitutes one
Rule on the defense. continued crime, motivated by one criminal impulse.
SUGGESTED ANSWER:
The defense is not tenable; (a) the possessor of a falsified Robbery under RPC (2000)
document is presumed to be the author of the A, B, C, D and B were in a beerhouse along MacArthur
falsification (People vs. Sendaydtego, 81 SCRA 120; Koh Tiek vs. Highway having a drinking spree. At about 1 o'clock in the
People, et al, Dec. 21, 1990); (b) In estafa, a mere disturbance of morning, they decided to leave and so asked for the bill.
property rights, even if temporary, would be sufficient to, They pooled their money together but they were still short
cause damage. Moreover, in a crime of falsification of a of P2,000.00. E then orchestrated a plan whereby A, B, C
commercial document, damage or intent to cause and D would go out, flag a taxicab and rob the taxi driver
damage is not necessary because the principal thing of all his money while E would wait for them in the
punished is the violation of the public faith and the beerhouse. A. B, C and D agreed. All armed with balisongs,
destruction of the truth as therein solemnly proclaimed. A, B, C and D hailed the first taxicab they
encountered. After robbing X, the driver, of his earnings,
Estafa; Defense of Ownership (2002) which amounted to P1,000.00 only, they needed P1
A sold a washing machine to B on credit, with the ,000.00 more to meet their bill. So, they decided to hail
understanding that B could return the appliance within another taxicab and they again robbed driver T of his
two weeks if, after testing the same, B decided not to buy it. hard-earned money amounting to P1,000. On their way
Two weeks lapsed without B returning the appliance. A back to the beerhouse, they were apprehended by a
found out that B had sold the washing machine to a police team upon the complaint of X, the driver of the
third party- Is B liable for estafa? Why? (5%) first cab. They pointed to E as the mastermind. What
SUGGESTED ANSWER: crime or crimes, if any, did A, B, C, D and B
No, B is not liable for estafa because he is not just commit? Explain fully. (3%)
an entrustee of the washing machine which he sold; he is SUGGESTED ANSWER:
the owner thereof by virtue of the sale of the washing A. B, C, D and E are liable for two (2) counts of robbery
machine to him. The sale being on credit, B as buyer is only under Article 294 of the Rev. Penal Code; not for
liable for the unpaid price of the washing machine; his highway Robbery under PD 532. The offenders are not
obligation is only a civil obligation. There is no brigands but only committed the robbery to raise money
felonious misappropriation that could constitute estafa. to pay their bill because it happened that they were short
of money to pay the same.
Estafa; Swindling (1998)
Divina, is the owner of a 500-square meter residential lot in Robbery under RPC (2001)
Makati City covered by TCT No. 1998. As her son A and B are neighbors in Barangay Nuevo I, Silang,
needed money for his trip abroad, Divina mortgaged her Cavite. A is a barangay Kagawad and known to be a
Criminal Law Bar Examination Q & A (1994-2006) bully, 69 of 86 highways
while B is reputed to be gay but noted for his and carries out his robbery in public
industry and economic savvy which allowed him to highways as venue, whenever the opportunity to do
amass wealth in leaps and bounds, including registered so arises. It is ordinary Robbery under the Revised
and unregistered lands in several barangays. Resenting B's Penal Code when the commission thereof in a
riches and relying on his political influence, A decided to public highway is only incidental and the offender is
harass and intimidate B into sharing with him some of not a brigand: and
his lands, considering that the latter was single and living
alone. One night, A broke into B's house, forced him to 3. In Highway Robbery under PD 532, there is
bring out some titles and after picking out a title covering frequency in the commission of the robbery in
200 square meters in their barangay, compelled B to type public highways and against persons travelling
out a Deed of Sale conveying the said lot to him for thereat; whereas ordinary Robbery in public
P1.00 and other valuable considerations. All the while, A highways is only occasional against a predetermined
carried a paltik caliber .45 in full view of B, who signed the victim, without frequency in public highways.
deed out of fear. When A later on tried to register the deed,
B summoned enough courage and had A arrested and
charged in court after preliminary investigation. Robbery w/ force upon things (2000)
A, brother of B, with the intention of having a night out
What charge or charges should be filed against with his friends, took the coconut shell which is
A? Explain. (5%) being used by B as a bank for coins from inside
SUGGESTED ANSWER: their locked cabinet using their common key. Forthwith,
The charge for Robbery under Article 298 of the Revised A broke the coconut shell outside of their home in the
Penal Code should be filed against A. Said Article presence of his friends.
provides that any person who, with intent to defraud What is the criminal liability of A, if any? Explain. (3%)
another, by means of violence or intimidation, shall Is A exempted from criminal liability under Article
compel him to sign, execute and deliver any public 332 of the Revised Penal Code for being a brother
instrument or document shall be held guilty of robbery. of B? Explain. (2%)
SUGGESTED ANSWER:
The paltik caliber .45 firearm carried by A was obviously a) A is criminally liable for Robbery with force upon
intended to intimidate B and thus, used in the things, because the coconut shell with the coins
commission of the robbery. If it could be established that inside, was taken with intent to gain and broken outside
A had no license or permit to possess and carry of their home, (Art. 299 (b) (2). RPC).
such firearm, it should be taken only as special
aggravating circumstance to the crime of robbery, b) No, A is not exempt from criminal liability under
not subject of a separate prosecution. Art. 332 because said Article applies only to
ALTERNATIVE ANSWER: theft, swindling or malicious mischief. Here, the
On the premise that the Deed of Sale which A compelled B crime committed is robbery.
to sign, had not attained the character of a "public"
instrument or document, A should be charged for the Robbery w/ Homicide - R.A. No. 7659 (2005)
crime of Qualified Trespass to Dwelling under Article Jose employed Mario as gardener and Henry as cook.
280 of the Revised Penal Code for having intruded into B’s They learned that Jose won P500,000.00 in the lotto, and
house, and for the crime of Grave Coercion under decided to rob him. Mario positioned himself about 30
Article 286 of same Code, for compelling B to sign such meters away from Jose’s house and acted as lookout. For
deed of sale against his will. his part, Henry surreptitiously gained entry into the
house and killed Jose who was then having his dinner.
Robbery vs. Highway Robbery (2000) Henry found the P500,000.00 and took it. Henry then
Distinguish Highway Robbery under Presidential Decree took a can of gasoline from the garage and burned the
No. 532 from Robbery committed on a highway. (3%) house to conceal the acts. Mario and Henry fled, but
SUGGESTED ANSWER: were arrested around 200 meters away from the house by
Highway Robbery under Pres. Decree 532 differs alert barangay tanods. The tanods recovered the
from ordinary Robbery committed on a highway in P500,000.00.
these respects:
1. In Highway Robbery under PD 532, the robbery is Mario and Henry were charged with and convicted of
committed indiscriminately against persons robbery with homicide, with the aggravating
who commute in such highways, regardless circumstances of arson, dwelling, and nighttime.
of the potentiality they offer; while in ordinary
Robbery committed on a highway, the robbery is Mario moved to reconsider the decision maintaining that he
committed only against predetermined victims; was not at the scene of the crime and was not aware that
Henry killed the victim; hence, he was guilty only of
2. It is Highway Robbery under PD 532, when the robbery, as an accomplice. Mario also claimed that he
offender is a brigand or one who roams in public conspired with Henry to commit robbery but not to kill

Criminal Law Bar Examination Q & A (1994-2006) 70 of 86 to
Jose. Henry, likewise, moved to reconsider the decision, prevent identification, what crime did the four
asserting that he is liable only for attempted robbery with commit? Explain.
homicide with no aggravating circumstance, SUGGESTED ANSWER:
considering that he and Mario did not benefit from the (a) Jose, Domingo, and Manolo committed Robbery,
P500,000.00. He further alleged that arson is a while Fernando committed complex crime of
felony and not an aggravating circumstance; dwelling Robbery with Rape. Conspiracy can be inferred from the
is not aggravating in attempted robbery with manner the offenders committed the robbery but the
homicide; and nighttime is not aggravating because rape was committed by Fernando at a place "distant
the house of Jose was lighted at the time he was killed. from the house" where the robbery was committed,
Resolve with reasons the respective motions of not in the presence of the other conspirators.
Mario and Henry. (7%) Hence, Fernando alone should answer for the rape,
SUGGESTED ANSWER: rendering him liable for the special complex crime.
Mario is not correct. Mario conspired and acted in (People vs. Canturia et. al, G.R. 108490, 22 June 1995}
concert with Henry to commit robbery. Hence, the act of
one is the act of all and the extent of the specific b) The crime would be Robbery with Homicide because
participation of each individual conspirator becomes the killings were by reason (to prevent identification) and
secondary, each being held liable for the criminal deed(s) on the occasion of the robbery. The multiple rapes
executed by another or others. As a conspirator, Mario committed and the fact that several persons were
casts his lot with his fellow conspirators and becomes killed [homicide), would be considered as
liable to any third person who may get killed in the aggravating circumstances. The rapes are
course of implementing the criminal design. (People v. synonymous with Ignominy and the additional killing
Punzalan, et al.. G.R. No. 78853, November 8, 1991) synonymous with cruelty, (People vs. Solis, 182 SCRA;
People vs. Plaga, 202 SCRA 531)
Henry is incorrect, since he acquired possession of
the money. The crime of robbery with force and Robbery w/ Homicide (1998)
intimidation is consummated when the robber acquires A, B, C and D all armed, robbed a bank, and when they
possession of the property, even if for a short time. were about to get out of the bank, policemen came and
It is no defense that they had no opportunity to ordered them to surrender but they fired on the
dispose of or benefit from the money taken. (People police officers who fired back and shot it out with them.
v. Salvilia, et al., G.R. No. 88163, April 26, 1990) 1. Suppose a bank employee was killed and the bullet
which killed him came from the firearm of the
Since the crime in robbery with force and intimidation police officers, with what crime shall you charge A, B. C
against persons (robbery with homicide), dwelling is and D? [3%]
aggravating. Arson, which accompanied the crime of 2. Suppose it was robber D who was killed by
robbery with homicide is absorbed (Art. 294, RFC as the policemen and the prosecutor charged A, B and C
amended by R.A. No. 7659) and is not aggravating because with Robbery and Homicide. They demurred arguing
the RPC does not that they (A, B and C) were not the ones who
(People v. Regala, G.R. No. 130508, killed robber D, hence, the charge should only be
April 5, 2000) provide that such crime is an Robbery. How would you resolve their argument? (2%)
aggravating circumstance. SUGGESTED ANSWER:
Nighttime, likewise, is not aggravating. 1. A, B, C and D should be charged with the crime of
There is no showing that the same was purposely sought robbery with homicide because the death of the bank
by the offenders to facilitate the commission of the crime employee was brought about by the acts of said
or impunity. offenders on the occasion of the robbery. They shot it
out with the policeman, thereby causing such death by
Robbery w/ Homicide (1996) reason or on the occasion of a robbery; hence, the
Jose, Domingo, Manolo, and Fernando, armed composite crime of robbery with homicide.
with bolos, at about one o'clock in the morning, 2. The argument is valid, considering that a separate
robbed a house at a desolate place where Danilo,
charge for Homicide was filed. It would be different if
his wife, and three daughters were living. While the
the charge filed was for the composite crime of robbery
four were in the process of ransacking Danilo's house,
with homicide which is a single, indivisible offense.
Fernando, noticing that one of Danilo's daughters was
ALTERNATIVE ANSWER:
trying to get away, ran after her and finally caught up 2. The argument raised by A, B and C is not
with her in a thicket somewhat distant from the correct because their liability is not only for Robbery but
house. Fernando, before bringing back the daughter to
for the special complex crime of Robbery with homicide.
the house, raped her first. Thereafter, the four carted
But the facts stated impresses that separate crimes of
away the belongings of Danilo and his family.
Robbery "and" Homicide were charged, which is not
a) What crime did Jose, Domingo, Manolo correct. What was committed was a single indivisible
and Fernando commit? Explain. offense of Robbery with homicide, not two crimes.
b) Suppose, after the robbery, the four took turns in
raping the three daughters of Danilo inside the latter's
house, but before they left, they killed the whole family
Criminal Law Bar Examination Q & A (1994-2006) 71 of 86 who took
Robbery w/ Homicide (2003) part in the robbery are guilty as principals of the
A learned two days ago that B had received dollar crime of robbery with homicide, unless the accused
bills amounting to $10,000 from his daughter working in tried to prevent the killing (People vs. Baello, 224 SCRA 218).
the United States. With the intention of robbing B of Further, the aggravating circumstance of craft could
those dollars, A entered B's house at midnight, be assessed against the accused for pretending to
armed with a knife which he used to gain entry, be customers of Mang Pandoy.
and began quietly searching the drawers, shelves,
and other likely receptacles of the cash. While Robbery w/ Intimidation vs. Theft (2002)
doing that, B awoke, rushed out from the bedroom, A entered the house of another without employing force
and grappled with A for the possession of the knife or violence upon things. He was seen by a maid
which A was then holding. After stabbing B to death, who wanted to scream but was prevented from
A turned over B's pillow and found the latter's wallet doing so because A threatened her with a gun. A then
underneath the pillow, which was bulging with the dollar took money and other valuables and left. Is A guilty
bills he was looking for. A took the bills and left the of theft or of robbery? Explain. (3%)
house. What crime or crimes were committed? 8% SUGGESTED ANSWER:
SUGGESTED ANSWER: A is liable for robbery because of the intimidation
The crime committed is robbery with homicide, a he employed on the maid before the taking of the
composite crime. This is so because A's primordial money and other valuables. It is the intimidation of
criminal intent is to commit a robbery and in the course of person relative to the taking that qualifies the crime as
the robbery, the killing of B took place. Both the robbery, instead of simply theft. The non-
robbery and the killing were consummated, thus giving employment of force upon things is of no
rise to the special complex crime of robbery with moment because robbery is committed not only by
homicide. The primary criminal intent being to commit a employing force upon things but also by employing
robbery, any killing on the "occasion" of the robbery, violence against or intimidation of persons.
though not by reason thereof, is considered a component
of the crime of robbery with homicide as a single Robbery w/ Rape (1999)
indivisible offense. Two young men, A and B, conspired to rob a residential
house of things of value. They succeeded in
Robbery w/ Homicide; Special Complex Crime (1995) the commission of their original plan to simply rob.
Victor, Ricky, Rod and Ronnie went to the store of Mang A, however, was sexually aroused when he saw the
Pandoy. Victor and Ricky entered the store while Rod lady owner of the house and so, raped her.
and Ronnie posted themselves at the door. After
ordering beer Ricky complained that he was The lady victim testified that B did not in any way
shortchanged although Mang Pandoy vehemently denied it. participate in the rape but B watched the happening from
Suddenly Ricky whipped out a knife as he announced a window and did nothing to stop the rape.
"Hold-up ito!" and stabbed Mang Pandoy to death. Rod Is B as criminally liable as A for robbery with rape?
boxed the store's salesgirl Lucy to prevent her from Explain. (4%)
helping Mang Pandoy. When Lucy ran out of the store to SUGGESTED ANSWER:
seek help from people next door she was chased by Yes, B is as criminally liable as A for the composite crime of
Ronnie. As soon as Ricky had stabbed Mang Pandoy, robbery with rape under Art. 294 (1). Although the
Victor scooped up the money from the cash box. Then conspiracy of A and B was only to rob, B was present
Victor and Ricky dashed to the street and shouted, when the rape was being committed which gave rise to a
"Tumakbo na kayo!" Rod was 14 and Ronnie was 17. composite crime, a single indivisible offense of robbery
The money and other articles looted from the store of with rape. B would not have been liable had he
Mang Pandoy were later found in the houses of Victor endeavored to prevent the commission of the rape. But
and Ricky. since he did not when he could have done so, he in effect
Discuss fully the criminal liability of Victor, Ricky, acquiesced with the rape as a component of the robbery
Rod and Ronnie. and so he is also liable for robbery with rape.
SUGGESTED ANSWER:
All are liable for the special complex crime of robbery Robbery w/ Rape; Conspiracy (2004)
with homicide. The acts of Ricky in stabbing Mang Together XA, YB and ZC planned to rob Miss
Pandoy to death, of Rod in boxing the salesgirl to OD. They entered her house by breaking one of the
prevent her from helping Mang Pandoy, of Ronnie in windows in her house. After taking her personal
chasing the salesgirl to prevent her in seeking help, of properties and as they were about to leave, XA decided
Victor in scooping up money from the cash box, and of on impulse to rape OD. As XA was molesting her,
Ricky and Victor in dashing to the street and announcing YB and ZC stood outside the door of her bedroom
the escape, are all indicative of conspiracy. and did nothing to prevent XA from raping OD.
What crime or crimes did XA, YB and ZC commit, and
The rule is settled that when homicide takes place as a what is the criminal liability of each? Explain briefly.
consequence or on the occasion of a robbery, all those (5%)
SUGGESTED ANSWER: The taking of the money from the victims was a mere
The crime committed by XA, YB and ZC is afterthought of the killings. Hence, Harry committed the
the composite crime of Robbery with Rape, a separate crime of theft and not the complex crime of
single, indivisible offense under Art. 294(1) of the robbery with homicide. Although theft was committed
Revised Penal Code. against dead persons, it is still legally possible as the
offended party are the estates of the victims.
Although the conspiracy among the offenders was
only to commit robbery and only XA raped CD, In burning the cottage to hide his misdeed. Harry became
the other robbers, YB and ZC, were present and aware liable for another separate crime, arson. This act of
of the rape being committed by their co-conspirator. burning was not necessary for the consummation of the
Having done nothing to stop XA from committing the two (2) previous offenses he committed. The fact
rape, YB and ZC thereby concurred in the commission that the caretaker died from the blaze did not qualify
of the rape by their co-conspirator XA. Harry's crime into a complex crime of arson with
homicide for there is no such crime.
The criminal liability of all, XA, YZ and ZC, shall be the
same, as principals in the special complex crime of Hence, Harry was improperly charged with the complex
robbery with rape which is a single, indivisible crime of arson with quadruple homicide and
offense where the rape accompanying the robbery is robbery. Harry should have been charged with three (3)
just a component. separate crimes, murder, theft and arson.
Robbery; Homicide; Arson (1995) Robbery; Rape (1997)
Harry, an overseas contract worker, arrived from Saudi After raping the complainant in her house, the
Arabia with considerable savings. Knowing him to be accused struck a match to smoke a cigarette before
"loaded", his friends Jason, Manuel and Dave invited him departing from the scene. The brief light from the match
to poker session at a rented beach cottage. When he was allowed him to notice a watch in her wrist. He
losing almost all his money which to him was his savings of demanded that she hand over the watch. When she
a lifetime, he discovered that he was being cheated by his refused, he forcibly grabbed it from her. The accused
friends. Angered by the betrayal he decided to take was charged with and convicted of the special complex
revenge on the three cheats. crime of robbery with rape. Was the court correct?
SUGGESTED ANSWER:
Harry ordered several bottles of Tanduay Rhum and gave No. the court erred in convicting the accused of the
them to his companions to drink, as they did, until they all special complex crime of robbery with rape. The accused
fell asleep. When Harry saw his companions already should instead be held liable for two (2) separate crimes
sound asleep he hacked all of them to death. Then he of robbery and rape, since the primary intent or objective
remembered his losses. He rifled through the pockets of his of the accused was only to rape the complainant, and his
victims and got back all the money he lost. He then ran commission of the robbery was merely an
away but not before burning the cottage to hide his afterthought. The robbery must precede the rape. In
misdeed. The following day police investigators found order to give rise to the special complex crime for
among the debris the charred bodies of Jason, Manuel, which the court convicted the accused.
Dave and the caretaker of the resort.
Theft (1998)
After preliminary investigation, the Provincial Prosecutor Mario found a watch in a jeep he was riding, and since it
charged Harry with the complex crime of arson did not belong to him, he approached policeman P and
with quadruple homicide and robbery. delivered the watch with instruction to return the same to
Was Harry properly charged? Discuss fully. whoever may be found to be the owner.
SUGGESTED ANSWER:
No, Harry was net properly charged. Harry should have P failed to return the watch to the owner and,
been charged with three (3) separate crimes, namely: instead, sold it and appropriated for himself the
murder, theft and arson. proceeds of the sale.
Harry killed Jason, Manuel and Dave with evident Charged with theft, P reasoned out that he cannot
premeditation, as there was considerable lapse of time be found guilty because it was not he who found the
before he decided to commit the crime and the actual watch and, moreover, the watch turned out to
commission of the crime. In addition, Harry employed be stolen property. Is P's defense valid? [5%]
means which weakened the defense of Jason, Manuel and SUGGESTED ANSWER:
Dave. Harry gave them the liquor to drink until they were No, P's defense is not valid. In a charge for theft, it
drunk and fell asleep. This gave Harry the opportunity to is enough that the personal property subject thereof
carry out his plan of murder with impunity. belongs to another and not to the offender (P). It is
irrelevant whether the person deprived of the possession of
the watch has or has no right to the watch. Theft is
committed by one who, with intent to gain, appropriates A vehicular accident occurred on the national highway in
property of another without the consent of its Bulacan. Among the first to arrive at the scene of
owner. And the crime is committed even when the the accident was A, who found one of the victims
offender receives property of another but acquires already dead and the others unconscious. Before rescuers
only physical possession to hold the same. could come, A, taking advantage of the helpless
condition of the victims, took their wallets and jewelry.
Theft (2001) However, the police, who responded to the report of
Francis Garcia, a Jollibee waiter, found a gold bracelet in the accident, caught A. What crime or crimes did A
front of his working place in Makati and, upon inspecting commit? Why? (5%)
it, saw the name and address of the owner engraved on SUGGESTED ANSWER:
the inside. Remembering his parents' admonition that he A committed the crime of qualified theft because he took
should not take anything which does not belong to him, the wallets and jewelry of the victims with evident intent
he delivered the bracelet to PO1 Jesus Reyes of the to gain and on the occasion of a vehicular accident
Makati Quad precinct with the instruction to locate wherein he took advantage of the helpless condition
the owner and return it to him. PO1 Reyes, instead, sold of the victims. But only one crime of qualified theft
the bracelet and misappropriated the proceeds. was committed although there were more than one
Subsequent events brought out the fact that the bracelet victim divested of their valuables, because all the taking
was dropped by a snatcher who had grabbed it from the of the valuables were made on one and the same
owner a block away from where Francis had found it occasion, thus constituting a continued crime.
and further investigation traced the last possessor as
PO1 Reyes. Charged with theft, PO1 Reyes reasoned Theft; Qualified Theft (2006)
out that he had not committed any crime because it was 1. Forest Ranger Jay Velasco was patrolling the
not he who had found the bracelet and, moreover, it Balara Watershed and Reservoir when he noticed a
turned out to have been stolen. big pile of cut logs outside the gate of the
Resolve the case with reasons. (10%) watershed. Curious, he scouted around and after a few
SUGGESTED ANSWER: minutes, he saw Rene and Dante coming out of the gate
Charged with theft, PO1 Reyes is criminally liable. with some more newly-cut logs. He apprehended and
His contention that he has not committed any crime charged them with the proper offense.
because he was not the one who found the bracelet and What is that offense? Explain.
it turned out to be stolen also, is devoid of merit. It is SUGGESTED ANSWER:
enough that the bracelet belonged to another and The offense is Qualified Theft under Sec. 68 of P.D. 705,
the failure to restore the same to its owner is amending P.D. No. 330, which penalizes any person who
characterized by intent to gain. directly or indirectly cuts, gathers, removes, or smuggles
timber, or other forest products from any of the public
The act of PO1 Reyes of selling the bracelet which does forest. The Balara Watershed is protected by the
not belong to him and which he only held to be delivered cited laws.
to its owner, is furtive misappropriation with intent
to gain. 2. During the preliminary investigation and up to the trial
proper, Rene and Dante contended that if they were to
Where a finder of lost or mislaid property entrusts it to be held liable, their liability should be limited only to the
another for delivery to the owner, the person to whom newly-cut logs found in their possession but not to those
such property is entrusted and who accepts the same, found outside the gate. If you were the judge, what will
assumes the relation of the finder to the owner as if he was be your ruling? (2.5%)
the actual finder: if he would misappropriate it, he is guilty SUGGESTED ANSWER:
of theft (People vs. Avila, 44 Phil. 720). The contention is untenable, the presence of the
newly cut logs outside the gate is circumstantial
Theft; Qualified Theft (2002) evidence, which, if unrebutted, establishes that
A fire broke out in a department store, A, they are the offenders who gathered the same.
taking advantage of the confusion, entered the store and
Theft; Stages of Execution (1998)
carried away goods which he later sold. What crime, if
In the jewelry section of a big department store, Julia
any, did he commit? Why? (2%)
SUGGESTED ANSWER: snatched a couple of bracelets and put these in her purse.
A committed the crime of qualified theft because he took At the store's exit, however, she was arrested by the
the goods on the occasion of and taking advantage of the guard after being radioed by the store personnel who
fire which broke out in the department store. caught the act in the store's moving camera. Is the crime
The occasion of a calamity such as fire, when the consummated, frustrated, or attempted? [5%]
theft was committed, qualifies the crime under SUGGESTED ANSWER:
The crime is consummated theft because the taking of
Article 310 of the Revised Penal Code, as amended.
the bracelets was complete after Julia succeeded in
Theft; Qualified Theft (2002) putting them in her purse. Julia acquired complete
control of the bracelets after putting them in her purse;
Criminal Law Bar Examination Q & A (1994-2006) 74 of 86 felony,
hence, the taking with intent to gain is complete and thus unless the intimidation resulted in a more serious felony.
the crime is consummated.
Theft; Stages of Execution (2000) 2} The crime would still be usurpation of real rights
Sunshine, a beauteous "colegiala" but a shoplifter, went under Art. 312, RPC, even if the said offenders killed the
to the Ever Department Store and proceeded to the caretaker because the killing is the Violence against
women's wear section. The saleslady was of the persons" which is the means for committing the crime
impression that she brought to the fitting room three (3) and as such, determinative only. However, this gives way to
pieces of swimsuits of different colors. When she came the proviso that the penalty provided for therein is "in
out of the fitting room, she returned only two (2] pieces to addition to the penalty incurred in the acts of violence
the clothes rack. The saleslady became suspicious and (murder or homicide] executed by them. The crime is
alerted the store detective. Sunshine was stopped by the similar to a robbery where a killing is committed by
detective before she could leave the store and brought to reason thereof, giving rise only to one indivisible offense
the office of the store manager. The detective and the (People vs. Judge Alfeche, plus the fine mentioned therein.
manager searched her and found her wearing the third
swimsuit under her blouse and pants. Was the theft of Crimes Against Chastity
the swimsuit consummated, frustrated or attempted?
Explain. (5%) Acts of Lasciviousness vs. Unjust Vexation (1994)
SUGGESTED ANSWER:
The theft was consummated because the taking or
When is embracing, kissing and touching a girl's
breast considered only unjust vexation instead of
asportation was complete. The asportation is complete
when the offender acquired exclusive control of the
acts of lasciviousness?
SUGGESTED ANSWER:
personal property being taken: in this case, when The acts of embracing, kissing of a woman arising either
Sunshine wore the swimsuit under her blouse and pants and out of passion or other motive and the touching of her
was on her way out of the store. With evident intent to breast as a mere incident of the embrace without lewd
gain, the taking constitutes theft and being complete, it is design constitutes merely unjust vexation (People us,
consummated. It is not necessary that the offender is in a Ignacio. CA GRNo. 5119-R, September 30, 1950).
position to dispose of the property,
ALTERNATIVE ANSWER; However,
The crime of theft was only frustrated because Sunshine where the kissing, embracing
has not yet left the store when the offense was and the touching of the breast (People vs. Percival Gilo, 10
opportunely discovered and the article seized from her. of a woman are done with lewd
She does not have yet the freedom to dispose of the design, the same
constitute acts of lasciviousness
swimsuit she was taking (People vs. Dino, CA 45 O.G. 3446) .
Moreover, in case of doubt as to whether it is SCRA 753).
consummated or frustrated, the doubt must be resolved in
Adultery (2002)
favor of the milder criminal responsibility.
A, a married woman, had sexual intercourse with a man
Usurpation of Real Rights (1996) who was not her husband. The man did not know
Teresita is the owner of a two-hectare land in Bulacan she was married. What crime, if any, did each of
which she planted to rice and corn. Upon her arrival them commit? Why? (2%)
SUGGESTED ANSWER:
from a three-month vacation in the United States, she A, the married woman, committed the crime of adultery
was surprised to discover that her land had been taken
under Article 333 of the Revised Penal Code, as
over by Manuel and Teofilo who forcibly evicted her
amended, for having sexual intercourse with a man not
tenant-caretaker Juliana, after threatening to kill the latter if
her husband while her marriage is still subsisting. But the
she would resist their taking of the land. Thereafter,
man who had carnal knowledge of her, not knowing her to
Manuel and Teofilo plowed, cultivated and appropriated
be married, shall not be liable for adultery.
the harvest for themselves to the exclusion of Teresita.
1) What crime or crimes did Manuel and Concubinage (1994)
Teofilo commit? Explain. Abe, married to Liza, contracted another marriage
2) Suppose Manuel and Teofilo killed Juliana when the
with Connie in Singapore. Thereafter, Abe and
latter refused to surrender possession of the land, what
Connie returned to the Philippines and lived as husband
crime or crimes did the two commit? Explain.
SUGGESTED ANSWER:
and wife in the hometown of Abe in Calamba, Laguna.
1) Manuel and Teofilo committed the crime of 1) Can Abe be prosecuted for bigamy?
usurpation of real rights under Art. 312 of the Revised 2) If not, can he be prosecuted for any other crime?
SUGGESTED ANSWER:
Penal Code for employing violence against or
1) No, Abe may not be prosecuted for bigamy ...
intimidation of persons. The threats to kill employed by
them in forcibly entering the land is the means of 2) Yes, Abe, together with Connie, may be prosecuted
committing the crime and therefore absorbed in the for concubinage under Art. 334 of the Revised Penal
Code for having cohabited as husband and wife. But
concubinage being a private crime requires the sworn
complaint of Liza, the offended spouse in accordance
Criminal Law Bar Examination Q & A (1994-2006) 75 of 86 tions
with Rule 110 of the Revised Rules on prejudicial to the child's development. The reaction of
Criminal Procedure. the victim, screaming for help upon the occurrence of
the touching indicates that she perceived her dignity was
Concubinage (2002) being debased or violated.
A is married. He has a paramour with whom he
has sexual relations on a more or less regular basis. Crimes Against the Civil Status
They meet at least once a week in hotels, motels
and other places where they can be alone. Is A guilty of of Persons
any crime? Why? (3%)
SUGGESTED ANSWER: Bigamy (1994)
A is guilty of the crime of concubinage by having sexual Issa and Bobby, who were first cousins, were married in
intercourse under scandalous circumstances, with a 1975. In 1993, Bobby was told that his marriage to Issa
woman who is not his wife. was incestous under the law then in force and therefore
void ab initio. He married Caring.
Having sexual relations on a more or less regular basis in
hotels, motels and other places may be considered a Charged with bigamy, Bobby raised the defense that his
scandalous circumstance that offends public conscience, first marriage is void ab initio and therefore, there is no
giving rise to criticism and general protest such acts previous marriage to speak of.
being imprudent and wanton and setting a bad example Will you sustain Bobby's defense?
(People vs. Santos, 86 SCRA 705 [1978]). SUGGESTED ANSWER:
ALTERNATIVE ANSWER: No. I will not sustain Bobby's defense, Bobby remarried
A is not guilty of any crime because a married man does in 1993, or after the Family Code took effect on August
not incur the crime of concubinage by merely 3, 1988, and therefore his capacity to marry in 1993 shall
having a paramour, unless under scandalous be governed by said Code. In Art. 40 of the Family Code,
circumstances, or he keeps her in the conjugal it is mandated that the absolute nullity of a
dwelling as a mistress, or cohabits with her in any previous marriage maybe invoked for purposes of
other place. His weekly meetings with his paramour remarriage on the basis solely of a final
does not per se constitute scandalous circumstance. judgment declaring such previous marriage void. In
short, there is a need of a judicial declaration of
Unjust Vexation vs. Act of Lasciviousness (2006) such nullity before Bobby may validly remarry
Eduardo Quintos, a widower for the past 10 years, felt (Dorothy Terre vs. Jordan Terre, 211 SCRA 6).
that his retirement at the age of 70 gave him
the opportunity to engage in his favorite pastime Bigamy (1996)
— voyeurism. If not using his high-powered binoculars Joselito married Ramona in July, 1995, only to learn later
to peep at his neighbor's homes and domestic activities, his on that Ramona was previously married to David, from
second choice was to follow sweet young girls. One day, he whom Ramona had been separated for more than
trailed a teenage girl up to the LRT station at EDSA- ten years. Believing that his marriage to Ramona
Buendia. While ascending the stairs, he stayed one step was an absolute nullity, Joselito contracted a
behind her and in a moment of bravado, placed his hand subsequent marriage with Anabelle.
on her left hip and gently massaged it. She screamed and Can Joselito be prosecuted for bigamy? Explain.
shouted for help. Eduardo was arrested and charged with SUGGESTED ANSWER:
acts of lasciviousness. Is the designation of the crime Yes, Joselito can be prosecuted for bigamy for his
correct? (5%) subsequent marriage with Anabelle even though his
ALTERNATIVE ANSWER: marriage with Ramona was an absolute nullity.
The designation of the crime as acts of lasciviousness is
not correct. There is no lewd design exhibited Despite the nullity of the first marriage, Joselito
by Eduardo when he placed his hand on the left hip of should have filed a case of dissolution of such
the victim and gently massaging it. The act does not marriage under Art. 40, Family Code, before
clearly show an exclusively sexual motivation. The contracting a second marriage with Anabelle.
crime he committed is only unjust vexation for causing
annoyance, irritation or disturbance to the victim (Art. Bigamy (2004)
287, Revised Penal Code), not acts of lasciviousness CBP is legally married to OEM. Without obtaining a
(Art. 336, Revised Penal Code). marriage license, CBP contracted a second marriage to
ALTERNATIVE ANSWER: RST. Is CBP liable for bigamy? Reason briefly. (5%)
The crime should be Other Acts of Child Abuse under SUGGESTED ANSWER:
Section 10 of RA. 7610, par. b of Section 3 that refers to Whether CBP could be held liable for bigamy or not,
child abuse committed by any act, deeds or words which depends on whether the second marriage is invalid or
debases, degrades or demeans the intrinsic worth and valid even without a marriage license. Although as a
dignity of a child as a human being. In relation thereto, general rule, marriages solemnized without license are
Section 10 provides criminal liability for other acts of null and void ob initio, there are marriages exempted
child abuse, cruelty or exploitation, or for other condi- from license requirement under Chapter 2, Title 1 of the
Family Code, such as in Article 27 which is a marriage in they are not really the biological parents of said
articulo mortis. If the second marriage was valid child constitutes the crime of simulation of birth.
even without a marriage license, then CBP would be
liable for bigamy. C, the unwed mother is criminally liable for
"child trafficking", a violation of Article IV, Sec. 7 of
Otherwise, CBP is not liable for bigamy but for Rep. Act No. 7610. The law punishes inter alia the act of
Illegal Marriage in Art. 350 for the Revised buying and selling of a child.
Penal Code, specifically designated as "Marriage ALTERNATIVE ANSWER:
contracted against provisions of laws." The couple A and B, the unwed mother C, and the
doctor being all involved in the simulation of birth of the
newborn child, violate Rep. Act No. 7610. Their
Bigamy; Prescriptive Period (1995) acts constitute child trafficking which are penalized
Joe and Marcy were married in Batanes in 1955. After under Article IV of said law.
two years, Joe left Marcy and settled in Mindanao where he
later met and married Linda on 12 June 1960. The Crimes Against Honor
second marriage was registered in the civil registry of
Davao City three days after its celebration. On 10 Libel (2002)
October 1975 Marcy who remained in Batanes A. A was nominated Secretary of a Department in the
discovered the marriage of Joe to Linda. On 1 March Executive Branch of the government. His nomination
1976 Marcy filed a complaint for bigamy against Joe. was thereafter submitted to the Commission on
Appointments for confirmation. While the Commission
The crime of bigamy prescribed in fifteen years was considering the nomination, a group of concerned
computed from the day the crime is discovered by the citizens caused to be published in the newspapers a full-
offended party, the authorities or their agents. Joe raised page statement objecting to A's appointment They
the defense of prescription of the crime, more than alleged that A was a drug dependent, that he had several
fifteen years having elapsed from the celebration of the mistresses, and that he was corrupt, having accepted
bigamous marriage up to the filing of Marcy's complaint. bribes or favors from parties transacting business in his
He contended that the registration of his second previous office, and therefore he was unfit for the
marriage in the civil registry of Davao City was position to which he had been nominated. As a result of the
constructive notice to the whole world of the celebration publication, the nomination was not confirmed by the
thereof thus binding upon Marcy. Commission on Appointments. The official sued the
Has the crime of bigamy charged against Joe already concerned citizens and the newspapers for libel and
prescribed? Discuss fully, damages on account of his non-confirmation. How will
SUGGESTED ANSWER: you decide the case? (3%)
No. The prescriptive period for the crime of bigamy is SUGGESTED ANSWER:
computed from the time the crime was discovered by the I will acquit the concerned citizens and the
offended party, the authorities or their agents. The newspapers involved, from the crime of libel, because
principle of constructive notice which ordinarily applies obviously they made the denunciation out of a moral or
to land or property disputes should not be applied to the social duty and thus there is absence of malice.
crime of bigamy, as marriage is not property. Thus when
Marcy filed a complaint for bigamy on 7 March 1976, it was Since A was a candidate for a very important public
well within the reglamentary period as it was barely a few position of a Department Secretary, his moral, mental
months from the time of discovery on 10 October and physical fitness for the public trust in such position
1975. (Sermonia vs. CA, 233 SCRA 155) becomes a public concern as the interest of the public is at
stake. It is pursuant to such concern that the
Simulation of Birth & Child Trafficking (2002) denunciation was made; hence, bereft of malice.
A childless couple, A and B, wanted to have a child they
could call their own. C, an unwed mother, sold her B. If defamatory imputations are made not by publication
newborn baby to them. Thereafter, A and B caused their in the newspapers but by broadcast over the radio,
names to be stated in the birth certificate of the child as do they constitute libel? Why? (2%)
his parents. This was done in connivance with the doctor SUGGESTED ANSWER:
who assisted in the delivery of C. What are the criminal Yes, because libel may be committed by radio broadcast
liabilities, if any, of the couple A and B, C and the Article 355 of the Revised Penal Code punishes libel
doctor? committed by means, among others, of radio broadcast,
SUGGESTED ANSWER: inasmuch as the broadcast made by radio is public
The couple A and B, and the doctor shall be liable for the and may be defamatory.
crime of simulation of birth, penalized under Article 347 of
the Revised Penal Code, as amended. The act of Libel (2003)
making it appear in the birth certificate of a child that the During a seminar workshop attended by government
persons named therein are the parents of the child when employees from the Bureau of Customs and the Bureau
Criminal Law Bar Examination Q & A (1994-2006) of 77 of 86 land
Internal Revenue, A, the speaker, in the course of his grabber she imputed to him the commission of
lecture, lamented the fact that a great majority of those crimes.
serving in said agencies were utterly dishonest and
corrupt. The following morning, the whole group of Slander (1996)
employees in the two bureaus who attended the seminar, as Pia, a bold actress living on top floor of a plush
complainants, filed a criminal complaint against A for condominium in Makati City sunbathed naked at its
uttering what the group claimed to be defamatory penthouse every Sunday morning. She was unaware that the
statements of the lecturer. In court, A filed a motion to business executives holding office at the adjoining tall
quash the information, reciting fully the above facts, on the buildings reported to office every Sunday morning and,
ground that no crime were committed. If you were the with the use of powerful binoculars, kept on gazing at
judge, how would you resolve the motion? 8% her while she sunbathed. Eventually, her sunbathing
SUGGESTED ANSWER: became the talk of the town.
I would grant the motion to quash on the ground that 1) What crime, if any, did Pia commit? Explain,
the facts charged do not constitute an offense, since 2) What crime, if any, did the business executives
there is no definite person or persons dishonored. The commit? Explain.
crime of libel or slander, is a crime against honor such SUGGESTED ANSWER:
that the person or persons dishonored must be 1) Pia did not commit a crime, The felony closest
identifiable even by innuendoes: otherwise the crime to making Pia criminally liable is Grave Scandal, but
against honor is not committed. Moreover, A was not then such act is not to be considered as highly
making a malicious imputation, but merely stating an scandalous and offensive against decency and good
opinion; he was delivering a lecture with no malice at all customs. In the first place, it was not done in a public
during a seminar workshop. Malice being inherently place and within public knowledge or view. As a matter
absent in the utterance, the statement is not actionable as of fact it was discovered by the executives accidentally
defamatory. and they have to use binoculars to have public and full
view of Pia sunbathing in the nude.
Libel (2005)
In an interview aired on television, Cindee 2) The business executives did not commit any crime.
uttered defamatory statements against Erika, a Their acts could not be acts of lasciviousness [as there
successful and reputable businesswoman. What was no overt lustful act), or slander, as the eventual talk of
crime or crimes did Cindee commit? Explain. (3%) the town, resulting from her sunbathing, is not directly
SUGGESTED ANSWER: imputed to the business executives, and besides such
Cindee committed libel for uttering defamatory remarks topic is not intended to defame or put Pia to ridicule.
tending to cause dishonor or discredit to Erika. Libel can
be committed in television programs or broadcasts, Slander by Deed vs. Maltreatment (1994 )
though it was not specifically mentioned in the article Distinguish slander by deed from maltreatment.
since it was not yet in existence then, but is included as SUGGESTED ANSWER:
"any similar means." Defamatory statements aired on SLANDER BY DEED is a crime committed when
television is similar to radio, theatrical exhibition or a person publicly subjects another to an act
cinematographic exhibition, which are among the modes intended or calculated to cast dishonor, discredit or
for the commission of libel. (Arts. 353 and 355, RPC) contempt upon the latter. Absent the intent to cast
dishonor, discredit, contempt, or insult to the
Slander (1988) offended party, the crime is only MALTREATMENT
For some time, bad blood had existed between the two under Art, 266. par. 3, where, by deed, an offender ill-
families of Maria Razon and Judge Gadioma who treats another without causing injury.
were neighbors. First, there was a boundary dispute
between them which was still pending in court. Slander vs. Criminal Conversation (2004)
Maria's mother also filed an administrative complaint Distinguish clearly but briefly between oral
against the judge which was however dismissed. The defamation and criminal conversation.
Razons also felt intimidated by the position and alleged SUGGESTED ANSWER:
influence of their neighbor. Fanning fire to the situation Oral defamation, known as SLANDER, is a
was the practice of the Gadiomas of throwing garbage malicious imputation of any act, omission,
and animal excrement into the Razon's premises. In condition or circumstance against a person, done
an explosion of anger, Maria called Judge Gadioma orally in public, tending to cause dishonor,
"land grabber", "shameless", and "hypocrite." What discredit, contempt, embarassment or ridicule to the
crime was committed by Maria, if any? Explain briefly. latter. This is a crime against honor penalized in Art.
SUGGESTED ANSWER: 358 of the Revised Penal Code.
Maria committed the crime of slander or slight
defamation only because she was under the influence of CRIMINAL CONVERSATION. The term is used in
anger. When Maria called Judge Gadioma a hypocrite and making a polite reference to sexual intercourse as in

certain crimes, like rape, seduction and adultery. It has no
definite concept as a crime. Entrapment vs. Instigation (1995)
Distinguished entrapment from Instigation.
Miscellaneous SUGGESTED ANSWER:
In INSTIGATION, the instigator practically induces the
prospective accused into commission of the offense and
Corpus Delicti (2001)
himself becomes co-principal. In ENTRAPMENT,
At a birthday party in Bogo, Cebu, A got intoxicated and
ways and means are resorted to for the purpose of
started quarrelling with B and C. At the height of
trapping and capturing the lawbreaker while executing
their arguments, A left and took a bolo from his house,
his criminal plan.
after which he returned to the party and threatened to
stab everybody. B got scared and ran towards the Instigation (1995)
seashore, with A chasing him, B ran up a steep incline Suspecting that Juan was a drug pusher, SPO2 Mercado,
along the shore and was cornered on top of a cliff. Out of leader of the Narcom team, gave Juan a Pl00-bill and
fear, B jumped from the cliff into the sea, A returned asked him to buy some marijuana cigarettes. Desirous of
to the scene of their confrontation and seeing that nobody pleasing SPO2 Mercado, Juan went inside the shopping
was there, went home to sleep. The next day, B's wife mall while the officer waited at the corner of the mall.
reported to the police station that her husband had not yet After fifteen minutes, Juan returned with ten sticks of
come home. A search was conducted by the residents of marijuana cigarettes which he gave to SPO2 Mercado
the barangay but after almost two days, B or his body could who thereupon placed Juan under arrest and charged him
not be located and his disappearance continued for the next with violation of The Dangerous Drugs Law by selling
few days. Based on the testimony of C and other guests, marijuana cigarettes.
who had seen A and B on top of the cliff, A was arrested
Is Juan guilty of any offense punishable under The
and charged with Murder. In his defense, he claimed
Dangerous Drugs Act? Discuss fully.
that since B's body has not been found, there was no SUGGESTED ANSWER:
evidence of "corpus delicti' and therefore, he should be Juan cannot be charged of any offense punishable under
acquitted. The Dangerous Drugs Act. Although Juan is a suspected
Is the defense of A tenable or not? State the reason(s) for drug pusher, he cannot be charged on the basis of a mere
your answer. (5%) suspicion. By providing the money with which to
SUGGESTED ANSWER:
buy marijuana cigarettes, SPO2 Mercado practically
The defense of A is not tenable. "Corpus delicti" induced and prodded Juan to commit the offense
does not refer to the body of the purported victim of illegal possession of marijuana. Set against the facts
which had not been found. Even without the body of instigation is a valid defense available to Juan.
the purported victim being found, the offender can be
convicted when the facts and circumstances of a crime, Entrapment vs. Instigation (2003)
the body of the crime or "corpus delicti" is established. Distinguish fully between entrapment and instigation
in Criminal Law, Exemplify each. 4%
In other words, the non-recovery of the body of SUGGESTED ANSWER:
the victim is not a bar to the prosecution of A for In ENTRAPMENT -
Murder, but the fact of death and identity of the victim 1. the criminal design originates from and
must be established beyond reasonable doubt. is already in the mind of the lawbreaker
even before entrapment;
Corpus Delicti; Definition & Elements (2000) 2. the law enforcers resort to ways and means for
a) Define "corpus delicti". (2%) the purpose of capturing the lawbreaker
b) What are the elements of "corpus delicti"? (3%) in flagrante delicto- and
SUGGESTED ANSWER: 3. this circumstance is no bar to prosecution
Corpus Delicti literally means "the body or substance of
and conviction of the lawbreaker.
the crime" or the fact that a crime has been committed,
but does not include the identity of the person who In INSTIGATION-
committed it. (People vs. Pascual 44 OG 2789). 1. the idea and design to bring about the
commission of the crime originated and
Elements of corpus delicti: developed in the mind of the law enforcers;
The actual commission by someone of the particular 2. the law enforcers induce, lure, or incite a person
crime charged. It is a compound fact made up of who is not minded to commit a crime and
two things: would not otherwise commit it, into committing
1. The existence of a certain act or result forming the the crime; and
basis of the criminal charge; and 3. this circumstance absolves the accused from
2. The existence of a criminal agency as the cause criminal liability (People v. Dante Marcos, 185
of the act or result SCRA 154. [1990]).
3. The identity of the offender is not a necessary
element of corpus delicti
Example of Entrapment: Highways and in the discharge of his official
A, an anti-narcotic agent of the Government acted as a administrative functions, did then and there willfully
poseur buyer of shabu and negotiated with B, a and unlawfully work for and facilitate the approval of B's
suspected drug pusher who is unaware that A is a police claim for the payment of the price of his land
officer. A then issued marked money to B who handed a which the government had expropriated, and after the
sachet of shabu to B. Thereupon, A signaled his anti- claim was approved, the accused gave B only
narcotic team to close-in and arrest B. This is a case P1,000.00 of the approved claim of P5,000 and
of entrapment because the criminal mind is in B willfully and unlawfully appropriated for himself the
already when A transacted with him. balance of P4,000, thus causing undue injury to B and
the Government."
Example of Instigation:
Because the members of an anti-narcotic team are A has filed a motion to quash the information,
already known to drug pushers. A, the team leader, contending that it does not charge an offense. Is he
approached and persuaded B to act as a buyer of shabu correct?
and transact with C, the suspected drug pusher. For SUGGESTED ANSWER:
the purpose, A gave B marked money to be used in Yes, the contention of A is correct. The information
buying shabu from C. After C handed the sachet of failed to allege that the undue injury to B and the
shabu to B and the latter handed the marked money to government was caused by the accused's manifest
C, the team closed-in and placed B and C under partiality, evident bad faith, or gross Inexcusable
arrest. Under the facts, B is not criminally liable for negligence, which are necessary elements of the offense
his participation in the transaction because he was charged, ie., violation of Section 3(e) of the Anti-Graft
acting only under instigation by the law enforcers. and Corrupt Practices Act. The accused is employed in
the Office of the District Engineer of the DPWH which
has nothing to do with the determination and fixing of
Special Penal Laws the price of the land expropriated, and for which
expropriated land the Government is legally obligated to
Anti-Carnapping Act; Carnapping w/ Homicide (1998) pay. There is no allegation in the information that the
Samuel, a tricycle driver, plied his usual route using a land was overpriced or that the payment of the amount was
Honda motorcycle with a sidecar. One evening, Raul disadvantageous to the Government. It appears that the
rode on the sidecar, poked a knife at Samuel and charge was solely based on the accused having followed
instructed him to go near the bridge. Upon reaching the up the payment for B's land which the
bridge, Raul alighted from the motorcycle and suddenly Government has already appropriated, and that the
stabbed Samuel several times until he was dead. Raul fled accused eventually withheld for himself from the price of
from the scene taking the motorcycle with him. the said land, the amount of P4,000 for his services. No
What crime or crimes did Raul commit? |5%] violation of Section 3(e) of the Anti-Graft and Corrupt
SUGGESTED ANSWER:
Act appears. At most, the accused should be merely
Raul committed the composite crime of Carnapping with
charged administratively
homicide under Sec. 14 of Rep. Act No. 6539, ALTERNATIVE ANSWERS:
as amended, considering that the killing "in the 1. Yes, A is correct in filing a motion to quash
course or "on the occasion of a carnapping (People vs. De the information because Section 3(e) of Republic
la Cruz, et al. 183 SCRA 763). A motorcycle is included in Act 3019 applies only to officers and employees of
the definition of a "motor vehicle" in said Rep. Act, also government corporations charged with the grant
known as the 'Anti-Carnapping Act of 1972'. There is of licenses or permits or other concessions, and not
no apparent motive for the killing of the tricycle driver to DPWH, which is not a government corporation.
but for Raul to be able to take the motorcycle. The fact 2. A is not correct. In the case of Meforda vs.
that the tricycle driver was killed brings about the Sandiganbayan. 151 SCRA 399, which involves a
penalty of reclusion perpetua to death. substantially identical information as the Information
ALTERNATIVE ANSWER:
quoted in the question, the Supreme Court held that the
The crime committed by Raul is carnapping, punished by
Information was valid. While it is true that the
Section 14 of Rep. Act No. 6539. The killing of Samuel is
information quoted In the question, failed to allege
not a separate crime but only an
evident bad faith, gross inexcusable negligence or
aggravating circumstance.
manifest partiality, said Information Is nevertheless
Anti-Graft & Corrupt Practices - RA 3019 (1997) adequate because it averred the three (3) elements for the
violation of Section 3(c) of RA. 3012 when it stated (1) that
A is charged with the crime defined in Section 3(e) of the
Anti-Graft and Corrupt Practices Act in an Information the accused is a public officer at the time of the
that reads: commission of the crime, being employed in the Office of
That from 01 to 30 January 1995, in the City of Pasig the District Engineer, DPWH; (2) that the accused
and within the jurisdiction of this Honorable Court, caused undue Injury to B and the Government, with the
the accused, being then employed in the Office of the statement that BT the owner of the land, received only
District Engineer, Department of Public Works and P1,000.00 instead of the full value of P5,000.00; and (3)
Criminal Law Bar Examination Q & A (1994-2006) that 80 of 86
in the discharge of A's official administrative Child Abuse; RA 7610 (2006)
functions, he "did then and there willfully and unlawfully Eduardo Quintos, a widower for the past 10 years, felt
work for and facilitate the approval of his claim xxx and that his retirement at the age of 70 gave him
"willfully and unlawfully appropriate for himself the the opportunity to engage in his favorite pastime
balance of P4,000.00 x x x". An information need not — voyeurism. If not using his high-powered binoculars
employ or use the very words or language of the statute. It to peep at his neighbor's homes and domestic activities, his
may also use words or language of similar import. second choice was to follow sweet young girls. One day, he
trailed a teenage girl up to the LRT station at EDSA-
Anti-Hazing law – RA 8049 (2002) Buendia. While ascending the stairs, he stayed one step
What is hazing as defined by law? (2%) behind her and in a moment of bravado, placed his hand
SUGGESTED ANSWER: on her left hip and gently massaged it. She screamed and
Hazing, as defined by law, is an initiation rite or practice shouted for help. Eduardo was arrested and charged with
as a prerequisite for admission into membership in a acts of lasciviousness. Is the designation of the crime
fraternity, sorority or organization by placing the recruit, correct? (5%)
neophyte or applicant in some embarrassing ALTERNATIVE ANSWER:
or humiliating situations such as forcing him to do The crime should be Other Acts of Child Abuse under
menial, silly, foolish and similar tasks or activities or Section 10 of RA. 7610, par. b of Section 3 that refers to
otherwise subjecting him to physical or psychological child abuse committed by any act, deeds or words which
suffering or injury. debases, degrades or demeans the intrinsic worth and
dignity of a child as a human being. In relation thereto,
What does the law require before initiation rites may Section 10 provides criminal liability for other acts of
be performed? (3%) child abuse, cruelty or exploitation, or for other condi-
SUGGESTED ANSWER: tions prejudicial to the child's development. The reaction of
Section 2 of Rep. Act No. 8049 (Anti-Hazing Law) the victim, screaming for help upon the occurrence of the
requires that before hazing or initiation rites may be touching indicates that she perceived her dignity was being
performed, notice to the school authorities or head of debased or violated.
organizations shall be given seven (7) days before the
conduct of such rites. The written notice shall indicate (a) Dangerous Drug Act: Plea-Bargaining (2005)
the period of the initiation activities, not exceeding three (3) Obie Juan is suspected to have in his possession an
days; (b) the names of those to be subjected to such unspecified amount of methamphetamine hydrochloride
activities, and (c) an undertaking that no physical violence or “shabu”. An entrapment operation was conducted by
shall be employed by anybody during such initiation rites. police officers, resulting in his arrest following
the discovery of 100 grams of the said dangerous drug in
CHILD ABUSE; RA 7610 (2004) his possession. He was subjected to a drug test and
Mrs. MNA was charged of child abuse. It appears from the was found positive for the use of marijuana,
evidence that she failed to give immediately the another dangerous drug. He was subsequently charged
required medical attention to her adopted child, BPO, with two crimes: Violation of Section 11, Article II of
when he was accidentally bumped by her car, resulting in RA 9165 for the possession of “shabu” and violation
his head injuries and impaired vision that could lead to of Section 15, Article II of RA 9165 for the use of
night blindness. The accused, according to the social marijuana. (5%) a) Are the charges proper? Explain.
worker on the case, used to whip him when he failed to SUGGESTED ANSWER:
come home on time from school. Also, to punish him No. The use of dangerous drugs is not committed when
for carelessness in washing dishes, she sometimes sent Obie Juan was also found to have in his possession such
him to bed without supper. quantity of any dangerous drug. (See s. 11 and 16, RA.
No. 9165)
She moved to quash the charge on the ground that there
is no evidence she maltreated her adopted child b) So as not to be sentenced to death, Obie
habitually. She added that the accident was caused by her Juan offers to plead guilty to a lesser offense. Can
driver's negligence. She did punish her ward for he do so? Why?
naughtiness or carelessness, but only mildly. SUGGESTED ANSWER:
Is her motion meritorious? Reason briefly. (5%) No. Obie Juan cannot plead guilty to a lower offense as it
SUGGESTED ANSWER: is prohibited under the law. (Section 23, RA. No. 9165)
No, the motion to quash is not meritorious. It is not Any person charged under any provision of this Act
necessary that movant's maltreatment of a child be regardless of the imposable penalty shall not be allowed
"habitual" to constitute child abuse. The wrongful acts to avail of the provision on plea-bargaining.
penalized as "Child Abuse" under Rep. Act No. 7610
refers to the maltreatment of the child, "whether habitual Dangerous Drugs Act (1998)
or not": this is expressly stated in Sec. 2(b) of the said Superintendent Al Santiago, Chief of the Narcotics
Law. Mrs. MNA should be liable for child abuse. Division, Western Police District, received information
that a certain Lee Lay of-No. 8 Tindalo Street, Tondo,

Manila is a member of the 14K Gang selling shabu and Chief Inspector Gamboa and PO3 Pepito Lorbes
marijuana. SPOl Lorenzo and SPO3 Peralta were who conspired in taking the attache case are liable
instructed to conduct surveillance and buy-bust for the following crimes defined under RA. 9165:
operations against Lay. Their informant contacted a) Sec. 27 for misappropriation or failure to account
Lay and a meeting was arranged at T. Pinpin for the confiscated or seized dangerous drugs.
Restaurant at 2:00 in the afternoon on February 14, b) Sec. 4 in relation to Sec. 3(ee) for their acts
1993. SPO1 Lorenzo and SPO3 Peralta, acting as as protector/coddler of Dante Ong who imported drugs
poseur-buyers, purchased from Lay 10 sticks of
marijuana and paid P500. Later, Lay agreed to sell to In addition, by allowing Ong to escape prosecution
them one kilo of dried marijuana fruiting tops which for illegal importation or illegal transportation of
he gave them at his residence. dangerous drugs, where the penalty is life
imprisonment to death, they are also liable for qualified
The policemen arrested Lay and a search was conducted. bribery under Art. 211-A of the Revised Penal Code.
Found were 356 grams of marijuana seeds, 932 grams of
marijuana fruiting tops and 50 sticks of With respect to Dante Ong, he is guilty of illegal
marijuana cigarettes. What offense or offenses did importation of dangerous drugs under Sec. 4, R.A. 9165, if
Lay commit? [5%] PR 181 is an international flight. If PR 181 is a
SUGGESTED ANSWER: domestic flight, he is liable for violation of Sec. 5, RA.
Lay committed the offenses of illegal selling of dangerous 9165 for illegal transportation of dangerous drugs.
drugs and illegal possession of dangerous drugs which
should be made subject of separate informations. Dangerous Drugs Act (6425); Marked Money (2000)
At about 9 o'clock in the morning, a Narcom Group laid a
The crime of illegal selling of dangerous drugs plan to entrap and apprehend A, a long suspected drug
is committed as regards the 10 sticks of marijuana dealer, through a "buy-bust" operation. At the appointed
and as regards the one (1) kilo of dried marijuana time, the poseur-buyer approached A who was then with B.
fruiting tops, which should be subject of two (2) A marked P100 bill was handed over to A who in
separate informations because the acts were committed turn, gave the poseur-buyer one (1) tea bag of marijuana
at different times and in different places. leaves. The members of the team, who were then
positioned behind thick leaves, closed in but evidently
The crime of Illegal possession of dangerous drugs were not swift enough since A and B were able to
is committed as regards the marijuana seeds, run away. Two days later, A was arrested in connection with
marijuana fruiting tops and marijuana cigarettes which another incident. It appears that during the operations,
are not the subject of the sale. Another information the police officers were not able to seize the marked
shall be filed for this. money but were able to get possession of the marijuana tea
bag. A was subsequently prosecuted for violation of Section
Dangerous Drugs Act (2006) 4, Article II of Republic Act No. 6425, otherwise known as
After receiving reliable information that Dante Ong, a the Dangerous Drugs Act, During the trial, the marked
notorious drug smuggler, was arriving on PAL Flight money was not presented. Can A be held liable? Explain.
NO. PR 181, PNP Chief Inspector Samuel Gamboa (2%)
formed a group of anti-drug agents. When Ong arrived at SUGGESTED ANSWER:
the airport, the group arrested him and seized his attache Yes. A can be held liable. The absence of the marked
case. Upon inspection inside the Immigration holding money will not create a hiatus in the prosecution's
area, the attache case yielded 5 plastic bags of heroin evidence as long as the sale of the dangerous drugs is
weighing 500 grams. Chief Inspector Gamboa took the adequately proven and the drug subject of the transaction is
attache case and boarded him in an unmarked car driven by presented before the court. There was a perfected
PO3 Pepito Lorbes. On the way to Camp Crame and upon contract of sale of the drug (People vs. Ong Co, 245 SCRA
nearing White Plains corner EDSA, Chief 733; People vs. Zervoulakos, 241 SCRA 625).
Inspector Gamboa ordered PO3 Lorbes to stop the car.
They brought out the drugs from the case in the Dangerous Drugs Act (6425); Plea Bargaining (1998)
trunk and got 3 plastic sacks of heroin. They then told Ong Edgardo was charged with importation of prohibited
to alight from the car. Ong left with the 2 remaining plastic drugs in an information filed with the Regional Trial
sacks of heroin. Chief Inspector Gamboa advised him to Court of Kalookan City on June 4, 1994. The offense is
keep silent and go home which the latter did. Unknown to punishable by reclusion perpetua to death. Can
them, an NBI team of agents had been following them and Edgardo avail of plea-bargaining? [2%]
witnessed the transaction. They arrested Chief SUGGESTED ANSWER:
Inspector Gamboa and PO3 Lorbes. Meanwhile, another No, Edgardo cannot avail of plea-bargaining because the
NBI team followed Ong and likewise arrested him. All of imposable penalty for his violation of the Dangerous
them were later charged. Drugs Act (R.A. No. 6425. as amended) is reclusion
What are their respective criminal liabilities? (5%) perpetua to death. Section 20-A expressly provides that
SUGGESTED ANSWER: plea-bargaining shall not be allowed where the imposable
Criminal Law Bar Examination Q & A (1994-2006) 82 of 86 the
penalty for the violation of said law is reclusion perpetua Comprehensive Dangerous Drugs Act of 2002,
to death. (Sec. 20-A, R.A. No. 6425, as amended). regardless of the imposable penalty.
Dangerous Drugs Act; Consummation of Sale (1996) Highway Robbery (2001)

Pat. Buensuceso, posing as a buyer, approached Ronnie, Police Sgt. Diego Chan, being a member of the Theft and
a suspected drug pusher, and offered to buy P300 worth Robbery Division of the Western Police District and
of shabu. Ronnie then left, came back five minutes later assigned to the South Harbor, Manila, was privy to and
and handed Pat, Buensuceso an aluminum foil containing more or less familiar with the schedules, routes and hours
the shabu. However, before Pat, Buensuceso was able to of the movements of container vans, as well as the
deliver the marked money to Ronnie, the latter spotted a mobile police patrols, from the pier area to the different
policeman at a distance, whom Ronnie knew to be export processing zones outside Metro Manila. From
connected with the Narcotics Command of the time to time, he gave valuable and detailed information
Police. Upon seeing the latter, Ronnie ran away but was on these matters to a group interested in those shipments in
arrested thirty minutes later by other policemen who said container vans. On several instances, using the said
pursued him. information as their basis, the gang hijacked and
Under the circumstances, would you consider the crime pilfered the contents of the vans. Prior to their sale to
of sale of a prohibited drug already "fences" in Banawe, Quezon City and Bangkal, Makati
consummated? Explain. City, the gang Informs Sgt, Chan who then inspects the
SUGGESTED ANSWER: pilfered goods, makes his choice of the valuable items
Yes, the sale of prohibited drug is already consummated and disposes of them through his own sources or
although the marked money was not yet delivered. When "fences". When the highjackers were traced on one
Ronnie handed the aluminum foil containing the occasion and arrested, upon custodial investigation, they
shabu to Pat. Buensuceso pursuant to their agreed implicated Sgt. Chan and the fiscal charged them all,
sale, the crime was consummated. Payment of the including Sgt. Chan as co-principals. Sgt. Chan, in his
consideration is not an element of requisite of the defense, claimed that he should not be charged as a
crime. If ever, the marked money is only evidentiary to principal but only as an accessory after the fact under
strengthen the case of the prosecution. P.D. 532, otherwise known as the Anti-Piracy and Anti-
Highway Robbery Act of 1972.
Dangerous Drugs Act; Criminal Intent to Posses (2002) Is the contention of Sgt. Chan valid and
A and his fiancee B were walking in the plaza when they tenable? Explain, (5%)
met a group of policemen who had earlier been tipped SUGGESTED ANSWER:
off that A was in possession of prohibited drugs. Upon No, the contention of Sgt. Chan is not valid or tenable
seeing the policemen and sensing that they were after because by express provision of P.D. 532, Section 4, a
him, A handed a sachet containing shabu to his fiancee B, person who knowingly and in any manner, aids or
telling her to hide it in her handbag. The policemen protects highway robbers/brigands, such as giving them
saw B placing the sachet inside her handbag. If B was information about the movement of police officers or
unaware that A was a drug user or pusher or that what was acquires or receives property taken by brigands, or who
inside the sachet given to her was shabu, is she directly or indirectly abets the commission of highway
nonetheless liable under the Dangerous Drugs Act? (5%) robbery/brigandage, shall be considered as accomplice of
SUGGESTED ANSWER: the principal offenders and punished in accordance with
No, B will not be criminally liable because she is unaware the rules in the Revised Penal Code.
that A was a drug user or pusher or of the content of the ALTERNATIVE ANSWER:
sachet handed to her by A, and therefore the No, the contention of Sgt. Chan that he should be
criminal intent to possess the drug in violation of the charged only as accessory after the fact is not tenable
Dangerous Drugs Act is absent. There would be no because he was a principal participant in the commission of
basis to impute criminal liability to her in the the crime and in pursuing the criminal design.
absence of animus possidendi.
An accessory after the fact involves himself in
Dangerous Drugs Act; Plea-Bargaining (2004) the commission of a crime only after the crime had
MNO, who is 30 years old, was charged as a drug pusher already been consummated, not before, For his
under the Comprehensive Dangerous Drugs Act of criminal participation in the execution of the
2002. During pre-trial, he offered to plead guilty to highjacking of the container vans, Sgt. Chan is
the lesser offense concerning use of dangerous a co-principal by indispensable cooperation.
drugs. Should the Judge allow MNO's plea to the
lesser offense? Explain briefly. (5%) Illegal Fishing - PD 704 (1996)
SUGGESTED ANSWER: Upon a laboratory examination of the fish seized by the
No, the Judge should not allow MNO's plea to a lesser police and agents of the Fisheries Commission, it was
offense, because plea-bargaining in prosecutions of drug- indubitably determined that the fish they were selling
related cases is no longer allowed by Rep. Act No. 9165, were caught with the use of explosives. Accordingly, the
three vendors were criminally charged with the violation
Criminal Law Bar Examination Q & A (1994-2006) of 83 of 86
Section 33 of P.D. 704 which makes it unlawful for that he was not in actual possession thereof at the time
any person to knowingly possess, deal in, or sell for he was arrested. Are the allegations meritorious? Explain.
profit any fish which have been illegally caught. (3%)
During the trial, the three vendors claimed that they SUGGESTED ANSWER:
bought the fish from a fishing boat which they duly A's allegations are not meritorious. Ownership is not an
identified. The prosecution however claimed that the essential element of the crime of illegal possession of
three vendors should nevertheless be held liable for the firearms and ammunition. What the law requires is
offense as they were the ones caught in possession merely possession, which includes not only actual
of the fish illegally caught. physical possession but also constructive possession
On the basis of the above facts, if you were the where the firearm and explosive are subject to one's
judge, would you convict the three fish vendors? Explain. control and management. (People us. De Grecia, 233 SCRA
SUGGESTED ANSWER: 716; U.S. vs. Juan, 23 Phil. 105: People vs. Soyag, 110 Phil. 565).
No, I would not convict the three fish vendors if I were the
judge. Mere possession of such fish without PD 46 & RA 6713 & Indirect Bribery (2006)
knowledge of the fact that the same were caught with the Commissioner Marian Torres of the Bureau of internal
use of explosives does not by itself render the seller- Revenue (BIR) wrote solicitation letters addressed to the
possessor criminally liable under P.D. 704. Although the act Filipino-Chinese Chamber of Commerce and Industry
penalized in said Decree may be a malum prohibitum, the and to certain CEOs of various multinational
law punishes the possession, dealing in or selling of such corporations requesting donations of gifts for her office
fish only when "knowingly" done that the fish were caught Christmas party. She used the Bureau's official stationery.
with the use of explosives; hence criminal intent is essential. The response was prompt and overwhelming so much so
The claim by the fish vendors that they only bought that Commissioner Torres' office was overcrowded with
the fish from fishing boats which they "duly rice cookers, radio sets, freezers, electric stoves and
identified", renders their possession of such fish innocent toasters. Her staff also received several envelopes
unless the prosecution could prove that they have containing cash money for the employees' Christmas
knowledge that explosives were used in catching such luncheon.
fish, and the accused had knowledge thereof. Has Commissioner Torres committed any impropriety or
irregularity? What laws or decrees did she violate? (5%)
Illegal Possession of Firearms – RA 8294 (1998) SUGGESTED ANSWER:
Supposing a public school teacher participated in a coup Yes, Commissioner Torres violated the following:
d'etat using an unlicensed firearm. What crime or crimes 1. RA. 6713 — Code of Conduct and Ethical
did he commit? [2%] Standards for Public Officials and Employees when
SUGGESTED ANSWER: he solicited and accept gifts (Sec. 7[d]).
The public school teacher committed only coup d'etat 2. P.D. 46 — Making it punishable for public officials
for his participation therein. His use of an unlicensed and employees to receive, and for private persons to give,
firearm is absorbed in the coup d'etat under the new gifts on any occasion, including Christmas.
firearms law (Rep. Act No. 8294). A prosecution for 3. Indirect Bribery (Art. 211, Revised Penal Code) for
illegal possession of firearm under the new law is receiving gifts offered by reason of office.
allowed only if the unlicensed firearm was not used
in the commission of another crime. PD 46 (1994)
Gino was appointed Collector of Customs and was
Illegal Possession of Firearms & Ammunitions (2000) assigned at the Ninoy Aquino International Airport,
A has long been wanted by the police authorities for Gerry, an importer, hosted a dinner for 100 persons
various crimes committed by him. Acting on an at the Westin Philippine Plaza in honor of Gino.
information by a tipster, the police proceeded to an What are the offense or offenses committed by Gino and
apartment where A was often seen. The tipster also Gerry?
warned the policemen that A was always armed. At the SUGGESTED ANSWER:
given address, a lady who introduced herself as the elder Both Gino and Gerry are liable for violation of
sister of A, opened the door and let the policemen in Presidential Decree No. 46, which punishes any public
inside, the team found A sleeping on the floor. official or employee who receives, directly or indirectly,
Immediately beside him was a clutch bag which, when and for private persons who give, offer any gift, present or
opened, contained a .38 caliber paltik revolver and a hand valuable thing on any occasion, including Christmas,
grenade. After verification, the authorities discovered that when such gift or valuable thing is given by reason of his
A was not a licensed holder of the .38 caliber paltik official position, regardless of whether or not the same is
revolver. As for the hand grenade, it was established that for past favor or favors, or the giver hopes or expects to
only military personnel are authorized to carry hand receive a favor or better treatment in the future. Being an
grenades. Subsequently, A was charged with the crime of importer, Gerry reasonably expects future favor from
Illegal Possession of Firearms and Ammunition. During Gino. Included within the prohibition is the throwing of
trial, A maintained that the bag containing the unlicensed parties or entertainment in honor of the official or
firearm and hand grenade belonged to A, his friend, and employee or of his immediate relatives.

Criminal Law Bar Examination Q & A (1994-2006) 84 of 86 as property
which involves or relates to the proceeds of an unlawful
PD 46 (1997) activity such as jueteng. In addition, he may be
A, who is the private complainant in a murder case prosecuted for liability as ajueteng operator. (R.A. No.
pending before a Regional Trial Court Judge, gave a 9287)
judge a Christmas gift, consisting of big basket
of assorted canned goods and bottles of expensive The mayor who allowed the opening of an account in his
wines, easily worth P10.000.00. The judge accepted name is likewise guilty for violation of the AMLA.
the gift knowing it came from A. He, knowing that the money instrument or property
What crime or crimes, if any, were committed? involves the proceeds of an unlawful activity, performs
SUGGESTED ANSWER: or fails to perform any act which results in the
The Judge committed the crime of Indirect bribery under facilitation of money laundering.
Art. 211 of the Revised Penal Code. The gift was offered
to the Judge by reason of his office. In addition, Ra 3019; Preventive Suspension (1999)
the Judge will be liable for the violation of P.D. 46 A public officer was accused before the Sandiganbayan
which punishes the receiving of gifts by pubic of a violation of Section 3 (e) of RA No. 3019, the Anti-
officials and employees on occasions like Christmas. Graft and Corrupt Practices Act. Just after arraignment
and even before evidence was presented, the
Plunder under RA 7080; Prescriptive Period (1993) Sandiganbayan issued an order for his suspension
Through kickbacks, percentages or commissions and pendente lite. The accused questioned the said Order
other fraudulent schemes /conveyances and taking contending that it is violative of the constitutional
advantage of his position, Andy, a former mayor of provision against an ex post facto law. Will you sustain
a suburban town, acquired assets amounting to P10 the objection of the accused? Why? [2%]
billion which is grossly disproportionate to his lawful (c) What pre-conditions are necessary to be met or
income. Due to his influence and connections satisfied before preventive suspension may be
and despite knowledge by the authorities of his Ill- ordered? (2%)
gotten wealth, he was charged with the crime of plunder SUGGESTED ANSWER:
only after twenty (20) years from his defeat in (b) No, I will not sustain the objection of the accused.
the last elections he participated in. Suspension of the accused pendente lite is not
1) May Andy still be held criminally liable? Why? violative of the constitutional provision against ex-post
2) Can the State still recover the properties and assets facto law. Ex-post facto law means making an innocent
that he illegally acquired, the bulk of which is in the name act a crime before it is made punishable.
of his wife and children? Reason out. (c) The pre-conditions necessary to be met or satisfied
SUGGESTED ANSWER: before a suspension may be ordered are: (1) there must
1) Andy will not be criminally liable because Section 6 be proper notice requiring the accused to show cause at a
of RA 7080 provides that the crime punishable under specific date of hearing why he should not be
this Act shall prescribe in twenty years and the problem ordered suspended from office pursuant to RA
asked whether Andy can still be charged with the 3019, as amended; and (2) there must be a
crime of plunder after 20 years. determination of a valid information against the
accused that warrants his suspension.
2) Yes, because Section 6 provides that recovery of
properties unlawfully acquired by public officers RA 3019; Preventive Suspension (2000)
from them or their nominees or transferees shall not be A month after the arraignment of Brad Kit
barred by prescription, laches or estoppel. Commissioner of the Housing and Land Use Regulatory
Board, who was charged with violation of Section 3 (h) of
R.A. No. 9160 Anti-Money Laundering Act (2005) Republic Act 3019 [Anti-Graft and Corrupt Practices Act)
Don Gabito, a philanthropist, offered to fund several before the Sandiganbayan, the Office of the Special
projects of the Mayor. He opened an account in the Prosecutor filed a Motion to Suspend Accused Pendente
Mayor’s name and regularly deposited various amounts Lite pursuant to Section 13 of the Anti-Graft Law. The
ranging from P500,000.00 to P1 Million. From this Court granted the motion and suspended accused Brad
account, the Mayor withdrew and used the money for Kit for a period of 90 days. Accused assailed the
constructing feeder roads, barangay clinics, repairing constitutional validity of the suspension order on the
schools and for all other municipal projects. It was ground that it partakes of a penalty before Judgment of
subsequently discovered that Don Gabito was actually a conviction is reached and is thus violative of his
jueteng operator and the amounts he deposited were constitutional right to be presumed innocent. He also
proceeds from his jueteng operations. claimed that this provision of the law on suspension
What crime/s were committed? Who are pendente lite applies only to elective officials and not to
criminally liable? Explain. (6%) appointed ones like him. Rule with reasons. (5%)
Don Gabito violated the Anti-Money Laundering Act The suspension order does not partake of a penalty and
(Sec. 4, R.A. No. 9160) for knowingly transacting money is thus not violative of Brad Kit's constitutional right to
Criminal Law Bar Examination Q & A (1994-2006) be 85 of 86
presumed innocent. Under the law, the accused public President had taken his oath and assumed his office, he
officers shall be suspended from office while the criminal appointed Robert as Honorary Consul to the Republic of
prosecution is pending in court (Sec. 13, RA. 3019). Such Vietnam. Robert took his oath before the President and
preventive suspension is mandatory to prevent the after furnishing the Department of Foreign Affairs with
accused from hampering the normal course of the his appointment papers, flew to Saigon, now Ho Chi Min
investigation (Rios vs. Sandiganbayan,279 SCRA 581 City, where he organized his staff, put up an office and
(1997); Bunye vs. Escareal 226 SCRA 332 (1993)). Neither stayed there for three months attending to trade
is there merit in Brad Kit's claim that the provision opportunities and relations with local businessman.
on suspension pendente lite applies only to elective On the fourth month, he returned to the Philippines to
officials and not to appointed ones like him. It applies make his report to the President. However, the
to all public officials Indicted upon a valid Anti-Graft League of the Philippines filed a
information under RA. No. 3019, whether they be complaint against Robert for (1) falling to file his
appointive or elective officials; or permanent or Statement of Assets and Liabilities within thirty (30)
temporary employees, or pertaining to the career or non- days from assumption of office; (2) failing to resign
career service (Segovia vs. Sandiganbayan, 288 SCRA 328 from his businesses, and (3) falling to divest his shares
[1998]). and investments in the banks and corporations owned
by him, as required by the Code of Conduct and
RA 3019; Public Officer (2003) Ethical Standards for Public Officials and Employees.
The Central Bank (Bangko Sentral ng Pilipinas}, by Will the complaint prosper? Explain. (5%)
a resolution of the monetary board, hires Theof SUGGESTED ANSWER:
Sto Tomas, a retired manager of a leading bank The complaint will not prosper because the Code of
as a consultant. Theof later receives a valuable gift Conduct and Ethical Standards for Public Officials and
from a bank under investigation by the Central Bank. Employees (Rep. Act. No. 6713), expressly exempts
May Theof be prosecuted under Republic Act No. 3019 those who serve the Government in an honorary capacity
(Anti-Graft and Corrupt Practices Act) for accepting from filing Statements of Assets and Liabilities, and from
such a gift? Explain. 8% resigning and divesting themselves of interest from any
SUGGESTED ANSWER: private enterprise (Secs. 8A and 9).
No, Theof may not be prosecuted under Rep. Act 3019, ALTERNATIVE ANSWER:
but may be prosecuted for violation of Pres, Decree No. Yes, the complaint will prosper under Sec. 7 of the Anti-
46, under which such act of receiving a valuable Graft and Corrupt Practices Act (Rep. Act No. 3019, as
gift is punished. amended], which requires all public officers within 30
days from assuming public office to file a true, detailed
Although Theof is a "public officer" within the sworn statement of assets and liabilities. Violations of
application of the Anti-Graft and Corrupt Practices Act this law are mala prohibita which admits of no excuses.
(RA 3019), yet his act of receiving such gift does not
appear to be included among the punishable acts under RA 7438-Economic Sabotage; Illegal Recruitment (2004)
Rep. Act 3019 since he is not to intervene in his official RR represented to AA, BB, CC and DD that she could send
capacity in the investigation of the bank which gave the them to London to work there as sales ladies and
gift. Penal laws must be strictly construed against the waitresses. She collected and received from them various
State. In any case, Theof is administratively liable. amounts of money for recruitment and placement fees
ALTERNATIVE ANSWER totalling P400,000. After their dates of departure were
Yes, Theof may be prosecuted under Rep. Act 3019 postponed several times, the four prospects got
because he is a "public officer" within the purview of suspicious and went to POEA (Phil. Overseas
said law, and Theof received the valuable gift from Employment Authority). There they found out that RR
a bank which is under investigation by the Central Bank was not authorized nor licensed to recruit workers for
where he is employed as a "public officer". employment abroad. They sought refund to no avail.
Receiving gift, directly or indirectly by a public officer Is RR guilty of any grave offense? Explain briefly. (5%)
from a party who has a transaction with the SUGGESTED ANSWER:
Government is wrong, more so when the gift-giver Yes. RR is guilty of a grave offense, having engaged in
is under investigation by the government office illegal recruitment constituting the offense of
to which the public officer is connected. economic sabotage which is punishable with life
imprisonment and a fine of P100.000.00.
Ra 6713; Coverage (2001)
Robert Sy, a well known businessman and a founding ECONOMIC SABOTAGE is an offense defined in
member of the Makati Business Club, aside from being a 38(b) of the Labor Code, as amended by Pres. Decree
classmate of the newly-elected President of the No. 2018, which is incurred when the illegal recruitment is
Philippines, had Investments consisting of shares of carried out in large scale or by a syndicate. It is in a
stocks in the Urban Bank, the PNB, the Rural Bank of large scale when there are three or more aggrieved
Caloocan City and his privately-owned corporation, the parties, individually or as a group. And it is committed by a
RS Builders Corporation and Trans-Pacific Air. After the syndicate when three or more persons conspire or

cooperate with one another in carrying out the illegal
transaction, scheme or activity.
RA 7610 – Child Exploitation (2006)

Aling Maria received an urgent telephone call from
Junior, her eldest son, asking for P2,000.00 to complete his
semestral tuition fees preparatory to his final exams in
Commerce. Distressed and disturbed, she borrowed
money from her compadre Mang Juan with the assurance
to pay him within 2 months. Two months lapsed but
Aling Maria failed to settle her obligation. Mang Juan told
Aling Maria that she does not have to pay the loan if she
will allow her youngest 10-year old daughter Annie to
work as a housemaid in his house for 2 months at
Pl,000.00 a month. Despite Aling Maria's objection,
Mang Juan insisted and brought Annie to his house to
work as a maid.
1. Was a crime committed by Mang Juan when he
brought Annie to his house as maid for the purpose of
repaying her mother's loan? (2.5%)
SUGGESTED ANSWER:
Yes. Mang Juan committed the crime of exploitation of
child labor which is committed by any persons who un-
der the pretext of reimbursing himself of a debt incurred
by an ascendant, guardian or person entrusted with
the custody of a minor, shall, against the latter's will,
retainh im in his service (Art. 273, Revised Penal Code).
He can also be liable as an employer for the
employment of a minor below 15 yrs. old, under
Sec. 12, Art. 8 of RA. 7610.
2. If Aling Maria herself was made to work as a house-

maid in Mang Juan's household to pay her loan, did
he commit a crime? (2.5%)
SUGGESTED ANSWER:
Yes. Mang Juan committed the crime of involuntary
servitude for rendering services under compulsion
and payment of debts. This is committed by any person
who, in order to require or enforce the payment of a
debt, shall compel the debtor to work for him,
against his will, as household servant or farm
laborer (Art. 274, Revised Penal Code)

LABOR LAW – Bar Q & A (as arranged by Topics) 1994-2006
ANSWERS TO BAR
IN
LABOR LAW
&
SOCIAL LEGISLATION
ARRANGED BY TOPIC
(1994 – 2006)

July 26, 2005
Updated by:
Romualdo L. Señeris II, LLB.
April 27, 2007
From the ANSWERS TO BAR EXAMINATION

QUESTIONS in POLITICAL LAW by the
UP LAW COMPLEX and
PHILIPPINE ASSOCIATION OF LAW SCHOOLS
Page 1 of 108
FORWARD
This work is not intended for sale or commerce. This work is freeware. It may be
freely copied and distributed. It is primarily intended for all those who desire
to have a deeper understanding of the issues touched by the Philippine
Bar Examinations and its trend. It is specially intended for law students from
the provinces who, very often, are recipients of deliberately distorted notes from other
unscrupulous law schools and students. Share to others this work and you will be
richly rewarded by God in heaven. It is also very good karma.
We would like to seek the indulgence of the reader for some Bar Questions which are
improperly classified under a topic and for some topics which are improperly or
ignorantly phrased, for the authors are just Bar Reviewees who have prepared this
work while reviewing for the Bar Exams under time constraints and within
their limited knowledge of the law. We would like to seek the reader’s indulgence for
a lot of typographical errors in this work.
The Authors
Page 2 of 108
Table of Contents
GENERAL PRINCIPLES ...................................................................................................10
Constitutional Provisions on Labor (1998) ............................................................................10
Interpretation of Labor Laws (1998) ......................................................................................10
Interpretation of Labor Laws; Liberal Approach (2006) ......................................................10
Labor Legislations; Purpose (2006) .......................................................................................11
Labor Standard vs. Labor Relation (1997) ...........................................................................11
Labor Standard vs. Labor Relation (2003) ...........................................................................11
Labor Statutes; Classification (1995 No. 1:) .........................................................................11
Labor Statutes; Principle of Solutio Indebiti; Not Applicable (1994) .................................12
Labor vs. Social Legislation ....................................................................................................12
Labor; as Property Right (2006) .............................................................................................12
Rights of Employer/Employee (1996) ....................................................................................12
Rights of the Employer; Management Prerogative (2000) .................................................12
Rights of the Employer; Management Prerogative; Benefits; Unilaterally Given (2005).13
Rights of the Employer; Management Prerogative; Contracting Out Services (1994) 13
Rights of the Employer; Management prerogatives (1994) 14
Rule; Injunction in Labor Cases (2000) 15
Social Justice as Guiding Principles in Labor (2003) 15
JURISDICTION 15
CBA; Implementation & Interpretation (1995) 15
Damages; Absence of E-E Relationship (1995) 15
Damages; Not arising from the E-E Relations (1999) 16
Dismissal; Int’l Agency (1994) 16
Intra-corporate Matters/Officers (1996) 17
Intra-corporate Matters/Officers (1997) 17
Labor Arbiter (1995) 17
Labor Arbiter; Appeals (2001) 17
Labor Dispute ( 2001) 17
Med-arbiter (1996) 18
Money Claims; Reinstatement (1996) 18
Nat’l Labor Relations Commission (1995) 18
Nat’l Labor Relations Commissions (2001) 19
Overseas Employment; Claim; Torts (2004) 19
Overseas Employment; Mandatory Remittance; Foreign Exchange (2006) 20
Recovery of Wages (1994) 20
Remedies; illegal dismissal (1999) 20
Secretary of Labor; Authority (1998) 21
Secretary of Labor; Dismissal of Employees (1998) 21
Voluntary Arbitrator (1997) 21
Voluntary Arbitrator (2003) 21
LABOR RELATIONS 22
CBA; Appropriate Bargaining Unit (1998) 22
CBA; Arbitral Award; Retroactive Effect (2001) 22
CBA; Arbitral Awards; Effectivity (1994) 22
Page 3 of 108
CBA; Automatic Renewal Clause (1999) ................................................................................23
CBA; Automatic Renewal Clause (2001) ................................................................................23
CBA; Bargaining Representative (2000) ....................................................................................23
CBA; Certification Election (2005) ............................................................................................23
CBA; Certification Election; “No-Union" Win (2006) ..............................................................24
CBA; Certification Election; Consent Election; Run-Off Election (2000) .................................24
CBA; Certification Election; Freedom Period (1999) .............................................................24
CBA; Certification Election; Probationary Employees (1999) ..................................................24
CBA; Closed Shop Provision; When not applicable (1999) .....................................................25
CBA; Closed Shop vs. Agency Shop (1997) ..........................................................................25
CBA; Contract Bar Rule vs. Deadlock Bar Rule (1999)............................................................25
CBA; Coverage; Non-Union Members; Religious Sect (2005) ................................................25
CBA; interpretation (2004) .........................................................................................................26
CBA; Jurisdictional Pre-Conditions (1996) .............................................................................26
CBA; Lock-out vs. Closed Shop (2004) .....................................................................................26
CBA; Mandatory Subjects of Bargaining (1996) ....................................................................26
CBA; Registration Requirement; Contract Bar-Rule (2000) .....................................................27
CBA; Run-Off Election (2006) ...................................................................................................27
CBA; Sale of Establishment; Effect (1994) ................................................................................27
CBA; Social Security vs. Union Security (2004) ........................................................................27
CBA; Substitutionary Doctrine (2000) ........................................................................................27
CBA; Union Security Clause (2004) ...........................................................................................28
CBA; Union Security Clause; Closed Shop Provision (1995) ..................................................28
CBA; Union; Representation Issue (1999) .................................................................................28
CBA; Wage Increase Coverage; Non-Union Employees (2005) .............................................29
CBU; Company Union vs. Union Shop (2004) ..........................................................................29
CBU; Confidential Employees (1994).........................................................................................29
CBU; Consent Election vs. Certification Election (2004) ..........................................................30
CBU; Managerial Employees; Supervisory Employees (1995) ...............................................30
CBU; Managerial Employees; Supervisory Employees (1999) ...............................................30
CBU; Modes; Determination of Exclusive Bargaining Agreement (2006) .........................31
Due Process; Disciplinary Cases (1995) ...................................................................................31
Employees; groups of employees (1996) ...............................................................................32
Employees; Managerial Employee vs. Managerial Staff (1994) .............................................32
Employees; managerial employees vs. supervisory employees (2002) ............................32
Employees; Managerial vs. Supervisory vs. Rank-and-File Employees (2003) .....................32
Right to Strike: Sympathy vs. General Strike (2004) ................................................................33
Right to Strike; Assumption Power .............................................................................................33
Right to Strike; Compulsory Arbitration; Certification to NLRC (1995) ...............................34
Right to Strike; Effects; Hired Replacements (2006) ................................................................34
Right to Strike; Effects; illegal strike (1995) ...............................................................................34
Right to Strike; Effects; Strikers’ illegal Acts (2006) ..............................................................34
Right to Strike; illegal dismissal (2003) ...................................................................................34
Right to Strike; illegal lockout (1995) ......................................................................................35
Right to Strike; illegal strike; Loss of Employment (1994) ........................................................35
Right to Strike; Industries Vital to National Interest (2004) ......................................................36
Right to Strike; Industries Vital to National Interest; Return to Work Order (1996) ................36
Right to Strike; Lawful Strike; Effect on Participants (1997).....................................................37
Page 4 of 108
Right to Strike; Lawful; Right to Reinstatement (2006) 37
Right to Strike; Limitations (2000) 37
Right to Strike; National Interest; DOLE Sec. intervention (2004) 38
Right to Strike; Picketing Activity (2000) 38
Right to Strike; Picketing Activity; illegal dismissal (2004) 38
Right to Strike; Return to Work Order (1994) 39
Right to Strike; Return to Work Order; Assumption Order (2003) 40
Right to Strike; Statutory Requisites; Procedural Requirements (2004) 40
Right to Strike; Temporary Stoppage (2002) 41
Right to Strike; Wildcat Strike (1997) 41
Right to Strike; Work Slowdown (1998) 41
Self Organization; Acquisition of Legal Personality (2003) 42
Self Organization; Appropriate Bargaining Unit; Confidential Employees (2002) 42
Self Organization; BLR Certification; Certification Election (1998) 42
Self Organization; Certification Election (2001) 43
Self Organization; Certification Election; Bystander Rule (1996) 43
Self Organization; Certification Election; Unorganized Establishment (2003) 44
Self Organization; E-E Relationship; Certification Election (1998) 44
Self Organization; Gov’t Employees (2004) 44
Self Organization; Importance (1996) 45
Self Organization; Membership Policy (1998) 45
Self Organization; Right to Disaffiliate from the Local Union; illegal dismissal (1994) 45
Self Organization; Right to Self-Organization of Coop Employees (2002) 46
Self Organization; Union Dues; Assessment (2002) 46
Self Organization; Union Dues; Assessments (1997) 46
Self Organization; Unions; Assessments (2001) 47
Self Organization; Unions; Financial Records (1999) 47
Self Organization; Unions; Financial Records (2001) 48
Self Organization; Unions; Membership; Dismissal in Bad Faith (2002) 48
Self-Organization (2002) 48
Self-Organization; Dismissal due to Union Activities (2004) 48
Self-Organization; Gov’t vs. Private Employees (1996) 49
Self-Organization; Right to Join (2000) 49
ULP; Awards of Damages (2001) 49
ULP; Contracting Out Labor (2001) 50
ULP; Definition & Examples of ULP (1996) 50
ULP; Jurisdiction; Labor Arbiter (1997) 50
ULP; Refusal to Negotiate (1997) 51
ULP; Rights & Obligations; Workers’ Association (2004) 51
ULP; Subject to Criminal Prosecution (2005) 52
LABOR STANDARDS 52
E-E Relationship; Corporation (1999) 52
E-E Relationship; Determined by Facts & Laws (2000) 53
E-E Relationship; Elements (1996) 53
E-E Relationship; GRO’s & Night Clubs (1999) 53
E-E Relationship; Security Guards; Floating Status (1999) 53
E-E Relationship; Self-Employed (2003) 54
Page 5 of 108
E-E Relationship; Workers paid by Results (2004) 54
E-E Relationship; Working Student & School (1997) 55
Employment; Aliens; Requisites (1995) 55
Employment; Children; Below 15 yrs old (2004) 56
Employment; Driver as Househelper & in a Commercial Establishment (1998) 56
Employment; Handicapped Employee (1998) 56
Employment; Handicapped Employee (2000) 56
Employment; Handicapped Workers; Contractual Employees (2006) 57
Employment; Homeworkers (2000) 57
Employment; Househelpers (2000) 57
Employment; Minors (2006) 57
Employment; Minors; Hazardous Work (2002) 58
Employment; Radio-TV Show Host; Expiration of Term (2005) 58
Employment; Women; Anti-Sexual Harassment Act (2000) 59
Employment; Women; Anti-Sexual Harassment vs. Discrimination against Women (2003)
60
Employment; Women; Discrimination by reason of Age (1998) 60
Employment; Women; Discrimination by reason of Marriage (1995) 60
Employment; Women; discrimination; illegal dismissal (1997) 60
Employment; Women; Sexual Harassment Act (2005) 61
Employment; Women; Sexual Harassment Act (2006) 61
Independent Contractor (2001) 62
Independent Contractor (2002) 62
Independent Contractor vs. Labor-Only Contracting; Four-Fold Test (2000) 63
Independent Contractor; Liabilities (2004) 63
Labor-Only Contract vs. Job Contracting (1997) 63
Labor-Only Contractor (2002) 64
Labor-Only Contractor vs. Independent Contractor (1994) 64
Recruitment & Placement; Cancellation; Certificate of Registration; Travel Ban (2004) 65
Recruitment & Placement; illegal recruitment to economic sabotage (2005) 65
Recruitment & Placement; illegal recruitment; Economic Sabotage (2002) 65
Recruitment & Placement; Large Scale Illegal Recruitment (2005) 66
Recruitment & Placement; Non-Transferability of License (1998) 66
Recruitment & Placement; Recruitment Agencies (2002) 66
Recruitment & Placement; Travel Agency; Prohibition (2006) 66
Wage Distortion (2002) 67
Wage; Reduction of Minimum Pay & Wages (2006) 67
Wage; Wage Distortion; Definition & Elements (2006) 67
Wage; Wage Distortion; Means of Solving (2006) 67
Wage; Wage Distortion; Not a ground for Strike/Lockout (2006) 67
Wages; 13th month pay (1994) 68
Wages; 13th month pay (1998) 68
Wages; Bonus (2002) 68
Wages; Bonus (2003) 69
Wages; Bonus; Nature (1995) 69
Wages; Computation of Basic Salary (1997) 69
Wages; Computation; Holiday Pay (2002) 69
Wages; Computation; Holiday Pay; Overtime Pay (2002) 70
Page 6 of 108
Wages; Holiday Pay (2005).........................................................................................................70
Wages; Money Claims (1998) .....................................................................................................70
Wages; Money Claims; Attorney’s Fees; Damages (2001) .....................................................71
Wages; Paid by Results; Holiday Pay (2002) ............................................................................71
Wages; Teachers; ECOLA (1997) ...........................................................................................71
Wages; Unpaid Wages; Preference of Credit in favor of Employees (1995) ....................72
Wages; Wage Distortion (1997) ...............................................................................................73
Wages; Wages vs. Salary; Subject to Attachment (1994) ...................................................73
Wages; Waiver of Compensation (1996) ................................................................................74
Working Hours; Charitable Institution; Overtime Pay (2002) ...................................................74
Working Hours; Charitable Institution; Weekly Rest Period; (1998) ........................................74
Working Hours; Compressed Work Week (2005) .................................................................74
Working Hours; Night Shift Differential (2002)...........................................................................74
Working Hours; Saturday Work (2003) ...................................................................................75
Working Hours; Sick Leave; Overtime Pay (1997) ...................................................................75
Working Hours; When Compensable; “While on Call” (2004)..................................................75
Working Hours; When Compensable; “While on Call”; Waiting Time (1997) .........................76
TERMINATION OF EMPLOYMENT ................................................................................76
Backwages (2002) ......................................................................................................................76
Backwages vs. Unpaid Wages (1994) .......................................................................................76
Backwages; Basis (2001) ..........................................................................................................77
Backwages; Basis (2001) ..........................................................................................................77
Backwages; Basis (2001) ..........................................................................................................77
Dismissal; Authorized Causes (2002) .....................................................................................78
Dismissal; Authorized Causes vs. Just Cause (2004) ..........................................................78
Dismissal; Authorized Causes; Closure & Cessation (2001) ...............................................78
Dismissal; Authorized Causes; Closure & Cessation of Business; Old Age (2006) ..............78
Dismissal; Authorized Causes; Closure & Cessation of Business; Separation Pay (2006)
79
Dismissal; Authorized Causes; Downsizing Employees (2001) 79
Dismissal; Authorized Causes; Redundancy (1999) 79
Dismissal; Authorized Causes; Redundancy (2000) 79
Dismissal; Authorized Causes; Retrenchment & Redundancy (2001) 80
Dismissal; Authorized Causes; Retrenchment (1998) 80
Dismissal; Authorized Causes; Retrenchment (2003) 81
Dismissal; Authorized Causes; Seniority Rule (2001) 81
Dismissal; Authorized Causes; Sickness (2004) 81
Dismissal; Constructive Dismissal; Floating Status (2004) 82
Dismissal; Constructive Dismissal; Transfer (1996) 82
Dismissal; Damages Recoverable (2001) 83
Dismissal; Due Process; Requirements (1994) 83
Dismissal; Due Process; Requirements (2006) 83
Dismissal; Just Cause; Immoral Conduct (1996) 84
Dismissal; Just Cause; Independent Contractor (2005) 84
Dismissal; Just Cause; Misconduct (1996) 85
Dismissal; Just Cause; Probationary Employees; Rights (2006) 85
Page 7 of 108
Dismissal; Just Cause; Requirements (1999) 85
Dismissal; Just Cause; Separation Pay (1996) 86
Dismissal; Just Causes (2001) 86
Dismissal; Just Causes vs. Authorized Causes (2000) 87
Dismissal; Just Causes; Disobedience (1995) 87
Dismissal; Just Causes; Disobedience (2003) 88
Dismissal; Just Causes; Insubordination (1999) 88
Dismissal; Just Causes; Misconduct (1995) 88
Dismissal; Just Causes; Quitclaims (1999) 89
Dismissal; Liability; Corporate Officers (1997) 89
Dismissal; Payroll Reinstatement (2005) 89
Dismissal; Payroll Reinstatement; Reinstatement Order (1999) 90
Dismissal; Reinstatement (1994) 90
Dismissal; Reinstatement (1995) 90
Dismissal; Requirements (1998) 91
Dismissal; Requirements (1999) 91
Dismissal; Requirements; Suspension of Termination (1994) 92
Dismissal; Requisites; Reinstatement 93
Dismissal; Separation Pay; Backwages (2002) 93
Employee; Contractual Employees; Seafarers (2002) 94
Employee; Contractual Worker vs. Casual Worker (2005) 94
Employee; Probationary Employees (1998) 95
Employee; Probationary Employees (2001) 95
Employee; Project Employee vs. Regular Employee (1996) 95
Employee; Project Employees vs. Casual Employees (2005) 95
Employee; Regular Employee; Constructive Dismissal (2005) 96
Employee; Regular Employees (1994) 96
Employee; Regular Employees (1995) 97
Employee; Regular Employees vs. Project Employee (1998) 97
Employee; Regular vs. Project Employees (2002) 98
Prescriptive period; illegal dismissal (1994) 98
Resignation; Voluntary; Quitclaim (1994) 100
Resignation; Voluntary; Quitclaims (1999) 100
Retirement; Optional Retirement (2005) 101
Retirement; Retirement Benefits (1994) 101
Retirement; Retirement Pay (2001) 101
SOCIAL LEGISLATIONS 102
Employees Compensation Act; Work-Connected Disability (1996) 102
GSIS; Benefits (2004) 103
GSIS; Death Benefit (1999) 103
GSIS; Death Benefits; Dependent; 24-hour Duty Rule (2005) 103
Maternity Benefits (2000) 104
Paternity Leave (2002) 104
Paternity Leave; Maternity Leave (2005) 104
SSS; Compulsory Coverage (1995) 105
Page 8 of 108
SSS; Compulsory Coverage (2002) .........................................................................................105
SSS; GSIS; Beneficiality; Portability Provisions of RA 7699 (2005) .................................106
SSS; GSIS; Jurisdiction; Benefit Claims (1995) .................................................................106
SSS; Prescriptive Period; Benefit Claims (2001) .................................................................106
SSS;GSIS; Employees Compensation Act (1997) ..............................................................107
State Insurance Fund (1994) ....................................................................................................107
State Insurance Fund (1995) ....................................................................................................107
Stray Questions ....................................................................................................................108
Stray Problem; Political Law; Power of the President; FTAA (2006) ....................................108
Page 9 of 108
GENERAL PRINCIPLES of labor to its just share in the fruits

of production and the right of
Constitutional Provisions on Labor (1998)
What are the salient features of the protection enterprises to reasonable returns on
to labor provision of the Constitution? [5%] investments, and to expansion and growth.
SUGGESTED ANSWER:
Interpretation of Labor Laws (1998)
The salient features of the Protection to Labor
provision of the Constitution (Article XIII. Section 3) 3. Article 4 of the Labor Code provides that in case
are as follows: of doubt in the implementation and interpretation of
1. Extent of Protection - Full protection to labor; the provisions of the Code and its Implementing
2. Coverage of Protection - Local and Rules and Regulations, the doubt shall be resolved
overseas, organized and unorganized; in favor of labor. Article 1702 of the Civil Code also
3. Employment Policy - Full employment and provides that in case of doubt, all labor legislation
equality of employment opportunities for all; and all labor contracts shall be construed in favor
4. Guarantees of the safety and decent living for the laborer.
4.1. Unionism and Method of Determination
Mica-Mara company assails the validity of
Conditions of Employment - Right of all
these statutes on the ground that they
workers to self-organization,
violate its constitutional right to equal protection
collective bargaining and negotiations.
4.2. Concerted Activities - Right to engage of the laws. Is the contention of Mica Mara
in peaceful concerted activities, including Company tenable? Discuss fully
the right to strike in accordance with law. SUGGESTED ANSWER:
4.3. Working Conditions - Right to security No, the Constitution provides that the state
of tenure, humane conditions of work and a shall afford full protection to labor.
living wage. Furthermore, the State affirms labor as a primary
4.4. Decision Making Processes - Right economic force. It shall protect the rights of
workers and promote their welfare.
to participate hi policy and decision
ALTERNATIVE ANSWER:
making processes affecting their rights and
a) No, because a law which promotes a
benefits as way to provided by law.
constitutional mandate does not violate the equal
5. Share in Fruits of production - Recognition protection clause. The constitutional mandate is
of right of labor to its just share in for the State to afford full protection to labor such
fruits of production. that, when conflicting interests of labor and capital
ANOTHER SUGGESTED ANSWER: are to be weighed on the scales of justice, the
o The Constitution (In Article XIII, Section heavier influence of the latter should be counter-
3) provides that the State shall afford balanced by the sympathy the law should accord
protection to labor, local and overseas, the underprivileged.
organized and unorganized.
b) The contention of Mica-Mara Company is not
o The State shall afford protection to labor
tenable. The constitutional right to equal protection
by promoting full employment and
equality of employment opportunities for all. of the laws is not violated by reasonable
o Workers are entitled to security of tenure, classification. Thus, it is constitutionally possible to
humane conditions of work and a living wage. treat workers differently from employers.
o The State shall guarantee the right of all
workers to self organization, collective
The social justice principle embodied in the
Constitution could be the basis for treating workers
bargaining and negotiations, and peaceful
concerted activities, including the right to more favorably than employers, in
strike, in accordance with law. the implementation and interpretation of the
o Workers shall also participate in policy and provisions of the Labor Code and of its
decision making processes affecting their implementing rules and regulations.
rights and benefits as may be provided by law.
o The State shall promote the principle of shared Interpretation of Labor Laws; Liberal
responsibility between workers and employers Approach (2006)
and the preferential use of voluntary modes in What is the concept of liberal approach in
settling labor disputes, including conciliation, interpreting the Labor Code and its Implementing
and shall enforce mutual compliance therewith Rules and Regulations in favor of labor? (2.5%)
to foster industrial peace. SUGGESTED ANSWER:
o The State shall regulate the relations between The workers' welfare should be the paramount
workers and employers, recognizing the right consideration in interpreting the Labor Code and
its Implementing Rules and Regulations. This is
Page 10 of 108
LABOR LAW – Bar Q & A (as arranged by Topics) 1994-
2006
rooted in the Constitutional mandate to afford full SUGGESTED ANSWER:
protection to labor. Article 4 of the Labor Code LABOR RELATIONS law focuses its provisions on
provides that "all doubts in the implementation and the collective aspects of employer-employee
interpretation of the provisions of the Labor Code relationship. Its legal provisions deal with
including its implementing rules and regulations employees organizing unions and how through
shall be resolved in favor of labor" (PLOT v. NLRC, these unions, employees are able to have
G.R No. 111933, July 23,1997). It underscores the collective bargaining with their employer.
policy of social justice to accommodate the
interests of the working class on the humane On the other hand, LABOR STANDARDS law
justification that those who have less in life shall focuses on the terms and conditions of
have more in law (PAL v. Santos, G.R. No. 77875, employment of employees as individual employees
February 4, 1993). or those legal provisions dealing with wages, hours
of work and other terms and conditions of
Labor Legislations; Purpose (2006) employment.
What is the purpose of labor legislation? (2.5%)
SUGGESTED ANSWER: There may be instances when the provisions of
Labor legislation is an exercise of police power. labor relations law may interrelate with provisions
The purpose of labor legislation is to regulate the of labor standards law. Thus, a CBA which is dealt
relations between employers and employees with in labor relations law may have provisions that
respecting the terms and conditions of improves upon the minimum terms and conditions
employment, either by providing for certain of employment prescribed in labor standards law,
standards or for a legal framework within which like a CBA providing for a higher minimum wage,
better terms and conditions of work could be or for the computation of a higher overtime pay or
negotiated through collective bargaining. It is the payment of holiday pay not only for regular
intended to correct the injustices inherent in holidays but also for certain special holidays.
employer-employee relationship.
Labor Statutes; Classification (1995 No. 1:)
Labor Standard vs. Labor Relation (1997) 1. What are the three (3) general classifications of
Differentiate labor standards law from labor labor statutes? Describe and give an example of
relations law. Are the two mutually exclusive? each classification.
LABOR STANDARDS law is that labor law which The three (3) general classifications of labor
prescribes terms and conditions of employment statutes are:
like Book in Book IV, Title I and Book VI of the a) Labor Relations Laws;
Labor Code. These Books of the Labor Code deal b) Labor Standards Laws; and
with working conditions, wages, working conditions c) Social Security Laws.
for women, minors, househelpers and home-
workers, medical and dental services, occupational LABOR RELATIONS Laws are those labor statutes
health and safety, termination and retirement. that deal with the relations of labor and
management, like the laws on unions, collective
On the other hand, LABOR RELATIONS law is that bargaining, unfair labor practices, strikes, lockouts
labor law which regulates the relations between and picketing.
employers and workers like Book V of the Labor
Code which deals with labor organizations, LABOR STANDARDS are those labor statutes that
collective bargaining, unfair labor practices and prescribe standards relating to terms and
strikes and lockouts. conditions of employment for compliance by
employers, like the laws on hours of work, weekly
Labor standards laws and labor relations laws are rest periods, holiday pay, wages, and laws dealing
not mutually exclusive; they are complement to with women, minors, house-helpers, and industrial
each other. Thus, the law on strikes and lockouts home-workers.
which is an example of labor relations law includes
some provisions on the security of tenure of SOCIAL SECURITY Laws are those labor statutes
workers who go on strike or who are locked out. that provide protection not only to a worker but also
These provisions are examples of labor standards to members of his family in case of loss of income
law. or when there is need for medical care brought
about by contingencies like sickness, disability,
Labor Standard vs. Labor Relation (2003) death, and old age. Examples of social security
How do the provisions of the law on labor relations laws are the Social Security Law, Revised
interrelate, if at all, with the provisions pertaining to Government Service Insurance Act, the Articles of
the Labor Code on Employees Compensation, the
labor standards? 5%
Page 11 of 108
2006
State Insurance Fund, and the National Health laws are social legislation, but not all social
Insurance Act. legislation is labor law.
Labor Statutes; Principle of Solutio Indebiti; Labor; as Property Right (2006)

Not Applicable (1994) What property right is conferred upon an employee
Concepcion Textile Co. included the overtime pay, once there is an employer-employee relationship?
night-shift differential pay, and the like in the Discuss briefly. (5%)
computation of its employees' 13th-month pay. SUGGESTED ANSWER:
Subsequently, with the promulgation of the His employment is not merely a contractual
decision of the Supreme Court in the case of San relationship. One's employment is a property right
Miguel Corporation vs. Inciong (103 SCRA 139) within the mantle of constitutional protection
holding that these other monetary claims should (Callanta v. Carnation Phil., No. L-70615, October
not be included in the computation of the 13th- 28, 1986). Hence, the employee enjoys security of
month pay, Concepcion Textile Co. sought to tenure and he cannot be dismissed except for
recover under the principle of solutio indebiti its cause and only after due process. The worker is
overpayment of its employees' 13th-month pay, by thus protected and insulated against any arbitrary
debiting against future 13th-month payments deprivation of his job (Philips Semi Conductors
whatever excess amounts it had previously made. [Phils.] v. Fadriquela, G.R. No. 141717, April 14,
1) Is the Company's action tenable? 2004).
SUGGESTED ANSWER:
1) The Company's action is not tenable. The Rights of Employer/Employee (1996)
principle of salutio indebiti which is a civil law 2) What are the rights of an employer and an
concept is not applicable in labor law. Thus, solutio employee?
indebiti is not applicable to the instant case, SUGGESTED ANSWER:
(Davao Fruits Corporations vs. National Labor The Constitution in Art. XIII, Section 3 provides for
Relations Commission, et at. 225 SCRA 562) the following rights of employers and employees:
ALTERNATIVE ANSWERS: A. Employers Right to a reasonable return on
a) The Company's action would be tenable if investments, and to expansion and growth.
payment was done by mistake, In which case 1. To a just share in the fruits of production;
recovery can be done under the principle of solutio 2. Right to self organization, collective bargaining
indebiti. But if there was no mistake, the and negotiations and peaceful concerted
Company's action would be untenable because it activities, including the right to strike in
would violate Article 100 of the Labor Code which accordance with law;
prohibits elimination or diminution of benefits. 3. To security of tenure, humane conditions of
work, and a living wage; and
Labor vs. Social Legislation 4. To participate in policy and decision-making
2. Is there any distinction between labor legislation processes affecting their rights and benefits as
and social legislation? Explain. may be provided by law,
LABOR LEGISLATION is sometimes distinguished In an employer-employee relationship, it is the right
from social legislation by the former referring to of the employer to use the services of an employee
labor statutes, like Labor Relations Law and Labor who is under his (employer's) orders as regards
Standards, and the latter to Social Security Laws. the employment. On the other hand, it is the right
Labor legislation focuses on the rights of the of the employee to receive compensation for the
worker in the workplace. services he renders for the employer.
SOCIAL LEGISLATION is a broad term and may Rights of the Employer; Management
include not only laws that give social security Prerogative (2000)
protection, but also those that help the worker a) An exclusive school for girls, run by a religious
secure housing and basic necessities. The order, has a policy of not employing unwed
Comprehensive Agrarian Reform law could also be mothers, women with live-in partners, and
considered a social legislation. lesbians. Is the policy violative of any provision of
the Labor Code on employment of women? (3%)
ALTERNATIVE ANSWER:
Yes. Labor Legislation is limited in scope, and b) The same school dismissed two female faculty
deals basically with the rights and duties of members on account of pregnancy out of wedlock.
employees and employers. Social Legislation is Did the school violate any provision of the Labor
more encompassing and includes such subjects as Code on employment of women? (3%)
agrarian relations, housing and human settlement, SUGGESTED ANSWER:
protection of women and children, etc. All labor
Page 12 of 108
2006
a) No, the policy does not violate the Labor (d) No, because this amounts to a diminution of
Code. The practice is a valid exercise of benefits which is prohibited by the Labor
management function. Considering the nature and Code;
reason for existence of the school, it may adopt (e) No, because it is a fringe benefit that has
such policy as will advance its laudable objectives. already ripened into a demandable right or
In fact, the policy accords with the constitutional entitlement. (10%)
precept of inculcating ethical and moral values in ALTERNATIVE ANSWER:
schools. The school policy does not discriminate (b) Yes, because it is suffering losses for the first
against women solely on account of sex (Art. 135, time;
Labor Code) nor are the acts prohibited under Art. (c) Yes, because this is a management
137 of the Labor Code. prerogative which is not due any legal or
ALTERNATIVE ANSWER: contractual obligation;
The school violated Art. 137 (2) of the Labor Code
which states that: "It shall be unlawful for any An employer cannot be forced to continue giving a
employer to discharge such woman on account of benefit, being given as a management prerogative,
pregnancy". The pregnancy here could obviously when it can no longer afford to pay for it. To hold
have resulted from love and such only lends otherwise, would be to penalize the employer for
substance to the saying that "the heart has his past generosity. (Producer's Bank of the
reasons of its own which reason does not know", a Philippines v. NLRC, G.R. No. 100701, March 28,
matter that cannot "be so casually equated with 2001)
immorality". [Chua-Qua v. Clave, 189 SCRA 117 ALTERNATIVE ANSWER:
(1990)]. (d) No, because this amounts to a diminution of
SUGGESTED ANSWER: benefits which is prohibited by the Labor Code;
b) No, because to tolerate pregnancy out of (e) No, because it is a fringe benefit that has
wedlock will be a blatant contradiction of the already ripened into a demandable right or
school's laudable mission which, as already stated, entitlement.
accords with high constitutional precepts.
A company practice favorable to employees had
This answer does not contradict the ruling in Chua- indeed been established and the payments made
Qua where the teacher merely fell in love with a pursuant thereto, ripened into benefits enjoyed by
bachelor student and the teacher, also single, did them. And any benefit and supplement being
not get pregnant out of wedlock. enjoyed by the employees cannot be reduced,
diminished, discontinued or eliminated by the
Rights of the Employer; Management employer by virtue of Article 100 of the Labor Code
Prerogative; Benefits; Unilaterally Given of the Philippines which prohibits the diminution or
(2005) elimination of the employer of the employees'
Little Hands Garment Company, an unorganized existing benefits. (Sevilla Trading Co. v. Semana,
manufacturer of children's apparel with around G.R. No. 152456, April 28, 2004)
1,000 workers, suffered losses for the first time in ALTERNATIVE ANSWER:
history when its US and European customers (b) Yes, because it is suffering losses for the first
shifted their huge orders to China and Bangladesh. time;
The management informed its employees that it (d) No, because this amounts to a diminution of
could no longer afford to provide transportation benefits which is prohibited by the Labor Code.
shuttle services. Consequently, it announced that a You cannot compel an employer to continue
normal fare would be charged depending on the paying the benefits if it is suffering from serious
distance traveled by the workers availing of the business losses. However, the benefit has already
service. ripened into an employer practice or policy, and
therefore it cannot be withdrawn without violating
Was the Little Hands Garments Company within its Article 100 of the Labor Code on non-diminution of
rights to withdraw this benefit which it had benefits.
unilaterally been providing to its employees?
Select the best answer(s) and briefly explain your Rights of the Employer; Management
reason(s) therefor. Prerogative; Contracting Out Services (1994)
(a) Yes, because it can withdraw a benefit that Harbor View Hotel has an existing Collective
is unilaterally given; Bargaining Agreement (CBA) with the union of
(b) Yes, because it is suffering losses for the rank-and-file employees consisting, among others,
first time; of bartenders, waiters, roomboys, housemen and
(c) Yes, because this is a management stewards. During the lifetime of the CBA, Harbor
prerogative which is not due any legal or View Hotel, for reasons of economy and efficiency,
contractual obligation; decided to abolish the position of housemen and
Page 13 of 108
stewards who do the cleaning of the hotel's public Rights of the Employer;
areas. Over the protest of the Union, the Hotel Management prerogatives (1994)
contracted out the aforementioned job to the City Bulacan Medical Hospital (BMH) entered into a
Service Janitorial Company, a bonafide Collective Bargaining Agreement (CBA) with its
independent contractor which has a substantial Union, wherein it is expressly stipulated in the
capital in the form of Janitorial tools, equipment, Management Prerogative Clause that BMH shall,
machineries and competent manpower. in the exercise of its management prerogatives,
Is the action of the Harbor View Hotel legal have the sole and exclusive right to promulgate,
and valid? amend and modify rules and regulations for the
SUGGESTED ANSWER: employees within the bargaining unit. A year after
The action of Harbor View Hotel is legal and valid. the contract was signed, BMH issued its Revised
The valid exercise of management prerogative, Rules and Regulations and furnished a copy
discretion and judgment encompasses all aspects thereof to the Union for dissemination to all
of employment, including the hiring, work employees covered by the CBA. The Union wrote
assignments, working methods, time, place and BMH demanding that the Revised Rules and
manner of work, tools to be used, processes to be Regulations be first discussed with them before its
followed, supervision of workers, working implementation. BMH refused. So, the Union filed
regulations, transfer of employees, work an action for unfair labor practice (ULP) against
supervision, lay-off of workers, and the discipline, BMH.
dismissal and recall of workers, except as provided 1. Is the Union correct?
for, or limited by special laws. 2. Assuming that the CBA was signed "or
executed before the 1987 Constitution was
Company policies and regulations are, unless ratified, would your answer to the
shown to be gross oppressive or contrary to law, preceding question be different?
generally binding and valid on the parties and must SUGGESTED ANSWER:
be complied with until finally revised or amended 1) The Union is correct. A provision in the
unilaterally or preferably through negotiation or by collective bargaining agreement concerning
competent authority. (San Miguel Corporation vs. management prerogatives, may not be interpreted
Reynaldo R. Ubaldo and Emmanuel Noel A. Cruz, as cession of the employees right to participate in
Chairman and Member respectively of the the deliberation of matters which may affect their
Voluntary Arbitration Panel, et al G.R No. 92859, 1 right and the formulation of policies relative thereto,
February 1993. J. Campos, Jr., 218 SCRA 293) such as the formulation of a code of discipline.
ALTERNATIVE ANSWER:
a) The action of the Harbor View Hotel is legal and A line must be drawn between management
valid. CONTRACTING OUT SERVICES or prerogatives regarding business operations per se
functions being performed by union members is and those which affect the rights of the employees,
not illegal per se. In fact, it is the prerogative of and in treating the latter, management should see to
management to adopt cost-saving measures to it that its employees are at least properly
ensure economy and efficiency. Contracting out informed of its decisions or modes of action.
services or functions being performed by Union
members becomes illegal only when it interferes The attainment of a harmonious labor-
with, restrains or coerces employees in the management relationship and the existing state
exercise of their right to self-organization. policy of enlightening workers concerning
their rights as employees demand no less
b) The action of Harbor View Hotel would, at than the observance of transparency in
first glance, appear to be an unfair labor practice managerial moves affecting employees' rights.
under Article 248(c), e.g.. "to contract out [Philippine Airlines, Inc. vs. National Labor
services or functions being performed by union Relations Commission, et al, G.R No. 85985,
members if such will interfere with, 13 August 1993. J. Melo. 225 SCRA 258, 301.)
restrain or coerce employees in the exercise ALTERNATIVE ANSWER:
of their right to self- organization." a) The Union is correct. Workers have the right
to participate in policy and decision-
Considering, however, that in the case at bar, there making processes affecting their rights,
is no showing that the contracting out of services benefits and welfare. (Art. 255J.
would violate the employees right to self-
organization, it is submitted that the hotel's action b) Yes. The Union is correct in asking for
is a valid exercise of its management prerogatives discussion of the revised rules prior to their
and the right to make business judgments in effectivity. The reason is Art. XIII, Sec. 3 of the
accordance with law. 1987 Constitution, allowing workers the right to
Page 14 of 108
2006
participate in policy and decision-making on circumstances. Not all labor cases will be
matters related to their welfare and benefits. automatically decided in favor of the worker.
Management has also rights which are entitled to
The Union's remedy however should not be to file recognition and protection; justice must be
a ULP case but to initiate a GRIEVANCE dispensed according to facts and law; and social
proceeding, and if unresolved, submit the matter to justice is not designed to destroy or oppress the
voluntary arbitration. employer.
SUGGESTED ANSWER: Social justice as a guiding principle in Labor Law
2) The answer would be the same even if the CBA can be implemented side by side with the equal
was signed or executed before the ratification of protection clause of the Constitution.
the 1987 Constitution because it has always been
the policy of the State to promote the In implementation of the principle of social justice,
enlightenment of workers concerning their rights the Constitution commands that the State shall
and obligations as employees. (Art. 211; PAL vs. afford protection to labor. Thus Labor Law may be
NLRC, GR 85985, August 13, 1993) pro-labor in the sense that labor is given certain
benefits not given to management. But this is not
Rule; Injunction in Labor Cases (2000) necessarily violative of the equal protection clause
Professor Juan dela Cruz, an author of the of the Constitution because said clause allows
textbook Commentaries on the Labor Code of the reasonable classification.
Philippines, citing an American case, wrote: It is
said that the prohibition against the issuance of a JURISDICTION
writ of Injunction in labor cases creates substantive CBA; Implementation & Interpretation (1995)
and not purely procedural law." Is there any How are cases arising from the Interpretation or
statutory basis for the statement/comment under implementation of collective bargaining
Philippine law? (5%) agreements handled and disposed?
Yes. The statutory basis is Article 254 of the Labor Through the grievance machinery and if not
Code. It prohibits issuance of injunction, as a resolved by the grievance machinery, through
matter of policy, to resolve disputes except as
voluntary arbitration.
otherwise provided in Articles 218 and 264 of the
Labor Code. [Caltex Filipino Managers and Damages; Absence of E-E Relationship
Supervisors Association v. CZR, 44 SCRA 350
(1995)
(1972)] Pablo Bagsakin. a law graduate who got tired of
taking the bar examinations after several
unsuccessful attempts, joined the Investigation
Social Justice as Guiding Principles in Labor
Division of Warak Transport Company. From the
(2003)
very beginning Pablo never liked his manager
May social justice as a guiding principle in labor because the latter always made fun of the former's
law be so used by the courts in sympathy with the accident reports. When Pablo's patience ran out he
working man if it collides with the equal protection walked up to his manager who was reviewing the
clause of the Constitution? Explain. 5% investigator's assignments and workload and
SUGGESTED ANSWER: boxed him until the latter collapsed. The incident
Yes. The State is bound under the Constitution to happened during office hours at the Investigation
afford full protection to Labor; and when conflicting Division in the presence of his co-employees.
interests collide and they are to be weighed on the Pablo was dismissed without any investigation and
scales of social justice, the law should accord more was no longer allowed to enter the company
sympathy and compassion to the less privileged
premises.
workingman. (Fuentes v. NLRC. 266 SCRA 24 f
19971) However, it should be borne in mind that The manager filed a complaint for damages
social justice ceases to be an effective instrument against Pablo before the Pasig Regional Trial
for the "equalization of the social and economic Court (RTC). In turn, Pablo filed a case for illegal
forces" by the State when it is used to shield dismissal with the Labor Arbiter against the
wrongdoing. (Corazon Jamer v. NLRC. 278 SCRA manager and the transport company. Pablo asked
632 F1 99711 for reinstatement without loss of seniority rights
ANOTHER SUGGESTED ANSWER: with full back wages. Pablo also filed before the
No, social justice as a guiding principle in law may Pasig RTC a motion to dismiss the damage suit
not be used by the courts if it collides with the
against him alleging that the Labor Arbiter before
equal protection clause of the Constitution. Social
justice is not a magic wand applicable in all
Page 15 of 108
whom the case for illegal dismissal was pending Labor Code. (Medina v. Castro-Bartolome,
had exclusive jurisdiction over both cases. Resolve 116 SCRA 597)
the motion to dismiss. Discuss fully. ALTERNATIVE ANSWER:
SUGGESTED ANSWER: The Motion to dismiss should be granted.
The motion to dismiss filed by Pablo before According to the Labor Code (in Article 217 (a) 4),
the Pasig RTC should be denied. the Labor Arbiter has original and exclusive
jurisdiction to hear and decide, among
The damage suit filed by the manager against others, claims for actual, moral, exemplary
Pablo does not arise from employer-employee and other forms of damages arising from
relationship. While the case involves an employer the employer- employee relations.
and his employee. It is not the employer- employee The claim for damages in the case in question
relationship between the two that gives rise to the arose from the fact that the President of the
damage suit. Instead, it is based solely on an Company shouted invectives at Marlet Demetrio in
alleged tort which could give rise to a damage suit the presence of employees and visitors for a minor
under the Civil Code. Thus, the Labor Arbiter has infraction she committed. If the infraction has
no jurisdiction over the damage suit. something to do with her work, then, the claim for
damages could be considered as arising from
Damages; Not arising from the E-E Relations employer-employee relations. Thus, the claim is
(1999) under the exclusive jurisdiction of the Labor
FACTS: Mariet Demetrio was a clerk-typist in the Arbiter.
Office of the President of a multi-national
corporation. One day she was berated by the Dismissal; Int’l Agency (1994)
President of the company, the latter shouting In 1990, Vic Garcia was hired by the International
invectives at her in the presence of employees and Labor Organization (ILO) Office in Manila as a
visitors for a minor infraction she committed. Mariet was bookkeeper for five years. On January 5. 1994, he
reduced to tears out of shame and felt so bitter was advised that his services were
about the incident that she filed a civil case for being terminated for loss of confidence.
damages against the company president before the Garcia questioned his dismissal by ILO-Manila as
regular courts. Soon thereafter, Mariet received a arbitrary and without benefit of due process.
memorandum transferring her to the Office of the 1) If you were counsel for ILO, what
General Manager without demotion in rank or defense/s should you put up?
diminution in pay. Mariet refused to transfer. 2) If you were the Labor Arbiter, how would you
decide the case?
With respect to the civil suit for damages, the SUGGESTED ANSWER:
company lawyer filed a Motion to Dismiss for lack 1) The defense that I will put up will be to claim
of jurisdiction considering the existence of that being an international agency, the ILO enjoys
an employer-employee relationship and therefore, immunity, namely functional independence
it is claimed that the case should have and freedom from control of the state in whose
been filed before the Labor Arbiter. territory its office is located and is thus
2. Rule on the Motion to Dismiss. Should it beyond the jurisdiction of the Labor Arbiter.
be granted or denied? Explain briefly (3%). (Southeast Asian Fisheries Development
SUGGESTED ANSWER: Center - Aqua Culture Department, et al vs.
The Motion to Dismiss should be denied. It is National Labor Relations Commission, et al
a regular court and not a Labor Arbiter that G.R No, 86773, 14 February 1992)
has jurisdiction on the suit for damages.
2) If I were the Labor Arbiter. I will grant the
The damages are not arising from the employer- motion to dismiss. The ILO being an International
employee relations which would have placed the agency, the same is beyond the jurisdiction of the
suit under the jurisdiction of a Labor Arbiter. The Labor Arbiter and immune from the legal writs and
suit arises from the fact that the President of the processes of the administrative agencies of the
company shouted invectives at Marlet Demetrio in country, where it is found, for the reason that
the presence of employees and visitors. Her the subjection of such an organization to the
complaint for damages is against an officer of the authority of the local agencies would afford a
Company based on slanderous language allegedly convenient medium through which the host
made by the latter. This falls under the Jurisdiction of government may interfere in its operations or
the ordinary courts. There is here a simple even influence or control its policies and
action for damages for tortious acts allegedly decisions, and besides, such subjection to local
committed by the defendant. Such being the case, jurisdiction would Impair the capacity of such
the governing statute is the Civil Code and not the body to impartially discharge its responsibilities.
Page 16 of 108
Intra-corporate Matters/Officers (1996) 3. cases accompanied with a claim
Diego, Executive Vice-President of Evergreen for reinstatement, and involving wages,
Development Corporation (EDC) was dismissed by rates of pay, hours of work, and other
the Board of Directors for his involvement in terms and conditions of employment;
irregularities prejudicial to EDC's interests. He filed a 4. claims for actual, moral, exemplary and
complaint for illegal dismissal with the Labor other forms of damages arising
Arbiter, praying for reinstatement with back-wages, from employer-employee relations:
P5 million pesos as moral damages, P1 million 5. cases arising from any violation of Article 264
pesos as exemplary damages and attorney's fees. of the Labor Code, including questions
EDC questioned the Jurisdiction of the Labor involving the legality of strikes and lockout; and
Arbiter. Diego, in turn contended that the Labor 6. except claims of Employees Compensation,
Arbiter has jurisdiction over the case as it involves Social Security. Medicare and maternity
the termination of an employee and claims for benefits, all other claims arising from
backwages, benefits and damages. Decide. employer-employee relations including those
SUGGESTED ANSWER: persons in domestic or household service,
The dismissal of an Executive Vice-president of a Involving an amount exceeding five thousand
Corporation, who is a corporate officer, by the pesos (P5,000 00) regardless of whether
Board of Directors of the corporation is not accompanied with a claim for reinstatement.
a termination dispute under the Jurisdiction of
a Labor Arbiter. It is an intra-corporate dispute that is Labor Arbiter; Appeals (2001)
under the jurisdiction of the Securities and The affected members of the rank and file elevated a
Exchange Commission. labor arbiter's decision to the NLRC via a petition for
review filed after the lapse of the ten-day
Intra-corporate Matters/Officers (1997) reglementary period for perfecting an appeal.
Mr. Jonathan Pe, a registered stockholder of New Should the NLRC dismiss the petition outright or
Wave Beauty Shop, Inc. was elected Vice- may the NLRC take cognizance thereof? (5%).
President of New Wage at a regular monthly SUGGESTED ANSWER:
meeting. At a subsequent meeting of the Board of The NLRC should dismiss the appeal
Directors, it was resolved to dismiss Jonathan as outright because the same was filed
Vice-president due to loss of trust and confidence. beyond the reglementary period of appeal.
Jonathan Pe filed with the National Labor Article 223 of the Labor Code reads:
Relations Commission a complaint for illegal "Decisions, awards, or orders of the Labor
dismissal with damages against New Wage Arbiter are final and executory
claiming that he was dismissed without due unless appealed to the Commission by
process. New Wage filed a Motion to Dismiss any or both parties within ten (10)
based on lack of jurisdiction. calendar days from, receipt of such
Resolve the motion. decisions, awards, or orders."
SUGGESTED ANSWER: ANOTHER SUGGESTED ANSWER:
The Motion to Dismiss should be granted. The The NLRC could dismiss outright the appeal
election of Jonathan Pe as Vice President of New for being filed out of time. But if there
Wave Beauty Shop, Inc, made him a are good reasons that may justifiably explain
corporate officer. why there was a delay in the filing of the
appeal, substantial justice may be the basis
His subsequent dismissal as such corporate officer is for the NLRC to take cognizance of the appeal.
considered an intra-corporate matter. Thus, the
dismissal of Pe is not a case of a termination Labor Dispute ( 2001)
dispute which is under the Jurisdiction of a "A" was able to obtain a Judgment against his
Regional Branch of the NLRC. Instead, it is under the former employer, Company "B", for P750,000.00.
Jurisdiction of the Securities and Exchange In executing the judgment in favor of A, the Labor
Commission, it having jurisdiction over intra- Arbiter sought to levy on B's office equipment. B
corporate matters. filed an action for damages and injunction against
the Labor Arbiter before the Regional Trial Court of
Labor Arbiter (1995) the province where B's offices are located. Is B's
1. Give the original and exclusive jurisdiction action tenable? Why? (5%).
of Labor Arbiters. SUGGESTED ANSWER:
SUGGESTED ANSWER: B's action is not tenable. In the case of Delta
Labor Arbiters have original and Ventures Resources vs. Hon. Fernando P. Labato,
exclusive jurisdiction over: G.R. No. 118216, March 9, 2000, the Supreme
1. unfair labor practices; Court ruled that the regular courts have no
2. termination disputes; jurisdiction to act on labor cases or various
Page 17 of 108
incidents arising therefrom, including the execution visitorial powers under Art. 128 and of Art. 129 of the
of decisions, awards or orders. Labor Code, as amended, which empowers the
ANOTHER SUGGESTED ANSWER: Regional Director to hear and decide, among
Yes, B's action before the Regional Trial Court others, matters involving recovery of wages.
is tenable if said action is limited to the filing 1. Whose position will you sustain? Explain.
of a damage suit against the Labor Arbiter 2. Will your answer be the same if Sara's claim is
because there exists no employer-employee P4,500.00 with reinstatement? Explain.
relationship between "B" and the Labor Arbiter, SUGGESTED ANSWER:
and there is no labor dispute between them. 1) I will sustain the position of the Bojilov spouses.
In Agricultural Development Corporation vs. Art. 128 is not applicable because the case did not
Court of Appeals, G.R. No. 112139. January 31, arise as a result of the exercise of visitorial and
2000, the Supreme Court, ruled: enforcement powers by the Regional Director, as
"It is well settled in law and jurisprudence the duly authorized representative of the Secretary
that where NO employer-employee of Labor and Employment. Instead, the case is a
relationship exists between the parties and no simple money claim under Art. 129, which could be
issue is involved which may be under the jurisdiction of the Regional Director if the
resolved by reference to the Labor Code, claim does not exceed P5,000.
other labor statutes or any collective
bargaining agreement, it is the Regional But the claim exceeds P5,000.00. Thus, it is
Trial Court that has jurisdiction." the Labor Arbiter who has jurisdiction under Art.
217(a) of the Labor Code.
Med-arbiter (1996)
The national council of X Union, the exclusive 2) I will still hold that it is the Labor Arbiter that has
bargaining representative of all daily paid workers jurisdiction. It is true that the money claim no
of Z Corp., called a general meeting and passed a longer exceeds P5,000. But there is a claim
resolution which provides that each union member for reinstatement. Thus, this claim is under
was to be assessed P 1,000 to be deducted from the the jurisdiction of a Labor Arbiter, per Art. 129
lump sum of P10,000.00 which each employee was of the Labor Code.
to receive under the CBA. Sergio, a Union
member, protested and refused to sign the Nat’l Labor Relations Commission (1995)
authorization slip for the deduction. X Union then 3. What is the jurisdiction of the National
passed a resolution expelling Sergio from the Labor Relations Commission?
union. Sergio filed a complaint before the Labor SUGGESTED ANSWER:
Arbiter for illegal deduction and expulsion from the Jurisdiction of the NLRC:
union. Will the complaint prosper? Explain. 1. exclusive appellate jurisdiction over all
SUGGESTED ANSWER: cases decided by Labor Arbiter;
The complaint will not prosper before the Labor 2. exclusive appellate jurisdiction over all cases
Arbiter because there is here an intra-union conflict decided by Regional Directors or hearing
which is under the Jurisdiction of the Med-Arbiter. (See officers involving the recovery of wages and
Art, 226 and Rule V of Book V of the Rules and other monetary claims and benefits arising
Regulations Implementing the Labor Code). from employer-employee relations where the
aggregate money claim of each employee or
Money Claims; Reinstatement (1996) househelper does not exceed five thousand
Sara has been working as housemaid for pesos (P5,000.00);
the Bojilov spouses for three (3) years. In the 3. original Jurisdiction to act as a compulsory
early morning of July 28, the spouses and arbitration body over labor disputes certified to
Sara were watching the live coverage of NLRC by the Secretary of Labor
the finals of an Olympic boxing match between and Employment; and
a Bulgarian and a Filipino which the foreign 4. power to issue a labor injunction.
fighter won on points. Peeved by Sara's angry
remarks that the scoring was unfair, the Nat’l Labor Relations Commission (2001)
Bojilov spouses fired her on the spot. Company "A" and Union "B" could not resolve their
negotiations for a new CBA. After conciliation
Sara thereafter filed a complaint with the Regional proceedings before the NCMB proved futile, B
Director of the DOLE for unpaid salaries totalling went on strike. Violence during the strike prompted A
P5,500.00. The Bojilov spouses moved to dismiss to file charges against striker-members of B for
the complaint on the belief that Sara's claim falls their illegal acts. The Secretary of Labor assumed
within the Jurisdiction of the Labor Arbiter. Sara, Jurisdiction, referred the strike to the NLRC and
however, claimed that the Regional Director can issued a return-to-work order. The NLRC directed
decide on her claim by virtue of his plenary the parties to submit their respective position
Page 18 of 108
2006
papers and documentary evidence. At the Initial Bitonio, G.R. No. 120220, June 16, 1999, the
hearing before the NLRC, the parties agreed to Supreme Court ruled:
submit the case for resolution after the submission 'Appellate authority over decisions of the
of the position papers and evidence. Regional Director involving examination of union
accounts is expressly conferred on the BLR
Subsequently, the NLRC issued an arbitral award under the Rule of Procedure on Mediation-
resolving the disputed provisions of the CBA and Arbitration.
ordered the dismissal of certain strikers for having xxx
knowingly committed Illegal acts during the strike. Section 4. Jurisdiction of the Bureau — (b) The
The dismissed employees elevated their dismissal Bureau shall exercise appellate jurisdiction over
to the Court of Appeals claiming that they were all cases originating from the Regional Director
deprived of their right to due process and that the involving .... Complaints for examination of
affidavits submitted by A were self-serving and of union books of accounts.
no probative value. Should the appeal prosper?
State the reason(s) for your answer clearly. (5%). The language of the law is categorical. Any
SUGGESTED ANSWER: additional explanation on the matter is superflous."
The appeal should not prosper. The Supreme
Court, in many cases, has ruled that decisions Nat’l Labor Relations Commissions (2001)
made by the NLRC may be based on position Company "A", within the reglementary period,
papers. In the question, it is stated that the parties appealed the decision of a Labor Arbiter directing
agreed to submit the case for resolution after the the reinstatement of an employee and awarding
submission of position papers and evidence. Given backwages. However, A's cash bond was filed
this fact, the striker-members of B cannot now beyond the ten day period. Should the NLRC
complain that they were denied due process. They entertain the appeal? Why? (5%).
are in estoppel. After voluntarily submitting a case SUGGESTED ANSWER:
and encountering an adverse decision on the No, the NLRC should not entertain the appeal, as
merits, it is too late for the loser to question the the same was not perfected for failure to file a
jurisdiction or power of the court. A party cannot bond. Art. 223 of the Labor Code reads:
adopt a posture of double dealing. (Marquez vs. "In case of a judgment involving a monetary
Secretary of Labor, 16 March 1989). award, an appeal by the employer may be
ANOTHER SUGGESTED ANSWER: perfected only upon the posting of cash or
No, the appeal will not prosper. In CMP Federal surety bond... In the amount equivalent to the
Security Agency vs. NLRC, G.R. No. 125298, monetary award in the judgment appealed
February 11, 1999, the Supreme Court ruled: from."
"The standard of due process that must be met
in administrative tribunals allows a certain In ABA vs. NLRC, G.R. No. 122627. July 18, 1999,
degree of latitude as long as fairness is not the Supreme Court ruled:
ignored. Hence, it is not legally objectionable for "An appeal bond is necessary......the appeal
being violative of due process, for the labor may be perfected only upon the posting of cash
arbiter to resolve a case based solely on the or surety bond issued by a reputable bonding
position papers, affidavits or documentary company duly accredited by the Commission in
evidence submitted by the parties. The affidavits the amount equivalent to the monetary award in
of witnesses in such case may take the place of the judgment appealed from."
direct testimony." ANOTHER SUGGESTED ANSWER:
The NLRC may still entertain the appeal.
Nat’l Labor Relations Commission (2001) It is true that the Labor Code (in Art. 223) provides
Some disgruntled members of Bantay Labor, that appeal is perfected only upon the posting of a
Union filed with the Regional Office of the DOLE a cash or surety bond. But if Company A filed a
written complaint against their union officers for motion for the reduction of the bond, and said
mismanagement of union funds. The Regional motion was only acted upon after the reglementary
Director did not rule in the complainants' favor. Not period, then, the NLRC, in the interest of
satisfied, the complainants elevated the Regional substantial justice, may still take cognizance of the
Director's decision to the NLRC. The union officers appeal.
moved to dismiss on the ground of lack of
Jurisdiction. Are the union officers correct? Why? Overseas Employment; Claim; Torts (2004)
(3%). A. Under a seaman’s contract of employment with
SUGGESTED ANSWER: a local manning agent of a foreign shipping
Yes, the union officers are correct in claiming that company, Capt. TROY embarked on an ocean-
the NLRC has no jurisdiction over the appealed going vessel in good health. One stormy night at
ruling of the Regional Director. In Barles vs. sea, he was drenched with rainwater. The
Page 19 of 108
following morning, he contracted fever which lasted violations; he shall be repatriated at his
for days. He suffered loose bowel movement, lost own expense or at the expense of his employer as
his appetite, and eventually he died before a the case may be.
scheduled airlift to the nearest port.
Recovery of Wages (1994)
Subsequently, the widow of Capt. TROY Tina Aquino, a domestic helper in the household of
complained against the local manning agent and Fidel Aldeguer, filed an action In the Regional
its foreign principal before the Regional Arbitration Office of the Department of Labor and Employment
Branch of DOLE, for actual and exemplary (DOLE) for recovery of unpaid wages amounting to
damages and attorney’s fees. She invoked the P3,500.00 and P1,499.00 as moral damages.
Labor Code provision which requires the employer to Aquino claimed that the amount of P3,500.00 is
provide all necessary assistance to ensure the equivalent to the P500.00 a month she failed to
adequate and necessary medical attendance and receive for the last seven months of her
treatment of the injured or sick employee in case of employment with Aldeguer, based on their agreed
emergency. P2,500,00 monthly salary. Aldeguer moved to
have Aquino's complaint dismissed, alleging that
Respondents moved to dismiss the complaint on as a domestic helper Ms. Aquino should have first
the ground that the Labor Arbiter has no brought the matter to the Lupong Barangay.
jurisdiction over the complaint for damages arising If you were the Regional Director, how would
from illness and death of Capt. TROY abroad. you resolve the matter?
Resolve the motion with reasons. (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: As Regional Director, I will assume Jurisdiction.
In Tolosa v. NLRC, (G.R. 149578, April 10,2003), The provisions of P.D. No. 1508 requiring
the Supreme Court held that what we have in this the submission of disputes before the
case is a claim arising from tort or quasi-delict. In Barangay Lupong Tagapayapa prior to their filing
such a situation, the seaman who died on with the court or other government offices
November 18, 1992, cannot sue before the Labor are not applicable to labor cases.
Arbiter. But this will not apply now, as under Sec. 10,
R.A. 8042, [effective June 7, 1995], what we Article 129 of the Labor Code empowers the
have is a claim "arising out of an employer- Regional Director to hear and decide any matter
employee relationship or by virtue of any law or involving the recovery of wages and other
contract involving Filipino workers for overseas monetary claims and benefits owing to an
deployment including claims for actual, moral, employee or person employed in domestic or
exemplary and other forms of damages", household service, provided that the money claim
cognizable by the "Labor Arbiters of the National does not exceed P5.OOO.OO. (Montoya vs
Labor Relations Commission" (NLRC) who have .Escayo, G.R. Nos, 82211-12, March 21. 1989)
the original and exclusive jurisdiction thereon.
Remedies; illegal dismissal (1999)
Overseas Employment; Mandatory The Labor Arbiter dismissed the complaint for
Remittance; Foreign Exchange (2006) illegal dismissal filed by Genevieve Cruz against
Can an overseas worker refuse to remit Bulag Optical Inc. (BOI) which denied her prayer
his earnings to his dependents and deposit the for reinstatement but awarded financial assistance in
same in the country where he works to her favor. BOI appealed the decision of the
gain more interests? Explain. (5%) Labor Arbiter to the NLRC within the reglementary
SUGGESTED ANSWER: period. Genevieve filed an opposition to the
NO. Art. 22 of the Labor Code provides that it shall appeal. The NLRC affirmed in toto the decision of
be mandatory for all Filipino workers abroad to the Labor Arbiter. Both the BOI and Genevieve are
remit a portion of their foreign exchange earnings not satisfied with the decision of the NLRC, 1. What
to their families, dependents, and/or beneficiaries is the remedy, if any, of BOI and before what
in accordance with the rules and regulations forum? Explain briefly. (3%)
prescribed by the Secretary of Labor and SUGGESTED ANSWER:
Employment. Executive Order No. 857 prescribes BOI can file a Motion for Reconsideration with the
the percentage of foreign exchange remittance NLRC after ten (10) calendar days from receipt of
from 50% to 80% of the basic salary, depending on the decision.
the worker's kind of job.
If the NLRC denies the Motion for Reconsideration,
Hence, an overseas worker cannot refuse to remit BOI can file a petition for certiorari with the Court of
his earnings. Otherwise, he shall be suspended or Appeals under Rule 65 of the Rules of Court since
excluded from the list of eligible workers for the decision of the NLRC is final and executory.
overseas employment and in cases of subsequent
Page 20 of 108
2. Can Genevieve Cruz avail herself of the Secretary of Labor and Employment the
same remedy as that of BOI? Why? (2%) authority to enjoin the employer from
SUGGESTED ANSWER: terminating the employment of the workers?
Genevieve Cruz can avail herself of the same If so, on what grounds? [5%1
remedy as that of the BOI. The remedies SUGGESTED ANSWER:
described for the BOI are also the same The Secretary of Labor and Employment has
remedies available to Genevieve Cruz as a party the authority to enjoin an employer from
to the case, pursuant to the Labor Code (Article terminating the employment of workers.
223) and the Rules of Court (Rule 65).
The Labor Code (in Article 377(b) provides that the
Panel: But the facts of the case indicates that Secretary of Labor and Employment may suspend
Genevieve did not appeal. She therefore the effectivity of the termination of workers pending
cannot avail of the remedy. the resolution of a labor dispute in the event of
a prima facie finding of an appropriate official of the
Secretary of Labor; Authority (1998) Department of Labor and Employment before
An airline which flies both the international and whom such dispute is pending that the termination
domestic routes requested the Secretary of may cause a serious labor dispute or is in
Labor and Employment to approve the policy implementation of a mass lay off.
that all female flight attendants upon reaching
age forty (40) with at least fifteen (15) years of Voluntary Arbitrator (1997)
service shall be compulsorily retired; however, State the cases when a labor dispute would
flight attendants who have reached age forty fall under the Jurisdiction of voluntary
(40) but have not worked for fifteen (15) years arbitrators or panel of voluntary arbitrators.
will be allowed to continue working in order to SUGGESTED ANSWER:
qualify for retirement benefits, but in no case A labor dispute falls under the jurisdiction of a
will the extension exceed four (4) years. voluntary arbitrator or a panel of
Does the Secretary of Labor and Employment voluntary arbitrator if a labor disputes arises
have the authority to approve the policy? [5%| from an unresolved grievance which in turn
SUGGESTED ANSWER: arises from the interpretation or implementation
Yes, the Secretary of Labor and Employment of a Collective Bargaining Agreement or of
has the authority to approve a policy dealing company personnel policies. [Art. 261)
with the retirement of flight attendants of airlines.
Upon agreement of parties, a voluntary arbitrator
Article 132 (d) of the Labor Code provides that the or panel of voluntary arbitrators may also hear and
Secretary of Labor and Employment shall establish decide all other labor disputes including unfair
standards that will ensure the safety and health of labor practices and bargaining deadlock. (Art. 262)
women employees, including the authority to
determine appropriate minimum age and Voluntary Arbitrator (2003)
other standards for retirement or termination in The employer company, in a directive to the union
special occupations such as those of flight president, ordered the transfer of some of its
attendants and the like. employees, including a number of union officials, to
CAVEAT: its plant offices. The order was opposed by the
It could be argued that Article 132 (d) may union. Ultimately, the union filed an unfair labor
be unconstitutional because this may practice against the company alleging that the
constitute discrimination in violation of the purported transfer of its union officials was unjust
spirit of Section 14 of Article XIII of the and in violation of the Collective Bargaining
Constitution which provides that the State Agreement (CBA), Pursuant to the terms of the
shall protect working women by providing safe CBA, the dispute was referred to a voluntary
and healthful working conditions, taking into arbitrator who later ruled on the issues raised by
account their maternal functions, and such the parties. Could it later be validly asserted that
facilities and opportunities that will enhance the "decision" of the voluntary arbitrator would
their welfare and enable them to realize their have no "compulsory" effect on the parties?
full potential in the service of the nation. Explain.
SUGGESTED ANSWER:
Secretary of Labor; Dismissal of Employees No. A voluntary arbitrator chosen under the
(1998) Grievance Machinery of a CBA can exercise
The Secretary of Labor and Employment, after jurisdiction not only on disputes involving
receipt of a Notice to Terminate Employment of interpretation/implementation of a CBA and/or
one hundred (100) workers, enjoined the employer company rules, personnel policies (Art. 261, Labor
from implementing their termination. Has the Code) but also, upon agreement of the parties, "all
Page 21 of 108
other labor disputes including unfair labor practice' Voluntary Arbitrator may hear and decide any
(Art. 262, Labor Code). As no objection was raised labor dispute, including bargaining
by any of the parties when 'the dispute deadlocks, the Arbiter's decision providing
was referred to a voluntary arbitrator who later for retroactivity is tenable. Exercising his
ruled on the issues raised by the parties", it compulsory arbitration power, the Arbiter
follows that what we have is voluntary arbitration could decide the issue of retroactivity in any
agreed upon by the parties. His decision is way which is not contrary to law, morals, good
binding upon the parties and may be enforced customs, public order or public policy.
through any of the sheriffs, including those But in a case (Manila Electric Co vs. Secretary of
of the NLRC, he may deputize. Labor Leonardo Quisumbing, G.R. No. 127598,
ANOTHER SUGGESTED ANSWER: February 22, 2000), the Supreme Court said that
No. The award of voluntary arbitrators acting within an arbitral award shall retroact to the first day after
the scope of their authority determines the rights of the six-month period following the expiration of the
the parties, and their decisions have the same last day of the CBA that was being re-negotiated.
legal effects as a judgment of the Court. Such ANOTHER SUGGESTED ANSWER:
decisions on matters of fact or law are conclusive, The retroactive Order of the Labor Arbiter is void
and all matters in the award are thenceforth for want of jurisdiction. Jurisdiction is conferred by
res judicata on the theory that the matter has law. Nowhere in the Labor Code, more specifically,
been adjudged by the tribunal which the Article 217, is the Labor Arbiter given jurisdiction
parties have agreed to make final as tribunal over unresolved issues in collective bargaining,
of last resort. [Volkschel Labor Union v. NLRC. including determining the period or duration of a
98 SCRA 314 (1980). Collective Bargaining Agreement.
CBA; Arbitral Awards; Effectivity (1994)

LABOR RELATIONS Company X, a transportation company, and Union Y
were in the process of negotiating a new
CBA; Appropriate Bargaining Unit (1998) Collective Bargaining Agreement (CBA) to replace
the one which expired on March 15. 1990. The
What is an appropriate bargaining unit
negotiations reached an impasse on economic
for purposes of collective bargaining? [5%]
issues on June 30, 1990. The Secretary of
SUGGESTED ANSWER:
Labor assumed Jurisdiction over the dispute and
An APPROPRIATE BARGAINING UNIT is a group of
certified the same to the NLRC for proper
employees of a given employer comprised of all or
disposition. Proceedings before the NLRC
less than all of the entire body of employees,
ended on November 30. 1990 and a decision
which the collective interest of all the employees,
was rendered on December 15, 1990, The said
consistent with the interest of the employer,
decision made retroactive to March 15, 1990
indicate to be the best suited to serve reciprocal
the new CBA containing the issues resolved by
rights and duties of the parties under the collective
the NLRC, as well as those concluded and
bargaining provisions of the law. (See, e.g.,
agreed upon by the parties prior to their arriving at
University of the Philippines v. Ferrer-Calleja, 211
a deadlock in their negotiations. Company X
SCRA 451 (1992).
questioned the retroactivity of the CBA alleging
CBA; Arbitral Award; Retroactive that the same contravenes Art. 253-A of the
Labor Code, which provides for the automatic
Effect (2001)
retroactivity of the renewed CBA only if the
Company A and Union B had a 3-year CBA same is entered into within six (6) months from
that expired on June 12, 1990. Negotiations its expiry date, and, if not, the parties must
proved futile so the unresolved issues were agree on the duration of retroactivity.
referred to an Arbiter who rendered a decision
1) Is Company X's position correct?
on March 15, 1992 retroactive to December
2) Would your answer be different if
14, 1990. Is the Arbiter's decision providing for
the assumption of jurisdiction by the
retroactivity tenable or not? Why? (5%)
Secretary of Labor was at the request or
SUGGESTED ANSWER:
instance of Company X?
The referral of the unresolved issues of
SUGGESTED ANSWER:
the collective bargaining negotiations to an
1) The Company's position is not correct. In the
Arbiter is not within the jurisdiction of the Arbiter. absence of a specific provision of law prohibiting
But assuming that the unresolved issues in the retroactivity of the effectivity of arbitral awards
collective bargaining negotiations were properly issued by the Secretary of Labor, the same is
deemed vested with plenary and discretionary
referred to the Arbiter pursuant to the provision of the
powers to determine the effectivity thereof, (St
Labor Code (Art. 262} that states that a
Luke's Medical Center, Inc. vs. Hon. Ruben O.
Page 22 of 108
2006
Torres, etal,-G.R. No. 99395, 29 June 1993, J. the parties, they are duly bound to keep the
Melo. 222 SCRA 779) status quo and to continue in full force and
effect the terms and conditions of the existing
2) No. Regardless of which party sought the agreement. The law does not provide for any
assumption by the Labor Secretary, the effect exception or qualification as to which of the
would be the same. An assumption case gives the economic provisions of the existing agreement
Labor Secretary the plenary arbitration powers to are to retain force and effect, therefore, it must
rule on the issues presented for resolution, be understood as encompassing all the terms
including the retroactivity of the new CBA. and conditions in the said agreement."
CBA; Automatic Renewal Clause (1999) With Art. 253 of the Labor Code as basis, the
What is the "automatic renewal clause" in a disgruntled employees should be paid the annual
collective bargaining agreement? (2%) salary increases and other related annual
SUGGESTED ANSWER: increases provided in the 1990-1992 CBA even
The "AUTOMATIC RENEWAL CLAUSE" in a CBA after the expiration of said CBA as long as said
refers to that provision of the Labor Code (Article CBA did not provide that said increases were to be
253) which states that "It shall be the duty of both paid only for certain specific years.
parties (to a CBA) to keep the status quo and to
continue in full force and effect the terms and CBA; Bargaining Representative (2000)
conditions of the existing agreement during the 60- The Ang Sarap Kainan Workers Union appointed
day (freedom) period and/or until a new agreement Juan Javier, a law student, as bargaining
is reached by the parties." representative. Mr. Javier is neither an employee
of Ang Sarap Kainan Company nor a member of
CBA; Automatic Renewal Clause (2001) the union. Is the appointment of Mr. Javier as a
Company "A" and Union "B" negotiated the last bargaining representative in accord with law?
two years of their five-year CBA on April 1, 1990 to Explain, (3%)
expire on March 31, 1992. Considering the SUGGESTED ANSWER:
amicable relations between the parties, neither one Yes, the law does not require that the bargaining
moved for the extension or termination of the representative be an employee of the company nor
agreement. an officer or member of the union. {Art 212 (j),
Labor Code}.
Sometime in 1995. some disgruntled employees
filed a complaint demanding that they be paid the CBA; Certification Election (2005)
annual salary increases and other related annual As Human Resources Department (HRD) manager
increases specified in the CBA of April 1990, citing of EZ Components, an unorganized manufacturer
the provision in Art. 253 of the Labor Code which of electric and electronic components for
requires the parties to "xxx keep the status quo household appliances, you are suddenly
and to continue in full force and effect the terms confronted with demands for recognition and
and conditions of the existing agreement during collective bargaining negotiations from two
the 60 day period and/or until a new agreement is competing labor unions. They both claim to
reached by the parties". represent all the rank-and-file employees. Union A
is led by a moderate faction, while Union B is
A, however, maintained that the annual salary affiliated with a militant federation identified with
increases and related benefits specifically provided leftist ideology.
for in the CBA were, pursuant to contract and law,
effective only for the term specified therein, Which of the following courses of action should you
namely, until March 31, 1992 only. Who is correct? take to best protect the interests of your company
State the reason(s) for your answer. (5%) and employees?
SUGGESTED ANSWER: (a.) Recognize Union A as the rightful bargaining
The disgruntled employees are correct in their representative because it will be more
claim that the expired CBA remains in full force reasonable to deal with;
and effect until a new CBA is signed in accordance (b.) Recognize Union B because you do not want
with Article 253 of the Labor Code. to antagonize its leftist connections and
foment inter-union conflicts;
The SC ruled in New Pacific Timber and Supply (c.) Ignore the demands of either union since you
Co, Inc. us. NLRC, GR No. 124224. March 17, cannot be compelled legally to deal with them
2000: at this stage; or
"Article 253 of the Labor Code explicitly (d.) Petition the Bureau of Labor Relations to
provided that until a new Collective Bargaining conduct a certification election to determine
Agreement has been executed by and between
Page 23 of 108
which union really represents the majority of
the employees in the bargaining unit. (10%) But to have the above-mentioned effect, the CBA
ALTERNATIVE ANSWER: should have been filed and registered with the
(d) Petition the Bureau of Labor Relations to Department of Labor and Employment (See Article
conduct a certification election to determine which 231, 253-A and 256)
union really represents the majority of the
employees in the bargaining unit. (Haw at Buklod Thus, a CBA that has not been filed and registered
ng Manggagaiva [IBM] v. Calleja, G.R. No. 84685, with the Department of Labor and Employment
February 23,1990) cannot be a bar to a certification election and such
ALTERNATIVE ANSWER: election can be held outside of the freedom period
(c) Ignore the demands of either union since you of such CBA.
cannot be compelled legally to deal with them at
this stage. ALTERNATIVE ANSWER:
A petition for certification election may be filed
CBA; Certification Election; “No-Union" Win outside the freedom period of a current CBA if
(2006) such CBA is a new CBA that has been prematurely
Can a "no-union" win in a certification election? entered into, meaning, it was entered into before
(2.5%) the expiry date of the old CBA. The filing of the
SUGGESTED ANSWER: petition for certification election shall be within the
YES. Sec. 20, Rule 9, Book V provides that where freedom period of the old CBA which is outside of
the votes cast results in "no union" obtaining the the freedom period of the new CBA that had been
majority, the med arbiter shall declare such fact in prematurely entered into.
the order. Hence, the employees may choose not
to be represented by anyone (Reyes-Trajano v. CBA; Certification Election; Probationary
Trajano, G.R. No 84433, June 2, 1992). Employees (1999)
2. Are probationary employees entitled to vote in a
CBA; Certification Election; Consent certification election? Why? (2%).
Election; Run-Off Election (2000) SUGGESTED ANSWER:
Distinguish between "Certification Election", In a certification election, all rank-and-file
"Consent Election," and "Run-off Election", (6%) employees in the appropriate bargaining unit are
SUGGESTED ANSWER: entitled to vote. This principle is clearly stated in
CERTIFICATION ELECTION requires a petition for Article 255 of the Labor Code which states that the
a Certification Election filed by a union or "labor organization designated or selected by the
employer. A Med-Arbiter grants the petition and an majority of the employees in such unit shall be the
election officer is designated by the regional exclusive representative of the employees in such
director to supervise the election. (Art. 256, 257, unit for the purpose of collective bargaining."
258, Labor Code).
Collective bargaining covers all aspects of the
CONSENT ELECTION is held by agreement of the employment relation and the resultant CBA
unions with or without participation of the med- negotiated by the certified union binds all
arbiter. [Warren Manufacturing Workers Union v. employees in the bargaining unit. Hence, all rank-
Bureau of Labor Relations, 159 SCRA 387 (1988)] and-file employees, probationary or permanent,
have a substantial interest in the selection of the
RUN-OFF ELECTION takes place between the bargaining representative. The Code makes no
unions who received the two highest number of distinction as to their employment status as basis
votes where not one of the unions obtained the for eligibility to vote in the petition for certification
majority of the valid votes cast, provided that the election. The law refers to "all" the employees in
total union votes is at least 50% of the votes cast. the bargaining unit. All they need to be eligible to
(Art. 256, Labor Code). vote is to belong to the "bargaining unit," (Airtime
Specialists, Inc. v. Ferrer-Calleja, ISO SCRA 749)
CBA; Certification Election; Freedom Period ALTERNATIVE ANSWER:
(1999) PROBATIONARY EMPLOYEES may not be
1. In what instance may a petition for certification entitled to vote in a certification election where only
election be filed outside the freedom period of a regular employees belong to a bargaining unit and
current collective bargaining agreement? (3%). probationary employees do not belong to such
SUGGESTED ANSWER: bargaining unit. It is the belonging to a bargaining
As a general rule, in an establishment where there unit that entitles an employee to vote in a
is in force and effect a CBA, a petition for certification election.
certification election may be filed only during the ANOTHER ALTERNATIVE ANSWER:
freedom period of such CBA.
Page 24 of 108
YES. Any employee, whether employed for a Constitution and By-laws of the AWOL, then it was
definite period or not, shall, beginning on his first lawful for LTC to terminate Magallona.
day of service, be considered an employee for Panel: The termination is unlawful (Ferrer v. NLRC).
purposes of membership in any labor union (Art.
277(c)). CBA; Closed Shop vs. Agency Shop (1997)
(a) Describe a "closed shop agreement, does it
CBA; Closed Shop Provision; When not differ from an "agency shop agreement."
applicable (1999) (b) Are the above agreements legal?
FACTS: In a certification election conducted by the SUGGESTED ANSWER:
Department of Labor, Associated Workers (a) A "CLOSED SHOP AGREEMENT" is that
Organization in Laguna (AWOL) headed by Cesar agreement embodied in a collective bargaining
Montanyo, won over Pangkat ng mga agreement (CBA) whereby the employer binds
Manggagawa sa Laguna (PML), headed by Eddie itself not to hire any person unless he is first a
Graciaa. Hence, AWOL was certified as the union member of the collective bargaining
exclusive bargaining agent of the rank-and-file representative.
employees of the Laguna Transportation Company
(LTC). An "AGENCY SHOP AGREEMENT" is different
from a closed shop agreement in that under the
Shortly, thereafter, a Collective Bargaining former, the employer does not bind itself not to hire
Agreement was concluded by LTC and AWOL a person unless he is first a union member of the
which provided for a closed shop. Consequently, collective bargaining representative. Instead, the
AWOL, demanded that Eddie Graciaa and all the employer binds itself to check off from those who
PML members be required to become members of are not union members of the collective bargaining
AWOL as a condition for their continued representative a reasonable fee equivalent to the
employment: otherwise, they shall be dismissed dues and other fees paid by union members if the
pursuant to the closed shop provision of the CBA. non-union members accept the benefits of the
CBA.
The union security clause of the CBA also provided
for the dismissal of employees who have not (b) The above agreements are legal or they are
maintained their membership in the union. For one expressly allowed by the Labor Code.
reason or another, Francis Magallona, a member
of AWOL, was expelled from the union CBA; Contract Bar Rule vs. Deadlock Bar
membership for acts inimical to the interest of the Rule (1999)
union. Upon receipt of the notice that Francis Distinguish between "contract bar rule" and
Magallona failed to maintain his membership in "deadlock bar rule". (3%)
good standing with AWOL, LTC summarily SUGGESTED ANSWER:
dismissed him from employment. Under the "CONTRACT BAR RULE," a certification
1. Can Eddie Graciaa and all the PML members election cannot be held if there is in force and in
be required to become members of the AWOL effect a collective bargaining agreement that has
pursuant to the closed shop provision of the been duly registered with the Department of Labor
CBA? Why? (3%) and Employment except during the freedom period
SUGGESTED ANSWER: of such CBA which is the 60-day period prior to the
Eddie Gracla and all the PML members can not be expiry date of said CBA. (See Articles 231, 253-A
required to become members of AWOL pursuant to and 256)
the closed shop provision of the CBA. According to
the Labor Code (Article 248(e), a closed shop Under the "DEADLOCK BAR RULE" a certification
provision cannot be applied to those employees election can not be held if a bargaining deadlock to
who are already members of another union at the which an incumbent or certified bargaining agent is
time of the signing of the CBA. a party had been submitted to conciliation or
mediation or had become the subject of a valid
2. Is the termination from employment of Francis notice of strike or lockout. (See Section 3, Rule XI,
Magallona by LTC lawful? Why? (2%) Book V of the Implementing Rules and Regulations
SUGGESTED ANSWER: of the Labor Code)
Pursuant to the closed shop provision of the CBA
entered into by AWOL with LTC, membership in CBA; Coverage; Non-Union Members;
AWOL has become a condition of employment in Religious Sect (2005)
LTC. As long as the expulsion of Francis A group of employees in XYZ Factory belonging to
Magallona from AWOL was done in accordance a religious sect, in conformity with the teachings
with applicable provisions of law and with the and dictates of their religion, refused to join the
labor union in the factory. The labor union was
Page 25 of 108
able to negotiate a substantial wage increase in its rendering exactly, or no less than, three (3) hours
collective bargaining agreement with management. A of actual overtime work.
provision therein stated that the wage increase Which interpretation do you think should
would be paid to the members of the union only in prevail? Why? (5%)
view of a "closed shop" union security clause in the
new agreement. The members of the sect CBA; Jurisdictional Pre-Conditions (1996)
protested and demanded that the wage increase 2) What jurisdictional pre-conditions must be
be extended to them. The officers of the union present to set in motion the mechanics of
countered by demanding their termination from the a collective bargaining?
company pursuant to the "closed shop" provision in SUGGESTED ANSWER:
the just-concluded CBA. (6%)
(a) Is the CBA provision valid? To set in motion the mechanics of
SUGGESTED ANSWER: collective bargaining, these jurisdictional pre-
No, the CBA provision is not valid. The benefits of conditions must be present, namely:
a CBA are extendible to all employees regardless 1. The employees in a bargaining unit should
of their membership in the union because form a labor organization;
to withhold the same from non-union members 2. The labor organization should be a
would be to discriminate against them. (National legitimate labor organization;
Brewery & Allied Industries Labor Union of the 3. As such legitimate labor organization, it should
Philippines v. San Miguel Brewery, Inc., G.R. be recognized or certified as the
No. L-18170, August 31,1963) collective bargaining representative of the
employees of the bargaining unit; and
(b) Should the company comply with the 4. The labor organization as the collective
union's demand of terminating the members of bargaining representative should request the
the religious sect? employer to bargain collectively. (See Arts.
SUGGESTED ANSWER: 243, 234, 255 and 250 of the Labor Code)
No. The right to join includes the right not to join by
reason of religious beliefs. Members of said ALTERNATIVE ANSWER:
religious sect cannot be compelled or coerced to The mechanics of collective bargaining are set
join the labor union even when the union has a in motion only when the following Jurisdictional
closed shop agreement with the employer; that in pre- conditions are met:
spite of any closed shop agreement, members of (1) possession of the status of
said religious sect cannot be refused employment majority representation of the
or dismissed from their jobs on the sole ground employees' representative in accordance
that they are not members of the collective with any of the means of selection or
bargaining union. (Victoriano v. Elizalde Rope designation provided for by the Labor Code;
Workers' Union, G.R. No. L-25246, September (2) proof of majority of representation; and
12,1974) (3) a demand to bargain under Art. 251(g), of the
Labor Code. (Kiok Loy v. NLRC. 141
SCRA 179 [1986])
CBA; interpretation (2004)
B. The CBA between the Company and the rank- CBA; Lock-out vs. Closed Shop (2004)
and-file Union contained the following provision: Distinguish clearly but briefly between Lock-out
“Section 3. MEAL ALLOWANCE. The and Closed Shop.
Company agrees to grant a MEAL SUGGESTED ANSWERS:
ALLOWANCE of TEN PESOS (P10.00) to all LOCKOUT refers to the temporary refusal of
employees who render at least TWO (2) hours an employer to furnish work as a result of a
or more of actual overtime work on a workday, labor or industrial dispute. CLOSED SHOP, on
and FREE MEALS, as presently practiced, not the other hand, refers to a union security
exceeding TWENTY FIVE PESOS (P25.00) clause in a collective bargaining agreement
after THREE (3) hours of actual overtime work.” whereby the employer agrees not to employ any
person who is not a member of the exclusive
Dispute in the interpretation of the above provision collective bargaining representative of the
arose as the Company asserts that the phrase employees in a bargaining unit.
“after three (3) hours of actual overtime work” does not
mean after exactly three (3) hours of actual CBA; Mandatory Subjects of
overtime work; it means after more than three (3) Bargaining (1996)
hours of actual overtime work. The Union, on the other 1) What matters are considered
hand, maintained that “after three (3) hours of mandatory subjects of collective bargaining?
actual overtime work” simply means after SUGGESTED ANSWER:
Page 26 of 108
Wages, hours of work and all other terms and The employees received their respective
conditions of employment including proposals for separation pay under protest and thereafter filed
adjusting any grievances or questions arising from an action against CRP and Lyra Music Corporation
the collective bargaining agreement are for unfair labor practice (ULP). The Arbiter ruled in
considered mandatory subjects of collective favor of the workers and ordered Lyra Music
bargaining. (See Art. 252 of the Labor Code) Corporation to absorb the former workers of CRP.
Was the Labor Arbiter correct in his decision?
CBA; Registration Requirement; Contract SUGGESTED ANSWER:
Bar-Rule (2000) No. The Labor Arbiter is not correct. As held in the
A Collective Bargaining Agreement was signed case of San Felipe Neri School of Mandaluyong vs.
between the Ang Sarap Kainan Company and the NLRC, when there is a legitimate sale of a
Ang Sarap Kainan Workers Union. Should the company's assets, the buyer in good faith cannot
Collective Bargaining Agreement be registered be legally compelled to absorb the employees of
with the Bureau of Labor Relations? If so, why? the seller in good faith. In the case at bar, the
(3%) employees of the CRP were validly terminated
SUGGESTED ANSWER: based on Article 284, e.g. closure of operations
So that the contract-bar rule may apply the CBA and separation pay was paid at a rate much higher
should be registered, assuming it has been validly than the law.
ratified and contains the mandatory provisions.
(Art. 232, Labor Code). Furthermore, the case filed by the employees was
UNFAIR LABOR PRACTICE. It is highly irregular
CBA; Run-Off Election (2006) to order absorption of employees in a ULP case.
When does a "run-off' election occur? (2.5%)
SUGGESTED ANSWER: CBA; Social Security vs. Union Security
A run-off election occurs when the following (2004)
elements occur: Distinguish clearly but briefly between Social
1. Between three (3) or more choices, and no security and union security
choice receiving a majority of the valid votes SUGGESTED ANSWERS:
cast; SOCIAL SECURITY is the protection given by
2. The total number of votes for all contending social insurance programs such as the programs of
unions is at least 50% of the number of vote the SSS, GSIS and PHIC undertaken pursuant to
cast; and their respective charters, including the employees
3. Between the labor unions receiving the two compensation program provided for in the Labor
highest number of votes (Article 256, Labor Code. The aforesaid programs provide income
Code). benefits and/or medical care when contingencies
like sickness, (also maternity in the case of SSS)
CBA; Sale of Establishment; Effect (1994) disability, death, or retirement, including in the
Coronet Records Phil. (CRP) manufactures case of the GSIS, separation and unemployment
audio/video record players, compact discs, video benefits.
discs, cassettes and the like. CRPs shareholdings
is 40% foreign and 60% domestic. CRP signed a On the other hand, UNION SECURITY refers to a
Collective Bargaining Agreement (CBA) with its clause in a collective bargaining agreement
rank-and-file workers for three years starting from whereby the employer agrees to employ or
January 1, 1990 and ending on December 31, continue in employment only workers who are
1993. members of the exclusive collective bargaining
representative of the employees of said employer
Before the expiration of the CBA, CRP decided to in a bargaining unit.
sell all its assets to Lyra Music Corporation
effective September 30, 1993. In this regard, CBA; Substitutionary Doctrine (2000)
notice was sent on August 30, 1993 to each a) The Samahan ng Mga Manggagawa sa Pids
employee advising them of the sale of the and Co. Inc. lost its majority status in the
Company's assets to Lyra Music Corporation and bargaining unit one year after the signing of the
the closure of the company's operations effective Collective Bargaining Agreement. Bickerings
September 30, 1993. CRP, likewise, requested among all the three other unions in the bargaining
that each employee receive his separation pay unit were a daily occurrence, with each union
equivalent to one-and-one-half (1 & 1/2) month's asserting majority status. To resolve this pestering
pay per year of service, exclusive of all unused problem, the Company and the three other unions
leaves which were also converted to cash, and his agreed to hold a consent election under the
13th-month pay for 1993. supervision of the Bureau of Labor Relations. In
the consent election, Pids and Co, Worker's Union
Page 27 of 108
2006
won, and was accordingly recognized by the
Company as the exclusive bargaining Does the union security clause sufficiently justify
representative in the bargaining unit. Is the Pids the demand for dismissal of the three employees
and Co. Workers Union bound by the Collective or not? May the Hotel Management validly refuse
Bargaining Agreement signed between the the Union’s demand? (5%)
Company and the Samahan ng Mga Manggagawa
Sa Pids and Co. Inc.? Explain. (3%) CBA; Union Security Clause; Closed Shop
Provision (1995)
b) Shortly after the consent election, Pids and Co. Reconcile the compulsory nature of the closed
Inc. sold the Groceries Division to Metro Manila shop provision in a Collective Bargaining
Grocery Inc. The employees of the sold division Agreement with the constitutional guarantee of
formed part of the bargaining unit described in the freedom of association. Discuss fully.
Collective Bargaining Agreement, and all were SUGGESTED ANSWER:
absorbed by Metro Manila Grocery Inc. Is Metro Among the policies of the State in the field of labor
Manila Grocery Inc., as the new employer, bound relations is to promote trade unionism and to foster
by the Collective Bargaining Agreement existing at the organization of a strong and united labor
the time of the sale? Explain. (3%) movement. UNION SECURITY CLAUSES, like a
SUGGESTED ANSWER: closed shop agreement, is one way of
a) Yes, because the Collective Bargaining implementing the aforementioned labor relations
Agreement is not invalidated by the change of the policy. Implementing to some extent the concept of
bargaining agent while the CBA is still effective. freedom of association, an employee who is
The "substitutionary doctrine'' applies. (Benguet already a member of a union could not be
Consolidated Inc. v. BCI Employees, 23 SCRA 465 compelled to become a member of a bargaining
(1968)) union, even if there is a closed shop agreement.
ALTERNATIVE ANSWER:
b) No. There are no indications that the sale is It could be argued that a closed shop provision in a
simulated or intended to defeat the employees' Collective Bargaining Agreement, because it
right to organize. A bona fide sale terminates the requires that a person should first be a member of
employment relationship between the selling the bargaining union before he is employed, is
company and its employees. The CBA does not violative of the right to freedom of association,
bind the purchaser in good faith because the CBA because said right subsumes not only a right to
is a personam contract, unless the buyer agrees to join, but also a right not to join a union.
be bound. [Sundowner Dev. Corp. v. Drilon, 180
SCRA 14 (1989); Associated Labor Union v. On the other hand, it could be argued that the
NLRC, 204 SCRA 913 (1993)]. exercise of the freedom of association means that
workers should join unions. A closed shop
CBA; Union Security Clause (2004) agreement, as a union security clause, encourages
A. MPH Labor Union is the duly certified bargaining the joining of unions.
representative of the rank-and-file employees of
MM Park Hotel since the 1970’s. The collective CBA; Union; Representation Issue (1999)
bargaining agreement contained union shop FACTS: Jenson & Jenson (J & J) is a domestic
security provisions. After the signing of the 2000– corporation engaged in the manufacturing of
2005 CBA, the Union demanded the dismissal of 3 consumer products. Its rank-and-file workers
employees, XX, YY and ZZ, pursuant to the union organized the Jenson Employees Union (JEU), a
security clause in the CBA. duty registered local union affiliated with PAFLU, a
national union. After having been certified as the
The Hotel Management replied that it was legally exclusive bargaining agent of the appropriate
impossible to comply with the demand of the bargaining unit, JEU-PAFLU submitted its
Union. It might even be construed as unfair labor proposals for a Collective Bargaining Agreement
practice. For it appeared that XX, YY and ZZ had with the company.
been recently promoted as supervisors and
resigned from the Union. But according to the In the meantime, a power struggle occurred within
Union, the three submitted their resignations the national union PAFLU between its National
outside the freedom period after the 1996–2000 President, Manny Pakyao, and its National
CBA expired on June 30, 2000. The Union argued Secretary General, Gabriel Miro. The
that the Hotel Management could not skirt its representation issue within PAFLU is pending
obligation to respect and implement the union resolution before the Office of the Secretary of
security clause by promoting the three employees. Labor.
That could be viewed as rewarding employees for
their disloyalty to the union, said the union officers.
Page 28 of 108
By reason of this intra-union dispute within PAFLU, J Distinguish clearly but briefly between
& J obstinately and consistently refused to offer Company union and union shop.
any counterproposal and to bargain collectively SUGGESTED ANSWERS:
with JEU-PAFLU until the representation issue A COMPANY UNION is a union of employees
within PAFLU shall have been resolved with dominated or under the control of the employer of
finality. JEU-PAFLU filed a Notice of Strike. The said employees. A UNION SHOP, on the other
Secretary of Labor subsequently assumed hand, refers to a union security clause in a
jurisdiction over the labor dispute. collective bargaining agreement whereby the
1. Will the representation issue that has arisen employer agrees to terminate the employment of
involving the national union PAFLU, to which an employee who has not become a member of
the duty registered local union JEU is the union which is the exclusive collective
affiliated, bar collective bargaining negotiation bargaining representative of the employees in a
with J & J? Explain briefly. (3%) bargaining unit within a certain period after the
employment of said employee or has ceased to
2. Can the Secretary of Labor decide the become a union member.
labor dispute by awarding the JEU CBA
Proposals as the Collective Bargaining CBU; Confidential Employees (1994)
Agreement of the parties? Explain briefly. (2%) 1. Can an employer legally oppose the
SUGGESTED ANSWER: inclusion of confidential employees in the
1. The representation issue that has arisen bargaining unit of rank-and-file employees?
involving the national union PAFLU should not bar 2. Would your answer be different if
collective bargaining negotiation with J and J. It is the confidential employees are sought to
the local union JEU that has the right to be included in the supervisory union?
bargain with the employer J and J, and not SUGGESTED ANSWER:
the national union PAFLU. 1) Yes, an employer can legally oppose the
inclusion of confidential employees in
It is immaterial whether the representation issue the bargaining unit of the rank-and-file. This
within PAFLU has been resolved with finality or issue has been settled in the case of Golden
not. Said squabble could not possibly serve as a Farms vs. Calleja, and reiterated in the
bar to any collective bargaining since PAFLU is not case of Philips Industrial Dev. Inc. vs. NLRC.
the real party-in-interest to the talks; rather, the ALTERNATIVE ANSWERS:
negotiations are confined to the corporation and a) Yes, an employer can legally oppose the
the local union JEU. Only the collective bargaining inclusion of the confidential employees in the
agent, the local union JEU, possesses the legal bargaining unit of rank-and-file employees
standing to negotiate with the corporation. A duly because confidential employees are ineligible to
registered local union affiliated with a national form, assist or join a labor union. By the nature of
union or federation does not lose its legal their functions, they assist and act in a confidential
personality or Independence (Adamson and capacity to, or have access to confidential matters
Adamson, Inc. v. The Court of Industrial Relations of, persons who exercise managerial functions in
and Adamson and Adamson Supervising Union the field of labor relations, and the union might not
(FFW), 127 SCRA 268 [1984]). be assured of their loyalty in view of
evident conflict of interest.
2. Yes. It is within assumption power.
b) An employer can legally oppose the inclusion of
CBA; Wage Increase Coverage; Non-Union confidential employees in the bargaining unit of rank
Employees (2005) -and-file employees because confidential
(b) May a rank-and-file employee, who is not a employees are considered part of management.
member of the union representing his bargaining (Philtranco vs. BLR, 174 SCRA 388).
unit, avail of the wage increases which the union
negotiated for its members? (4%) SUGGESTED ANSWER:
SUGGESTED ANSWER: 2) The answer would be the same if confidential
Yes, because the bargaining representative employees are sought to be included in
(union) does not act for its members alone. It the supervisory union because confidential
represents all the employees covered by the employees, being a part of management would
bargaining unit. (Mactan Workers Union v. Aboitiz, not qualify to join, much less form a labor union.
G.R. No. L-30241, June 30, 1972) However, non- (Philtranco vs. BLR, 174 SCRA 388),
members who avail of CBA benefits are required ALTERNATIVE ANSWER:
under the law to pay agency fees. My answer would remain the same, even if the
confidential employees were sought to be included in
CBU; Company Union vs. Union Shop (2004) the supervisory union. Confidential employees
Page 29 of 108
would have the same adverse impact on the But this may be noted: The Bank officials
bargaining unit of supervisors: Confidential mentioned in the case, have control, custody
employees' access to highly sensitive information and/or access to confidential matters. Thus, they
may become the source of undue advantage by are confidential employees and in accordance with
the union over the employer. (Philips Industrial earlier Supreme Court decisions, as confidential
Development Inc., vs. National Labor Relations employees, the Branch Manager, Cashier,
Commission, et. al, G.R No. 88957, 25 June 1992) Controller are disqualified from joining or assisting the
supervisor's union of the Bank.
CBU; Consent Election vs. Certification ALTERNATIVE ANSWER:
Election (2004) The contention of the Fanners Bank is partially
Distinguish clearly but briefly between correct. The Department managers and Branch
Consent election and certification election. managers, if they in fact have the powers
SUGGESTED ANSWERS: implied by their titles, are managerial
A certification election and a consent election are personnel. In accordance with the Labor
both elections held to determine through secret Code, managerial personnel are not eligible to
ballot the sole and exclusive representative of the join and form labor unions.
employees in an appropriate bargaining unit for the
purpose of collective bargaining or negotiations. On the other hand, cashiers who are in charge of
There is this difference, however, a money received or expended, and comptrollers
CERTIFICATION ELECTION is ordered by the who examine and supervise expenditures, are not
Department of Labor and Employment while a managerial personnel, and if they
CONSENT ELECTION is voluntarily agreed upon by supervise personnel, they could be
the parties, with or without the intervention of the supervisors, and are therefore to be included
Department of Labor and Employment. in the bargaining unit of supervisors.
CBU; Managerial Employees; Supervisory 2. Is there any statutory basis for the petition of the
Employees (1995) union? Explain.
A supervisor's union filed a petition for certification SUGGESTED ANSWER:
election to determine the exclusive bargaining There is statutory basis for the petition of the
representative of the supervisory employees of supervisors' union. Under the Labor
Farmers Bank. Included in the list of supervisory Code, supervisors have the right to form and join
employees attached to the petition are the unions, but only unions of supervisory employees.
Department Managers, Branch Managers,
Cashiers and Comptrollers. Farmers Bank CBU; Managerial Employees;
questioned this list arguing that Department Supervisory Employees (1999)
Managers, Branch Managers, Cashiers and FACTS: Samahan ng mga Manggagawa sa
Comptrollers inherently possess the powers Companya ng Tabaco (SMCT) filed a Petition for
enumerated in Art. 212, par. (m), of the Labor Certification Election among the supervisory
Code, i.e., the power and prerogative to lay down employees of the Tabaco Manufacturing Company
and execute management policies and/or to hire, (Tabaco) before the NCR Regional Office of the
transfer, suspend, lay-off, recall, discharge, assign or Department of Labor and Employment. It alleged,
discipline employees. among other things, that it is a legitimate labor
1. Is the contention of Farmers Bank organization, a duly chartered local of NAFLU; that
correct? Discuss fully. Tabaco is an organized establishment; and that no
SUGGESTED ANSWER: certification election has been conducted within
The contention of the Farmers Bank is not correct, if, one year prior to the filing of its petition for
on examination of the actual powers exercised by certification election.
the Department Managers, Bank Managers,
Cashiers and Comptrollers, they are not vested The Petition filed by SMCT showed that out of
with powers or prerogatives to lay down and its 50 members, 15 were rank-and-filers and
execute management policies or to hire, transfer, two (2) were managers.
suspend, lay-off, recall, discharge, assign or
discipline employees. If their powers are to carry Tabaco filed a Motion to Dismiss on the ground
out their duties and responsibilities in accordance that SMCT union is composed of supervisory and
with the policies promulgated by the Board of rank-and-file employees and, therefore, cannot act
Directors of the Bank, or by external authorities, as bargaining agent for the proposed unit.
like the Central Bank, then, they are not
managerial but may be supervisory personnel. SMCT filed an opposition to the said Motion
alleging that the infirmity, if any, in the membership
of the union can be remedied in the pre-election
Page 30 of 108
conference thru the exclusion- bargaining unit where SMCT wishes to be the
inclusion proceedings wherein those employees exclusive collective bargaining representative.
who are occupying rank-and-file positions will
be excluded from the list of eligible voters. CBU; Modes; Determination of
Exclusive Bargaining Agreement (2006)
1. Should the Motion to Dismiss filed by The modes of determining an exclusive bargaining
the Tabaco be granted or denied? Explain. (3%) agreement are:
SUGGESTED ANSWER: a. voluntary recognition
The Motion to Dismiss filed by Tabaco should be b. certification election
granted. According to the Labor Code (in Article c. consent election
245), supervisory employees shall not be eligible Explain briefly how they differ from one
for membership in a labor organization of rank- another. (5%)
and-file employees but may join or form separate SUGGESTED ANSWER:
labor organizations of their own. (a.) VOLUNTARY RECOGNITION — is
the voluntary recognition by the employer
Because of the above-mentioned provision of the of the status of the union as the
Labor Code, a labor organization composed of bargaining representative of the
both rank-and-file and supervisory employees is no employees [Section l(bbb), Rule I, Book
labor organization at all. It cannot, for any guise or V, Rules to Implement the Labor Code, as
purpose, be a legitimate labor organization. Not amended by Department Order No. 40-03,
being a legitimate labor organization, it cannot Series of 2003 (17 February 2003)].
possess the requisite personality to file a petition (b.) CERTIFICATION ELECTION is the process
for certification election. (See Toyota Motor of determining the sole and exclusive
Philippines Corp. vs. Toyota Motor Philippines bargaining agent of the employees in an
Corp. Labor Union, 268 SCRA 573) appropriate bargaining unit [Section l(h), Rule I,
Book V, Rules to Implement the Labor
ALTERNATIVE ANSWER: Code, as amended by Department Order No.
The Motion to Dismiss should be denied. In the 40-03, Series of 2003 (17 February 2003)].
first place, the general rule is that in a certification (c.) CONSENT ELECTION is an agreed election,
election the employer is a mere bystander. An conducted with or without the intervention of
employer has no legal standing to question a the DOLE to determine the issue of majority
certification election as it is the sole concern of the representation of all the workers in the
workers. The exceptions to the general rule of appropriate bargaining unit (Algire v. De
which are 1) when the existence of an employer- Mesa, G.R. No. 97622, October 19, 1994).
employee relationship is denied; and 2) when the
employer questions the legal personality of the Due Process; Disciplinary Cases (1995)
union because of irregularities in its registration are 1. Gary, a salesman of Astro Chemical Company
not present in this case. (ASTRO), was reported to have committed some
serious anomalies in his sale and distribution of
2. Can the two (2) Managers be part of company products. ASTRO designated its Chief
the bargaining unit? Why? (2%) Legal Officer to investigate Gary. Instead of
SUGGESTED ANSWER: submitting to the investigation, Gary filed a petition to
No, the two (2) Managers cannot be part of the enjoin the investigation on the ground that
bargaining unit composed of supervisory ASTRO would appear to be his accuser,
employees. A bargaining unit must effect a prosecutor and judge at the same time. Will the
grouping of employees who have substantial, petition to enjoin the investigation prosper?
mutual interests in wages, hours, working Discuss fully.
conditions and other subjects of collective SUGGESTED ANSWER:
bargaining. (San Miguel Corp. Supervisors and The petition to enjoin the investigation will not
Exempt Employees Union v. Laguesma, 227 prosper. It is inevitable that in disciplinary cases,
SCRA 37O) the employer would appear to be accuser,
prosecutor, and judge at the same time since it is the
The Labor Code (in Article 245) provides employer who charges an employee for the
that managerial employees are not eligible commission of an offense; he is also the person
to join, assist or form any labor organization. who directs the investigation to determine whether the
charge against the employee is true or not and he is
The above provision shows that managerial the one who will judge if the employee is to be
employees do not have the same interests as the penalized or not. But if the employee is given
supervisory employees which compose the ample opportunity to defend himself, he could not
Page 31 of 108
2006
validly claim that he was deprived of his right to Distinguish managerial employees from
due process of law. supervisory employees, (3%)
ALTERNATIVE ANSWER: SUGGESTED ANSWER:
No. The employer is merely complying with the A MANAGERIAL EMPLOYEE is one who is vested
legal mandate to afford the employee due process with powers or prerogatives to lay down and
by giving him the right to be heard and the chance execute management policies and/or to hire,
to answer the charges against him and accordingly transfer, suspend, lay-off, recall, discharge, assign
to defend himself before dismissal is effected. or discipline employees. SUPERVISORY
EMPLOYEES, on the other hand, are those who in
Employees; groups of employees (1996) the interest of the employer, effectively recommend
1) Who are the managerial, supervisory and rank- such managerial actions, if the exercise of such
and-file employees? authority is not merely routinary or clerical in nature
SUGGESTED ANSWER: but requires the use of independent judgment [Art.
"MANAGERIAL EMPLOYEE" is one who is vested 212 (m), Labor Code]
with powers or prerogatives to lay down and
execute management policies or to hire, transfer, In a case, the Supreme Court said: "In the petition
suspend, layoff, recall, discharge, assign or before us, a thorough dissection of the job
discipline employees. description of the concerned supervisory
employees and section heads indisputably show
SUPERVISORY EMPLOYEES are those who, in that they are not actually managerial but only
the interest of the employer, effectively recommend supervisory employees since they do not lay down
such managerial actions if the exercise of such company policies. PICOP's contention that the
authority is not merely routinary or clerical in nature subject section heads and unit managers exercise
but requires the use of independent judgment. the authority to hire and fire is ambiguous and
quite misleading for the reason that any authority
All employees who are neither managerial or they exercise is not supreme but merely advisory
supervisory employees are considered RANK- in character. Theirs is not a final determination of
AND-FILE EMPLOYEES. (Art. 212(m) of the Labor the company policies Inasmuch as any action
Code) taken by them on matters relative to hiring,
promotion, transfer, suspension and termination of
Employees; Managerial Employee vs. employees is still subject to confirmation and
Managerial Staff (1994) approval by their respective superior. [See Atlas
Distinguish the rights of managerial employees Lithographic Services, Inc. v. Laguesma, 205
from members of a managerial staff. SCRA 12, 17 (1992)] Thus, where such power,
SUGGESTED ANSWER: which is in effect recommendatory in character, is
MANAGERIAL EMPLOYEES have no collective subject to evaluation, review and final action by the
bargaining rights because, they cannot join or form department heads and higher executives of the
any other labor organization while officers of a company, the same, although present, is not
managerial staff are not prohibited from joining, effective and not an exercise of independent
assisting or forming or arresting a supervisor's judgment as required by law. [Philippine Appliance
union; hence, they can bargain collectively. (Art. Corp. v. Laguesma, 229 SCRA 730, 737 (1993)
245, Labor Code; National Sugar Refineries Corp. citing Franklin Baker Company of the Philippines v.
vs. NLRC, 220 SCRA 452). Trajano, 157 SCRA 416, 422-433 (1988)]." (Paper
ALTERNATIVE ANSWER: Industries Corp. of the Philippines v. Bienvenido E.
MANAGERIAL EMPLOYEES, under Article 212(m) Laguesma 330 SCRA 295, (2000)]
of the Labor Code are vested with the prerogatives
to lay down and execute management policies Employees; Managerial vs. Supervisory vs.
and/or to hire, fire, transfer, promote, lay-off and Rank-and-File Employees (2003)
discipline employees. They are not eligible for the The Labor Code treats differently in various
right to self-organization for purposes of collective aspects the employment of (i) managerial
bargaining. employees, (ii) supervisory employees, and (iii)
rank-and-file employees. State the basic
Upon the other hand, members of MANAGERIAL distinguishing features of each type of
STAFF, under Article 82 of the Labor Code, are not employment.
vested with the above-cited prerogatives. They SUGGESTED ANSWER:
are not entitled to overtime pay and other benefits Under Book Three of the Labor Code, a
under Book III, Title 1 of the Code. MANAGERIAL EMPLOYEE refers to one whose
primary duty consists of the management of the
Employees; managerial employees vs. establishment in which he is employed or of a
supervisory employees (2002) department or subdivision thereof, and to other
Page 32 of 108
officers or members of the managerial staff. A strike to publicly protest a certain policy or
supervisor and a rank and file employee can be action taken by the government. Thus, for
considered as members of the managerial staff, instance, a general strike may be declared
and therefore, a managerial employee if their by workers to publicly protest the stand of
primary duty consists of work directly related to President Arroyo that she is against an increase
management policies; if they customarily and of the minimum wage at this time.
regularly exercise discretion and independent
judgment; regularly and directly assist a proprietor or Right to Strike; Assumption Power
a managerial employee whose primary duty FACTS: Jenson & Jenson (J & J) is a domestic
consists of the management of the establishment corporation engaged in the manufacturing of
in which they are employed or a subdivision consumer products. Its rank-and-flle workers
thereof; or execute under general supervision work organized the Jenson Employees Union (JEU), a
along specialized or technical lines requiring duty registered local union affiliated with PAFLU, a
special training, experience, or knowledge; or national union. After having been certified as the
execute under general supervision special exclusive bargaining agent of the appropriate
assignments and tasks; and who do not devote bargaining unit, JEU-PAFLU submitted its
more than 20 percent of their hours worked in a proposals for a Collective Bargaining Agreement
work-week to activities which are not directly and with the company.
closely related to the performance of the work
described above. All others are rank and file In the meantime, a power struggle occurred within
employees under said Book (Art. 82, Labor Code, the national union PAFLU between its National
Sec. 2 (c), Rule I, Bk. III, Omnibus Rules President, Manny Pakyao, and its
Implementing the Labor Code). National Secretary General, Gabriel
Miro. The representation issue within
Under Book Five of the Labor Code, PAFLU is pending resolution before the Office
"MANAGERIAL EMPLOYEE" is one who is vested of the Secretary of Labor.
with powers or prerogatives to lay down, and
execute management policies and/or to hire, By reason of this intra-union dispute within PAFLU, J
transfer, suspend, lay-off, recall, discharge, assign or & J obstinately and consistently refused to offer
discipline employees. A SUPERVISORY any counterproposal and to bargain collectively
EMPLOYEE is one who, in the interest of the with JEU-PAFLU until the representation issue
employer, effectively recommends such within PAFLU shall have been resolved with
managerial actions if the exercise of such authority is finality. JEU-PAFLU filed a Notice of Strike. The
not merely routinary or clerical in nature but Secretary of Labor subsequently assumed
requires the use of independent judgment. All jurisdiction over the labor dispute.
employees not falling within any of the above 1) Will the representation issue that has
definitions are considered rank-and-file employees arisen involving the national union PAFLU,
for purposes of this Book (Art. 212 (M), Labor to which the duty registered local union JEU
Code). is affiliated, bar collective bargaining
negotiation with J & J? Explain briefly. (3%)
On the matter of right to self-organization, 2) Can the Secretary of Labor decide the labor
a managerial employee cannot exercise such dispute by awarding the JEU CBA Proposals
right; while a supervisor and a rank and file as the Collective Bargaining Agreement of the
employee can (Arts. 245, 243, Labor Code). parties? Explain briefly. (2%)
SUGGESTED ANSWER:
Right to Strike: Sympathy vs. General 1. Representation issue in this case is not a bar...
Strike (2004)
Distinguish clearly but briefly between: 2. Yes. The Secretary of Labor can decide the
Sympathy strike and general strike. labor dispute by awarding the JEU CBA proposals as
SUGGESTED ANSWERS: the Collective Bargaining Agreement of the
In both a sympathy strike and in a general parties because when the Secretary of Labor
strike, there is a stoppage of work by the concerted (under Article 263[g]) assumes jurisdiction over a
action of employees. In both kinds of strike, the labor dispute causing or likely to cause a strike or
strike is not the result of a labor or industrial dispute. lockout in an industry indispensable to the national
interest, the Secretary of Labor exercises the
As the name implies, workers go on a SYMPATHY power of compulsory arbitration over the labor
STRIKE to show their sympathy for certain workers dispute, meaning, that as an exception to the
who are on strike. On the other hand, in a general rule, the Secretary of Labor now has the
GENERAL STRIKE, workers in the country or in a power to set or fix wages, rates of pay, hours of
region, province, or city or municipality go on a work or terms and conditions of employment by
Page 33 of 108
determining what should be the CBA of the parties. officer and did not commit any illegal act) may be
(See Divine Word University vs. Secretary entitled to reinstatement.
of Labor, 213 SCRA 759)
ALTERNATIVE ANSWER: Right to Strike; Effects; illegal strike (1995)
What is involved in the case in the question is a If the strike is declared illegal, will the strikers
corporation engaged in the manufacturing of be entitled to their wages for the duration for
consumer products. If the consumer products that the strike? Explain,
are being manufactured are not such that a strike SUGGESTED ANSWER::
against the company cannot be considered a strike NO. The applicable doctrine will be: No work,
in an Industry indispensable for the national no pay, unless there is an agreement to pay
interest, then the assumption of Jurisdiction by the strike duration pay.
Secretary of Labor is not proper. Therefore, he
cannot legally exercise the powers of compulsory Right to Strike; Effects; illegal strike (2000)
arbitration in the labor dispute. A division manager of a company taunted a union
officer two days after the union submitted to the
Right to Strike; Compulsory Arbitration; Department of Labor and Employment (DOLE) the
Certification to NLRC (1995) result of the strike vote. The division manager said:
What are the objectives of the Secretary of The union threat of an unfair labor practice strike is
Labor and Employment in certifying a labor dispute phony or a bluff. Not even ten percent (10%) of
to the NLRC for compulsory arbitration? Explain. your members will join the strike." To prove union
SUGGESTED ANSWER: member support for the strike, the union officer
The objectives of the Secretary of Labor immediately instructed its members to cease
and Employment in certifying a labor dispute working and walk out. Two hours after the walkout,
to the NLRC for compulsory arbitration is to the workers voluntarily returned to work.
prevent a work stoppage that may adversely A. Was the walkout a strike? And if so, was
affect the national interest and to see to it it a valid activity? (3%)
that a labor dispute is expeditiously settled. B. Can the union officer who led the short walk-
out, but who likewise voluntarily led the
Right to Strike; Effects; Hired Replacements workers back to work, be disciplined by the
(2006) employer? (3%)
If due to the prolonged strike, ROSE SUGGESTED ANSWERS:
Corporation hired replacements, can it refuse a) Yes, it was a strike because there was a work
to admit the replaced strikers? stoppage by concerted action and there is
SUGGESTED ANSWER: an existing labor dispute. It was not a valid
No. While present law recognizes the right of the activity because the requisites for a valid strike
employer to continue his business in the course of an were not observed, (Art. 212, (o), (l) Labor Code).
economic strike, it assures the right of the strikers
to return to their former positions at the expense of b) Yes, the employer may discipline the
the replacements. Art. 264(a) of the Labor Code union officer. An illegal strike is a cause for
provides that mere participation of a worker in a the union officer to be declared to have lost his
lawful strike shall not constitute sufficient ground employment status. [Art 263 (c), (d),(e), (f); Art
for termination of his employment, even if a 264 (a), Labor Code].
replacement had been hired by the employer
during such lawful strike (PT&T v. NLRC, G.R. No. Right to Strike; Effects; Strikers’ illegal
109281, December 7, 1995; Diwa ng Pagkakaisa v. Acts (2006)
Filtex International Corporation, Nos. L-23960 & L- Assuming the company admits all the strikers, can
23961, February 26, 1968). it later on dismiss those employees who committed
illegal acts?
Right to Strike; Effects; illegal strike (1995) SUGGESTED ANSWER:
Are the strikers in an illegal strike entitled No, when the company admits all the strikers, it is
to reinstatement under the Labor Code? Explain. deemed to have waived the issue and
SUGGESTED ANSWER: condoned the strikers who committed illegal
NO. Union officers and members who commit acts (Citizen's Labor Union v. Standard Vacuum
illegal acts lose their employment status. Any union Oil Co., G.R. No. L-7478, May 6,1955; TASLI-
officer who knowingly participates in an illegal ALU v. CA, G.R. No. 145428, July 7, 2004).
strike, and any worker or union officer who
knowingly participates in the commission of illegal acts Right to Strike; illegal dismissal (2003)
during a strike may be declared to have lost his Magdalo, a labor union in Oakwood, a furniture
employment status. Participants (not a union manufacturing firm, after failing in its negotiations
with Oakwood. filed with the Department of Labor
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and Employment (DOLE) a notice of strike. The
DOLE summoned Magdalo and Oakwood for Thus, the company committed an illegal lockout in
conciliation hearings to resolve the deadlock. refusing to accept the offer of the strikers to return
Unable to agree despite efforts of the DOLE, to work. Under the set of facts in the question, the
Magdalo called a strike participated in by its Company did not give the required notice
officers and union members including Cesar Trinio, a to lockout, much less did it observe the
rank-and-file employee, who led the "walk out." necessary waiting period, nor did it take a needed
Oakwood filed a petition to declare illegal the strike vote on the lockout. Thus, the lockout is illegal.
which Magdalo staged without observing the
seven-day ban under the Labor Code. Oakwood Right to Strike; illegal strike; Loss
claimed that the strike being illegal, all those of Employment (1994)
who participated therein, including Cesar Trinio, Union A filed a Notice of Strike with the National
could be dismissed as, in fact, they were so Conciliation and Mediation Board (NCMB) of the
dismissed by Oakwood. Decide the case. Department of Labor and Employment. Upon a
SUGGESTED ANSWER: motion to dismiss by the Company on the ground
When Oakwood dismissed all the officers that the acts complained of in the notice of strike
and members of the union who participated in the are non-strikeable. The NCMB dismissed the
strike which was declared illegal because it Notice of Strike but continued to mediate the
was staged without observing the seven-day issues contained therein to prevent the escalation of
ban under the Labor Code. the dispute between the parties. While the
NCMB was conducting mediation proceedings, the
Oakwood illegally dismissed the union members, Union proceeded to conduct a strike vote as
including Cesar Trinio. The Labor Code provides provided for under the Labor Code. After
that a union officer who knowingly participates in observance of the procedural processes required
an illegal strike loses his employment status. Thus, under the Code, the Union declared a strike.
the union officers were legally dismissed. But for a 1. Is the strike legal?
union member to lose his employment status, he 2. Can the employer unilaterally declare those
should have committed illegal acts during the who participated in the strike as having
strike, like acts of violence, coercion or intimidation lost their employment status?
or obstruction of ingress to or egress from the 3. What recourse do these employees (declared
employer's premises for lawful purposes or by the employer to have lost their employment
obstruction of public thoroughfares. The union status) have, if any?
members, including Cesar Trino, did not commit SUGGESTED ANSWER:
any of these acts. Thus, it would be illegal to 1) NO. The strike is not legal. The Labor Code
dismiss them. provides that no labor organization shall declare a
strike without first having bargained collectively in
Right to Strike; illegal lockout (1995) accordance with its Title VII of Book V, which in
Fifty percent (50%) of the employees of Grandeur turn provides that during conciliation proceedings
Company went on strike after negotiations for a at the NCMB, the parties are prohibited from doing
collective bargaining agreement ended in a any act that may disrupt or impede the
deadlock. Grandeur Company, being a public early settlement of the dispute. (Arts. 264(a),
utility, immediately petitioned the Secretary of also 250(d); Labor Code)
Labor and Employment to assume jurisdiction and ALTERNATIVE ANSWER:
certify the case to the NLRC. On the fourth day of the a) The strike is not legal, considering that it was
strike and before the DOLE Secretary could declared after the NCMB dismissed the Notice of
assume jurisdiction or certify the case to the Strike. Hence, it is as if, no notice of strike was
NLRC, the strikers communicated in writing their filed. A strike declared without a notice of strike is
offer to return to work. Grandeur Company refused to illegal, (GOP-CCP vs. CIR, 93 SCRA 118).
accept the offer of the strikers because it
realized that they were not at all capable of b) No. The strike is illegal. It is already settled in
paralyzing the operations of the company. The the case of PAL vs. Secretary of Labor (Drilon)
strikers accused Grandeur Company of illegal that the pendency of a mediation proceedings is a
lockout. bar to the staging of a strike even if all the
procedural requirements were complied with.
Has Grandeur Company committed the
act charged by refusing to accept the offer of SUGGESTED ANSWER:
the strikers to return to work? Discuss fully. 2) The employer may unilaterally declare those
SUGGESTED ANSWER: who participated in the strike as having lost their
There is no law that prohibits strikers to decide not employment status but such unilateral declaration
to continue with a strike that they have started. does not necessarily mean that thereby the strikers
Page 35 of 108
2006
are legally dismissed. The strikers could still file a Certification of labor dispute for immediate
case of illegal dismissal and prove, if they can, that assumption of jurisdiction by the Secretary of the
there was no just cause for their dismissal. Department of Labor and Employment, as
ALTERNATIVE ANSWER: indispensable to national interest. (Art. 263 [g],
a) The employer cannot unilaterally declare those Labor Code).
who participated in the Illegal strike as having lost 1. Bulletin Daily Newspaper. Access to information,
their employment status. Only the union officers e.g., local, foreign, or otherwise are requirements
who knowingly participated In the strike and for an informed citizenry.
workers who knowingly participated in the 2. Shipping and port services in Cebu and Manila.
commission of illegal acts. If any, may be declared The country needs domestic sea transport due to
to have lost their employment status. (Art. 264). our topography and for the smooth flow of
business and government operations.
b) The employer has two options:
1. It may declare the strikers as having lost 3. LBC, DHL, FEDEx Centers. Couriers are
their employment status pursuant to Art. essential to foreign and domestic business and
264 of the Labor Code, or government operations.
2. It may file a case before the Labor Arbiter,
under Art, 217, to have the strike declared Right to Strike; Industries Vital to National
illegal and after that proceed to terminate Interest; Return to Work Order (1996)
the strikers. A deadlock in the negotiations for the collective
bargaining agreement between X College and the
SUGGESTED ANSWER: Union prompted the latter, after duly notifying the
3) They could file a case of illegal dismissal. The DOLE, to declare a strike on November 5 which
strikers who are union officers may contend that totally paralyzed the operations of the school.
the strike is not illegal. The strikers who are mere
union members may contend that they did not The Labor Secretary immediately assumed
commit any Illegal acts during the strike. (Art, 264, Jurisdiction over the dispute and issued on the
Labor Code) same day (November 5) a return to work order.
ALTERNATIVE ANSWER: Upon receipt of the order, the striking union officers
a) The employees who were declared to have lost and members on November 7, filed a motion for
their employment status can file a complaint for reconsideration thereof questioning the Labor
illegal dismissal with the NLRC, or seek the Secretary's assumption of jurisdiction, and
assistance of the NCMB for conciliation/ mediation. continued with the strike during the pendency of
their motion.
b) The recourse of the workers whose employment
status are declared to have been lost is to file a On November 30, the Labor Secretary denied
case of illegal dismissal under Art. 217 of the reconsideration of his return to work order and
Code, and to pray for the suspension of the effects further noting the striker's failure to immediately
of termination under Article 277(b) of the said Code return to work terminated their employment.
because this involves a mass lay-off.
In assailing the Labor Secretary's decision, the
Right to Strike; Industries Vital to National Union contends that:
Interest (2004) 1. the Labor Secretary erroneously assumed
Which of the following may be considered among jurisdiction over the dispute since X College
industries most vital to national interest as to be could not be considered an industry
the subject of immediate assumption of jurisdiction indispensable to national interest;
by the Secretary of Labor and Employment or 2. the strikers were under no obligation to
certification for compulsory arbitration in case of immediately comply with the November 5
strike or work stoppage arising from a labor return to work order because of their then
dispute? pending motion for reconsideration of such
(1) Bulletin daily newspaper publishing order: and
company. 3. the strike being legal, the employment of the
(2) Local franchise of Jollibee and Starbucks. striking Union officers and members cannot be
(3) Shipping and port services in Cebu and terminated.
Manila. Rule on these contention. Explain.
(4) Enchanted Kingdom, Elephant Island and SUGGESTED ANSWERS:
Boracay Resort. 1} The Supreme Court has already ruled that
(5) LBC, DHL and FedEx centers. educational institutions are in an industry
Justify your answer or choice. (5%) indispensable to the national interest, considering
SUGGESTED ANSWER:
Page 36 of 108
the grave adverse effects that their closure entails ground for termination of his employment, even if a
on their students and teachers. replacement had been hired by the
employer during such lawful strike.
2) The striking workers must immediately comply
with a Return to Work Order even pending Right to Strike; Lawful; Right to
their motion for reconsideration. Compliance is Rein- statement (2006)
a duty imposed by law, and a Return to Work As a result of bargaining deadlock between ROSE
Order is immediately executory in character. Corporation and ROSE Employees Union, its
members staged a strike. During the strike, several
The nature of a Return to Work Order, employees committed illegal acts. The company
was characterized by the Supreme Court in refused to give in to the union's demands.
Sarmiento v. Juico, 162 SCRA 676 (1988) as: Eventually, its members informed the company of
It is also important to emphasize that the return their intention to return to work. (10%)
to work order not so much confers a right as it 1. Can ROSE Corporation refuse to admit all
imposes a duty. It must be discharged as a the strikers?
duty even against the workers' will. Returning SUGGESTED ANSWER:
to work in this situation is not a matter of Rose Corporation cannot refuse to admit all the
options or voluntariness but of obligation. strikers. Participants in a lawful strike generally
have the right to reinstatement to their positions
In Baguio Colleges Foundation v. NLRC, upon the termination of the strike (Insular Life
222 SCRA 604 (1993) the Court ruled: Assurance Co. Employees Assn. v. Insular Life
Assumption and certification orders are Assurance Co., G.R. No. L-25291, January 30,
executory in character and are to be 1979; Consolidated Labor Assn. of the Phil. v.
strictly complied with by the parties even Marsman & Co., Inc., G.R. No. L-17038, July 31,
during the pendency of any petition 1964). However, the Labor Code provides that any
questioning their validity. worker or union officer who knowingly participates in
the commission of illegal acts during a strike
3) The continuing strike is illegal because it is in may be deemed to have lost his employment
defiance of a return to work order of the Secretary status (Bascon v. CA, G.R. No. 144899, February 5,
of Labor and Employment, hence, termination 2004; First City Interlink Trans. Co., Inv. v.
of employment of all those who participated Confessor, G.R. No. 106316, May 5,1997;
whether officer or member, is legal. Lapanday Workers' Union v. NLRC, G.R. Nos.
95494-97, September 7, 1995; Art. 264, Labor
In Sta. Scholastica's College v. Torres. 210 SCRA Code).
565 (1992), the Court ruled:
Any worker or union officer who knowingly Right to Strike; Limitations (2000)
participates in a strike defying a return to work A. What is the rationale for the State regulation of
order may, consequently, be declared to have strike activity and what are the
lost his employment status in accordance with interests involved that the State must
Art. 246 of the Labor Code. balance and reconcile? (3%)
B. Cite two (2) examples on how the law
Right to Strike; Lawful Strike; Effect regulates the use of the strike as a form
on Participants (1997) of concerted activity. (2%)
A strike was staged in Mella Corporation because SUGGESTED ANSWER:
of a deadlock in CBA negotiations over certain a) The first rationale is the constitutional provision
economic provisions. During the strike, Mella that the right to strike is to be exercised
Corporation hired replacements for the workers "in accordance with law". Another rationale is the
who went on strike. Thereafter, the strikers Civil Code provision that the relations
decided to resume their employment. between employer and employee are imbued
Can Mella Corporation be obliged to reinstate with public interest and are subject to the
the returning workers to their previous positions? provisions of special law. A third rationale is
SUGGESTED ANSWER: the police power of the state.
YES. Mella Corporation can be obligated to
reinstate the returning workers to their previous The interests to be balanced are the rights of
positions. Workers who go on strike do not lose the workers, as primary socio-economic force,
their employment status except when, while on to protection of the law, to security of tenure,
strike, they knowingly participated in the to concerted activities, etc. These should
commission of illegal acts. The Labor Code be balanced with the right of the employer
expressly provides: Mere participation of a worker in to reasonable return on investment and to expansion
a lawful strike should not constitute sufficient and growth. General welfare or the general peace
Page 37 of 108
and progress of society should also be considered. Labor Union, 100 Phil 789 (1957): Cruz v. Cinema
This is why assumption of Jurisdiction Stage, etc., 101 Phil 1259 (1957}]
and certification to NLRC are allowed in ALTERNATIVE ANSWER:
"national interest" cases. {Art. 263, Labor No, the picketing activity itself cannot be curtailed.
Code; Raw at Buklod ng Manggagawa v. NLRC, What can be curtailed are the Illegal acts being
198 SCRA 586 (1991); Lapanday Workers done in the course of the picket. However, if this is a
Union v. NLRC, 248 SCRA 96 (1995)} "national Interest" case under Art 263(g), the
strike or work stoppage may be stopped by the
EXAMPLES: (1) procedural requirements should power of assumption of Jurisdiction or certification of
be observed, namely, filing of notice of the case to the National Labor Relations
strike, observance of cooling-off period, taking of Commission. {Nagkakaisang Mangagawa sa
strike note, and report of the strike vote; (2) use Cuison Hotel v. Libron, 124 SCRA 448 (1983);
of violence, intimidation or coercion and blockade Free Telephone Workers Union v. PLDT, 113
of ingress-egress are not allowed. (Art SCRA 662 (1982)].
263 (b)(c)(f)(g), Labor Code).
Right to Strike; Picketing Activity;
Right to Strike; National Interest; DOLE Sec. illegal dismissal (2004)
intervention (2004) B. President FX, head of a newly formed labor
Employees of ABC declared a strike after filing a union composed of 1/3 of the total number of rank-
Notice of Strike with the DOLE. They barricaded and-file employees in Super Stores, Inc., agitated
company gates and damaged vehicles entering his fellow employees to demand from management
company premises. On the second day of the pay increases and overtime pay. His supervisor
strike, ABC filed a petition with the summoned him to explain his tardiness and refusal
DOLE Secretary to intervene through the to obey regulations. Feeling threatened, he
issuance of an assumption of jurisdiction order that gathered 20 of his members and staged a 2-day
the Secretary may issue when a strike or lock-out will picket in front of the shopping mall. Security staff
adversely affect national interest. ABC arrived and dismantled the placards and
furnished the Secretary with evidence to show barricades blocking the employees’ entry to the
that company vehicles had been damaged; that mall. In retaliation, FX threw stones at the guards,
electric power had been cut off; and equipment but the other striking workers just stood by
and materials were damaged because electric watching him. Seven days after the picket, FX who
power was not immediately restored. ABC had gone absent without leave returned to the mall
forecast that the country’s supply of chlorine for and announced that he had filed a complaint for
water treatment (which the company produces) illegal dismissal and unfair labor practice against
would be affected adversely if ABC’s operations SSI.
were closed down by the strikers.
SSI learned that FX’s group was not registered. No
Could the DOLE Secretary intervene, strike vote and strike notice were filed prior to the
assume jurisdiction and issue a TRO picket. The guards were told not to allow FX entry
(Temporary Restraining Order)? Briefly justify to the company premises as management
your answer. (5%) considered him effectively terminated. Other union
members were accepted back to work by SSI.
Was the dismissal of FX for a valid cause?
Right to Strike; Picketing Activity (2000) Was due process observed? (5%)
The workers engaged in picketing activity in SUGGESTED ANSWER:
the course of a strike. There is a valid cause for the dismissal of FX, but
a) Will picketing be legal if non-employees of the due process was not observed.
strike-bound employer participate in the
activity? (3%) Peaceful picketing is part of the constitutional
b) Can picketing activity be curtailed when illegal freedom of speech. The right to free speech,
acts are committed by the picketing workers in the however, has its limits, and picketing as a
course of the activity? (3%) concerted activity is subject to the same limitations
SUGGESTED ANSWER: as a strike, particularly as to lawful purpose and
Yes, the picketing is legal even though non- lawful means. But it does not have to comply with
employees join it. Picketing is a form of the the procedural requirements for a lawful strike, like
exercise of freedom of speech. Picketing, provided it the notice of strike or the strike vote.
is held peacefully, is a constitutional right. The
disputants in a legal dispute need not be employer- However, in the problem given, picketing became
employee of each other. [De Leon v. National illegal because of unlawful means, as barricades
blocked the employees' entry to the mall, and
Page 38 of 108
violence, ensued when FX threw stones at the who participated in the strike dismissed
guards. There was thus, valid cause for from employment.
the dismissal of FX, however, due process
was not observed because SSI did not comply (a) Was the act of Manila Airlines' management in
with the twin requirements of notice and hearing. dismissing the participants in the strike valid?
(b) What are the effects of an assumption of
Right to Strike; Return to Work Order (1994) jurisdiction by the Secretary of Labor upon the
The Secretary of Labor assumed jurisdiction over a striking employees and Manila Airlines?
strike under Art. 263(g) of the Labor Code SUGGESTED ANSWER:
and issued a return-to-work order. The Union (a) Yes. The act of Manila Airlines' management
defied the return-to-work order and continued the in dismissing the participants in the strike is valid,
strike. The Company proceeded to declare in a number of Supreme Court decisions, it
all those who participated in the strike as has ruled that the defiance by workers of a
having lost their employment status. return to work order of the Secretary of Labor
1) Was the Company's action valid? issued when he assumes jurisdiction over a labor
2) Was the Company still duty bound to observe dispute is an illegal act and could be the
the requirements of due process before basis of a legal dismissal. The return to work
declaring those who participated in the strike as order imposes a duty; it must be discharged as
having lost their employment status? a duty even against the workers' will.
SUGGESTED ANSWER:
1) The Company's action is valid. (b) When the Secretary of Labor assumes
Any declaration of a strike after the Secretary of jurisdiction over a strike, all striking employees
Labor has assumed jurisdiction over a labor shall immediately return to work and the employer
dispute is considered an illegal act, and any shall immediately resume operations and readmit
worker or union officer who knowingly all workers under the same terms and conditions
participates in a strike defying a return-to- prevailing before the strike. [Art. 263(q)].
work order may consequently be declared to
have lost his employment status and forfeited Right to Strike; Return to Work Order (1998)
his right to be readmitted, having abandoned The Secretary of Labor and Employment, after
his position, and so could be validly replaced. assumption of jurisdiction over a labor dispute
in an airline issued a Return to Work Order.
For the moment a worker defies a return-to-work The airline filed a Motion for Reconsideration
order, he is deemed to have abandoned his job, as it of the Order and pending resolution of the
is already in itself knowingly participating in an motion, deferred the implementation of the Order.
illegal act, otherwise the worker will simply refuse Can the airline defer the implementation of the
to return to his work and cause a standstill in Return to Work Order pending resolution of
company operations while returning the position he the motion for reconsideration? [5%]
refuses to discharge or allow management to fill. SUGGESTED ANSWER:
(St. Scholastica's College vs. Hon. Ruben Torres, The airline cannot defer the implementation of the
Secretary of Labor, etal., G.R. No. 100158. 29 Return to Work Order on the basis of there being a
June 1992.) pending Motion for Reconsideration re: the
assumption of jurisdiction by the Secretary of
SUGGESTED ANSWER: Labor and Employment of a labor dispute.
2) Considering that the workers who defied According to the Supreme Court, the Return to
the return-to-work order are deemed to Work Order issued by the Secretary of Labor and
have abandoned their employment, the only Employment upon his assumption of jurisdiction
obligation required of an employer is to over a labor dispute in an industry indispensable
serve notices declaring them to have lost for the national interest is immediately executory.
their employment status at the worker's last ANOTHER SUGGESTED ANSWER:
known address. (Sec. 2 Rule XIV, Book V, No, the airline cannot defer the implementation
Rules Implementing the Labor Code) of a return to work order pending resolution of
a Motion for Reconsideration.
Right to Strike; Return to Work Order (1997) The Labor Code reads –
The Secretary of Labor assumed Jurisdiction over a Art. 263. Strikes, picketing, and lockouts. - xxx (g)
strike in Manila Airlines and eventually issued a When, in his opinion, there exists a labor
return-to-work. The Manila Airlines Employees dispute causing or likely to cause a strike or
Union defied the return-to-work order and lockout in an industry indispensable to the
continued with their strike. The management of national interest, the Secretary of Labor and
Manila Airlines then declared all the employees Employment may assume jurisdiction over the
dispute and decide it or certify the same to the
Page 39 of 108
2006
Commission for compulsory arbitration. Such 1. What are the statutory requisites for a valid
assumption or certification shall have the effect strike by the workers? Should these requisites
of automatically enjoining the intended or be complied with substantially or strictly?
impending strike... as specified in the SUGGESTED ANSWERS:
assumption or certification order. If one has The STATUTORY REQUISITES for a valid strike
already taken place at the time of assumption are the following:
or certification, all striking employees ...shall 1. A strike may be declared only in cases of
immediately return to work, (underscoring bargaining deadlocks or unfair labor practices.
supplied) Violations of Collective bargaining agreements,
except flagrant and/or malicious refusal to
The Supreme Court, in Baguio Colleges comply with its economic provisions, shall not
Foundation V NLRC. 222 SCRA 604 (1995), ruled be considered unfair labor practice and shall
- not be strikeable. No strike or lockout may be
xxx assumption and certification orders are declared on grounds involving inter-union and
executory in character and are to be strictly intra-union disputes.
complied with by the parties even during the 2. No strike may be declared without first having
pendency of any petition questioning their filed a notice of strike or without the necessary
validity. strike vote having been obtained and reported
to the National Conciliation and Mediation
Being executory in character, there was Board. A strike may actually take place only
nothing for the parties to do but implement the after a 30-day waiting period after notice was
same, (underscoring supplied) filed for a strike arising from a bargaining
deadlock or after & 15-day waiting period for
Right to Strike; Return to Work Order; an unfair labor practice strike. Notice about a
Assumption Order (2003) strike vote should be given seven days before
In a labor dispute, the Secretary of Labor issued the intended strike.
an "Assumption Order". Give the legal implications 3. No strike can be declared after assumption of
of such an order. jurisdiction by the Secretary of Labor and
SUGGESTED ANSWER: Employment or after certification or submission
Under Art. 263(g) of the Labor Code, such of the dispute to compulsory or voluntary
assumption shall have the effect of automatically arbitration or during the pendency of cases
enjoining the intended or impending strike or involving the same grounds for the strike or
lockout as specified in the assumption order. If one lockout.
had already taken place at the time of assumption,
all striking or lockout employees shall immediately The above requisites are to be complied with
return to work and the employer shall immediately strictly. Thus, the Supreme Court has ruled that
resume operations and re-admit all workers under non-compliance of the requirements of notice or a
the same terms and conditions prevailing before strike vote or of the waiting periods makes a strike
the strike or lockout. an illegal strike.
The Secretary of Labor and Employment may seek ANOTHER SUGGESTED ANSWER:
the assistance of law enforcement agencies to STATUTORY REQUIREMENTS for a Valid Strike
ensure compliance with this provision as well as A. STATUS OF STRIKING UNION -
with such orders as he may issue to enforce the For a ULP strike or bargaining deadlock
same. strike, only a duly-certified or -recognized
bargaining representative may declare
The mere issuance of an assumption order by the such strike.
Secretary of Labor automatically carries with it a B. PROCEDURAL REQUIREMENTS -
return-to-work order, even if the directive to return (1) Notice of Intent. Filing of Notice of Intent
to work is not expressly stated in the assumption to Strike with the NCMB.
order. Those who violate the foregoing shall be (2) Cooling-off Period.- Observance of
subject to disciplinary action or even criminal Cooling-off Period.
prosecution. Under Art. 264 of the Labor Code, no (a) ULP - 15 days before intended date of
strike or lockout shall be declared after the strike
assumption of jurisdiction by the Secretary. (b) Bargaining Deadlock - 30 days before
intended date of strike.
Right to Strike; Statutory Requisites; (3) Strike Vote and Filing of the same with the
Procedural Requirements (2004) NCMB and the observance of the seven
(7) days strike ban. [Art. 263 (c-f), Labor
Enumerate and discuss briefly:
Code].
Page 40 of 108
C. CAUSE - to talk with the union leaders, alleging that
The cause of a strike must be a labor or industrial they had not as yet presented any proof of
dispute. [Art. 212fo). Labor Code. Compliance with majority status.
all legal requirements are meant to be and should
be mandatory. (National Federation of Sugar The Kilusang Kabisig then chained Microchip
Workers v. Ovajera, 114 SCRA 354 [1982]). Corporation with unfair labor practice, and declared
a "wildcat" strike wherein means of ingress and
Right to Strike; Temporary Stoppage (2002) egress were blocked and remote and isolated acts of
Eaglestar Company required a 24-hour operation destruction and violence were committed.
and embodied this requirement in the employment a) Was the strike legal?
contracts of its employees. The employees agreed to b) Was the company guilty of an unfair labor
work on Sundays and Holidays if their work practice when it refused to negotiate with
schedule required them to do so for which they the Kilusang Kabisig?
would be paid additional compensation as SUGGESTED ANSWERS:
provided by law. Last March 2000, the union filed a (a) Because what was declared is a "wildcat"
notice of strike. Upon Eaglestar's petition, the strike, the strike is illegal. A "wildcat" strike is one
Secretary of Labor certified the labor dispute to the that is one declared by a group of workers without
NLRC for compulsory arbitration. On April 20, 2000 formal union approval. Thus, it is illegal because
(Maundy Thursday), while conciliation meetings the Labor Code requires that for a strike to be
were pending, the union officers and members who legal, among others, the decision to declare a
were supposed to be on duty did not report for strike must be approved by a majority of the
work. Neither did they report for work on April total union membership in the bargaining
21 (Good Friday) and on April 22 (Black unit concerned, obtained by a secret ballot in
Saturday), disrupting the factory's operations and meetings or referenda called for that purpose.
causing it huge losses. The union denied it had ALTERNATIVE ANSWERS:
gone on a strike because the days when its a.l) The strike is illegal. The Labor Code
officers and members were absent from work recognizes only one of two (2) grounds for a strike to
were legal holidays. Is the contention of the be legal: bargaining deadlock or unfair labor
union correct? Explain briefly. (5%) practice. A strike to compel an employer to
SUGGESTED ANSWER: recognize a union is not allowed by law.
The contention of the union is NOT correct. In the
case, it is clear that the employees agreed to work 2) The strike is not illegal. For the strike to be
on Sundays and Holidays if their work schedule illegal because of violence, it should be
required them to do so for which they would be characterized by pervasive violence. Here, there
paid additional compensation as provided by law. were only remote and violated acts of destruction
The above-mentioned agreement that the and violence. But even if the strike is not illegal,
employees voluntarily entered into is valid. It is not those strikers who committed illegal acts, namely,
contrary to law. It is provided in the agreement that if those who blocked the means of ingress and
they will work Sundays or Holidays that they will be egress and who committed acts of destruction and
paid additional compensation as provided by law. violence, these strikers can be legally dismissed.
Neither is the agreement contrary to morals,
good customs, public order or public policy. Right to Strike; Work Slowdown (1998)
The day following the workers' voluntary return
Thus, when the workers did not report for to work, the Company Production
work when by agreement they were supposed to Manager discovered an unusual and sharp drop in
be on duty, there was a temporary stoppage of workers' output. It was evidently clear that the
work by the concerted action of the employees as workers are engaged in a work slowdown activity.
a result of an Industrial or labor dispute because Is the work slowdown a valid form of strike activity?
they were on strike. [See Interphil Laboratories [5%]
Employees Union-FFW v. Interphil Laboratories SUGGESTED ANSWER:
Inc., GR No. 142824, December 19, 2001} A WORK SLOWDOWN is not a valid form of strike
activity. If workers are to strike, there should be
Right to Strike; Wildcat Strike (1997) temporary stoppage of work by the concerted
The Kilusang Kabisig, a newly-formed labor union action of employees as a result of an industrial or
claiming to represent a majority of the workers in labor dispute (See Article 2l2(o) of the Labor Code)
the Microchip Corporation, proceeded to present a ANOTHER SUGGESTED ANSWER:
list of demands to the management for purposes of No, a slowdown is not a valid form of strike activity.
collective bargaining. The Microchips Corporation, The Supreme Court in Ilaw at Buklod ng
a multinational corporation engaged in the Manggagawa v. NLRC 198 SCRA 586 (1991) ruled -
production of computer chips for export, declined The Court is in substantial agreement with the
Page 41 of 108
petitioner's concept of a slowdown as a "strike on the When the law provides that a "labor organization
installment plan", as a willful reduction in the rate xxx shall acquire legal personality xxx upon
of work by conceited action of workers for the issuance of the certificate of registration", the date
purpose of restricting the output of the employer, in appearing therein is legally presumed - under the
relation to a labor dispute, as an activity by which rule on presumption of regularity - to be its date of
workers, without a complete stoppage of work issuance. Actual issuance is a contentious
retard production or their performance of their evidentiary issue that can hardly be resolved, not
duties... The Court also agrees that such slowdown to mention that the law does not speak of "actual"
is generally condemned as inherently illicit and issuance.
unjustifiable, because while the employees
"continue to work and remain at their positions, Self Organization; Appropriate Bargaining
and accept wages paid to them", they at the same Unit; Confidential Employees (2002)
time select what part of their alloted tasks they Malou is the Executive Secretary of the Senior
care to perform of their own volition or refuse Vice-president of a bank while Ana is the
openly, or secretly, to the employers damage, to Legal Secretary of the bank's lawyer. They
do other work; in other words, they work on their and other executive secretaries would like to join
own terms. the union of rank and file employees of the
bank. Are they eligible to join the union?
Likewise, a slowdown is not a valid form of Why? Explain briefly. (3%)
concerted activity, absent a labor dispute between SUGGESTED ANSWER:
the parties. The Labor Code reads - Art. 212. . – The following rules will govern the right of
xxx Co) "Strike" means any temporary stoppage of self- organization of Malou, Ana, and the
work by the concerted action of employees as a other Executive Secretaries;
result of an industrial or labor dispute. 1. No Right to Self-Organization — Confidential
ANOTHER SUGGESTED ANSWER: employees who act in a confidential capacity to
No. It is a prohibited activity. It can be said to be a persons who formulate, determine, and effectuate
violation of the duty to bargain collectively. management policies in the field of labor-
The union is guilty of bad faith. The workers management relation. The two criteria are
should resume operations under the same cumulative and both must be met [San Miguel
terms and conditions prevailing prior to the strike. Corporation Union v. Laguesma, 277 SCRA 370
(1997)]
Self Organization; Acquisition of
Legal Personality (2003) 2. With Right to Self-Organization — When
At what particular point does a labor the employee does not have access to
organization acquire a legal personality? confidential labor relations information, there
a) On the date the agreement to organize the is no legal prohibition against confidential
union is signed by the majority of all employees from forming, assisting, or joining a
its members; or labor organization. [Sugbuanon Rural Bank,
b) On the date the application for registration Inc. v. Laguesma, 324 SCRA 425 (2000)]
is duly filed with the Department of Labor or
c) On the date appearing on the Certificate of 3. No right of self-organization for Legal
Registration; or Secretaries — Legal Secretaries fall under the
d) On the date the Certificate of Registration category of confidential employees with no right to
is actually issued; or serf-organization. [Pier & Arrastre Stevedoring
e) None of the above, Choose the correct Services, Inc. v, Confesser, 241 SCRA 294 (1995)]
answer.
SUGGESTED ANSWER: Self Organization; BLR Certification;
d.) On the date the Certificate of Registration Certification Election (1998)
is actually issued. Can the Bureau of Labor Relations certify a union
as the exclusive bargaining representative after
Any applicant labor organization, association or showing proof of majority representation thru union
group of unions or workers shall acquire legal membership cards without conducting an election?
personality and shall be entitled to the rights [5%]
and privileges granted by law to legitimate SUGGESTED ANSWER:
labor organizations upon issuance of the The Bureau of Labor Relations CANNOT certify a
certificate of registration. union as the exclusive collective bargaining
ANOTHER SUGGESTED ANSWER: representative after showing of proof of majority
(c) "On the date appearing on the Certificate representation thru union membership cards
of Registration." without conducting a certification election.
Page 42 of 108
2006
The Labor Code (In Arts. 256, 257 and 258} obstacles should be placed on the holding of a
provides only for a certification election as the certification election, (Samahang ng Manggagawa
mode for determining the exclusive collective sa Pacific Plastic vs. Laguesma 267 SCRA 203,
bargaining representative if there is a question of (1997) and that the law is indisputably partial to the
representation in an appropriate bargaining unit. holding of a certification election. (Western Agusan
ANOTHER SUGGESTED ANSWER: vs. Trajano, 196 SCRA 622 (1991).
No, the Bureau of Labor Relations cannot certify a
union as the exclusive bargaining representative At any rate, UNIDAD completed all the
without conducting a certification election. requirements for union registration on July 14,
The Supreme Court, in Colgate Palmolive 2001, and legitimate union status was accorded on
Philippines Inc. v. Ople. 163 SCRA 323 (1988), July 15, 2000, or at least ten (10) days before the
ruled - scheduled date for holding the Certification
The procedure for a representation case is Election.
outlined [in the] Labor Code ... the main purpose
of which is to aid in ascertaining majority Self Organization; Certification Election;
representation. The requirements under the law Bystander Rule (1996)
... are all calculated to ensure that the certified PT & T Supervisory Employees Union filed a
bargaining representative is the true choice of petition for the holding of a certification election
the employees against all contenders. xxx When among the supervisory employees of the PT & T
an ... official by-passes the law on the pretext of Company. The company moved to dismiss the
retaining a laudable objective, the intendment or petition on the ground that Union members were
purpose of the law will lose its meaning as the performing managerial functions and were not
law itself is disregarded. When the [Bureau of merely supervisory employees. The company also
Labor Relations] directly [certifies] a union, he in alleged that a certified bargaining unit existed
fact disregarded this procedure and its legal among its rank and file employees which barred
requirements. There was therefore failure to the filing of the petition.
determine with legal certainty whether the union 1. Does the company have the standing to file the
indeed enjoyed majority representation. motion to dismiss? Explain.
2. If you were the Med-Arbiter, how would you
Self Organization; Certification Election resolve the petition.
(2001) 3. What is the proper remedy of an employer to
UNIDAD, a labor organization claiming to ensure that the employees are qualified to hold
represent the majority of the rank and file workers a certification election?
of BAGSAK Toyo Manufacturing Corp. (BMTC), SUGGESTED ANSWER:
filed a petition for certification election during the 1) No, the company has no standing to file the
freedom period obtaining in said corporation. Motion to Dismiss as the employer has no right to
Despite the opposition thereto by SIGAW interfere in a purely union matter or concern.
Federation on the ground that UNIDAD was not (Philippine Fruits and Vegetable Industries, Inc.. vs
possessed with all the attributes of a duly Torres, 211 SCRA 95 (1992)
registered union, the Med-Arbiter issued an Order
calling for a certification election on July 25, 2001. The Court would wish to stress once more the rule
which It has consistently pronounced in many
This Order was promulgated and served on the earlier cases that a certification election is the sole
parties on July 12, 2001. On July 14, 2001, concern of the workers and the employer is
UNIDAD submitted and served the required regarded as nothing more than a bystander with no
documents for its registration as an independent right to interfere at all in the election.
union, which documents were approved by the
DOLE on July 15, 2001. 2) As the MED ARBITER I will:
a) Deny, for lack of merit, the employer's
During the elections, UNIDAD won over SIGAW. Motion to dismiss the Union's Petition for
SIGAW questioned UNIDAD's victory on the Certification Election.
ground that UNIDAD was not a duly registered b) Proceed to hear the merits of the petition,
union when it filed the petition for a certification especially:
election. Shall SIGAWs case prosper or not? Why? 1. the appropriation of the claimed
(5%). bargaining unit;
SUGGESTED ANSWER: 2. inclusion and exclusion of voters, or
No, SIGAW's case will not prosper. The application the proposed voter list; and
of technicalities of procedural requirements in 3. if the petition is in order, to set the
certification election disputes will serve no lawful date, time and place of the election.
objective or purpose. It is a statutory policy that no
Page 43 of 108
3) The employer has no remedy. The petition for certification election shall automatically be
certification election was initiated by the Union; conducted by the Med-Arbiter upon the filing of
hence, the employer is a total stranger or a a petition by a legitimate labor organization.
bystander in the election process. (Philippine Fruits
and Vegetable Industries, Inc. v. Torres, 211 In the above-described situation, a certification
SCRA 95 [1992]). To allow an employer to assert a election is made mandatory because if there is no
remedy is an act of interference in a matter which is certified bargaining agent as determined by a
purely a concern of the Union. certification election, there could be no collective
bargaining in the said unorganized establishment
ALTERNATIVE ANSWER:
1) The company does not have the standing to Self Organization; E-E Relationship;
file a motion to dismiss the petition for certification Certification Election (1998)
election, but it could move for the exclusion of the Is it required that an employer-employee
employees it alleged to be managerial employees relationship exists between an employer and the
from the bargaining unit for which a petition for employees in the appropriate bargaining unit
certification election has been filed. before a certification election can be ordered? If
so. why? [5%]
As a general rule, an employer has no standing in a SUGGESTED ANSWER:
petition for certification election because the Yes. it is required that an employer-employee
purpose of a certification election is to determine relationship is existing between the employer and
who should be the collective bargaining the employees in the appropriate bargaining unit
representative of the employees. Thus, a before a certification election can be ordered for
certification election is the concern of the the simple reason that a certification election is
employees and not of the employer. held for the purpose of determining which labor
organization shall be the exclusive collective
But in the case at bar, the employer may have bargaining representative of the employees in an
a standing because the petition for certification appropriate bargaining unit. There could be no
election involves personnel which the employer collective bargaining between persons who do not
alleges to be managerial employees. And have any employer-employee relationship.
managerial employees under the Labor Code are ANOTHER SUGGESTED ANSWER:
not eligible to form, assist or Join labor Yes. the Supreme Court has ruled that the
organizations, implying that they cannot be part of existence of an employer-employee relationship is
the bargaining unit for which a petition for required before a certification election can be held.
certification election has been filed. The Supreme Court in Allied Force Waters Union
v. Campania Maritime 19 SCRA 268 (1967). ruled -
2) As the MED-ARBITER, I will order the holding of xxx There being no employer-employee
the certification election. The fact that there is relationship between the parties disputants, there
already a certified collective bargaining is neither "a duty to bargain collectively" to
representative of the rank and file employees of speak of. And there being no such duty, to
the Company is not a bar to the holding of a hold certification elections would be pointless.
certification election for the determination of the There is no reason to select a representative to
collective bargaining representative of the negotiate when there can be no negotiations in
supervisory employees. But I will exclude those the first place. Where there is no duty to
employees found to be managerial from bargain collectively, it is not proper to hold
participating in the certification election. certification elections in connection therewith.
3) The proper remedy of an employer to Self Organization; Gov’t Employees (2004)

ensure that only the employees are qualified B. Because of alleged “unfair labor practices”
to hold a certification election is to move for the by the management of GFI System, a
exclusion of those whom he alleges to government- owned and controlled financial
be managerial personnel. corporation, its employees walked out from their
jobs and refused to return to work until the
Self Organization; Certification Election; management would grant their union official
Unorganized Establishment (2003) recognition and start negotiations with them.
There are instances when a certification election is
mandatory. What is the rationale for such a The leaders of the walk-out were dismissed, and
legal mandate? the other participants were suspended for sixty
SUGGESTED ANSWER: days. In arguing their case before the Civil Service
According to the Labor Code, in any establishment Commission, they cited the principle of social
where there is no certified bargaining agent, a justice for workers and the right to self-organization
Page 44 of 108
and collective action, including the right to (Mactan Workers Union v. Aboitiz, 45 SCRA
strike. They claimed that the Constitution 577 (1972|)
shielded them from any penalty because their c) It is the instrumentality through which
walk-out was a concerted action pursuant an individual laborer who is helpless as
to their rights guaranteed by the basic law. against a powerful employer may, through
concerted effort and activity, achieve
Is the position taken by the walk-out leaders and the goal of economic well-being.
participants legally correct? Reason briefly. (5%) (Gullarno v. CIR, 32 SCRA 307 [1993]).
SUGGESTED ANSWER:
The position taken by the walk-out leaders and Self Organization; Membership Policy (1998)
participants is not legally correct. They are A labor union lawyer opined V. that a
government employees, and as such, they do not labor organization is a private and
have the right to strike. According to the actual voluntary organization; hence, a union
wording of Section 3 of Article XIII of the can deny membership to any and all applicants.
Constitution, the State "shall guarantee the rights Is the opinion of counsel in accord with law? [5%]
of all workers to self-organization, collective SUGGESTED ANSWER:
bargaining and negotiations, and peaceful NO, the opinion of counsel is not in accord with
concerted activities including the right to strike in law. The Labor Code (in Article 249 (a and b)
accordance with law." provides that a labor organization has the right to
prescribe its own rules for the acquisition or
Thus, the last clause of the above-quoted provision retention of membership, but it is an unfair labor
of the Constitution makes it very clear: the right to practice act for a labor organization to restrain or
strike is not constitutional, it is statutory coerce employees in the exercise of their right to
because the right should be "in accordance self-organization. Thus, a labor organization
with law". And there is as yet no law cannot discriminate against any employee by
giving government employees the right to strike. denying such employee membership in the labor
organization on any ground other than the usual
ANOTHER SUGGESTED ANSWER: terms and conditions under which membership or
NO. What Art. XIV, Sec. 3 of the 1987 Constitution continuation of union membership is made
guarantees is "the right to strike in accordance with available to other members.
law." Assuming that what we have is a ANOTHER SUGGESTED ANSWER:
chartered government-owned and controlled Yes, the legal opinion of counsel, on the nature of
corporation, they cannot, under EO 180 a labor union and its admission policy is in accord
and related jurisprudence, stage such with law, but must be qualified. The Supreme
walk-out which is basically a case of strike. Court ruled in Salunga v. CIR, 21 SCRA 216
(1967) as follows:
Even if GFI was organized under the corporation Generally, a state may not compel ordinary
law, still no such walk-out is allowed without the voluntary association to admit thereto any given
employees' complying with the requirements of a individual, because membership therein maybe
valid strike, among which is that said strike or walk- accorded or withheld as a matter of privilege.
out should be validly grounded on a (a) deadlock in
collective bargaining, or (b) unfair labor practice, The same case further ruled that the law can
either of which is not present here. compel a labor union to admit an applicant for
membership when the union is -
Self Organization; Importance (1996) The rule is qualified in respect of labor unions
1) What is the importance of labor organizations? holding a monopoly in the supply of labor, either
SUGGESTED ANSWER: in a given locality or as regards a particular
A labor organization exists in whole or in part for employer with which it has a closed-shop
the purpose of collective bargaining or of dealing agreement. The reason is that [union security
with employers concerning terms and conditions of provisions] cause the admission requirements of
employment. Employees may form labor trade unions to be affected with public interest.
organizations for their mutual aid and protection.
(See Arts. 212(a) and 243 of the Labor Code) Self Organization; Right to Disaffiliate from
ALTERNATIVE ANSWER: the Local Union; illegal dismissal (1994)
The importance of labor unions are: In the Collective Bargaining Agreement (CBA)
a) The enhancement of democracy and the between Royal Films and its rank-and-file Union
promotion of social justice and development. (which is directly affiliated with MFF, a national
b) As instrumentalities through which worker federation), a provision on the maintenance of
welfare may be promoted and fostered, membership expressly provides that the Union can
demand the dismissal of any member employee
Page 45 of 108
2006
who commits acts of disloyalty to the Union as [San Jose Electric Service Cooperative v. Ministry
provided for In its Constitution and By-Laws. The of Labor, 173 SCRA 697 (1989)]
same provision contains an undertaking by the
Union (MFF) to hold Royal Films free from any and Self Organization; Union Dues; Assessment
all claims of any employee dismissed. (2002)
The union deducted P20.00 from Rogelio's wages
During the term of the CBA, MFF discovered that for January. Upon inquiry he learned that it was for
certain employee members were initiating a move death aid benefits and that the deduction was
to disaffiliate from MFF and join a rival federation, made pursuant to a board resolution of the
FAMAS. Forthwith, MFF sought the dismissal of its directors of the union. Can Rogelio object to the
employee members initiating the disafiliation deduction? Explain briefly. (5%)
movement from MFF to FAMAS. Royal Films, SUGGESTED ANSWER:
relying on the provision of the aforementioned Yes. In order that the special assessment (death
CBA, complied with MFFs request and dismissed aid benefit) may be upheld as valid, the following
the employees Identified by MFF as disloyal to it. requisites must be compiled with: (1) Authorization
(1) Will an action for Illegal dismissal against by a written resolution of the majority of all the
Royal Films and MFF prosper or not? members at the general membership meeting duly
(2) What are the liabilities of Royal and MFF to the called for the purpose; (2) Secretary's record of the
dismissed employees, if any? meeting; and (3) Individual written authorization for
SUGGESTED ANSWER: the check-off duly signed by the employee
1) The action for illegal dismissal will prosper. The concerned. [ABS-CBN Supervisors Employees
right of a local union to disaffiliate from its mother Union Members v. ABS-CBN Broadcasting Corp,
federation is well-settled. A local union, being a and Union Officers, 304 SCRA 489 (1999)]
separate and voluntary association, is free to serve
the interest of all its members including the In the problem given, none of the above requisites
freedom to disaffiliate when circumstances warrant were complied with by the union. Hence, Rogelio
this right is consistent with the constitutional can object to the deduction made by the union for
guarantee of freedom of association. Thus, the Act being Invalid.
of initiating move to disaffiliate is not an act of
disloyalty. (Tropical Hut. Employee's Union-CGW, Self Organization; Union Dues; Assessments
et al. vs. Tropical Hut Food Market, Inc., etal, G.R. (1997)
Nos. L-^3495-99, January 20. 1990) Arty. Facundo Veloso was retained by Welga
ALTERNATIVE ANSWER: Labor Union to represent it in the collective
The action for illegal dismissal will prosper. bargaining negotiations. It was agreed that Atty.
Disaffiliation cannot be considered an act of Veloso would be paid in the sum of P20,000.00 as
disloyalty. The very essence of self-organization is attorney's fees for his assistance in the CBA
for the workers to form a group for the effective
negotiations.
enhancement and protection of common interest.
(PICEWO v. People Industrial & Commercial After the conclusion of the negotiations. Welga
Corp., 112 SCRA 440) Labor Union collected from its individual members
the sum of P100.00 each to pay for Atty. Veloso's
2) MFF can be held liable to pay the backwages fees and another sum of Pl00 each for services
of the dismissed employees. Royal can be held rendered by the union officers. Several members
jointly and severally liable for backwages if it acted of the Welga Labor Union approached you to seek
with undue haste in dismissing the employees advice on the following matters.
(Manila Cordage Co. v. CIR, 78 SCRA 398). In a) Whether or not the collection of the amount
addition, Royal can be ordered to reinstate the assessed on the individual members to answer
dismissed employees. for the Attorney's fees was valid.
b) Whether or not the assessment of Pl00 from
Self Organization; Right to Self-Organization the individual members of the Welga Labor
of Coop Employees (2002) Union for services rendered by the union
Do employees of a cooperative have a right to form officers in the CBA negotiations was valid.
a union? Explain briefly. (2%) SUGGESTED ANSWER:
SUGGESTED ANSWER: (a) The assessment of P100.00 from each union
Employees who are members of a cooperative member as attorney's fees - for union negotiation,
cannot form a union because, as members, they is not valid. Art. 222(b) of the Labor Code, reads:
are owners and owners cannot bargain with "No attorneys fees, negotiation fees or similar
themselves. However, employees who are not charges of any kind arising from any collective
members of the cooperative can form a union. bargaining negotiations or conclusion of the
collective agreement shall be imposed on any
Page 46 of 108
individual member of the contracting union; Self Organization; Unions; Financial
Provided, however, that attorneys fees may be Records (1999)
charged against union funds in an amount FACTS: Polaris Drug Company had an existing
to be agreed upon by the parties. Any Collective Bargaining Agreement with Polaris
contract, agreement or arrangement of any Workers Union (PWU) which was due to expire on
sort to be contrary shall be null and void." May 31, 1999. PWU had a total membership of
one hundred [100] rank-and-file employees of the
(b) The assessment of P 100.00 as negotiation company. Mike Barela, a militant member of the
fees charged to each individual union member and union, suspected that the union officers were
payable to union officers is also not valid, for misappropriating union funds as no financial report
the same reason as stated above. The was given to the general membership during the
assessment is an act violative of Art. 222(b). union's general assembly. Hence, Mike Barela
ALTERNATIVE ANSWER: prepared a sworn written complaint and filed the
(a) The collection of the amount assessed on the same with the Office of the Secretary of Labor on
individual members to answer for the attorney's May 10, 1999, petitioning for an examination of the
fees would be valid if it was authorized by a written financial records of PWU.
resolution of a majority of all the members in 1. Is the Secretary of Labor authorized by law
a general membership meeting called for to examine the financial records of the union?
the purpose. If so, what power? If not, why not? (3%)
SUGGESTED ANSWER:
(b) The assessment of P100.00 from the Individual The Secretary of Labor is expressly authorized by
members of the Welga Labor Union for services the Labor Code (in Article 274} to examine the
rendered by the union officers in the CBA financial records of the unions to determine
negotiations would be valid if it was authorized by a compliance or non-compliance with the pertinent
written resolution of a majority of all the members in provisions of the Labor Code and to prosecute any
a general membership meeting duly called for the violation of the law and the union constitution-and-
purpose. (Art. 241(N)]. by-laws. But this authority may be exercised only
upon the filing of a complaint under oath and duly
Self Organization; Unions; Assessments supported by the written consent of at least twenty
(2001) percent (20%) of the total membership of the labor
(b) What requisites must a Union comply organization concerned.
with before it can validly impose special ALTERNATIVE ANSWER:
assessments against its members for Among the rights and conditions of membership in
incidental expenses, attorney's fees, a labor organization is the right implied by the
representation expenses and the like? (3%). proviso in the Labor Code (Article 241 (m)) stating
SUGGESTED ANSWER: that the books of accounts and other records of the
The Labor Code (in Art. 241(n)) provides that financial activities of any labor organization
"no special assessments or other extraordinary shall be open to inspection by any officer or
fees may be levied upon the members of member thereof during office hours.
a labor organization unless authorized by
a written resolution of a majority of all the As a union member, Mike Barela could file an
members at a general membership meeting intra- union case that may entail the act of the
duly called for the purpose." Secretary of Labor examining the financial
ANOTHER SUGGESTED ANSWER: records of the union. (See La Tondena
In the case of ABS-CBN Employees Workers Union v. Secretary of Labor and
Supervisors Union vs. ABS-CBN Boardcasting Employment, 239 SCRA 117)
Corp., and Union Officers, G.R. No. 106518, 2. Under the facts given above, could
March 11,1999, the Supreme Court ruled that the an examination or audit of the financial records of
following are the requisites: the union be ordered? Why? (2%)
(1) Authorization by a written resolution of SUGGESTED ANSWER:
the majority of all the members at the Under the facts given in the question, an
general membership meeting duly called examination or audit of the financial records of the
for the purpose; union can not be ordered because for such
(2) Secretary's record of the minutes of the examination or audit to take place, there should be a
meeting; and complaint under oath and duly supported by
(3) Individual written authorization for check- written consent of at least twenty (20%) per cent of
off duly signed by the employee the total membership of the labor organization
concerned. (See also: Gabriel vs. Secretary of concerned. In this case, the aforementioned
Labor, G.R. No. 115949, March 16* 2000). requirement was not fulfilled. It was only a sworn
Page 47 of 108
written complaint by one union member that Appeals, 332 SCRA 427, (2000), Lim v.
was filed. NLRC, 303 SCRA 432, (1999)]
Also, the Labor Code provides that an examination Yes. The General Manager may be held jointly and
of the books of a union shall not be severally liable for back wages of an illegally
conducted during the sixty (60) day freedom dismissed employee if he or she actually
period nor within thirty (30) days immediately authorized or ratified the wrongful dismissal of the
preceding the date of election of union officials. employee under the rule of respondeat superior. In
case of illegal dismissal, corporate directors and
In the case, the complaint was filed on May 10, officers are solidarity liable with the corporation
1999 which is within the freedom period of the where termination of employment are done with
current CBA which was to expire on May 31. 1999. malice or bad faith. [Bogo-Medellin Sugar Planters
Assoc., Inc. v. NLRC, 296 SCRA 108, (1998)]
Self Organization; Unions; Financial
Records (2001) Self-Organization (2002)
(a) Under what conditions may the Secretary Mang Bally, owner of a shoe repair shop with only
of Labor or his duly authorized representative nine (9) workers in his establishment, received
inquire into the financial activities or proposals for collective bargaining from the Bally
legitimate labor organizations? (2%). Shoe Union. Mang Bally refused to bargain with
SUGGESTED ANSWER: the workers for several reasons. First, his shoe
The Labor Code (in Art. 274), the Secretary of business is just a service establishment. Second,
Labor and Employment or his duly authorized his workers are paid on a piecework basis (i.e., per
representative is empowered to inquire into the shoe repaired) and not on a time basis. Third,
financial activities of legitimate labor organizations he has less than ten (10) employees in
upon the filing of a complaint under oath and duly the establishment. Which reason or reasons
supported by the written consent of at least twenty is/are tenable? Explain briefly. (2%)
(20%) percent of the total membership of the labor SUGGESTED ANSWER:
organization concerned and to examine their NONE. First, Mang Bally's shoe business is a
books of accounts and other records. commercial enterprise, albeit a service
establishment. Second, the mere fact that the
Self Organization; Unions; Membership; workers are paid on a piece-rate basis does not
Dismissal in Bad Faith (2002) negate their status as regular employees. Payment
A On what ground or grounds may a union by piece is just a method of compensation and
member be expelled from the organization? (3%) does not define the essence of the relation.
[Lambo v. NLRC, 317 SCRA 420 (1999)]. Third,
B. May the general manager of a company be held the employees' right to self organization is not
jointly and severally liable for backwages of an delimited by their number.
illegally dismissed employee? (2%)
SUGGESTED ANSWER: The right to self-organization covers all
A. Union members may be expelled from the labor persons employed in commercial, industrial and
organization only on valid grounds provided for agricultural enterprises and in religious, charitable,
in the Union Constitution, By-Laws, or medical, or educational Institutions whether
conditions for union membership. operating for profit or not {Art. 243, Labor Code}
Whenever appropriate for any violation of the Self-Organization; Dismissal due to
rights as: Union Activities (2004)
a) Refusal to pay union dues and A, B, C and D (treasurer, accountant, elementary
special assessments; department Principal, and secretary of the Director,
b) Disloyalty to the union; and respectively), regular employees of a private
c) Violation of the constitution and by-laws of the educational institution, were administratively
union. charged for their participation in a picket held in
front of the campus after office hours. Several
SUGGESTED ANSWER: faculty members, non-academic staff and students
B. Yes. If it is shown that he acted in bad faith, or joined the peaceful prayer rally organized by
without or in excess of authority, or was motivated by disgruntled employees to protest certain alleged
personal ill-will in dismissing the employee, the abuses of the incumbent School Director.
general manager may be held jointly and severally Subsequently, the rank-and-file employees
liable for the backwages of an illegally dismissed succeeded in forming the first and only union of the
employee. [ARB Construction C. v. Court of School.
Page 48 of 108
2006
During the investigation, the administration of the Labor Code and Sec. 3 of Executive Order
discovered that two (2) days prior to the rally, A, B, No. 180)
C and D attended the meeting of the School’s
employees’ association which planned the protest Self-Organization; Right to Join (2000)
activity. Two well-known organizers/leaders of a (1) Do workers have a right not to join a labor
national labor federation were also present. organization? (3%)
(2) Do the following workers have the right to self-
A, B, C and D were dismissed by the School on the organization? Reasons/basis (2%)
ground of violating the Labor Code which prohibits a. Employees of non-stock, non-profit
managerial employees to “join, assist or form any organizations?
labor organization”. b. Alien employees?
SUGGESTED ANSWER:
Is the contention of the School tenable? Is the Yes, workers decide whether they will or will not
dismissal of A, B, C and D valid? Explain. (5%) become members of a labor organization. That's
SUGGESTED ANSWER: why a union's constitution and by-laws need the
The dismissal of A, B, C and D on the ground that members' adoption and ratification. Moreover, if
they violated the Labor Code provision which they are members of a religious group whose
states that managerial employees "are not eligible doctrine forbids union membership, their right not
to join, assist or form any labor organization" is not to be compelled to become union members has
valid. The Labor Code does not provide for any been upheld. However, if the worker is not a
sanction for the aforesaid acts. These acts could "religious objector" and there is a union security
not be considered as just cause for the termination clause, he may be required to join the union if he
of employment, either. belongs to the bargaining unit. [Reyes v. Trajano,
ANOTHER SUGGESTED ANSWER: 209 SCRA 484 (1992)].
The dismissal of the managerial employees is
invalid. The dismissal of the management b)(i) Even employees of non-stock non-profit
employees because of union activities, no matter organizations have the right to self-organization.
how erroneous or tenous may be the basis of the This is explicitly provided for in Art. 243 of the
exercise, is a violation of the constitutional and Labor Code. A possible exception, however, are
statutory guaranteed rights of self-organization, employee-members of non-stock non-profit
and an act of unfair labor practice. (Sec. 3, Art. cooperatives.
XIII, Constitution; Art. 243, Labor Code. See also
Art. 248 (a), Labor Code). (ii) ALIEN EMPLOYEES with valid work permits in
RP may exercise the right to self-organization on
Self-Organization; Gov’t vs. Private the basis of parity or reciprocity, that is, if Filipino
Employees (1996) workers in the aliens' country are given the same
2) How does the government employees’ right to right. (Art. 269, Labor Code).
self-organization differ from that of the employees
in the private sector? ULP; Awards of Damages (2001)
SUGGESTED ANSWER: (b) "A", an employee, sued company "B" for unfair
There is no substantial difference of the right of labor practice, Illegal dismissal and damages as a
self-organization between workers in the private consequence thereof. The Arbiter granted A's
sector and those in the public sector. In the public prayer for reinstatement, backwages, and included
sector, Executive Order No. 180, the purpose of an award for attorney's fees. On appeal to the
self-organization is stated as "for the furtherance NLRC, the Commission affirmed the Arbiter's
and protection of their interest." In the private decision but deleted the award for attorney's fees
sector, Art. 243 of the Labor Code states "for the since fees were not claimed in A's complaint. Who
purpose of collective bargaining", and "for the was correct, the Arbiter or the NLRC? Why? (2%)
purpose of enhancing and defending their Interests SUGGESTED ANSWER:
and for their mutual aid and protection." The NLRC was correct in deleting the award for
ALTERNATIVE ANSWER: attorney's fees if an employee did not include
In government, managerial employees shall not be attorney's fees among his claims and, therefore,
eligible to join the organization of rank-and-file did not give any evidence to support the payment
employees per Executive Order No. 180 but said of attorney's fees.
law does not provide that they are not eligible to ANOTHER SUGGESTED ANSWER:
join, assist or form any labor organization, The decision of the Labor Arbiter to award
meaning, they could join, assist or form any labor attorney's fees even if the same is not claimed is
organization of their own. In the private sector, correct. Article 2208 of the New Civil Code allows
managerial employees are not eligible to join, the award of attorney's fees when the defendant's
assist or form any labor organization. (See Art. 243 act or omission has compelled the plaintiff to
Page 49 of 108
litigate or incur expenses to protect his and collective bargaining. (See Arts 248 and
interest. Attorney's fees may be considered as a 249 of the Labor Code).
part of an equitable relief awarded in the
concept of damages. 2) Give three (3) examples of unfair
labor practices on the part of the employer and
(c) Would your answer be different if the attorney's three (3) examples of unfair labor practices on
fees awarded by the Arbiter was over the part of the labor union.
fifteen percent of the total award? Why? (1%) ANSWER;
SUGGESTED ANSWER; Any three (3) from the following enumeration in the
An award of attorney's fees which is over Labor Code:
fifteen percent of the total award is not in ART. 248. Unfair labor practices of employers. It
conformity with the provision of the Labor Code shall be unlawful for an employer to commit any of
(Art. 111(a)) that in cases of unlawful the following unfair labor practice:
withholding of wages, the culpable party may 1. To interfere with, restrain or coerce employees
be assessed attorney's fees equivalent to ten in the exercise of their right to
percent of the amount of wages recovered. self- organization;
2. To require as a condition of employment that a
ULP; Contracting Out Labor (2001) person or an employee shall not join a
(a) Company "A" contracts out its clerical and labor organization or shall withdraw from
janitorial services. In the negotiations of its CBA, one to which he belongs;
the union insisted that, henceforth, the company 3. To contract out services or functions being
may no longer engage in contracting out these performed by union members when such will
types of services, which services the union claims to interfere with, restrain or coerce employees in
be necessary in the company's business, the exercise of their rights to self-organization;
without prior consultation. Is the union's stand valid 4. To initiate, dominate, assist or otherwise
or not? For what reason(s)? (2%) interfere with the formation or administration of
SUGGESTED ANSWER: any labor organization, including, the giving of
The union's stand is not valid. It is part financial or other support to it, or
of management prerogative to contract out any its organizations, or supporters;
work, task, job or project except that it is an unfair 5. To discriminate in regard to wages, hours of
labor practice to contract out services or work, and other terms and conditions of
functions performed by union members when employment in order to encourage
such will interfere with, restrain or coerce or discourage membership in any
employees in the exercise of their rights to self- labor organization. Nothing in this Code or in
organization. (Art. 248(c) of the Labor Code) any other law shall stop the parties from
ANOTHER SUGGESTED ANSWER: requiring membership in a recognized
The union's stand that there must be a prior collective bargaining agent as a
consultation by the employer with the union before condition for employment, except those
contracting out can be effected is valid. Article XIII, employees who are already members of another
Section 3 of the Constitution, and Article 255 of the union at the time of the signing of the
Labor Code guarantee the right of workers to collective bargaining agreement. Provided,
participate in policy and decision making that the individual authorization required
processes which affect their rights and benefits. under Article 241, paragraph (o) of this
Job contracting will undoubtedly and directly affect Code shall not apply to the non-members of
their rights, benefits and welfare. Philippine Airlines the recognized collective bargaining agent;
vs. NLRC, 255 SCRA 301 (1993), and Manila 6. To dismiss, discharge, or otherwise
Electric Company us. Quisumbing, 302 SCRA 173 prejudice or discriminate against an employee
(1999). for having given or being about to give
testimony under this Code;
ULP; Definition & Examples of ULP (1996) 7. To violate the duty to bargain collectively
1) Define unfair labor practice, Answer; as prescribed by this Code;
SUGGESTED ANSWER: 8. To pay negotiation or attorney's fees to
UNFAIR LABOR PRACTICE means any unfair the union or its officers or agents as part
labor practice as expressly defined by the Labor of the settlement of any issue in collective
Code (Arts. 248 and 249 of the Labor Code). bargaining or any other dispute; or
Essentially, an unfair labor practice is any act 9. To violate a collective bargaining agreement.
committed by an employer or by a labor
organization, its officers, agents or representatives ULP; Jurisdiction; Labor Arbiter (1997)
which has the effect of preventing the full exercise by On 01 August 1992, Pro-Knit, a corporation
employees of their rights to self-organization engaged in the manufacture of textile garments,
Page 50 of 108
entered into a collective bargaining agreement with The Kilusang Kabisig, a newly-formed labor union
the Kamao Union in representation of the rank and claiming to represent a majority of the workers in
file employees of the corporation. the Microchip Corporation, proceeded to present a
list of demands to the management for purposes of
The CBA was effective up to 20 June 1995. The collective bargaining. The Microchips Corporation,
contract had an automatic renewal clause which a multinational corporation engaged in the
would allow the agreement after its expiry date to production of computer chips for export, declined
still apply until both parties would have been able to talk with the union leaders, alleging that they
to execute a new agreement. had not as yet presented any proof of majority
status.
On 10 May 1995 Kamao Union submitted to Pro-
Knit's management their proposals for the The Kilusang Kabisig then chained Microchip
renegotiation of a new CBA. The next day, Pro-Knit Corporation with unfair labor practice, and declared
suspended negotiations while Kamao Union since a "wildcat" strike wherein means of ingress and
Pro-Knit had entered into a merger with Eagle egress were blocked and remote and isolated acts
Garments, a corporation also engaged in the of destruction and violence were committed.
manufacture of textile garments. Eagle Garments Was the company guilty of an unfair labor
assumed all the assets and liabilities of Pro-Knit. practice when it refused to negotiate with the
Kilusang Kabisig?
Kamao filed a complaint with the Regional Trial SUGGESTED ANSWERS:
Court for specific performance and damages with a NO. It is not an unfair labor practice (ULP) not to
prayer for preliminary injunction against Pro-Knit bargain with a union which has not presented any
and Eagle Garments. proof of its majority status. The Labor Code
imposes on an employer the duty to bargain
Pro-Knit and Eagle Garments filed a Motion to collectively only with a legitimate labor organization
Dismiss based on lack of Jurisdiction. How would designated or selected by the majority of the
you rule on the Motion to Dismiss? employees in an appropriate collective bargaining
SUGGESTED ANSWER: unit. It is not a ULP for an employer to ask a union
I will grant the Motion to Dismiss. The act of Pro- requesting to bargain collectively that such union
knit suspending negotiations with Kamao Union first show proof of its being a majority union.
could be an unfair labor practice. It could be a
violation of the duty to bargain collectively. As ULP; Rights & Obligations; Workers’
such, the case is under the jurisdiction of a Labor Association (2004)
Arbiter and not of a regular Court A. Around 100 workers of a mill in a coconut
ALTERNATIVE ANSWER: plantation organized themselves for the purpose of
I will deny the Union's Motion to Dismiss. There is promoting their common interest and welfare. The
no labor dispute between the parties; hence, the workers’ association prepared a petition for
Regional Trial Court has Jurisdiction over the increasing the daily pay of its members in
complaint. Art. 212 of the Labor Code, reads - compliance with minimum wage rates for their
Labor dispute Includes any controversy or sector in the region, and for granting benefits to
matter concerning terms or conditions of which they are entitled under the law.
employment or the association or representation
of persons in negotiating, fixing, maintaining, However, the workers became restless and
changing or arranging the terms and conditions anxious after the owner-manager threatened them
of employment regardless of whether the with mass lay-off if the association would press for
disputants stand in the proximate relations of their demands. Most of its members have worked
employer and employee. in the mill for 10 to 15 years with no improvement
in working conditions and monetary benefits.
In addition, the Company can claim that labor
contracts are contracts in personam and do not The leaders of the workers’ association
generally bind successors in interest except under approached you and asked: what legal steps could
special circumstances. In Sundowner Development they take to protect their security of tenure? What
Corporation v Drilon, 180 SCRA 14, the Court said: advice could you give them? (5%)
The rule is that unless expressly assumed, labor SUGGESTED ANSWER:
contracts such as xxx collective bargaining I would advise them to register the workers'
agreements are not enforceable against a association with the Department of Labor and
transferee of an enterprise, labor contracts being in Employment. Then, have the workers' association
personam, thus binding only between the parties. file a ULP case against the employer.
ULP; Refusal to Negotiate (1997)
Page 51 of 108
The workers are entitled to the constitutional (Art. with distinct and separate personalities from
XIII, Sec. 3, 1987 Constitution) and statutory (Art. LBM Construction Corporation and
279, Labor Code) guarantees of security of tenure. therefore, they cannot be held jointly and
When this right to security of tenure is violated, an severally liable for the money claims of
action for illegal dismissal is an available remedy. workers who are not their employees.
Rule on the Motion to Dismiss. Should it
If they are dismissed because of union be granted or denied? Why? (5%)
activities, an action for unfair labor practice can be SUGGESTED ANSWER:
filed (Sec. 3, Art. XIII, Constitution; Art. 243, It is very clear that even if LBM
Labor Code.) If successful, the workers will Construction company, Lastimoso Construction
be entitled to full backwages, including money Company, Inc. and RL Realty & Development
value of benefits, and reinstatement without loss Corporation all belong to the Lastimoso family and
of seniority (Art. 279, Labor Code). are engaged in the same line of business under one
management and used the same equipment
ULP; Subject to Criminal Prosecution (2005) including manpower services, these
Is the commission of an unfair labor practice by an corporations were separate juridical entities.
employer subject to criminal prosecution?
Please explain your answer briefly. (3%) Thus, only the LBM Construction Corporation is
SUGGESTED ANSWER: the employer of Teofllo Lacson. The other
Yes, because unfair labor practices are not only corporation do not have any employer-employee
violations of the civil rights of both labor and relations with Lacson.
management but are also criminal offenses against
the State which shall be subject to prosecution and The case in question does not include any fact that
punishment. (Article 247, Labor Code; See also would justify piercing the veil of corporate fiction of
B.P. Big. 386 as amended by R.A. No. 6715). the other corporations in order to protect the rights
However, the criminal aspect can only be filed of workers.
when the decision of the labor tribunals, finding the
existence of unfair labor practice, shall have In a case (Concept Builders, Inc. v. NLRC. 257
become final and executory. SCRA 149), the Supreme Court ruled that it is a
fundamental principle of corporation law that a
LABOR STANDARDS corporation is an entity separate and distinct from
its stockholders and from other corporations to
which it may be connected. But this separate and
E-E Relationship; Corporation (1999)
distinct personality of a corporation is merely a
FACTS: Teofilo Lacson was one of more than one fiction created by law for convenience and to
hundred (100) employees who were terminated promote justice. So, when the notion of separate
from employment due to the closure of juridical personality is used to defeat public
LBM Construction Corporation (LBM). convenience, justify wrong, protect fraud or defend
crime, or is used as a device to defeat the
LBM was a sister company of Lastimoso
labor laws, this separate personality of the
Construction, Inc. and RL Realty & Development
corporation maybe disregarded or the veil of
Corporation. All three (3) entities formed what
corporate fiction pierced.
came to be known as the Lastimoso Group of
ALTERNATIVE ANSWER:
Companies. The three (3) corporations were
Motion to Dismiss should be denied. In the case at bar,
owned and controlled by members of the
the Labor Arbiter would be justified in piercing the
Lastimoso Family; their incorporators and directors
corporate veil and considering the three (3)
all belonged to the Lastimoso family. The three (3)
corporations as one and the same entity as the
corporations were engaged in the same line of employer of Teofilo Lacson because based on the facts
business, under one management, and used the "the three corporations were owned and
same equipment including manpower services. controlled by members of the Lstimoso family; their
incorporators and directors all belonged to the
Teofilo Lacson and his co-employees filed
Lastimoso family. The three (3) corporations were
a complaint with the Labor Arbiter against
engaged in the same line of business, under one
LBM, RL Realty and Lastimoso Construction to
management and used the same equipment
hold them jointly and severally liable for including manpower services." The facts show that "the
backwages and separation pay. notion of legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend
Lastimoso Construction, Inc. and RL Realty &
crime, the law will regard the corporation as an
Development Corporation interposed a Motion to
association of persons, or in the case of two
Dismiss contending that they are Juridical entitles corporations, will merge them into one
Page 52 of 108
2006
generous customers. In time, the GROs formed the
E-E Relationship; Determined by Facts & Solar Ugnayan ng mga Kababaihang Inaapi
Laws (2000) (SUKI); a labor union duly registered with DOLE.
Banco de Manila and the Ang Husay Janitorial and Subsequently, SUKI filed a petition for certification
Pest Control Agency entered into an Independent election in order to be recognized as the exclusive
Contractor Agreement with the usual stipulations: bargaining agent of its members. Solar Plexus
specifically, the absence of employer-employee opposed the petition for certification election on the
relationship, and the relief from liability clauses. singular ground of absence of employer-employee
Can the Bank, as a client, and the Agency, as an relationship between the GROs on one hand and
independent contractor, stipulate that no employer- the night club on the other hand.
employee relationship exists between the Bank
and the employees of the Agency who may be May the GROs form SUKI as a labor organization
assigned to work in the Bank? Reason. (5%) for purposes of collective bargaining? Explain
SUGGESTED ANSWER: briefly. (5%).
They can so stipulate if the relationship is indeed SUGGESTED ANSWER:
Job contracting. Yet the stipulation cannot prevail The GROs may form SUKI as a labor organization
over the facts and the laws. The existence of for purposes of collective bargaining. There is an
employer-employee relationship is determined by employer-employee relationship between the
facts and law and not by stipulation of the parties. GROs and the night club.
(Insular Life Assurance Co.. Ltd. v. NLRC. 287
SCRA 476 (1998); Tabas v. California The Labor Code (in Article 138) provides that any
Manufacturing Co. Inc., 169 SCRA 497 (1989)]. woman who is permitted or suffered to work, with
ALTERNATIVE ANSWER: or without compensation, in any nightclub, cock tail
Yes, they can stipulate provided that the contract lounge, massage clinic, bar or similar
of Independent contractor is valid in accordance establishment, under the effective control or
with Art 106 of the Labor Code. supervision of the employer for a substantial period
of time as determined by the Secretary of Labor,
E-E Relationship; Elements (1996) shall be considered as an employee of such
1) When does an employer- employee establishment for purposes of labor and social
relationship exist? legislation.
SUGGESTED ANSWER:
The Supreme Court, in a long line of decisions has In the case at bar, it is clearly stated that the
consistently ruled that the following are the women once they enter the premises of the night
elements of an employer-employee relationship: club would be under the direct supervision of the
A. Selection and engagement of the employee; manager from 8:00 p.m. to 4:00 a.m. everyday
B. Payment of wages; including Sundays and holidays. Such is indicative
C. Power of discipline and dismissal; and of an employer-employee relationship since the
D. Power to control the employee's conduct as manager would be exercising the right of control.
regards his employment.
ALTERNATIVE ANSWER; E-E Relationship; Security Guards; Floating
An employer-employee relationship exists when a Status (1999)
person (an employer) who carries on a business, FACTS: Asia Security & Investigation Agency
trade, Industry, undertaking, or activity of any kind (ASIA) executed a one-year contract with the
uses the services of another person (an employee) Baron Hotel (BARON) for the former to provide the
who, receiving compensation, is under the latter with twenty (20) security guards to safeguard
employer's orders as regards the employment. the persons and belongings of hotel guests,
among others. The security guards filled up Baron
E-E Relationship; GRO’s & Night Clubs application form and submitted the executed forms
(1999) directly to the Security Department of Baron. The
FACTS: Solar Plexus Bar and Night Club allowed pay slips of the security guards bore Baron's logo
by tolerance fifty (50) Guest Relations Officers and showed that Baron deducted therefrom the
(GRO) to work without compensation in its amounts for SSS premiums, medicare
establishment under the direct supervision of its contributions and withholding taxes. Assignments
Manager from 8:00 p.m. to 4:00 a.m. everyday, of security guards, who should be on duty or on
including Sundays and holidays. The GROs, call, promotions, suspensions, dismissals and
however, are free to ply their trade elsewhere at award citations for meritorious services were all
anytime but once they enter the premises of the done upon approval by Baron's chief Security
night club, they are required to stay up to closing officer.
time. The GROs earned their keep exclusively from
commissions for food and drinks, and tips from
Page 53 of 108
After the expiration of the contract with Asia, Baron Pablo's widow filed a petition before the SSS
did not renew the same and instead executed asking that ABC & Co. be directed to pay the
another contract for security services with another premium contributions of Pablo and that his name be
agency. Asia placed the affected security guards reported for SSS coverage. ABC & Co.
on "floating status" on "no work no pay" basis. countered that Pablo was hired to plow, harrow and
Having been displaced from work, the Asia security burrow, using his own carabao and other
guards filed a case against the Baron Hotel for implements and following his own schedule of work
illegal dismissal, overtime pay, minimum wage hours, without any supervision from the company. If
differentials, vacation leave and sick leave proven, would this factual setting advanced by ABC
benefits, and 13th month pay. & Co. be a valid defense against the petition?
SUGGESTED ANSWER:
Baron Hotel denied liability alleging that Asia is the ABC & Co. has a valid defense. Pablo should
employer of the security guards and therefore, be an employee of ABC & Co. to be under
their complaint for illegal dismissal and the compulsory coverage of the SSS. To be
payment of money claims should be directed an employee, Pablo should be under the control
against Asia. Nevertheless, Baron filed a Third of ABC & Co. as regards his employment. But
Party Complaint against Asia. the facts show that he was not under the control
1. Is there an employer-employee of ABC & Co. as regards his employment.
relationship between the Baron Hotel, on one Among others, he had his own schedule of work
hand, and the Asia security guards, on the hours, without any supervision from the company.
other hand? Explain briefly, (3%) Thus, he is an independent contractor and
SUGGESTED ANSWER: not an employee. An independent contractor is not
As a general rule, the security guards of a private under the compulsory coverage of the SSS. He
security guard agency are the employees of maybe covered as a self-employed person. But
the latter and not of the establishment that has then as such, ABC & Co. has no legal obligation to
entered into a contract with the private report Pablo for coverage under the SSS because
security guard agency for security services. ABC & Co. is not Pablo's employer.
But under the facts in the question, Baron It is not a valid defense, for Pablo could be
Hotel appear to have hired the security guards, considered an employee of ABC & Co. The
to have paid their wages, to have the power elements of hiring, payment of wages, power to
to promote, suspend or dismiss the security dismiss and power to control are presumed from
guards and the power of control over them, the fact that Pablo is working 6 days a week, for 15
namely, the security guards were under orders of years now. Pablo's use of his plow, harrow,
Baron Hotel as regard their employment. burrow, carabao and other implements and his
having his own schedule of work hours without any
Because of the above-mentioned circumstances, supervision from the company do not erase the
Baron Hotel is the employer of the security guards. element of control on the part of ABC & Co.
because under the "control test", it is enough that the
2. Assuming that ASIA is the employer, is the employer's right to control exists. It is not
act of ASIA in placing the security guards on necessary that the same be exercised by the
"floating status" lawful? Why? (2%) employer, it is enough that such right to control
SUGGESTED ANSWER: exists. (Religious of the Virgin Mary v. NLRC. 316
It is lawful for a private security guard agency to SCRA 614, 629 (1999)
place its security guard on a "floating status" if it
has no assignment to give to said security guards. E-E Relationship; Workers paid by
Results (2004)
But if the security guards are placed on a "floating B. TRX, a local shipping firm, maintains a fleet of
status" for more than six (6) months, the motorized boats plying the island barangays of AP, a
security guards may consider themselves as coastal town. At day’s end the boat
having been dismissed. operators/crew members turn over to the boat
owner their cash collections from cargo fees and
E-E Relationship; Self-Employed (2003) passenger fares, less the expenses for diesel fuel,
Pablo was a farm-hand in a plantation owned by food, landing fees and spare parts.
ABC & Co., working approximately 6 days a week for
a good 15 years. Upon Pablo's death, his widow Fifty percent (50%) of the monthly income or
filed a claim for burial grant and pension benefits earnings derived from the operations of the boats
with the Social Security System (SSS). The claim are given to the boatmen by way of compensation.
was denied on the ground that Pablo had not Deducted from the individual shares of the
been a registered member-employee.
Page 54 of 108
boatmen are their cash advance and peso value of relationship between students on one hand,
their absences, if any. and schools, colleges, or universities on the
other, where students work with the latter in
Are these boatmen entitled to overtime exchange for the privilege to study free of
pay, holiday pay, and 13th month pay? (5%) charge, provided the students are given real
SUGGESTED ANSWER: opportunity, including such facilities as may be
If the boatmen are considered employees, like reasonable and necessary to finish their
jeepney drivers paid on a boundary system, chosen courses under such arrangement."
the boatmen are not entitled to overtime and ALTERNATIVE ANSWER;
holiday pay because they are workers who are Gomburza College can be held liable by Victor
paid by results. Said workers, under the Labor Monteverde as an employer of Ruben
Code are not entitled, among others, to Padilla. Applying the control test, the
overtime pay and holiday pay. College is the employer of Padilla because in
the latter's work of keeping clean the lavatory
In accordance with the Rules and facilities of the school, he is under the control
Regulations implementing the 13th month pay of the College as regards his employment.
law, however, the boatmen are entitled to the
13th month pay. Workers who are paid by However, Ruben Padilla was not acting within
results are to be paid their 13th month pay. his assigned tasks. Art. 2180. New Civil
ANOTHER SUGGESTED ANSWER: Code provides: The obligation imposed by
No. The arrangement between the boat owner and Art. 2176 (Quasi-delicts) is demandable xxx
the boat operators/crew members partook of the (also from) employers (who) shall be liable for
nature of a joint venture. The boatmen did not the damages caused by their employees xxx
receive fixed compensation as they shared only in acting within the scope of their assigned tasks,
the cash collections from cargo fees and even though the former are not engaged in
passenger fares, less expenses for fuel, food, any business or industry." It could be argued
landing fees and spare parts. It appears that there that Ruben Padilla was not acting within the
was neither right of control nor actual exercise of scope of his assigned tasks; thus, his employer,
such right on the part of the boat owner over Gomburza College is not liable.
the boatmen. It is clear that there was no
employer- employee relationship between the boat Employment; Aliens; Requisites (1995)
owner and the boatmen. As such, these boatmen 2. Phil-Norksgard Company, Inc., a domestic
are not entitled to overtime pay, holiday pay and corporation engaged in the optics business,
13th month pay. imported from Sweden highly sophisticated and
sensitive instruments for its laboratory. To install
E-E Relationship; Working Student & School the instruments and operate them, the company
(1997) intends to employ Borja Anders, a Swedish
Ruben Padilla entered into a written agreement technician sojourning as a tourist in the
win Gomburza College to work for the latter in Philippines.
exchange for the privilege of studying in said
institution. Ruben's work was confined to keeping As lawyer of the company, what measures will you
clean the lavatory facilities of the school. One take to ensure the legitimate employment of Borja
school day, Ruben got into a fist fight with Anders and at the same time protect
a classmate, Victor Monteverde, as a result of which Philippine labor. Discuss fully.
the latter sustained a fractured arm. SUGGESTED ANSWER:
To ensure the legitimate employment of Borja
Victor Monteverde filed a civil case for Anders, a non-resident alien, I will apply at the
damages against Ruben Padilla, impleading Department of Labor and Employment for the
Gomburza College due to the latter's alleged Issuance of an employment permit claiming that
liability as an employer of Ruben Padilla. there is no one in the Philippines who can do the
work that Anders is being asked to do.
Under the circumstances, could Gomburza College
be held liable by Victor Monteverde as an At the same time, to protect Philippine labor, I will
employer of Ruben Padilla? see to it that Anders will have an understudy who
SUGGESTED ANSWER: will learn, by working with Anders, how to
Gomburza College is not liable for the acts of install and operate the highly sophisticated and
Ruben Padilla because there is no employer- sensitive instruments from Sweden.
employee relationship between them. As provided in ALTERNATIVE ANSWER;
the Rules and Regulations Implementing the To protect Philippine Labor, the Labor Code
Labor Code "there is no employer-employee provides that the alien employee shall not transfer
Page 55 of 108
to another Job or change his employer without commercial establishment. Is the claim of the
prior approval of the Secretary of Labor. driver valid? [2%]
SUGGESTED ANSWER:
Employment; Children; Below 15 yrs old The driver is a househelper. A person is a
(2004) househelper or is engaged in domestic or
A spinster school teacher took pity on one of her household service if he/she renders services in the
pupils, a robust and precocious 12-year old boy employer's home which are usually necessary or
whose poor family could barely afford the cost of desirable for the maintenance and enjoyment
his schooling. She lives alone at her house near thereof and includes ministering to the personal
the school after her housemaid left. In the comfort and convenience of the members of the
afternoon, she lets the boy do various chores as employer's household including the services of
cleaning, fetching water and all kinds of errands family drivers.
after school hours. She gives him rice and P30.00
before the boy goes home at 7:00 every night. A family driver who drives the family van to fetch
The school principal learned about it and charged merchandise from suppliers and delivers the same
her with violating the law which prohibits the to a boutique in a mall owned by the family for
employment of children below 15 years of age. In whom he works should be paid the minimum daily
her defense, the teacher stated that the work wage of a driver in a commercial establishment.
performed by her pupil is not hazardous, and she
invoked the exception provided in the Department The Labor Code (in Article 143) provides that no
Order of DOLE for the engagement of persons in househelper shall be assigned to work in a
domestic and household service. commercial, industrial or agricultural enterprise at a
wage or salary rate lower than that provided by law
Is her defense tenable? Reason. (5%) for agricultural or non-agricultural workers.
SUGGESTED ANSWER:
No, her defense is not tenable. Under Article 139 Employment; Handicapped Employee (1998)
of the Labor Code on "minimum employable age", A lady worker was born with a physical deformity,
no child below 15 years of age shall be employed specifically, hard of hearing, speech impaired, and
except when he works directly under the sole color blind. However, these deficiencies do not
responsibility of his parents or guardian, the impair her working ability.
provisions of the alleged Department Order of
DOLE to the contrary notwithstanding. A mere Can the employer classify the lady worker as a
Department Order cannot prevail over the express handicapped worker so that her daily wage will
prohibitory provisions of the Labor Code. only be seventy-five percent (75%) of the
applicable daily minimum wage? [5%]
[Note: Sec. 3, RA 9231 allows a child below 15 years of SUGGESTED ANSWER:
age to work for not more than 20 hours a week; provided, No, the employer cannot classify the lady worker
that the work shall not be more than four (4) hours at any as a handicapped worker because according to the
given day; provided, further, that he does not work facts in the question, her deficiencies do not impair
between 8 o'clock in the evening and 6 o'clock in the her working ability. If her earning capacity is
morning of the following day; and provided, finally, that therefore not also impaired, then she cannot be
the work is not hazardous or deleterious to his health or
considered a handicapped worker.
morals. THIS IS A RECENT LAW APPROVED ONLY
ON JULY 28, 2003, which is beyond the cut-off period of Because of the above fact, the employer shall not
the Bar Exams] pay her less than the applicable daily minimum
wage. (See Article 78 of the Labor Code)
Employment; Driver as Househelper & in a ANOTHER SUGGESTED ANSWER:
Commercial Establishment (1998) Yes, the employer can classify the lady worker as
The weekly work schedule of a driver is as follows: a handicapped worker because her earning
Monday, Wednesday, Friday - Drive the family car capacity may be impaired by her physical
to bring and fetch the children to and from school. deficiencies As such handicapped worker, the
employer may enter into an employment
Tuesday, Thursday. Saturday - Drive the family agreement with her whereby the rate to be paid to
van to fetch merchandise from suppliers and her may be less than the applicable legal minimum
deliver the same to a boutique in a mall owned by wage but not less than 75% of such wage.
the family. Is the driver a househelper? [3%]
Employment; Handicapped Employee (2000)
The same driver claims that for work performed on Ana Cruz has a low IQ. She has to be told at least
Tuesday, Thursday and Saturday, he should be three times before she understands her daily work
paid the minimum daily wage of a driver of a assignment. However, her work output is at least
Page 56 of 108
equal to the output of the least efficient whatever being exercised by the former over
worker in her work section. Is Ms, Cruz a the latter."
handicapped worker? Explain. (5%)
SUGGESTED ANSWER: Employment; Homeworkers (2000)
No, low IQ or low efficiency does not make the b) Mrs. Josie Juan is the confidential secretary of
worker "handicapped" in the contemplation of law. the Chairman of the Board of the bank. She is
Handicap means such physical or mental infirmity presently on maternity leave. In an arrangement
that impairs capacity to work. The deficiency may where the Chairman of the Board can still have
also be due to age or injury. (Art 78. Labor Code). access to her services, the bank allows her to work in
her residence during her leave. For this purpose, the
Employment; Handicapped Workers; bank installed a fax machine in her residence, and
Contractual Employees (2006) gave her a cellphone and a beeper. Is Mrs. Juan a
For humanitarian reasons, a bank hired several homeworker under the law? Explain. (3%)
handicapped workers to count and sort out SUGGESTED ANSWER:
currencies. Their employment contract was for six No, she is actually an office worker. She is not an
(6) months. The bank terminated their employment industrial homeworker who accepts work to be
on the ground that their contract has fabricated or processed at home for a
expired prompting them to file with the Labor contractor, which work, when finished, will be
Arbiter a complaint for illegal dismissal. Will returned to or repurchased by said contractor.
their action prosper? (5%) (Art. 155, Labor Code).
ALTERNATIVE ANSWER:
Their action will not prosper because they are Employment; Househelpers (2000)
covered by the fixed term employment contract a) Nova Banking Corporation has a resthouse and
which automatically lapsed at the end of the 6- recreational facility in the highlands of Tagaytay
month period (Brent School v. Zamora, G.R. No. City for the use of its top executives and corporate
48494, February 5, 1990; Art. 280, Labor Code). A clients. The resthouse staff includes a caretaker,
contract of employment for a definite period two cooks and a laundrywoman. All of them are
terminates on its own term at the end of its period. It reported to the Social Security System as domestic
does not necessarily follow that the parties are or household employees of the resthouse and
forbidden from agreeing on a fixed period of time recreational facility and not of the bank. Can the
for the performance of activities usually necessary bank legally consider the caretaker, cooks and
and desirable in the usual business of the laundrywoman as domestic employees of the
employer (Pangilinan v. Gen. Milling, G.R. No. resthouse and not of the bank? (3%)
149329, July 12, 2004). SUGGESTED ANSWER:
ALTERNATIVE ANSWER: No, they are not domestic employees. They
Yes. Undeniably, handicapped workers are are bank employees because the resthouse
never on equal terms with the bank as and recreational facility are business facilities
employer. In Philippine National Oil as they are for use of the top executives and
Company-Energy Development Corporation v. clients of the bank. [Art. 141, Labor Code; Apex
NLRC, G.R. No. 97747, March 31, 1993, the Mining Co., Inc. v. NLRC, 196 SCRA 251
Supreme Court set down two criteria under (1991); Traders Royal Bank v. NLRC. G.R.
which fixed contracts of employment do not No. 127864, December 22. 1999]
circumvent security of tenure, to wit:
1. The fixed period of employment was knowingly Employment; Minors (2006)
and voluntarily agreed upon by the parties, Determine whether the following minors should be
without any force, duress or improper pressure prohibited from being hired and from performing
being brought to bear upon the employee and their respective duties indicated hereunder: (5%)
about any other circumstances vitiating 1. A 17-year old boy working as miner at the
his consent; or Walwadi Mining Corporation.
2. It satisfactorily appears that the employer SUGGESTED ANSWER:
and the employee dealt with each other on It is absolutely Prohibited for any person below 18
more or less equal terms with no moral years of age to be employed in hazardous work,
dominance whatever being exercised by the harmful to health and safety (Sec. 3, Rule 12, Book
former on the latter. 3, ties Implementing the Labor Code), including
construction work, logging, firefighting, mining,
Even granting that the handicapped workers and quarrying, stevedoring, dock work, deep sea
the bank agreed to term employment, it could not fishing and mechanized fishing (Sec. 8[2], Rule 1,
be said that they "dealt with each other on more or Book 4, Rules Implementing the Labor Code).
less equal terms with no moral dominance
Page 57 of 108
2. An 11-year old boy who is an B. I will advise the paint manufacturing
accomplished singer and performer in company that ft cannot hire a person who is aged
different parts of the country. seventeen (17). Art 139 (c) of the Labor Code
SUGGESTED ANSWER: provides that a person below eighteen (18) years
Under RA. 7610, Section 12, as amended by RA. of age shall not be allowed to work in an
No. 9231 states that: undertaking which is hazardous or deleterious
Employment of children — children below 15 years in nature as determined by the Secretary of
of age shall not be employed (Art. 139, Labor Labor. Paint manufacturing has been classified
Code) except when the following conditions are by the Secretary of Labor as a hazardous work.
met:
(a) When the child's participation in public Employment; Radio-TV Show
entertainment is essential; Host; Expiration of Term (2005)
(b) There is a written contract approved by the (1) Malyn Vartan is a well-known radio-TV show
DOLE and signed by the child's parents host. She signed a contract with XYZ
or legal guardians, with the express Entertainment Network to host a one-hour daily
consent of the child; and talk show where she interviews various celebrities on
(c) the employer who employs the child topical subjects that she herself selects. She was
must secure a work permit from the DOLE. paid a monthly remuneration of P300,000.00. The
program had been airing for almost two years when
3. A 15-year old girl working as a library assistant sponsors' advertising revenues dwindled,
in a girls' high school. constraining the network to cancel the show upon
SUGGESTED ANSWER: the expiration of its latest contract with Ms. Vartan.
She may work as a library assistant provided: The talk-show host protested the discontinuance of
(1) The employment does not endanger her her monthly talent fee, claiming that it was
life, safety, morals and normal development; tantamount to her illegal dismissal from the
(2) She is given the opportunity for primary or network since she has already attained the status of
secondary education; and a regular employee. (6%)
(3) The employment does not exceed 8 hours (a) As the network's legal counsel, how would
a day and 40 hours a week (Sees. 12 & 14, you justify its decision to cancel Ms.
RA. 7610, as amended by RA. 9231). Vartan's program which in effect
terminated her services in the process?
4. A 16-year old girl working as model promoting ALTERNATIVE ANSWER:
alcoholic beverages. As the network's legal counsel, I will argue that Ms.
SUGGESTED ANSWER: Vartan is under contract on a fixed term
Section 14, Article 8, RA. 7610, as amended by employment basis. The network cancelled the
Section 5, RA. 9231 states that a child shall be show "upon the expiration of its latest contract with
prohibited to act as a model in any advertisement Ms. Vartan." Hence, this does not involve dismissal
directly or indirectly promoting alcoholic beverages, but an expiration of term. (Felix v. Buenaseda,
intoxicating drinks, tobacco and its byproducts, G.R. No. 109704, January 17,1995; St. Theresa's
gambling or any form of violence or pornography. School of Novaliches Foundation v. NLRC, G.R.
No. 122955, April 15, 1998)
ALTERNATIVE ANSWER:
5. A 17-year old boy working as a dealer in As the network's counsel, there was no termination
a casino. of her services, only the expiration of her contract,
SUGGESTED ANSWER: being an independent contractor. (Sonza v.
Section 14, Article 8, RA. 7610, as amended ABS- CBN, G.R. No. 138051, June 10, 2004)
by Section 5, RA. 9231 prohibits the boy from
working as a dealer in a casino as this promotes (b) As counsel for the talk-show host, how
gambling. Moreover, DOLE Dept. Order No. would you argue your case?
04, series of 1999, expressly prohibits ALTERNATIVE ANSWER.
employment of "teenagers" in gambling halls. As a radio-TV talk show host, Ms. Vartan is
performing an activity which is necessary and
Employment; Minors; Hazardous Work (2002) desirable in the usual trade or business of XYZ
B. You were asked by a paint manufacturing Entertainment Network. Hence, Ms. Vartan is a
company regarding the possible employment as a regular employee and cannot be terminated except
mixer of a person, aged seventeen (17), who shall be for cause and only after due process. The
directly under the care of the section supervisor. cancellation of the program is tantamount to
What advice would you give? Explain briefly. (2%) closure but XYZ Entertainment Network did not
SUGGESTED ANSWER: comply with the procedural requirements of law,
Page 58 of 108
2006
i.e., 30 days notice to Ms. Vartan and to DOLE the remarks did not give due regard to the
prior to the intended date of termination. applicants' feelings and it is a chauvinistic disdain
ALTERNATIVE ANSWER: of her honor, justifying the finding of sexual
As counsel for the talk show host, I will argue that harassment [Villarama v. NLRC, 236 SCRA 280
she is a regular employee. First, she performs job (1994)]
that is necessary and desirable to the nature of the
business of the employer; Second, she serves for Employment; Women; Anti-Sexual
at least one (1) year which is an indication of Harassment Act (2004)
regular employment. A. Pedrito Masculado, a college graduate from
the province, tried his luck in the city and
Employment; Women; Anti-Sexual landed a job as utility/maintenance man at the
Harassment Act (2000) warehouse of a big shopping mall. After
A Personnel Manager, while interviewing an working as a casual employee for six months,
attractive female applicant for employment, stared he signed a contract for probationary
directly at her for prolonged periods, albeit in a employment for six months. Being well-built
friendly manner. After the interview, the manager and physically attractive, his supervisor, Mr.
accompanied the applicant to the door, shook her Hercules Barak, took special interest to
hand and patted her on the shoulder. He also befriend him. When his probationary period
asked the applicant if he could invite her for dinner was about to expire, he was surprised when
and dancing at some future time. Did the one afternoon after working hours, Mr. Barak
Personnel Manager, by the above acts, commit followed him to the men’s comfort room. After
sexual harassment? Reason. (3%) seeing that no one else was around, Mr. Barak
SUGGESTED ANSWER: placed his arm over Pedrito’s shoulder and
Yes, because the Personnel Manager, a man, is in softly said: “You have great potential to
a position to grant or not to grant a favor (a job) to become regular employee and I think I can
the applicant. Under the circumstances, inviting the give you a favorable recommendation. Can
applicant for dinner or dancing creates a situation you come over to my condo unit on Saturday
hostile or unfriendly to the applicant's chances for evening so we can have a little drink? I’m
a job if she turns down the invitation. [Sec. 3(a)(3), alone, and I’m sure you want to stay longer
R.A. No. 7877, Anti-Sexual Harassment Act]. with the company.”
ALTERNATIVE ANSWER:
There is no sexual harassment because there was Is Mr. Barak liable for sexual harassment
no solicitation of sexual favor in exchange of committed in a work-related or employment
employment. Neither was there any intimidating, environment? (5%)
hostile or offensive environment for the applicant. SUGGESTED ANSWER:
Yes, the elements of sexual harassment are all
Employment; Women; Anti-Sexual present. The act of Mr. Barak was committed in a
Harassment Act (2000) workplace. Mr. Barak, as supervisor of Pedrito
b) In the course of an interview, another female Masculado, has authority, influence and moral
applicant inquired from the same Personnel ascendancy over Masculado.
Manager if she had the physical attributes required B. Given the specific circumstances mentioned in
for the position she applied for. The Personnel the question like Mr. Barak following
Manager replied: "You will be more attractive if you Masculado to the comfort room, etc. Mr. Barak
will wear micro-mini dresses without the was requesting a sexual favor from Masculado
undergarments that ladies normally wear." Did the for a favorable recommendation regarding the
Personnel Manager, by the above reply, commit an latter's employment.
act of sexual harassment? Reason. (3%)
SUGGESTED ANSWER: It is not impossible for a male, who is a
No, the Personnel Manager's reply to the homosexual, to ask for a sexual favor from another
applicant's question whether she qualifies for the male.
position she is applying for does not constitute ANOTHER SUGGESTED ANSWER:
sexual harassment. The Personnel Manager did I do not see any sexual favor being solicited.
not ask for or insinuate a request for a sexual favor Having a "little drink" in Mr. Barak's Condo Unit, as
in return for a favorable action on her application condition for a "favorable recommendation is not
for a job. But the Manager's statement may be one of the prohibited acts enumerated in Sec. 3 (a)
offensive if attire or physical look is not a criterion of R.A. 7877, otherwise known as the Anti-Sexual
for the job being applied for. Harassment Act of 1995.
ALTERNATIVE ANSWER:
Yes. The remarks would result in an offensive or
hostile environment for the employee. Moreover,
Page 59 of 108
Employment; Women; Anti-Sexual 136), and prohibited acts (Art. 137} of the
Harassment vs. Discrimination Labor Code.
against Women (2003) STILL ANOTHER SUGGESTED ANSWER:
Can an individual, the sole proprietor of a business It may be noted that the policy is directed only
enterprise, be said to have violated the Anti-Sexual to married women. This may violate the spirit
Harassment Act of 1995 if he clearly discriminates of Article 136 of the Labor Code which provides that
against women in the adoption of policy standards it shall be unlawful for an employer to require as
for employment and promotions in the enterprise? a condition of employment or continuation
Explain. of employment that a woman shall not get married.
SUGGESTED ANSWER:
When an employer discriminates against women in Employment; Women; Discrimination
the adoption of policy standards for employment by reason of Marriage (1995)
and promotion in his enterprise, he is not guilty of Fil-Aire Aviation Company (FIL-AIRE) is a new
sexual harassment. Instead, the employer is guilty of airline company recruiting flight attendants for its
discrimination against women employees which is domestic flights. It requires that the applicant be
declared to be unlawful by the Labor Code. single, not more than 24 years old, attractive, and
familiar with three (3) major Visayan dialects, viz:
For an employer to commit sexual harassment, he - Ilongo, Cebuano and Waray. Lourdes, 23 years
as a person of authority, influence or moral old, was accepted as she possessed all the
ascendancy -should have demanded, requested or qualifications. After passing the probationary
otherwise required a sexual favor from his period, Lourdes disclosed that she got married
employee whether the demand, request or when she was 18 years old but the marriage was
requirement for submission is accepted by the already in the process of being annulled on the
object of said act. ground that her husband was afflicted with a
sexually transmissible disease at the time of the
Employment; Women; Discrimination celebration of their marriage. As a result of this
by reason of Age (1998) revelation, Lourdes was not hired as a regular flight
At any given time, approximately ninety percent attendant. Consequently, she filed a complaint
(90%) of the production workforce of a semi- against FIL-AIRE alleging that the pre-employment
conductor company are females. Seventy-five qualifications violate relevant provisions of the
percent (75%) of the female workers are married Labor Code and are against public policy.
and of child-bearing years. It is imperative that the Is the contention of Lourdes tenable? Discuss fully.
Company must operate with a minimum number of SUGGESTED ANSWER:
absences to meet strict delivery schedules. In view of The contention of Lourdes is tenable. When
the very high number of lost working hours due to she was not hired as a regular flight attendant by
absences for family reasons and maternity FIL- AIRE because she disclosed that she got
leaves, the Company adopted a policy that it will married when she was 18 years old. The
employ married women as production workers only if airline company violated the provision of the
they are at least thirty-five (35) years of age. Labor Code which states:
Is the policy violative of any law? [5%] "It shall be unlawful for an employer to
SUGGESTED ANSWER: require as a condition of employment or
Yes, it is violative of Article 140 of the Labor Code continuation of employment that a woman
which provides that no employer shall discriminate employee shall not get married, or to stipulate
against any person in respect to terms and expressly or tacitly that upon getting married a
conditions of employment on account of his age. woman employee shall be deemed resigned or
ANOTHER SUGGESTED ANSWER: separated, or to actually dismiss, discharge,
The policy of the company to employ married discriminate or otherwise prejudice a woman
women as production workers only if they are at employee merely by reason of her marriage."
least thirty-five (35) years of age is valid. There is no
prohibition in the Labor Code for such an Employment; Women; discrimination;
employer to exercise this management function. illegal dismissal (1997)
There is a justifiable basis for the company policy. Dinna Ignacio was hired by Stag Karaoke Club as
i.e., the need for continuity of production with a guest relations officer. Dinna was also
minimum absences because of the peculiar required to sing and dance with guests of the club.
business conditions and needs of the company, In Dinna Ignacio's employment contract, which
i.e., very tight delivery schedules. The company she signed, the following stipulations appeared:
respects the institution of marriage as shown by Compensation: Tips and commissions
the fact that it employs married women. There is coming from guests shall be subjected
no violation of the stipulation against marriage (Art. to 15% deduction.
Page 60 of 108
Hours of work: 5 P.M. up to 2 A.M. dairy six months. A rating of "outstanding" is rewarded
including Sundays and Holidays with a merit increase. She was given a "below
Other conditions: Must maintain a body weight average" rating in the last two periods. According
of 95 Ibs., remain single. Marriage or to the bank's personnel policy, a third rating of
pregnancy will be considered as a valid ground "below average" will result in termination. Mr. Perry
for a termination of employment. Winkle called Carissa into his office a few days
before submitting her performance ratings. He
A year later, Dinna Ignaclo requested to go on invited her to spend the night with him in his rest
leave because she would be getting married to one house. She politely declined. Undaunted, Mr.
of the club's regular guests. The management of Winkle renewed his invitation, and Carissa again
the club dismissed her. declined. He then warned her to "watch out"
because she might regret it later on. A few days
Dinna filed a complaint for illegal dismissal, night later, Carissa found that her third and last rating
shift differential pay, backwages, overtime pay and was again "below average."
holiday pay. Discuss the merits of Dinna's
complaint. Carissa then filed a complaint for sexual
SUGGESTED ANSWER: harassment against Mr. Winkle with the
The first issue to be resolved is: Is Dinna Ignacio Department of Labor and Employment. In his
an employee of the Star Karaoke Club? Yes, she is counter-affidavit, he claimed that he was enamored
an employee per the provision of the Labor Code with Carissa. He denied having demanded, much
that states: "Any woman who is permitted or less received any sexual favors from her in
suffered to work, with or without compensation, in consideration of giving her an "outstanding" rating.
any night club, cocktail lounge, massage clinic, bar He also alleged that the complaint was premature
or similar establishment, under the effective control because Carissa failed to refer the matter to the
or supervision of the employer for a substantial Committee on Decorum and Discipline for
period shall be considered an employee of such investigation and resolution before the case
establishment for purposes of labor and social against him was filed. In her reply affidavit, Carissa
legislation"(Art. 138). In Dinna's conditions of claimed that there was no need for a prior referral
employment have all the aforesaid characteristics. to the Committee on Decorum and Discipline of her
complaint.
She has been illegally dismissed. The Labor Code Resolve the case with reasons. (5%)
expressly provides, that "It shall be unlawful for an SUGGESTED ANSWER:
employer to require as a condition of employment I will hold Mr. Perry Winkle guilty of sexual
or continuation of employment that a woman harassment. This resolution is predicated mainly
employee shall not get married, or to stipulate upon the following considerations:
expressly or tacitly that upon getting married a (1) Mr. Perry Winkle exercises authority, influence
woman employee shall be deemed resigned or or moral ascendancy over Carissa;
separated, or to actually dismiss, discharge, (2) Mr. Winkle's insistence in inviting Carissa "to
discriminate or otherwise prejudice a woman spend the night with him in his rest house"
employee merely by reason of her marriage." (Art. implies a request or demand for a sexual favor;
136) (3) Mr. Winkle's warning clearly manifests that the
refusal of the sexual favor would jeopardize
Because of her illegal dismissal, she is entitled to Carissa's continued employment; and
backwages from the time her compensation was (4) Mr. Winkle's invitation for a sexual favor will
withheld from her to the time of her actual result in an intimidating, hostile, or otherwise
reinstatement. offensive working environment for Carissa.
Dinna is not entitled to night differential pay, Carissa is correct in stating that there was no need
overtime pay and holiday pay because she for prior referral to the Committee on Decorum and
belongs to one of those classes of employees who Discipline of her complaint because nothing in the
are not covered by the provision of the Labor Code law precludes the victim of sexual harassment from
providing for these benefits. She is a worker paid instituting a separate and independent action for
by results, since her compensation is determined damages and other affirmative relief. (Sec. 6, R.A.
by the tips and commission that she receives from No. 7877)
her guests.
Employment; Women; Sexual Harassment
Employment; Women; Sexual Harassment Act (2006)
Act (2005) As a condition for her employment, Josephine
Carissa, a comely bank teller, was due for her signed an agreement with her employer that she
performance evaluation which is conducted every
Page 61 of 108
will not get married, otherwise, she will be of Y. It should also be noted that X pays the salary
considered resigned or separated from the service. of Y as the employee of the former.
ANOTHER SUGGESTED ANSWER;
Josephine got married. She asked Owen, the Yes, Y's case against Company "Z" will
personnel manager, if the company can reconsider prosper. Company "Z" will be deemed the
the agreement. He told Josephine he can do direct employer because the Company
something about it, insinuating some sexual favors. directly and specifically controlled the manner
She complained to higher authorities but to no by which the work should be done and, and by
avail. She hires you as her counsel. What action or doing so also the result. (See Traders Royal
actions will you take? Explain. (5%) Bank vs. NLRC, December 2. 1999).
ALTERNATIVE ANSWER:
I will file a criminal case against Owen for violation The presence of the element or factor of control,
of RA. No. 7877, otherwise known as the which is the most important factor in determining
"Anti- Sexual Harassment Act of 1995." the existence of an employer-employee
relationship is present. In Religious of the Virgin
I will also file a separate and independent Mary vs. NLRC, G.R. No. 103606, October 13,
action for damages against Owen. By reason 1999, the Supreme Court, ruled:
of the fact that the Company did not take As this Court has consistently ruled, the
immediate action thereon, I will include the power of control is the most decisive
Company in the civil suit for damages and make it factor in determining the existence of
jointly and severally liable with Owen. employer- employee relationship.
ALTERNATIVE ANSWER: Independent Contractor (2002)

Aside from filing a criminal case against Owen for Pandoy, an electronics technician, worked within
violation of the Sexual Harassment Law (R.A. the premises of Perfect Triangle, an auto
7877) and a separate action for damages, accessory shop. He filed a complaint for illegal
impleading the company, I will also file an action dismissal, overtime pay and other benefits against
for constructive dismissal against the Company Perfect Triangle, which refused to pay his claims
since the employee was placed in a job on the ground that Pandoy was not its employee
atmosphere imposing oppressive work conditions but was an independent contractor. It was common
contrary to public policy and morals. practice for shops like Perfect Triangle to collect
the service fees from customers and pay the same
Independent Contractor (2001) to the independent contractors at the end of each
(a) "X" is a bona fide service contractor providing week. The auto shop explained that Pandoy was
manpower services to various companies, like a partner who worked within its premises,
possessing the necessary capital and equipment using parts provided by the shop, but otherwise
needed to effectively carry out its commitments. Pandoy was free to render service in the other auto
"Y" is an employee of "X" and assigned to work as a shops. On the other hand, Pandoy insisted that he
janitor in Company "Z". In the course of Y's still was entitled to the benefits because he was
assignment, Z's supervisors and employees would loyal to Perfect Triangle, it being a fact that he did
give verbal instructions to Y as to how and where to not perform work for anyone else. Is Pandoy
perform his work. X pays Y salary. correct? Explain briefly. (5%)
Subsequently, Y's services were terminated by X. SUGGESTED ANSWER:
Y sued Z for Illegal dismissal. May Y's case Pandoy is not correct. He is not an employee
against Z prosper? Why? (2%). because he does not meet the fourfold test for him to
SUGGESTED ANSWER: be an employee of Perfect Triangle. All that he could
Y's case against Z will not prosper, because Z is claim is: he worked within the premises of
not the employer of Y. The employer of "Y" is "X". "Y' Perfect Triangle. Pandoy was NOT engaged as an
would be an employee of "Z" if "X" here is a employee by Perfect Triangle. He was NOT paid
labor-only contractor but X is not a labor-only wages by Perfect Triangle. Perfect Triangle does
contractor. He possesses the necessary capital NOT have the power to dismiss him
and equipment needed to effectively carry out its although Perfect Triangle may not continue to
commitment as a service contractor. allow him to work within its premises. And most
important of all, Pandoy was NOT under the
Applying the control test, the fact that "Z's" control of Perfect Triangle as regards the work
supervisors and employees give verbal instructions he performs for customers.
to Y as to how and where to perform his work does
not necessarily mean that thereby he is under the The Supreme Court has ruled: "In stark contrast to
control of Z as regards his employment as long as X, the Company's regular employees, there are
as service contractor, actually directs the work independent, free lance operators who are
Page 62 of 108
2006
permitted by the Company to position themselves ALTERNATIVE ANSWER:
proximate to the Company premises. These a) My analytical framework will be an analysis of
independent operators are allowed by the the law on Independent contractor and labor only
Company to wait on Company customers who contracting.
would be requiring their services. In exchange for
the privileges of favorable recommendation by the If there is a valid INDEPENDENT CONTRACTOR
Company and immediate access to the customers situation, Mr. Dado will be the direct employer, and
in need of their services, these independent the Metro Grocery will be the indirect employer.
operators allow the Company to collect their
service fee from the customer and this fee is given If there is a LABOR-CONTRACTOR only
back to the Independent operator at the end of the relationship, the Metro Grocery will be the
week. In effect, they do not earn fixed wages from employer as it directly hired the employees.
the Company as their variable fees are earned by
them from the customers of the Company. The SUGGESTED ANSWER:
Company has no control over and does not restrict b) The legal significance is the determination of
the methodology or the means and manner by employee-employer relationship, which gives rise
which these operators perform their work. These to certain rights and obligation of both employer
operators are not supervised by any employee of and employee, such as SSS membership, union
the Company since the results of their work is membership, security of tenure, etc.
controlled by the customers who hire them.
Likewise, the Company has no control as an Independent Contractor; Liabilities (2004)
employer over these operators. They are not A. Clean Manpower Inc. (CMI) had provided
subject to the regular hours and days of work and janitorial services to the National Economic
may come and go as they wish. They are not Development Authority (NEDA) since April 1988.
subject to any disciplinary measures from the Its service contract was renewed every three
Company, save merely for the inherent rules of months. However, in the bidding held on July
general behavior and good conduct" {Ushio 1992, CMI was disqualified and excluded. In 1993,
Marketing v. NLRC, 294 SCRA 673(1998)] six janitors of CMI formerly assigned at NEDA filed
a complaint for underpayment of wages. Both CMI
Independent Contractor vs. Labor-Only and NEDA were impleaded as respondents for
Contracting; Four-Fold Test (2000) failure to comply with NCR Wage Orders Nos. 01
Metro Grocery Inc. arranged with Mr. Juan Dado, a and 02, which took effect on November 1, 1990
Barangay Chairman, to provide the grocery with and January 2, 1992, respectively.
workers who will work as cashiers, bag boys, shelf
counter helpers and sanitation workers. The Should NEDA, a government agency subject to
grocery will pay Mr. Dado an amount equivalent to budgetary constraints, be held liable solidarily with
the direct and hidden costs of the wages of each CMI for the payment of salary differentials due the
worker assigned, plus ten percent (10%) to cover complainants? Cite the legal basis of your answer.
the administrative costs related to their (5%)
arrangement. Mr. Dado, in turn, will pay directly the SUGGESTED ANSWER:
workers their wages. As far as the workers are NEDA shall be held solidarily liable with CMI for
concerned, Mr. Dado is their employer. A group of the payment of salary differentials due to the
concerned workers consulted you if Mr, Dado is complainants, because NEDA is the indirect
really under the law their employer. employer of said complainants. The Labor Code
A. How will you analyze the problem in order to provides that xxx (A) person, partnership,
formulate your answer? (3%) association or corporation which, not being an
B. What is the legal significance, if any, of the employer, contracts with an independent contractor
question of the concerned workers as to who is for the performance of any work, task, job or
their employer? (3%) project" xxx "shall be jointly and severally liable
SUGGESTED ANSWER: with his contractor or subcontractor to such
a) I will analyze the problem by applying the four- employees (of the contractor or subcontractor) to
fold test of employer-employee relationship. I will the extent of work performed under the contract
examine if Mr. Dado exercises power of control or xxx." (Arts. 106 and 107, Labor Code)
supervision over the workers' manner and method
of doing their work. Control is the most important Labor-Only Contract vs. Job Contracting
factor in examining employer-employee (1997)
relationship. The other factors are hiring, payment Distinguish between "job contracting" and "labor-
of wages, and power to dismiss, I will also examine only contracting."
whether there was job contracting or labor-only SUGGESTED ANSWER:
contracting.
Page 63 of 108
When a person, not being an employer, contracts B. Sta. Monica Plywood Corp. is liable for
with an independent contractor for the the claims of the workers hired by Arnold. A
performance of any work, task, job or project, there is finding that Arnold is a labor only contractor is
"JOB CONTRACTING." When the independent equivalent to declaring that there exist an
contractor does the work that is contracted out, he is employer-employee relationship between Sta.
not under the control of the person who Monica Plywood Corp. and workers hired by
contracted out the work to be done. Arnold. This is so because Arnold is considered
a mere agent of Sta. Monica Plywood Corp. [Lim
In "LABOR-ONLY CONTRACTING", a person v. NLRC, 303 SCRA 432, (1999); Baguio et
supplies workers to an employer. Said person does al, v. NLRC, 202 SCRA 465 (1991)]
not have substantial capital or investments in the
form of tools, equipment, machineries, work Labor-Only Contractor vs.
premises, among others, and the workers recruited Independent Contractor (1994)
and placed by such person are performing 1) What is a "labor-only" contract?
activities related to the principal business of the 2) Distinguish the liabilities of an employer
employer to whom the workers are supplied. who engages the services of a bonafide
"independent contractor" from one who
Labor-Only Contractor (2002) engages a "labor-only" contractor?
Sta. Monica Plywood Corporation entered into a SUGGESTED ANSWER:
contract with Arnold for the milling of lumber as 1) "LABOR-ONLY" CONTRACT is a contract
well as the hauling of waste wood products. The between an employer and a person who supplies
company provided the equipment and tools workers to such employer where the person
because Arnold had neither tools and equipment supplying workers does not have substantial
nor capital for the job. Arnold, on the other capital or investment in the form of
hand, hired his friends, relatives and neighbors tools, equipment, machineries, work premises,
for the job. Their wages were paid by Sta. among others, and the workers recruited and
Monica Plywood Corp. to Arnold, based on their placed by such person are performing activities
production or the number of workers and the which are directly related to the principal
time used in certain areas of work. All work business of such employer. (Art. 106, Labor Code)
activities and schedules were fixed by the company.
A. Is Arnold a job contractor? Explain briefly. (2%) 2) A person who engages the services of a
B. Who is liable for the claims of the workers bona fide "INDEPENDENT CONTRACTOR" for
hired by Arnold? Explain briefly. (3%) the performance of any work, task, job or project is
SUGGESTED ANSWER: the indirect employer of the employees who have
A. No. In two cases decided by the Supreme been hired by the independent contractor to
Court, it was held that there is "job contracting" perform said work, task, job or project.
where (1) the contractor carries on an independent
business and undertakes the contract work in his In the event that the independent contractor fails to
own account, under his own responsibility pay the wages of his employees, an
according to his own manner and method, free indirect employer, in the same manner and extent
from the control and direction of his employer or that he is liable to employees directly employed by
principal in all matters connected with the him, is JOINTLY and SEVERALLY LIABLE
performance of the work except as to the results with the Independent contractor to the
thereof; and (2) the contractor has substantial employees of the latter to the extent of the work
capital or investment in the form of tools, performed under the contract.
equipment, machineries, work premises and other
materials which are necessary in the conduct of his As for the person who engages the services of
business. [Lim v. NLRC, 303 SCRA 432 (1999); a "labor only" contractor, the latter is
Baguio v. NLRC, 202 SCRA 465(1991)] considered merely as an agent of the former
who shall be responsible to the workers hired by
In the problem given, Arnold did not have sufficient the "labor only" contractor in the same manner and
capital or in vestment for one. For another Arnold extent as if he directly employed such workers.
was not free from the control and direction of Sta.
Monica Plywood Corp. because all work activities ALTERNATIVE ANSWERS;
and schedules were fixed by the company. a) An employer who engages the services of a
bona fide "independent contractor" is
Therefore, Arnold is not a job contractor. He SOLIDARILY LIABLE with his contractor or
is engaged in labor-only contracting. sub-contractor only for non-payment or under-
payment of wages and other labor standards
SUGGESTED ANSWER: provisions of the Labor Code, whereas an
Page 64 of 108
employer who engages a "labor-only" of Service Exporters v. Drilon, 163 SCRA 386
contractor is liable for all benefits, terms and 11988]).
conditions of employment that it normally ANOTHER SUGGESTED ANSWER:
grants to its regular or direct employees. The DOLE orders should be set aside. It is true
that the Migrant Workers and Overseas Filipinos
b) An employer who deals with a bona-fide Act, particularly its Section 5, could be the basis of
independent contractor shall be liable only the power of DOLE to effect a ban on the
subsidiarily, if the contractor or sub-contractor deployment of OFWs by XYZ. If the ban, however, is
fails to pay the wages to the workers in for the purpose of preventing XYZ from
accordance with the Labor Code. transporting extremists to terrorist training camps
abroad, this is a police and national security
Upon the other hand, an employer who deals problem better dealt with by the police or the Office
with a "labor-only" contractor shall be primarily of the National Security Adviser.
responsible to the workers in the same manner
and extent as if the latter were directly More importantly, the cancellation of the license of
employed by him. (Arts 106-107, Labor Code) XYZ requires notice and hearing. Absent such
notice and hearing, the order of cancellation of the
Recruitment & Placement; Cancellation; Secretary of Labor and Employment is null and
Certificate of Registration; Travel Ban (2004) void because of the denial of due process.
Concerned Filipino contract workers in the Middle
East reported to the Department of Foreign Affairs Recruitment & Placement; illegal
(DFA) that XYZ, a private recruitment and recruitment to economic sabotage (2005)
placement agency, is covertly transporting (1) During the open forum following your lecture to
extremists to terrorist training camps abroad. a group of managers and HRD personnel, you
Intelligence agencies of the government allegedly were asked the following questions:
confirmed the report. (a) What qualifying circumstances will
convert "illegal recruitment" to "economic
Upon being alerted by the DFA, the Department of sabotage," thus subjecting its perpetrator or
Labor and Employment issued orders cancelling perpetrators to a penalty of life imprisonment
the licenses of XYZ, and imposing an immediate and a fine of at least P500,000.00? Please
travel ban on its recruits for the Middle East. XYZ explain your answer briefly. (3%)
appealed to the Office of the President to reverse SUGGESTED ANSWER.
and set aside the DOLE orders, citing damages Under Article 38(b) of the Labor Code, as
from loss of employment of its recruits, and amended by P.D. No. 2018, it provides that illegal
violations of due process including lack of notice recruitment shall be considered an
and hearing by DOLE. The DOLE in its answer offense involving economic sabotage if any of the
claimed the existence of an emergency in the following qualifying circumstances exists:
Middle East which required prompt measures to (1) When illegal recruitment is committed by a
protect the life and limb of OFWs from a clear and SYNDICATE, requiring three or more persons
present danger posed by the ongoing war against who conspire or confederate with one another
terrorism. in carrying out any unlawful or
illegal transaction, enterprise or scheme;
Should the DOLE orders be upheld or set When illegal recruitment is committed in a LARGE
aside? (5%) SCALE, as when it is committed against three
SUGGESTED ANSWER: or more persons individually or as a group.
1. The DOLE order cancelling the licenses of XYZ (People v. Navarra, G.R. No. 119361, February
is void because a report that an agency is covertly 19, 2001; See also Sec. 6 of R.A. No. 8042)
transporting extremists is not a valid ground
for cancellation of a Certificate of Registration Recruitment & Placement; illegal
(Art. 239, Labor Code) and there is failure recruitment; Economic Sabotage (2002)
of due process as no hearing was conducted When is illegal recruitment considered a crime
prior to the cancellation (Art. 238, Labor Code). of economic sabotage? Explain briefly. (3%)
SUGGESTED ANSWER:
2. The DOLE order imposing the travel ban is valid According to Art. 28 of the Labor Code, illegal
because it is a valid exercise of police power to recruitment is considered a crime of
protect the national interest (Sec. 3, Art. XIII, economic sabotage when committed by a
Constitution on full protection to labor safety of syndicate or in large scale.
workers) and on the rule making authority of the
Secretary of Labor (Art. 5, Labor Code; Phil. Assn. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or
Page 65 of 108
more persons conspiring and/or confederating with Recruitment & Placement; Non-
one another in carrying out any unlawful or Transferability of License (1998)
illegal transaction, enterprise or scheme which A Recruitment and Placement Agency declared
is an act of illegal recruitment. voluntary bankruptcy. Among its assets is
its license to engage in business.
Illegal recruitment is deemed committed in Is the license of the bankrupt agency an asset
large scale if committed against three (3) which can be sold in public auction by
or more persons individually or as a group. the liquidator? [5%]
SUGGESTED ANSWER:
Recruitment & Placement; Large Scale No, because of the non-transferability of the
Illegal Recruitment (2005) license to engage in recruitment and placement.
Maryrose Ganda's application for the renewal other
license to recruit workers for overseas employment The Labor Code (in Article 29) provides that no
was still pending with the Philippine Overseas license to engage in recruitment and placement
Employment Administration (POEA). Nevertheless, shall be used directly or indirectly by any person
she recruited Alma and her three sisters, Ana, other than the one in whose favor it was issued nor
Joan, and Mavic, for employment as housemates may such license be transferred, conveyed or
in Saudi Arabia. Maryrose represented to the assigned to any other person or entity.
sisters that she had a license to recruit workers for
overseas employment. Maryrose also demanded It may be noted that the grant of a license is
and received P30,000.00 from each of them for her a governmental act by the Department of Labor
services. However, Maryrose's application for the and Employment based on personal
renewal of her license was denied, and qualifications, and citizenship and capitalization
consequently failed to employ the four sisters in requirements. (Arts. 27-28, Labor Code)
Saudi Arabia.
The sisters charged Maryrose with large scale Recruitment & Placement;
illegal recruitment. Testifying in her defense, Recruitment Agencies (2002)
Maryrose declared that she acted in good faith Is a corporation, seventy percent (70%) of the
because she believed that her application for the authorized and voting capital of which is owned
renewal of her license would be approved. and controlled by Filipino citizens, allowed to
Maryrose adduced in evidence the Affidavits of engage in the recruitment and placement of
Desistance which the four private complainants workers, locally or overseas? Explain briefly. (2%)
had executed after the prosecution rested its case. In SUGGESTED ANSWER:
the said affidavits, they acknowledge receipt of No. A corporation, seventy percent (70%) of the
the refund by Maryrose of the total amount of authorized and voting capital stock of which is
P120,000.00 and indicated that they were no owned and controlled by Filipino citizens cannot be
longer interested to pursue the case against permitted to participate in the recruitment
Maryrose. Resolve the case with reasons. (5%) and placement of workers, locally or overseas,
ALTERNATIVE ANSWER: because Art 27 of the Labor Code requires at
Illegal recruitment is defined by law as any least seventy- five percent (75%).
recruitment activities undertaken by non-licenses
or non-holders of authority. (People v. Senoron, Recruitment & Placement; Travel
G.R. No. 119160, January 30,1997) And it is large Agency; Prohibition (2006)
scale illegal recruitment when the offense is Wonder Travel and Tours Agency (WTTA) is a
committed against 3 or more persons, individually well-known travel agency and an authorized sales
or as a group. (Article 38[b], Labor Code) agent of the Philippine Air Lines. Since majority of
its passengers are overseas workers, WTTA
In view of the above, Maryrose is guilty of large applied for a license for recruitment and placement
scale illegal recruitment. Her defense of good faith activities. It stated in its application that its purpose
and the Affidavit of Desistance as well as the is not for profit but to help Filipinos
refund given will not save her because R.A. No. find employment abroad.
8042 is a special law, and illegal recruitment is Should the application be approved? (5%)
malum prohibitum. (People v. Saulo, G.R. No. ALTERNATIVE ANSWER:
125903, November 15, 2000) The application should be disapproved, as it is
ALTERNATIVE ANSWER: prohibited by Article 26 of the Labor Code, to
With the execution of the affidavit of desistance by wit: "Article 26. Travel agencies and sales
the complainants and the refund made agencies of airline companies are prohibited
by Maryrose, the case against her for large from engaging in the business of recruitment
scale illegal recruitment will surely fail. and placement of workers for overseas
employment whether for profit or not."
Page 66 of 108
2006
arising out of an emergency, exigency or business
Rule I, Part IIPOEA Rules and Regulations losses.
Governing the Recruitment and Employment of
Land-Based Workers (2002) disqualifies any entity Wage; Wage Distortion; Definition &
having common director or owner of travel Elements (2006)
agencies and sales agencies of airlines, including When is there a wage distortion?
any business entity from the recruitment and ALTERNATIVE ANSWER:
placement of Filipino workers overseas, whether A WAGE DISTORTION arises when an increase in
they derive profit or not. prescribed wage rates results in the elimination or
ALTERNATIVE ANSWER: severe contraction of intentional quantitative
No. Section 6 of RA No. 8042 considers the differences in wage or salary rates between and
following act as illegal recruitment: "(j) For an among employee groups in an establishment as to
officer or agent of a recruitment agency to become effectively obliterate the distinctions embodied in
an officer or member of the Board of any such wage structure based on skills, length of
corporation engaged in travel agency or to engage service, or other logical bases of differentiation
directly or indirectly in the management of a travel (Article 124, Labor Code of the Philippines).
agency." The law considers the operation of travel ALTERNATIVE ANSWER:
agencies and recruitment agencies as There is wage distortion when the following four
incompatible activities. elements concur:
a. An existing hierarchy of positions with
Wage Distortion (2002) corresponding salary rates;
A. How should a wage distortion be resolved (1) b. A significant change in the salary rate of a
in case there is a collective bargaining agreement lower pay class without a concomitant
and (2) in case there is none? Explain briefly. (3%) increase in the salary rate of a higher one;
SUGGESTED ANSWER: c. The elimination of the distinction between the
A. According to Art. 124 of the Labor Code, in two levels; and
case there is a collective bargaining agreement, a d. The existence of the distortion in the same
dispute arising from wage distortions shall be region of the country.
resolved through the grievance machinery
provided in the CBA, and if remains unresolved, Wage; Wage Distortion; Means of Solving
through voluntary arbitration. In case there is no (2006)
collective bargaining agreement, the employers How should a wage distortion be settled?
and workers shall endeavor to correct such SUGGESTED ANSWER:
distortions
. Any dispute arising therefrom shall be In organized establishments, the wage distortion
settled through the National Conciliation and shall be resolved through the GRIEVANCE
Mediation Board and if it remains unresolved after PROCEDURE under their collective bargaining
ten (10) calendar days of conciliations, then the agreement, and if it remains unresolved, through
dispute is referred to the appropriate branch of the VOLUNTARY ARBITRATION. On the other hand,
National Labor Relations Commission. in establishments where there are no collective
bargaining agreements or recognized labor unions,
Wage; Reduction of Minimum Pay & Wages the employers and workers shall endeavor to
(2006) correct such distortion. Any dispute arising
Can an employer and an employee enter into an therefrom shall be settled through the National
agreement reducing or increasing the minimum Conciliation and Mediation Board, and if it remains
percentage provided for night differential pay, unresolved after ten (10) calendar days of
overtime pay, and premium pay? (5%) conciliation, shall be referred to the appropriate
SUGGESTED ANSWER: branch of the National Labor Relations
Article 100 of the Labor Code prohibits the Commission for COMPULSORY ARBITRATION
elimination and the diminution of benefits being (Article 124, Labor Code of the Philippines).
enjoyed by employees at the time the law was
passed. The employer and employee cannot enter Wage; Wage Distortion; Not a ground for
into an agreement to reduce the minimum Strike/Lockout (2006)
percentage provided by law for night differential Can the issue of wage distortion be raised in a
pay, overtime pay and premium pay as that would notice of strike? Explain. (10%)
be against public policy. On the other hand, an SUGGESTED ANSWER:
agreement increasing the percentage of benefits NO. Section 16, Chapter I of Rules Implementing
would be valid for being beneficial to the RA 6727 provides that "Any dispute involving wage
employee. However, Art. 227 of the Labor Code distortions shall not be a ground for strike/lockout."
authorizes diminution or reduction of benefits in Article 124 of the Labor Code, as amended by
case of an impelling, reasonable justification Republic Act 6727 prescribes a procedure for the
Page 67 of 108
correction of a wage distortion, implicitly excluding NLRC, on 11 November 1993,
strikes or lockouts or other concerted activities as Accordingly, management may undertake to
modes of settlement of the issue. The legislative exclude sick leave, vacation leave, maternity
intent that wage distortion shall be solved by leave, premium pay for regular holiday, night
voluntary negotiation or arbitration is made clear in differential pay and cost of living allowance.
the rules (Ilaiv at Buklod ng Manggagawa v. NLRC, Sales commissions, however, should be
G.R. No. 91980, June 27, 1991). included based on the settled rule as earlier
enunciated in Songco vs. NLRC, 183 SCRA 610.
Wages; 13th month pay (1994)
Concepcion Textile Co. included the overtime pay, Wages; 13th month pay (1998)
night-shift differential pay, and the like in the What would be your advice to your client, a
computation of its employees' 13th-month pay. manufacturing company, who asks for your legal
Subsequently, with the promulgation of the opinion on whether or not the 13th Month Pay Law
decision of the Supreme Court in the case of San (Presidential Decree No. 851) covers a casual
Miguel Corporation vs. Inciong (103 SCRA 139) employee who is paid a dally wage? (5%)
holding that these other monetary claims should SUGGESTED ANSWER:
not be included in the computation of the 13th- I will advise the manufacturing company to pay the
month pay, Concepcion Textile Co. sought to casual employee 13th Month Pay if such
recover under the principle of solutio indebiti its casual employee has worked for at least one
overpayment of its employees' 13th-month pay, by (1) month during a calendar year. The law on the
debiting against future 13th-month payments 13th Month Pay provides that employees are
whatever excess amounts it had previously made. entitled to the benefit of said law regardless of
(1) Is the Company's action tenable? their designation or employment status.
(2) With respect to the payment of the 13th-month
pay after the San Miguel Corporation, The Supreme Court ruled in Jackson Building-
ruling, what arrangement, if any, must the Condominium Corporation v. NLRC, 246 SCRA
Company make in order to exclude from the 329, (1995) interpreting P.D. No. 851, as follows:
13th-month pay all earnings and xxx employees are entitled to the thirteenth-
remunerations other than the basic pay. month pay benefits regardless of
SUGGESTED ANSWER: their designation and irrespective of the
1) The Company's action is not tenable. The method by which their wages are paid.
principle of salutio indebiti which is a civil law
concept is not applicable in labor law. Thus, solutio Wages; Bonus (2002)
indebiti is not applicable to the instant case, B. The projected bonus for the employees of
(Davao Fruits Corporations vs. National Labor Suerte Co. was 50% of their monthly
Relations Commission, et at. 225 SCRA 562) compensation. Unfortunately, due to the slump in
ALTERNATIVE ANSWERS: the business, the president reduced the bonus to
a) The Company's action would be tenable if 5% of their compensation. Can the company
payment was done by mistake, In which case unilaterally reduce the amount of bonus? Explain
recovery can be done under the principle of solutio briefly. (2%)
indebiti. But if there was no mistake, the SUGGESTED ANSWER:
Company's action would be untenable because it Yes. The granting of a bonus is a management
would violate Article 100 of the Labor Code which prerogative, something given in addition to what is
prohibits elimination or diminution of benefits. ordinarily received by or strictly due the recipient.
b) No. The Company's action is not tenable. The An employer, like Suerte Co., cannot be forced to
grant by Concepcion Textile Co. of a better distribute bonuses when it can no longer afford to
formula, more favorable to the employee, pay. To hold otherwise would be to penalize
constituted a valid offer by the company as the the employer for his past generosity. [Producers
offerer and the employees as the offeree. There Bank of the Phil. v NLRC, 355 SCRA 489, (2001)]
having been a meeting of the minds of the parties, ANOTHER SUGGESTED ANSWER:
the rights and obligations arising therefrom were It depends. If there is a legal obligation on the part of
valid. Thus, any amount received by virtue thereof Suerte Co. to pay a bonus of its employees
could not be recovered, much less taken away equivalent to 50% of their monthly compensation,
unilaterally. The principle does not apply to the because said obligation is included in a collective
case at bar. bargaining agreement, then Suerte Co. cannot
reduce the bonus to 5% of their monthly
SUGGESTED ANSWER: compensation. But if the payment of the bonus is
2} After the 1981 San Miguel ruling, the High Court not a legal obligation but only a voluntary act on
decided the case of Philippine Duplicators Inc. vs. the part of the employer, said employer,
Page 68 of 108
2006
unilaterally, can only reduce the bonus from 50% (2) It is entirely dependent on the employer's
to 5% of the monthly compensation of its capacity to pay.
employees; the employer can, in fact, not give any
bonus at all. Normally discretionary, it becomes part of the
regular compensation by reason of long and
Wages; Bonus (2003) regular concession or when the bonus is Included
XYZ Employees Association filed a complaint as among the benefits granted in a CBA.
against ABC Bank for wrongful diminution of
benefits. It alleged that the bank had been Wages; Computation of Basic Salary (1997)
providing for a mid-year bonus equivalents one- Robert Suarez is a salesman for Star
month basic pay and a Christmas bonus equivalent Pharmaceuticals, Star Pharmaceuticals has
to one-month basic pay since 1971. Upon the applied with the Department of Labor and
effectivity of Presidential Decree (P.D.) No. 851 in Employment for clearance to terminate (by way of
1975 which granted the 13th month pay, the bank retrenchment) the services of Suarez due to
started giving its employees a one-month basic financial losses. Robert Suarez, aside from his
pay as mid-year bonus, one-month basic pay as monthly salary, receives commissions on the sales
Christmas bonus, and one-month basic pay as he makes. He also receives allowances. The
13th month pay. In 1980, the bank was placed existing CBA between Star Pharmaceuticals and
under conservatorship and by virtue of a monetary the union, of which Robert Suarez is a member,
board resolution of the Central Bank, the bank only states that any employee separated from
gave one month basic pay mandated by P.D. 851, employment for causes not due to the fault of the
and it no longer gave its employees the traditional employee shall receive from the company a
mid-year and Christmas bonuses. Could ABC retirement gratuity in an amount equivalent to one
Bank be compelled, given the circumstances, to month's salary per year of service.
continue paying its employees the traditional mid-
year and Christmas bonuses in addition to the 13th Robert Suarez contends that in computing his
month pay? separation pay, his sales commission and his
SUGGESTED ANSWER: allowances should be included in the monthly
No. The grant of a bonus is a prerogative, not an salary. Do you agree?
obligation, of the employer. (Traders Royal Bank v. SUGGESTED ANSWER:
NLRC. 189 SCRA 274 (1990). The matter of giving I agree, with some conditions. In computing
a bonus over and above that which is required by separation pay, the monthly salary should include
law is entirely dependent on the financial capability commissions because commissions received by a
of the employer to give it. (Businessday v. NLRC. salesman is part of his salary.
221 SCRA 9 (1993).
But for allowances to be included as part of salary,
Hence, given the circumstances, ABC Bank cannot they should be for services rendered or to be
be compelled to continue paying its employees the rendered, like a cost of living allowance. But
traditional mid-year and Christmas bonuses in transportation and representation allowances are
addition to the 13th month pay. not considered as part of salary because they are
to meet expenses for transportation and
Wages; Bonus; Nature (1995) representation. Thus, cost of living allowances, but
What is a bonus? When is it demandable as a not transportation or representation allowances,
matter of right? Explain. shall be included as part of salary in the
SUGGESTED ANSWER: computation of separation pay.
A bonus is money given in addition to an Note: Re: allowances as part of salary, in Santos
employee's usual compensation. It may be given vs. NLRC 154 SCRA 166, the Supreme Court
as a gratuity, as an act of liberality. But a bonus is said: "in the computation of backwages and
demandable as a matter of right if it is made a legal separation pay, account must be taken not only
obligation by law or in a collective bargaining of basic salary but also her transportation and
agreement or in a contract of employment or by its emergency living allowances."
having been given for such a long time such that
the receipt of a bonus has ripened into a right. Wages; Computation; Holiday Pay (2002)
ALTERNATIVE ANSWER: On orders of his superior, Efren, a high-speed
A bonus is an amount granted and paid to an sewing machine technician, worked on May 1,
employee for his industry and loyalty which Labor Day. If he worked eight (6) hours on that
contributed to the employer's success and day, how much should he receive if his daily rate is
realization of profit. P400.00? (2%)
(1) Grant of bonus is a prerogative, not an SUGGESTED ANSWER:
obligation of the employer: and
Page 69 of 108
2006
Efren should receive P800.00. Art 92 of the Labor regular holidays, but also of their regular wage,
Code provides that the employer may require an plus the premium thereof. (DOLE Explanatory
employee to work on any regular holiday but such Bulletin on Workers' Entitlement to Holiday Pay on
employee shall be paid a compensation equivalent 9 April 1993, Araw ng Kagitingan and Good Friday)
to twice his regular rate.
Wages; Money Claims (1998)
Wages; Computation; Holiday Pay; Overtime An explosion in a mine site resulted in the death of
Pay (2002) fifty (50) miners. At the time of the accident
This year, National Heroes Day (August 25) falls (1) The Mining Company has not yet paid the
on a Sunday. Sunday is the rest day of Bonifacio wages, overtime, holiday and rest day
whose daily rate is P500.00. compensation of the deceased miners;
A. If Bonifacio is required by his employer to (2) All the deceased miners owed the Miners
work on that day for eight (8) hours, how much Cooperative Union sums of money;
should he be paid for his work? Explain. (3%) (3) The Mining Company was served by a sheriff
B. If he works for ten (10) hours on that day, Writs of Garnishment of Wages of some of the
how much should he receive for his work? Explain. deceased miners by virtue of final Judgments
(2%) in several collection suits.
SUGGESTED ANSWER:
A. For working on his scheduled rest day, After the accident, the wives, paramours, brothers,
according to Art 93(a), Bonifacio should be paid sisters and parents of the deceased miners filed
P500.00 (his daily rate) plus P150.00 (30% of his their claims for unpaid wages, overtime, holiday
daily rate) = P650.00. This amount of P650.00 and rest day compensation. The Company has
should be multiplied by 2 = P1 ,300.00. This is the acknowledged its obligations. However, it is in a
amount that Bonifacio as employee working on his quandary as to how to adjudicate the conflicting
scheduled rest day which is also a regular holiday, claims; and whether it can deduct from the monies
should receive. Art. 94(c) of the Labor Code due the miners their unpaid debts with the credit
provides that an employee shall be paid a union.
compensation equivalent to twice his regular rate
for work on any regular holiday. The "regular rate" How will you advise the mining company on the
of Bonifacio on May 1, 2002 is with an additional following:
thirty percent because the day is also his 1) Can the Mining Company defer payment of
scheduled rest day. the money claims until an appropriate court
has ruled on the conflicting claims? [3%]
B. P1,300.00 which is the amount that Bonifacio 2) Can the Mining Company deduct from the
is to receive for working on May 1, 2002 should be amount due to each miner an amount
divided by 8 to determine his hourly rate of equivalent to their debt and remit the same to
P162.50. This hourly rate should be multiplied by 2 the Credit Union?'(2%]
(the number of hours he worked overtime). Thus, SUGGESTED ANSWER:
the amount that Bonifacio is entitled to receive for 1. I will advise the Mining Company to pay to the
his overtime work on May 1, 2002 is P325.00. respective heirs of the deceased miners whatever
were the unpaid wages, overtime, holiday and rest
Wages; Holiday Pay (2005) day compensation of said deceased miners without
During the open forum following your lecture the necessity of intestate proceedings. The
before members of various unions affiliated with a claimants, if they are all of age shall execute an
labor federation, you were asked the following affidavit attesting to their relationship to the
questions (State your answers and your reasons deceased and the fact that they are his heirs, to
therefor): the exclusion of all other persons. If any of the
(a) Araw ng Kagitingan and Good Friday are heirs is a minor, the affidavit shall be executed on
among the 10 paid regular holidays under Article his behalf by his natural guardian or next of kin.
94 of the Labor Code. How much will an employee The affidavit shall be presented to the employer
receive when both holidays fall on the same day? who shall make payment through the Secretary of
(4%) Labor or his representative. The representative of
SUGGESTED ANSWER: the Secretary of Labor shall act as referee in
If unworked, the covered employees are entitled to dividing the amount paid among the heirs. {See
at least 200% of their basic wage, because to do Art. 105 (b) of the Labor Code)
otherwise would reduce the number of holidays
under EO No. 203. If worked, the covered 2. I will advise the Mining Company not to deduct
employees are entitled to compensation equivalent from the amount due to each miner the amount
to at least 300% of their basic wage because they equivalent to his debt to the Credit Union. The
are entitled to the payment not only of the two debts of a deceased worker to the Credit Union is
Page 70 of 108
not one of the allowable deductions under the ANOTHER SUGGESTED ANSWER:
Labor Code, or any rules and regulations of the Yes. Nemia is entitled to holiday pay. The
Department of Labor and Employment. (See Art. Supreme Court has ruled: "As to the other benefits,
113 of the Labor Code) namely, holiday pay, premium pay, 13th month
ANOTHER SUGGESTED ANSWER: pay, and service incentive leave which the labor
Yes, if pursuant to CBA provision or authorized by arbiter failed to rule on but which the petitioners
worker in writing; otherwise. No. prayed for in their complaint, we hold that
petitioners are so entitled to these benefits. Three
Wages; Money Claims; Attorney’s Fees; (3) factors lead us to conclude that petitioners,
Damages (2001) although piece rate workers, were regular
(a) Eduardo Santiago, a project worker, was being employees of private respondents.
assigned by his employer, Bagsak Builders, to FIRST as to the nature of the petitioner's tasks,
Laoag, Ilocos Norte. Santiago refused to comply their job of repacking snack food was
with the transfer claiming that it, in effect, necessary or desirable in the usual business of
constituted a constructive dismissal because it private respondents, who were engaged in the
would take him away from his family and his usual manufacture and selling of such food products;
work assignments in Metro Manila. The Labor SECOND, petitioners worked for private
Arbiter found that there was no constructive respondents throughout the year, their
dismissal but ordered the payment of separation employment not having been dependent on a
pay due to strained relations between Santiago specific project or season; and
and Bagsak Builders plus attorney's fees THIRD, the length of time that petitioners
equivalent to ten percent (10%) of the value of worked for private respondents. Thus, while
Santiago's separation pay. petitioner's mode of compensation was on a
Is the award of attorney's fees valid? State the "per piece basis" the status and nature of their
reasons for your answer. (2%). employment was that of regular employees."
SUGGESTED ANSWER: [Labor Congress of the Philippines v. NLRC,
No, the award of attorney's fees is not valid. 290 SCRA 509 (1998)
According to the Labor Code (Art. 111 (a)),
attorney's fees may be assessed in cases of Wages; Teachers; ECOLA (1997)
unlawful withholding of wages which does not exist Lita Cruz, a full time professor in San Ildefonso
in the case. The worker refused to comply with a University, is paid on a regular monthly basis. Cruz
lawful transfer order, and hence, a refusal to work. teaches for a period of ten months in a schoolyear,
Given this fact, there can be no basis for the excluding the two month's summer break.
payment of attorney's fees.
(b) Could the labor arbiter have validly awarded During the semestral break, the University did not
moral and exemplary damages to Santiago instead pay Lita Cruz her emergency Cost of Living
of attorney's fees? Why? (3%). allowance (ECOLA) although she received her
SUGGESTED ANSWER; regular salary since the semestral break was
No, moral and exemplary damages can be allegedly not an integral part of the school year
awarded only if the worker was illegally terminated and no teaching service were actually rendered by
in an arbitrary or capricious manner. (Nueva Ecija her. In short, the University invoked the principle of
Electric Cooperative Inc., Employees Assn., us. "no work, no pay".
NLRC, G.R. No. 116066, January 24, 2000; Cruz
us. NLRC, G.R. No. 116384, February 7, 2000; Lita Cruz seeks your advice on whether or not she
Phil. Aeolus etc., vs. NLRC, G.R. No. 124617, April is entitled to receive her ECOLA during semestral
28, 2000), breaks. How would you respond to the query?
SUGGESTED ANSWER:
Wages; Paid by Results; Holiday Pay (2002) There is no longer any law making it the legal
Nemia earns P7.00 for every manicure she does in obligation of an employer to grant an Emergency
the barber shop of a friend which has nineteen (19) Cost of Living Allowance (ECOLA). Effective 1981,
employees. At times she takes home P175.00 a the mandatory living allowances provided for in
day and at other times she earns nothing. She now earlier Presidential Decrees were integrated into
claims holiday pay. Is Nemia entitled to this the basic pay of all covered employees.
benefit? Explain briefly (5%)
SUGGESTED ANSWER: Thus, whether the ECOLA will be paid or not
No, Nemia is not entitled to holiday pay. Art. 82 of during the semestral break now depends on the
the Labor Code provides that workers who are paid provisions of the applicable wage order or contract
by results are, among others, not entitled to holiday which may be a CBA, that many grant said
pay. Nemia is a worker who is paid by results. She ECOLA.
earns P7.00 for every manicure she does.
Page 71 of 108
2006
ALTERNATIVE ANSWER; SUGGESTED ANSWER:
The "no work, no pay" principle does not apply. No. The preference of credits established in Art.
The teachers receive their regular salaries during 110 of the Labor Code cannot be invoked in the
the semestral break. The law granting emergency absence of any insolvency proceedings,
cost of living allowances was designed to augment declaration of bankruptcy, or judicial liquidation.
the income of the employees to enable them to (DBP v. Santos. 171 SCRA 138 (1989).
cope with the rising cost of living and inflation. It ANOTHER SUGGESTED ANSWER:
was enacted pursuant to the State's duty to protect No. What Art. 110 of the Labor Code establishes is
labor and to alleviate the plight of the workers. To not a lien but a preference of credit in favor of
uphold the school's interpretation of the law would employees. Unlike a lien, a preference of credit
run counter to the intent of the law and constitution does not create a charge upon any particular
(University of Pangasinan Faculty Union v. property of the debtor. (Development Bank of the
University of Pangasinan, 127 SCRA 691). Philippines v. Secretary of Labor. 179 SCRA 630
(1989).
Wages; Unpaid Wages; Preference of Credit ANOTHER SUGGESTED ANSWER:
in favor of Employees (1995) The Decision of the Labor Arbiter holding Premiere
1. Under the Labor Code, is the right of first Bank (as foreclosing mortgagee-creditor)
preference a lien on the property of the insolvent subsidiarily liable for a money obligation of XYZ &
debtor in favor of the workers? Explain. Co, (as mortgagor) to Caspar, its employee, has
SUGGESTED ANSWER: no legal basis.
The right of first preference in favor of workers is 1. There is no privity of relationship between the
not a lien on the property of the insolvent debtor. Bank and Caspar. The relationship, upon which
The preference could be exercised only in the the obligation to pay a sum of money is based, is
event of bankruptcy or liquidation of an employer's between XYZ (the mortgagor) and Caspar as its
business. employee arising from the Labor Code provision
ALTERNATIVE ANSWER: requiring an employer to pay separation pay, re:
A preference does not attach to specific properties. other causes of employment.
A lien creates charges on a particular property.
The right of first preference as regards unpaid 2. At both times - Labor Arbiter Decision to pay
wages recognized by the Labor Code does not separation pay and foreclosure - XYZ & Co. was
constitute a lien on the property of the insolvent an existing business entity and neither bankrupt or
debtor in favor of the workers. It is but a preference in liquidation, although its business operations
of credit in their favor, a preference in application. after the foreclosure ceased.
The Labor Code does not purport to create a lien 3. The decision of the Labor Arbiter for XYZ &
in favor of workers or employees for unpaid wages Co. to pay a sum of money to Caspar was based
either upon all of the properties or upon any on an action in personam, not in rem. enforceable
particular property owned by their employer. against any party. (Sundowner Corporation vs.
drilon. 180 SCRA 14 (1989)
Wages; Unpaid Wages; Preference of Credit
in favor of Employees (2003) 4. The reference in the Decision to "labor
Premiere Bank, a banking corporation, being the benefits due to an employee is superior to the right
creditor-mortgagee of XYZ & Co., a garment firm, of a mortgagee of property" is misplaced. The
foreclosed the hypothecated assets of the latter. preferential claim rule has no basis and runs
Despite the foreclosure, XYZ & Co. continued its contrary to law and jurisprudence.
business operations. A year later, the bank took
possession of the foreclosed property. The Wages; Unpaid Wages; Preference of Credit
garment firm's business operations ceased without in favor of Employees (1995)
a declaration of bankruptcy. Jose Caspar, an Distinguish the mortgage created under the Civil
employee of XYZ & Co., was dismissed from Code from the right of first preference created by
employment due to the cessation of business of the Labor Code as regards the unpaid wages of
the firm. He filed a complaint against XYZ & Co. workers. Explain.
and the bank. The Labor Arbiter, after hearing, so SUGGESTED ANSWER:
found the company liable, as claimed by Jose A MORTGAGE directly subjects the property upon
Caspar, for separation pay. Premiere Bank was which it is imposed, whoever the possessor may
additionally found subsidiarily liable upon the be, to the fulfillment of the obligation for which it
thesis that the satisfaction of labor benefits due to was constituted. It creates a real right which is
the employee is superior to the right of a enforceable against the whole world. It is therefore
mortgagee of property. Was the Labor Arbiter a lien on an identified real property.
correct in his decision?
Page 72 of 108
2006
MORTGAGE CREDIT is a special preferred credit with respect to their claims as workers against
under the Civil Code in the classification of credits. LCFC.
The preference given by the Labor Code when not Panel: All claims must be filed in insolvency
attached to any specific property, is an ordinary proceedings, which are outside the jurisdiction of
preferred credit. the NLRC (Republic v. Peralta)
ALTERNATIVE ANSWER:
If the asset of an employer which has become Wages; Wage Distortion (1997)
bankrupt or has been liquidated has been (a) Define Wage Distortion.
mortgaged, the proceeds of the sale of said (b) May a wage distortion, alleged by the
mortgaged asset is first subject to the lien of the employees but rejected by the employer to be
person to whom the property is mortgaged. Said such, be a valid ground for staging a strike?
lien is superior to the first preference enjoyed by SUGGESTED ANSWER:
the workers pursuant to the Labor Code. (a) A WAGE DISTORTION is that brought about
where an increase in the prescribed wage rates
Wages; Unpaid Wages; Preference of Credit results in the elimination or severe contraction of
in favor of Employees (1999) intentional quantitative differences in wage or
FACTS: Lowland Cement & Factory Company salary rates between and among employee groups
(LCFC) borrowed P500M from the Development in an establishment as to effectively obliterate the
Bank of the Philippines and mortgaged the entire distinctions embodied in such wage rates based on
company, inclusive of its land, buildings and skills, length of service and other logical bases of
equipment, to guarantee the payment of the loan. differentiation.
However, because of the economic conditions,
LCFC incurred heavy losses and eventually failed (b) No, the existence of wage distortion is not a
to pay DBP the required monthly amortizations valid ground for a strike because Art. 124 of the
over a period of more than one (1) year. In due Labor Code provides for a specific method of
time, DBP foreclosed the mortgaged assets of procedure for correcting wage distortion. Ilaw at
LCTC resulting in the closure of the company and Buklod ng Manggagawa vs. NLRC, 198 SCRA
the displacement of all its employees for want of 586, the Court said:-
work. It goes without saying that these joint or
coordinated activities may be forbidden or
The LCFC Labor Union [Union] filed in behalf of restricted by law or contract. For the particular
the displaced workers a labor case against DBP as instance of "distortions of the wage structure
the new owner of the defunct cement factory for within an establishment" resulting from the
wage differentials, retirement pay and other money application of any prescribed wage increase by
claims. The Labor Arbiter decided in the favor of virtue of a law or wage order. Section 3 of
the Union. DBP appealed to the NLRC. Republic Act No. 6727 prescribes a specific,
detailed and comprehensive procedure for the
DBP contended in its appeal that its acquisition of correction thereof, thereby implicitly excluding
the mortgage assets of LCFC through foreclosure strikes or lockouts or other concerted activities
sale did not make it the owner of the defunct as modes of settlement of the issue.
Lowland Cement, and that the doctrine of
successor-employer is not applicable in this case, ALTERNATIVE ANSWER:
since DBP did not continue the business operation (b) A wage distortion, alleged by the employees
of LCFC. but rejected by the employer can be a valid ground
for staging a strike if it happens that in rejecting the
The NLRC while finding merit in DBP's contention, allegation of wage distortion, the employer refuses
nonetheless held DBP liable to the extent of the to consider the issue under the grievance
proceeds of the foreclosure sale since the Union's procedure provided for in the applicable CBA, and
claims in behalf of the workers constitute a first later on through Voluntary Arbitration. These acts
preference with respect thereto pursuant to article of the employer could be considered as a violation
110 of the Labor Code. of its duty to bargain collectively which is unfair
labor practice (ULP). A ULP strike is legal.
Is the NLRC correct in holding DBP liable to the
extent of the proceeds of the foreclosure sale? Wages; Wages vs. Salary; Subject to
Explain briefly (5%) Attachment (1994)
SUGGESTED ANSWER: 1) Distinguish "salary" from "wages."
No. DBP is not liable. DBP has a lien over the 2) Are these subject to attachment and execution?
properties of LCFC which were mortgaged to DBP SUGGESTED ANSWER:
and said lien is superior to the preference that the 1) The term "WAGES" applies to compensation
workers have under the Labor Code (in Article 110) for manual labor, skilled or unskilled, while salary
Page 73 of 108
denotes a compensation for a higher degree of "Rights may be waived, unless the waiver is
employment. (Gaa vs. Court of Appeals, 140 contrary to law, public order, public policy,
SCRA 304), morals or good customs."
ALTERNATIVE ANSWER:
"WAGES" are those paid to any employee as his Working Hours; Charitable Institution;
remuneration or earnings payable by an employer Overtime Pay (2002)
for work done or to be done, or for services Socorro is a clerk-typist in the Hospicio de San
rendered or to be rendered. Jose, a charitable institution dependent for its
existence on contributions and donations from well
On the other hand, "SALARY" is used in the law wishers. She renders work eleven (11) hours a day
that provides for a 13th-month pay. In this law, but has not been given overtime pay since her
basic salary includes all remuneration or earnings place of work is a charitable institution. Is Socorro
paid by an employer to his employees for services entitled to overtime pay? Explain briefly. (5%)
rendered, but does not include allowances or SUGGESTED ANSWER:
monetary benefits which are not considered or Yes. Socorro is entitled to overtime compensation.
integrated as part of the regular or basic salary. She does not fall under any of the exceptions to
(Art. 97(f), Labor Code; Sec, 2(b), P.D. No. 851) the coverage of Art. 82, under the provisions of
Hours of Work. The Labor Code is equally
2) Under Article 1708 of the Civil Code, only applicable to non-profit institutions. A covered
"wages" are exempt from attachment or execution. employee who works beyond eight (8) hours is
Salaries are not exempt from attachment or entitled to overtime compensation.
execution. (Gaa vs. Court of Appeals, 140 SCRA
304). Working Hours; Charitable Institution;
Weekly Rest Period; (1998)
Wages; Waiver of Compensation (1996) A Ladies Dormitory run or managed by a charitable
2) Jose applied with Mercure Drug Company for non-profit organization claims that it is exempt from
the position of Sales Clerk. Mercure Drug the coverage of the Weekly Rest Period provision
Company maintains a chain of drug stores that are of the Labor Code.
open everyday till late at night. Jose was informed Is the claim valid? [5%]
that he had to work on Sundays and holidays at SUGGESTED ANSWER:
night as part of the regular course of employment. No. The claim is not valid. The provisions on
He was presented with a contract of employment weekly rest periods in the Labor Code cover every
setting forth his compensation on an annual basis employer, whether operating for profit or not. (See
with an express waiver of extra compensation for
Article 91 of the Labor Code)
work on Sundays and holidays, which Jose signed.
Is such a waiver binding on Jose? Explain. Working Hours; Compressed Work Week
SUGGESTED ANSWER: (2005)
As long as the annual compensation is an amount (d) Under what conditions may a "compressed
that is not less than what Jose should receive for work week" schedule be legally authorized as an
all the days that he works, plus the extra exception to the "eight-hour a day" requirement
compensation that he should receive for work on under the Labor Code? (4%)
his weekly rest days and on special and regular ALTERNATIVE ANSWER:
holidays and for night differential pay for late night The conditions for an allowable "compressed work
work, considering the laws and wage orders week" are the following: the workers agree to the
providing for minimum wages, and the pertinent temporary change of work schedule and they do
provisions of the Labor Code, then the waiver that not suffer any loss of overtime pay, fringe benefits
Jose signed is binding on him for he is not really or their weekly or monthly take-home pay. (DOLE
waiving any right under Labor Law. It is not Explanatory Bulletin on the Reduction of Workdays
contrary to law, morals, good customs, public order on Wages issued on July 23, 1985)
or public policy for an employer and employee to ALTERNATIVE ANSWER:
enter into a contract where the employees' "Compressed work week" is resorted to by the
compensation that is agreed upon already includes employer to prevent serious losses due to causes
all the amounts he is to receive for overtime work beyond his control, such as when there is a
and for work on weekly rest days and holidays and substantial slump in the demand for his goods or
for night differential pay for late night work. services or when there is lack of raw materials.
ALTERNATIVE ANSWER: (Explanatory Bulletin on the Reduction of
The waiver of benefits provided for by law is void. Workdays on Wages Issued by DOLE, July
Art. 6 of the New Civil Code provides: 23,1985)
Working Hours; Night Shift Differential (2002)
Page 74 of 108
As a tireman in a gasoline station, open twenty four Monday through Friday to offset the overtime on
(24) hours a day with only five (5) employees, Saturday. Hence, the employees are entitled to
Goma worked from 10:00 P.M. until 7:00 A.M. of overtime compensation, i.e. premium rates of pay
the following day. He claims he is entitled to night on Saturday.
shift differential. Is he correct? Explain briefly.
(3%) Working Hours; Sick Leave; Overtime Pay
Yes. Under Art 86 of the Labor Code, night shift Danilo Flores applied for the position of driver in
differential shall be paid to every employee for the motor-pool of Gold Company, a multinational
work performed between 10:00 o'clock in the corporation. Danilo was informed that he would
evening to six o'clock in the morning. frequently be working overtime as he would have
to drive for the company's executives even beyond
Therefore, Goma is entitled to nightshift differential the ordinary eight-hour work day. He was provided
for work performed from 10:00 pm until 6:00 am of with a contract of employment wherein he would
the day following, but not from 6:00 am to 7:00 am be paid a monthly rate equivalent to 35 times his
of the same day. daily wage, regular sick and vacation leaves, 5
ANOTHER SUGGESTED ANSWER: day-leave with pay every month and time off with
The Omnibus Rules Implementing the Labor Code pay when the company's executives using the cars
(In Book III, Rule II dealing with night shift do not need Danilo's service for more than eight
differential) provides that its provisions on night hours a day, in lieu of overtime.
shift differential shall NOT apply to employees of
"retail and service establishments regularly Are the above provisions of the contract of
employing not more than five (5) workers". employment in conformity with, or violative of, the
Because of this provision, Goma is not entitled to law?
night shift differential because the gasoline station SUGGESTED ANSWER:
where he works has only five employees. Except for the provision that Danilo shall have time
off with pay when the company's executives using
Working Hours; Saturday Work (2003) the cars do not need Danilo's service for more than
A case against an employer company was filed eight hours a day, in lieu of overtime, the
charging it with having violated the prohibition provisions of the contract of employment of Danilo
against offsetting undertime for overtime work on are not violative of any labor law because they
another day. The complainants were able to show instead improve upon the present provisions of
that, pursuant to the Collective Bargaining pertinent labor laws.
Agreement (CBA), employees of the union had
been required to work "overtime" on Saturday but Thus, the monthly rate equivalent to 35 times the
were paid only at regular rates of pay on the thesis daily wage may be sufficient to include overtime
that they were not required to complete, and they pay. There is no labor law requiring the payment of
did not in fact complete, the eight-hour work period sick and vacation leaves except the provision for a
daily from Monday through Friday. Given the five-day service incentive leave in the Labor Code.
circumstances, the employer contended that the
employees were not entitled to overtime The 5-day-leave with pay every month has no
compensation, i.e., with premium rates of pay. counterpart in Labor Law and is very generous.
Decide the controversy.
SUGGESTED ANSWER: As for the provision in Danilo's contract of
The employer is correct. While Art. 88 of the Labor employment that he shall receive time off with pay
Code clearly provides that undertime work on any in lieu of overtime, this violates the provision of the
other particular day shall not be offset by overtime Labor Code which states that undertime work on
work on any other day, this rule is inapplicable in any particular day shall not be offset by overtime
this case pertaining to Saturday work which in work on any other day. Permission given to the
reality does not constitute overtime work as employer to go on leave on some other day of the
Saturday is still a working day under the law and week shall not exempt the employer from paying
there is no CBA stipulation against it. the additional compensation required by the Labor
ANOTHER SUGGESTED ANSWER: Code.
Art, 88 of the Labor Code provides that undertime
work on any particular day shall not be offset by Working Hours; When Compensable; “While
overtime work on any other day. The CBA being on Call” (2004)
the law between the parties and the Union having Gil Bates, a computer analyst and programmer of
shown that the employees rendered overtime work Hard Drive Company, works eight hours a day for
on Saturday, the contention of the employer is not five days a week at the main office providing
tenable. The employer cannot use the undertime of customers information technology assistance.
Page 75 of 108
required to keep his cellular phone on so that he
On Saturdays, however, the company requires him could be contacted whenever his services as driver
to keep his cellular phone open from 8:00 A.M. to becomes necessary.
5:00 P.M. so that the Management could contact
him in case of heavy work load or emergency Would the hours that Lito and Bong are on call be
problems needing his expertise. considered compensable working hours?
SUGGESTED ANSWER:
May said hours on Saturdays be considered The hours of Lito and Bong while on call can be
compensable working hours “while on call”? If so, considered compensable hours. The applicable
should said compensation be reported to the rule is: "An employee who is required to remain on
Social Security System? (5%) call in the employer's premises or so close thereto
SUGGESTED ANSWER: that he cannot use the time effectively and
Said hours on Saturdays should be considered as gainfully for his own purpose shall be considered
compensable working hours "while on call". In as working while on can. An employee who is not
accordance with the Rules and Regulations required to leave word at his home or with
Implementing the Labor Code, an employee who is company officials where be may be reached is not
not required to leave word at his home or with working while on call." Here, Bong is required to
company officials as to where he may be reached stay at the office after office hours so he could be
is not working while on call. But in the question, Gil called to drive the trucks of the Company. As for
Bates was required to keep his cell phone open Bong, he is required to keep his cellular phone so
from 8:00 A.M. to 5:00 P.M. Therefore, Bates that he could be contacted whenever his services
should be considered as working while on call, if as driver as needed. Thus, the waiting time of Lito
he cannot use effectively and gainfully for his own and Bong should be considered are compensable
purpose the time from 8:00 A.M. to 5:00 P.M. on hours.
Saturdays when he is required to keep his cell- Note: It could be argued that in the case of Bong
phone open. who is not required to stay in the office but is
allowed to go home, if he is not actually asked by
The compensation actually received by Bates for cellular phone to report to the office to drive a
working while on call on Saturdays should be car, he can use his time effectively and gainfully
reported to the Social Security System because to his own purpose, thus, the time that he is at
under the Social Security Law, compensation home may mean that there are not compensable
means "all actual remuneration for employment." hours.
If Gil Bates can effectively utilize the Saturdays in
TERMINATION OF EMPLOYMENT
his own interest even "while on call", said hours on
Saturdays are not compensable. However, if Backwages (2002)
during said hours on Saturdays, Bates is actually A. An employee was ordered reinstated with
required to attend to urgent work to the extent of backwages. Is he entitled to the benefits and
leaving what he is doing, then the same are increases granted during the period of his lay-off?
compensable working hours to the extent of the
Explain briefly. (3%)
actual hours of work rendered by him.
B. Aside from the just causes enumerated in
The compensation paid by the company to Bates Article 282 of the Labor Code for the termination of
for said hours worked on Saturdays should be employment, state three {3} lawful or authorized
reported to the SSS. This is so because the basis causes for the dismissal of an employee. (2%)
of computing the SSS contribution includes all SUGGESTED ANSWER:
actual remuneration, including allowances and A. Yes. An employee who is ordered reinstated
cash value of any compensation paid in any with backwages is entitled to the benefits and
medium other than cash. increases granted during the period of his lay-off.
The Supreme Court has ruled: "Backwages are
Working Hours; When Compensable; “While granted for earnings a worker lost due to his illegal
on Call”; Waiting Time (1997) dismissal and an employer is obliged to pay an
Lito Kulangkulang and Bong Urongsulong are illegally dismissed employee the whole amount of
employed as truck drivers of Line Movers, Inc. salaries plus all other benefits and bonuses and
Usually. Lito is required by the personnel manager general increases to which the latter should have
to just stay at the head office after office hours been normally entitled had he not been dismissed."
because he could be called to drive the trucks. [Sigma Personnel Services v. NLRC, 224 SCRA
While at the head office. Lito merely waits in the
181 (1993)]
manager's reception room. On the other hand.
Bong is allowed to go home after office hours but is Backwages vs. Unpaid Wages (1994)
Page 76 of 108
Distinguish between an award for back wages and backwages was excessive in that it went beyond
an award for unpaid wages. three-year rule set forth in Mercury Drug v. CIR (56
SUGGESTED ANSWER: SCRA 696). Is B's contention tenable? Why? (5%)
An award for BACKWAGES is to compensate an SUGGESTED ANSWER:
employee who has been illegally dismissed, for the No, the contention of "B" is not tenable. Rep.
wages, allowances and other benefits or their Act No. 6715, which was enacted in 1989, in effect
monetary equivalent, which said employee did not set aside the three-year rule set forth in Mercury
receive from the time he was illegally dismissed up to Drug vs. CIR (56 SCRA 696) when it provided
the time of his actual reinstatement. that the full backwages that an unjustly
dismissed employee shall receive shall be computed
On the other hand, an award for UNPAID WAGES from the time his compensation was withheld from
is for an employee who has actually worked him up to the time of his actual reinstatement.
but has not been paid the wages he is
entitled to receive for such work done. (Arts. The word "actual" was inserted in the law by Rep.
279 and 97(1), Labor Code) Act No. 6715. Thus, in accordance with the
ALTERNATIVE ANSWER: aforesaid law, an unjustly dismissed employee
An award of BACKWAGES is given to an shall receive his full backwages computed from the
employee who is unjustly dismissed. The cause of time his compensation was withheld from him up to
action here is the unjust dismissal. On the the time of his actual reinstatement even if this
other hand, an award of UNPAID WAGES is given period is more than three years.
to an employee who has not been paid his ANOTHER SUGGESTED ANSWER:
salaries or wages for services actually rendered. No, the contention of "B" is not tenable.
The cause of action here is non-payment of The Supreme Court (In Ferrer vs. NLRC, July 5,
wages or salaries. (General Baptist Bible 1993) abandoned the Mercury Drug Rule and
College vs. NLRC 219 SCRA 549). in 1996 Bustamante vs. NLRC, 265 SCRA 61 the
Supreme Court said:
Backwages; Basis (2001) [Quoting Article 279 of the Labor Code] Under
What economic components constitute backwages the above quoted provision, it became
for a rank and file employee? Are mandatory to award backwages to illegally
these components equally applicable to a dismissed regular employees. The law
managerial employee? (5%) specifically declared that the award of
SUGGESTED ANSWER: backwages was to be computed from the time
The Labor Code (Art. 279) provides that an compensation was withheld from the employee
employee who is unjustly dismissed from work is up to the time of his reinstatement.
entitled to reinstatement and also to his full xxx
backwages, inclusive of allowances, and to his The clear legislative intent of the amendment in
other benefits or their monetary equivalent RA No. 6715 is to give more benefits to the
computed from the time his compensation was workers than was previously given them under
withheld from him up to his actual reinstatement. the Mercury Drug rule. In other words, the
provision calling for "full backwages" to illegally
An employee is entitled to all the above dismissed employees is clear, plain and free
benefit regardless of whether he is a from ambiguity, and, therefore, must be applied
rank-and-file employee or a managerial employee. without attempted or strained interpretation.
However, backwages may also include the Backwages; Basis (2001)

13th month pay which are paid to rank- (a) "A", an employee of Company "B", was
and-file employees, as well as benefits arising found to have been illegally dismissed and was
from a CBA given only to employees in the ordered to be reinstated and paid backwages from
bargaining unit. Managerial employees cannot the time of dismissal until actual reinstatement.
be given the same since they are ineligible The case was elevated all the way to the Supreme
to join a labor organization. Court. By the time the Supreme Court's decision
became final and executory, B had closed down and
Backwages; Basis (2001) was in the process of winding up. Nonetheless, B
"A" was hired by company "B" in January 1980 paid A his backwages and separation pay. A
until A was illegally dismissed on April 30, 1990 as complained that B’s computation was erroneous
found by a Labor Arbiter who ordered in that A's allowances was not included. Is A
reinstatement and full backwages from April 30, correct in his claim? For what reason(s)? (2%).
1990 until As reinstatement. The Arbiter's decision SUGGESTED ANSWER:
was promulgated on April 29, 1995. B appealed A is correct. After its amendment by Rep. Act No.
claiming, among others, that the award for 6715, the backwages that an employee who has
Page 77 of 108
been unjustly dismissed is entitled to receive is not of closure or cessation of operation due to serious
limited to his full backwages but also includes business losses or financial reverses.
his allowances and the other benefits or
their monetary equivalent. Dismissal; Authorized Causes; Closure
ANOTHER SUGGESTED ANSWER: & Cessation (2001)
In the case of Consolidated .Rural Bank us. NLRC, Company "A" was engaged in the manufacture of
G.R. No. 123810, January 20,1999, the goods using the by-products of coconut trees and
Supreme Court ruled that allowances of the employed some fifty workers who lived in the
employee should be included in the coconut plantation in Quezon Province. The land
computation of backwages. upon which A conducted its operation was
subjected to land reform under R.A. 6657 for
Dismissal; Authorized Causes (2002) distribution to the tenants and residents of the
B. According to Art 283 of the Labor Code, the land. Consequently, A had to close its operations
lawful or authorized causes for the termination and dismiss its workers. The union representing
of an employee are: the employees demanded that A pay the
1. installation of labor saving devices dismissed workers separation pay under Art. 283
2. redundancy of the Labor Code that requires, among others, the
3. retrenchment to prevent losses or; payment of separation pay to employees in cases of
4. closing or cessation of operation of the "closing or cessation of operations of the
establishment or undertaking, unless the closing is establishment or undertaking". Is the union's claim
for the purpose of circumventing the provisions of correct or not? Why? (5%)
the Labor Code. Art 284 also provides that an SUGGESTED ANSWER:
employer may terminate the services of an The union's claim is not correct. In the case
employee who has been found to be suffering from of National Federation of Labor vs. NLRC,
any disease and whose continued employment is G.R. No. 127718, March 2. 2000, the
prohibited by law or is prejudicial to his health Supreme Court ruled that there is no obligation
as well as to the health of his co-employees. to pay separation pay if the closure is not a
unilateral and voluntary act of the employer.
Dismissal; Authorized Causes vs. Just
Cause (2004) In the question, the closure was brought about not
What are the authorized causes for a valid by a unilateral and voluntary act of the
dismissal by the employer of an employee? employer but due to the act of
Why are they distinct from the just causes? (5%) government in the implementation of the
SUGGESTED ANSWERS: Comprehensive Agrarian Reform Law.
The AUTHORIZED CAUSES for a valid
dismissal are the following: Dismissal; Authorized Causes; Closure &
1. installation of labor-saving devices Cessation of Business; Old Age (2006)
2. redundancy If the reason for the closure is due to old age of the
3. retrenchment to prevent losses brothers and sisters:
4. the closing or cessation of operation of the 1. Is the closure allowed by law? (2.5%)
establishment or undertaking 2. Are the employees entitled to
separation benefits? (2.5 %)
SUGGESTED ANSWERS: SUGGESTED ANSWER:
The authorized causes for a valid dismissal are If closure is due to old age —
distinct from just causes because where the 1. YES, it is allowed by law. The employer may
dismissal of an employee is based on just causes, go out of business by closing the same regardless of
these just causes are acts committed by the his reasons, if done in good faith and due to
employee which provide the basis for his dismissal. causes beyond his control. (LVN Pictures
On the other hand, where the dismissal is based Employees and Workers Association v. LVN
on authorized causes, these authorized causes are Pictures, No. L-23495, September 30,1970;J.A,T.
the results of the proper exercise by the employer of General Services v. NLRC, No. L-26432,
his management prerogatives. September 30, 1970; Alabang Country Club, Inc. v.
NLRC, G.R. No. 157611, August 9, 2005)
If a valid dismissal is based on just causes, there is SUGGESTED ANSWER:
no liability on the part of the employer, although 2. YES. One month pay, or one-half month pay
sometimes, financial assistance to be given to the for every year of service, a fraction of at least
dismissed employee is asked of the employer. If a 6 months or more equivalent to one year,
valid dismissal is based on authorized causes, the whichever is higher. (Catatista v. NLRC, GR.
employer has to pay separation pay except in case No. 102422, August 3,1995).
Page 78 of 108
2006
Dismissal; Authorized Causes; Closure & RETRENCHMENT on the other hand, ... is
Cessation of Business; Separation Pay resorted to primarily to avoid or minimize
(2006) business losses."
ABC Tomato Corporation, owned and managed by
three (3) elderly brothers and two (2) sisters, has In Escareal vs. NLRC, 213 SCRA 472 (1992), the
been in business for 40 years. Due to serious Supreme Court ruled that the law does not require
business losses and financial reverses during the financial loss as a basis for redundancy.
last five (5) years, they decided to close the
business. Dismissal; Authorized Causes; Redundancy
1. As counsel for the corporation, what steps will (1999)
you take prior to its closure? (2.5%) FACTS: Harvester Independent Ventures (HIV)
2. Are the employees entitled to separation pay? adopted a redundancy program to streamline
(2.5%) operations. Positions which overlapped each other,
SUGGESTED ANSWER: or which are in excess of the requirements of the
1. Steps to take prior to closure: service, were declared redundant. This program
a) Written Notice to DOLE 30 days prior to resulted in the reduction of manpower complement
the intended date of termination, showing and consequent termination of fifteen (15)
a bona fide reason for closure; employees, which included the secretary of the
b) Written Notice to employees 30 days prior local union and the company's Pollution control
to the intended date of termination Officer.
(Catatista v. NLRC, GR. No. 102422, Aug.
3 1995). Ilaw at Buklod ng Manggagawa (IBM), questioned
the termination of the 15 employees, contending
SUGGESTED ANSWER: that the same constituted union busting and
2. NO, Art. 283 of the Labor Code does not therefore, illegal, if the same is undertaken without
obligate an employer to pay separation benefits prior union approval.
when the closure is due to serious business losses 1. Is IBM correct in its contention that redundancy
or financial reverses (North Davao Mining and can be implemented by HIV only upon prior union
Development Corp. v. NLRC, G.R. No. 112546, approval? Why? (3%)
March 13,1996), except if the CBA provides SUGGESTED ANSWER:
otherwise (JAKA Foods v. Pacot, G.R. No. 151378, The Labor Code (in Article 283) very clearly gives
Mar. 28, 2005). the employer the right to terminate any of its
employees for redundancy.
Dismissal; Authorized Causes; Downsizing 2. Can the position of Pollution Control Officer be
Employees (2001) declared redundant? Why? (2%)
Soon after the Asian meltdown began in October SUGGESTED ANSWER:
1997, ABC Realty and Management Corporation If there is a law requiring companies to have a
undertook a downsizing program and terminated Pollution Officer, then HIV cannot declare such
nearly a third of its regular workforce. The affected office redundant.
employees questioned their termination arguing
that the action was precipitate in that ABC had not If there is no such law, then the Pollution Officer
proved that it sustained any losses. Is the claim of could be considered redundant.
the employees correct? Explain your answer, (3%). Panel: Consider case of Escareal. A position
SUGGESTED ANSWER: created by law cannot be declared redundant.
The claim of the employees may or may not be
correct. When the Corporation undertook its Dismissal; Authorized Causes; Redundancy
"downsizing" program, it may have terminated its (2000)
employees on either one of two grounds, namely, a) Can redundancy exist where the same is due
redundancy or retrenchment. to the company's failure to properly forecast its
manpower requirements? (3%)
For REDUNDANCY, there is no requirement of b) Can redundancy exist where the work
losses, whereas in retrenchment, substantial performed by twelve (12) workers can be
losses, actual or anticipated, is a requirement. performed as efficiently by ten (10) workers by
(Article 283, Labor Code). In Atlantic Gulf and increasing the speed of a machine without
Pacific Company vs. NLRC, G.R. No. 127516. May detriment to the health and safety of the workers?
28, 1999, the Supreme Court ruled: (3%)
"... it is necessary to distinguish redundancy SUGGESTED ANSWER:
from retrenchment... Redundancy exists when a) Yes, REDUNDANCY exists when a position
the services of an employee are in excess of has become an excess or superfluous which, in
what is required by an enterprise. turn, may be caused by reorganization, closure of
Page 79 of 108
a section or department, or adoption of when the service capability of the work is in excess
labor- saving arrangements. Poor forecasting of what is reasonably needed to meet the
does not invalidate redundancy. Forecasting demands on the enterprise. A REDUNDANT
after all is not fail-free. [Wiltshire File Co..Inc. POSITION is one rendered superfluous by any
v. NLRC. 193 SCRA 665 (1991)]. number of factors, such as overhiring of workers,
decreased volume of business dropping of a
b) Yes, redundancy can exist where particular line previously manufactured by the
work efficiency has been improved company or phasing out of a service activity
mechanically thus resulting in excessive or previously undertaken by the business. Under
superfluous manpower. [Wiltshire File Co., these conditions, the employer has no legal
Inc. v. NLRC, 193 SCRA 665(1991)]. obligation to keep in its payroll more employees
than are necessary for the operation of its
Dismissal; Authorized Causes; business.
Retrenchment & Redundancy (2001)
(a) What conditions must prevail and For the implementation of a redundancy
what requirements, if any, must an employer program to be valid, the employer must
comply with to justify/effect a valid retrenchment comply with the following REQUISITES:
program? (2%). (1) written notice served on both the
SUGGESTED ANSWER; employees and the Department of Labor and
In the case of Asian Alcohol Corp. vs. NLRC, G.R. Employment at least one month prior to the
No. 131108, March 25,1999, the Supreme intended date of retrenchment;
Court stated that the requirements for (2) payment of separation pay equivalent to at
a valid retrenchment must be proved by least one month pay or at least one month pay for
clear and convincing evidence: every year of service whichever is higher;
(1) that the retrenchment is reasonably necessary (3) good faith in abolishing the
and likely to prevent business losses which, if redundant positions; and
already incurred, are not merely de (4) fair and reasonable criteria in ascertaining what
minimis, but SUBSTANTIAL, SERIOUS, positions are to be declared redundant and
ACTUAL and REAL or if only expected, accordingly abolished.
are reasonably imminent as perceived
objectively and in good faith by the employer; Dismissal; Authorized
(2) that the employer served WRITTEN NOTICE Causes; Retrenchment (1998)
both to the employees and to the Department The Company Legal Counsel advised the Board of
of Labor and Employment at least one month Directors as follows: "A company cannot
prior to the intended date of retrenchment; retrench to prevent losses until actual losses
(3) that the employer pays the retrenched occur. The Company must wait until the end
employees SEPARATION PAY equivalent to of the Business Year when its Books of
one month pay or at least one month pay Accounts, Profit and Loss Statement showing
for every year of service, whichever is higher; the actual loss and Balance Sheet have been
(4) that the employer exercises its prerogative audited by an Independent auditing firm."
to retrench employees in GOOD FAITH for Is the legal advice of counsel correct?[5%]
the advancement of its interest and not to SUGGESTED ANSWER:
defeat or circumvent the employees' right The legal advice is not correct. The Labor Code (in
to security of tenure; and Article 283) provides that retrenchment may be
(5) that the employer used FAIR resorted to "TO PREVENT LOSSES" Thus,
and REASONABLE CRITERIA in ascertaining there could be legal basis for retrenchment even
who would be dismissed and who would before actual losses as long as the losses are
be retained among the employees, such as imminent and serious.
status (i.e., whether they are temporary, ANOTHER SUGGESTED ANSWER:
casual, regular or managerial employees), The advise of the Company Legal Counsel that an
efficiency, seniority, physical fitness, age, employer cannot retrench to prevent losses
and financial hardship for certain workers. until actual losses occur is not correct. The Labor
Code provides:
(b) What conditions must prevail and Art. 283. Closure of establishment and
what requirements, if any, must an employer reduction of personnel. - The employer
comply with to justify/effect a valid redundancy may also terminate the employment of any
program? (2%). employee xxx retrenchment to prevent losses.
SUGGESTED ANSWER:
In the case of Asian Alcohol Corp. (supra), the The law does not require that retrenchment can be
Supreme Court stated that REDUNDANCY exists undertaken by an employer only after an actual
Page 80 of 108
business loss occurs. The Supreme Court in Lopez employees concerned 30 days prior to the
Sugar Corporation v, Federation of Free Workers, intended date of termination, as well as the
189 SCRA 179 (1990). said: requisite separation pay, were not complied with.
In its ordinary connotation, the phrase "to
prevent losses" means that the retrenchment or ANOTHER SUGGESTED ANSWER:
termination of some employees is authorized to Yes. The authorized cause to dismiss due to
be undertaken by the employer sometime redundancy or retrenchment under Art. 283 of the
before the losses anticipated are actually Labor Code has been disproved by Daisy's
sustained or realized. It is not, in other words, engaging the services of a substitute checker at a
the intention of the lawmaker to compel the salary much lower than that which Leo used to
employer to stay his hand and keep all his receive. Also, it appears that the one (1) month
employees until sometime after losses shall notice rule required in said law was not complied
have in fact materialized; if such an intent were with. Such being the case, the twin requirements
expressly written into law, the law may well for a valid dismissal under Arts. 277 (b) and 283 of
be vulnerable to constitutional attack as the Code have clearly not been complied with.
taking property from one man to That no separation pay was paid Leo, in
another, (underscoring supplied] violation of Art. 283 of the Code, his dismissal
can all the more be successfully assailed.
Dismissal; Authorized
Causes; Retrenchment (2003) Dismissal; Authorized Causes;
Daisy's Department Store hired Leo as a checker Seniority Rule (2001)
to apprehend shoplifters. Leo later became Chief (c) Is the SENIORITY RULE or "last in first out"
of the Checkers Section and acquired the status of a policy to be strictly followed in effecting
regular employee. By way of a cost-cutting a retrenchment or redundancy program? (1%).
measure, Daisy's decided to abolish the entire SUGGESTED ANSWER:
Checkers Section. The services of Leo, along with Again, in Asian Alcohol Corp., the Supreme Court
those of his co-employees working in the same stated that with regard the policy of "first in, last
section, were terminated on the same day. A out" in choosing which positions to declare as
month after the dismissal of Leo, Daisy's engaged redundant or whom to retrench to prevent further
the services of another person as an ordinary business losses, there is no law that mandates
checker and with a salary much lower than that such a policy. The reason is simple enough. A host
which Leo used to receive. Given the above factual of relevant factors come into play in determining
settings (nothing more having been established), cost efficient measures and in choosing the
could the dismissal of Leo be successfully assailed employees who will be retained or separated to
by him? save the company from closing shop. In
SUGGESTED ANSWER: determining these issues, management plays a
Yes. Given the factual setting in the problem, and pre-eminent role. The characterization of positions
since "nothing more (have) been established", the as redundant is an exercise of business judgment on
dismissal of Leo can be successfully assailed by the part of the employer. It will be upheld as
him. This is so because the burden of proof is upon long as it passes the test of arbitrariness.
the employer to show compliance with the
following requisites for reduction of personnel: Dismissal; Authorized Causes;
1. Losses or expected losses should be substantial Sickness (2004)
and not merely de minimis; A. Gabriela Liwanag has been working as
2. The expected losses must be bookkeeper at Great Foods, Inc., which operates a
reasonably imminent, and such chain of high-end restaurants throughout the
imminence can be perceived objectively country, since 1970 when it was still a small eatery
and in good faith by the employer. at Binondo. In the early part of the year 2003,
3. It must be necessary and likely to prevent Gabriela, who was already 50 years old, reported
the expected losses. The employer must for work after a week-long vacation in her province. It
have taken other measures to cut costs was the height of the SARS (Severe Acute
other than labor costs; and Respiratory Syndrome) scare, and management
4. Losses if already realized, or the learned that the first confirmed SARS death case
expected losses must be proved by in the Philippines, a “balikbayan” nurse from
sufficient and convincing evidence. Canada, is a townmate of Gabriela. Immediately, a
(Lopez Sugar Corp. v. Federation of memorandum was issued by management
Sugar Workers. 189 SCRA 179(1990). terminating the services of Gabriela on the ground
that she is a probable carrier of SARS virus and
Moreover, the notice requirements to be given by that her continued employment is prejudicial to the
Daisy's Department Store to DOLE and the health of her co-employees.
Page 81 of 108
2006
Is the action taken by the employer justified? (5%) evaluation test by the Mahusay Medical Center is
SUGGESTED ANSWER: not the certification required for disease to be a
The employer's act of terminating the employment ground for termination. The Rules and Regulations
of Gabriela is not justified. There is no showing that implementing the Labor Code require a certification
said employee is sick with SARS, or that she by a public health authority that the disease is of
associated or had contact with the deceased such nature or at such a stage that it cannot be
nurse. They are merely townmates. Furthermore, cured within a period of six (6) months even with
there is no certification by a competent public proper medical treatment.
health authority that the disease is of such a nature ANOTHER SUGGESTED ANSWER:
or such a stage that it cannot be cured within a The issues involved are as follows:
period of six (6) months even with proper medical 1. Is there constructive dismissal?
treatment. (Implementing Rules, Book VI, Rule 1, 2. Is there a valid exercise of management
Sec. 8, Labor Code). prerogative?
On the first issue, there is constructive dismissal.
Dismissal; Constructive Dismissal; Floating RS cannot be placed on "off-detail" and "floating
Status (2004) status" indefinitely. If it lasts for more than six (6)
RS, a security guard, filed a complaint for illegal months, RS shall be deemed to have been
dismissal against Star Security Agency. He constructively dismissed thus entitling him to
alleged he was constructively dismissed after ten separation benefits. (Superstar Security Agency v.
years of service to the Agency. Having been NLRC, 184 SCRA 74, [1990]).
placed on “off-detail” and “floating status” for 6
months already, he claimed the Agency just really On the second issue, there is no valid exercise of
wanted to get rid of him because it required him to management prerogative. Star's claim of
take a neuro-psychiatric evaluation test by management prerogative in assigning its guards
Mahusay Medical Center. RS said he already cannot be exercised to defeat or circumvent RS'
submitted the result of his evaluation test by Brent right to security of tenure.
Medical Clinic as precondition to a new
assignment, but the report was rejected by the Dismissal; Constructive Dismissal; Transfer
Agency. RS added that Mahusay Medical Center (1996)
had close ties with Star’s president. It could Mansueto was hired by the Philippine Packing
manipulate tests to favor only those guards whom Company (PPC) sometime in 1960 as an hourly
the Agency wanted to retain. Star defended its paid research field worker at its pineapple
policy of reliance on Mahusay Medical Center plantation in Bukidnon. In 1970, he was transferred
because it has been duly accredited by the to the general crops plantation in Misamis Oriental.
Philippine National Police. It is not one of those Mansueto was promoted to the position of a
dubious testing centers issuing ready-made monthly paid regular supervisor four years after.
reports. Star cited its sad experience last year
when a guard ran amuck and shot an employee of Subsequently, research activity in Misamis Oriental
a client-bank. Star claimed management was phased out to March of 1982 for having
prerogative in assigning its guards, and prayed become unnecessary. Mansueto thereafter
that RS’ complaint be dismissed. received a written memorandum from the PPC,
reassigning him to the Bukidnon plantation
What are the issues? Identify and resolve them. effective April 1, 1982, with assurance that his
(5%) position of supervisor was still there for him to hold.
SUGGESTED ANSWER: Mansueto tried to persuade the PPC management
The facts in the question raise these issues: to reconsider his transfer and if this was not
1. When RS was placed on "off-detail" or "floating possible, to at least consider his position as
status" for more than six months, can RS claim redundant so that he could be entitled to
that he was terminated? severance pay. PPC did not accept Mansueto's
2. Is there a valid reason for the termination of proposal.
RS?
When Mansueto continuously failed to report for
On the first issue, based on prevailing work at the Bukidnon plantation, PPC terminated
jurisprudence, RS can be considered as his employment by reason of his refusal to accept
terminated because he has been placed on "off his new assignment.
detail" or "floating status" for a period which is
more than six (6) months. Mansueto claims that his reassignment is
tantamount to an Illegal constructive dismissal. Do
On the second issue, it is true that disease is a you agree with Mansueto? Explain.
ground for termination. But the neuro-psychiatric SUGGESTED ANSWER:
Page 82 of 108
There is no constructive dismissal by the mere act complainant only if the claimant claimed and
of transferring an employee. The employee's proved that he is entitled to attorney's fees.
contention cannot be sustained simply because a ANOTHER SUGGESTED ANSWER:
transfer causes inconvenience. There is no Article 2208 of the New Civil Code allows the
constructive dismissal where, as in Philippine award of attorney's fees when the defendant's act
Japan Active Carbon Corp., vs. NLRC, 171 SCRA or omission has compelled the plaintiff to litigate or
164 (1989), the Court ruled that constructive incur expenses to protect his interest. Attorney's
dismissal means: fees may be considered as a part of an equitable
relief awarded in the concept of damages.
A quitting because continued employment is
rendered impossible, unreasonable or unlikeable; Dismissal; Due Process; Requirements
as an offer involving a demotion in rank and a (1994)
diminution in pay. 1) Distinguish between the substantive and the
procedural requirements for the dismissal of an
The transfer will not substantially alter the terms employee.
and conditions of employment of the Supervisor. SUGGESTED ANSWER:
The right to transfer an employee is part of the 1) This is the SUBSTANTIVE REQUIREMENT for
employer's managerial function. the valid dismissal of an employee: There should
be a just cause for the termination of an employee
Furthermore, the Court ruled that an employee has or that the termination is authorized by law.
no vested right to a position, and in justifiable
cases employment may be terminated. This is the PROCEDURAL REQUIREMENT: The
employer should furnish the employee whose
An employer's right to security of tenure does not employment is sought to be terminated a written
give him such a vested right to his position as notice containing a statement of the causes for
would deprive the Company of its prerogative to termination and the employer should afford the
change his assignment or transfer him where he employee to be terminated ample opportunity to be
will be most useful. When his transfer is not heard and to defend himself with the assistance of
unreasonable, not inconvenient, nor prejudicial to his representative if he so desires. (Arts. 279 and
him, and it does not involve a demotion in rank or a 277 (b), Labor Code)
diminution of his salaries, benefits, and other
privileges, the employee may not complain that it Dismissal; Due Process; Requirements
amounts to a constructive dismissal. (2006)
Dismissal; Damages Recoverable Inday was employed by Herrera Home
(2001) Improvements, Inc. (Herrera Home) as interior
What damages can an illegally dismissed decorator. During the first year of her employment,
employee collect from his employer? (2%). she did not report for work for one month. Hence,
SUGGESTED ANSWER: her employer dismissed her from the service. She
An illegally dismissed employee may collect from filed with the Labor Arbiter a complaint for illegal
his employer ACTUAL or COMPENSATORY dismissal alleging she did not abandon her work
damages, MORAL damages and EXEMPLARY and that in terminating her employment, Herrera
damages, as well as attorney's fees as damages. Home deprived her of her right to due process.
ANOTHER SUGGESTED ANSWER: She thus prayed that she be reinstated to her
Moral and exemplary damages are only proper position.
where the employee has been harassed and
arbitrarily terminated by the employer, Nueva Ecija Inday hired you as her counsel. In preparing the
vs. Electric Cooperative Employees Association position paper to be submitted to the Labor Arbiter,
(G.R. No. 116066, January 24, 2000; Cruz vs. explain the standards of due process which should
NLRC, G.R. No. 16384. February 7, 2000; have been observed by Herrera Home in
Philippine Aeolus etc., vs. Chua (G.R. No. 124617, terminating your client's employment. (5%)
April 28, 2000; and Lucas vs. Royo, G.R. No. SUGGESTED ANSWER:
136185, October 30, 2000). The Labor Code provides the following procedure
to be observed in terminating the services of an
(b) May the Labor Arbiter, NLRC or Court of employee based on just causes as defined in Art.
Appeals validly award attorney's fees in favor 283 of the Code:
of a complainant even if not claimed or proven a. A written notice must be served on the
in the proceedings? Why? (3%). employee specifying grounds for termination
SUGGESTED ANSWER: and giving him opportunity to answer;
A Labor Arbiter, NLRC and Court of Appeals may The employee shall be given ample opportunity to
validly award attorney's fees in favor of a defend himself, with or without the assistance of
Page 83 of 108
counsel; and c) A written notice of termination and could be just cause for the termination of her
indicating the grounds to justify his termination employment.
(Agabon v. NLRC, G.R. No. 158693, 17 November ALTERNATIVE ANSWER:
2004). The case should be decided in favor of Marimar,
the school teacher. The school failed to adduce
Dismissal; Just Cause; Immoral evidence in support of its claim of immoral conduct
Conduct (1996) on the part of Marimar; hence, its claim "that the
Marimar is a teacher in Santibanez High School, marriage between the two (teacher and student) is
She is the class adviser of the senior batch where best proof which confirm the suspicion that
Sergio is enrolled. Since it is the policy of the Marimar and Sergio indulged in amorous relations
school to extend remedial instructions to its inside the classroom after office hours" is a
students, Sergio is imparted such instructions in gratuitous statement. Furthermore, marriage
school by Marimar after regular class hours. In the between two parties of disparate ages, even as
course thereof, Marimar and Sergio fell in love with between an older teacher and a younger student is
each other and shortly after got married. Marimar not an immoral act.
is 31 years old while Sergio is only 16.
In Chua Qua v Clave, 189 SCRA 117 (1990)
Santibanez High School thereafter seeks to a case which is exactly similar to the problem,
terminate the employment of Marimar for abusive the Supreme Court ruled:
and unethical conduct unbecoming of a dignified Where there is no substantial evidence of the
school teacher and that her continued employment is imputed immoral acts, it follows that the alleged
inimical to the best interest and would violation of the Code of Ethics would have no
downgrade the high moral values of the school. basis. If the two eventually fell in love, despite
Marimar, according to the school, recklessly took the disparity on their ages and academic levels,
advantage of her position as a teacher by luring a this only lends substance, to the truism that the
graduating student under her advisory section and heart has reasons of its own which reason does
15 years her junior into an amorous relationship, in not know. But, definitely, yielding to this gentle
violation of the Code of Ethics for teachers which and universal emotion is not to be casually
states, among others, that a "school official or equated with immorality. The deviation of the
teacher should never take advantage of his/her circumstances of their marriage from the usual
position to court a pupil or student." While no one societal pattern cannot be considered as a
directly saw Marimar and Sergio doing any intimate defiance of contemporary social norms.
acts inside the classroom, the school nonetheless
maintains that the marriage between the two is the Dismissal; Just Cause;
best proof which confirms the suspicion that Independent Contractor (2005)
Marimar and Sergio indulged in amorous relations Antonio Antuquin, a security guard, was caught
inside the classroom after class hours. sleeping on the job while on duty at the Yosi
Cigarette Factory. As a result, he was dismissed
Marimar, on the other hand, contends that there is from employment by the Wagan Security Agency,
nothing wrong with a teacher falling in love with her an independent contractor. At the time of his
pupil and consequently, contracting marriage with dismissal, Antonio had been serving as a
him. How would you decide the case. Explain. watchman in the factory for many years, often at
SUGGESTED ANSWER: stretches of up to 12 hours, even on Sundays and
The fact that Marimar and Sergio got married is not holidays, without overtime, nighttime and rest day
by itself sufficient proof that Marimar as a 31 year benefits. He thereafter filed a complaint for illegal
old teacher, took advantage of her position to court dismissal and non-payment of benefits against
Sergio, a 16-year old student, whom she Yosi Cigarette Factory, which he claimed was his
was tutoring after regular class hours. Thus, actual and direct employer.
Marimar could not be considered as violating As the Labor Arbiter assigned to hear the case,
the school's Code of Ethics which could have how would you correctly resolve the following: (6%)
been a valid cause for her termination. Marimar's (a) Antonio's charge of illegal dismissal;
falling in love with her student cannot be SUGGESTED ANSWER:
considered serious misconduct which is a Just This is a case involving permissible job contracting.
cause for termination of employment. Antonio's charge of illegal dismissal against Yosi
Cigarette Factory will not prosper. Wagan Security
Of course, if it is proven that Marimar and Sergio Agency, an independent contractor, is Antonio's
indulged in amorous relations inside the classroom after direct employer. Yosi is only Antonio's indirect
class hours, this would constitute serious employer. By force of law, there is in reality no
misconduct on the part of Marimar as a teacher employer-employee relationship between Yosi and
Page 84 of 108
Antonio. (Baguio v. NLRC, G.R. Nos. 79004- Code was interpreted by the Supreme Court in
08, October 4, 1991) Aris Philippines, Inc. v. NLRC, as follows:
(b) Antonio's claim for overtime and other "It is not disputed that private respondent has
benefits. done, indeed he admitted to have committed, a
SUGGESTED ANSWER: serious misconduct. In order to constitute a "just
I will dismiss Antonio's claim for overtime and other cause" for dismissal, however, the act
benefits for lack of merit as against Yosi. In complained of must be related to the
legitimate job contracting, the principal employer performance of the duties of the employee such
(Yosi) becomes jointly and severally liable with the as would show him to be thereby unfit to
job contractor (Wagan) only for the payment of the continue working for the employer."
employee's (Antonio) wages whenever the
contractor fails to pay the same. Other than that, Dismissal; Just Cause; Probationary
the principal employer (Yosi) is not responsible for Employees; Rights (2006)
any other claim made by the employee (Antonio). During their probationary employment, eight (8)
(San Miguel Corp. v. MAERC Integrated Services, employees were berated and insulted by their
Inc., G.R. No. 144672, July 10, 2003) supervisor. In protest, they walked out. The
supervisor shouted at them to go home and never to
Dismissal; Just Cause; Misconduct (1996) report back to work. Later, the personnel man-
Sergio, an employee of Encantado Philippines, Inc. ager required them to explain why they should not
(EPI), was at the company canteen when Corazon, a be dismissed from employment for abandonment
canteen helper, questioned him for his use of and failure to qualify for the positions applied for.
somebody else's identification card (ID). Sergio They filed a complaint for illegal dismissal against
flared up and shouted at Corazon "Wala kang their employer.
pakialam! Kung gusto mo, itapon ko itong mga As a Labor Arbiter, how will you resolve the case?
pagkain ninyo!". When Sergio noticed that some (10%)
people where staring at him rather menacingly, he SUGGESTED ANSWER:
left the canteen but returned a few minutes later to As a Labor Arbiter I will resolve the case in favor of
remark challengingly "Sino ba ang nagagalit" the eight (8) probationary employees due to
Sergio then began smashing some food items that the following considerations:
were on display for sale in the canteen, after which 1. Probationary employees also enjoy security of
he slapped Corazon which caused her to fall and tenure (Biboso v. Victoria Milling, G.R. No.
suffer contusions. The incident prompted Corazon to L- 44360, March 31, 1977).
file a written complaint with Gustavo, the 2. In all cases involving employees
personnel manager of EPI, against Sergio. on probationary status, the employer shall
make known to the employee at the time he is
Gustavo required Sergio to explain in writing why hired, the standards by which he will
no disciplinary action should be taken against him. In qualify for the positions applied for.
his written explanation. Sergio admitted his 3. The filing of the complaint for illegal
misconduct but tried to explain it away by saying dismissal effectively negates the employer's
that he was under the influence of liquor at the theory of abandonment (Rizada v. NLRC,
time of the incident. Gustavo thereafter issued a G.R. No. 96982, September 21, 1999).
letter of termination from the employment of Sergio 4. The order to go home and not to return to work
for serious misconduct. constitutes dismissal from employment.
5. The eight (8) probationary employees were
Sergio now flies a complaint for illegal dismissal, terminated without just cause and without due
arguing that his acts did not constitute serious process
misconduct that would justify his dismissal. Decide.
SUGGESTED ANSWER: In view of the foregoing, I will order reinstatement
The acts of Sergio constituted serious misconduct. to their former positions without loss of
Thus, there was just cause for his termination. The seniority rights with full backwages, plus
fact that he was under the influence of liquor at the damages and attorney fees.
time that he did what he did does not
mitigate, instead it aggravates, his misconduct. Dismissal; Just Cause; Requirements (1999)
Being under the influence of liquor while at FACTS: Joseph Vitriolo (JV), a cashier of Seaside
work is by itself serious misconduct. Sunshine Supermart (SSS), was found after an
ALTERNATIVE ANSWER: audit, to have cash shortages on his monetary
The dismissal is not justified because the serious accountability covering a period of about five
misconduct committed by the employee is not in months in the total amount of P48,000.00. SSS
connection with his work. Art. 282(g) of the Labor served upon JV the written charge against him via a
memorandum order of preventive suspension,
Page 85 of 108
giving JV 24 hours to submit his explanation. As Was the award of the separation pay proper?
soon as JV submitted his written explanation within Explain.
the given period, the same was deemed SUGGESTED ANSWER:
unsatisfactory by the company and JV was No, the award of separation pay is not proper
peremptorily dismissed without any hearing. because the employee was terminated for serious
misconduct and payment of separation pay will be
The day following his termination from to reward an employee for a wrong doing. In
employment. JV filed a case of illegal dismissal Philippine Long Distance Telephone Co., vs NLRC,
against SSS. During the hearing before the Labor 164 SCRA 671 (1988).
Arbiter. SSS proved by substantial evidence JV's
misappropriation of company funds and various We hold that henceforth separation pay shall be
infractions detrimental to the business of the allowed as a measure of social justice only in those
company. JV, however, contended that his instances where the employee is validly dismissed
dismissal was illegal because the company did not for causes other than serious misconduct or those
comply with the requirements of due process. reflecting his moral character.
I. Did SSS comply with the requirements of The policy of social justice is not intended to
procedural due process in the dismissal from countenance wrongdoing. Compassion for the
employment of JV? Explain briefly (2%) poor is an imperative of every human society but
SUGGESTED ANSWER: only when the recipient is not a rascal claiming an
In connection with the right to due process in the undeserve privilege. Those who invoke social
termination of an employee, the Labor Code (in justice may do so only if their hands are clean and
Article 277[b]) requires that the employer furnish their motives blameless.
the worker whose employment is sought to be
terminated a written notice containing a statement A contrary rule would have the effect of rewarding
of the causes for termination and shall afford rather than punishing the erring employee for his
ample opportunity to be heard and to defend offense.
himself with the assistance of his representative if ALTERNATIVE ANSWER;
he so desires. The award of the separation pay was not proper.
According to the Labor Code, SEPARATION PAY
SSS did not comply with the above described is to be paid to an employee whose employment is
requirements for due process. The memorandum terminated due to the installation of labor saving
order was for the preventive suspension of JV, not devices, redundancy, retrenchment to prevent
a notice for his termination and the causes of his losses or the closing or cessation of operation of
termination. the establishment or undertaking. When an
2. If you were the Labor Arbiter, how would you employer terminates the services of an employee
decide the case? Explain briefly (3%) who has been found to be suffering from any
SUGGESTED ANSWER: disease, the employee is also to be paid
I will decide that the termination of JV was legal. It separation pay.
was for just cause. JV's misappropriation of
company funds and various infractions detrimental But on the basis of equity, the Supreme Court has
to the business of the company duly proven by ruled that an employee whose employment has
substantial evidence constitute a willful breach by been terminated for just cause may nevertheless,
JV of the trust reposed in him by his employer for humanitarian reasons, be granted financial
which is a just cause for termination. (See Article assistance in the form of separation pay. But also
282) according to the Supreme Court, a terminated
employee is not deserving of said financial
But I will award him indemnity of, say Pl,000, for assistance if her termination is due to serious
the failure of the employer to give him due process. misconduct.
Dismissal; Just Cause; Separation Pay In the case, Daisy was dismissed because of
(1996) serious misconduct. Thus, she should not be paid
1) Daisy, the branch manager of Tropical Footwear separation pay.
Inc.. was dismissed for serious misconduct. She
filed a complaint for illegal dismissal and damages. Dismissal; Just Causes (2001)
The Labor Arbiter sustained Daisy's dismissal but "A" worked for company "B" as a rank and file
awarded her separation pay based on social employee until April 1990 when A's services were
justice and as an act of compassion considering terminated due to loss of confidence in A.
her 10-year service with the company. However, before effecting A's dismissal, B
accorded A due process including full opportunity
Page 86 of 108
to answer the charges against him in the course of his seventh year, he became a steward of his labor
the investigation. Was B justified in dismissing union. Since then he became disputatious and
A after the investigation? Why? (5%) obstinate and his performance fell below par. One
SUGGESTED ANSWER: day his manager told him to pick up some
In the case of PLDT vs. NLRC (G.R. No. 106947, documents from a certain bank which were needed
February 11, 1999), the Supreme Court ruled that to close a business transaction. Roman did not
the basic requisite for dismissal on the ground obey. He said he had an important personal
of loss of confidence is that the employee engagement. Moreover, he did not want to drive a
concerned must be one holding a position vehicle that was not air-conditioned. When his
of trust and confidence. immediate supervisor asked him in the afternoon to
drive an air-conditioned car, Roman again refused.
Rank-and-file employees may only be He said he did not want to drive as he wanted
dismissed for loss of confidence if the same is to leave the office early.
because of a willful breach of trust by a rank
and file employee of the trust reposed in him by Roman was asked to explain. After hearing his
his employer or duly authorized representative explanation, Roman was dismissed for willful
(Art. 282(c), Labor Code). disobedience. Roman filed a case for illegal
ANOTHER SUGGESTED ANSWER: dismissal against the Double-Ten Corporation with
"B" is justified in dismissing "A" for loss of prayer for reinstatement and full back wages
confidence after according him the right to without loss of seniority rights, plus moral and
procedural due process. However, the following exemplary damages and attorney's fees. Roman
guidelines must be observed, as ruled in Nokom contended that since there was no emergency
vs. NLRC, G.R. No. 140034. July 18, 2000: situation and there were other drivers available, his
1. loss of confidence should not be simulated; refusal to drive for the manager, and later for
2. it should not be used as subterfuge for causes his supervisor, was not serious enough to warrant
which are improper, illegal or unjustified; his dismissal. On the other hand, he claimed
3. it may not be arbitrarily asserted in the face of that he was being punished because of his activities
overwhelming evidence to the contrary; and as a steward of his union. If you were the Labor
4. it must be genuine, not a mere after thought to Arbiter, would you sustain Roman? Discuss fully.
justify their action SUGGESTED ANSWER:
If I were the Labor Arbiter, I will not sustain
Dismissal; Just Causes vs. Authorized Roman. It is true that it would be an unfair labor
Causes (2000) practice for an employer to discriminate against
Distinguish between dismissal of an employee for his employee for the latter's union activities.
just cause and termination of employment for
authorized cause. Enumerate examples of just But in the case, the Corporation is not
cause and authorized cause. (5%) discriminating against Roman because he is a
SUGGESTED ANSWER: union official. When the Manager of Roman told
Dismissal for a JUST CAUSE is founded on faults him to pick up some documents from a certain
or misdeeds of the employee. Separation pay, as a bank, this was a lawful order and when Roman did
rule, will not be paid. Examples: serious not obey the order, he was disobedient; and when
misconduct, willful disobedience, commission he disobeyed a similar request made later in the
of crime, gross and habitual neglect, fraud and afternoon of same day, he was guilty of willful
other causes analogous to the foregoing. (Art 282, disobedience to do what management asked him
Labor Code). to do. This is just cause for his termination.
ALTERNATIVE ANSWER:
Termination for AUTHORIZED CAUSES are based a) No. The existence of an emergency situation is
on business exigencies or measures adopted irrelevant to the charge of willful disobedience; an
by the employer, not constituting faults of opposite principle would allow a worker to
the employee. Payment of separation pay at shield himself under his self-designed concept
varying amounts is required. Examples: of "non- emergency situation" to deliberately
redundancy, closure, retrenchment, installation defy the directive of the employer.
of labor saving device and authorized cause.
(Art. 283-284, Labor Code). Roman was given adequate opportunity under the
circumstances to answer the charge.
Dismissal; Just Causes; Disobedience (1995) His explanation was taken into consideration in
Roman had been a driver of Double-Ten arriving at the decision to dismiss him.
Corporation for ten (10) years. As early as his fifth
year in the service he was already commended as a b) If it can be established that the true and basic
Model Employee and given a salary increase. On motive for the employer's act is derived from the
Page 87 of 108
2006
employee's union affiliation or activities, the of jurisdiction considering the existence of an
allegation by the employer of another reason employer-employee relationship and therefore, it is
whatever its substance of validity, is unavailing. claimed that the case should have been filed
Thus, the dismissal could be considered illegal. before the Labor Arbiter.
1. Will Mariet Demetrio's refusal to transfer
Dismissal; Just Causes; Disobedience (2003) constitute the offense of insubordination? Explain
Oscar Pimentel was an agent supervisor, rising briefly. (2%}
from the ranks, in a corporation engaged in real SUGGESTED ANSWER:
estate. In order to promote the business, the Mariet Demetrio's transfer constitutes the offense
company issued a memorandum to all agent of insubordination. The transfer is a lawful order of
supervisors requiring them to submit a feasibility the employer.
study within their respective areas of operation. All
agent supervisors complied except Oscar. It is the employer's prerogative, based on its
Reminded by the company to comply with the assessment and perception of its employees'
memorandum, Oscar explained that being a drop- qualifications, aptitudes, and competence, to move
out in school and uneducated, he would be unable its employees around in the various areas of its
to submit the required study. The company found business operations in order to ascertain where
the explanation unacceptable and terminated his they will function with maximum benefit to the
employment. Aggrieved, Oscar filed a complaint for company. An employee's right to security of tenure
illegal dismissal against the company. Decide the does not give him such a vested right in his
case. position as would deprive the company of its
SUGGESTED ANSWER: prerogative to change his assignment or transfer
For failure to comply with the memorandum to him where he will be most useful. When his
submit a feasibility study on his area of operation, transfer is not unreasonable, nor inconvenient, nor
Oscar can not be terminated (presumably for prejudicial to him, and it does not involve a
insubordination or willful disobedience) because demotion in rank or a diminution of his salaries,
the same envisages the concurrence of at least benefits, and other privileges, the employee may
two requisites: (1) the employee's assailed conduct not refuse to obey the order of transfer. (Philippine
must have been willful or intentional, the willfulness Japan Active Carbon Corp. V. NLRC, 171 SCRA
being characterized by a wrongful and perverse 164)
attitude; and (2) the order violated must have been
reasonable, or lawful, made known to the Dismissal; Just Causes; Misconduct (1995)
employee and must pertain to the duties which he Universal Milling Company (UNIVERSAL) and
had been engaged to discharge. Mara's Canteen (MARA'S) executed an agreement
that UNIVERSAL employees patronizing MARA'S
In the case at bar, at least two requisites are could buy food on credit and enjoy a 25% discount
absent, namely: (1) Oscar did not willfully disobey provided that they present their Identification Card
the memorandum with a perverse attitude; and (2) (ID) and wear their company uniform. Nikko, an
the directive to make a feasibility study did not employee of UNIVERSAL, used the ID of Galo, a
pertain to his duties. Hence, the termination from co-employee in buying food at MARA'S. An alert
employment of Oscar Pimentel is not lawful. employee of MARA'S discovered the
misrepresentation of Nikko but not without
Dismissal; Just Causes; Insubordination engaging him in a heated argument. Nikko boxed
(1999) MARA'S employee resulting in serious physical
FACTS: Mariet Demetrio was a clerk-typist in the injuries to the latter. UNIVERSAL dismissed Nikko
Office of the President of a multi-national from the company. Nikko sued UNIVERSAL for
corporation. One day she was berated by the illegal dismissal.
President of the company, the latter shouting
invectives at her in the presence of employees and As Labor Arbiter, how would you decide the case?
visitors for a minor infraction she committed. Mariet Discuss fully.
was reduced to tears out of shame and felt so SUGGESTED ANSWER:
bitter about the incident that she filed a civil case There is ground for disciplining Nikko. In
for damages against the company president before presenting the ID of a co-employee to buy food at
the regular courts. Soon thereafter, Mariet received Mara's at a discount and engaging in a fist fight,
a memorandum transferring her to the Office of the these acts of Nikko constitute misconduct. But it is
General Manager without demotion in rank or not the kind of serious misconduct that could be
diminution in pay. Mariet refused to transfer. the basis of dismissal. It will be noted that the fight
did not take place at the workplace.
With respect to the civil suit for damages, the ALTERNATIVE ANSWER:
company lawyer filed a Motion to Dismiss for lack
Page 88 of 108
The facts are not clear whether the canteen is authorized representative, and said willful breach
within the company premises. If it is, then the act is proven by substantial evidence.
of Nikko in boxing Mara's employee may
be considered as a valid ground for disciplinary When adequately proven, the dual grounds of
action. However, in this case, the penalty of breach of trust and loss of confidence constitute
dismissal is not commensurate to the valid and ample bases to warrant termination of an
misconduct allegedly committed. errant employee. As a general rule, however,
employers are allowed a wider altitude of discretion
Dismissal; Just Causes; Quitclaims (1999) in terminating the employment of managerial
Can a final and executory judgment personnel or those of similar rank performing
be compromised under a "Release and Quitclaim" functions which by their nature requires the
for a lesser amount? (3%) employer's full trust and confidence, than in the
SUGGESTED ANSWER: case of an ordinary rank-and-file employee, whose
Yes, as long as the "Release and Quitclaim" is termination on the basis of these same grounds
signed by the very same person entitled to receive requires proof of involvement in the events
whatever is to be paid under the final and in question; mere uncorroborated assertions
executory judgment that was the subject of the and accusations by the employer will not
compromise agreement and that the "Release and suffice. (Manila Midtown Commercial
Quitclaim" was signed voluntarily. Corporation v. Nuwhrain. 159 SCRA 212).
In Alba Patio de Makati v. NLRC: A final and Dismissal; Liability; Corporate

executory judgment can no longer be altered, even if Officers (1997)
the modification is meant to correct what is Are the principal officers of a corporation liable
perceived to be an erroneous conclusion of fact or in their personal capacity for non-payment of
law, and regardless of whether the modification is unpaid wages and other monetary benefits
attempted to be made by the court rendering it or by due its employees?
the highest court of the land. Moreover, a final and SUGGESTED ANSWER:
executory judgment cannot be negotiated, hence, As a general rule, the obligations incurred by
any act to subvert it is contemptuous. the principal officers and employees of a
corporation are not theirs but the direct
It was incumbent upon the counsel for the accountabilities of the corporation they represent.
complainant to have seen to it that the
interest of all complainants was protected. The However, SOLIDARY LIABILITIES may at times be
quitclaim and the release in the preparation of incurred but only when exceptional circumstances
which he assisted clearly worked to the grave warrant such as, generally, in the following cases:
disadvantage of the complainants. To render the when directors and trustees or, in appropriate
decision of this Court meaningless by paying cases, the officers of a corporation:
the back-wages of the affected employees (1) vote for or assent to patently unlawful acts
in a much lesser amount clearly manifested of the corporation;
a willful disrespect of the authority of this (2) act in bad faith or with gross negligence
Court as the final arbiter of cases brought to it. in directing the corporate affairs;
(3) are guilty of conflict of Interest to the prejudice
A final and executory judgment cannot be of the corporation, its stockholders
compromised under a "Release and Quitclaim" if or members, and other persons.
said "Release and Quitclaim is clearly to the
grave disadvantage of the affected employees by In labor cases, the Supreme Court has held
paying them much lesser amounts than what they corporate directors and officers solidarity liable with
were entitled to receive under the judgment. (See the corporation for the termination of employment
Alba Patio de Makati vs. NLRC, 201 SCRA 355). of employees done with malice or bad faith. (Sunio v.
NLRC. 127 SCRA 390; General Bank and Trust Co.
2. May an ordinary rank-and-file employee be v. Court of Appeals, 135 SCRA 659).
terminated for loss of trust and confidence? If so, ALTERNATIVE ANSWER:
what proof is required? If not, why not? No. Unless they are guilty of malice or bad faith in
(2%) connection with the non-payment of unpaid wages
SUGGESTED ANSWER: and other monetary benefits due to employees.
An ordinary rank and file employee may be
terminated for loss of trust and confidence as long as Dismissal; Payroll Reinstatement (2005)
loss of trust and confidence is brought about (c) What is meant by "payroll reinstatement" and
objectively due to a willful breach by the employee of when does it apply? (4%)
the trust reposed in him by his employer or duly SUGGESTED ANSWER:
Page 89 of 108
"PAYROLL REINSTATEMENT" is one where an In a case (Maranaw Hotel Corp. v. NLRC, 238
employee is paid his monthly salary without SCRA 191), the Supreme Court said that although
making him perform actual work. It applies in the reinstatement aspect of a Labor Arbiter's
termination cases where the labor court declares decision was immediately executory, it does not
the dismissal illegal and orders reinstatement of follow that it is self-executory. There must still be a
the employee, but the employer does not want to writ of execution issued motu proprio or upon
actually or physically reinstate him and instead, at motion of the interested party. (See Article 224)
the employer's option, merely reinstates the
employee in the payroll pending appeal. 2. May the NLRC order the payroll
reinstatement of Sharon Cometa? Why? (2%)
Dismissal; Payroll Reinstatement; SUGGESTED ANSWER;
Reinstatement Order (1999) The NLRC may NOT order the payroll
FACTS: In the illegal dismissal case filed by reinstatement of Sharon Cometa. The Labor Code
Sharon Cometa against Up & Down Company, the (Article 223) provides that in the immediate
labor Arbiter rendered a decision directing her reinstatement of a dismissed employee, the
immediate reinstatement and payment of full employee shall be admitted back to work under the
backwages. The Company appealed to the NLRC. same terms and conditions prevailing prior to the
Following her lawyer's advise that the employee's dismissal or, at the option of the
reinstatement aspect of the decision is immediately employer, merely reinstated in the payroll. Thus,
executory, Sharon went to the HRD Office of the the reinstatement of the employee in the payroll is
Company and demanded immediate at the option of the employer and not of the NLRC
reinstatement. When the Company refused, her or the Labor Arbiter who have the power only to
lawyer, Atty. Maximiano Anunciacion, filed a direct reinstatement.
motion to cite the employer in contempt. Acting on
the motion, the NLRC ordered the payroll Dismissal; Reinstatement (1994)
reinstatement of Sharon Cometa. May a court order the reinstatement of a dismissed
1. Can the company or any of its officials be employee even if the prayer of the complaint did
cited for contempt for refusing to reinstate not include such relief?
Sharon Cometa? Why? (3%) SUGGESTED ANSWER:
SUGGESTED ANSWER: So long as there is a finding that the employee was
Yes. The company or any of its officials can be illegally dismissed, the court can order the
cited for contempt. It is noted that in his decision, reinstatement of an employee even if the complaint
the Labor Arbiter specifically directed the does not include a prayer for reinstatement,
immediate reinstatement of Sharon Cometa. This unless, of course, the employee has waived his
directive under the Labor Code (Article 223) is right to reinstatement. By law an employee who is
immediately executory, even pending appeal. unjustly dismissed is entitled to reinstatement,
(Pioneer Texturizing Corporation v. NLRC, 280 among others.
SCRA 806)
ALTERNATIVE ANSWER: The mere fact that the complaint did not pray for
Yes. Under Art. 223 of the Labor Code, an reinstatement will not prejudice the employee,
employer has two options in order for him to because technicalities of law and procedure are
comply with an order of reinstatement, which is frowned upon in labor proceedings. (General
immediately executory, even pending appeal. Baptist Bible College vs. NLRC. 219 SCRA 549).
FIRSTLY, he can admit the dismissed
employee back to work under the same terms Dismissal; Reinstatement (1995)
and conditions prevailing prior to his dismissal Give at least five (5) instances when an illegally
or separation or to a substantially equivalent dismissed employee may not be reinstated.
position if the former position is already filled SUGGESTED ANSWER:
up. Five [5] instances when an illegally dismissed
SECONDLY, the employer can be reinstated in employee may not be reinstated:
the payroll. Failing to exercise any of the above (1) When the position held by the illegally
options, the employer can be compelled under dismissed employee has been abolished and
PAIN OF CONTEMPT, to pay instead the there is no substantially equivalent position for
salary of the employee effective from the date said employee;
the employer failed to reinstate despite an (2) When the employer has ceased to operate;
executory writ of execution served upon him. (3) When the employee no longer wishes to be
Under Art. 218 of the Labor Code, the NLRC reinstated;
has the power to cite persons for direct and (4) When strained relations between the employer
indirect contempt. and the employee have developed and
ANOTHER ALTERNATIVE ANSWER:
Page 90 of 108
2006
(5) When the employer has lost his trust and cause for termination; Hearing; and Notice of
confidence in the employee who is holding a Termination.
position of trust and confidence.
The Labor Code reads: A. Notice and Hearing
In addition to the above, an illegally dismissed Art, 277. Miscellaneous provisions. - xxx
employee may not be reinstated: (b) xxx The employer shall furnish the worker
(1) When he is already entitled to retire at the time whose employment is sought to be terminated a
he is to be reinstated; written notice containing a statement of the causes
(2) When he is already dead; for termination and shall afford the latter ample
(3) When reinstatement will not serve the interest opportunity to be heard and to defend himself with
of the parties; and the assistance of his representative if he so desires
(4) When he has obtained regular and ...
substantially equivalent employment The Supreme Court ruled in Salaw v, NLRC, 202
elsewhere. SCRA 7 (1991)
xxx Not only must the dismissal be for a valid or
Dismissal; Requirements (1998) unauthorized cause as provided by law xxx but
Assuming the existence of valid grounds for the rudimentary requirements of due process -
dismissal, what are the requirements before an notice and hearing - most also be observed
employer can terminate the services of an before an employee must be dismissed.
employee? [5%]
SUGGESTED ANSWER: B. Two (2) Notice Requirements -
The employee being terminated should be given The Supreme Court in Tanala v. NLRC 252 SCRA
DUE PROCESS by the employer. 314 (1996), and in a long line of earlier cases,
ruled:
For termination of employment based on any of the xxx This Court has repeatedly held that to meet
JUST CAUSES for termination, the requirements the requirements of due process, the law
of due process that the employer must comply with requires that an employer must furnish the
are: workers sought to be dismissed with two written
1. A WRITTEN NOTICE should be served on the notices before termination of employment can
employee specifying the ground or grounds for be legally effected, that is, (1) a notice which
termination and giving to said employee apprises the employee of the particular acts or
reasonable opportunity within which to explain omissions for which his dismissal is sought; and
his side. (2) subsequent notice, after due hearing, which
2. A HEARING or CONFERENCE should be held informs the employee of the employers decision
during which the employee concerned, with the to dismiss him.
assistance of counsel if the employee so
desires, is given the opportunity to respond to Dismissal; Requirements (1999)
the charge, present his evidence and present FACTS: On September 3, 1998, the National
the evidence presented against him. Bureau of Investigation (NBI) extracted from Joko
3. A WRITTEN NOTICE OF TERMINATION, if Diaz — without the assistance of counsel — a
termination is the decision of the employer, sworn statement which made it appear that Joko,
should be served on the employee indicating in cahoots with another employee, Reuben Padilla,
that upon due consideration of all the sold ten (10) cash registers which had been
circumstances, grounds have been established foreclosed by North-South Bank for P50,000.00
to justify his termination. and divided the proceeds therefrom in equal
shares between the two of them.
For termination of employment based on
AUTHORIZED CAUSES, the requirements of due On September 10, 1998. Joko was requested by
process shall be deemed complied with upon Rolando Bato, the bank manager, to appear before
service of a WRITTEN NOTICE to the employee the Disciplinary Board for an investigation in the
and the appropriate Regional Office of the following tenor: "You are requested to come on
Department of Labor & Employment at least thirty Thursday. September 14, 1998, at 11:00 a.m. the
(30) days before the effectivity of the termination Board Room, without counsel or representative, in
specifying the ground or grounds for termination. connection with the investigation of the foreclosed
ANOTHER SUGGESTED ANSWER: cash registers which you sold without authority."
Assuming that there is a valid ground to terminate
employment, the employer must comply with the Mr. Bato himself conducted the investigation, and
requirement of PROCEDURAL DUE PROCESS - two (2) days thereafter, he dismissed Joko. The
written notice of intent to terminate stating the bank premised its action in dismissing Joko solely
on the latter's admission of the offense imputed to
Page 91 of 108
him by the NBI in its interrogation on September 3, very least, what the Bank should do should
1998. Aside from this sworn statement, no be to confront Reuben Padilla with the
other evidence was presented by the bank to declaration of Joko (Century Textile Mills, Inc.
establish the culpability of Joko in the fraudulent vs. NLRC, 161 SCRA628).
sale of the bank's foreclosed properties.
1. Is the dismissal of Joko Diaz by North- Dismissal; Requirements; Suspension
South Bank legally justified? Explain briefly. (3%) of Termination (1994)
SUGGESTED ANSWER: Atty. Oliza heads the legal department of Company
The dismissal of Joko Diaz by North-South Bank is X with the rank and title of Vice-President. During his
not legally justified, Diaz was not given leave of absence, his assistant took over as
the required due process by the Bank. He should acting head of the legal department. Upon his
have been given a written notice that he was return, Atty. Oliza was informed in writing that
being terminated and a statement of the his services were no longer needed, it appearing that
causes for his termination. the Company had lost so many cases by default
due to his incompetence. Atty. Oliza filed a case
He was instead given a just notice about for illegal dismissal.
an investigation relative to an incident. 1) Will his case prosper?
2) Pending hearing, may Atty. Oliza ask
It was also contrary to law for the Bank to tell Diaz the Secretary of Labor to suspend the effects
that he should attend the investigation "without of the termination of the services of an employee
counsel or representative." Instead, he should and to order his temporary reinstatement?
have been afforded as provided in the Labor Code SUGGESTED ANSWER:
(in Article 277 [b]) ample opportunity to be heard 1) His case will prosper. He was not
and to defend himself with the assistance of his given procedural due process. He was not
representative if he so desires. given the required notice, namely, a written notice
containing a statement of the causes for
If the evidence that was the basis for the termination, and he was not afforded ample
termination of Joko Diaz was only his own opportunity to be heard and to defend himself.
statement "extracted" from him by the NBI
when Joko was without the assistance of But if, before the Labor Arbiter, in a hearing of the
counsel, then the statement cannot be case of illegal dismissal that Atty. Oliza may have
substantial evidence for Joko's termination. filed, he is found to be grossly incompetent, this is
ALTERNATIVE ANSWER: just cause for his dismissal. (Art. 277(b), Labor
No. Under Sec. 12 of Art. in of the 1987 Code)
Constitution any "confession or admission obtained ALTERNATIVE ANSWER:
in violation of Sec. 12 and 17 shall be inadmissible Yes. The examinee submits that Atty. Oliza's case
in evidence against him". Since the sole basis will prosper. Well-settled is the rule that even
for his dismissal was the confession procured managerial employees are entitled to the
by the NBI in violation of his right to counsel constitutional guarantee of security of tenure. In
which is inadmissible for any purpose and any the case at bar, there was a clear deprivation of
proceeding including an administrative case, his Atty. Oliza's right to due process. The blanket
dismissal is illegal. Diaz's termination is accusation of "incompetence" hardly qualifies as
likewise- illegal because he was deprived compliance with the substantive requirements for
of his right to due process since during an employee's dismissal. The written notice that
the investigation he was required to his services were no longer needed also fall short of
attend without counsel or representative. the procedural requirements of notice and
opportunity to be heard, the twin ingredients of due
2. Can Reuben Padilla's participation in the process.
fraudulent sale of the bank's foreclosed properties
be made to rest solely on the unilateral declaration 2) The Labor Code gives the Secretary of Labor
of Joko Diaz? Why? (2%) and Employment the power to suspend the effects of
SUGGESTED ANSWER: a termination made by an employer pending
No. The unilateral declaration of Joko, where Joko resolution of a labor dispute in the event of a prima
has not been subjected to cross- facie finding by the Department of Labor and
examinations cannot be considered as substantial Employment before whom such dispute is pending
evidence; it is just hearsay. that the termination may cause serious labor
ALTERNATIVE ANSWER: dispute or is in implementation of a mass lay-off.
No. The unilateral declaration of Joko is not
enough. Such declaration must be corroborated by The termination of Atty. Oliza does not cause a
other competent and convincing evidence. At the serious labor dispute considering that he is a
Page 92 of 108
managerial employee. It is not in implementation of a Pending appeal, what rights are available to
mass lay-off. Thus, pending hearing, the Juan relative to the favorable decision of
Secretary of Labor and Employment may not the Labor Arbiter? Explain.
suspend the effects of the termination and order SUGGESTED ANSWER:
his temporary reinstatement. (Art. 277[b]) Juan can ask for immediate reinstatement pending
resolution of the appeal filed by the company with
Dismissal; Requisites; Reinstatement the NLRC. At the option of his employer, he
Juan Dukha, a bill collector of Ladies Garments may be admitted back to work or merely
Company, was dismissed because he did not remit reinstated in the payroll.
his collections. He filed a case against his
company for illegal dismissal. During the hearing, Dismissal; Separation Pay;
the President of the Company admitted that Juan Backwages (2002)
was never formally investigated for his dishonesty; Lyric Theater Corp. issued a memorandum
neither was he informed of the nature of the prohibiting all ticket sellers from encashing any
charge against him. He was simply barred from check from their cash collections and requiring
entering company premises by the security guards them instead to turn over all cash collections to the
upon instruction of management. management at the end of the day. In violation of
this memorandum, Melody, a ticket seller,
Juan Dukha asks for immediate reinstatement with encashed five (5) checks from her cash collection.
full back wages and without loss of seniority rights. Subsequently the checks were dishonored when
Will the complaint of Juan Dukha for deposited in the account of Lyric Theater. For this
illegal dismissal prosper? Explain. action, Melody was placed under a 20-day
SUGGESTED ANSWER: suspension and directed to explain why she should
Yes, there may be just cause for terminating Juan not be dismissed for violation of the company's
Dukha. But he was not accorded the required due memorandum. In her explanation, she admitted
process of law. having encashed the checks without the
ALTERNATIVE ANSWER: company's permission. While the investigation was
The complaint of Juan Dukha for illegal dismissal pending, Melody filed a complaint against Lyric
will prosper in the sense that the complaint will be Theater for backwages and separation pay. The
heard by a Labor Arbiter. His being barred from Labor Arbiter ordered Lyric Theater to pay Melody
entering company premises is tantamount to P115,420.79 representing separation pay and
dismissal. In the hearings, the employer will have backwages. The NLRC affirmed the ruling of the
the burden of proving that there is just cause for Labor Arbiter. Is the ruling of the NLRC correct?
terminating Juan, possibly on the basis of willful Explain briefly. (5%)
breach of trust. On the other hand, Juan will be SUGGESTED ANSWER:
given the opportunity to prove that his failure to The ruling of the NLRC affirming the
remit his collection is not because of dishonesty, Labor Arbiter's decision ordering Lyric Theater
to pay P115,420.79 representing separation
2. Assuming that he cannot be reinstated, pay and backwages is wrong.
what right can he immediately assert
against his employer? Explain. The Labor Arbiter's decision is wrong because:
SUGGESTED ANSWER: a) It is premature. There was still no termination.
Assuming that Juan cannot be reinstated because All that was done by the employer
there is just cause for his dismissal, he would (Lyric Theater) was to place the employee
nevertheless be entitled to an indemnity from (Melody) under a 20-day suspension,
his employer, because he was denied due meanwhile directing her to explain why she
process of law by said employer. should not be dismissed for violation
ALTERNATIVE ANSWER: of company's memoranda.
Juan can pursue the case of illegal b) The order for Lyric Theater to pay separation
dismissal before a Labor Arbiter where he will pay has no factual basis. Separation pay is to be
assert the right to defend himself, ie., to explain paid to an employee who is terminated due to
his failure to remit his collections. the Installation of labor saving devices,
redundancy, retrenchment to prevent losses or
3. Suppose Juan Dukha proved during the hearing the closing or cessation of operation of the
that he was robbed of his collections and, establishment undertaking. None of these
consequently, the Labor Arbiter decided in events has taken place. Neither is separation
his favor. In the meantime, the Ladies pay here in lieu of reinstatement. Melody is not
Garments Company appealed to the entitled to reinstatement because there Is a
National Labor Relations Commission (NLRC). just cause for her termination.
Page 93 of 108
c) The order for Lyric Theater to pay backwages governed by the rules and regulations governing
has no factual basis. If after investigation, Lyric overseas employment and the said rules do not
Theater dismisses Melody, there is just cause for provide for separation or termination pay.
such termination. There is willful
disobedience by the employee of the lawful From the foregoing cases, it is clear that seafarers
orders of her employer in connection with her are considered contractual employees. They
work. She did not just violate the lawful order of cannot be considered as regular employees under
the employer. She violated it five times. Art 280 of the Labor Code. Their employment is
Melody did not give any justifiable reason for governed by the contracts they sign every time
violating the company's memorandum they are rehired and their employment is
prohibiting the encashment of checks. [Jo terminated when the contract expires. Their
Cinema Corp. v. Avellana, GR No. 132837, employment is contractually fixed for a certain
June 28, 2001] period of time. They fall under the exception of Art
280 whose employment has been fixed for a
Employee; Contractual specific project or undertaking the completion or
Employees; Seafarers (2002) termination of which has been determined at the
Tomas and Cruz have been employed for the last 22 time of engagement of the employee or where the
years in various capacities on board the ships of work or services to be performed is seasonal in
BARKO Shipping Company. Their employment nature and the employment is for the duration of
was made through a local manning company. They the season. We need not depart from the rulings of
have signed several ten (10) month employment this court in the two aforementioned cases which
contracts with BARKO Shipping. The NLRC ruled indeed constitute stare decisis with respect to the
that they were contractual employees and that their employment status of seafarers. [Douglas Millares v.
employment was terminated each time their NLRC, et. al. 328 SCRA 79, (2000)] Therefore,
contracts expired is the ruling of the NLRC correct? Tomas and Cruz are contractual employees.
Explain your answer fully. (5%) The ruling of the NLRC is correct.
SUGGESTED ANSWER:
Yes. A contract of employment for a definite period ANOTHER SUGGESTED ANSWER:
terminates by its own terms at the end of No. The ruling of the NLRC is not correct. Such
such period. Since Tomas and Cruz signed repeated re-hiring, which continued for twenty
ten (10)- month contracts, their employment years cannot but be appreciated as sufficient
terminates by its own terms at the end of evidence of the necessity and indispensability of
each ten (10)-month period. petitioner's service to the [employer's] trade. Verily,
as petitioners had rendered 20 years of service,
The decisive determinant in term performing activities that were necessary and
employment should not be the activities that desirable in the trade (of the employer), they
the employee is called upon to perform but the are, by express provision of Art. 280 of the Labor
day certain agreed upon by the parties for the Code, considered regular employees. [Millares v.
commencement and termination of their NLRC, 328 SCRA 79 (2000)]
employment relation (not the character of his
duties as being "usually necessary or desirable Employee; Contractual Worker vs.
in the usual business of the employer"). Casual Worker (2005)
How is the project worker different from a casual or
Stipulation in the employment contracts contractual worker? Briefly explain your answers.
providing for "term employment" or ALTERNATIVE ANSWER:
"fixed period employment" are valid when the A "CONTRACTUAL WORKER" is a generic term
period are agreed upon knowingly and used to designate any worker covered by a written
voluntarily by the parties without force, duress contract to perform a specific undertaking for a
or improper pressure exerted on the employee; fixed period. On the other hand, a "PROJECT
and when such stipulations were not designed to WORKER" is used to designate workers in the
circumvent the laws on security of tenure. [Brent construction industry, hired to perform a specific
School v. Zamora, 181 SCRA 702 (1990)] undertaking for a fixed period, co-terminus with a
project or phase thereof determined at the time of
Moreover, in Brent School v. Zamora, supra, the the engagement of the employee. (Policy
Supreme Court stated that Art. 280 of the Labor Instruction No. 19, DOLE) In addition, to be
Code does not apply to overseas employment. considered a true project worker, it is required that a
termination report be submitted to the nearest
In Pablo Coyoca v. NLRC, 243 SCRA 190, (1995), public employment office upon the completion of
the Supreme Court also held that a seafarer is not a the construction project. (Aurora Land Projects
regular employee and Filipino seamen are Corp. v. NLRC, G.R. No. 114733, January 2, 1997)
Page 94 of 108
In contrast, there is no such requirement for of the latter's engagement. In the question, the
an ordinary contractual worker. probationary employee was not informed of
ALTERNATIVE ANSWER: such reasonable standards at the time
A PROJECT WORKER performs job that is he was employed. Thus, if he is to be legally
necessary and desirable to the nature of the terminated, it should be because of gross and
business of the employer. On the other hand, a habitual neglect of duties.
CASUAL WORKER performs job that is not
necessary or desirable to the nature of the Employee; Probationary Employees (2001)
business of the employer. (Art. 280, Labor Code) What limitations, if any, do the law
and jurisprudence impose on an employer's
A project worker becomes a regular employee if right to terminate the services of a
the employer fails to submit as many reports to the probationary employee? (2%)
DOLE on terminations as there were projects SUGGESTED ANSWER:
actually finished. (Audion Electric Co. v. NLRC, The Labor Code [in Art. 281) provides that the
G.R. No. 106648, June 17, 1999) On the other services of an employee who has been engaged
hand, a casual worker becomes a regular on a probationary basis may be terminated for a
employee if he has rendered service for at least just cause or when he fails to qualify as a regular
one (1) year whether the same is continuous or employee in accordance with reasonable
broken. (Art. 280, Labor Code) standards made known by the employer to the
employee at the time of his engagement. If the
Employee; Probationary Employees (1998) probationary employee is being terminated for just
The services of an employee were terminated cause, he must, of course, be given due process
upon the completion of the probationary period of before his termination,
employment for failure to qualify, for the position.
The employee filed a complaint for Illegal Employee; Project Employee vs.
Dismissal on the ground that the employer failed to Regular Employee (1996)
inform him in writing the reasonable standards for Distinguish the project employees from
regular employment. regular employees.
Will the complaint for Illegal Dismissal prosper? SUGGESTED ANSWER:
[5%] A REGULAR EMPLOYEE is one engaged to
SUGGESTED ANSWER: perform activities which are usually necessary or
Yes, the Complaint for Illegal Dismissal will desirable in the usual business or trade of the
prosper. The Labor Code provides: employer. On the other hand, a
Art. 281. PROBATIONARY EMPLOYMENT, - PROJECT EMPLOYEE is one whose employment is
xxr The services of an employee who has been fixed for a specific project or undertaking; the
engaged on a probationary basis may be completion or termination of which has been
terminated xxx when he fails to qualify as a determined at the time of the engagement of the
regular employee in accordance employee. (See Art. 280 of the Labor Code)
with reasonable standards made known to
the employee at the time of his engagement. Employee; Project Employees vs.
Casual Employees (2005)
The Supreme Court in A.M. Oreta and Co., Inc. v. Mariano Martillo was a mason employed by the
NLRC, 176 SCRA 218 (1989), ruled: ABC Construction Company. Every time that ABC
The law is clear to the effect that in all cases had a project, it would enter into an employment
involving employees engaged on probationary contract with Martillo for a fixed period that
basis, the employer shall make known to the coincided with the need for his services, usually for a
employee at the time he is hired, the standards by duration of three to six months.
which he will qualify as a regular employee.
Since the last project involved the construction of a
The failure of the employer to inform the employee 40-storey building, Martillo was contracted for 14
of the qualification for regularization is fatal. months. During this period, ABC granted wage
The failure violates the rules of fair play which increases to its regular employees, composed
is a cherished concept in labor law. mostly of engineers and rank-and-file construction
ANOTHER SUGGESTED ANSWER: workers as a result of the just concluded CBA
The complaint for illegal dismissal will prosper. The negotiations, feeling aggrieved and discriminated
Labor Code (in Article 281) provides that a against, Martillo and other similarly-situated project
probationary employee may be terminated when workers demanded that increases be extended to
he fails to qualify as a regular employee in them, inasmuch as they should now be considered
accordance with reasonable standards made regular employees and members of the bargaining
known by the employer to the employee at the time unit. Briefly explain your answers. (6%)
Page 95 of 108
(a) If you were ABC's legal counsel, how performance during her last stint was
would you respond to this demand? "below average."
ALTERNATIVE ANSWER:
The demand is without legal basis. The simple fact Since there was no union to represent her, Kitchie
that the employment of petitioners as project seeks your advice as a labor lawyer about her
employees had gone beyond one (1) year does not chances of getting her job back. What will
detract from, or legally dissolve, their status as your advice be? (5%)
project employees. The second paragraph of ALTERNATIVE ANSWER:
Article 280 of the Labor Code, providing that an The repeated rehiring and the continuing need of
employee who has served for at least one (1) year Kitchie's services for 4 years are sufficient
shall be considered a regular employee, relates to evidence of the necessity and indispensability of
casual employees, not to project employees. (ALU- her services to HITEC's business or trade.
TUCP v. NLRC, G.R. No. 109902, August 2, 1994) (Magsalin v. National Organization for Working
Men, et al., G.R. No. 148492, May 9, 2003) Where a
In the case of Mercado, Sr. v. NLRC, G.R. No. person thus engaged has been performing the
79869, September 5, 1991, the Supreme Court job for at least one year, even if the performance is
ruled that the proviso in the second paragraph of not continuous or is merely intermittent, the law
Article 280 of the Labor Code relates only deems the employment as regular with respect
to casual employees and is not applicable to to such activity and while such activity exists.
those who fall within the definition of said (Paguio v. NLRC, G.R. No. 147816, May 9, 2003)
Article's first paragraph, i.e., project employees.
The familiar rule is that a proviso is to be Hence, Ritchie is considered a regular employee of
construed with reference to the immediately HITEC and as such, she cannot be terminated
preceding part of the provision to which it is except for cause and only after due process.
attached, unless there is clear legislative intent to ALTERNATIVE ANSWER:
the contrary. No such intent is observable in I will advice Kitchie to file a case of constructive
Article 280 of the Labor Code. dismissal with the Regional Arbitration branch of
ALTERNATIVE ANSWER: the NLRC having territorial jurisdiction over the
If I were ABC's legal counsel, I will argue that the workplace of the complainant because the
project workers are not regular employees but constant re-hiring of Kitchie makes her a regular
fixed-term employees. Stipulation in employment employee.
contracts providing for term employment or fixed
period were agreed upon knowingly and voluntarily by Employee; Regular Employees (1994)
the parties without force, duress or improper Aldrich Zamora, a welder, was hired on February
pressure, being brought to bear upon the 1972 by Asian Contractors Corporation (ACC) for a
employee and absent any other circumstances project. He was made to sign a contract stipulating
vitiating his consent, or where it satisfactorily that his services were being hired for
appears that the employer and employee dealt with the completion of the project, but not later
each other on more or less equal terms with no than December 30, 1972, whichever comes first.
moral dominance whatever being exercised by the
former over the latter. (Pangilinan v. General Milling After December 1972, Zamora, being a man
Corp., G.R. No. 149329, July 12, 2004) of many talents, was hired for different
projects of ACC in various capacities, such
Employee; Regular Employee; as carpenter, electrician and plumber. In
Constructive Dismissal (2005) all of these engagements, Zamora signed a
Kitchie Tempo was one of approximately 500 contract similar to his first contract except
production operators at HITEC Semiconductors, for the estimated completion dates of the
Inc., and export-oriented enterprise whose project for which he was hired.
business depended on orders for computer chips
from overseas. She was hired as a contractual What is Zamora's status with ACC? Is he a
employee four years ago. Her contracts would be contract worker, a project employee, a temporary
for a duration of five (5) months at a time, usually or a regular employee? State your reason.
after a one-month interval. Her re-hiring was SUGGESTED ANSWER:
contingent on her performance for the immediately Zamora could be a project employee if his work is
preceding contract. coterminous with the project for which he was
hired.
Six months after the expiration of her last contract,
Kitchie went to HITEC's personnel department to But in the case, Zamora was rehired after the
inquire why she was not yet being recalled for completion of every project throughout the period
another temporary contract. She was told that her of his employment with the company which ranged
Page 96 of 108
for quite a long time. Thus, he should be when the line man trainees were given an
considered a regular employee, (Philippine additional probationary period of another ten (10)
National Construction Corporation vs. National months, may be considered as a circumvention of
Labor Relations Commission, et al, G.R No. the rule on probationary employment.
95816, 27 October 1972. J. Grino-Aquino)
ALTERNATIVE ANSWER: Thus, because they were already
a) Zamora is a regular employee because he was regular employees after the first six (6) month
engaged to work in various projects of ACC period, from said date, they are entitled to the
for a considerable length of time, on an CBA increases provided for regular employee.
activity that is usually necessary desirable in ALTERNATIVE ANSWER:
the usual business or trade of ACC. They are not entitled to the wage adjustments
(Mehitabel Furniture vs. NLRC, 220 SCRA 602) under the CBA that were given when they were not
yet regular employees.
b) Zamora is a regular employee. Article 280 of
the Labor Code declares with unmistakable clarity: But if by virtue of their becoming regular
THE PROVISIONS OF WRITTEN AGREEMENT employees, they are now part of the appropriate
TO THE CONTRARY NOTWITHSTANDING, xxx collective bargaining unit defined by the CBA, their
an employment shall be deemed to be regular not being union members is not a bar to their
where the employee has been engaged to perform receipt of any wage adjustments given under the
activities which are usually necessary or desirable in CBA, after they become regular employees.
the usual business or trade of the employer."
Employee; Regular Employees vs.
He is not a CONTRACT or TEMPORARY Project Employee (1998)
WORKER because even the provisions of the A Construction Group hired Engineer "A" as a
simulated contracts were not followed when his job Project Engineer in 1987. He was assigned to five
was used continuously. He is not a project (5) successive separate projects. All five (5)
employee, as the term is understood in Art. 280 or Contracts of Employment he signed, specified the
under Policy Instruction No. 20. name of the project, its duration, and the
temporary-project nature of the engagement of his
Employee; Regular Employees (1995) services. Upon completion of the fifth [5th) project in
ILECO is an electric cooperative which accepted August 1998, his services were terminated. He
fresh graduates from a vocational school as worked for a total of ten (10) years (1987-1998) in
lineman trainees for six (6) months after which they the five (5) separate projects.
were hired as probationary employees for another Six months after his separation, the Group
ten (10) months. Thereafter, they were made won a bid for a large construction project. The
regular employees. These employees then sought Group did not engage the services of Engineer
entitlement to salary increases under the existing "A" as a Project Engineer for this new project;
Collective Bargaining Agreement (CBA) which instead, it engaged the services of Engineer "B".
were given at the time when they were not yet
regular employees, hence, not yet members of the Engineer "A" claims that by virtue of the nature of
employees' union. ILECO denied their claims his functions, i.e., Engineer in a
because they were not yet regular members when Construction Group, and his long years of
the CBA took effect and therefore not entitled to service he had rendered to the Group, he is
wage adjustments thereunder. a regular employee and not a project engineer at
the time he was first hired. Furthermore, the
Resolve the Issue. Discuss fully. hiring of Engineer "B" showed that there is
SUGGESTED ANSWER: a continuing need for his services.
In implementing a CBA that provides for salary Is the claim of Engineer "A" correct? [5%]
increases to regular employees, it is but logical SUGGESTED ANSWER:
that said salary increases should be The claim of Engineer "A" that he is a regular
given to employees only from the time they employee and not a protect employee is
are regular employees. not correct. The Labor Code provides:
Art. 280. Regular and Casual Employment. -
Given the facts mentioned in the question, the An employment shall be deemed to be regular
lineman trainees that ILECO hired became regular where the employee has been engaged to
employees six (6) months after they were hired. perform activities which are usually necessary
The Labor Code provides that probationary or desirable in the usual business or trade of the
employment shall not exceed six (6) months from employer, except, where the employment has
the date the employee started working. Double been fixed for a specific project or undertaking
probation, which happened in the case in question the completion of which has been determined at
Page 97 of 108
the time of the engagement of the employee. SUGGESTED ANSWER:
(underscoring supplied) Yes. The principal test for determining whether a
particular employee is a "project employee" as
In all the five (5) successive contracts of distinguished from a "regular employee" is whether
employment of Engineer "A" the name of the or not the "PROJECT EMPLOYEE" was assigned
project, its duration, and the temporary project to carry out a "specific project or undertaking," the
nature of the engagement of his services are duration and scope of which were specified at the
clearly stated: hence, Engineer "A" falls within the time the employee was engaged for the projects.
exemption of Art. 280. The Supreme Court has
ruled as follows: Manansag v. NLRC, 218 SCRA In the problem given, there is no showing that
722 (1993) Omar was informed that he was to be assigned to
The fact that the petitioners worked for several a "specific project or undertaking." Neither has it
projects of private respondent company is no been established that he was informed of the
basis to consider them as regular employees. duration and scope of such project or undertaking
By the very nature of their employer's business, at the time of his engagement. [Philex Mining Corp.
they will always remain project employees v. NLRC, 312 SCRA 119 (1999)]
regardless of the number of projects in which
they have worked. Moreover, the re-hiring of Omar is sufficient
evidence of the necessity or the indispensability of
De Ocampo v NLRC, 186 SCRA 361 (1990] his services to the company's business. [Aurora
[Project employees] are not considered regular Land Projects Corp v. NLRC, 266 SCRA 48(1997}]
employees, their services, being needed only Hence, Omar is correct in claiming that he is a
when there are projects to be undertaken. The regular employee of Design Consultants, Inc.
rationale for this rule, is that if a project has ANOTHER SUGGESTED ANSWER:
already been completed, it would be unjust to Omar is not correct Omar is a project employee as
require the employer to maintain them in the defined by Art. 280 of Labor Code. He was hired
payroll while they are doing absolutely nothing for a specific project with fixed periods of
except waiting for another project. employment, specifically: two (2) years for the first
contract, and nine (9) months for the second
ANOTHER SUGGESTED ANSWER: contract. A project employee who is hired for a
The claim of Engineer "A" is not correct. The fact specific project only is not a regular employee
that he has been working for Construction Group notwithstanding an extension of the project
for a total of ten (1O) years does not make him a provided that the contract of project employment
regular employee when it is very clear from the clearly specifies the project and the duration
Contracts of Employment he signed that he was thereof. [Palomares v. NLRC, 277 SCRA 439
always being engaged as a project employee. (1997}]
The tenure of a project employee is co-terminous Prescriptive period; illegal dismissal (1994)
with the project in connection with which his On October 30, 1980, A, an employee, was served
services were engaged. Thus, after the end of the notice of dismissal allegedly for gross dishonesty.
project, the employer-employee relationship Forthwith, the Union to which A was a member
ceases to exist. Such project employee has no raised A's dismissal with the grievance machinery
legal right to insist that he should be employed by as provided for in its Collective Bargaining
the Construction Group for a subsequent project of Agreement (CBA). At that point, negotiations for a
said Group. new CBA was in progress. Hence, both the Union
and the Company had very little time to address
Employee; Regular vs. Project Employees A's grievance. In fact, said grievance, as it were,
(2002) slept the sleep of the dead, being resolved only
Design Consultants, Inc. was engaged by the with finality on November 23, 1983 when the
PNCC to supervise the construction of the South General Manager of the Company affirmed A's
Expressway Extension. Design Consultants, Inc. dismissal on the fifth and the last step of the
hired Omar as a driver for two (2) years. After his grievance machinery.
two-year contract expired, he was extended
another contract for nine (9) months. These A filed an action for illegal dismissal with the
contracts were entered into during the various Arbitration Branch of the NLRC on November 25,
stages and before the completion of the extension 1983. The Company immediately filed a Motion to
project. Omar claims that because of these Dismiss on the ground of prescription, invoking
repeated contracts, he is now a regular employee Article 290 of the Labor Code.
of Design Consultants. Inc. Is he correct? Explain
briefly. (5%)
Page 98 of 108
If you were the Labor Arbiter, how would you distinct from a criminal action. Each may
resolve the Company's Motion to Dismiss? proceed independently of each other.
SUGGESTED ANSWER:
As the Labor Arbiter, I will deny the Motion to The right to file an action for illegal dismissal is not
Dismiss. Where an employee was dismissed and dependent upon the outcome of the criminal case.
the matter of his dismissal was then referred to the Guilt or innocence in the criminal case is
grievance machinery pursuant to the provision in not determinative of the existence of a just
the existing collective bargaining agreement, and or authorized cause for a dismissal. [Pepsi-
the grievance machinery had a final meeting after Cola Bottling Co. v. Guanzon 172 SCRA 571(1989)}
quite a long while thereafter, the complaint for
Illegal dismissal was then filed, the action was not SUGGESTED ANSWER:
barred by laches, as the pendency of the matter B. I agree with the statement. A case of illegal
before the grievance machinery affected the dismissal filed by an employee who has been
ripeness of the cause of action for illegal dismissal. terminated without a just or authorized cause is not a
(Radio Communications of the Philippines, Inc. money claim covered by Art. 291 of the Labor
(RCPI), vs. National Labor Relations Commission, et Code. An employee who is unjustly dismissed from
al G.R No. 102958, 25 June 1993, J. Davide, Jr. 223 work is entitled to reinstatement and to his
SCRA 656. backwages. A case of illegal dismissal is based
ALTERNATIVE ANSWER: upon an injury to the right to security of tenure
If I were the Labor Arbiter, I will deny the motion to of an employee. Thus, in accordance with Art 1146,
dismiss because the action for Illegal dismissal has it must be instituted within four years. [Callanta
not yet prescribed. The prescriptive period for v. Carnation Phil. 145 SCRA 268(1986);
an action for illegal dismissal is four {4} Baliwag Transit v. Ople 171 SCRA 250(1989);
years. (Callanta vs. Carnation ,145 SCRA 268) International Harvester Macleod, Inc. v. NLRC,
200 SCRA 817(1991)]
Prescriptive period; illegal dismissal (2002)
A. State your agreement or disagreement with Prescriptive period; illegal dismissal (1997)
the following statement and explain your answer The general manager of Junk Food Manufacturing
briefly: A criminal case filed against an employee Corporation dismissed Andrew Tan, a rank-and-file
does not have the effect of suspending or employee, on the ground of insubordination.
interrupting the running of the prescriptive period The general manager served on Andrew Tan the
for the filing of an action for illegal dismissal (2%) letter of termination effective upon receipt which
was on 08 March 1992. Shocked by his
B. State your agreement or disagreement with unexpected dismissal, Andrew Tan confronted
the following statement and explain your the general manager and hit the latter on the
answer briefly: The period of prescription in head with a leap pipe.
Article 291 of the Labor Code applies only to
money claims so that the period of prescription Junk Food Manufacturing filed a complaint in court
for other cases of injury to the rights of against Andrew Tan for less serious physical
employees is governed by the Civil Code. Thus, injuries. Somehow, Andrew Tan was acquitted by
an action for reinstatement for injury to an the court assigned to hear the criminal case. A few
employee's rights prescribes in four (4) years as days following his acquittal, or on 01 March 1996,
provided in Article 1146 of the Civil Code. (3%) Andrew Tan filed complaint against the company
SUGGESTED ANSWER: for illegal dismissal, reinstatement and the
A. I agree. The two (2) cases, namely: the criminal payment of backwages and damages.
case where the employee is the accused; and the a) Was the complaint filed by Andrew Tan for
case for illegal dismissal, where the employee illegal dismissal within the reglementary period
would be the complainant, are two (2) separate granted by law?
and independent actions governed by different b) What reliefs may Andrew Tan be entitled to
rules, venues, and procedures. The criminal case if the Labor Arbiter finds just cause
is within the jurisdiction of the regular courts of law for termination but that the requirements of
and governed by the rules of procedure in criminal notice and hearing are not complied with?
cases. The action for the administrative aspect of SUGGESTED ANSWER:
illegal dismissal would be filed with the NLRC and (a) Yes. The complaint was filed within four (4)
governed by the procedural rules of the Labor years from the date Andrew Tan was dismissed by
Code. his employer. Illegal dismissal, as a cause of
ANOTHER SUGGESTED ANSWER: action, prescribes after four (4) years from the time
I agree. An action for illegal dismissal is an the cause of action, namely, illegal dismissal took
administrative case which is entirely separate and place. This is pursuant to the Civil Code which
provides that actions upon an injury to the rights of
Page 99 of 108
2006
a person should be initiated within four years from was merely a merger, but it really was a projected
the time the right of the action accrues. (Art. 1146 buy-out. While dire necessity as a reason for
of the Civil Code) signing a quitclaim is not acceptable reason to set
aside a quitclaim in the absence of showing that
(b) Andrew Tan would be entitled to an indemnity the employee has been forced to execute it, such
of P1,000 to P10,000 from his employer for the reason gains importance if the consideration is
latter's non-compliance of the requirements of unconscionable, low and the employee has been
notice and hearing in cases of termination of tricked Into accepting it. (Wyeth-Suaco v. NLRC,
employment. (Wenphil Philippines v. NLRC, 176 219 SCRA 356)
SCRA 66)
Resignation; Voluntary; Quitclaims (1999)
Resignation; Voluntary; Quitclaim (1994) FACTS: International Motors Corporation (IMC)
Nonoy Santos was employed as a middle undertook a reorganization of the company and
management employee in Company A. In the right-sizing of its personnel complement due to the
course of his employment he was told by his current financial crisis. The affected employees
superiors of the possible merger between were given the option to resign with corresponding
Company A and Company B. Fearing that he might generous benefits attending such option. The said
lose his Job upon the merger of the two employees opted to resignation on account of
companies, he looked for and found another job. these negotiated benefits; and after receipt of
Upon resignation he was given separation pay which, they executed quitclaims in favor of IMC.
equivalent to one month's pay per year of service, Immediately thereafter, the employees voluntarily
although technically speaking, he is not entitled resigned for valuable consideration and that, in any
thereto being a resigned employee. Mr. Santos case, they have executed quitclaims in favor of the
executed a quitclaim and Waiver upon receipt of company. The employees, however, claimed that
his separation pay benefits. they were forced to resign, and that they executed
the quitclaims only because of dire necessity.
The merger between the two companies turned out Is the company guilty of Illegal dismissal? Why?
to be a buy-out by the latter of the former. At this (3%)
point, Company A's employees, save for a handful, SUGGESTED ANSWER:
were dismissed upon payment of separation pays NO. The company is not guilty of illegal dismissal
equivalent to three (3) months for every year of since the facts clearly indicate that the "employees
service because of the Union's efforts on the were given the option to resign with corresponding
workers' behalf. Feeling aggrieved, Santos generous benefits attending such option" and that
subsequently charged Company A with these employees "opted for resignation on account
discrimination, constructive dismissal, of these negotiated benefits". Nothing in the facts
underpayment, resignation, separation benefits indicate that their consent to the waiver of benefits
and reinstatement. under the Labor Code was vitiated by fraud,
violence, undue influence or any other vice or
The Labor Arbiter and NLRC sustained Company defect.
A's position that Santos' quitclaim is valid, and that ALTERNATIVE ANSWER:
as a manager he knew the import of what he was The company is not guilty of Illegal dismissal.
signing and, therefore, estopped from claiming According to the facts of the case, the employees
otherwise. opted to resign voluntarily, considering the
Are the Labor Arbiter and the NLRC correct? generous benefits given to them in connection with
SUGGESTED ANSWER: such resignation.
The Labor Arbiter and the NLRC are correct. VOLUNTARY RESIGNATION cannot be
Santos was not coerced into resigning. He considered as illegal dismissal. (SamanIego v.
voluntarily resigned. Then, upon receipt of the NLRC, 198 SCRA 111)
separation pay that technically he was not entitled
to receive, he voluntarily executed a quitclaim and Can the quitclaim be annulled on the ground of
waiver. These facts show beyond doubt that he is "dire necessity"? Why? [2%]
estopped from claiming he was a victim of SUGGESTED ANSWER:
discrimination. (Enieda MonttUa vs. National Labor A quitclaim case can be annulled on the ground of
Relations Commission, et al, G.R No, 71504, 17 its being entered into involuntarily by employees
Decernber 1993, J. Nocon, 228 SCRA 538) because of "dire necessity". Thus, if it was dire
ALTERNATIVE ANSWER; necessity that forced a worker to sign a quitclaim
Both the Labor Arbiter and NLRC are not correct. even if the amount of money given to him by the
Santos resigned because of the uncertainty as to employer was very much less than what the
the future of Company A, he was made to believe workers was entitled to receive, then the quitclaim
that the deal between Company A and Company B was not voluntary, and thus, the said quitclaim is
Page 100 of 108
null and void. In a case (Veloso v. DOLE, 200
SCRA 201) the Supreme Court held that "dire
necessity" is not an acceptable ground for
annulling the releases, especially since it has not
been shown that the employees had been forced
to execute them. It has not been proven that the
considerations for the quitclaims were
unconscionably low and that the petitioners had
been tricked into accepting them.
Retirement; Optional Retirement (2005)

(1) Ricky Marvin had worked for more than ten
(10) years in IGB Corporation. Under the terms of
the personnel policy on retirement, any
employee who had reached the age of 65 and
completed at least ten (10) years of
service would be compulsorily retired and
paid 30 days' pay for every year of service.
Ricky Marvin, whose immigrant visa to the USA

had just been approved, celebrated his 60th
birthday recently. He decided to retire and move to
California where the son who petitioned him had
settled. The company refused to grant him any
retirement benefits on the ground that he had
not yet attained the compulsory retirement age of
65 years as required by its personnel
policy; moreover, it did not have a policy on
optional or early retirement.
Taking up the cudgels for Ricky Marvin, the union

raised the issue in the grievance machinery as
stipulated in the CBA. No settlement was
arrived at, and the matter was referred to
voluntary arbitration.
If you were the Voluntary Arbitrator, how would you
decide? Briefly explain the reasons for your award.
(5%)
SUGGESTED ANSWER:
I will decide the case in accordance with
the Retirement Law. (R.A. No. 7641) Under the
law, Ricky Marvin is entitled to Optional
Retirement at age 60 since he has served the
Company for at least 5 years, in fact 10 years
already. He will also receive 22.5 days for every
year of service. (Capitol Wireless v. Confesor,
G.R. No. 117174, November 13, 1996)
Retirement; Retirement Benefits (1994)

A Collective Bargaining Agreement (CBA) between
Company A and its employees provides for optimal
retirement benefits for employees who have served the
company for over 25 years regardless of age,
equivalent to one-and-one-half months pay per
year of service based on the employee's last pay. The
CBA further provides that "employees whose
services are terminated, except for cause, shall
receive said retirement benefits regardless of age or
service record with the company or to the
applicable separation pay provided by law,
whichever is higher." The Company, due to poor entitled to retirement benefits or separation pay,
business conditions, decided to cease operations whichever is higher. The CBA, therefore, does not
and gave its employees the required one month's give the employees a right to both retirement pay
advance notice as well as notice to DOLE, with the and separation pay. Hence, they cannot be entitled
further advice that each employee may claim his to both. The exclusion of one by the other is
corresponding separation or retirement benefits deductible not only from the term "or" but also
whichever is higher after executing the required by the qualifying phrase "whichever is higher".
waiver and quitclaim. This phrase would be immaterial if the employees
were entitled to both.
Dino Ramos and his co-employees who have
all rendered more than 25 years of service, b) Dino and his co-employees were correct. In the
received their retirement benefits. Soon after, case of University of the East vs. NLRC, it
Ramos and others similarly situated was clarified that the retirement benefits arising
demanded for their separation pay. The from the CBA is an Obligation Ex
Company refused, claiming that under the Contractu while separation pay under Art. 284 is
CBA they cannot receive both benefits. an Obligation Ex- Lege.
Who is correct, the employees or the Company?
SUGGESTED ANSWER: Thus, the Company should grant both benefits
The employees are correct. In the absence of to those who were separated due to CLOSURE
a categorical provision in the Retirement Plan and at the same time were qualified to retire.
and the CBA that an employee who (Cipriano v. San Miguel, 24 SCRA 703)
receives separation pay is no longer entitled to
retirement benefits, the employee is entitled to the Retirement; Retirement Pay (2001)
payment of both benefits pursuant to the social B. Ukol was compulsorily retired by his employer,
justice policy. (Conrado M. Aquino, et al v. Kurot Bottling Corporation, upon the former's
National Labor Relations Commission, et al, reaching 65 years of age, having rendered 30
G.R No. 87653, 11 February 1992) years of service. Since there was no CBA, B. Ukol
ALTERNATIVE ANSWER: was paid his retirement benefits computed 15
a) The Company is correct. The CBA clearly days' pay for every year of service, based on B.
provides that employees who are terminated are Ukol's highest salary during each year of his
Page 101 of 108
employment. Not satisfied, B. Ukol filed action with No. 626, as amended. The GSIS granted the claim
the Arbitration Branch of the NLRC claiming that and awarded Efrenia permanent partial
his retirement benefits were not computed disability benefits.
properly. Is B. Ukol's claim meritorious? What are
the components of his retirement benefits? (2%), After she underwent a surgical operation on her
SUGGESTED ANSWER: spine in November, 1985, her condition worsened.
Ukol's claim is meritorious. His retirement benefit is
to be computed in accordance with Article 287, In 1990, Efrenia filed with the GSIS a petition for
which reads: "In the absence of a retirement conversion of her disability status to permanent total
plan or agreement providing for retirement disabilities with corresponding adjustment of benefits.
benefits of employees in the establishment, an GSIS denied the claim stating that after Efrenia's
employee may retire ... and shall be entitled to retirement, any progression of her ailment is no longer
retirement pay equivalent to at least one-half compensable.
(1/2) month salary for every year of service, a
fraction of at least six months being considered Is the GSIS correct in denying the claim. Explain.
as one whole year. The same Article then SUGGESTED ANSWER:
explains that the term one-half (1/2) month salary Considering that the disability of Reyes is
means fifteen days plus one- twelfth (1/12) of the work connected, the provisions of the Labor
13th month pay and the cash equivalent of not more Code dealing with employees compensation
than five (5) days of service incentive leaves. should determine her right to benefits.
The components of retirement pay are:
6. 15 days pay According to said provisions, if any
7. 1/12 of the 13th month pay. and employee under permanent partial disability
8. cash equivalent of not more than five (5) days suffers another injury which results in a
of service incentive leave. compensable disability greater than the
previous injury, the State Insurance Fund
(b) What exception(s) do(es) the law shall be liable for the income benefit of
on retirement benefits provide(s) if any? (3%). the new disability even after her retirement.
SUGGESTED ANSWER:
Retail, service and agricultural establishments Was Reyes still an "employee" for the purpose
or operations employing not more than ten of applying the above provision of the Labor
(10) employees or workers are exempted Code? Liberally construing said provision.
from the coverage of the provision on retirement Reyes may be considered still as an employee
benefits in the Labor Code. so that she could receive additional benefits for
the progression of her ailment.
Also, where there is a retirement plan of ALTERNATIVE ANSWERS:
the employer that grants more than what the a) No. When an employee is constrained to retire at
Labor Code grants. an early age due to his illness and the illness
persists even after retirement, resulting in his
SOCIAL LEGISLATIONS continued unemployment, such condition amounts to
total disability which should entitle him to the
Employees Compensation Act; maximum benefits allowed by law. Her disability
Work- Connected Disability (1996) which should entitle her to the maximum
Efrenia Reyes was a classroom teacher falls within the definition of permanent total disability.
assigned by the Department of Education, b) No, the GSIS erred in denying the claim. Note,
Culture and Sports (DECS) in Panitan, Capiz. that the original claim and grant of benefits was
She has been in the government service
based on Presidential Decree No, 626, or Book IV,
since 1951 up to November, 1985 when
Title II of the Labor Code: Employees
she retired at 55 due to poor health.
Compensation and State Insurance Fund. The
In March, 1982, while she was teaching her Grade 1 same law does not provide for separation fee from
pupils the proper way of scrubbing and sweeping the employment as a basis for denial of benefits.
floor, she accidentally slipped. Her back hit the edge
The worsening of the school teacher's condition is
of a desk. She later complained of weak lower
a direct result, or a continuing result of the
extremities and difficulty in walking. After an X-ray
first injury which was deemed work-connected
examination, she was found to be suffering from
by the GSIS and hence compensable.
Pott's disease and was advised to undergo an
operation. In 1985, she filed with the GSIS a claim In Diopenes vs. GSIS, 205 SCRA 331 (1992), the
for disability benefits under Presidential Decree Supreme Court cautioned against a too strict
Page 102 of 108
interpretation of the law which may be detrimental DAM on or before the scheduled date of the
to claimants and advised the GSIS of the contest."
constitutional mandate on protection to labor and
the promotion of social Justice. Said the Court: Mordero complied with his superior's instruction
The GSIS and the ECC should be commended and constructed an improvised electric microdam,
for their vigilance against unjustified claims that which he took home to enable him to finish it
will only deplete the funds intended to be before the deadline. On May 27, 1997, while
disbursed for the benefit only of deserving working on the MODEL DAM Project in his house,
disabled employees. Nevertheless, we should he came to contact with a live wire and was
caution against a too strict interpretation of the electrocuted. He was immediately brought to a
rules that will result in the withholding of full clinic for emergency treatment but was pronounced
assistance from those whose capabilities have dead on arrival. The death certificate showed that
been diminished if not completely impaired as a he died of cardiac arrest due to accidental
compensation of their service in the electrocution.
government. A humanitarian impulse dictated by
no less than the Constitution itself under the Pepay Palaypay (Pitoy Mondero's common-law
social justice policy, calls for a liberal and wife for more than twenty years) and a Pitoy
symphathetic approach to the legitimate appeals Mordero Jr. (his only son) filed a claim for death
of disabled public servants. Compassion for benefits with the Government Service Insurance
them is not a dole but a right. System (GSIS), which was denied on the ground
that Pitoy Mordeno's death did not arise out of and
GSIS; Benefits (2004) in the course of employment and therefore not
B. Atty. CLM, a dedicated and efficient public compensable because the accident occurred in his
official, was the top executive of a government house and not in the school premises.
owned and controlled corporation (GOCC). While
inspecting an ongoing project in a remote village in Is Pepay Palaypay entitled to file a claim for
Mindanao, she suffered a stroke and since then death benefits with the GSIS? Why? (2%)
had been confined to a wheelchair. At the time SUGGESTED ANSWER:
she stopped working because of her illness in line The beneficiaries of a member of the GSIS are
of duty, Atty. CLM was only sixty years old but she entitled to the benefits arising from the death of
had been an active member of the GSIS for thirty said member. Death benefits are called
years without any break in her service record. survivorship benefits under the GSIS Law.
What benefits could she claim from the GSIS? Not being a beneficiary, Pepay Palaypay to not
Cite at least five benefits. (5%) entitled to receive survivorship benefits. She is not
SUGGESTED ANSWER: a beneficiary because she to a common-law wife
The benefits Atty. CLM could claim from the GSIS and not a legal dependent spouse.
are:
(1) Employees compensation which shall include Is the cause of death of Pitoy Mordeno (cardiac
both income and medical and related benefits, arrest due to accidental electrocution in his
including rehabilitation; house) compensable? Why? (3%).
(2) Temporary total disability benefit; SUGGESTED ANSWER:
(3) Permanent total disability benefit; Yes. To be compensable under the GSIS Law, the
(4) Separation benefit; and death need not be work connected.
(5) Retirement benefit.
GSIS; Death Benefits; Dependent; 24-hour
GSIS; Death Benefit (1999) Duty Rule (2005)
FACTS: Pitoy Mondero was employed as a public Odeck, a policeman, was on leave for a month.
school teacher at the Marinduque High School While resting in their house, he heard two of his
from July 1, 1983 until his untimely demise on May neighbors fighting with each other. Odeck rushed
27, 1997. to the scene intending to pacify the protagonists.
However, he was shot to death by one of the
On April 27, 1997, a memorandum was issued by protagonists. Zhop, a housemaid, was Odeck's
the school principal, which reads: "You are hereby surviving spouse whom he had abandoned for
designated to prepare the MODEL DAM project, another woman years back. When she learned of
which will be the official entry of or school the Odeck's death, Zhop filed a claim with the GSIS for
forthcoming Division Search for Outstanding death benefits. However, her claim was denied
Improvised Secondary Science Equipment for because: (a) when Odeck was killed, he was on
Teachers to be held in Manila on June 4, 1997. leave; and (b) she was not the dependent spouse
You are hereby instructed to complete this MODEL of Odeck when he died.
Page 103 of 108

Resolve with reasons whether GSIS is correct in How many times may a male employee go on
denying the claim. (5%) Paternity Leave? Can he avail himself of this
ALTERNATIVE ANSWER: benefit for example, 50 days after the first delivery
Yes, because under the law, a dependent is one by his wife? (3%)
who is a legitimate spouse living with the SUGGESTED ANSWER:
employee. (Article 167[i], Labor Code) In the A male employee may go on Paternity Leave up to
problem given, Zhop had been abandoned by four (4) children. (Sec. 2, RA 8187) On the
Odeck who was then living already with another question of whether or not he can avail himself of
woman at the time of his death. this benefit 50 days after the delivery of his wife,
the answer is: Yes, he can because the Rules
Moreover, Odeck was on leave when he was Implementing Paternity Leave Act says that the
killed. The 24-hour duty rule does not apply when availment should not be later than 60 days after
the policeman is on vacation leave. (Employees' the date of delivery.
Compensation Commission v. Court of Appeals,
G.R. No. 121545, November 14, 1996) Taking Paternity Leave; Maternity Leave (2005)
together jurisprudence and the pertinent guidelines Mans Weto had been an employee of Nopolt
of the ECC with respect to claims for death Assurance Company for the last ten (10) years. His
benefits, namely: wife of six (6) years died last year. They had four
(a) that the employee must be at the place where (4) children. He then fell in love with Jovy, his co-
his work requires him to be; employee, and they got married.
(b) that the employee must have been performing
his official functions; and In October this year, Weto's new wife is expected
(c) that if the injury is sustained elsewhere, the to give birth to her first child. He has accordingly
employee must have been executing an order filed his application for paternity leave, conformably
for the employer, it is not difficult to understand with the provisions of the Paternity Leave Law
then why Zhop's claim was denied by the which took effect in 1996. The HRD manager of
GSIS. (Tancinco v. Government Service the assurance firm denied his application, on the
Insurance System, G.R. No. 132916, ground that Weto had already used up his
November 16, 2001) entitlement under the law. Weto argued that he
has a new wife who will be giving birth for the first
In the present case, Odeck was resting at his time, therefore, his entitlement to paternity leave
house when the incident happened; thus, he was benefits would begin to run anew. (6%)
not at the place where his work required him to be. (a) Whose contention is correct, Weto or the
Although at the time of his death Odeck was HRD manager?
performing a police function, it cannot be said that ALTERNATIVE ANSWER:
his death occurred elsewhere other than the place The contention of Weto is correct. The law
where he was supposed to be because he was provides that every married male is entitled to a
executing an order for his employer. paternity leave of seven (7) days for the first four
ALTERNATIVE ANSWER: (4) deliveries of the legitimate spouse with whom
GSIS is correct in denying the claim not on the he is cohabiting. Jovy is Weto's legitimate spouse
grounds provided in the problem but for the reason with whom he is cohabiting. The fact that Jovy is
that uniformed members of the PNP are not his second wife and that Weto had 4 children with
covered by R.A. No. 8291 or the GSIS Law of his first wife is beside the point. The important fact
1997. is that this is the first child of Jovy with Weto. The
law did not distinguish and we should therefore not
Maternity Benefits (2000) distinguish.
Ms. Sara Mira is an unwed mother with three
children from three different fathers. In 1999, she The paternity leave was intended to enable the
became a member of the Social Security System. husband to effectively lend support to his wife in
In August 2000, she suffered a miscarriage, also her period of recovery and/or in the nursing of the
out of wedlock, and again by a different father. Can newly born child. (Sec. 3, RA. No. 8187) To deny
Ms. Mira claim maternity benefits under the Social Weto this benefit would be to defeat the rationale
Security Act of 1997? Reason. (5%) for the law. Moreover, the case of Weto is a gray
SUGGESTED ANSWER: area and the doubt should be resolved in his favor.
Yes, she can claim maternity benefit. Entitlement ALTERNATIVE ANSWER:
thereto is not dependent on the claimant's being Weto's contention is correct. R.A. No. 8187
legally married. (Sec. 14-A, Social Security Act of provides that paternity leave of (7) days with full
1997). pay shall be granted to all married employees in
the private and public sectors for the first four (4)
Paternity Leave (2002) deliveries of the legitimate spouse with whom he is
Page 104 of 108

cohabiting. With the death of Weto's first wife, the observance of club rules, he can be disciplined by
first (4) deliveries provided by law, shall apply being barred from the premises of Barili Golf.
to the new legitimate spouse of Weto with whom
he is cohabiting. Is Marvin within the compulsory coverage of
ALTERNATIVE ANSWER: the Social Security System? Why? (5%)
Since R.A. No. 8282 is silent on the matter, SUGGESTED ANSWER:
the doubt should be resolved in favor of the Because he is not an employee of the Barili Golf &
second wife. Country Club, Marvin is not within the compulsory
coverage of the Social Security System. Marvin is
(b) Is Jovy entitled to maternity leave not an employee of the club because under the
benefits? specific circumstances of his relations with the
Yes, Jovy's maternity benefit is personal to her and club, he is not under the orders of the club as
she is entitled under the law to avail herself of the regards employment which would have made him
same for the first four times of her deliver. an employee of the club. (See Manila Golf
(R.A. No. 8282) & Country Club, Inc. v. IAC, 237 SCRA 207)
SSS; Compulsory Coverage (1995) But Marvin is within the compulsory coverage
Big Foot Company of Paete, Laguna, has been in of the SSS as a self-employed person. (See
the business of manufacturing wooden sandals for Section 9-A, Social Security Law of 1957)
export since 5 November 1980. On 5 January
1994 it employed an additional labor SSS; Compulsory Coverage (2000)
complement of thirty workers, two The Collective Bargaining Agreement of the
supervisors and two department managers. Golden Corporation Inc. and the Golden
On 5 February 1994 it hired five carpenters to fix Corporation Workers Union provides a package of
the roof and walls of its factory which welfare benefits far superior in comparison with
were destroyed by typhoon "Huaning." those provided for in the Social Security Act of
1997. The welfare plan of the company is
Who among the aforementioned persons are funded solely by the employer with no
compulsorily covered by the Social Security contributions from the employees. Admittedly, it is
Law and when should they be considered the best welfare plan in the Philippines. The
effectively covered? Discuss fully. company and the union jointly filed a petition with
SUGGESTED ANSWER: the Social Security System for exemption from
Assuming that all of them were not yet over sixty coverage. Will the petition for exemption from
years of age, the additional labor complement of coverage prosper? Reason. (5%)
thirty workers, two supervisors and two department SUGGESTED ANSWER:
managers were compulsorily covered by the Social No, because coverage under the SSS is
Security Law on 5 January 1994, when they were compulsory where employer-employee relations
employed. According to said law, workers are exist. However, if the private plan is superior to that
covered on the day of their employment. of the SSS, the plan may be integrated with the
SSS plan. Still, it is integration and not exemption
But the five carpenters which the company hired to from SSS law. (Philippine Blooming Mills Co., Inc. v.
fix the roof and walls of its factory were not under the Social Security System, 17 SCRA 107(1966); RA.
compulsory coverage of the Social Security Law No. 1161 as amended by RA No. 8282}.
because said carpenters are casual
employees. The Social Security Law provides that SSS; Compulsory Coverage (2002)
employment purely casual and not for the purpose of The owners of FALCON Factory, a company
occupation or the business of the employer are not engaged in the assembling of automotive
under its compulsory coverage. components, decided to have their building
renovated. Fifty (50) persons, composed of
SSS; Compulsory Coverage (1999) engineers, architects and other construction
Marvin Patrimonio is a caddy rendering caddying workers, were hired by the company for this
services for the members and guests of the Barili purpose. The work was estimated to be completed in
Golf & Country Club. As such caddy, he is subject to three (3) years. The employees contended that
Barili golfs rules and regulations governing since the work would be completed after more than
Caddies regarding conduct, dress, language, etc. one (1) year, they should be subject to compulsory
However, he does not have to observe any coverage under the Social Security Law. Do you
working hours, he is free to leave anytime he agree with their contention? Explain your answer
pleases; and he can stay away for as long as he fully. (5%)
likes. Nonetheless, if he is found remiss in the SUGGESTED ANSWER:
Page 105 of 108

No. Under Section 8 (j) of RA 1161, as amended, sectors, whose creditable services or contributions
employment of purely casual and not for in both systems credited to his service
the purpose of the occupation or business or contribution record in each of the system and
of the employer are excepted from compulsory shall be totalized for purposes of old-age,
coverage. An employment is purely casual if it disability, survivorship and other benefits. (Sec.
is not for the purpose of occupation or 3, R.A. No. 7699)
business of the employer.
The "portability" provisions of R.A. No. 7699 allow
In the problem given, Falcon Factory is a company the transfer of funds for the account and benefit of
engaged in the assembling of automotive the worker who transfers from one system
components. to another.
The fifty (50) persons (engineers, architects and This is advantageous to the SSS and
construction workers) were hired by Falcon Factory GSIS members for purposes of death,
to renovate its building. The work to be performed by disability or retirement benefits. In the event
these fifty (60) people is not in connection with the the employees transfer from the private sector to
purpose of the business of the factory. Hence, the the public sector, or vice-versa, their creditable
employ of these fifty (50) persons is purely employment services and contributions are
casual. They are, therefore, excepted from the carried over and transferred as well.
compulsory coverage of the SSS law.
ANOTHER SUGGESTED ANSWER: SSS; GSIS; Jurisdiction; Benefit
I agree with the contention that the employees Claims (1995)
hired by the owners of FALCON factory Is it necessary for an employee to litigate in order
as construction workers in the renovation of to establish and enforce his right to compensation?
its building should be under the compulsory Explain.
coverage of the Social Security Law. SUGGESTED ANSWER:
No. All that an employee does to claim employee's
It is true that in connection with FALCON Factory, compensation is to file a claim for said
which is engaged in the assembling of automotive benefits with the SSS (for those in the private
components, the construction workers may be sector) or GSIS (for those in the public sector).
considered casual employees because their
employment is not for the purpose of occupation of In the event that the claim is denied on
business of FALCON Factory. As such, in the SSS/GSIS level, claimant may appeal to
accordance with Section 8{j) of the Social Security the Employees Compensation Commission
Law, they are excepted form the compulsory where he may prove the causal connection
coverage of the Social Security System. between injury and nature of work.
But they could also be considered SSS; Prescriptive Period; Benefit

project employees of FALCON Factory and as Claims (2001)
such could be under the compulsory coverage (b) In 1960, Juan hired Pablo to drive for the
of the SSS, applying Art 4 of the Labor Code that former's lumber company. In 1970, Pablo got sick
provides that all doubts in the Implementation and and was temporarily laid-off. In 1972, Pablo
interpretation of the provisions of Labor Law shall recovered and resumed working for the same
be resolved in favor of labor. The employees lumber company, now run by Juan's wife since
here therefore, should be considered as under Juan had already passed away. In 1996, Pablo
the compulsory coverage of the SSS. retired. When Pablo applied for retirement benefits
with the SSS that same year, he discovered that
SSS; GSIS; Beneficiality; Portability the lumber company never enrolled him as an
Provisions of RA 7699 (2005) employee, much less remitted his contributions
How are the "portability" provisions of Republic Act that were deducted from his salary. The lumber
No. 7699 beneficial or advantageous to SSS company agreed to pay for Pablo's contributions
and GSIS members in terms of their plus penalties but maintained that most of Pablo's
creditable employment services in the private claims had already prescribed under Art, 1150 of
sector or the government, as the case may be, the Civil Code. (Art. 1150 provides "The time for
for purposes of death, disability or retirement? prescription of all kinds of actions, when there is no
Please explain your answer briefly. (3%) special provision which ordains otherwise, shall be
SUGGESTED ANSWER: counted from the day they may be brought."). Is
Portability provisions of R.A. No. 7699 shall benefit a the Lumber company's contention correct? Why?
covered worker who transfers employment from one (3%),
sector to another or is employed in both SUGGESTED ANSWER:
Page 106 of 108
The lumber company's contention is not Samson Security Agency [SAMSON) undertook to
correct. The Social Security Law (in Sec. 22(b) provide 24 hours security service to Jarillo Realty
provides that the right to institute the (JARILLO) in the latter's construction operations.
necessary action against an employer may be The contract between SAMSON and JARILLO
commenced within twenty (20) years from the expressly stipulated that Samson's security guards
time the delinquency is known or the assessment are its employees and not that of JARILLO.
is made by the SSS, or from the time the benefit SAMSON undertook to hold JARILLO free from
accrues, as the case may be. any liability whatsoever resulting from injuries
which its (SAMSON's) guards may suffer or be
SSS;GSIS; Employees Compensation exposed to suffer as guards of JARILLO's
Act (1997) construction operations.
State the respective coverages of {a} the
Social Security Law: (b) the Revised government To facilitate payment. JARILLO undertook to pay
Service Insurance Act and (c) the directly to the guards the agreed wages, which are
Employees Compensation Act. subsequently deducted from the monthly payments
SUGGESTED ANSWER: to SAMSON under its contract with JARILLO.
(a) Coverage of SSS (Sec. 9. RA 8282) shall JARILLO, in turn, charges SAMSON for the
be compulsory upon all employees not over equipment supplied to the guards such as
sixty years of age and their employers. uniforms, pistols and ammunition and cost of
Filipinos recruited in the Philippines by foreign- training of guards JARILLO wants replaced.
based employers for employment abroad may
be covered by the SSS on a voluntary basis. During a storm, several scaffoldings of
Coverage in the SSS shall also be compulsory JARILLO fell and killed two (2) guards whose
upon all self-employed persons earning families later sued JARILLO. JARILLO, in
P1,800 or more per annum. turn, impleaded SAMSON as third-party
defendant before the Arbiter.
(b) Membership in the Government Service Decide who should be held liable.
Insurance System (Art. 3, RA8291) shall SUGGESTED ANSWER:
be compulsory for all permanent employees below Liability lies against the State Insurance
60 years of age upon appointment to Fund administered by the SSS. This is a case of
permanent status, and for all elective officials for death in connection with the employees' work.
the duration of their tenure.
Any person, whether elected or appointed, Jarillo is deemed to be the employer of the guards
in the service of an employer is a in view of the direct payment of wages to the
covered employee if he receives guards. Thus, if there are benefits arising from
compensation for such service. employer-employee relationship, Jarillo should
be held answerable.
(c) Coverage in the State Insurance Fund (Art, NOTE: The law involved, namely the law on
168, Labor Code) shall be compulsory upon all employees compensation and State Insurance
employers and their employees not over sixty (60) Fund was expressly excluded from this years bar
years of age; Provided, that an employee who examination in Labor and Social Legislation.
is over (60) years of age and paying contributions
to qualify for the retirement or life insurance State Insurance Fund (1995)
benefit administered by the System shall be What is the extent of an employer's intervention in
subject to compulsory coverage. the compensation process and the payment of
benefits to employees under the State
The Employees Compensation Commission Insurance Fund? Explain.
shall ensure adequate coverage of Filipino SUGGESTED ANSWER:
employees employed abroad, subject to The new law establishes a State Insurance Fund
regulations as it may prescribe. (Art, 170} built up by the contributions of employers based on
Any person compulsorily covered by the GSIS the salaries of their employees. The employer does
including the members of the Armed Forces of not intervene in the compensation process and it
the Philippines, and any person employed as has no control over the payment of benefits.
casual, emergency, temporary, substitute or
contractual, or any person compulsorily covered Unlike under the Workmen's Compensation Act,
by the SSS are covered by the employers are no longer directly liable for the
Employees Compensation Program. income and medical and related benefits that are to
be paid to covered employees if they should suffer
State Insurance Fund (1994) from work connected injury or sickness or death.
The payment of employees compensation is
Page 107 of 108
now from the State Insurance Fund which (FTAA) with Mr. Reyes to explore, develop,
is constituted from the contributions collected and utilize the land? Explain. (5%)
from employers. SUGGESTED ANSWER:
NO. Only the President may enter into
Stray Questions financial and technical assistance agreements
for large- scale exploration development and
utilization of natural resources (Art. XII, Sec. 2,
Stray Problem; Political Law; Power of the 1987 Consti- tution). Moreover, forest lands
President; FTAA (2006) are inalienable lands of the state (La Bugal
Armstrong Corporation, a foreign corporation, — B'laran Tribal Association, Inc. v. Ramos,
intends to engage in the exploration of Philippine G.R. No. 127882, December 1, 2004).
natural resources. Mr. Antonio Reyes offered the N.B. This appears to be a proper question for
forest land he owns to the president of the Political Law.
corporation. May Armstrong Corporation enter into a
financial and technical assistance agreement
Page 108 of 108

Mercantile Law Bar Examination Q & A (1990-2006) Page 1 of 103
ANSWERS TO BAR
IN
MERCANTILE LAW
ARRANGED BY TOPIC
(1990 – 2006)
Silliman University
College of Law Batch 2005
Updated by:
Dondee
D’ BAR-Retake 2007

by the UP LAW COMPLEX & PHILIPPINE ASSOCIATION
OF LAW SCHOOLS 2005
June 27, 2007
Version 1990-2003 Arranged by SULAW Class 2005 Version 1990-2006 Updated by Dondee
FOREWARD
This work is not intended for sale or commerce. This work is freeware. It may be freely
copied and distributed. It is primarily intended for all those who desire to have a deeper
understanding of the issues touched by the Philippine Bar Examinations and its trend. It
is specially intended for law students from the provinces who, very often, are recipients
of deliberately distorted notes from other unscrupulous law schools and students. Share
to others this work and you will be richly rewarded by God in heaven. It is also very
good karma.
ignorantly phrased, for the authors are just Bar Reviewees who have prepared
this work while reviewing for the Bar Exams under time constraints and within
their limited knowledge of the law. We would like to seek the reader’s indulgence for a
lot of typographical errors in this work.
The Authors
July 26, 2005
Updated:
June 27, 2007
TABLE OF CONTENTS
General Principles of Mercantile Law 0
12
408H408H
Commercial Transaction (2003) 1H1H

12
409H409H
Joint Account (2000)

2H2H
12
410H41 0H
Joint Account vs. Partnership (2000)

3H3H
12
411H411H
Theory of Cognition vs. Theory of Manifestation (1997)

H4H
4
412H412H
Banking Law 5H5H

12
413H413H
Banks: Applicability: Foreign Currency Deposit Act & Secrecy of Bank Deposits (2005)
6H6H
12
414H414H
Banks: Collateral Security (2002)

7H7H
12
415H415H
Banks: Secrecy of Bank Deposits; Garnishment (2004)

8H8H
13
416H416H
Banks; Classifications of Banks (2002)

9H9H
13
417H417H
Banks; Conservator vs. Receiver (2006)

0H
10H1 13
418H418H
Banks; Diligence Required (1992)

1H
11H1 14
419H419H
Banks; Insolvency; Prohibited Transactions (2000)

2H
12H1 14
420H420H
Banks; Insolvency; Requirements (1997)

3H
13H1 14
421H421H
Banks; Restrictions on Loan Accommodations (2002)

4H
14H1 14
422H422H
Banks; Restrictions on Loan Accommodations (2006)

5H
15H1 15
423H423H
Banks; Safety Deposit Box; Liability

6H
16H1 15
424H424H
Banks; Secrecy of Bank Deposit; AMLC (2006)

7H
17H1 15
425H425H
Banks; Secrecy of Bank Deposit; Exceptions (2006)

8H
18H1 16
426H426H
Banks; Secrecy of Bank Deposits (1990)

9H
19H1 16
427H427H

0H
20H2 16
428H428H

1H
21H2 17
429H429H

2H
22H2 17
430H430H

3H
23H2 17
431H431H

4H
24H2 17
432H432H

5H
25H2 18
433H433H
Banks; Secrecy of Bank Deposits; Exceptions (2004)

6H
26H2 18
434H434H
Banks; Secrecy of Bank Deposits; Garnishment (2001)

7H
27H2 18
435H435H
BSP; Receivership; Jurisdiction (1992)

28H
28H 18
436H436H
Legal Tender (2000)

29H29H
19
437H437H
PDIC Law vs. Secrecy of Bank Deposits Act (1997)

0H30H
3 19
438H438H
Responsibilities & Objectives of BSP (1998) 31H31H

19
4 39H439H
Truth in Lending Act (1991)

2H32H
3 19
440H440H

3H33H
3 19
441H441H
Bulk Sales Law 34H34H

20
442H442H
Bulk 35H35H Sales Law; Covered Transactions (1994) 20

443H443H

444H444H

445H445H
Bulk 38H38H Sales Law; Exclusions (1993) 20

446H446H
Bulk 39H39H Sales Law; Obligation of the Vendor (1995) 21

447H447H

448H448H

449H449H
Consumer Protection Law 42H42H

21
450H450H
Metric System Law (1994)

43H43H
21
451H451H
Corporation 44H44H
Law....................................................................................................................22 452H452H
BOD: Election of Aliens as members (2005)

5H
45H4 22
453H453H
BOD; Capacity of Directors (1996)

6H
46H4 22
454H454H
BOD; Compensation (1991)

7H
47H4 22
455H455H
BOD; Conflict of Interest (1994)

8H
48H4 22
456H456H
BOD; Interlocking Directors (1995)

9H
49H4 22
457H457H

0H
50H5 23
458H458H
By -Laws; Validity; limiting qualifications of BOD members (1998)

51H51H
23
459H459H

52H52H
23
460H460H

53H53H
23
461H461H

54H54H
24
462H462H
Close Corporations; Deadlocks (1995)

H55H
55 24
463H463H
Closed Corporation; Restriction; Transfer of shares (1994)

56H56H
24
464H464H
Controversy; Intra-Corporate (1994)

7H
57H5 25
465H465H

8H
58H5 25
466H466H

9H
59H5 25
467H467H

0H
60H6 25
468H468H
Controversy; Intra-corporate; Jurisdiction (1997)

1H
61H6 25
469H469H
Corporation Sole; Definition (2004)

62H62H
26
470H470H
Corporation: Issuance of shares of stock to pay for the services (2005)

63H63H
26
471H471H
Corporation: Right of Repurchase of Shares; Trust Fund Doctrine (2005)

64H64H
26
472H472H
Corporation: Sole Proprietorship (2004)

65H65H
26
473H473H
Corporation; Articles of Incorporation (1990)

66H66H
26
474H474H
Corporation; Bulk Sales Law (2005) 67H67H

27
475H475H
Corporation; By-laws (2001) 68H68H

28
476H476H
Corporation; Commencement; Corporate Existence (2003)

69H69H
28
477H477H
Corporation; Conversion of Stock Corporation (2001)

70H70H
28
478H478H
Corporation; De Facto Corporation (1994)

71H71H
28
479H479H
Corporation; Dissolution; Methods of Liquidation (2001)

72H72H
28
480H480H
Corporation; Incorporation; Requirements (2006)

73H73H
28
481H481H
Corporation; Incorporation; Requisites (2002)

74H74H
29
482H482H
Corporation; Meetings; BOD & Stockholders (1993)

75H75H
29
483H483H
Corporation; Nationality of Corporation (1998)

76H76H
29
484H484H
Corporation; Non-Stock Corporation (1993)

77H77H
29
485H485H
Corporation; Power to Invest Corporate Funds for other Purpose (1995)

78H78H
30
486H486H
Corporation; Power to Invest Corporate Funds in another Corporation (1996)

79H79H
30
487H487H
Corporation; Recovery of Moral Damages (1998)

80H80H
30
488H488H
Corporation; Separate Juridical Personality (1995)

81H81H
31
489H489H

82H82H
31
490H490H

83H83H
31
491H491H

84H84H
31
492H492H

85H85H
32
493H493H

86H86H
32
494H494H
Corporation; Set-Off; Unpaid Subscription (1994)

87H87H
32
495H495H
Corporation; Stock Corporation (2001)

88H88H
32
496H496H
Corporation; Validity of Corporate Acts (1998)

89H89H
33
497H497H
90H90H
33
498H498H
Corporation; Voluntary Dissolution (2002)

91H91H
33
499H499H
Corporation; Voting Trust Agreement (1992)

92H92H
33
500H500H
Derivative Suit: Requisites 34
(2004) Derivative Suit: Watered
93H93H
501H501H
Stock (1993)
94H94H
34
Derivative Suit; Close Corporation; Corporate Opportunity 502H502H
(2005) Derivative Suit; Minority Stockholder (2003) 34

95H95H
Distinction: De facto Corporation vs. Corporation by Estoppel

96H96H
503H503H
35
(2004) Distinction: Dividends vs. Profit: Cash Dividend vs. Stock
97H97H
504H504H
Dividend (2005) Distinction; Private vs. Public Corporation (2004) 35

98H98H
99H99H 505H505H
Distinction; Stock vs. Non-Stock Corporation (2004) 100H100H

35
506H506H
Dividends: Declaration of Dividends (2005) Dividends:

101H101H
35
507H507H
Sources of Dividends; Trust Fund Doctrine (2005)

102H10 2H 36
Dividends; Declaration of Dividends (1990) Dividends;
508H508H
103H103H
36
Declaration of Dividends (1991) Dividends;
509H509H
104H104H 105H105H
36
Declaration of Dividends (2001) Dividends; Right;
510H510H
106H106H
36
Managing Corporation (1991) 511H511H
36
Doctrine of Corporate Opportunity 512H512H
(2005) Effect: Expiration of Corporate

107H107H
36
Term (2004) Effects; Merger of
108H108H
513H513H
37
Corporations (1999)
109H109H
514H514H
Effects; Winding Up Period of a Corporation (1997) 37

Effects; Winding Up Period of a Corporation (2000)
110H110H
515H515H
37
Foreign Corporation; “Doing Business” in the Philippines
111H111H
516H516H
(1998) 37
112H112H
517H517H
Foreign Corporation; “Doing Business” in the Philippines; Acts or Activities

113H113H
38
518H518H
(2002) Foreign Corporation; “Doing Business” in the Philippines; Test (2002) 114H114H
38
519H519H
Joint Venture; Corporation (1996)

115H115H 38
Liabilities; BOD; Corporate Acts (1996)
520H520H
38
Liabilities; Stockholders, Directors, Officers
116H116H
521H521H
(1997) Piercing the Corporate Veil (1994)

117H117H
118H118H
39
Piercing the Corporate Veil
522H522H
119H119H
39
(1996) Piercing the 120H120H
523H523H
39
Corporate Veil (2001) Piercing 121H121H
524H524H
the Corporate Veil (2004) Piercing 39

the Corporate Veil (2006) Pre
525H525H
122H122H
39
-emptive Right (2001)
526H526H
123H123H
40
Pre -Emptive Right vs. Appraisal Right (1999) 527H527H
40
124H124H
SEC; Jurisdiction; Transferred Jurisdiction

125H125H
528H528H
(1996) Stockholder; Delinquent; Unpaid 126H126H

40
529H529H
Subscription (1997) Stockholders: 127H127H 40

Preemptive Right (2004) Stockholders;
530H530H
128H128H
40
Appraisal Right (2003) Stockholders; 129H129H
531H531H
41
Removal of Officers & BOD (2001)Stockholders; 130H130H
532H532H
Removal; Minority Director (1991) Stockholders; 131H131H

41
533H533H
Rights (1996) 41
Stockholders; Voting Power of Stockholders
534H534H
132H132H
42
(1990) Stocks; Increase of Capital Stock (2001)
535H535H
133H133H
42
Stocks; Sale, Transfer of Certificates of Stock
134H134H
536H536H
(1996) Stocks; Sale, Transfer of Certificates of 135H135H

42
537H537H
Stock (2001) Stocks; Sale, Transfer of 136H136H

42
Certificates of Stock (2004) Trust Fund Doctrine
538H538H
137H137H
42
(1992) 539H539H
42
Trust Fund Doctrine; Intra-Corporate Controversy (1991) 540H540H
42
138H138H
541H541H
43
542H542H
543H543H
43
544H544H
43
545H545H
43
546H546H
Credit Transactions 139H139H

44
547H547H
Chattel Mortgage vs. After-Incurred Obligations (1991)
140H
140H 44
548H548H
141H
141H 44
549H549H
Chattel Mortgage; Foreclosure (1997)

142H
142H 44
550H550H
Chattel Mortgage; Ownership of Thing Mortgaged (1990)

143H
143H 45
551H551H
Credit Transactions (1999)

H144H
144 45
552H552H
Mortgage (1999)
H145H
145 45
553H553H
Mortgage vs. Levy (2003)

H146H
146 46
554H554H
Mortgage; Extrajudicial Foreclose (2006)

H
147H147 46
555H555H
Mortgage; Foreclosure (2003)

H
148H148 46
556H556H

H
149H149 46
557H557H
Mortgage; Foreclosure of Improvements (1999)

H
150H150 46
558H558H
Mortgage; Foreclosure; Effect of mere taking by creditor-mortgagor of property (1992)

H
151H151 47
559H559H
Mortgage; Redemption Period; Foreclosed Property (2002)

H
152H152 47
560H560H
Mortgage; Remedies (2003)

H
153H153 48
561H561H
Preference of Credits (2002) 154H154H

48
562H562H
Promissory Note: Liability (2001) 155H155H

48
563H563H
Remedies; Available to Mortgagee-Creditor (1996)

H156H
156 48
564H564H
Remedies; Available to Mortgagee-Creditor (2001)

H157H
157 49
565H565H
Remedies; Secured Debt (1991)

H158H
158 49
566H566H
Insurance 159H159H
Law........................................................................................................................49 567H567H
Beneficiary: Effects: Irrevocable Beneficiary (2005)

160H160H
49
568H568H
Beneficiary: Rights; Irrevocable Beneficiary (2005)

161H161H
50
569H569H
Beneficiary; Life Insurance; Prohibited Beneficiaries (1998)

162H162H
50
570H570H
Concealment; Material Concealment (2001) 163H163H

50
571H571H
Concealment; Material Concealment: Incontestability Clause (1994)

164H164H
50
572H572H

165H165H
50
573H573H

166H166H
51
574H574H
Concealment; Material Concealment; Incontestability Clause (1991)

167H167H
51
575H575H
Concealment; Material Concealment; Incontestability Clause (1998)

168H168H
51
576H576H
Insurable Interest: Bank Deposit (2000)

69H
169H1 51
577H577H
Insurable Interest: Public Enemy (2000)

70H
170H1 52
578H578H
Insurable Interest: Separate Insurable Interest (1999)

71H
171H1 52
579H579H
Insurable Interest; Equitable Interest (1991)

72H
172H1 52
580H580H
Insurable Interest; Life vs. Property Insurance (1997)

73H
173H1 52
581H581H

74H
174H1 52
582H582H

75H
175H1 53
583H583H
Insurable Interest; Property Insurance (1994)

76H
176H1 53
584H584H

77H
177H1 53
585H585H
Insurance; Cash & Carry Basis (2003)

78H178H
1 53
586H586H
Insurance; Co-Insurance vs. Re-Insurance (1994)

79H179H
1 53
587H587H
Insurance; Double Insurance (2005)

80H180H
1 54
588H588H
Insurance; Double Insurance; effect (1993)

81H181H
1 54
589H589H
Insurance; Effects; Payment of Premiums by Installment (2006)

82H182H
1 54
590H590H
Insurance; Life Insurance; Assignment of Policy (1991)

83H183H
1 54
591H591H
Insurance; Perfection of Insurance Contracts (2003)

84H184H
1 54
592H592H
Insurance; Property Insurance; Prescription of Claims (1996)

85H185H
1 54
593H593H
Insurance; Return of Premiums (2000)

86H186H
1 55
594H594H
Insured; Accident Policy (2004)
187H187H
55
595H595H
Insured; Accident vs. Suicide (1990)

188H188H
55
596H596H
89H1 89H
1 56
597H597H

90H190H
1 56
598H598H
Insurer: Effects: Several Insurers (2005)

H
191H191 56
599H599H
Insurer; 3rd Party Liability (1996)

H
192H192 56
600H600H
Insurer; 3rd Party Liability (2000)

H
193H193 57
601H601H
Insurer; 3rd Party Liability; No Fault Indemnity (1994)

H
194H194 57
602H602H
Insurer; 3rd Party Liability; Quitclaim (1994)

H
195H195 57
603H603H
Insurer; Authorized Driver Clause (1991)

H
196H196 57
604H604H
Insurer; Authorized Driver Clause (2003)

H
197H197 57
605H605H
Insurer; Authorized Driver Clause; vehicle is stolen (1993)

H
198H198 58
606H606H
Insurer; Group Insurance; Employer-Policy Holder (2000)

H
199H199 58
607H607H
Insurer; Liability of the Insurers (1990)

H
200H200 58
608H608H
Loss: Actual Total Loss (1996)

201H
201H 59
609H609H
Loss: Constructive Total Loss (2005)

2H202H
20 59
610H610H
Loss: Total Loss Only (1992)

203H
203H 59
611H611H
Marine Insurance; Implied Warranties (2000)

04H
204H2 60
612H612H
Marine Insurance; Peril of the Ship vs. Peril of the Sea (1998)
05 H
205H2 60
613H613H
Mutual Insurance Company; Nature & Definition (2006)

H206H
206 60
614H614H
Intellectual Property 207H207H

60
615H615H
Copyright (1995) 208H208H

60
616H616H
Copyright; Commissioned Artist (1995) 209H209H

60
617H617H
Copyright; Commissioned Artist (2004) 210H210H

60
618H618H
Copyright; Infringement (1994) 211H211H

60
619H619H

61
620H620H

61
621H621H

61
622H622H
Copyright; Photocopy; when allowed (1998)

215H215H
61
623H623H
Infringement vs. Unfair Competition (1996) 216H216H

61
624H624H
Infringement vs. Unfair Competition (2003) 217H217H

61
625H625H
Infringement; Jurisdiction (2003) 218H218H

61
626H626H
Patent; Non-Patentable Inventions (2006)

H219H
219 61
627H627H
Patents: Gas-Saving Device: first to file rule (2005)

0H220H
22
628H628H
Patents: Infringement; Remedies & Defenses (1993)

1H221H
22
629H629H
Patents; Infringement (1992)

2H222H
22 62
630H630H
Patents; Rights over the Invention (1990)

3H223H
22
631H631H
Trademark (1990) 224H224H
632H632H
Trademark (1994) 225H225H
633H633H
Trademark, Test of Dominancy (1996) 226H226H
634H634H
Trademark; Infringement (1991) 227H227H
635H635H
Trademark; Test of Dominancy (1996) 228H228H

64
636H636H
Tradename: International Affiliation (2005) 229H229H

64
637H637H
Insolvency & Corporate Recovery 230H230H

64
638H638H
Insolvency 231H231H vs. Suspension of Payment (1998) 64

639H639H
Insolvency: 232H232H Voluntary Insolvency (2005) 640H640H
Insolvency; 233H233H Assets vs. Liabilities (1998) 65

641H641H
Insolvency; 234H234H Assignees (1996) 65

642H642H
Insolvency; 235H235H Effect; Declaration of Insolvency (1991) 65

643H643H
Insolvency; Fraudulent Payment (2002) 236H236H
65
644H644H
Insolvency; Jurisdiction; Sole Proprietorship (1990) 237H237H

66
645H645H
Insolvency; obligations that survive (1997) 238H238H

66
646H646H
Insolvency; Voluntary Insolvency Proceeding (1991) 239H239H

66
647H647H
Insolvency; Voluntary vs. Involuntary Solvency (1995) 240H240H

66
648H 648H
Law on Corporate Recovery (2003)

241H241H
67
649H649H
Rehabilitation; Stay Order (2006) 242H242H

67
650H650H
Suspension of Payment vs. Insolvency (1995) 243H243H

67
651H651H
Suspension of Payments vs. Stay Order (2003) 244H244H

67
652H652H
Suspension of Payments; Rehabilitation Receiver (1999) 245H245H

67
653H653H
Suspension of Payments; Remedies (2003) 246H246H

68
654H654H
Letters of Credit 247H247H

68
655H655H
Letter of Credit: Mortgage (2005)

H248H
248 68
656H656H
Letter of Credit; Certification from Consignee (1993)

H249H
249 68
657H657H
Letters of Credit; Liability of a confirming and notifying bank (1994)

0H
250H25 69
658H658H
Letters of Credit; Liability of a Notifying Bank (2003)

1H
251H25 69
659H659H
Letters of Credit; Three Distinct Contract Relationships (2002)

2H
252H25 69
660H660H
Maritime Commerce 253H253H

69
661H661H
Average; Particular Average vs. General Average (2003)

4H254H
25 69
662H662H
Bottomry (1994)
5H255H
25 70
663H663H
Carriage of Goods: Deviation: Liability (2005)

56H
256H2 70
664H664H
Carriage of Goods; Deviation; When Proper (2005)

57H
257H2 70
665H665H
Carriage of Goods; Exercise Extraordinary Diligence (2005)

58H
258H2 70
666H666H
Charter Party (1991)

59H259H
2 70
667H667H
Charter Party (2004)

60H260H
2 71
668H668H
COGSA: Prescription of Claims/Actions (2004)

261H
261H 71
669H669H
COGSA; Prescription of Claims (1992)

262H
262H 71
670H670H
COGSA; Prescription of Claims (2000)

263H
263H 72
671H671H
COGSA; Prescriptive Period (1995)

264H
264H
672H672H
Doctrine of Inscrutable Fault (1995)

H
265H265 72
673H673H

H
266H266 72
674H674H

H
267H267 72
675H675H
Limited Liability Rule (1994)

H268H
268 72
676H676H

H269H
269 72
6 7 7H677H

H270H
270 72
678H678H

H271H
271 73
679H679H
Limited Liability Rule; Doctrine of Inscrutable Fault (1991)

H272H
272 73
680H680H
Limited Liability Rule; General Average Loss (2000)

H273H
273 73
681H681H

H274H
274 73
682H682H
Nationalized Activities or Undertakings 275H275H

74
683H683H
Nationalized Activities or Undertakings (1993) 276H276H

74
684H684H

74
685H685H

75
686H686H
Retail Trade Law (1990)

H279H
279 75
687H687H

H280H
280 75
688H688H

H281H
281 75
689H689H
Retail
282H
282H
Trade Law (1993) 76
690H690H
Retail
283H
283H
Trade Law (1996) 76
691H691H
Retail
284H
284H
Trade Law (1996) 76
692H692H
Retail
285H
285H
Trade Law; Consignment (1991) 76
693H693H
Negotiable Instruments Law ..............................................................................................76

286H286H 694H694H
Bond: Cash Bond vs. Surety Bond (2004)

7H287H
28 76
695H695H
Checks: Crossed Checks (2005)

H288H
288 77
696H696H
Checks: Crossed Checks vs. Cancelled Checks (2004)

H289H
289 77
697H697H
Checks; Crossed Check (1991)

H290H
290 77
698H698H

H291H
291 77
699H699H

H292H
292 78
700H700H

H293H
293 78
701H701H

H294H
294 78
702H702H
Checks; Effect; Acceptance by the drawee bank (1998)

H295H
295 78
703H703H
Checks; Effects; Alterations; Prescriptive Period (1996)

H296H
296 78
704H704H
Checks; Forged Check; Effects (2006)

H297H
297 79
705H705H
Checks; Liability; Drawee Bank (1995)

H298H
298 80
706H706H
Checks; Material Alterations; Liability (1999)

H299H
299 80
707H707H
Checks; Presentment (1994)

H300H
300 80
7 0 8H708H

H301H
301 80
709H709H
Checks; Validity; Waiver of Bank’s liability for negligence (1991)

H302H
302 80
710H710H
Defenses; Forgery (2004) 303H303H

81
711H711H
Forgery; Liabilities; Prior & Subsequent Parties (1990)

04H304H
3 81
712H712H

05H305H
3 81
713H713H
Incomplete & Delivered (2004) 306H306H

82
714H714H
Incomplete and Delivered (2005) 307H307H

82
715H715H
Incomplete Instruments; Incomplete Delivered Instruments vs. Incomplete Undelivered Instrument (2006) 82
08H
308H3
716H716H
Indorser: Irregular Indorser vs. General Indorser (2005)

309H309H
82
717H717H
Negotiability (1993) 310H310H

82
718H718H
Negotiability (2002) 311H311H

83
719H719H
Negotiability; Holder in Due Course (1992) 312H312H

83
720H720H
Negotiability; Requisites (2000) 313H313H

83
721H721H
Negotiable Instrument: Ambiguous Instruments (1998)

H
314H314 84
722H722H
Negotiable Instrument: Definition & Characteristics (2005)

H
315H315 84
723H723H
Negotiable Instrument: Identification (2005)

H
316H316 84
724H724H
Negotiable Instrument: Negotiable Document vs. Negotiable Instrument (2005)

H
317H317 85
725H725H
Negotiable Instrument; Negotiability (1997)

H
318H318 85
726H726H
Negotiable Instruments; Bearer Instrument (1998)

H
319H319 85
7 27H727H
Negotiable Instruments; Bearer Instruments (1997)

H
320H320 85
728H728H
Negotiable Instruments; bearer instruments; liabilities of maker and indorsers (2001)

H
321H321 85
729H729H
Negotiable Instruments; incomplete and undelivered instruments; holder in due course (2000)
H
322H322 86
730H730H
Negotiable Instruments; Incomplete Delivered Instruments; Comparative Negligence (1997)

H
323H323 86
731H731H
Negotiable Instruments; kinds of negotiable instrument; words of negotiability (2002)

H
324H324 86
732H732H
Negotiable Instruments; Requisites (1996)

H
325H325 87
733H733H
Notice Dishonor (1996)

6H326H
32 87
734H734H
Parties; Accommodation Party (1990)

27H
327H3 87
735H735H

28H
328H3 87
736H736H
29H
329H3 87
737H737H
0H330H
33 87
738H738H

1H331H
33 88
739H739H

2H332H
33 88
740H740H

3H333H
33 88
741H741H
Parties; Holder in Due Course (1993)

4H334H
33 88
742H742H

5H335H
33 88
7 4 3H743H

6H336H
33 88
744H744H

7H337H
33 89
745H745H
Parties; Holder in Due Course; Indorsement in blank (2002)

8H338H
33 89
746H746H
Place of Payment (2000)

39H
339H3 89
747H747H
Public Service Law

H
340H340 89
748H748H
Certificate of public Convenience (1998) 341H341H

89
749H749H
Certificate of Public Convenience; inseparability of certificate and vessel (1992)

342H342H
90
750H750H
Certificate of Public Convenience; Requirements (1995)

343H343H
90
751H751H
Powers of the Public Service Commission (1993)

H344H
344 90
752H752H
Public utilities (2000)

45H345H
3 90
753H753H
Revocation of Certificate (1993) 346H346H

91
754H754H
Revocation of Certificate (1993) 347H347H

91
755H755H
Securities Regulation 348H348H

91
756H756H
Insider (2004)
49H349H
3 91
757H757H
Insider Trading (1995)

50H350H
3 91
758H758H
Insider Trading; Manipulative Practices (1994)

51H351H
3 92
759H759H
Manipulative Practices (2001) 352H352H

92
760H760H
Securities Regulation Code; Purpose (1998) 353H353H

92
761H761H
Securities; Definition (1996) 354H354H

92
762H762H
Securities; Selling of Securities; Meaning (2002)

355H355H
92
763H763H
Tender Offer (2002)

6H
356H35 93
764H764H
Transportation Law 357H357H

93
765H765H
Boundary System (2005)

H358H
358 93
766H766H
Carriage; Breach of Contract; Presumption of Negligence (1990)

59H
359H3 93
767H767H
Carriage; Breach of Contract; Presumption of Negligence (1997)

60H
360H3 93
768H768H
Carriage; Fortuitous Event (1995)

61H
361H3 93
769H769H
Carriage; Liability; Lost Baggage or Acts of Passengers (1997)

62H
362H3 94
770H770H
Carriage; Prohibited & Valid Stipulations (2002)

63H
363H3 94
771H771H
Carriage; Valuation of Damaged Cargo (1993)

64H
364H3 94
772H772H
Common Carrier (1996)

5H
365H36 94
773H773H
Common Carrier; Breach of Contract; Damages (2003)

6H
366H36 94
774H774H
Common Carrier; Defenses (2002)

H367H
367 95
775H775H
Common Carrier; Defenses; Fortuitous Events (1994)

H368H
368 95
776H776H
Common Carrier; Defenses; Limitation of Liability (1998)

H369H
369 95
777H777H
Common Carrier; Defenses; Limitation of Liability (2001)

H370H
370 95
778H778H
Common Carrier; Duration of Liability (1996)

1H
371H37 95
779H779H
Common Carrier; Duty to Examine Baggages; Railway and Airline (1992)

2H
372H37 96
780H780H
Common Carrier; Test (1996)

3H
373H37 96
781H781H
Common Carriers; Defenses (1996)

H374H
374 96
782H782H
Common Carriers; Liability for Loss (1991)
5H
375H37 96
783H783H
Common vs. Private Carrier; Defenses (2002) 376H376H 97 784H784H
Kabit System (2005)

377H
377H
97 785H785H
Kabit System; Agent of the Registered Owner (2005)

378H378H 97 786H786H
Maritime Commerce; Bareboat (2003) 379H379H 97 787H787H
Prior Operator Rule (2003) 380H380H 97 788H788H
Registered Owner; Conclusive Presumption (1990) 381H381H 98 789H789H
Trans -Shipment; Bill of Lading; binding contract (1993)

382H382H 98 790H790H
Trust Receipts Law

83H383H
3
98 791H791H
Trust Receipts Law; Acts & Omissions; Covered (2006)

384H384H 98 792H792H
Trust Receipts Law; Liability for estafa (1991)

385H385H 99 793H793H
Trust Receipts Law; Liability for Estafa (1997)

386H386H 99 794H794H
Trusts Receipt Law (2003)

H387H
387
99 795H795H
Usury Law 388H388H 99 796H796H
Usury Law (199)

389H
389H
99 797H797H
Warehouse Receipts Law 390H390H

100 798H79
8H
Bill of Lading (1998)

391H391H
100
799H799H
Delivery of Goods; Requisites (1998) 392H392H

100
800H800H
Delivery of the Goods (1991) 393H393H

100
801H801H
Garnishment or Attachment of Goods (1999) 394H394H

100
802H802H
Negotiable Documents of Title (1992) 395H395H

100
803H803H
Ownership of Goods Stored (1992) 396H396H

101
804H804H
Right to the Goods (2005)

7H397H
39 101
805H805H
Unpaid Seller; Negotiation of the Receipt (1993)

H
398H398 101
806H806H
Validity of stipulations excusing warehouseman from negligence (2000)

H399H
399 101
807H807H
Miscellaneous 400H400H
102 808H80
8H
Energy Regulatory Commission: Jurisdiction & Power (2004)

H
401H401 102
809H809H
Four ACID Problems of Philippine Judiciary (2006)

402H402H
102
810H810H
Government Deregulation vs. Privatization of an Industry (2004) 403H403H

102
811H811H
Political Law; WTO (1999)

404H404H
102
812H812H
Power of the State: Regulating of Domestic Trade (2004)

405H405H
103
813H813H
Tariff and Customs Code: Violation of Customs Laws (2004)

406H
406H 103
814H814H
General Principles of Banking Law
Mercantile Law Banks: Applicability: Foreign Currency Deposit Act
& Secrecy of Bank Deposits (2005)
Hi Yielding Corporation filed a complaint against five of
Commercial Transaction (2003) its officers for violation of Section 31 of the Corporation
What do you understand by the term Code. The corporation claimed that the said officers
“commercial transaction”? Is it essential that at least were guilty of advancing their personal interests
one party to a contract be a merchant in order to to the prejudice of the corporation, and that they were
consider such a commercial transaction? (4%) grossly negligent in handling its affairs. Aside from
SUGGESTED ANSWER:
documents and contracts, the corporation also
A “Commercial transaction” is defined as ...... It is
submitted in evidence records of the officers’ U.S.
not essential that at least one party to the
Dollar deposits in several banks overseas - Boston
commercial transaction be a merchant. What is
Bank, Bank of Switzerland, and Bank of New York.
essential is that the transaction evince an intent to
engage in commerce or trade. For their part, the officers filed a criminal complaint
against the directors of Hi Yielding Corporation for
Joint Account (2000) violation of Republic Act No. 6426, otherwise known as
What is a joint account? (2%) the Foreign Currency Deposit Act of the Philippines.
SUGGESTED ANSWER:
The officers alleged that their bank deposits were illegally
A joint account is a transaction of merchants where other
disclosed for want of a court order, and that such
merchants agree to contribute the amount of capital deposits were not even the subject of the case against
agreed upon, and participating in the favorable
or unfavorable results thereof in the proportion they
Will the complaint filed against the directors of Hi
may determine. Yielding Corporation prosper? Explain.
them. a)
Joint Account vs. Partnership (2000)
SUGGESTED ANSWER:
Distinguish joint account from partnership. (3%)
SUGGESTED ANSWER: No, because the Foreign Currency Deposit Act (R.A. No.
The following are the distinctions between joint account 6426), including its punitive provisions, refers to foreign
and partnership: currency deposits accounts constituted within the
(1) A partnership has a firm name while a joint account Philippines. It has no application at all to accounts, even
has none and is conducted in the name of the though they are banks, opened and constituted abroad.
ostensible partner.
(2) While a partnership has juridical personality and may b) Was there a violation of the Secrecy of Bank
sue or be sued under its firm name, a joint account Deposits Law (Republic Act No. 1405)? Explain.
has no juridical personality and can sue or be (5%)
sued only in the name of the ostensible partner. SUGGESTED ANSWER:
(3) While a partnership has a common fund, a No, because the punitive provisions of the Secrecy of
joint account has none. Bank Deposits Law (R.A. No. 1405), including the
(4) While in a partnership, all general partners have the statutory exemptions provided therein, are not applicable to
right of management, in a joint account, the FCDU accounts, even when constituted locally.
ostensible partner manages its business operations. (Intengan v. Court of Appeals, G.R. No. 128996, February 15,
2002)
(5) While liquidations of a partnership may,
by agreement, be entrusted to a partner or partners, Banks: Collateral Security (2002)
in a joint account liquidation thereof can only be Andrew is engaged in the business of building low-cost
done by the ostensible partner. housing units under contracts with real estate developers.
Theory of Cognition vs. Theory of Manifestation (1997) He applied for a loan of P3 Million from Ready Credit
Bank (the Bank), which required Andrew to provide
The Civil Code adopts the theory of cognition, while the
collateral security for it. Andrew offered to assign to the
Code of Commerce generally recognizes the theory
Bank his receivables amounting to P4 million from
of manifestation, in the perfection of contracts. How
Home Builders Development Corporation (the Obligor).
do these two theories differ?
SUGGESTED ANSWER: The Bank accepted the offer. Accordingly, Andrew
Under the theory of cognition, the acceptance is obtained the loan and he executed a promissory note
considered to effectively bind the offeror only from the undertaking to pay the loan in full in one lump sum on
time it came to his knowledge. Under the theory of September 1, 2002, together with interest thereon at the
manifestation, the contract is perfected at the moment rate of 20% per annum. At the same time, Andrew
when the acceptance is declared or made by the offeree. executed a Deed of Assignment in favor of the Bank
assigning to the Bank his receivables from the Obligor.
The deed of assignment read:
“I, Andrew Lee, hereby assign, transfer and convey,
absolutely and unconditionally, to Ready Credit Bank Banks; Classifications of Banks (2002)
(hereinafter called the Bank) all of my right, title There are six (6) classes of banks identified in the
and interest in and to my accounts receivable from General Banking Law of 2000. Name at least four (4) of
Home Builders Development Corporation (hereinafter them and explain the distinguishing characteristic or
called the Obligor) arising from delivery of housing units function of each one. (5%)
with a total contract price of P4,000,000.00, the SUGGESTED ANSWER:
description and contract value of which are attached Any four (4) of the following six (6) classes of banks
hereto as Annex A (hereinafter called the Receivables).” identified in the General Banking Law of 2002, to wit:
1. Universal Banks – These are those which used to
“In the event that I shall be unable to pay be called expanded commercial banks and
my outstanding indebtedness owned to the Bank, the operations of which are now primarily governed
the Bank shall have the right, without any further by the General Banking Law of 2002. They can
formality or act on its part, to collect the Receivables exercise the powers of an investment house and
from the Obligor and to apply the proceeds thereof invest in non-allied enterprises. They have
toward payment of my said indebtedness.” the highest capitalization requirement.
2. Commercial Banks – These are ordinary or regular
Andrew failed to pay the loan on its due date on commercial banks, as distinguished from a universal
September 1, 2002. When the Bank attempted to collect bank. They have a lower capitalization
from the Obligor, the Bank discovered that the latter had requirement than universal banks and cannot
already closed operations and liquidated all its assets. The exercise the powers of an investment house and
Bank sued Andrew for collection, but Andrew moved to invest in non-allied enterprises.
dismiss the complaint on the ground that the debt 3. Thrift Banks – These banks (such as savings and
had already been paid by reason of his execution of mortgage banks, stock savings and loan associations,
the aforesaid Deed of Assignment which, being absolute and private development banks) may exercise most
and unconditional, was in essence a dacion en pago. of the powers and functions of a commercial bank
The Bank opposed the motion, contending that the except that they cannot, among others, open current or
Deed of Assignment was only a security for a loan. check accounts without prior Monetary Board
If you were the Judge, how would you resolve the approval, and they cannot issue letters of credit.
motion to dismiss filed by Andrew? Explain (5%) Their operations are governed primarily by the
SUGGESTED ANSWER: Thrift Banks Act of 1995 (RA 7906).
(Since the question is outside the scope of the Bar 4. Rural Banks – these are those which are organized
Examination, it is recommended that the candidate be primarily to extend loans and other credit facilities to
given full credit of 5%, whatever may be his answer, and he be farmers, fishermen or farm families, as well as
given a bonus if he made an answer in the following manner:)
cooperatives, merchants, and private and public
The motion to dismiss should be granted. The employees and whose operations are primarily
simple absolute and unconditional conveyance governed by the Rural Banks Act of 1992 (RA 7353).
embodied in the deed of assignment would be
5. Cooperative Banks – these are those which
operative, and the assignment would constitute
are organized primarily to provide financial and
essentially a mode of payment or dacion en pago.
credit services to cooperatives and whose
operations are primarily governed by the
Banks: Secrecy of Bank Deposits; Garnishment (2004)
Cooperative Code of the Philippines (RA 6938).
CDC maintained a savings account with CBank. On 6. Islamic Banks – these are those which are
orders of the MM Regional Trial Court, the Sheriff organized primarily to provide financial and
garnished P50,000 of his account, to satisfy the judgment credit services in a manner or transaction
in favor of his creditor, MO. CDC complained that the consistent with the Islamic Shari’ah. At present,
garnishment violated the Law on the Secrecy of
only the Al Amanah Islamic Investment Bank of the
Bank Deposits because the existence of his savings
Philippines has been organized as an Islamic Bank.
account was disclosed to the public. (5%)
Is CDC's complaint meritorious or not? Reason briefly. Banks; Conservator vs. Receiver (2006)
SUGGESTED ANSWER:
No. CDC's complaint is not meritorious. It was held in Distinguish between the role of a conservator and that of
China Banking Corporation v. Ortega, 49 SCRA 355 (1973) a receiver of a bank. (2.5%)
SUGGESTED ANSWER:
that peso deposits may be garnished and the depositary
The Conservator is appointed for a period not exceeding
bank can comply with the order of garnishment without
one (1) year, to take charge of the assets, liabilities, and
violating the Law on the Secrecy of Bank Deposits.
the management of a bank or a quasi-bank in a state of
Execution is the goal of litigation as it is its fruit.
continuing inability, or unwillingness to maintain
Garnishment is part of the execution process. Upon
a condition of liquidity deemed adequate to protect
service of the notice of garnishment on the bank where
the interest of depositors and creditors.
the defendant deposited funds, such funds become part
On the other hand, the Receiver is appointed to manage
of the subject matter of litigation.
a bank or quasi-bank that is unable to pay its liabilities in
Mercantile Law Bar Examination Q & A (1990-2006) Page 14 of 103 payable
the ordinary course of business, or has insufficient to himself in the sum of P5 million. This is paying
realizable assets to meet its liabilities, or cannot continue in out or permitting to be paid out funds of the bank after
business without probable losses to its depositors or the latter became insolvent. This act is penalized by fine
creditors; or has willfully violated a final cease and desist of not less than P1,000.00 nor more than P10,000.00
order, involving acts or transactions amounting to fraud or and by imprisonment for not less than two nor
a dissipation of the assets of the institution. The main more than ten years.
purpose of the Receiver is to recommend the
rehabilitation or liquidation of the bank. Banks; Insolvency; Requirements (1997)
Give the basic requirements to be complied with by the
Banks; Diligence Required (1992) BSP before the Monetary Board can declare a bank
Placido, a bank depositor, left his checkbook on his desk insolvent, order it closed and forbid it from doing further
at his house. Unknown to him, a visitor at the business in the Philippines.
time, noticing the same, took a check therefrom, filled it SUGGESTED ANSWER:
up in the amount of P3,000.00 and succeeded in Before the Monetary Board can declare a bank insolvent,
encashing the check on the same day. Placido’s order it closed and forbid it from doing further business
account was thereby debited in the same amount. in the Philippines, the following basic requirements must
be complied with by the BSP, to wit:
Discovering the erroneous debit, Placido demanded that 1. There must be an examination by the head of the
the bank credit him with a like amount. The bank refused Department of Supervision or his examiners or
on the ground that Placido was negligent in leaving his agents into the condition of the bank.
checkbook on his desk so that he could not put up the 2. The examination discloses that the condition of the
defense of forgery or want of authority under the NIL. bank is one of insolvency, or that its continuance in
business would involve probable loss to creditors or
The Facts disclose that even to the naked eye, there were depositors.
marked differences between Placido’s signature and the 3. The head of said Department shall inform in writing
one in the check forged by the visitor. As between the Monetary Board of such facts.
Placido and the bank, who should bear the loss? Explain. 4. Upon finding said information or statement to be
SUGGESTED ANSWER: true, the Monetary Board shall appoint a receiver to
The bank should bear the loss. A drawee bank take charge of the assets and liabilities of the bank.
must exercise the highest diligence in safeguarding 5. Within 60 days, the Monetary Board shall determine
the accounts of its client-depositors. The bank is and confirm if the bank is insolvent, and public
also charged with genuineness of the signatures of its interest requires, to order the liquidation of the
current account holders. But what can be more bank.
striking is that there were marked differences
between Placido’s signature and the one in the check Banks; Restrictions on Loan Accommodations (2002)
forged by the visitor. Certainly, Placido was not As part of the safeguards against imprudent banking, the
negligent in leaving his checkbook in his own General Banking Law imposes limits or restrictions
desk (PNB v Quimpo 158 SCRA 582) on loans and credit accommodations which may
be extended by banks. Identify at least two (2) of
Banks; Insolvency; Prohibited Transactions (2000) these limits or restrictions and explain the rationale of
The Monetary Board of the BSP closed Urban Bank after each of them. (5%)
it encountered crippling financial difficulties that resulted SUGGESTED ANSWER:
in a bank run. X, one of the members of the BOD of the Any two (2) of the following limits or restrictions on loan
bank, attended and stayed throughout the entire meeting and credit transactions which may be extended by banks,
of the Board that was held well in advance of the bank as part of the safeguards against imprudent banking,
run and before news had begun to trickle to the business to wit:
community about the dire financial pit the bank had 1. SBL Rules – (i.e., Single Borrower’s Limit) rules are
fallen into. Immediately after the meeting, X caused the those promulgated by the Bangko Sentral ng
preparation and issuance of a manager’s check payable to Pilipinas, upon the authority of Section 35 of
himself in the sum of 5 million pesos equivalent to the General Banking Law of 2000, which
the amount placed or invested in the bank by a regulate the total amount of loans, credit
business acquaintance. He now claims that he is keeping accommodations and guarantees that may be
the funds in trust for the owner and that he had extended by a bank to any person, partnership,
committed no violation of the General Banking association, corporation or other entity. The rules
Act (RA 337, as amended) for which he should seek to protect a bank from making excessive
be punished. Do you agree that there has been no loans to a single borrower by prohibiting it
violation of the statute? (3%) from lending beyond a specified ceiling.
SUGGESTED ANSWER: 2. DOSRI Rules – These rules promulgated by the
No. I do not agree that there is no violation of the statute BSP, upon authority of Section 5 of the General
(RA 337, as amended). X violated Sec 85 when he caused Banking Law of 2000, which regulate the amount of
the preparation and issuance of a manager’s check credit accommodations that a bank may extend to its
Mercantile Law Bar Examination Q & A (1990-2006) Page 15 of 103 observed
directors, officers, stockholders and their related by the depositary. Any stipulation exempting the
interests (thus, DOSRI). Generally, a bank’s depositary from any liability arising from the loss of the
credit accommodations to its DOSRI must thing deposited would be void for being contrary to law
be in the regular course of business and on and public policy. The deposit box is located in the bank
terms not less favorable to the bank than those premises and is under the absolute control of the
offered to non- DOSRI borrowers. bank.
3. No commercial bank shall make any loan
or discount on the security of shares of its own Banks; Secrecy of Bank Deposit; AMLC (2006)
capital stock. Rudy is jobless but is reputed to be a jueteng
operator. He has never been charged or convicted of any
Banks; Restrictions on Loan Accommodations (2006) crime. He maintains several bank accounts and has
Pio is the president of Western Bank. His wife purchased 5 houses and lots for his children from the
applied for a loan with the said bank to finance an Luansing Realty, Inc. Since he does not have any
internet cafe. The loan officer told her that her visible job, the company reported his purchases to
application will not be approved because the grant of the Anti-Money Laundering Council (AMLC). Thereafter,
loans to related interests of bank directors, officers, and AMLC charged him with violation of the Anti-Money
stockholders is prohibited by the General Banking Law. Laundering Law. Upon request of the AMLC, the bank
Explain whether the loan officer is correct. (5%) disclosed to it Rudy's bank deposits amounting to
SUGGESTED ANSWER: P100 Million. Subsequently, he was charged in court
Section 36 of the General Banking Law of 2000 does not for violation of the Anti-Money Laundering Law.
entirely prohibit directors or officers of the bank, directly 1. Can Rudy move to dismiss the case on the ground that
or indirectly, from borrowing from the bank. In this case, he has no criminal record? (2.5%)
Pio is the president of Western Bank, which makes him an SUGGESTED ANSWER:
officer, director and stockholder of the said bank. The No. Under the Anti-Money Laundering Law, Rudy
General Banking Law provides for additional restrictions to would be guilty of a "money laundering crime"
the bank before it can lend to its directors or officers. A committed when the proceeds of an "unlawful activity," like
written approval of the majority vote of all the jueteng operations, are made to appear as having
directors of the bank, excluding the director concerned, is originated from legitimate sources. The money
required. Furthermore, such dealings must be upon laundering crime is separate from the unlawful activity of
terms not less favorable to the bank than those offered to being a jueteng operator, and requires no previous
others (Section 1326, Central Bank's "Manual of Regulations conviction for the unlawful activity (See also Sec. 3, Anti-
for Banks and Other Financial Intermediaries, cited in Ranioso v. Money Laundering Act of 2001).
CA, G.R. No. 117416, December 8, 2000). A violation of
this provision will cause his or her position to be declared 2. To raise funds for his defense, Rudy sold the houses
vacant and the erring director or officer subjected to the and lots to a friend. Can Luansing Realty, Inc.
penal provisions of the New Central Bank Act. be compelled to transfer to the buyer ownership of
the houses and lots? (2.5%)
Banks; Safety Deposit Box; Liability SUGGESTED ANSWER:
MN and OP rented a safety deposit box at Luansing Realty, Inc. is a real estate company, hence it is
SIBANK. The parties signed a contract of lease with the not a covered institution under Section 3 of the
conditions that: the bank is not a depository of the Anti- Money Laundering Act. Only banking
contents of the safe and has neither the possession institutions, insurance companies, securities dealers and
nor control of the same; the bank assumed no interest brokers, pre- need companies and other entities
in said contents and assumes no liability in connection administering or otherwise dealing in currency,
therewith. The safety deposit box had two keyholes: commodities or financial derivatives are covered
one for the guard key which remained with the institutions. Hence, Luansing Realty, Inc. may not use
bank; and the other for the renters' key. The box can the Anti-Money Laundering Act to refuse to transfer
be opened only with the use of both keys. to the buyer ownership of the houses and lots.
The renters deposited certificates of title in the box. But
later, they discovered that the certificates were gone. MN 3. In disclosing Rudy's bank accounts to the AMLC,
and OP now claim for damages from SIBANK. Is did the bank violate any law? (2.5%)
the bank liable? Explain briefly. (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: No, the bank did not violate any law. The bank being
The bank is liable, based on the decisions of the Supreme specified as a "covered institution" under the Anti-
Court in CA Agro-Industrial Development Corp. v. Court of Appeals, Money Laundering Law, is obliged to report to the
219 SCRA 426 (1993) and Sia v. Court of Appeals, 222 SCRA 24 AMLC covered and suspicious transactions, without
(1993). In those cases, the Supreme Court ruled that the thereby violating any law. This is one of the exceptions to
renting out of safety deposit boxes is a "special kind of the Secrecy of Bank Deposit Act.
deposit" wherein the bank is the depositary. In the absence
of any stipulation prescribing the degree of diligence
required, that of a good father of a family is to be
4. Supposing the titles of the houses and lots are in filed a complaint with the City Fiscal of Manila for
possession of the Luansing Realty, Inc., is it under unlawfully disclosing information about her
obligation to deliver the titles to Rudy? (2.5%) bank account.
SUGGESTED ANSWER: a) Will the said suit prosper? Explain your answer.
Yes, it has an obligation to deliver titles to Rudy. As
Luansing Realty, Inc. is not a covered institution under b) Supposing that Gigi is charged with unlawfully
Section 3 of the Anti-Money Laundering Act, it may not acquiring wealth under RA 1379 and that the fiscal issued a
invoke this law to refuse delivery of the titles to Rudy. subpoena duces tecum for the records of the bank account of
Gigi. May Gigi validly oppose the said issuance on the
Banks; Secrecy of Bank Deposit; Exceptions (2006) ground that the same violates the law on secrecy of bank
Under Republic Act No.1405 (The Bank Secrecy Law), deposits? Explain your answer.
bank deposits are considered absolutely confidential and SUGGESTED ANSWER:
may not be examined, inquired or looked into by any a) The Secrecy of Bank Deposits Act prohibits, subject to
person, government official, bureau or office. its exclusionary clauses, any person from examining,
What are the exceptions? (5%) inquiring or looking into all deposits of whatever nature
SUGGESTED ANSWER: with banks or banking institutions in the Philippines
The exceptions to the Bank Secrecy Law are which by law are declared “absolutely confidential” in
the following: nature. Manosa who merely overheard what appeared to be
1. Special or general examination of a a vague remark of a Bank employee to a co-employee and
bank, authorized by the Bangko Sentral ng writing the same in his newspaper column is neither the
Pilipinas' Monetary Board, in connection with a inquiry nor disclosure contemplated by law.
bank fraud or serious irregularity. ALTERNATIVE ANSWER:
2. Examination by an independent Auditor, hired by a) The complaint against Manosa will not prosper
the Bank and for the Bank's exclusive use. because merely writing a vague remark of a Bank
3. Disclosure with the Depositor's employee to a co-employee is not the disclosure
written permission. contemplated by law. If anyone should be liable, it will be
a. In case of Impeachment. the bank employee who disclosed the information.
b. In cases of Bribery or dereliction of duty SUGGESTED ANSWER:
by a Public Officer, upon order b) Among the instances excepted from the coverage of
of a competent court. the Secrecy of Bank Deposits Act are Anti-graft cases.
c. In cases of money deposited/invested Hence Gigi may not validly oppose the issuance of a
which, in turn, is the subject of Litigation, subpoena duces tecum for the bank records on her.
upon order of a competent Court.
4. DOSRI Loans: Loans with their Banks of Banks; Secrecy of Bank Deposits (1991)
Bank Directors, Officers, Stockholders and The law (RA 6832) creating a Commission to conduct a
related interests. Thorough Fact-Finding Investigation of the Failed Coup
a. Loans in excess of 5% of the d’etat of Dec 1989, Recommend Measures to Prevent the
Bank's Capital & Surplus Occurrence of Similar Attempts At a Violent Seizure of
b. The Borrower waived his right as Power and for Other Purposes, provides that the
regards the Secrecy of Bank Deposits Commission may ask the Monetary Board to disclose
5. Violation of the Anti-Graft and Corrupt Practices information on and/or to grant authority to examine any
Act. bank deposits, trust or investment funds, or banking
6. Coup d' etat Law (RA 6968, Oct 24,1990). transactions in the name of and/or utilized by a person,
7. BIR Commissioner's authority to verify a natural or juridical, under investigation by the
decedent's Gross Estate and a taxpayer's Commission, in any bank or banking institution in the
request for a compromise agreement due to Philippines, when the Commission has reasonable
incapacity to pay his tax liability. ground to believe that said deposits, trust or investment
8. Foreign Currency Deposits by foreign lenders funds, or banking transactions have been used in support
& investors under PDs 1034. or in furtherance of the objectives of the said coup d’etat.
9. Violations of the Anti-Money Laundering Law. Does the above provision not violate the Law on Secrecy
10. When the State exercises/invokes its Police Power. of Bank Deposits (RA 1405)?
(NOTA BENE: It is suggested that any 6 of the above be SUGGESTED ANSWER:
given full credit) The Law on Secrecy of Bank Deposits is itself merely a
statutory enactment, and it may, therefore, be modified, or
Banks; Secrecy of Bank Deposits (1990) amended (such as by providing further exceptions
Manosa, a newspaper columnist, while making a deposit in therefrom), or even repealed, expressly or impliedly, by a
a bank, overheard a pretty bank teller informing a co- subsequent law. The Secrecy of Bank Deposits Act did
employee that Gigi, a well known public official, has just a not amount to a contract between the depositors and
few hundred pesos in her bank account and that her depository banks within the meaning of the non-
next check will in all probability bounce. Manosa wrote this impairment clause of the Constitution. Even if it did, the
information in his newspaper column. Thus, Gigi police power of the State is superior to the non-
Mercantile Law Bar Examination Q & A (1990-2006) Page 17 of 103 name of
impairment clause. RA 6832, creating a commission to other persons. To sustain Miguel’s theory and
conduct an investigation of the failed 1989 coup d’etat restrict the inquiry only to property held by or in
and to recommend measures to prevent similar attempts to the name of the government official would make
seize power is a valid exercise of police power. available to persons in government who illegally acquire
property an easy means of evading prosecution. All they
Banks; Secrecy of Bank Deposits (1992) have to do would be to simply place the property in
Socorro received $10,000 from a foreign bank although the name of persons other than their spouses and
she was entitled only to $1,000.00. In an apparent plan to children (Banco Filipino Savings vs. Purisima 161 scra 576; Sec 8
conceal the erroneously sent amount, she opened a dollar Anti-Graft Law as amended by BP 195)
account with her local bank, deposited the $10,000
and issued 4 checks in the amount of $2,000 and 1 check Banks; Secrecy of Bank Deposits (1995)
for $1,000 each payable to different individuals Michael withdrew without authority funds of the
who deposited the same in their respective dollar partnership in the amounts of P500th and US$50th
accounts with different local banks. for services he claims he rendered for the benefit
of the partnership. He deposited the P500th in his
The sender bank then brought a civil suit before the RTC personal peso current account with Prosperity
for the recovery of the erroneously sent amount. In the Bank and the US$50th in his personal foreign
course of the trial, the sender presented testimonies currency savings account with Eastern Bank.
of bank officials to show that the funds were, in
fact, deposited in a bank by Socorro and paid out to The partnership instituted an action in court against
several persons, who participated in the Michael, Prosperity, and Eastern to compel Michael
concealment and dissipation of the amount that to return the subject funds to the partnership and
Socorro had erroneously received. pending litigation to order both banks to disallow any
withdrawal from his accounts.
Socorro moved to strike out said testimonies from
the record invoking the law on secrecy of bank deposits. At the initial hearing of the case the court ordered
If you were the Judge, would you issue an order to Prosperity to produce the records of Michael’s peso
strike them out? Why? current account, and Eastern to produce the records of
SUGGESTED ANSWER: his foreign currency savings account.
I will not strike out the testimonies from the record. The
testimonies of bank officials indicating where the Can the court compel Prosperity and Eastern to disclose
questioned dollar accounts were opened in depositing the bank deposits of Michael? Discuss fully.
misappropriated sums must be considered as likewise SUGGESTED ANSWER:
involved in litigation – one which is among the excepted Yes, as far as the peso account is concerned. Sec 2 of RA
cases under the Secrecy of Bank Deposits Act (Melon 1405 allows the disclosure of bank deposits in case where
Bank v Magsino 190 SCRA 633) the money deposited is the subject matter of
litigation. Since the case filed against Michael is aimed at
Banks; Secrecy of Bank Deposits (1994) recovering the amount he withdrew from the
Miguel, a special customs agent is charged before the funds of the partnership, which amount he allegedly
Ombudsman with having acquired property out of deposited in his account, a disclosure of his bank
proportion to his salary, in violation of the Anti-Graft deposits would be proper.
and Corrupt Practices Act. The Ombudsman issued a
subpoena duces tecum to the Banco de Cinco commanding No, with respect to the foreign currency account. Under
its representative to furnish the Ombudsman records of the Foreign Currency Law, the exemption to the
transactions by or in the name of Miguel, his wife and prohibition against disclosure of information concerning
children. A second subpoena was issued expanding the bank deposits is the written consent of the depositor.
first by including the production of records of friends of
Miguel in said bank and in all its branches and extension Banks; Secrecy of Bank Deposits (1998)
offices, specifically naming them. 1998 (20) An insurance company is deluded into
releasing a check to A for P35th to pay for Treasury Bills
Miguel moved to quash the subpoenas arguing that they (T-bills) which A claims to be en route on board an
violate the Secrecy of Bank Deposits Law. In addition, he armored truck from a government bank. The check is
contends that the subpoenas are in the nature of “fishing delivered to A who deposits it to his account with XYZ
expedition” or “general warrants” and Bank before the insurance company realizes it is a scam.
are constitutionally impermissible with respect to Upon such realization, the insurance company files an
private individuals who are not under investigation. action against A for recovery of the amount defrauded
Is Miguel’s contention tenable? and obtains a writ of preliminary attachment. In addition to
SUGGESTED ANSWER: the writ, the Bank is also served a subpoena to
No. Miguel’s contention is not tenable. The inquiry into examine the account records of A. The Bank declines to
illegally acquired property extends to cases where such provide any information in response to the writ and
property is concealed by being held by or recorded in the moves to quash the subpoena invoking secrecy of bank
deposits under RA 1405, as amended. Can the Bank Under Section 6(F) of the National Internal Revenue
justifiably invoke RA 1405 and a) not respond to the writ Code, the Commissioner of Internal Revenue can inquire
and b) quash the subpoena for examination? (5%) into the deposits of a decedent for the purpose of
SUGGESTED ANSWER: determining the gross estate of such decedent. Apart
Yes. Whether the transaction is considered a sale or from this case, a BIR inquiry into bank deposits cannot be
money placement does not make the money “subject made. Thus, exception 3 may not always be applicable.
matter of litigation” within the meaning of Sec 2 of RA
1405 which prohibits the disclosure or inquiry into bank Turning to exception 4, an inquiry into bank deposits is
deposit except “in cases where the money deposited possible only in prosecutions for unexplained wealth
or invested is the subject matter of litigation” nor under the Anti-Graft and Corrupt Practices Act,
will it matter whether the money was “swindled.” according to the Supreme Court in the cases of Philippine
National Bank v. Gancayco, 15 SCRA 91 (1965) and Banco Filipino
Banks; Secrecy of Bank Deposits (2000) Savings and Mortgage Bank v. Purisima, 161 SCRA 576 (1988).
GP is a suspected jueteng lord who is rumored to be However, all other cases of anti-graft and corrupt
enjoying police and military protection. The envy of practices will not warrant an inquiry into bank deposits.
many drug lords who had not escaped the dragnet of the Thus, exception 4 may not always be applicable. Like any
law, GP was summoned to a hearing of the Committee on other exception, it must be interpreted strictly.
Racketeering and Other Syndicated Crimes of the
House of Representatives, which was conducting a Exceptions 1, 2 and 5, on the other hand, are provided
congressional investigation “in aid of legislation” on the expressly in the Law on Secrecy of Bank
involvement of police and military personnel, and Depositors. They are available to depositors at all times.
possibly even of local government officials, in the illegal
activities of suspected gambling and drug lords. Banks; Secrecy of Bank Deposits; Garnishment (2001)
Subpoenaed to attend the investigation were officers of The Law on Secrecy of Bank Deposits, otherwise known
certain identified banks with a directive to them to bring as RA 1405, is intended to encourage people to deposit
the records and documents of bank deposits of their money in banking institutions and also to
individuals mentioned in the subpoenas, among them discourage private hoarding so that the same may
GP. GP and the banks opposed the production of the be properly utilized by banks to assist in the
banks’ records of deposits on the ground that no such economic development of the country. Is a notice of
inquiry is allowed under the Law on Secrecy of Bank garnishment served on a bank at the instance of a
Deposits (RA 1405 as amended). Is the opposition of GP creditor of a depositor covered by the said law? State
and the banks valid? Explain. the reason(s) for your answer. (5%)
Yes. The opposition is valid. GP is not a public official. No. The notice of garnishment served on a bank at the
The investigation does not involve one of the exceptions to instance of a creditor is not covered by the Law on
the prohibition against disclosure of any information Secrecy of Bank Deposits. Garnishment is just a part of
concerning bank deposits under the Law on Secrecy of the process of execution. The moment a notice
Bank Deposits. The Committee conducting the of garnishment is served on a bank and there exists
investigation is not a competent court or the a deposit by the judgment debtor, the bank is
Ombudsman authorized under the law to issue a directly accountable to the sheriff, for the benefit
subpoena for the production of the bank record of the judgment creditor, for the whole amount of the
involving such disclosure. deposit. In such event, the amount of the deposit
becomes, in effect, a subject of the litigation.
Banks; Secrecy of Bank Deposits; Exceptions (2004)
The Law on Secrecy of Bank Deposits provides that all BSP; Receivership; Jurisdiction (1992)
deposits of whatever nature with banks or banking Family Bank was placed under statutory receivership and
institutions are absolutely confidential in nature and may subsequently ordered liquidated by the Central Bank
not be examined, inquired or looked into by any person, (CB) due to fraud and irregularities in its
government official, bureau or office. However, the law lending operations which rendered it insolvent.
provides exceptions in certain instances. Judicial proceedings for liquidation were thereafter
Which of the following may not be among the commenced by the CB before the RTC. Family
exceptions: Bank opposed the petition.
1. In cases of impeachment. Shortly thereafter, Family Bank filed in the same court a
2. In cases involving bribery special civil action against the CB seeking to enjoin and
3. In cases involving BIR inquiry. dismiss the liquidation proceeding on the ground of
4. In cases of anti-graft and corrupt practices. grave abuse of discretion by the CB. The court poised to:
5. In cases where the money involved is the subject of 1) restrain the CB from closing Family Bank; and 2)
litigation. authorize Family Bank to withdraw money from its
Explain your answer or choice briefly. (5%) deposits during the pendency of the case. If you were the
SUGGESTED ANSWER: Judge, would you issue such orders? Why?
SUGGESTED ANSWER:
No. The RTC has no authority to restrain the monetary of the economy. It shall promote and maintain monetary
board of the BSP from statutory authority to undertake stability and convertibility of the Peso.
receivership and ultimate liquidation of a bank. Any
opposition to such an action could be made to the court Truth in Lending Act (1991)
itself where assistance is sought. The action of the RTC Dana Gianina purchased on a 36 month installment basis
where the proceeding is pending appeal have to be made the latest model of the Nissan Sentra Sedan car from the
in the Court of Appeals. Jobel Cars Inc. In addition to the advertised selling price,
the latter imposed finance charges consisting of interests,
Legal Tender (2000) fees and service charges. It did not, however, submit to
After many years of shopping in the Metro Manila area, Dana a written statement setting forth therein the
housewife HW has developed the sound habit of making information required by the Truth in Lending Act (RA
cash purchases only, none on credit. In one shopping 3765). Nevertheless, the conditional deed of sale which
trip to Mega Mall, she got the shock of her shopping life the parties executed mentioned that the total amount
for the first time, a store’s smart salesgirl refused to indicated therein included such finance charges.
accept her coins in payment for a purchase worth not a. Has there been substantial compliance of the
more than one hundred pesos. HW was paying seventy aforesaid Act?
pesos in 25- centavo coins and twenty five pesos in 10 b. If your answer to the foregoing question is in
centavo coins. Strange as it may seem, the salesgirl the negative, what is the effect of the violation
told HW that her coins were not “legal tender.” Do on the contract?
you agree with the salesgirl in respect of her c. In the event of a violation of the Act, what remedies
understanding of “legal tender?” Explain (2%) may be availed of by Dana?
No. The salesgirl’s understanding that coins are not legal a) There was no substantial compliance with the Truth in
tender is not correct. Coins are legal tender in amounts Lending Act. The law provides that the creditor
not exceeding fifty pesos for denominations from twenty must make a full disclosure of the credit lost. The
five centavos and above, and in amounts not exceeding statement that the total amount due includes the
twenty pesos for denominations ten centavos and less. principal and the financial charges, without
specifying the amounts due on each portion thereof
PDIC Law vs. Secrecy of Bank Deposits Act (1997) would be insufficient and unacceptable.
An employee of a large manufacturing firm earns a salary
which is just a bit more than what he needs for a b) A violation of the Truth in Lending Act will not
comfortable living. He is thus able to still maintain adversely affect the validity of the contract itself.
a P10,000 savings account, a P20,000 checking account,
a P30,000 money market placement and a P40,000 c) It would allow Dana to refuse payment of financial
trust fund in a medium-size commercial bank. charges or, if already paid, to recover the same.
a) State which of the four accounts are deemed insured Dana may also initiate criminal charges
by the PDIC. against the creditor.
b) State which of the above accounts are covered by
the Law on Secrecy of Bank Deposits. ALTERNATIVE ANSWER:
SUGGESTED ANSWER: c) (Per Atty Jomby Paras if u read the provisions closely)
a) The P10th savings account and the P20th checking Under the Truth in Lending Act, said financial
account are deemed insured by the PDIC. charges are valid, and Dana may not refuse payment
b) The P10th savings account and the P20th checking thereof. Only criminal charges may be initiated
account are covered by the Law on Secrecy of Bank against the creditor.
Deposits.
Responsibilities & Objectives of BSP (1998) Embassy Appliances sells home theater components that
What are the responsibilities and primary objectives are designed and customized as entertainment centers for
of the BSP? (5%) consumers within the medium-to-high price bracket.
SUGGESTED ANSWER: Most, if not all, of these packages are sold on installment
The BSP shall provide policy directions in the areas basis, usually by means of credit cards allowing a
of money, banking and credit. It shall have supervision maximum of 36 equal monthly payments. Preferred
over the operations of banks and exercise such credit cards of this type are those issued by banks, which
regulatory powers as provided in the Central Bank regularly hold mall wide sales blitzes participated in by
Act and other pertinent laws over the operations of appliance retailers like Embassy Appliances. You are a
finance companies and non-bank financial institutions buyer of a home theater center at Embassy Appliances. The
performing quasi- banking functions, such as quasi- salesclerk who is attending to you simply swipes your
banks and institutions performing similar functions. credit card on the electronic approval machine (which
momentarily prints out your charge slip since you have
The primary objective of the BSP is to maintain price unlimited credit), tears the slip from the machine,
stability conducive to a balanced and sustainable growth hands the same over to you for your signature, and
Mercantile Law Bar Examination Q & A (1990-2006) Page 20 of 103 their loan
without more, proceeds to arrange the delivery and portfolios. Company X was faced with the dismal
installation of your new home theater system. You know choice of either suspending its operations or selling its
you will receive a statement on your credit card business. It chose the latter. Having struck a deal with
purchases from the bank containing an option to Company Z, a more viable entity engaged in the same
pay only a minimum amount, which is usually 1/36 business, Company X sold its entire business to the
of the total price you were charged for your purchase. former without much fanfare or any form of
Did Embassy Appliances comply with the provisions publicity. In fact, evidence exists that the transaction was
of the Truth in Lending Act (RA 3765)? furtively entered into to avoid the prying eyes of
SUGGESTED ANSWER: Company X’s creditors. The creditor banks and other
There is no need for Embassy Appliances to comply financial institutions sued Company X for violation of
with the Truth in Lending Act. The transaction is not a the Bulk Sales Law. Decide. (5%)
sale on installment basis. Embassy Appliances is a seller SUGGESTED ANSWER:
on cash basis. It is the credit card company which Company X violated the Bulk Sales Law when it sold its
allows the buyer to enjoy the privilege of paying the entire business to Company Z furtively to avoid the
price on installment basis. prying eyes of its creditors. Its manufactured goods
are sold wholesale to distributors and dealers. The sale
of all or substantially all of its stocks, not in the
Bulk Sales Law ordinary course of business, constitutes bulk sale. The
transaction being a bulk sale, entering into such
Bulk Sales Law; Covered Transactions (1994) transaction without complying with the requirements of
Stanrus Inc a department store with outlets in Makati, the Bulk Sales Law, Company X violated said law.
Mandaluyong, and Quezon City, is contemplating to
refurbish and renovate its Makati store in order to Bulk Sales Law; Covered Transactions (2006)
introduce the most modern and state of the art Pursuant to a writ of execution issued by the
equipment in merchandise display. To carry out its plan, it Regional Trial Court in "Express Bank v. Don Rubio,"
intends to sell ALL of the existing fixtures and the sheriff levied and sold at public auction 8
equipment (display cases, wall decorations, furniture, photocopying machines of Don Rubio. Is the sheriff's
counters, etc.) to Crossroads Department Store. sale covered by the Bulk Sales Law? (5%)
Thereafter, it will buy and install new fixtures and SUGGESTED ANSWER:
equipment and continue operations. Crossroads wants to No. The sale by sheriff at public sale is not a sale by
know from you as counsel: a merchant. Section 8 of the Bulk Sales Law itself
1) Whether the intended sale is “bulk sale.” provides that it has no application to executors,
2) How can it protect itself from future claims of administrators, receivers, assignees in insolvency, or
creditors of Stanrus. public officers, acting under process. The Bulk Sales
SUGGESTED ANSWER: Law only applies to the sale or encumbrance of a
1) Yes. The sale involves all fixtures and equipment, not merchant of goods, merchandise or commodity done
in the ordinary course of trade and the regular "in bulk" as defined by the Law itself.
prosecution of business of Stanrus, Inc. (Sec 2 Act 3952,
as amended) Bulk Sales Law; Exclusions (1993)
In the annual meeting of XYZ Corporation, the
2) Crossroads should require from Stanrus Inc.
stockholders unanimously adopted a resolution proposed
submission of a written waiver of the Bulk Sales Law by the
by the BOD to sell substantially all the fixtures and
creditors as shown by verified statements or to comply equipment used in and about its business. The President
with the requirements of the Bulk Sales Law, that is, the of the Corporation approached you and asked for
seller must notify his creditors of the terms and legal assistance to effect the sale.
conditions of the sale, and also, before receiving from the 1) What steps should you take so that the sale may be
vendee any part of the purchase price, deliver to such valid?
vendee a written sworn statement of the names and 2) What are the two instances when the sale, transfer,
addresses of all his creditors together with the amount of mortgage or assignment of stock of goods, wares,
indebtedness due to each (Sec 2 Act 3952, amended) merchandise, provision, or materials otherwise than in
the ordinary course of trade and the regular
Bulk Sales Law; Covered Transactions (2000) prosecution of the business of the vendor are not
Company X, engaged in the business of manufacturing deemed to be a sale or transfer in bulk?
car parts and accessories, operates a factory with SUGGESTED ANSWER:
equipment, machinery and tools for this purpose. The 1) The requirements of the Bulk Sales Law must be
manufactured goods are sold wholesale to distributors complied with. The seller delivers to the purchaser a list
and dealers throughout the Philippines. Company X was of his creditors and the purchaser in turn notifies
among the business entities adversely hit by the 1997 such creditors of the proposed sale at a stipulated
Asian business crisis. Its sales dropped with the decline in time in advance.
car sales and its operating costs escalated, while its
creditor banks and other financial institutions tightened
2) If the sale and transfer is made a) by the vendor, indebtedness due or owing, on account of the goods,
mortgagor, transferor or assignor who produces and fixtures or business subject matter of the bulk sale.
delivers a written waiver of the provisions of the Bulk
Sales Law from his creditors as shown by verified Bulk Sales Law; Obligation of the Vendor (2001)
statement; and b) by a vendor, mortgagor, transferor or A is a merchant engaged in the sale of a variety of goods
assignor who is an executor, administrator, receiver, and merchandise. Because of the economic crisis, he
assignee in insolvency, or public officer acting under incurred indebtedness to X, Y and Z. Thereafter, A sold
judicial process, the sale or transfer is not covered by the to B all the stock of goods and merchandise.
Bulk Sales Law. a) What steps should A undertake to effect a valid sale
in bulk of his goods to B. (2%).
Bulk Sales Law; Obligation of the Vendor (1995) SUGGESTED ANSWER:
House of Pizza (Pizza) is the owner and operator A must prepare an affidavit stating the names of all his
of a nationwide chain of pizza outlets. House of creditors, in this case, X, Y, and Z, their addresses,
Liquor (Liquor) is a retailer of all kinds of liquor. the amount of their credits and their maturity. A should
give the affidavit to B who, in turn, should furnish a
House of Foods (Foods) has offered to purchase all copy to each creditor and notify the creditors that
of the outlets, equipment, fixtures and furniture of there is a proposed bulk sale in order to enable the
Pizza. Foods also offered to purchase from Liquor latter to protect their interests.
all of its moderately priced stock constituting 50%
of its total inventory. b) Suppose A submitted a false statement on the
schedule of his creditors. What is the effect of such
Both Pizza and Liquor have creditors. What false statement as to Vendee B. (2%)
legal requirements must Pizza and Liquor comply SUGGESTED ANSWER:
with in order for Foods to consummate the If the vendee does not have knowledge of the falsity of
transactions? Discuss fully. the schedule, the sale is valid. However, if the vendee has
SUGGESTED ANSWER: knowledge of such falsity, the sale is void because he is in
Pizza and Liquor must prepare an affidavit stating the bad faith.
names of all their creditors, their addresses, the amounts of
their credits and their respective maturities. Pizza and c) What is the right of creditors X, Y, and Z if A failed
Liquor must submit said affidavit to Foods which, in to comply with the procedure/steps required by law
turn, should notify the creditors about the transaction under question letter (a) hereof? (1%)
which is about to be concluded with Pizza and Liquor. SUGGESTED ANSWER:
ALTERNATIVE ANSWER: The recourse of X, Y, and Z is to question the validity of
As far as Liquor is concerned, it must prepare an affidavit the sale from A to B so as to recover the goods
stating the names of all its creditors, their addresses, the and merchandise to satisfy their credits.
amounts of their credits and their respective maturities. It
must submit said affidavit to its buyer, who in turn,
should notify the creditors about the transaction which is Consumer Protection Law
about to be concluded with his seller.
But as far as Pizza is concerned, it is not covered by the Metric System Law (1994)
Bulk Sales Law. So Foods can consummate the Angelene is a customer of Meralco Electric
transaction without doing anything. Company (MECO). Because of the abrupt rise in
electricity rates, Angelene complained with MECO
Bulk Sales Law; Obligation of the Vendor (1997) insisting that she should be charged the former rates.
The sole proprietor of a medium-size grocery shop, However, Angelene did not tender any payment.
engaged in both wholesale and retail transactions,
When MECO’s employees served the first 48-
sells the entire business “lock, stock and barrel” because
hour notice of disconnection, Angelene protested.
of his plan to emigrate abroad with his family. Is he
MECO, however, did not implement the 48-hour
covered by the provisions of the Bulk Sales Law? In the
affirmative, what must be done by the parties so as to notice of disconnection. Instead, its employees
comply with the law? examined Angelene’s electric meter, changed the
SUGGESTED ANSWER: same, and installed another. Still, Angelene, made no
Yes. This is a sale of the stock of goods, fixtures and tender of payment.
entire business, not in the ordinary course of business or
trade of the vendor. Before receiving from the vendee MECO served a second 48-hour notice of disconnection
any part of the purchase price, the vendor must deliver to on June 22, 1984. It gave Angelene until 5 pm of June 25,
such vendee a written statement, duly sworn, of the 1984 within which to pay. As no payment had been
names and addresses of all creditors to whom said made, MECO cut Angelene’s electric service on June 28,
vendor may be indebted, together with the amount of 1984. Angelene contends that the 48-hour written notice
of disconnection rule cannot be invoked by MECO
when there is a bona fide and just dispute as to Gregorio of 500 bags, which Gregorio accepted, is
the amount due as her electric consumption rate. Is an entirely new transaction. (Yao Ka Sin Trading v CA GR
Angelene’s contention valid? 53820 June 15, 1992 209s763)
SUGGESTED ANSWER:
No. Angelene’s only legal recourse in this case was to pay BOD; Compensation (1991)
the electric bill under protest. Her failure to do so After many difficult years, which called for sacrifices on the
justified MECO to cut the electric service (Ceniza v CA 218 part of the company’s directors, ABC Manufacturing Inc
S 290) was finally earning substantial profits. Thus, the
President proposed to the BOD that the directors be
paid a bonus equivalent to 15% of the company’s net
Corporation Law income before tax during the preceding year. The
President’s proposal was unanimously approved by the
BOD. A stockholder of ABC questioned the bonus.
BOD: Election of Aliens as members (2005)
Does he have grounds to object?
A Korean national joined a corporation which is engaged SUGGESTED ANSWER:
in the furniture manufacturing business. He was elected Yes, the stockholder as a valid and legal ground to object
to the Board of Directors. To complement its furniture to the payment to the directors of a bonus equivalent to
manufacturing business, the corporation also engaged in 15% of the company’s net income. The law provides that
the logging business. With the additional logging activity, the total annual compensation of the directors, in
can the Korean national still be a member of the Board the preceding year, cannot exceed 10% of the company’s
of Directors? Explain. (3%) net income before income tax (Sec 30 Corp Code).
SUGGESTED ANSWER:
Yes, just as long as sixty percent (60%) of the Board of
BOD; Conflict of Interest (1994)
Directors are Filipinos. Corporations that are sixty
ABC Pigger Inc is engaged in raising and selling hogs in
percent (60%) owned by Filipinos can engage in the
the local market. Mr. De Dios, one of its directors while
business of exploration, development and utilization of
traveling abroad, met a leather goods manufacturer who
natural resources. (Art. XII, Sec. 2, 1987 Constitution)
was interested in buying pig skins from the Philippines.
The election of aliens as members of the Board Of
Mr De Dios set up a separate company and started
Directors engaging in partially-nationalized activities is
exporting pig skins to his foreign contact but the
allowed in proportion to their allowable participation or
pig skins exported were not sourced from ABC. His
share in the capital of such entities. (Sec. 2-A, Anti-
fellow directors in ABC complained that he should have
Dummy Law) Nothing in the facts shows that more than
given this business to ABC. How would you decide
forty percent (40%) of the Board of Directors are
on this matter?
foreigners. SUGGESTED ANSWER:
I would decide in favor of Mr De Dios. ABC is engaged
BOD; Capacity of Directors (1996) in raising and selling hogs in the local market. The
Rodman, the President of TF Co, wrote a letter to company that Mr De Dios had set up was to engage, as it
Gregorio, offering to sell to the latter 5,000 bags of did, in the export of pigs skins. There is thus no conflict
fertilizer at P100 per bag. Gregorio signed his conformity of interest between Mr. De Dios and ABC Pigger Inc so
to the letter-offer, and paid a down-payment of P50th. A as to make the case fall within the conflict of
few days later, the Corporate Secretary of TF interest situation under the law (Sec 34 Corp Code)
informed Gregorio of the decision of their BOD not to Observation: The term “conflict of interest” is susceptible
ratify the letter offer. However, since Gregorio had to varied views and interpretations.
already paid the down-payment, TF delivered 500
bags of fertilizer which Gregorio accepted. TF made BOD; Interlocking Directors (1995)
it clear that the delivery should be considered Chito Santos is a director of both Platinum Corporation
an entirely new transaction. Thereafter, Gregorio and Kwik Silver Corporation. He owns 1% of
sought enforcement of the letter-offer. the outstanding capital stock of Platinum and 40T of
Is there a binding contract for the 5,000 bags Kwik. Platinum plans to enter into a contract with
of fertilizer? Explain. Kwik that will make both companies earn very
SUGGESTED ANSWER: substantial profits. The contract is presented at
No, there is no binding contract for the 5,000 bags of the respective board meetings of Platinum and Kwik.
fertilizer. First, the facts do not indicate that Rodman, the 1. In order that the contract will not be voidable,
President of TF Co, was authorized by the BOD to enter
what conditions will have to be complied with? Explain.
into the said contract or that he was empowered to do so
under some provision of the by-laws of TF Co. The facts 2. If these conditions are not met, how may this contract
do not also indicate that Rodman has been clothed with the be ratified? Explain.
apparent power to execute the contract or SUGGESTED ANSWER:
agreements similar to it. Second, TF Co has specifically 1. At the meeting of the BOD of Platinum to
informed Gregorio that it has not ratified the contract for approve the contract, Chito would have to make sure that
the sale of 5,000 bags of fertilizer and that the delivery to
a) his presence as director at the meeting is The BOD of X Co, acting on a standing authority of the
not necessary to constitute a quorum for stockholders to amend the by-laws, amended its by-laws
such meeting; so as to disqualify any of its stockholders who is also a
b) his vote is not necessary for the approval of the stockholder and director of a competitor from being
contract; and elected to its BOD.
c) the contract is fair and reasonable under
the circumstances. Y, a stockholder holding sufficient assets to assure him
of a seat in the BOD, filed a petition with the SEC for a
At the meeting of the BOD of Kwik to approve declaration of nullity of the amended by-laws. He alleged
the contract, Chito would have to make sure that - among other things that as a stockholder, he had
a) there is no fraud involved; and acquired rights inherent in stock ownership such as the
b) the contract is fair and reasonable under right to vote and be voted upon in the election of
the circumstances. directors. Is the stockholder’s petition tenable? (5%)
SUGGESTED ANSWER:
SUGGESTED ANSWER: No. There is no vested right of a stockholder to be
2. If the conditions relating to the quorum and required elected as director. When a person buys stock in a
number of votes are not met, the contract must be corporation he does so with the knowledge that its affairs
ratified by the vote of stockholders representing at least are dominated by a majority of the stockholders. To this
2/3 of the outstanding capital stock in a meeting called extent, the stockholder parted with his personal right to
for the purpose. Furthermore, the adverse interest of regulate the disposition of his property which he invested
Chito in the contract must be disclosed and the contract in the capital stock of the corporation and surrendered it
is fair and reasonable. (Secs. 32 and 33, BP 68) to the will of the majority of his fellow incorporators or
stockholders.
Leonardo is the Chairman and President, while Raphael is a Corporations have the power to make by-laws declaring a
Director of NT Corporation. On one occasion, NT Co, person employed in the service of a rival company to be
represented by Leonardo and A Ent, a single ineligible for the Corporation’s BOD. An
proprietorship owned by Raphael, entered into a amendment which renders a director ineligible, or if
dealership agreement whereby NT Co appointed A Ent as elected, subjects him to removal, if he is also a director
exclusive distributor of its products in Northern in a corporation whose business is in competition with
Luzon. Is the dealership agreement valid? Explain. or is antagonistic to the other corporation is valid.
SUGGESTED ANSWER:
The dealership agreement is voidable at the option of By-Laws; Validity; limiting qualifications of BOD
NT Co inasmuch as the facts do not indicate that the
members (2000)
same was approved by the BOD of NT Co before At the annual stockholders’ meeting of MS Corporation,
it was signed or, assuming such approval, that it was the stockholders unanimously passed a resolution
approved under the following conditions: authorizing the Board of Directors to amend the
1) That the presence of Raphael, the owner of A Ent, corporate by-laws so as to disqualify any stockholder
in the meeting of the BOD at which the agreement who is also a director or stockholder of a competing
was approved was not necessary to constitute a business from being elected to the Board of Directors of
quorum for such meeting; MS Corporation. The by-laws were accordingly amended.
2) That the vote of Raphael was not necessary for the GK, a stockholder of MS Corporation and a majority
approval of the agreement; stockholder of a competitor, sought election to the Board
3) That the agreement is fair and reasonable under the of Directors of MS Corporation. His nomination was
circumstances (Sec 32 Corp Code) denied on the ground that he was ineligible to run for the
ALTERNATIVE ANSWER:
The dealership agreement is valid upon the position. Seeking a nullification of the offending
assumption that the same was approved by the disqualification provision, GK consults you about its
BOD of NT Co before it was signed and that such validity under the Corporation Code of the Phils. What
approval was made under the following conditions: would your legal advice be? (3%)
SUGGESTED ANSWER:
1) That the presence of Raphael, the owner of A Ent,
The provision in the amended by-laws disqualifying any
in the meeting of the BOD at which the agreement
stockholder who is also a director or stockholder of
was approved was not necessary to constitute a
a competing business from being elected to the
quorum for such meeting;
Board of Directors of MS Corp is valid. The
2) That the vote of Raphael was not necessary for the
corporation is empowered to adopt a code of
approval of the agreement;
by-laws for its government not inconsistent with the
3) That the agreement is fair and reasonable under the
Corp Code. Such disqualifying provision is not
circumstances (Sec 32 Corp Code) inconsistent with the Corp Code.
By-Laws; Validity; limiting qualifications of BOD
By-Laws; Validity; limiting qualifications of BOD
members (1998)
members (2001)
Mercantile Law Bar Examination Q & A (1990-2006) Page 24 of 103 which to
Is a by-law provision of X Corporation “rendering invest the funds of the corporation. Robert wants
ineligible or if elected, subject to removal, a director if he is the deadlock broken.
also a director in a corporation whose business is in 1. What are the remedies available to Robert under
competition with or is antagonistic to said corporation” the Corp code to break the deadlock? Explain.
valid and legal? State your reasons. (5%). 2. Are there any remedies to prevent the paralyzation of
SUGGESTED ANSWER: the business available to Robert under PD 902-A
Yes, the by-law provision is valid. It is the right of while the petition to break the deadlock is pending
a corporation to protect itself against possible harm litigation? Explain.
and prejudice that may be caused by its competitors. SUGGESTED ANSWER:
The position of director is highly sensitive and 1. Robert can petition the SEC to arbitrate the
confidential. To say the least, to allow a person, who is a dispute, with such powers as provided in Sec 104
director in a corporation whose business is in of the Corp Code.
competition with or is antagonistic to X Corporation, to 2. The SEC can appoint a rehabilitation receiver or
become also a director in X Corporation would be a management committee.
harboring a conflict of interest which is harmful to the
latter (Gokongwei Jr v SEC 89 S 336 (1979); 97 S 78 (1980)). Closed Corporation; Restriction; Transfer of
shares (1994)
By-Laws; Validity; limiting qualifications of Rafael inherited from his uncle 10,000 shares of Sta. Ana
BOD members (2003) Corporation, a close corporation. The shares have a par
To prevent the entry of Marlo Enriquez, whom value of P10.00 per share. Rafael notified Sta. Ana
it considered as one antagonistic to its interests, into that he was selling his shares at P70.00 per share. There
its Board of Directors, Bayan Corporation amended being no takers among the stockholders, Rafael sold the
its articles of incorporation and by-laws to add same to his cousin Vicente (who is not a
certain qualifications of stockholders to be elected as stockholder) for P700,000.
members of its Board of Directors. When presented for
approval at a meeting of its stockholders duly called The Corporate Secretary refused to transfer the shares in
for the purpose, the amendments were overwhelmingly Vicente’s name in the corporate books because Alberto,
ratified. Marlo Enriquez brought suits against Bayan one of the stockholders, opposed the transfer on
Corporation to question the amendments. Would the the ground that the same violated the by-laws.
action prosper? Why? (4%) Alberto offered to buy the shares at P12.50 per share, as
SUGGESTED ANSWER: fixed by the by-laws or a total price of P125,000 only.
(per Dondee) The SC reiterated in the case of SMC vs. SEC
decided in April 11, 1979, that it is recognized by all While the by-laws of Sta. Ana provides that the right of
authorities that 'every corporation has the inherent power first refusal can be exercised “at a price not
to adopt by-laws 'for its internal government, and to exceeding 25% more than the par value of such shares,
regulate the conduct and prescribe the rights and duties the Articles of Incorporation simply provides that the
of its members towards itself and among themselves stockholders of record “shall have preferential right
in reference to the management of its affairs.'" At to purchase said shares.” It is silent as to pricing.
common law, the rule was "that the power to make and
adopt by- laws was inherent in every corporation as Is Rafael bound by the pricing proviso under the by-laws
one of its necessary and inseparable legal incidents. of Sta. Ana Corporation?
And it is settled throughout the United States that in SUGGESTED ANSWER:
the absence of positive legislative provisions limiting Yes. In a close corporation, the restriction as to the
it, every private corporation has this inherent transfer of shares has to be stated/ annotated in the
power as one of its necessary and inseparable legal Articles of Incorporation, the By-Laws and the certificate
incidents, independent of any specific enabling provision of stock. This serves as notice to the person dealing with
in its charter or in general law, such power of self- such shares like Rafael in this case. With such notice, he is
government being essential to enable the corporation bound by the pricing stated in the By-laws.
to accomplish the purposes of its creation." ALTERNATIVE ANSWER:
No, Rafael is not bound by the pricing proviso under the
Close Corporations; Deadlocks (1995) By-laws of Sta Ana Corporation. Under the corporation
Robert, Rey and Ben executed a joint venture agreement to law, the restrictions on the right to transfer shares must
form a close corporation under the Corp Code the appear in the articles of incorporation and in the by-laws
outstanding capital stock of which the three of them as well as in the certificate of stock, otherwise, the same
would equally own. They also provided therein that any shall not be binding on any purchaser thereof in
corporate act would need the vote of 70% of the good faith. Moreover the restriction shall not be more
outstanding capital stock. The terms of the agreement onerous than granting the existing stockholders
were accordingly implemented and the corresponding or the corporation the option to purchase the
close corporation was incorporated. After 3 years, shares of the transferring stockholder with such
Robert, Rey and Ben could not agree on the business in reasonable term or period stated therein.
Here, limiting the price to be paid, when the right of first Jennifer and Gabriel owned the controlling stocks in
refusal is exercised, to not more than 25% par value, MFF Co and CLO Inc, both family corporations. Due to
without any qualification whatsoever, is not in the serious disagreements, Jennifer assigned all her shares in
articles. It is merely stated in the By-laws. Therefore such MFF to Gabriel, while Gabriel assigned all his shares in
limitation shall not be binding on the purchaser. (GoSock & CLO to Jennifer. Subsequently, Jennifer and CLO filed a
Sons & Sy Gui Huat Inc v IAC 19 Feb 87 Min Res) complaint against Gabriel and MFF in the SEC seeking
to recover the corporate records and funds of CLO
Controversy; Intra-Corporate (1994) which Gabriel allegedly refused to turn over, and which
Because of disagreement with the BOD and a threat by the remained in the offices of MFF.
BOD to expel her for misconduct and inefficiency, Is there an intra-corporate controversy in this case?
Carissa offered in writing to resign as President and SUGGESTED ANSWER:
member of the BOD, and to sell to the company all her Yes, there is an intra-corporate controversy in this case.
shares therein for P300,000.00 Her offer to resign was The fact that, when the complaint against Gabriel
“effective as soon as my shares are fully paid.” At its and MFF was filed with the SEC (per 2006,
meeting, the BOD accepted Carissa’s resignation, RTC’s Jurisdiction), Jennifer and CLO were no
approved her offer to sell back her shares of stock to the longer stockholders of MFF did not divest the SEC (per
company, and promised to buy the stocks on a staggered 2006, RTC’s Jurisdiction) of its jurisdiction over
basis. Carissa was informed of the BOD Resolution in a the case inasmuch as Jennifer was a former stockholder
letter-agreement to which she affixed her consent. The of MFF and the controversy arose out of this relation.
Company’s new President singed the promissory note. (SEC v CA GR 93832 Aug 23 91; 201s124)
After payment P100,000 the company defaulted in paying
the balance of P200,000. Controversy; Intra-Corporate (2006)
What is an intra-corporate controversy? (8%)
Carissa wants to sue the Company to collect the balance. SUGGESTED ANSWER:
If you were retained by Carissa as her lawyer, where will An intra-corporate controversy is a conflict between
you file the suit? A) Labor Arbiter; b) RTC; or c) SEC? stockholders, members or partners and the corporation,
SUGGESTED ANSWER: association or partnership regarding the regulation of the
The RTC has jurisdiction over this case which involves corporation. The controversy must arise out of intra-
intra-corporate controversy. As of 2006, the applicable corporate or partnership relations of the parties; or
rule is that there is a TRANSFERRED JURISDICTION between such corporation, partnership or association and
under Sec. 5.2 of the SRC, the Commission’s jurisdiction the State insofar as it concerns their individual franchises. It
over all cases enumerated under PD 902-A sec. 5 has is further required that the dispute be intrinsically
been transferred to the Courts of general jurisdiction or the connected with the regulation of the corporation (Speed
appropriate Regional Trial Court. Distributing Corp., et al. v. Court of Appeals, et al, G.R. No. 149351,
March 17, 2004; Intestate Estate of Alexander T.Tyv. Court of
Controversy; Intra-Corporate (1996) Appeals, G.R. No. 112872, April 19, 2001).
In 1970, Magno joined AMD Co as a Junior Accountant. Is the Securities and Exchange Commission the
He steadily rose from the ranks until he became AMD’s venue for actions involving intra-corporate
Executive VP. Subsequently, however because of his controversies? (2%)
involvement in certain anomalies, the AMD SUGGESTED ANSWER:
BOD considered him resigned from the company due No, pursuant to Subsection 5.2 of the Securities Regu-
to loss of confidence. lation Code, the quasi-judicial jurisdiction of the
Securities and Exchange Commission to hear corporate
Aggrieved, Magno filed a complaint in the SEC cases, including intra-corporate controversies, under
questioning the validity of his termination, and seeking Section 5 of Pres. Decree No. 902-A, has been expressly
reinstatement to his former position, with backwages, transferred to the designated Regional Trial Court.
vacation and sick leave benefits, 13th month pay and Pursuant to a memorandum circular issued by the
Christmas bonus, plus moral and exemplary damages, Supreme Court, only particularly designated RTC special
attorney’s fees and costs. AMD filed a motion to dismiss, commercial courts in each judicial region have original
arguing that the SEC has no jurisdiction over cases of and exclusive jurisdiction over such cases (See Intestate
illegal dismissal, and has no power to award damages. Estate of Alexander T. Ty v. Court of Appeals, G.R. No. 112872,
Should the motion to dismiss be granted? Explain. April 19, 2001).
SUGGESTED ANSWER:
As of 2006, the applicable rule is that there is Controversy; Intra-corporate; Jurisdiction (1997)
a TRANSFERRED JURISDICTION under Sec. 5.2 Juan was a stockholder of X Co. He owned a total of 500
of the SRC, the Commission’s jurisdiction over all shares evidenced by Cert of Stock No 1001. He sold the
cases enumerated under PD 902-A sec. 5 has been shares to Pedro. After getting paid, Juan indorsed and
transferred to the Courts of general jurisdiction or delivered said Certificate of Stock No 1001 to Pedro. The
the appropriate REGIONAL TRIAL COURT. following day, Juan went to the offices of the corporation
and claimed that his Certificate of Stock No 1001 was
Controversy; Intra-Corporate (1996) lost and that, despite diligent efforts, the certificate could
Mercantile Law Bar Examination Q & A (1990-2006) Page 26 of 103 stock
not be located. The formalities prescribed by law for the may include labor performed for or services
replacement of the “lost” certificate were complied with. actually rendered to the corporation.
Eventually X Co issued in substitution of the “lost”
certificate, Cert of Stock No 2002. Juan forthwith Corporation: Right of Repurchase of Shares; Trust Fund
transferred for valuable consideration the new certificate to Doctrine (2005)
Jose who knew nothing of the previous sale to Pedro. In Under what conditions may a stock corporation acquire
time, the corporation was confronted with the its own shares? (2%)
conflicting claims of Jose and Pedro. The BOD of X Co SUGGESTED ANSWER:
invited you to enlighten them on these questions; viz: In line with the trust fund doctrine that generally renders it
a) If a suit were to be initiated in order to resolve the unlawful for the corporation to return assets to the
controversy between Pedro and Jose, should the stockholders representing capital, a corporation may
matter be submitted to the SEC or to the acquire its own shares only when there exists in the books
regular courts? unrestricted retained earnings to cover the repurchase of shares. The
b) Between Jose and Pedro, whom should the purpose of the repurchase of shares must be a legitimate
corporation so recognize as the rightful stockholder? business purpose of the corporation, such as to:
1. ELIMINATE fractional shares arising out of
How would you respond to the above queries? stock dividends;
SUGGESTED ANSWER: 2. COLLECT or COMPROMISE an indebtedness
a) The matter should be submitted to the regular courts – to the corporation arising out of unpaid
specifically in the Regional Trial Court where subscription in a delinquency sale;
the principal office of the corporation is located. 3. to PURCHASE delinquent shares sold during
The controversy between Pedro and Jose is not an the sale; and
intra- corporate controversy. 4. to PAY dissenting or withdrawing stockholders
entitled to such payment under the Corporation
b) If there is no over-issuance of shares resulting Code. (Sees. 41 and 82, Corporation Code)
from the two-transactions of Juan, the corporation
should recognize both Pedro and Jose as rightful Corporation: Sole Proprietorship (2004)
stockholders. This is without prejudice to the right of YKS Trading filed a complaint for specific performance
the corporation to claim against Juan for the value with damages against PWC Corporation for failure to
of the shares which Juan sold to Jose. deliver cement ordered by plaintiff. In its answer, PWC
denied liability on the ground, inter alia, that YKS has no
Corporation Sole; Definition (2004) personality to sue, not being incorporated, and that the
What is a corporation sole? President of PWC was not authorized to enter into a
SUGGESTED ANSWER: contract with plaintiff by the PWC Board of Directors,
Section 110 of the Corporation Code defines a hence the contract is ultra vires. YKS Trading replied
"corporation sole" as one formed for the purpose of that it is a sole proprietorship owned by YKS, and that the
administering and managing, as trustee, the affairs, President of PWC had made it appear in several letters
property and temporalities of any religious denomination, presented in evidence that he had authority to sign
sect or church. It is formed by the chief archbishop, contracts on behalf of the Board of Directors of PWC. Will
bishop, priest, minister, rabbi or other presiding elder of the suit prosper or not? Reason briefly. (5%)
such religious denomination, sect or church. SUGGESTED ANSWER:
Yes the suit will prosper. As a sole proprietorship,
Corporation: Issuance of shares of stock to pay for the proprietor of YKS Trading has the capacity to
the services (2005) act and the personality to sue PWC. It is not necessary
Janice rendered some consultancy work for XYZ for YKS Trading to be incorporated before it can
Corporation. Her compensation included shares of stock sue. On the other hand, PWC is estopped from
therein. Can XYZ Corporation issue shares of stock asserting that its President had no authority to enter
to pay for the services of Janice as its consultant? into the contract, considering that, in several of
Discuss your answer. (2%) PWC's letters, it had clothed its President with
SUGGESTED ANSWER: apparent authority to deal with YKS Trading.
Yes, provided the approval of stockholders representing
two-thirds (2/3) of the outstanding capital stock is Corporation; Articles of Incorporation (1990)
obtained. Although the facts indicate that the consultancy The articles of incorporation to be registered in the SEC
work has already been "rendered" constituting contained the following provisions - -
"previously contracted debt," under Section 39 of the a) “First Article. The name of the corporation shall
Corporation Code, the pre-emptive rights of existing be Toho Marketing Company.”
stockholders need not be respected "in payment of a
previously contracted debt," but only with the indicated b) “Third Article. The principal office of
stockholders' approval. Under Section 62 of the such corporation shall be located in Region III,
Corporation Code, consideration for the issuance of in such municipality therein as its Board of
Directors may designate.”
stockholders representing at least two-thirds (2/3) of the
c) “Seventh Article. The capital stock of the corporation outstanding capital stock, as mandated under Sec. 40 of
is One Million Pesos (P1,000,000) Philippine Currency.” the Corporation Code. The sale would be void in case of
failure to meet the twin approvals. (Islamic Directorate of the
What are your comments and suggested changes to Philippines v. Court of Appeals, G.R. No. 117897, May 14, 1997)
the proposed articles? ALTERNATIVE ANSWER:
SUGGESTED ANSWER: Divine Corporation can sell the items to its competitor,
a) On the First Article, I would suggest that the Top Grade Fashion Corporation. However, Divine
corporate name indicate the fact of incorporation by Corporation must comply with Sections 3, 4 and 5 of the
using either “Toho Marketing Corporation” or “Toh Bulk Sales Law, namely: (1) deliver sworn statement of
Marketing Company, Incorporated.” the names and addresses of all the creditors to whom the
vendor or mortgagor may be indebted together with the
b) The Third Article should indicate the City or the amount of indebtedness due or owing to each of the said
Municipality and the Province in the Philippines, and creditors; (2) apply the purchase or mortgage money to
not merely the region or as its BOD may later the pro-rata payment of bona fide claims of the creditors;
designate, to be its place of principal office. and (3) make a full detailed inventory of the stock of
goods, wares, merchandise, provisions or materials, in
c) The Seventh Article must additionally point out the bulk, and notify every creditor at least ten (10) days
number of shares into which the capital stock is before transferring possession.
divided, as well as the par value thereof or a
statement that said stock or a portion thereof are 3) How would you protect the interests of the creditors
without par value. (Sec 14 & 15 Corp Code) of Divine Corporation?
SUGGESTED ANSWER:
Corporation; Bulk Sales Law (2005) Considering that Divine Corporation has entered a de
Divine Corporation is engaged in the manufacture of facto stage of dissolution with the ceasing of its
garments for export. In the course of its business, it was operations, I would invoke on behalf of the creditors the
able to obtain loans from individuals and financing protection under Sec. 122 of the Corporation Code, that the
institutions. However, due to the drop in the demand for proceeds of the sale should first be applied towards the
garments in the international market, Divine Corporation settlement of the obligations of the corporation, before
could not meet its obligations. It decided to sell all its any amount can be paid to the stockholders.
ALTERNATIVE ANSWER:
equipment such as sewing machines, perma-press
Under the Bulk Sales Law, if the proceeds are not;
machines, high speed sewers, cutting tables, ironing
applied proportionately towards the settlement of the
tables, etc., as well as its supplies and materials to Top
accounts of the corporate debts, to have the sale of the
Grade Fashion Corporation, its competitor. (5%)
subject matters to Top Grade Fashion Corp., as being
1) How would you classify the transaction?
SUGGESTED ANSWER:
"fraudulent and void" and obtain satisfaction from the
The transactions would constitute a sale of "substantially properties which are deemed to still be owned by Divine
all of the assets of Divine Corporation complying Corporation in spite of delivery to the buyer. The
with the test under Sec. 40 of the Corporation creditors can collect on the credit against Divine
Code, the transactions not being "in the ordinary Corporation, and if it cannot pay, the creditors can apply
course of business," and one "thereby the for attachment on the property fraudulently sold. (See
corporation would be rendered incapable of People v. Mapoy, G.R. No. 48836, September 21, 1942)
continuing the business or accomplishing the 4) In case Divine Corporation violated the law, what
purpose for which it was incorporated."
ALTERNATIVE ANSWER:
remedies are available to Top Grade Fashion
It is a sale and transfer in bulk in contemplation of the Corporation against Divine Corporation?
SUGGESTED ANSWER:
Bulk Sales Law. Under Sec. 2 of the Bulk Sales
If the sale by Divine Corporation did not obtain the
Law, a bulk sale includes any sale, transfer,
required two-thirds (2/3) vote of the outstanding capital
mortgage, or assignment of all, or substantially all, of
stock, then the transaction is void. (Islamic Directorate of the
the business or trade theretofore conducted by the
Philippines v. Court of Appeals, G.R. No, 117897, May 14, 1997)
vendor, mortgagor, transferor, or assignor. This is
Top Grade Fashion Corporation can have the purchase
exactly what happened in the case at bar.
declared void and recover the purchase price paid, as well
2) Can Divine Corporation sell the aforesaid items to as damages against the directors and officers
its competitor, Top Grade Fashion Corporation? who undertook the transaction in violation of the law.
ALTERNATIVE ANSWER:
What are the requirements to validly sell the items? For violation of the Bulk Sales Law, the principal officers
Explain. of the Divine Corporation can be held criminally liable.
SUGGESTED ANSWER:
In addition, Top Grade can sue Divine Corporation for
For such a transaction to be valid, it requires not only the
damages. Violation of the Bulk Sales Law would render
favorable resolution of the Board of Directors of Divine
such a sale fraudulent and void. Since Top Grade would
Corporation, but also the ratificatory vote of
be compelled to return the goods to Divine Corporation,
Top Grade can compel Divine Corporation to return the
purchase price and pay damages. b) No, my answer will not be the same. In a non-stock
corporation, the members are not entitled to share in the
Corporation; By-laws (2001) profits of the corporation because all present and future
Suppose that the by-laws of X Corp, a mining firm profits belong to the corporation. In converting the non-
provides that “The directors shall be relieved from stock corporation to a stock corporation by a mere
all liability for any contract entered into by the amendment of the Articles of Incorporation, the non-
corporation with any firm in which the directors may be stock corporation is deemed to have distributed an asset of
interested.” Thus, director A acquired claims which the corporation – i.e. its profits, among its members,
overlapped with X’s claims and were necessary for the without a prior dissolution of the corporation. Under Sec
development and operation of X’s mining properties. 122, the non-stock corporation must be dissolved first.
a) Is the by-law provision valid? Why? (3%)
b) What happens if director A is able to consummate (Observation: The question is rather vague more particularly question 1b.
The question does not specify that the conversion is from a non-
his mining claims over and above that of the stock corporation to a stock corporation. The candidate is likely to be
corporation’s claims? (2%) confused because of the words “if at the inception, X Co is a nonstock
SUGGESTED ANSWER: corporation.” Hence, any answer along the same line should be treated with
a) No. It is in violation of Section 32 of the Corp Code. liberality)
b) A should account to the corporation for the Corporation; De Facto Corporation (1994)
profits which he realized from the transaction. He A corporation was created by a special law. Later, the law
grabbed the business opportunity from the corporation. creating it was declared invalid. May such
(Section 34, Corp Code) corporation claim to be a de facto corporation?
SUGGESTED ANSWER:
Corporation; Commencement; Corporate Existence No. A private corporation may be created only under the
(2003) Corporation Code. Only public corporations may be
1. When does a corporation acquire corporate created under special law.
existence?
SUGGESTED ANSWER: Where a private corporation is created under a special
law, there is no attempt at a valid incorporation. Such
2. CBY & Co., Inc., registered with the Securities and corporation cannot claim a de facto status.
Exchange Commission its articles of incorporation.
It failed, however, for one reason or another, to Corporation; Dissolution; Methods of Liquidation (2001)
have its by-laws filed with, and registered by, the X Corporation shortened its corporate life by amending
Commission. It nevertheless transacted and did its Articles of Incorporation. It has no debts but owns a
business as a corporation for sometime. A suit was prime property located in Quezon City. How would the
commenced by its minority stockholders assailing said property be liquidated among the five stockholders
the continued existence of CBY & Co., Inc., because of said corporation? Discuss two methods of liquidation.
of the non-adoption and registration of its by-laws. (5%)
Would the action prosper? Why? (6%) SUGGESTED ANSWER:
SUGGESTED ANSWER: The prime property of X Corporation can be liquidated
among the five stockholders after the property has been
conveyed by the corporation to the five stockholders, by
Corporation; Conversion of Stock Corporation (2001) dividing or partitioning it among themselves in any two
X company is a stock corporation composed of the of the following ways:
Reyes family engaged in the real estate business. Because 1) by PHYSICAL DIVISION or PARTITION based on
of the regional crisis, the stockholders decided to convert the proportion of the values of their stockholdings; or
their stock corporation into a charitable non-stock
and non-profit association by amending the 2) SELLING THE PROPERTY to a third person
articles of incorporation. and dividing the proceeds among the five
a) Could this be legally done? Why? (3%) stockholders in proportion to their stockholdings; or
b) Would your answer be the same if at the inception,
X Company is a non-stock corporation? Why? (2%) 3) after the determination of the value of the property, by
SUGGESTED ANSWER: ASSIGNING or TRANSFERRING THE PROPERTY
a) Yes, it can be legally done. In converting the to one stockholder with the obligation on the part of said
stock corporation to a non-stock corporation by stockholder to pay the other four stockholders
a mere amendment of the articles of incorporation, the amount/s in proportion to the value of the
the stock corporation is not distributing any of its stockholding of each.
assets to the stockholders. On the contrary, the
stockholders are deemed to have waived their right to Corporation; Incorporation; Requirements (2006)
share in the profits of the corporation which is a What is the minimum and maximum number of in-
gain not a loss to the corporation. corporators required to incorporate a stock corporation?
Is this also the same minimum and maximum number of Center, Pasig, MM while its factory processing
directors required in a stock corporation? (2.5%) leather products, is in Manila. The corporation holds its
SUGGESTED ANSWER: annual stockholders’ meeting at the Manila Hotel in
Under Section 10 of the Corporation Code, any number Manila and its BOD meeting at a hotel in Makati MM.
of natural persons not less than five (5) but not The by-laws are silent as to the place of meetings of the
more than fifteen (15), all of legal age and a majority of stockholders and directors.
whom are residents of the Philippines, may form a 1) Who shall preside at the meeting of the directors?
private corporation for any lawful purpose. 2) Can Ting, a stockholder, who did not attend
the stockholders’ annual meeting in Manila,
This is the same minimum and maximum number question the validity of the corporate resolutions
of directors required in a stock corporation under passed at such meeting?
Section 14(6) of the Corporation Code. 3) Can the same stockholder question the validity of
the resolutions adopted by the BOD at the meeting
Corporation; Incorporation; Residency Requirements held in Makati?
(2006) SUGGESTED ANSWER:
Must all incorporators and directors be residents of the 1) The President presides over the meeting of the
Philippines? (2.5%) directors, if there is no position of Chairman provided in
SUGGESTED ANSWER: the By-Laws. If there is the position of Chairman
Not all directors and incorporators need to be residents provided in the By-Laws, the Chairman presides over the
of the Philippines. Under Section 10 of the Corporation meeting of the Directors (Sec 54 Corp Code)
Code, only a majority of the incorporators need to
be residents of the Philippines. As provided in Section 2) No. The law provides that the annual
23 of the same Code, only a majority of the stockholders’ meeting shall be held in the city or
members of the Board of Directors need to be municipality where the principal office of the
residents of the Philippines. Corporation is located. For this purpose, the law also
provides that Metro Manila is considered a city or
Corporation; Incorporation; Requisites (2002) municipality. Since the principal place of business of
You have been asked to incorporate a new company to MIC is Pasig, MM, the holding of the annual
be called FSB Savings & Mortgage Bank, Inc. List stockholders meeting in Manila is proper. (Sec 51 Corp)
the documents that you must submit to the
Securities and Exchange Commission (SEC) to 3) No. The law allows the BOD to hold its
obtain a certificate of incorporation for FSB Savings meeting anywhere in the Philippines. The holding of
& Mortgage Bank, Inc. (5%) the BOD meeting in Makati was proper and the
SUGGESTED ANSWER: validity of the resolutions adopted by the Board in that
The documents to be submitted to the Securities meeting cannot be questioned. (Sec 53 Corp code)
and Exchange Commission (SEC) to incorporate
a new company to be called FSB Savings & Corporation; Nationality of Corporation (1998)
Mortgage Bank, Inc., to obtain the certificate of What is the nationality of a corporation organized
incorporation for said company, are: and incorporated under the laws of a foreign
1) Articles of Incorporation country, but owned 100% by Filipinos? (2%)
2) Treasurer’s Affidavit; SUGGESTED ANSWER:
3) Certificate of Authority from the Monetary Board of Under the control test of corporate nationality, this
the BSP; foreign corporation is of Filipino Nationality. Where
4) Verification slip from the records of the there are grounds for piercing the veil of corporate entity,
SEC whether or not the proposed name has already that is, disregarding the fiction, the corporation will
been adopted by another corporation, follow the nationality of the controlling members or
partnership or association; stockholders, since the corporation will then
5) Letter undertaking to change the proposed name if be considered as one and the same.
already adopted by another corporation, partnership
or association; Corporation; Non-Stock Corporation (1993)
6) Bank certificate of deposit concerning the paid- The AB Memorial Foundation was incorporated as a
up capital; non-profit, non-stock corporation in order to
7) Letter authorizing the SEC or Monetary Board or its establish and maintain a library and museum in
duly authorized representative to examine the bank honor of the deceased parents of the incorporators.
records regarding the deposit of the paid-up capital; Its Articles of Incorporation provided for a board of
8) Registration Sheet; trustees composed of 5 incorporators, which
authorized to admit new members. The Articles of
Corporation; Meetings; BOD & Stockholders (1993) Incorporation also allow the foundation to receive
Under the Articles of Incorporation of Manila Industrial donations from members. As of Jan 30, 1993, 60
Corp, its principal place of business shall be in Pasig, members had been admitted by the BOT.
MM. The principal corporate offices are at the Ortigas
Mercantile Law Bar Examination Q & A (1990-2006) Page 30 of 103 incidental
1) Can the Foundation use the funds donated to it by its to, or necessary for the existence of the
members for purchase of food and medicine for corporation.
distribution to the victims of the Pinatubo eruption?
2) Can the Foundation operate a specialty restaurant that SUGGESTED ANSWER:
caters to the general public in order to augment its funds? 2.a) The procedure in securing the approval of the BOD
3) One of the original trustees died and the other is as follows:
two resigned because they immigrated to the US. a. a notice of the BOD should be sent to all
How will the vacancies in the BOT be filled? the directors. The notice should state the purpose
SUGGESTED ANSWER: of the meeting.
1) Yes, (Sec 36(9) of the Corp Code) as long as b. At the meeting, each of the project should
the amount of donation is reasonable. be approved by a majority of the BOD (not
merely a majority of those present at the meeting)
2) If the purposes of the corporation are limited to the
establishment and maintenance of the library and 2.b) The procedure in securing the approval of the
museum as stated in the problem, the foundation cannot stockholders is as follows:
operate a specialty restaurant that caters to the a. Written notice of the proposed investment and the
general public. In such case, the action of the foundation time and place of the stockholders’ meeting should
will be ultra vires. be sent to each stockholder at his place of residence
ALTERNATIVE ANSWER: as shown on the books of the corporation and
2) If the act of the corporation is justified by the deposited to the addressee in the post office
secondary purpose of the corporation which includes the with postage prepaid, or served personally.
act of operating a restaurant, the foundation will be b. At the meeting, each of the projects should be
within its power to do so. approved by the stockholders representing at least
2/3 of the outstanding capital stock. (Sec 42 BP 68)
3) Since there are only 2 of the members of the
BOT remaining and there is no quorum, the Corporation; Power to Invest Corporate Funds in
vacancies will have to be filled up in a special meeting another Corporation (1996)
of the members (sec 29 Corp) When may a corporation invest its funds in another
corporation or business or for any other purposes?
Corporation; Power to Invest Corporate Funds for SUGGESTED ANSWER:
other Purpose (1995) A corporation may invest its funds in another
Stikki Cement Co was organized primarily for cement corporation or business or for any other purpose other
manufacturing. Anticipating substantial profits, its than the primary purpose for which it was organized
President proposed that Stikki invest in a) a power plant when the said investment is approved by a majority of
project, b) a concrete road project, and c) quarry the BOD and such approval is ratified by the
operations for limestone in the manufacture of cement. stockholders representing at least 2/3 of the outstanding
1) What corporate approvals or votes are needed capital stock. Written notice of the proposed investment
for the proposed investments? Explain. and the date, time and place of the stockholders’ meeting at
2) Describe the procedure in securing these approvals. which such proposal will be taken up must be sent to each
SUGGESTED ANSWER: stockholder. (Sec 42 Corp Code)
1. Unless the power plant and the concrete road project
are reasonable necessary to the manufacture of Corporation; Recovery of Moral Damages (1998)
cement by Stikki (and they do not appear to be In a complaint filed against XYZ Corporation, Luzon
so), then the approval of said projects by a majority of Trading Corporation alleged that its President & General
the BOD and the ratification of such approval by Manager, who is also a stockholder, suffered mental
the stockholders representing at least 2/3 of the anguish, fright, social humiliation and serious anxiety as a
outstanding capital stock would be necessary. result of the tortuous acts of XYZ Corporation.
As for the quarry operations for limestone, the same is In its counterclaim, XYZ Co claimed to have
an indispensable ingredient in the manufacture of suffered moral damages due to besmirched reputation or
cement and may, therefore, be considered reasonably goodwill as a result of Luzon Trading Co’s complaint.
necessary to accomplish the primary purpose of 1) May Luzon Trading Co recover damages based
Stikki. In such case, only the approval of the BOD on the allegations of the complaint? (2%)
would be necessary (Sec 42 BP 68) 2) May XYZ Co recover moral damages? (3%)
1. The majority vote of the BOD is necessary. The No. A corporation, being an artificial person which has
investment in a) a power plant project, b) a concrete road no feelings, emotions or senses, and which
project, and c) quarry operations of limestone used in the cannot experience physical suffering or mental
manufacture of cement, is within the express or implied anguish, is not entitled to moral damages.
power of the corporation, or at least the same is ALTERNATIVE ANSWER:
Mercantile Law Bar Examination Q & A (1990-2006) Page 31 of 103 stopping
Yes. When a juridical person has a good reputation that payment thereof, Seldon was acting in his
is debased, resulting in social humiliation, moral damages capacity as an officer of Turtle. He was not acting in his
may be awarded. Moreover, goodwill can be considered personal capacity. Furthermore, no facts have
an asset of the corporation. been provided which would indicate that the action of
Seldon was dictated by an intent to defraud Shamron by
TAKE NOTE: In the case of FBN Inc. vs AMEC, himself or in collusion with Turtle. Having acted in
January 17, 2005, the SC ruled that; what he considered as his duty as an officer of the
FBNI contends that AMEC is not entitled to moral corporation, Seldon should not be held personally liable.
damages because it is a corporation.
A juridical person is generally not entitled to moral PR Co owns a beach resort with several cottages. Jaime, the
damages because, unlike a natural person, it cannot President of PR, occupied one of the cottages for
experience physical suffering or such sentiments as residential purposes. After Jaime’s term expired, PR
wounded feelings, serious anxiety, mental anguish or wanted to recover possession of the cottage. Jaime
moral shock. The Court of Appeals cites Mambulao refused to surrender the cottage, contending that as a
Lumber Co. v. PNB, et al. to justify the award of moral stockholder and former President, he has a right to
damages. However, the Court's statement in Mambulao possess and enjoy the properties of the corporation.
that "a corporation may have a good reputation which, if Is Jaime’s contention correct? Explain.
besmirched, may also be a ground for the award of moral SUGGESTED ANSWER:
damages" is an obiter dictum. Jaime’s contention is not correct. Jaime may own shares
of stock in PR Corp but such ownership does not entitle
Nevertheless, AMEC's claim for moral damages falls him to the possession of any specific property of
under item 7 of Article 2219 of the Civil Code. the corporation or a definite portion thereof. Neither is
This provision expressly authorizes the recovery of he a co-owner of corporate property. Properties
moral damages in cases of libel, slander or any registered in the name of the corporation are owned by
other form of defamation. Article 2219(7) does not it as an entity separate and distinct from its stockholders.
qualify whether the plaintiff is a natural or juridical
person. Therefore, a juridical person such as a Stockholders like Jaime only own shares of stock in the
corporation can validly complain for libel or any other corporation. Such shares of stock do not
form of defamation and claim for moral damages. represent specific corporate property. (Rebecca Boyer-
Roxas v CA GR 100866 Jul 14, 92 211s470)
Moreover, where the broadcast is libelous per se, the law
implies damages. In such a case, evidence of an Corporation; Separate Juridical Personality (1996)
honest mistake or the want of character or Richard owns 90% of the shares of the capital stock of
reputation of the party libeled goes only in mitigation GOM Co. On one occasion, GOM represented
of damages. Neither in such a case is the plaintiff by Richard as President and General Manager
required to introduce evidence of actual damages as executed a contract to sell a subdivision lot in favor of
a condition precedent to the recovery of some Tomas. For failure of GOM to develop the subdivision,
damages. In this case, the broadcasts are libelous Tomas filed an action for rescission and damages against
per se. Thus, AMEC is entitled to moral damages. GOM and Richard. Will the action prosper? Explain.
SUGGESTED ANSWER:
Corporation; Separate Juridical Personality (1995) The action may prosper against GOM but definitely not
against Richard. Richard has a legal personality separate
Ronald Sham doing business under the name of
and distinct from that of GOM. If he singed the contract to
SHAMRON Machineries (Shamron) sold to Turtle
sell, he did so as the President and General Manager of
Mercantile (Turtle) a diesel farm tractor. In payment,
GOM and not in his personal capacity. Mere
Turtle’s President and Manager Dick Seldon issued a
ownership by Richard of 90% of the capital stock of
check for P50th in favor of Shamron. A week later,
GOM is not of itself sufficient ground to disregard his
Turtle sold the tractor to Briccio Industries (Briccio) for
separate legal personality absent a showing, for example
P60th. Briccio discovered that the engine of the tractor
was reconditioned so he refused to pay Turtle. As a that he acted maliciously or in bad faith (EPG Const Co v
CA GR 103372 Jn 22,92 210s230)
result, Dick Seldon ordered “Stop Payment” of the check
issued to Shamron. Corporation; Separate Juridical Personality (1999)
Shamron sued Turtle and Dick Seldon. Shamron As a result of perennial business losses, a
corporation’s net worth has been wiped out. In fact,
obtained a favorable judgment holding co-defendants
it is now in negative territory. Nonetheless, the
Turtle and Dick Seldon jointly and severally liable.
stockholders did not like to give up. Creditor-banks,
Comment on the decision of the trial court. Discuss fully.
SUGGESTED ANSWER:
however, do not share the confidence of the
The trial court erred in holding Dick Seldon, President stockholders and refuse to grant more loans.
and GM of Turtle, jointly and severally liable with Turtle. a) What tools are available to the stockholders to
In issuing the check issued to Shamron and, thereafter, replenish capital? (3%)
b) Assuming that the corporation continues to operate Philippines (BP 68). Incorporator S was elected director
even with depleted capital, would the stockholders and president – general manager. Part of his emolument
or the managers be solidarily liable for the is a Ford Expedition, which the corporation owns. After
obligations incurred by the corporation? Explain. a few years, S lost his corporate positions but he refused
(3%) to return the motor vehicle claiming that as a stockholder
SUGGESTED ANSWER: with a substantial equity share, he owns that portion of
a) In the face of the refusal of the creditor-banks to grant the corporate assets now in his possession. Is
more loans, the following are tools available to the the contention of S valid? Explain (5%)
stockholders to replenish capital, to wit: SUGGESTED ANSWER:
1) additional subscription to shares of stock of the No. The contention of S is not valid. The Ford
corporation by stockholders or by investors; Expedition is owned by the corporation. The corporation
2) advances by the stockholders to has a legal personality separate and distinct from that of its
the corporation; stockholder. What the corporation owns is its own
3) payment of unpaid subscription by the property and not the property of any stockholder even
stockholders. how substantial the equity share that stockholder owns.
SUGGESTED ANSWER:
b) No. As a general rule, the stockholders or the Corporation; Set-Off; Unpaid Subscription (1994)
managers cannot be held solidarily liable for the Victor was employed in MAIA Corporation. He
obligations incurred by the corporation. The corporation subscribed to 1,500 shares of the corporation at P100 per
has a separate and distinct personality from that of the share or a total of P150,000. He made an initial
stockholders or managers. The latter are presumed to be down payment of P37,500.00. He was appointed
acting in good faith in continuing the operation of the President and General Manager. Because of his
corporation. The obligations incurred by the corporation disagreement with the BOD, he resigned and demanded
are those of the corporation which alone is liable payment of his unpaid salaries, his cost of living
therefor. However, when the corporation is already allowance, his bonus, and reimbursement of his
insolvent, the directors and officers become trustees of gasoline and representation expenses.
the business and assets of the corporation for the benefit of
the creditors and are liable for negligence or MAIA Corporation admits that it owed Victor P40,000.
mismanagement. but told him that this will be applied to the unpaid
balance of his subscription in the amount of P100,000.00
Corporation; Separate Juridical Personality (2000) There was no call or notice for the payment of the
Marulas Creative Technology Inc., an e- unpaid subscription. Victor questioned the set-off.
business enterprise engaged in the manufacture of 1) May MAIA set-off the unpaid subscription
computer media accessories; rents an office and with victor’s claim for salaries?
store space at a commercial building owned by X. 2) Would your answer be the same if indeed there
Being a start-up company, Marulas enjoyed some had been a call for the unpaid subscription?
leniency in its rent payments; but after three years, SUGGESTED ANSWER:
X put a stop to it and asked Marulas president and 1) No. MAIA cannot setoff the unpaid subscription with
general manager, Y, who is a stockholder, to pay the Victor’s claim for salaries. The unpaid subscription is not
back rentals amounting to a hundred thousand pesos yet due as there is no call.
or to vacate the premises at the end of the month.
Marulas neither paid its debt nor vacated the 2) Yes. The reason is that Victor is entitled to the
premises. X sued Marulas and Y for collection of payment of his salaries which MAIA has no right to
the unpaid rentals, plus interest and costs of litigation. withhold in payment of unpaid subscription. To do so
Will the suit prosper against X? Against Y? (5%) would violate Labor Laws (Apodaco v NLRC 172 S 442)
SUGGESTED ANSWER:
Yes, the suit will prosper against Marulas. It is the Corporation; Stock Corporation (2001)
one renting the office and store space, as lessee, “XY” is a recreational club which was organized to
from the owner of the building, X, as lessor. operate a golf course for its members with an original
authorized capital stock of P100M. The articles of
But the suit against Y will not prosper. Y, as president incorporation nor the by-laws did not provide for
and general manager, and also stockholder of Marulas distribution of dividends although there is a provision
Creative Technology, Inc., has a legal personality separate that after its dissolution, the assets shall be given to a
and distinct from that of the corporation. The liability of charitable corporation. Is “XY” a stock corporation?
the corporation is that of the corporation and not that of its Give reasons for your answer? (5%)
officers and stockholders who are not liable for SUGGESTED ANSWER:
corporate liabilities. XY is a stock corporation because it is organized as a
stock corporation and there is no prohibition in its
Corporation; Separate Juridical Personality (2000) Articles of Incorporation or its by-laws for it to declare
Nine individuals formed a private corporation pursuant dividends. When a corporation is organized as a stock
to the provisions of the Corporation Code of the corporation and its articles of Incorporation or By-Laws
are silent, the corporation is deemed to have the power SUGGESTED ANSWER:
to declare dividends under Sec 43. Since it has the power Valid
to declare dividends, XY is a stock corporation.
3) XL Foods Corporation guaranteed the loan of
The provision of the Articles of Incorporation that at its sister company XL Meat Products, Inc.
dissolution the assets of the corporation shall be given to a SUGGESTED ANSWER:
charitable corporation does not prohibit the Void – This is an ultra vires act on part of XL
corporation from declaring dividends before dissolution. Foods Corporation, and is not one of the powers
provided for in Sec. 36 of the Corporation Code.
The stockholders of People Power Inc (PPI) approved Corporation; Voluntary Dissolution (2002)
two resolutions in a special stockholders’ meeting: Name three (3) methods by which a stock corporation
a) Resolution increasing the authorized capital stock of may be voluntarily dissolved. Explain each method. (5%)
SUGGESTED ANSWER:
PPI; and The three (3) methods by which a stock corporation may
b) Resolution authorizing the BOD to issue, for cash
be voluntarily dissolved are:
payment, the new shares from the proposed 1) Voluntary Dissolution where no creditors are
capital stock increase in favor of outside investors affected. This is done by a majority vote of the
who are non-stockholders. directors, and resolution of at least 2/3 vote of
The foregoing resolutions were approved by stockholders, submitted to the Securities
and Exchange Commission.
stockholders representing 99% of the total
2) Voluntary dissolution where creditors are
outstanding capital stock. The sole dissenter was Jimmy
affected. This is done by a petition for dissolution
Morato who owned 1% of the stock.
which must be filed with the Securities
1. Are the resolutions binding on the corporation and its and Exchange Commission, signed by a
stockholders including Jimmy Morato, the
majority of the members of the board of
dissenting stockholder? (3%) directors, verified by the president or secretary, and
2. What remedies, if any, are available to Morato? (2%)
SUGGESTED ANSWER:
upon affirmative vote of stockholders representing
1. No. The resolutions are not binding on the at least 2/3 of the outstanding capital stock.
corporation and its stockholders including Jimmy 3) Dissolution by shortening of the corporate term.
Morato. While these resolutions were approved by the This is done by amendment of the articles
stockholders, the directors’ approval, which is required of incorporation.
by law in such case, does not exist.
Corporation; Voting Trust Agreement (1992)
2. Jimmy Morato can petition the SEC (Now RTC) A distressed company executed a voting trust agreement
to declare the 2 resolutions, as well as any and all for a period of three years over 60% of its
outstanding paid up shares in favor of a bank to
actions taken by the BOD thereunder, null and void.
whom it was indebted, with the Bank named as
Corporation; Validity of Corporate Acts (2002) trustee. Additionally, the Company mortgaged all its
Which of the following corporate acts are valid, void, or properties to the Bank. Because of the insolvency of
the Company, the Bank foreclosed the mortgaged
voidable? Indicate your answer by writing the paragraph
properties, and as the highest bidder, acquired said
number of the query, followed by your
properties and assets of the Company.
corresponding answer as “Valid,” “Void,” or
“Voidable,” as the case may be. If your answer is The three-year period prescribed in the Voting Trust
“Void,” explain your answer. In case of a “Voidable” Agreement having expired, the company demanded the
answer, specify what conditions must be present or turn-over and transfer of all its assets and properties,
complied with to make the corporate act valid. (5%)
including the management and operation of the
1) XL Foods Corporation, which is engaged in the fast-
Company, claiming that under the Voting Trust
food business, entered into a contract with its
President Jose Cruz, whereby the latter would supply Agreement, the Bank was constituted as trustee of the
the corporation with its meat and poultry management and operations of the Company.
requirements. Does the demand of the Company tally with the concept
SUGGESTED ANSWER:
Voidable – A contract of the corporation with one of a Voting Trust Agreement? Explain briefly.
SUGGESTED ANSWER:
or more of its directors or trustees or officers is
The demand of the company does not tally with the
voidable, at the option of such corporation (Sec 32,
concept of a Voting Trust Agreement. The Voting Trust
Corporation Code).
Agreement merely conveys to the trustee the right
2) The Board of Directors of XL Foods to vote the shares of grantor/s. The consequence
of foreclosure of the mortgaged properties would be
Corporation declared and paid cash dividends
alien to the Voting Trust Agreement and its effects.
without approval of the stockholders.
committed the breach of trust against the interests of the
NOTE: (per D ondee) The law sim ply provides thata voting corporation would be to emasculate the right of minority
trustagreem entis an agreem entin writing whereby one or stockholders to seek redress for the corporation. Filing
m ore stockholders of a corporation consentto transferhis
or theirshares to a trustee in orderto vestin the lattervoting or such action as a derivative suit even by a lone stockholder is
other rights pertaining to said shares for a period not one of the protections extended by law to minority
exceeding five years upon the fulfillm entof statutory stockholders against abuses of the majority.
conditions and such other term s and conditions
specified in the agreem ent. The five year-period m ay be
Derivative Suit: Watered Stock (1993)
extended in cases where the voting trust is executed
pursuant to a loan agreem entwhereby the period is m A became a stockholder of Prime Real
ade contingentupon full paym entof the loan. Estate Corporation (PREC) on July 10, 1991, when
he was given one share by another stockholder to
Undersection 59 of the C orporation C ode, supra, a voting trust
agreem ent m ay confer upon a trustee not only the
qualify him as a director. A was not re-elected
stockholder's voting rights butalso otherrights pertaining to his director in the July 1, 1992 annual meeting but he
shares as long as the voting trustagreem entis notentered "for the continued to be a registered shareholder of PREC.
purpose of circum venting the law againstm onopolies and
illegalcom binations in restraintof trade orused forpurposes of When he was still a director, A discovered that on Jan 5,
fraud." (section 59, 5th paragraph of the C orporation C ode). Thus,
the traditional concept of a voting trust agreem ent prim arily
1991, PREC issued free of charge 10,000 shares to X a
intended to single outa stockholder's rightto vote lawyer who assisted in a court case involving PREC.
from his other rights as such and m ade irrevocabl for a 1) Can A now bring an action in the name of the
lim ited duration m ay in practice becom e a legal device corporation to question the issuance of the shares to
whereby a transfer of the stockholders shares is effected
subjectto the specific provision of the voting trustagreem ent.
X without receiving any payment?
The execution of a voting trust agreem ent, therefore, m ay 2) Can X question the right of A to sue him in behalf
creat a dichotom y between the equitable or beneficial of the corporation on the ground that A has
ownership of the corporate shares of a stockholder, on the one
only one share in his name?
hand, and the legaltitle thereto on the other hand. (Lee vs.
CA, Feb. 4, 1992)
3) Cannot the shares issued to X be considered as
Derivative Suit: Requisites (2004) watered stock?
SUGGESTED ANSWER:
AA, a minority stockholder, filed a suit against BB, CC,
1) As a general rule, A cannot bring a derivative suit in
DD, and EE, the holders of majority shares of MOP
the name of the corporation concerning an act that took
Corporation, for alleged misappropriation of corporate
funds. The complaint averred, inter alia, that MOP place before he became a stockholder. However, if
Corporation is the corporation in whose behalf and for the act complained of is a continuing one, A may do so.
whose benefit the derivative suit is brought. In their 2) No. In a derivative suit, the action is instituted/
capacity as members of the Board of Directors, the
brought in the name of a corporation and reliefs
majority stockholders adopted a resolution authorizing
are prayed for therein for the corporation, by a
MOP Corporation to withdraw the suit. Pursuant to said
minority stockholder. The law does not qualify
resolution, the corporate counsel filed a Motion to
the term “minority” in terms of the number of shares
Dismiss in the name of the MOP Corporation. Should the
motion be granted or denied? Reason briefly. (5%)
owned by a stockholder bringing the action in
SUGGESTED ANSWER: behalf of the corporation. (SMC v Khan 176 SCRA 448)
No. All the requisites for a valid derivative suit
3) No. WATERED SHARES are those sold by the
exist in this case.
corporation for less than the par/book value. In the
First, AA was exempt from exhausting his remedies
within the corporation, and did not have to make a instant case, it will depend upon the value of services
demand on the Board of Directors for the latter to sue. rendered in relation to the total par value of the shares.
Here, such a demand would be futile, since the directors
Derivative Suit; Close Corporation;
who comprise the majority (namely, BB, CC, DD
and EE) are the ones guilty of the wrong complained of. Corporate Opportunity (2005)
Malyn, Schiera and Jaz are the directors of Patio
Second, AA appears to be stockholder at the time Investments, a close corporation formed to run the Patio
the alleged misappropriation of corporate funds. Cafe, an al fresco coffee shop in Makati City. In 2000,
Patio Cafe began experiencing financial reverses,
Third, the suit is brought on behalf and for the benefit of consequently, some of the checks it issued to its beverage
MOP Corporation. In this connection, it was held in distributors and employees bounced.
Conmart (Phils.) Inc. v. Securities and Exchange Commission, 198
SCRA 73 (1991) that to grant to the corporation In October 2003, Schiera informed Malyn that she found
concerned the right of withdrawing or dismissing the a location for a second cafe in Taguig City. Malyn
suit, at the instance of the majority stockholders and objected because of the dire financial condition of
directors who themselves are the persons alleged to have the corporation.
Mercantile Law Bar Examination Q & A (1990-2006) Page 35 of 103 nullify
the questioned investments. Would her action
Sometime in April 2004, Malyn learned about Fort Patio prosper? Why?
Cafe located in Taguig City and that its development was SUGGESTED ANSWER:
undertaken by a new corporation known as Fort Yes, she is already a stockholder at the time the alleged
Patio, Inc., where both Schiera and Jaz are directors. misappropriation of corporate funds. And that filing such
Malyn also found that Schiera and Jaz, on behalf action as a derivative suit even by a lone stockholder is
of Patio Investments, had obtained a loan of one of the protections extended by law to minority
P500,000.00 from PBCom Bank, for the purpose of stockholders against abuses of the majority. Nevertheless,
opening Fort Patio Cafe. This loan was secured by Gina must first exhaust any administrative
the assets of Patio Investments and personally remedies before her suit be consider in court.
guaranteed by Schiera and Jaz.
Distinction: De facto Corporation vs. Corporation by
Malyn then filed a corporate derivative action before the Estoppel (2004)
Regional Trial Court of Makati City against Schiera and Is there a difference between a de facto corporation and
Jaz, alleging that the two directors had breached a corporation by estoppel? Explain briefly. (2%)
their fiduciary duties by misappropriating money and SUGGESTED ANSWER:
assets of Patio Investments in the operation of Fort A DE FACTO CORPORATION is one which actually
Patio Cafe. (5%) exists for all practical purposes as a corporation but
1) Did Schiera and Jaz violate the principle of which has no legal right to corporate existence as against
corporate opportunity? Explain. the State. It is essential to the existence of a de
SUGGESTED ANSWER: facto corporation that there be (1) a valid law under
Yes. Although Malyn refused the business before, which a corporation might be incorporated, (2) a
nevertheless, using the resources and credit standing bona fide attempt to organize as a corporation under
of the company, Schiera and Jaz clearly such law, and (3) actual use or exercise in good faith
demonstrated that the business could have been of corporate powers conferred upon it by law.
successfully pursued in the name of the close
corporation. More importantly, Schiera and Jaz are guilty A CORPORATION BY ESTOPPEL exists when
of diverting the resources of the close corporation to persons assume to act as a corporation knowing it to be
another entity, equivalent to fraud and bad faith. without authority to do so. In this case, those
persons will be liable as general partners for all
2) Was it proper for Malyn to file a derivative suit with debts, liabilities and damages incurred or arising as a
a prayer for injunctive relief? Explain. result of their actions.
SUGGESTED ANSWER:
Although it is a close corporation, nevertheless the Distinction: Dividends vs. Profit: Cash Dividend vs.
principles of separate juridical personality still apply. The Stock Dividend (2005)
business of the corporation is still separate and distinct Distinguish dividend from profit; cash dividend from
from the proprietary interests of its stockholders and stock dividend. (2%)
directors. Consequently, since the business opportunity SUGGESTED ANSWER:
and the resource's used pertain to the close corporation, the PROFITS are residual amounts representing return
standing to sue and to recover remains with the close of capital after deducting all corporate costs and
corporation and not with Malyn. Therefore, it is still expenses from revenues. The accumulated profits,
necessary to file a derivative suit on behalf of the close from year to year, represent the corporate retained
corporation, although the proceedings would be earnings from which the dividends can be declared.
governed under the Interim Rules of Procedure for Intra-
Corporate Disputes. CASH DIVIDENDS represent an actual distribution of
accumulated profits to the stockholders as a return
3) Assuming that a derivative suit is proper; may the on their investments. Declaration of cash dividends
action continue if the corporation is dissolved during requires only the approval of the majority of the
the pendency of the suit? Explain. Board of Directors in a proper resolution.
SUGGESTED ANSWER:
Yes, for in spite of the dissolution of any corporation, it STOCK DIVIDENDS are simply transfers of
remains a juridical person for purpose of dissolution for retained earnings to capital stock, thereby increasing the
three years from the date of dissolution, precisely one of number of shares of stocks of each stockholder with no
the purposes is to allow the winding-up of its required cash contribution. A two-thirds vote of the
affairs, including the termination of pending suits. stockholders, coupled with a majority vote of the Board
of Directors, is needed to declare stock dividends.
Derivative Suit; Minority Stockholder (2003)
Gina Sevilla, a minority stockholder of Bayan Distinction; Private vs. Public Corporation (2004)
Corporation, felt that various investments of the Distinguish clearly a private corporation from a
company’s capital were ultra vires if not, indeed, made in public corporation
violation of law. She filed a derivative suit seeking to SUGGESTED ANSWER:
A PRIVATE CORPORATION is one formed for some
private purpose, benefit or end, while a PUBLIC Dividends; Declaration of Dividends (1990)
CORPORATION is formed for the government of a At least 2/3 of the stockholders of Solar Corporation,
portion of the State for the general good or welfare. The meeting upon the recommendation of the BOD, declared a
true test is the purpose of the corporation. If the 50% stock dividend during their annual meeting. The
corporation is created for political or public purpose notice of the annual stockholders’ meeting did not
connected with the administration of government, then it is mention anything about a stock dividend declaration.
a public corporation. If not, it is a private corporation The matter was taken up only under the item “other
although the whole or substantially the whole interest in the business” in the agenda of the meeting. C.K. Senwa, a
corporation belongs to the State. A public stockholder, who received his copy of the notice but did
corporation is created by special legislation or act of not attend the meeting, subsequently learned about the
Congress. A private corporation must be organized 50% stock dividend declaration. He desires to have the
under the Corporation Code. stock dividend declaration cancelled and set aside, and
wishes to retain your services as a lawyer for the purpose.
Distinction; Stock vs. Non-Stock Corporation (2004) Will you accept the case? Discuss with reasons.
Distinguish clearly a stock corporation from a non-stock SUGGESTED ANSWER:
corporation. I will not accept the case. Sec 43 of the Corp Code states
SUGGESTED ANSWER: that no stock dividend shall be issued without the
A stock corporation is one that has capital stock divided approval of the stockholders representing not less than
into shares and is authorized to distribute to the holders 2/3 of the outstanding capital stock at a regular or special
of such shares dividends or allotments of the meeting duly called for that purpose. Conformably with Sec
surplus profits on the basis of the shares held. 50 of the Corp Code, a written notice of the holding of the
All other corporations are non-stock corporations. regular meeting sent to the shareholders will suffice.
The notice itself specified the said subject matter.
Dividends: Declaration of Dividends (2005) ALTERNATIVE ANSWER:
Under what circumstances may a corporation declare Yes, I will accept the case. The problem does not
dividends? (2%)' indicate that there is action by the BOD which is also
SUGGESTED ANSWER: necessary for the declaration of 50% stock dividend.
No form of dividends can be declared and paid by
the corporation except from unrestricted retained Dividends; Declaration of Dividends (1991)
earnings appearing on its books. Dividends must be During the annual stockholders meeting, Riza,
paid in amounts proportional to all stockholders on the a stockholder proposed to the body that a part of
basis of outstanding stock held by them. Cash or the corporation’s unreserved earned surplus be
property dividends, can be declared from such capitalized and stock dividends be distributed to the
unrestricted retained earnings by a proper resolution of stockholders, arguing that as owners of the company,
the Board of Directors. Stock dividends, however, must the stockholders, by a majority vote, can do anything. As
be declared by a proper resolution of the Board of chairman of the meeting, how would you rule on the
Directors from existing unrestricted retained earnings motion to declare stock dividends?
and ratified by stockholders representing at least two- SUGGESTED ANSWER:
thirds (2/8) of the outstanding capital stock of the As the chairman of the meeting, I would rule against the
corporation, obtained in a meeting duly called for motion considering that a declaration of stock dividends
the purpose. (Sec. 43, Corporation Code) should initially be taken by the BOD and thereafter to be
concurred in by a 2/3 vote of the stockholders (Sec 43
Dividends: Sources of Dividends; Trust Fund Corp Code). There is no prohibition, however, against
Doctrine (2005) the stockholders’ resolving to recommend to the BOD
From what funds are cash and stock dividends sourced? that it consider a declaration of stock dividends for
Explain why. (2%) concurrence thereafter by the stockholders.
SUGGESTED ANSWER:
All cash and stock dividends are always paid out of the Dividends; Declaration of Dividends (2001)
unrestricted retained earnings (also called surplus profit) of For the past three years of its commercial operation, X, an
the corporation. If the corporation has no unrestricted oil company, has been earning tremendously in excess of
retained earnings, the dividends would have to be 100% of the corporation’s paid-in capital. All of the
sourced from the capital stock. This is illegal. It violates the stockholders have been claiming that they share in the
"TRUST FUND DOCTRINE" that provides that the profits of the corporation by way of dividends but the
capital stock of the corporation is a trust fund to be kept Board of Directors failed to lift its finger.
intact during the life of the corporation for the benefit a) Is Corporation X guilty of violating a law? If in
of the creditors of the corporation. (Commissioner of Internal- the affirmative, state the basis (2%)
Revenue v. Court of Appeal®, G.R. No. 108576, January 20, 1999; SUGGESTED ANSWER:
Boman Environmental Development Corp. v. Court of Appeals, G.R. Corporation X is guilty of violating Section 43 of the
No. 77860, November 22, 1988; and Steinberg v. Velasco, G.R. No. Corp Code. This provision prohibits stock corporations
30460, March 12,1929)
Mercantile Law Bar Examination Q & A (1990-2006) Page 37 of 103 acquires,
from retaining surplus profits in excess of 100% of their in violation of his duty, an interest adverse to the
paid-in capital. corporation in respect of any matter which has been
reposed in him in confidence, he shall be liable as a
b) Are there instances when a corporation shall not trustee for the corporation and must account for the
be held liable for not declaring dividends? (3%) profits which otherwise would have accrued to the
SUGGESTED ANSWER: corporation. Equity imposes liability upon him not to
The instances when a corporation shall not be held liable deal for his own benefit. (Sec. 31, Corporation Code)
for not declaring dividends are:
1) when justified by definite corporate expansion Under Sec. 34 of the Corporation Code where a director,
projects or programs approved by the BOD; or by virtue of his office, acquires for himself a
business opportunity which should belong to the
2) when the corporation is prohibited under any corporation, thereby obtaining profits to the
loan agreement with any financial institution or prejudice of such corporation, he must account to
creditor, whether local or foreign, from declaring the latter for all such profits by refunding the same,
dividends without its or his consent, and such unless his act has been ratified by a vote of the
consent has not yet been secured; or stockholders owning or representing at least two-
thirds (2/8) of the outstanding capital stock.
3) when it can be clearly shown that such retention is
necessary under special circumstances obtaining Effect: Expiration of Corporate Term (2004)
in the corporation, such as when there is need XYZ Corporation entered into a contract of lease with
for special reserve for probable contingencies. ABC, Inc., over a piece of real estate for a term of 20
years, renewable for another 20 years, provided that
Dividends; Right; Managing Corporation (1991) XYZ's corporate term is extended in accordance with
ABC Management Inc. presented to the DEF law. Four years after the term of XYZ Corporation
Mining Co, the draft of its proposed Management expired, but still within the period allowed by the lease
Contract. As an incentive, ABC included in the terms of contract for the extension of the lease period, XYZ
compensation that ABC would be entitled to 10% of Corp. notified ABC, Inc., that it is exercising the option to
any stock dividend which DEF may declare during extend the lease. ABC, Inc., objected to the proposed
the lifetime of the Management Contract. Would extension, arguing that since the corporate life of XYZ
you approve of such provision? If not, what Corp. had expired, it could no longer opt to renew the
would you suggest as an alternative? lease. XYZ Corp. countered that withstanding the lapse of
SUGGESTED ANSWER: its corporate term it still has the right to renew the
I would not approve a proposed stipulation in the lease because no quo warranto proceedings for
management contract that the managing corporation, as an involuntary dissolution of XYZ Corp. has been instituted
additional compensation to it, should be entitled to by the Office of the Solicitor General.
10% of any stock dividend that may be declared. Is the contention of XYZ Corp. meritorious?
Stockholders are the only ones entitled to receive stock Explain briefly. (5%)
dividends (Nielsen & Co v Lepanto Mining 26 s 569) I would SUGGESTED ANSWER:
add that the unsubscribed capital stock of a corporation XYZ Corporation's contention is not meritorious. Based on
may only be issued for cash or property or for services the ruling of the Supreme Court in Philippine National
already rendered constituting a demandable debt (Sec 62 Bank vs. CFI of Rizal, 209 SCRA (1992). XYZ Corp. was
Corp Code). As an alternative, I would suggest that the dissolved ipso facto upon the expiration of its original
managing corporation should instead be given a net term. It ceased to be a body corporate for the purpose of
profit participation and, if it later so desires, to then continuing the business for which it was organized,
convert the amount that may be due thereby to equity or except only for purposes connected with its winding up or
shares of stock at no less than the par value thereof. liquidation. Extending the lease is not an act to wind up or
liquidate XYZ Corp.'s affairs. It is contrary to the idea of
Doctrine of Corporate Opportunity (2005) winding up the affairs of the corporation.
Briefly discuss the doctrine of corporate opportunity.
(2%) Effects; Merger of Corporations (1999)
SUGGESTED ANSWER: Two corporations agreed to merge. They then executed
In brief, the doctrine disqualifies a director, trustee an agreement specifying the surviving corporation
or officer from appropriating for his personal and the absorbed corporation. Under the
benefit a transaction or opportunity that agreement of merger dated November 5, 1998,
pertains to the corporation, and which under the the surviving corporation acquired all the rights,
duty of loyalty he should first bring to the properties and liabilities of the absorbed corporation.
corporation for its use or exploitation. 1) What would happen to the absorbed corporation?
Must the absorbed corporation undertake
The doctrine of corporate opportunity is an enforcement dissolution and the winding up procedures? Explain
of the duty of loyalty of corporate directors and officers. your answer. (3%)
When a director, trustee or officer attempts to acquire or SUGGESTED ANSWER:
No. There is no need for the absorbed corporation to Code. As shortened, the corporation continued
undertake dissolution and winding up procedure. As a its business operations until May 30, 1997, the last day
result of the merger, the absorbed corporation is of its corporate existence. Prior to said date, there
automatically dissolved and its assets and liabilities are were a number of pending civil actions, of varying
acquired and assumed by the surviving corporation. nature but mostly money claims filed by creditors,
none of which was expected to be completed or
2) Pending approval of the merger by the SEC, may the resolved within five years from May 30, 1997.
surviving corporation already institute suits to collect
all receivables due to the absorbed corporation from If the creditors had sought your professional help at that
its customers? Explain your answer. (3%) time about whether or not their cases could be pursued
SUGGESTED ANSWER: beyond May 30, 1997, what would have been your
No. The merger does not become effective until advice? (2%)
and unless approved by the SEC. Before approval by the SUGGESTED ANSWER:
SEC of the merger, the surviving corporation has The cases can be pursued even beyond May 30, 1997, the
no legal personality with respect to receivables last day of the corporate existence of GHQ Corp.
due to the absorbed corporation. The Corporation is not actually dissolved upon the
expiration of its corporate term. There is still
3) A case was filed against a customer to collect on the the period for liquidation or winding up.
promissory note issued by him after the date of the
merger agreement. The customer raised the defense NOTE: Under Section 122 of the C orporation C ode, a
that while the receivables as of the date of the corporation whose corporate existence is term inated in any
m annercontinues to be a body corporate forthree (3) years
merger agreement was transferred to the surviving afterits dissolution forpurposes of prosecuting and defending suit
corporation, those receivables which were created by and againstitand to enable itto settle and close its affairs,
after the merger agreement remained to be owned culm inating in the disposition and distribution of its rem
by the absorbed corporation. These receivables aining asset. Itm ay, during the three-yearterm , appointa trustee
ora receiverwho m ay actbeyond thatperiod.
would be distributed to the stockholders
conformably with the dissolution and liquidation The term ination of the life of a corporate entity does
procedures under the New Corporation Code? notby itself cause the extinction or dim inution of the
Discuss the merits of this argument. (3%) rights and liabilities of such entity. 27 If the three-
SUGGESTED ANSWER: yearextended life has expired withouta trustee or receiver
Whether the receivable was incurred by the having been expressly designated by the corporation, within
thatperiod, the board of directors (ortrustees) itself, m ay
absorbed corporation before or after the merger be perm itted to so continue as "trustees" by legal im
agreement, or before or after the approval thereof by plication to com plet the corporate liquidation. (PEPSI-
the SEC, the said receivable would still belong to the COLA PHILIPPINES, INC., vs. THE COURT OF
surviving corporation under Sec 80 of the Corp. APPEALS, [G.R. No. 145855. November 24, 2004.])
Code which does not make any distinction as to the
assets and liabilities of the absorbed corporation Foreign Corporation; “Doing Business” in
that the surviving corporation would inherit. the Philippines (1998)
When is a foreign corporation deemed to be “doing
Effects; Winding Up Period of a Corporation (1997) business in the Philippines?” (3%)
SUGGESTED ANSWER:
The corporation, once dissolved, thereafter continues to
be a body corporate for three years for purposes of A foreign corporation is deemed to be “doing business in
the Philippines” if it is continuing the body or substance
prosecuting and defending suits by and against it and of
of the business or enterprise for which it was organized.
enabling it to settle and close its affairs, culminating
It is the intention of an entity to continue the body of its
in the final disposition and distribution of its
remaining assets. If the 3 year extended life expires business in the country. The grant and extension of 90-
without a trustee or receiver being designated by the day credit terms of a foreign corporation to a domestic
corporation within that period and by that time corporation for every purchase shows an intention
(expiry of the 3 year extended term), the corporate to continue transacting with the latter.
liquidation is not yet over, how, if at all, can a final
Foreign Corporation; “Doing Business” in
settlement of the corporate affairs be made?
SUGGESTED ANSWER: the Philippines; Acts or Activities (2002)
The liquidation can continue with the winding up. Give at least three (3) examples of the acts or activities
The members of the BOD can continue with the that are specifically identified under our
winding of the corporate affairs until final liquidation. foreign investment laws as constituting “doing
They can act as trustees or receivers for this purpose. business” in the Philippines (3%)
SUGGESTED ANSWER:
Effects; Winding Up Period of a Corporation (2000) Any three (3) of the following acts or activities constitute
The SEC approved the amendment of the Articles of “doing business” in the Philippines under our
Incorporation of GHQ Corp shortening its corporate life foreign investment laws:
1. Soliciting orders
to only 25 years in accordance with Sec 120 of the Corp
2. Opening offices by whatever name 5) When he is made, by a specific provision of law, to
3. Participating in the management, supervision personally answer for the corporate action.
or control of any domestic entity (Tramat Mercantile Inc v CA GR 111008, Nov 7, 94 238s14)
4. Entering into service contracts
5. Appointing representatives or distributors, operating Liabilities; Stockholders, Directors, Officers (1997)
under the control of the foreign entity, who is A, B, and C are shareholders of XYZ Co. A has an
domiciled in the Philippines or who stays in the unpaid subscription of P100th, B’s shares are fully paid
country for a period or periods totaling at least 180 up, while C owns only nominal but fully paid up shares and
days in any calendar year. is a director and officer. XYZ becomes insolvent, and
it is established that the insolvency is the result of
Foreign Corporation; “Doing Business” in the fraudulent practices within the company. If you were
Philippines; Test (2002) counsel for a creditor of XYZ, would you advise legal
What is the legal test for determining if an action against A, B, and C?
unlicensed foreign corporation is doing business in the SUGGESTED ANSWER:
Philippines? (2%) a) As to A— an action can be brought against A for
SUGGESTED ANSWER: P100th which is the amount of unpaid subscription.
The test is whether or not the unlicensed Since the corporation is insolvent, the limit of the
foreign corporation has performed an act or acts stockholder’s liability to the creditor is only up to the
that imply a continuity of commercial dealings or extent of his unpaid subscription.
arrangements, and contemplate to that extent the
performance of acts or works, or the exercise of some b) As to B— there is no cause of action against B
of the functions normally incident to, and in because he has already fully paid for his subscription. As
progressive prosecution of, commercial gain or of stated earlier, the limit of the stockholder’s liability to the
the purpose and object of the business corporation. creditor of the corporation, when the latter becomes
insolvent, is the extent of his subscription.
Joint Venture; Corporation (1996)
May a corporation enter into a joint venture? c) As to C— an action can be filed against C, not as
SUGGESTED ANSWER: stockholder because he has already paid up the shares,
A corporation may enter into a joint venture. However, but in his capacity as director and officer because of the
inasmuch as the term ‘joint venture’ has no precise legal corporation’s insolvency being the result of fraudulent
definition, it may take various forms. It could take the practices within the company. Directors are liable jointly
form of a simple pooling of resources (not involving and severally for damages sustained by the corporation,
incorporation) between two or more corporations for a stockholders or other persons resulting from gross
specific project, purpose or undertaking, or for a limited negligence or bad faith in directing the affairs of the
time. It may involve the creation of a more formal corporation. (Sec 31 Corp Code)
structure and, hence, the formation of a corporation. If the
joint venture would involve the creation of a Piercing the Corporate Veil (1994)
partnership, as the term is understood under the Civil Mr. Pablo, a rich merchant in his early forties, was a
Code, then a corporation cannot be a party to it. defendant in a lawsuit which could subject him to
substantial damages. A year before the court rendered
Liabilities; BOD; Corporate Acts (1996) judgment, Pablo sought his lawyer’s advice on how to
When may a corporate director, trustee, or officer plan his estate to avoid taxes. His lawyer suggested that he
be held personally liable with the corporation? should form a corporation with himself, his wife and his
SUGGESTED ANSWER: children (all students and still unemployed) as
A corporate director, trustee or officer may be held stockholders and then transfer all his assets and liabilities to
personally liable with the corporation under the this corporation. Mr Pablo followed the
following circumstances: recommendation of his lawyer. 1 year later, the court
1) When he assents to a patently unlawful act of rendered judgment against Pablo and the plaintiff sought to
the corporation; enforce this judgment. The sheriff, however, could not
2) When he acts in bad faith or with gross negligence locate any property in the name of Pablo and therefore
in directing the affairs of the corporation, or in returned the writ of execution unsatisfied. What remedy, if
conflict with the interest of the corporation any, is available to the plaintiff?
resulting in damages to the corporation, its SUGGESTED ANSWER:
stockholders or other persons; The plaintiff can avail himself of the doctrine of piercing
3) When he consents to the issuance of watered stocks the veil of corporate fiction which can be invoked when a
or who, having knowledge thereof, does not corporation is formed or used in avoiding a just
forthwith file with the corporate secretary his obligation. While it is true that a family corporation may be
written objection thereto; organized to pursue an estate tax; planning, which is
4) When he agrees to hold himself personally and not per se illegal or unlawful (Delpher Trades Corp v IAC 157
solidarily liable with the corporation; or SCRA 349) the factual settings, however, indicate the
existence of
a lawsuit that could subject Pablo to a
substantial amount of damages. It would thus be difficult What is the doctrine of "piercing the veil of
for Pablo to convincingly assert that the incorporation of corporate entity?" Explain.
the family corporation was intended merely as a case of SUGGESTED ANSWER:
“estate tax planning.” (Tan Boon Bee v Jarencio 41337 30June88) The doctrine of "piercing the veil of corporate entity," is
the doctrine that allows the courts to look behind
Piercing the Corporate Veil (1996) the separate juridical personality of a corporation
E Co sold its assets to M Inc after complying with and treat the corporation as an association of persons
the requirements of the Bulk Sales Law. Subsequently, and thereby make the individual actors personally liable
one of the creditors of E Co tried to collect the amount for corporate liabilities. The fiction of corporate identity
due it, but found out that E Co had no more is disregarded and the individuals comprising it
assets left. The creditor then sued M Inc on the theory can be treated identically. The stockholders can be
that M Inc is a mere alter ego of E Co. held directly liable for corporate obligations, even to
Will the suit prosper? Explain. the extent of their personal assets (Concept Builders v.
SUGGESTED ANSWER: NLRC, Marabe, et al, G.R. No. 108734, May 29, 1996).
The suit will not prosper. The sale by E Co of its assets to
M Inc does not result in the transfer of the liabilities of the To what circumstances will the doctrine apply?
latter to, nor in the assumption thereof by, the former. (2.5%)
The facts given do not indicate that such transfer or The doctrine is applicable when the notion of legal entity
assumption took place or was stipulated upon by the parties is used to —
in their agreement. Furthermore, the sale by E Co of its 1) Defeat public convenience.
assets is a sale of its property. It does not involve the sale 2) Justify wrong.
of the shares of stock of the corporation 3) Protect fraud.
belonging to its stockholders. There is therefore no 4) Defend crime (PNB v. Andrada Electric, G.R.
merger or consolidation that took place. E Co continues to No. 142936, April 17, 2002).
exist and remains liable to the creditor. 5) Shield a violation of the proscription against
forum shopping (First Philippine International Bank v.
Piercing the Corporate Veil (2001) Court of Appeals, G.R. No. 137537, January 24, 1996).
Plaintiffs filed a collection action against X Corporation. 6) Work inequities among members of the
Upon execution of the court’s decision, X Corporation corporation internally, involving no rights of the
was found to be without assets. Thereafter plaintiffs filed public or third persons (Secosa v. Heirs ofErwin Suarez
an action against its present and past stockholder Y Francisco, G.R. No. 156104, June 29, 2004).
Corporation which owned substantially all of the stocks of 7) Evade the lawful obligations of the corporation
X Corporation. The two corporations have the same board like a judgment credit (Sibagat Timber Corp. v. Garcia,
of directors and Y Corporation financed the G.R. No. 112546, December 11, 1992).
operations of X Corporation. May Y Corporation be held 8) Escape liability arising from a debt (Arcilla v. Court of
liable for the debts of X Corporation? Why? (5%) Appeals, G.R. No. 88113, October 23, 1992).
SUGGESTED ANSWER: 9) Avoid inclusion of corporate assets as part of the
Yes, Y Corporation may be held liable for the debts of X estate of the decedent (Cease v. Court of Appeals,
Corporation. The doctrine of piercing the veil of G.R. No. L-35861, October 18, 1979).
corporation fiction applies to this case. The two 10) To promote or to shield unfair objectives
(Villanueva v. Adre, G.R. No. 80863, April 27, 1989).
corporations have the same board of directors and Y
Corporation owned substantially all of the stocks of X
Corporation, which facts justify the conclusion that the Pre-emptive Right (2001)
latter is merely an extension of the personality of the Suppose that X Corporation has already issued the 1000
former, and that the former controls the policies of the originally authorized shares of the corporation so that its
latter. Added to this is the fact that Y Corporation BOD and stockholders wish to increase X’s authorized
controls the finances of X Corporation which is merely an capital stock. After complying with the requirements of
adjunct, business conduit or alter ego of Y the law on increase of capital stock, X issued an
Corporation (CIR v Norton & Harrison Co 11 S 714 (1964)) additional 1000 shares of the same value.
a) Assume that the stockholder A presently holds 200 out
Piercing the Corporate Veil (2004) of the 1000 original shares. Would A have a pre-emptive
How does one pierce the veil of corporate fiction? right to 200 of the new issue of 1000 shares? Why? (3%)
SUGGESTED ANSWER:
The veil of corporate fiction may be pierced by proving b) When should stockholder A exercise the pre-emptive
in court that the notion of legal entity is being used right? (2%)
to defeat public convenience, justify wrong, protect SUGGESTED ANSWER:
fraud, or defend crime or the entity is just an instrument a) Yes, A would have a pre-emptive right to 200 of the new
or alter ego or adjunct of another entity or person. issue of 1000 shares. A is a stockholder of record
holding 200 shares in X Corpo. According to the Corp
Piercing the Corporate Veil (2006)
407H407H
Code, each stockholder has the pre-emptive right to all
issues of shares made by the corporation in proportion to
the number of shares he holds on record in SUGGESTED ANSWER:
the corporation. d. No, the stockholder may not exercise appraisal
right because the matter that he dissented from is not
b) Pre-emptive right must be exercised in one of those where right of appraisal is available
accordance with the Articles of Incorporation or the By- under the corporation code.
Laws. When the Articles of Incorporation and the By-
Laws are silent, the BOD may fix a reasonable time SEC; Jurisdiction; Transferred Jurisdiction (1996)
within which the stockholders may exercise the right. What is the original and exclusive jurisdiction of the
SEC?
Pre-Emptive Right vs. Appraisal Right (1999) SUGGESTED ANSWER:
ABC Corporation has an authorized capital stock of P1M The SEC has original and exclusive jurisdiction over
divided into 50,000 common shares and 50,000 preferred cases involving:
shares. At its inception, the Corporation offered for a) Devices or schemes amounting to fraud and
subscription all the common shares. However, misrepresentation;
only 40,000 shares were subscribed. Recently, the b) Controversies arising out of intra-corporate or
directors thought of raising additional capital and partnership relations;
decided to offer to the public all the authorized shares of c) Controversies in the election or appointment of
the Corporation at their market value. directors, officers, etc;
a) Would Mr. X, a stockholder holding 4,000 d) Petitions to be declared in a state of suspension of
shares, have pre-emptive rights to the remaining payments (Sec 5 PD 902-A)
10,000 shares? (2%)
TAKE NOTE: The RTC has jurisdiction over the cases
b) Would Mr. X have pre-emptive rights to the 50,000
which involves intra-corporate controversy. As of 2006,
preferred shares? (2%)
the applicable rule is that there is a
c) Assuming that the existing stockholders are entitled
to pre-emptive rights, at what price will the shares TRANSFERRED JURISDICTION under Sec. 5.2
be offered? (2%) of the SRC, the Commission’s jurisdiction over
d) Assuming a stockholder disagrees with the issuance all cases enumerated under PD 902-A sec. 5 has
of new shares and the pricing for the shares, may the been transferred to the Courts of general jurisdiction
stockholder invoke his appraisal rights and demand or the appropriate Regional Trial Court.
payment for his shareholdings? (2%)
SUGGESTED ANSWER: Stockholder; Delinquent; Unpaid Subscription (1997)
a. Yes. Mr. X, a stockholder holding 4,000 shares, The BOD of a corporation, by a vote of ten in favor of
has pre-emptive right to the remaining 10,000 one against, declared due and payable all unpaid
shares. All stockholders of a stock corporation shall subscription to the capital stock. The lone dissenting
enjoy pre- emptive right to subscribe to all issues or director failed to pay on due date, i.e., 19 Sept 1997, his
disposition of shares of any class, in proportion to unpaid subscription. Other than the shares wherein
their respective shareholdings. he was unable to complete payment, he did not
ALTERNATIVE ANSWER. own any share in the corporation. On 23 Sept 1997,
a. No, Mr X does not have pre-emptive right over the he was informed by the BOD that, unless due
remaining 10,000 shares because these shares have payment is meanwhile received, he:
already been offered at incorporation and he chose not to a) could no longer serve as a director of the
subscribe to them. He, therefore, has waived his right corporation forthwith:
thereto and the corporation may offer them to anyone. b) would not be entitled to the cash and
stock dividends which were declared and payable
SUGGESTED ANSWER: on 24 Sep 1997; and
b. Yes. Mr. X would have pre-emptive rights to the c) could not vote in the stockholders
50,000 preferred shares. All stockholders of a stock meeting scheduled to take place on 26 Sept 1997.
corporation shall enjoy pre-emptive right to subscribe to
all issues or disposition of shares of any class, Was the action of the BOD on each of the
in proportion to their respective shareholdings. foregoing matters valid?
b. Yes, Mr. X has preemptive right over the 50,000 a) No. The period of 30 days within which
preferred shares because they were not offered before by the stockholder can pay the unpaid subscription had not
the corporation for subscription. yet expired.
SUGGESTED ANSWER: b) No. The delinquency did not deprive the stockholder of
c. The shares will be offered to existing his right to receive dividends declared. However, the cash
stockholders, who are entitled to preemptive right, at a dividend declared may be applied by the corporation to the
price fixed by the BOD, which shall not be less than the
unpaid subscription. (Sec 71 Corp Code)
par value of such shares.
Mercantile Law Bar Examination Q & A (1990-2006) Page 42 of 103 the
c) No. The period of 30 days within which majority stockholders can always muster a 2/3 vote,
the stockholder can pay the unpaid subscription had not would you allow the majority stockholders to remove the
yet expired. one director representing the minority?
SUGGESTED ANSWER:
Stockholders: Preemptive Right (2004) No. I will not allow the majority stockholders to remove
The Board of Directors of ABC, Inc., a the director. While the stockholders may, by a 2/3 vote,
domestic corporation, passed a resolution authorizing remove a director, the law also provides, however,
additional issuance of shares of stocks without notice that his right may not, without just cause, be exercised
nor approval of the stockholders. DX, a stockholder, so as to deprive the minority of representation in the
objected to the issuance, contending that it violated BOD (Sec 28 Corp code; Gov’t vs Agoncillo 50p348)
his right of pre- emption to the unissued shares.
Is his contention tenable? Explain briefly. (5%) Stockholders; Rights (1996)
SUGGESTED ANSWER: What are the rights of a stockholder?
Yes. DX's contention is tenable. Under Section 39 of the SUGGESTED ANSWER:
Corporation Code, all stockholders of ABC, Inc. enjoy The rights of a stockholder are as follows:
preemptive right to subscribe to all issues of shares of 1) The right to vote, including the right to appoint
any class, including the reissuance of treasury shares in a proxy;
proportion to their respective shareholdings. 2) The right to share in the profits of the corporation,
including the right to declare stock dividends;
Stockholders; Appraisal Right (2003) 3) The right to a proportionate share of the assets
In what instances may the right of appraisal be availed of of the corporation upon liquidation;
under the Corporation Code? 4) The right of appraisal;
SUGGESTED ANSWER: 5) The pre-emptive right to shares;
SECTION 81. Instances of Appraisal Right. — 6) The right to inspect corporate books and records;
Any stockholder of a corporation shall have the 7) The right to elect directors;
right to dissent and demand payment of the fair 8) Such other rights as may contractually be granted to
value of his shares in the following instances: the stockholders by the corporation or by
1. In case any amendment to the articles special law.
of incorporation has the effect of
changing or restricting the rights of any Stockholders; Voting Power of Stockholders (1990)
stockholders or class of shares, or of authorizing Mercy subscribed to 1,000 shares of stock of
preferences in any respect superior to those of Rosario Corporation. She paid 25% of said subscription.
outstanding shares of any class, or of extending or During the stockholders’ meeting, can Mercy vote
shortening the term of corporate existence; all her subscribed shares? Explain.
SUGGESTED ANSWER:
2. In case of sale, lease, exchange, transfer,
mortgage, pledge or other disposition of all or Yes, Mercy can vote all her subscribed shares. Section 72
substantially all of the corporate property and assets of the Corporation Code states that holders of
as provided in the Code; and subscribed shares not fully paid which are not delinquent
3. In case of merger or consolidation. (n) shall have all the rights of a stockholder.
Stockholders; Removal of Officers & BOD (2001) Stocks; Increase of Capital Stock (2001)
In 1999, Corporation A passed a board resolution Suppose X Corporation has an authorized capital stock
removing X from his position as manager of said of P1M divided into 100,000 shares of stock with
corporation. The by-laws of A corporation provides that par value of P10 each.
the officers are the president, vice-president, treasurer a) Give two ways whereby said authorized capital stock
and secretary. Upon complaint filed with the SEC, it held may be increased to about P1.5M. (3%)
that a manager could be removed by mere resolution of the b) Give three practical reasons for a corporation to
board of directors. On motion for reconsideration, X increase its capital stock (2%)
SUGGESTED ANSWER:
alleged that he could only be removed by the affirmative
a) Two ways of increasing the Authorized Capital Stock
vote of the stockholders representing 2/3 of the
of X corporation to P1.5M are:
outstanding capital stock. Is X’s contention legally
1) Increase the number of shares from 100,000 to
tenable. Why? (5%)
150,000 shares with the same par value of
SUGGESTED ANSWER:
No. Stockholders’ approval is necessary only for the P10.00 each.
removal of the members of the BOD. For the removal 2) Increase par value of 100,000 shares to P15.00
of a corporate officer or employee, the vote of the BOD each.
is sufficient for the purpose. b) Three practical reasons for a corporation to
Stockholders; Removal; Minority Director (1991) increase its capital stock are:
Assuming that the minority block of the XYZ 1) to generate more working capital;
Corporation is able to elect only 1 director and therefore,
Mercantile Law Bar Examination Q & A (1990-2006) Page 43 of 103 children.
2) to have more shares with which to pay for the They then brought the deed of assignment to the
acquisition of more assets like acquisition of proper corporate officers for registration with the
company car, stocks, house, machinery or request for the transfer in the corporation's stock and
business; and transfer books of the assigned shares, the cancellation of
3) to have extra share with which to cover or meet the stock certificates in PX's name, and the issuance of
the requirement for declaration of new stock certificates in the names of his wife and his
stock dividend. children as the new owners. The officers of the
Corporation denied the request on the ground that
Stocks; Sale, Transfer of Certificates of Stock (1996) another heir is contesting the validity of the deed of
Arnold has in his name 1,000 shares of the capital stock assignment. May the Corporation be compelled by
of ABC Co as evidenced by a stock certificate. mandamus to register the shares of stock in the names of
Arnold delivered the stock certificate to Steven who the assignees? Explain briefly. (5%)
now claims to be the real owner of the shares, SUGGESTED ANSWER:
having paid for Arnold’s subscription. ABC refused Yes. The corporation may be compelled by mandamus to
to recognize and register Steven’s ownership. register the shares of stock in the name of the assignee.
Is the refusal justified? Explain. The only legal limitation imposed by Section 63 of
SUGGESTED ANSWER: the Corporation Code is when the Corporation holds
ABC’s refusal to recognize and register Steven’s any unpaid claim against the shares intended
ownership is justified. The facts indicate that the stock to be transferred. The alleged claim of another heir
certificate for the 1,000 shares in question is in the name of of PX is not sufficient to deny the issuance of new
Arnold. Although the certificate was delivered by certificates of stock to his wife and children. It would be
Arnold to Steven, the facts do not indicate that the otherwise if the transferee's title to the shares has no
certificate was duly endorsed by Arnold at the time it was prima facie validity or is uncertain.
delivered to Steven or that the procedure for the effective
transfer of shares of stock set out in the by-laws of ABC Trust Fund Doctrine (1992)
Co, if any, was observed. Since the certificate was not A Corporation executed a promissory note binding itself
endorsed in favor of Steven (or anybody else for that to pay its President/Director, who had tendered his
matter), the only conclusion could be no other than that the resignation, a certain sum in payment of the latter’s
shares in question still belong to Arnold. (Razon v IAC GR shares and interests in the company. The
74306 Mar 16,92 207s234) corporation defaulted in paying the full amount so
that said former President filed suit for collection of
Stocks; Sale, Transfer of Certificates of Stock (2001) the balance before the SEC.
A is the registered owner of Stock Certificate No. a) Under what conditions is a stock corporation
000011. He entrusted the possession of said certificate to empowered to acquire its own shares?
his best friend B who borrowed the said endorsed b) Is the arrangement between the corporation and its
certificate to support B’s application for passport (or for a President covered by the trust fund doctrine? Explain
purpose other than transfer). But B sold the certificate to your answers briefly.
X, a bona fide purchaser who relied on the endorsed SUGGESTED ANSWER:
certificates and believed him to be the owner thereof. a) A stock corporation may only acquire its own shares
a) Can A claim the shares of stock from X? Explain (3%) of stock if the trust fund doctrine is not impaired. This is
b) Would your answer be the same if A lost the stock to say, for instance, that it may purchase its own shares
certificate in question or if it was stolen from him? (2%) of stock by utilizing merely its surplus profits over
SUGGESTED ANSWER: and above the subscribed capital of the corporation.
a) No. Assuming that the shares were already transferred ALTERNATIVE ANSWER:
to B, A cannot claim the shares of stock from X. a) (an answer enumerating the instances or cases
The certificate of stock covering said shares have under the Corporation Code where the Corp
been duly endorsed by A and entrusted by him to allows the acquisition of shares such as in the
B. By his said acts, A is now estopped from claiming stockholder’s exercise of appraisal right, failure of bids
said shares from X, a bona fide purchaser who relied on in the sale of delinquent shares, etc.)
the endorsement by A of the certificate of stock.
SUGGESTED ANSWER:
b) Yes. In the case where the certificate of stock was lost b) The arrangement between the corporation and its
or stole from A, A has a right to claim the certificate of President to the extent that it calls for the payment of the
stock from the thief who has no right or title to the same. latter’s shares is covered by the trust fund doctrine. The
“One who has lost any movable or has been unlawfully only exceptions from the trust fund doctrine are the
deprived thereof, may recover it from the person in redemption of redeemable shares and, in the case of
possession of the same.” (Art 559 NCC) close corporation, when there should be a deadlock and
the SEC orders the payment of the appraised value of a
Stocks; Sale, Transfer of Certificates of Stock (2004) stockholder’s share.
Four months before his death, PX assigned 100 shares of
stock registered in his name in favor of his wife and his Trust Fund Doctrine; Intra-Corporate Controversy (1991)
On December 6, 1988, A, an incorporator and the
General Manager of the Paje Multi Farms Co, resigned as Chattel Mortgage vs. After-Incurred Obligations (1999)
GM and sold to the corporation his shares of stocks in the On December 1, 1996, Borrower executed a chattel
corporation for P300th, the book value thereof, payable mortgage in favor of the Bank to secure a loan of P3M.
as follows: a) P100th as down payment; b) P100th on In due time the loan was paid.
or before 31 July1989; and c) the remaining balance On December 1, 1997, Borrower obtained another loan
of P100th on or before 30 Sep 1989. A for P2M which the Bank granted under the same security
promissory note, with an acceleration clause, was as that which secured the first loan.
executed by the corporation for the unpaid balance.
For the second loan, Borrower merely delivered
The corporation failed to pay the first installment on due a promissory note; no new chattel mortgage agreement
date. A then sued Paje on the promissory note in was executed as the parties relied on a provision in the
the RTC. 1996 chattel mortgage agreement which included future
a) Does the court have jurisdiction over the case? debts as among the obligations secured by the mortgage.
b) Would your answer be the same if A instead sold his The provision reads:
shares to his friend Mabel and the latter filed a case with “In case the Mortgagor executes subsequent
the RTC against the corporation to compel it to register the promissory note or notes either as a renewal, as an
sale and to issue new certificates of stock in her extension, or as a new loan, this mortgage shall also
name? stand as security for the payment of said promissory
SUGGESTED ANSWER: note or notes without necessity of executing a new
a) The RTC has jurisdiction over the case. The SC said contract and this mortgage shall have the same force
that a corporation may only buy its own shares of stock and effect as if the said promissory note or notes were
if it has enough surplus profits therefore. existing on date hereof.”
b) My answer would be the same. An action to compel a As Borrower failed to pay the second loan, the
corporation to register a sale and to issue new certificates Bank proceeded to foreclose the Chattel
of stock is itself an intra-corporate matter that exclusively Mortgage.Borrower sued the Bank claiming that the
lies with the RTC. mortgage was no longer in force. Borrower claimed that
a fresh chattel mortgage should have been executed
TAKE NOTE: The RTC has jurisdiction over the cases when the second loan was granted.
which involves intra-corporate controversy. As of 2006, a) Decide the case and ratiocinate. (4%)
the applicable rule is that there is a b) Suppose the chattel mortgage was not registered,
TRANSFERRED JURISDICTION under Sec. 5.2 would its validity and effectiveness be impaired?
of the SRC, the Commission’s jurisdiction over Explain. (4%)
all cases enumerated under PD 902-A sec. 5 has SUGGESTED ANSWER:
been transferred to the Courts of general jurisdiction a. The foreclosure of the chattel mortgage regarding the
or the appropriate Regional Trial Court. second loan is not valid. A chattel mortgage cannot
validly secure after incurred obligations. The affidavit of
good faith required under the chattel mortgage
Credit Transactions law expressly provides that “the foregoing mortgage is
made for securing the obligation specified in the
conditions hereof, and for no other purpose.” The
after-incurred obligation not being specified in the
To secure the payment of an earlier loan of P20,000 as affidavit, is not secured by mortgage.
well as subsequent loans which her friend Noreen, would
extend to her, Karen executed in favor of Noreen a b. Yes. The chattel mortgage is not valid as against any
chattel mortgage over her (Karen) car. person, except the mortgagor, his executors
Is the mortgage valid? and administrators.
SUGGESTED ANSWER:
A chattel mortgage cannot effectively secure after-
Chattel Mortgage; Foreclosure (1997)
incurred obligations. While a stipulation to include after-
Ritz bought a new car on installments which provided
incurred obligations in a chattel mortgage is itself not
for an acceleration clause in the event of default. To
invalid, the obligation cannot, however, be deemed
secure payment of the unpaid installments, as and when
automatically secured by that mortgage until after a new
due, he constituted two chattel mortgages, i.e., one over his
chattel mortgage or an addendum to the original chattel
very old car and the other covering the new car that he had
mortgage is executed to cover the obligation after it has
just bought as aforesaid, on installments. After Ritz
been actually incurred. Accordingly, unless such
defaulted on three installments, the seller-mortgagee
supplements are made, the chattel mortgage in the
foreclosed on the old car. The proceeds of the
problem given would be deemed to secure only the loan of
foreclosure were not enough to satisfy the due obligation;
P20,000 (Sec 5 Act 1505; Belgian Catholic Missionaries v
Magallanes Press 49p647)
hence, he similarly sought to foreclose on the new car.
Mercantile Law Bar Examination Q & A (1990-2006) Page 45 of 103 situated
Would the seller-mortgagee be legally justified in as well as the LTO where the vehicle is
foreclosing on this second chattel mortgage? registered. (Sec 4 Chattel Mortgage Law)
SUGGESTED ANSWER:
No. The two mortgages were executed to secure the Credit Transactions (1999)
payment of the unpaid installments for the purchase of a Various buyers of lots in a subdivision brought actions to
new car. When the mortgage on the old car compel either or both the developer and the bank
was foreclosed, the seller-mortgagee is deemed to to lease and deliver free and clear the titles to
have renounced all other rights. A foreclosure of their respective lots.
additional property, that is, the new car covered by
the second mortgage would be a nullity. The problem arose because notwithstanding prior sales
mostly on installments – made by the developer to
Chattel Mortgage; Ownership of Thing Mortgaged (1990) buyers, developer had mortgaged the whole subdivision
Zonee, who lives in Bulacan, bought a 1988 model to a commercial bank. The mortgage was duly executed and
Toyota Corolla sedan on July 1, 1989 from Anadelaida, registered with the appropriate governmental
who lives in Quezon City, for P300th, paying P150th as agencies. However, as the lot buyers were completely
downpayment and promising to pay the balance in 3 unaware of the mortgage lien of the bank, they religiously
equal quarterly installments beginning October 1, 1989. paid the installments due under their sale contracts.
Anadelaida executed a deed of sale of the vehicle in favor
of Zonee and, to secure the unpaid balance of the As the developer failed to pay its loan, the mortgage was
purchase price, had Zonee execute a deed of chattel foreclosed and the whole subdivision was acquired by the
mortgage on the vehicle in Anadelaida’s favor. bank as the highest bidder.
a) May the bank dispossess prior purchasers of
Ten days after the execution of the abovementioned individual lots or, alternatively, require them to pay
documents, Zonee had the car transferred and registered again for the paid lots? Discuss (3%)
in her name. Contemporaneously, Anadelaida had b) What are the rights of the bank vis-à-vis those
the chattel mortgage on the car registered in the buyers with remaining unpaid installments? Discuss.
Chattel Mortgage Registry of the Office of the Register (3%)
of Deeds of Quezon City. Recommendation: Since the subject matter of these
two (2) questions is not included within the scope of
In Sep 1989, Zonee sold the sedan to Jimbo the Bar Questions in Mercantile Law, as it is within
without telling the latter that the car was Civil Law, it is suggested that whatever answer is
mortgaged to Anadelaida. When Zonee failed to given by the examinee, or the lack of answer should be
pay the first installment on October 1, 1989, given full credit. If the examinee gives a good
Anadelaida went to see Zonee and discovered that the answer, he should be given additional credit.
latter had sold the car to Jimbo.
a) Jimbo refused to give up the car on the ground that SUGGESTED ANSWER:
the chattel mortgage executed by Zonee in favor of a. No. The bank may not dispossess the prior purchasers of
Anadelaida is not valid because it was executed before the individual lots, much less require them to pay for the
the car was registered in Zonee’s name, i.e., before Zonee said lots. The bank has to respect the rights of the
became the registered owner of the car. Is the said prior purchasers of the individual lots. The purchasers
argument meritorious? Explain your answer. have the option to pay the installments of the mortgagee.
b) Jimbo also argued that even if the chattel mortgage is b. The bank has to respect the rights of the buyers with
valid, it cannot affect him because it was not properly remaining unpaid installments. The purchaser has the
registered with the government offices where it should be option to pay the installments to the mortgagee who
registered. What government office is Jimbo referring to? should apply the payments to the mortgage indebtedness.
SUGGESTED ANSWER: Mortgage (1999)
a) Jimbo’s argument is not meritorious. Zonee Debtor purchased a parcel of land from a realty company
became the owner of the property upon delivery; payable in five yearly installments. Under the contract of
registration is not essential to vest that ownership in sale, title to the lot would be transferred upon full
the buyer. The execution of the chattel mortgage by the payment of the purchase price.
buyer in favor of the seller, in fact, can demonstrate the
vesting of such ownership to the mortgagor. But even before full payment, debtor constructed a
house on the lot. Sometime thereafter, debtor mortgaged
b) Jimbo was referring to the Register of Deeds of the house to secure his obligation arising from the
Bulacan where Zonee was a resident. The Chattel issuance of a bond needed in the conduct of his business.
Mortgage Law requires the registration to be made in the The mortgage was duly registered with the proper chattel
Office of the Register of Deeds of the province where mortgage registry.
the mortgagor resides and also in which the property is
Five years later after completing payment of the purchase To pay for her loan obtained from Stela, Liza constituted in
price, debtor obtained title to the lot. And even as the Stela’s favor a chattel mortgage over an electric
chattel mortgage on the house was still subsisting, debtor generator. Cecil, a creditor of Liza, levied on attachment
mortgaged to a bank the lot and improvement thereon to the generator. Stela filed a third party claim. Cecil
secure a loan. This real estate mortgage was duly opposed the claim. Rule on their conflicting claims.
registered and annotated at the back of the title. SUGGESTED ANSWER:
Due to business reverses, debtor failed to pay Mortgage; Extrajudicial Foreclose (2006)
his creditors. The chattel mortgage was foreclosed when A real estate mortgage may be foreclosed judicially or
the debtor failed to reimburse the surety extrajudicially. In what instance may a mortgagee
company for payments made on the bond. In the extrajudicially foreclose a real estate mortgage? (5%)
foreclosure sale, the surety company was awarded the SUGGESTED ANSWER:
house as the highest bidder. When a sale is made under a special power inserted
or attached to any real-estate mortgage, thereafter given
Only after the foreclosure sale did the surety as security for the payment of money or the fulfillment
company learn of the real estate mortgage in favor of the of any other obligation, then the mortgagee
lending investor on the lot and the improvement may extrajudicially foreclose the real estate mortgage
thereon. Immediately, it filed a complaint praying (Sec. 1, Act No. 3135, as amended).
for the exclusion of the house from the real estate Mortgage; Foreclosure (2003)
mortgage. It was submitted that as the chattel mortgage May the sale at public auction by a bank of a
was executed and registered ahead, it was superior to property mortgaged to it be nullified because the
the real estate mortgage. price was extremely low? Why?
SUGGESTED ANSWER:
On the suggestion that a chattel mortgage on a house- a
real property- was a nullity, the surety company
countered that when the chattel mortgage was executed, Because of failure of Janette and Jeanne to pay their loan
debtor was not yet the owner of the lot on which the to X Bank, the latter foreclosed on the
house was built. Accordingly, the house was a personal mortgage constituted on their property which was put
property and a proper subject of a chattel mortgage.
up by them as security for the payment of the loan.
The price paid for the property at the foreclosure sale
a. Discuss the validity of the position taken by the surety
was not enough to liquidate the obligation. The bank
company. (3%)
sued for deficiency. In their answer, Janette and
b. Who has a better claim to the house, the surety
Jeanne did not deny the existence of the loan nor
company or the lending investor? Explain (3%)
the fact of their default. They, however, interposed the
c. Would the position of the surety company be bolstered
defenses that the price at the auction was extremely
by the fact that it acquired title in a foreclosure sale
low and that their loan, despite the loan documents, was
conducted by the Provincial Sheriff. Explain (3%)
SUGGESTED ANSWER:
a long-term loan which had not yet matured. If you were
a) The house is always a real property even though it was the judge, how would you rule on the case? Why? (6%)
SUGGESTED ANSWER:
constructed on a land not belonging to the builder.
However, the parties may treat it as a personal property Mortgage; Foreclosure of Improvements (1999)
and constitute a chattel mortgage thereon. Such
Borrower obtained a loan against the security of
mortgage shall be valid and binding but only on the a mortgage on a parcel of land. While the mortgage
parties. It will not bind or affect third parties. was subsisting, borrower leased for fifty years the
b) The lending investor has a better claim to the house. mortgaged property to Land Development Company
The real estate mortgage covering the house and lot was (LDC). The mortgagee was duly advised of the
duly registered and binds the parties and third persons. lease. Thereafter, LDC constructed on the mortgaged
On the other hand, the chattel mortgage on the house
property an office condominium.
securing the credit of the surety company did not affect the Borrower defaulted on his loan and mortgagee
rights of third parties such as the lending investor foreclosed the mortgage. At the foreclosure sale, the
despite registration of the chattel mortgage. mortgagee was awarded the property as the
c) No. The chattel mortgage over the house which highest bidder. The corresponding Certificate of Sale
was foreclosed did not affect the rights of third was executed and after the lapse of one year, title was
parties like the lending investor. Since the third consolidated in the name of mortgagee.
parties are not bound by the chattel mortgage, they are Mortgagee then applied with the RTC for the issuance of
not also bound by any enforcement of its provisions. a writ of possession not only over the land but also the
The foreclosure of such chattel mortgage did not bolster condominium building. The mortgagee contended
or add anything to the position of the surety company. that the mortgage included all accessions, improvements
Mortgage vs. Levy (2003) and accessories found on the mortgaged property.
b. The lease rentals belong to the mortgagor. However,
LDC countered that it had built on the mortgaged the mortgage extends to rentals not yet received
property with the prior knowledge of mortgagee when the obligation becomes due and the mortgagee
which had received formal notice of the lease. may ran after the said rentals for the payment of
a) How would you resolve the dispute between the the mortgage debt.
mortgagee and LDC? (3%)
b) Is the mortgagee entitled to the lease rentals due Mortgage; Foreclosure; Effect of mere taking by creditor-
from LDC under the lease agreement? (3%) mortgagor of property (1992)
Recommendation: Since the subject matter of these two X & Co obtained a loan from a local bank in the amount of
(2) questions is not included within the scope of the Bar P500th, mortgaging as security therefore its real
Questions in Mercantile Law, as it is within Civil Law, it is property. Subsequently, the company applied with the
suggested that whatever answer is given by the examinee, or the
same bank for a Letter of Credit (LC) for $200th in favor
lack of answer should be given full credit. If the examinee gives a
of a foreign bank to cover the importation of machinery.
good answer, he should be given additional credit.
To guarantee payment of the obligation under the LC,
SUGGESTED ANSWER: the company and its President and Treasurer executed a
a. The mortgagee has a better right than LDC. The surety agreement in the local bank’s favor.
mortgage extends to the improvements introduced on
the land, with the declarations, amplifications, and The machinery arrived and was released to the company
limitations established by law, whether the estate remains in under a trust receipt agreement. As the company
the possession of the mortgagor or passes into the defaulted in the payment of its obligations, the bank took
hands of a third person (Art 2127 NCC). The notice possession of the imported machinery. At the same time,
given by LDC to the mortgagee was not enough to it sought to foreclose the mortgaged property and to
remove the building from coverage of the mortgage hold the company as well as its President and Treasurer,
considering that the building was built after the mortgage liable under the Surety Agreement.
was constituted and the notice was only as regards the
lease and not as to the construction of the building. Since Did the taking of possession of the machinery by
the mortgagee was informed of the lease and did not the bank result in the 1) full payment of the
object to it, the mortgagee became bound by the terms of obligations of the company and its officers, and 2)
the lease when it acquired the property as the highest foreclosure of the mortgage?
bidder. Hence, the mortgagee steps into the shoes of the SUGGESTED ANSWER:
mortgagor and acquires the rights of the lessor under Art 1) The taking of possession of the machinery by the bank
1768 of the NCC. This provision gives the lessor the did not result in full payment of the obligations owing
right to appropriate the condominium building but after from the company and its officers. The taking of such
paying the lessee half of the value of the building at that possession must be considered merely as a measure in
time. Should the lessor refuse to reimburse said amount, order to protect or further safeguard the bank’s security
the lessee may remove the improvement even though the interest. Dacion en pago can only be considered as having
land will suffer damage thereby. taken place when a creditor accepts and appropriates the
1st Alternative Answer: ownership of the goods in payment of a due obligation.
a. The mortgagee has a better right to the building. (PNB v Pineda 197 s 1)
Under Art 2127 of the NCC, the mortgage extends
to all improvements on the mortgaged property 2) The mere taking of possession of mortgaged
regardless of who and when the improvements were assets does not amount to foreclosure. Foreclosure
introduced. LDC cannot complain otherwise, because requires a sale at public auction. The foreclosure,
it knew that the property it was leasing was mortgaged therefore, has not as yet been effected.
when it built the condominium.
2nd alternative Answer: Mortgage; Redemption Period; Foreclosed
a. Assuming that the office condominium was duly Property (2002)
constituted under the Condominium Law, before LDC Primetime Corporation (the Borrower) obtained a
could validly constitute the same as a condominium, it P10 Million, five-year term loan from Universal
should cause to be recorded in the register of deeds of Bank (the Bank) in 1996. As security for the loan and as
the province or city where the land is situated an enabling required by the Bank, the Borrower gave the
or master deed showing, among others, a certificate of following collateral security in favor of the Bank:
the registered owner and of all registered holders of any lien 1) a real estate mortgage over the land and building
or encumbrance on the property that they consent to the owned by the Borrower and located in Quezon City;
registration of the deed. (Sec 4. RA 4726). If the 2) the joint and several promissory note of Pr.
mortgagee gave its consent thereto, then LDC should Primo Timbol, the President of the Borrower; and
prevail. If no consent was given, the condominium was 3) a real estate mortgage over the residential house and
included in the mortgage. lot owned by Mr. Timbol, also located in
Quezon City.
SUGGESTED ANSWER:
Because of business reverses, neither the Borrower nor (5) Integrity Bank – which granted Edzo a loan in 2001
Mr. Timbol was able to pay the loan. In June 2001, the in the amount of P500,000. The loan was
Bank extrajudicially foreclosed the two real estate not secured by any asset of Edzo, but it was
mortgages, with the Bank as the only bidder in the guaranteed unconditionally and solidarily by
foreclosure sale. On September 16, 2001, the certificates of Edzo’s President and controlling stockholder,
sale of the two properties in favor of the Bank were Eduardo Z. Ong, as accommodation surety.
registered with the Register of Deeds of Quezon City.
The loan due to Integrity Bank fell due on June 15, 2002.
Ten months later, both the Borrower and Mr. Despite pleas for extension of payment by Edzo,
Timbol were able to raise sufficient funds to the bank demanded immediate payment. Because the
redeem their respective properties from the Bank, bank threatened to proceed against the surety,
but the Bank refused to permit redemption on the Eduardo Z. Ong, Edzo decided to pay up all its
ground that the period for redemption had already obligations to Integrity Bank. On June 20, 2002, Edzo
expired, so that the Bank now has absolute paid to Integrity Bank the full principal amount of
ownership of both properties. The Borrower and P500,000, plus accrued interests amounting to
Mr. Timbol came to you today, September 15, 2002, P55,000. As a result, Edzo had hardly any cash left
to find out if the position of the Bank is correct. for operations and decided to close its business. After
What would be your answer? State your reasons (5%). paying the unpaid salaries of its employees, Edzo
filed a petition for insolvency on July 1, 2002.
SUGGESTED ANSWER:
1. With respect to the real estate mortgage over How would you, as judge in the insolvency proceedings,
the land and building owned by the rank the respective credits or claims of the five (5)
Borrower, Primetime Corporation, a juridical body, creditors mentioned above in terms of preference or
the period of redemption is only three (3) priority against each other? (5%)
months, which period already expired. SUGGESTED ANSWER:
The claim of Handyman Garage for P10,000 has a
2. As to the real estate mortgage over the specific lien on the car repaired.
residential house and lot owned by Mr. Timbol, the
period of redemption is one (1) year from The remaining four (4) claims have preference or priority
the date of registration of the certificate of against each other in the following order:
sale, which period has not yet expired in this case. (1) No. 4 – claim of the BIR for unpaid value
added taxes
(2) No. 3 – claim of Joselyn Reyes for
Mortgage; Remedies (2003) Unlawful termination
Carmakers, Inc., sold a motor vehicle on installment (3) No. 1 – claim of Ace equipment Supplies as an
basis to Chari Paredes. The transaction was reflected on a unpaid seller; and
promissory note executed by Chari in favor of (4) No. 5 – claim of Integrity Bank.
Carmakers. The note was secured by a mortgage over the
car. Contemporaneous with the execution of the note
and the mortgage deed, Carmakers, Inc., assigned the Promissory Note: Liability (2001)
instruments sans recourse to Adelantado Finance X, Y and Z signed a promissory note in favor of
Corporation. Chari defaulted in her obligations. Could A stating: “We promise to pay A on December 31, 2001
Adelantado Finance corporation take action against both the sum of P5,000.00” When the note fell due, A sued X
Carmakers Inc., and Chari? Why? (6%) and Y who put up the defense that A should have
SUGGESTED ANSWER: impleaded Z. Is the defense valid? Why? (5%)
Preference of Credits (2002) SUGGESTED ANSWER:
As of June 1, 2002, Edzo Systems Corporation The defense is not valid. The liability of X, Y, and
(Edzo) was indebted to the following creditors: Z under the promissory note is joint. Such being the
(1) Ace Equipment Supplies – for various personal case, Z is not an indispensable party. The fact that A did
computers and accessories sold to Edzo on not implead Z will not prevent A from
credit amounting to P300,000. collecting the proportionate share of X and Y in
(2) Handyman Garage – for mechanical repairs the payment of the loan.
(parts and service) performed on Edzo’s (Observation: Even if the liability of X, Y, and
company car amounting to P10,000. Z is solidary, the defense would still not be valid)
(3) Joselyn Reyes – former employee of Edzo who sued
Edzo for unlawful termination of employment
and was able to obtain a final judgment against Remedies; Available to Mortgagee-Creditor (1996)
Edzo for P100,000. Finding a 24-month payment plan attractive, Anjo
(4) Bureau of Internal Revenue – for unpaid value- purchased a Tamaraw FX from Toyota QC. He paid a
added taxes amounting to P30,000. down-payment of P100th and obtained financing for the
balance from IOU Co. He executed a chattel mortgage
over the vehicle in favor of IOU. When Anjo defaulted, Upon his failure to pay the loan on due date, the
IOU foreclosed the chattel mortgage, and sought to bank foreclosed the mortgage on the 3 lots,
recover the deficiency. which were subsequently sold for only P99th at the
May IOU still recover the deficiency? Explain. foreclosure sale. Thereafter, the bank filed an
SUGGESTED ANSWER: ordinary action for the collection of the deficiency.
IOU may no longer recover the deficiency. Under Art A contended that the mortgage contract he
1484 of the NCC, in a contract of sale of personal executed was indivisible and consequently, the bank
property the price of which is payable in installments, the had no legal right to foreclose only the real estate
vendor may, among several options, foreclose the chattel mortgage and leave out the chattel mortgage, and
mortgage on the thing sold, if one has been constituted, then sue him for a supposed deficiency judgment.
should the vendee’s failure to pay cover two or more If you were the Judge, would you sustain the contention
installments. In such case, however, the vendor shall of A?
have no further action against the purchaser to recover SUGGESTED ANSWER:
any unpaid balance of the price and any agreement to the If I were the Judge, I would dismiss the action as being
contrary is void. While the given facts did not explicitly premature since the proper remedy would be to complete
state that Anjo’s failure to pay covered 2 or more the foreclosure of the mortgages and only thereafter can
installments, this may safely be presumed because the there by an action for collection of any deficiency. In
right of IOU Co to foreclose the chattel mortgage under Caltex v IAC (GR 74730, 25 Aug 89) , the remedies on a
the circumstances is premised on Anjo’s failure to pay 2 or secured debt, said the court, are either an action to collect
more installments. The foreclosure would not have or to foreclose a contract of real security. These remedies
been valid if it were not so. (The given facts did not also are alternative remedies, although an action for any
state explicitly whether Anjo’s default was a payment deficiency is not precluded, subject to certain exceptions
default or a default arising from a breach of a negative such as those stated in Art 1484 of the Civil Code, by a
pledge or breach of a warranty. In such case, however, foreclosure on the mortgages. While the factual settings in
IOU Company would not have been able to foreclose the the case of Suria v IAC (30 June 87) are not similar to the facts
chattel mortgage validly as such foreclosure, under the given in the problem, the SC implied that
circumstances contemplated by the law, could only be foreclosure as a remedy in secured obligations must first be
effected for a payment default covering two or more availed of by a creditor in preference to other
installments) (Luis Ridad v Filipinas Investment and Finance remedies that might also be invoked by him.
Co GR L-39806 Jan27,83 120s246) ALTERNATIVE ANSWER:
The indivisibility of a contract of real security, such as a real
Remedies; Available to Mortgagee-Creditor (2001) estate mortgage or a chattel mortgage, only means that a
Debtor “A” issued a promissory note in the amount of division or a partial payment of a secured obligation
P10M in favor of commercial bank Y secured does not warrant a corresponding division or proportionate
by mortgage of his properties worth P30M. When A reduction of the security given. A creditor in such secured
failed to pay his indebtedness, despite demands made by debts may pursue the remedy of foreclosure, in part or
bank Y, the latter instituted a collection suit to in full, or file an ordinary action for collection on any
enforce payment of the P10M account. Subsequently, amount due. A favorable judgment can warrant an issuance
bank Y also filed foreclosure proceedings against A of a writ of execution on any property, not exempt from
for security given for the account. If you were the execution, belonging to the judgment debtor. There should
judge, how would you resolve the two cases? (5%) be no legal obstacle for a creditor to waive, in full or in
SUGGESTED ANSWER: part, his right to foreclosure on contracts of real security.
The case for collection will be allowed to proceed. But
the foreclosure proceedings have to be dismissed. In
instituting foreclosure proceedings, after filing a
collection case involving the same account or transaction, Insurance Law
bank Y is guilty of splitting a cause of action. The loan of
P10M is the principal obligation while the mortgage
securing the same is merely an accessory to said loan Beneficiary: Effects: Irrevocable Beneficiary (2005)
obligation. The collection of the loan and the foreclosure of What are the effects of an irrevocable designation of a
the mortgage securing said loan constitute one and the beneficiary under the Insurance Code? Explain. (2%)
SUGGESTED ANSWER:
same cause of action. The filing of the collection case
The irrevocable designation gives the beneficiary a vested
bars the subsequent filing of the foreclosure proceedings.
right over Life Insurance. The Insured cannot act to
Remedies; Secured Debt (1991) divest the irrevocable beneficiary, in whole or in
part, without the beneficiary's consent.
To secure the payment of his loan of P200th, A executed
To be specific:
in favor of the Angeles Banking Co in 1 document, a real (1) The beneficiary designated in a life insurance
estate mortgage over 3 lots registered in his name and a
contract cannot be changed without the consent of the
chattel mortgage over his 3 cars and 1 Isuzu cargo truck.
beneficiary because he has a vested interest in the
policy (Philamlife v. Pineda, G.R. No. 54216, July 19,
Mercantile Law Bar Examination Q & A (1990-2006) Page 50 of 103 relation,
1989, citing Gcrcio v. Sun Life, G.R. No. 23703, September 28, Purita cannot be a donee of the deceased. Hence,
1925; and Go v. Redfern, G.R. No. 47705, April 25, 1841); she cannot also be his beneficiary.
(2) Neither can the Insured take the cash surrender Concealment; Material Concealment (2001)
value, assign or even borrow on said policy without A applied for a non-medical life insurance. The insured
the beneficiary's consent (Nario v. Philamlife, G.R. did not inform the insurer that one week prior to
No. 22796, June 26, 1967); his application for insurance, he was examined and
confined at St. Luke’s Hospital where he was diagnosed
(3) The Insured cannot add another beneficiary because for lung cancer. The insured soon thereafter died in a
that would reduce the amount which the plane crash. Is the insurer liable considering that the
first beneficiary may recover and therefore fact concealed had no bearing with the cause of
adversely affect his vested right (Go v. Redfem, death of the insured? Why? (5%)
G.R. No. 47705, April 25, 1941); SUGGESTED ANSWER:
No. The concealed fact is material to the approval and
(4) Unless the policy allows, the Insured cannot even issuance of the insurance policy. It is well settled that the
designate another beneficiary should the original insured need not die of the disease he failed to disclose to
beneficiary predecease him. His estate acquires the the insurer. It is sufficient that his nondisclosure misled the
beneficiary's vested right upon his death; and insurer in forming his estimate of the risks of the
proposed insurance policy or in making inquiries.
(5) The Insured cannot allow his creditors to attach or
execute on the policy. (Philamlife v. Pineda, G.R. No. Concealment; Material Concealment:
54216, July 19, 1989) Incontestability Clause (1994)
On September 23, 1990, Tan took a life insurance policy
Beneficiary: Rights; Irrevocable Beneficiary (2005)
from Philam. The policy was issued on November
Jacob obtained a life insurance policy for P1 Million
6, 1990. He died on April 26, 1992 of hepatoma.
designating irrevocably Diwata, a friend, as his
The insurance company denied the beneficiaries’
beneficiary. Jacob, however, changed his mind and wants
claim and rescinded the policy by reason of
Yob and Jojo, his other friends, to be included as
alleged misrepresentation and concealment of
beneficiaries considering that the proceeds of the policy are
material facts made by Tan in his application. It
sufficient for the three friends. Can Jacob still add
returned the premiums paid.
Yob and Jojo as his beneficiaries? Explain. (2%)
SUGGESTED ANSWER:
The beneficiaries contend that the company had no right
No, Jacob can no longer add Yob and Jojo as his
to rescind the contract as rescission must be
beneficiaries in addition to Diwata. As the
done “during the lifetime” of the insured within two
irrevocable beneficiary, Diwata has acquired a-
years and prior to the commencement of the action.
vested right over Jacob's life insurance policy. Any
Is the contention of the beneficiaries tenable?
additional beneficiaries will reduce the amount SUGGESTED ANSWER:
which Diwata, as the first beneficiary, may recover, No. The incontestability clause does not apply. The
which will adversely affect her vested right. (Go v. insured dies within less than two years from the issuance
Redfern, G.R. No. 47705, April 25, 1941) of the policy on September 23, 1990. The insured
died on April 26, 1992, or less than 2 years from
Beneficiary; Life Insurance; Prohibited
September 23, 1990.
Beneficiaries (1998)
Juan de la Cruz was issued Policy No. 8888 of the The right of the insurer to rescind is only lost if the
Midland Life Insurance Co on a whole life plan for beneficiary has commenced an action on the policy.
P20,000 on August 19, 1989. Juan is married to Cynthia There is no such action in this case. (Tan v CA 174 s 143)
with whom he has three legitimate children. He,
however, designated Purita, his common-law wife, as the Concealment; Material Concealment:
revocable beneficiary. Juan referred to Purita in Incontestability Clause (1996)
his application and policy as the legal wife. Juan procured a “non-medical” life insurance from Good
3 years later, Juan died. Purita filed her claim for Life Insurance. He designated his wife, Petra, as the
the proceeds of the policy as the designated beneficiary. Earlier, in his application in response to the
beneficiary therein. The widow, Cynthia, also filed a question as to whether or not he had ever been
claim as the legal wife. To whom should the hospitalized, he answered in the negative. He forgot to
proceeds of the insurance policy be awarded? (5%) mention his confinement at the Kidney Hospital.
SUGGESTED ANSWER:
The proceeds of the insurance policy shall be awarded to
After Juan died in a plane crash, Petra filed a claim with
the ESTATE of Juan de la Cruz. Purita, the common-
Good Life. Discovering Juan’s previous hospitalization,
law-wife, is disqualified as the beneficiary of the deceased
Good Life rejected Petra’s claim on the ground of
because of illicit relation between the deceased and
concealment and misrepresentation. Petra sued Good
Purita, the designated beneficiary. Due to such illicit
Life, invoking good faith on part of Juan.
Will Petra’s suit prosper? Explain.
SUGGESTED ANSWER: Concealment; Material Concealment; Incontestability
No, Petra’s suit will not prosper (assuming that the policy Clause (1991)
of life insurance has been in force for a period of less Atty Roberto took out a life insurance policy from
than 2 years from the date of its issue). The matters the Dana Ins Co (DIC) on 1 Sep 1989. On 31 Aug
which Juan failed to disclose was material and relevant to 1990, Roberto died. DIC refused to pay his
the approval and issuance of the insurance policy. They beneficiaries because it discovered that Robert had
would have affected Good Life’s action on his misrepresented certain material facts in his application.
application, either by approving it with the corresponding The beneficiaries sued on the basis that DIC can contest
adjustment for a higher premium or rejecting the same. the validity of the insurance policy only within 2 years
Moreover, a disclosure may have warranted a medical from the date of issue and during the lifetime of the
examination of Juan by Good Life in order for it to insured. Decide the case.
reasonably assess the risk involved in accepting the SUGGESTED ANSWER:
application. In any case, good faith is no defense in I would rule in favor of the insurance company.
concealment. The waiver of a medical examination in the The incontestability clause, applies only if the policy had
‘non-medical’ life insurance from Good Life makes it been in effect for at least 2 years. The 2 year period is
even more necessary that Juan supply complete counted from the time the insurance becomes effective
information about his previous hospitalization for such until the death of the insured and not thereafter (Tan
information constitutes an important factor which Good v CA GR 48044 29Jun1989)
Life takes into consideration in deciding whether to issue ALTERNATIVE ANSWER:
the policy or not. (See Sunlife Assurance Co of Canada v CA GR I would rule in favor of the insurance company.
105135, June 22, 1995 245 s 268) Although an insurer may not rescind the contract on
ground of misrepresentation after an action is
If the policy of life insurance has been in force for a commenced for recovery under the policy, the insurer is not
period of 2 years or more from the date of its issue (on precluded from invoking the ground of
which point the given facts are vague) then Good Life misrepresentation as a defense in the action for recovery.
can no longer prove that the policy is void ab initio or is This is alright since the bar problem is not covered yet by
rescindible by reason of the fraudulent concealment or the incontestability clause.
misrepresentation of Juan ( Sec 48 Ins Code)
Concealment; Material Concealment; Incontestability
Concealment; Material Concealment: Clause (1998)
Incontestability Clause (1997) Renato was issued a life insurance policy on January
The assured answers “No” to the question in 2, 1990. He concealed the fact that 3 years prior to
the application for a life policy: “Are you suffering from the issuance of his life insurance policy, he had been
any form of heart illness?” In fact, the assured has seeing a doctor about his heart ailment.
been a heart patient for many years. On 7 Sep 1991, the
assured is killed in a plane crash. The insurance company On March 1, 1992, Renato died of heart failure. May the
denies the claim for insurance proceeds and heirs file a claim on the proceeds of the life
returns the premiums paid. insurance policy of Renato? (5%)
Is the decision of the insurance company justified? SUGGESTED ANSWER:
SUGGESTED ANSWER: Yes. The life insurance policy in question was issued on
Assuming that the incontestability clause does not apply January 9, 1990. More than 2 years had elapsed
because the policy has not been in force for 2 years, from when Renato, the insured, died on March 1,
the date of issue, during the lifetime of the insured, the 1992. The incontestability clause applies.
decision of the insurance company not to pay is justified.
There was fraudulent concealment. It is not material that INCONTESTABILITY CLAUSE
the insured died of a different cause than the fact The insurer has two years from the date of issuance of
concealed. The fact concealed, that is heart ailment, is the insurance contract or of its last reinstatement within
material to the determination by the insurance company which to contest the policy, whether or not, the insured still
whether or not to accept the application for insurance lives within such period. After two years, the
and to require the medical examination of the insured. defenses of concealment or misrepresentation, no matter
how patent or well founded, no longer lie.
However, if the incontestability clause which applies
to the insurance policy covering the life of the insured Insurable Interest: Bank Deposit (2000)
had been in force for 2 years from issuance thereof, BD has a bank deposit of half a million pesos. Since the
the insurance company would not be justified in denying limit of the insurance coverage of the Philippine Deposit
the claim for proceeds of the insurance and in returning Insurance Corp (PDIC) (RA 3591) is only one tenth of
the premium paid. In that case, the insurer cannot prove BD’s deposit, he would like some protection for the
the policy void ab initio or rescindible by excess by taking out an insurance against all risks or
reason of fraudulent concealment or contingencies of loss arising from any unsound or unsafe
misrepresentation of the insured. banking practices including unforeseen adverse effects of
the continuing crisis involving the banking and financial Moreover, in the problem at hand, there is no
sector in the Asian region. Does BD have an double insurance because the insured with the First
insurable interest within the meaning of the Insurance Insurance is different from the insured with the
Code of the Philippines (PD1460)? (2%) Second Insurance Company. The same is true with
SUGGESTED ANSWER: respect to the interests insured in the two policies.
Yes. BD has insurable interest in his bank deposit. In
case of loss of said deposit, more particularly to the c) As Judge, I would allow the businessman to
extent of the amount in excess of the limit covered by recover his total loss of P5M representing the full
the PDIC Act, PBD will be damnified. He will suffer value of his goods which were lost through fire. As to
pecuniary loss of P300,000.00, that is, his bank deposit of the creditor, I would allow him to recover the amount to
half a million pesos minus P200,000.00 which is the the extent of or equivalent to the value of the credit he
maximum amount recoverable from the PDIC. extended to the businessman for the stocks-in-
trade which were mortgaged by the businessman.
Insurable Interest: Public Enemy (2000)
May a member of the MILF or its breakaway group, the Insurable Interest; Equitable Interest (1991)
Abu Sayyaf, be insured with a company licensed to A piece of machinery was shipped to Mr Pablo on
do business under the Insurance Code of the Phils the basis of C&F Manila. Pablo insured said machinery
(PD 1460)? Explain. (3%) with the Talaga Merchants Ins Co (Tamic) for loss or
SUGGESTED ANSWER:
damage during the voyage. The vessel sank en route
A member of the MILF or the Abu Sayyaf may be to Manila. Pablo then filed a claim with Tamic which
insured with a company licensed to do business was denied for the reason that prior to deliver, Pablo
under the Insurance Code of the Phils. What is had no insurable interest. Decide the case.
prohibited to be insured is a public enemy. A public SUGGESTED ANSWER:
enemy is a citizen or national of a country with which Pablo had an existing insurable interest on the piece
the Philippines is at war. Such member of the MILF of machinery he bought. The purchase of goods
or the Abu Sayyaf is not a citizen or national of under a perfected contract of sale already vests
another country, but of the Philippines. equitable interest on the property in favor of the
buyer even while it is pending delivery (Filipino
Insurable Interest: Separate Insurable Interest (1999) Merchants Ins Co v CA GR 85144 28Nov1989)
A businessman in the grocery business obtained
from First Insurance an insurance policy for P5M to Insurable Interest; Life vs. Property Insurance (1997)
fully cover his stocks-in-trade from the risk of fire. a) A obtains a fire insurance on his house and as
a generous gesture names his neighbor as
Three months thereafter, a fire of accidental origin broke the beneficiary. If A’s house is destroyed by fire,
out and completely destroyed the grocery including can B successfully claim against the policy?
his stocks-in-trade. This prompted the businessman b) A obtains insurance over his life and names his
to file with First Insurance a claim for five neighbor B the beneficiary because of A’s secret love
million pesos representing the full value of his goods. for B. If A dies, can B successfully claim against the
policy?
First Insurance denied the claim because it discovered SUGGESTED ANSWER:
that at the time of the loss, the stocks-in-trade were a) No. In property insurance, the beneficiary must have
mortgaged to a creditor who likewise obtained from insurable interest in the property insured. (Sec 18
Second Insurance Company fire insurance coverage for Ins Code). B does not have insurable interest in the
the stocks at their full value of P5M. house insured.
a) May the businessman and the creditor obtain
separate insurance coverages over the same b) Yes. In life insurance, it is not required that the
stocks- in-trade? Explain (3%) beneficiary must have insurable interest in the life of the
b) First Insurance refused to pay claiming that double insured. It was the insured himself who took the policy
insurance is contrary to law. Is this on his own life.
contention tenable? (3%)
c) Suppose you are the Judge, how much would you Insurable Interest; Life vs. Property Insurance (2000)
allow the businessman and the creditor to recover IS, an elderly bachelor with no known relatives, obtained
from their respective insurers. Explain (3%) life insurance coverage for P250,000.00 from Starbrite
SUGGESTED ANSWER: Insurance Corporation, an entity licensed to engage in
a) Yes. The businessman, as owner, and the creditor, as the insurable business under the Insurance Code of the
mortgagee, have separate insurable interests in the same Philippines (PD1460). He also insured his residential
stocks-in-trade. Each may insure such interest to protect house for twice that amount within the same
his own separate interest. corporation. He immediately assigned all his rights to the
b) The contention of First Insurance that double insurance proceeds to BX, a friend-companion living
insurance is contrary to law is untenable. There is no law with him. Three years later, IS died in a fire that gutted his
providing that double insurance is illegal per se. insured house two days after he had sold it. There is
no evidence of suicide or arson or involvement of BX in On March 19, 1993, a fire razed the building to the
these events. BX demanded payment of the ground. Garapal Insurance refused to make good its
insurance proceeds from the two policies, the premiums obligation to Benjie under the insurance contract.
for which IS had been faithfully paying during all the 1) Is Garapal Insurance legally justified in
time he was alive. Starbrite refused payment, contending refusing payment to Benjie?
that BX had no insurable interest and therefore was 2) Is Nat entitled to collect on the insurance policy?
not entitled to receive the proceeds from IS’s insurance SUGGESTED ANSWER:
coverage on his life and also on his property. Is 1)Yes. At the time of the loss, Benjie was no longer the
Starbrite’s contention valid? Explain? (5%) owner of the property insured as he failed to redeem the
SUGGESTED ANSWER: property. The law requires in property insurance that
Starbrite is correct with respect to the insurance coverage a person can recover the proceeds of the policy if he has
on the property of IS. The beneficiary in the property insurable interest at the time of the issuance of the policy
insurance policy or the assignee thereof must have and also at the time when the loss occurs. At the time of
insurable interest in the property insured. BX, a mere fire, Benjie no longer had insurable interest in
friend-companion of IS, has no insurable interest in the the property insured.
residential house of IS. BX is not entitled to receive the
proceeds from IS’s insurance on his property. 2) No. While at the time of the loss he had
insurable interest in the building, as he was the owner
As to the insurance coverage on the life of IS, BX is thereof, Nat did not have any interest in the policy.
entitled to receive the proceeds. There is no requirement There was no automatic transfer clause in the policy
that BX should have insurable interest in the life of IS. It that would give him such interest in the policy.
was IS himself who took the insurance on his own life.
Insurable Interest; Life vs. Property Insurance (2002) JQ, owner of a condominium unit, insured the same
Distinguish insurable interest in property insurance from against fire with the XYZ Insurance Co., and made the
insurable interest in life insurance. (5%) loss payable to his brother, MLQ. In case of loss by fire
SUGGESTED ANSWER: of the said condominium unit, who may recover on the
a) In property insurance, the expectation of benefit fire insurance policy? State the reason(s) for your answer.
must have a legal basis. In life insurance, (5%)
the expectation of benefit to be derived SUGGESTED ANSWER:
from the continued existence of a life need not JQ can recover on the fire insurance policy for the loss of
have any legal basis. said condominium unit. He has the insurable interest as
owner-insured. As beneficiary in the fire insurance policy,
b) In property insurance, the actual value of the interest MLQ cannot recover on the fire insurance policy.
therein is the limit of the insurance that can validly For the beneficiary to recover on the fire or
be placed thereon. In life insurance, there is no limit property insurance policy, it is required that he
to the amount of insurance that may be taken upon must have insurable interest in the property insured.
life. In this case, MLQ does not have insurable
interest in the condominium unit.
c) In property insurance, an interest insured must exist
when the insurance takes effect and when the Insurance; Cash & Carry Basis (2003)
loss occurs but need not exist in the meantime. What is meant by “cash and carry” in the business
In life insurance, it is enough that insurable of insurance?
interest exists at the time when the contract is SUGGESTED ANSWER:
made but it need not exist at the time of loss.
Insurance; Co-Insurance vs. Re-Insurance (1994)
Insurable Interest; Property Insurance (1994) Distinguish co-insurance from re-insurance.
In a civil suit, the Court ordered Benjie to pay Nat SUGGESTED ANSWER:
P500,000.00. To execute the judgment, the sheriff levied CO-INSURANCE is the percentage in the value of the
upon Benjie’s registered property (a parcel of land insured property which the insured himself assumes
and the building thereon),and sold the same at public or undertakes to act as insurer to the extent of
auction to Nat, the highest bidder. The latter, on March the deficiency in the insurance of the insured
18, 1992, registered with the Register of Deeds the property. In case of loss or damage, the insurer will be
certificate of sale issued to him by the sheriff. liable only for such proportion of the loss or damage as
Meanwhile, on January 27, 1993, Benjie insured with the amount of insurance bears to the designated
Garapal Insurance for P1,000,000.00 the same building percentage of the full value of the property insured.
that was sold at public auction to Nat. Benjie failed to
REINSURANCE is where the insurer procures a third
redeem the property by March 18, 1993.
party, called the reinsurer, to insure him against liability
by reason of such original insurance. Basically, a
reinsurance is an insurance against liability which the Yes, when insured and insurer have agreed to the
original insurer may incur in favor of the original insured. payment of premium by installments and partial payment
has been made at the time of loss, then the insurer
Insurance; Double Insurance (2005) becomes liable. When the car loss happened on the 5th
When does double insurance exist? (2%) month, the six months agreed period of payment had not
SUGGESTED ANSWER: yet elapsed (UCPB General Insurance v. Masagana Telamart, G.R. No.
Under Section 93 of the Insurance Code, there is double 137172, April 4, 2001). Francis can recover from
insurance when there is over-insurance with two or more Peninsula Insurance Company, but the latter has the right
companies, covering the same property, the same to deduct the amount of unpaid premium from the
insurable interest and the same risk. Double insurance proceeds.
insurance exists where the same person is
insured by several insurers separately in respect of the Insurance; Life Insurance; Assignment of Policy (1991)
same subject matter and interests. (Geagonia v. Court of The policy of insurance upon his life, with a face value of
Appeals, G.R. No. 114427, February 6, 1995) P100th was assigned by Jose, a married man with 2
legitimate children, to his nephew Y as security for a loan
Insurance; Double Insurance; effect (1993) of P50th. He did not give the insurer any written notice
Julie and Alma formed a business partnership. Under the of such assignment despite the explicit provision to that
business name Pino Shop, the partnership engaged in a effect in the policy. Jose died. Upon the claim on
sale of construction materials. Julie insured the stocks in the policy by the assignee, the insurer refused to pay on
trade of Pino Shop with WGC Insurance Co for P350th. the ground that it was not notified of the assignment.
Subsequently, she again got an insurance contract with Upon the other hand, the heirs of Jose contended that Y
RSI for P1m and then from EIC for P200th. A fire of is not entitled to any amount under the policy
unknown origin gutted the store of the partnership. Julie because the assignment without due notice to the
filed her claims with the three insurance companies. insurer was void. Resolve the issues.
However, her claims were denied separately for breach of SUGGESTED ANSWER:
policy condition which required the insured to give A life insurance is assignable. A provision, however,
notice of any insurance effected covering the stocks in in the policy stating that written notice of such
trade. Julie went to court and contended that she should an assignment should be given to the insurer is valid
not be blamed for the omission, alleging that the (Secs 181-182 Ins Code). The failure of the
insurance agents for WGC, RSI and EIC knew of the notice of assignment would thus preclude the
existence of the additional insurance coverages and that she assignee from claiming rights under the policy. The
was not informed about the requirement that such failure of notice did not, however, avoid the policy;
other or additional insurance should be stated in the hence, upon the death of Jose, the proceeds would, in
policy. the absence of a designated beneficiary, go to the estate
Is the contention of Julie tenable? Explain. of the insured. The estate, in turn, would be liable for
May she recover on her fire insurance policies? Explain. the loan of P50,000 owing in favor of Y.
SUGGESTED ANSWER:
1) No. An insured is required to disclose the other Insurance; Perfection of Insurance Contracts (2003)
insurances covering the subject matter of the insurance Josie Gatbonton obtained from Warranty Insurance
being applied for. (New Life Ent v CA 207 s 669) Corporation a comprehensive motor vehicle insurance to
cover her brand new automobile. She paid, and the
2) No, because she is guilty of violation of a warranty/ insurer accepted payment in check. Before the check
condition. could be encashed, Josie was involved in a motor vehicle
accident where her car became a total wreck. She sought
Insurance; Effects; Payment of Premiums by payment from the insurer. Could the insurer be made
Installment (2006) liable under the insurance coverage? (6%)
The Peninsula Insurance Company offered to insure SUGGESTED ANSWER:
Francis' brand new car against all risks in the sum of PI (per Dondee) Yes, because there was a perfected contract
Million for 1 year. The policy was issued with the of insurance the moment there is a meeting of the minds
premium fixed at 160,000.00 payable in 6 with respect to the object and the cause of payment. The
months. Francis only paid the first two months payment of check is a valid payment unless
installments. Despite demands, he failed to pay upon encashment the check bounced.
the subsequent installments. Five months after the
issuance of the policy, the vehicle was carnapped. Insurance; Property Insurance; Prescription of
Francis filed with the insurance company a claim Claims (1996)
for its value. However, the company denied his claim Robin insured his building against fire with
on the ground that he failed to pay the premium EFG Assurance. The insurance policy contained the
resulting in the cancellation of the policy. usual stipulation that any action or suit must be
Can Francis recover from the Peninsula filed within one year after the rejection of the claim.
Insurance Company? (5%)
SUGGESTED ANSWER:
Mercantile Law Bar Examination Q & A (1990-2006) Page 55 of 103 son,
After his building burned down, Robin filed his claim for BOY, injured 3 children of POS, a neighbor, who
fire loss with EFG. On Feb 28, 1994, EFG denied sued SAM for damages. SAM's lawyer was ATT,
Robin’s claim. On April 3, 1994, Robin sought who was paid for his services by the insurer for
reconsideration of the denial, but EFG reiterated its reporting periodically on the case to CNI. In one
position. On March 20, 1995, Robin commenced judicial report, ATT disclosed to CNI that after his
action against EFG. investigations, he found the injuries to the 3
Should Robin’s action be given due course? Explain. children not accidental but intentional.
SUGGESTED ANSWER:
No, Robin’s action should not be given due course. Is SAM lost the case in court, and POS was awarded
filing of the request for reconsideration did not suspend the one million pesos in damages which he sought to collect
running of the prescriptive period of one year from the insurer. But CNI used ATTs report to deny the
stipulated in the insurance policy. Thus, when robin claim on the ground that the injuries to POS's 3 children
commenced judicial action against EFG Assurance on were intentional, hence excluded from the policy's
March 20, 1995, his ability to do so had already coverage. POS countered that CNI was estopped from
prescribed. The one-year period is counted from Feb 28, using ATTs report because it was unethical for ATT
1994 when EFG denied Robin’s claim, not from the date to provide prejudicial information against his client
(presumably after April 3, 1994) when EFG reiterated its to the insurer, CNI.
position denying Robin’s claim. The reason for this rule is Who should prevail: the claimant, POS; or the
to insure that claims against insurance companies are insurer, CNI? Decide with reasons briefly. (5%)
promptly settled and that insurance suits are brought by the SUGGESTED ANSWER:
insured while the evidence as to the origin and cause of the CNI is not estopped from using ATT's report, because
destruction has not yet disappeared. (See Sun Ins Office Ltd CNI, in the first place, commissioned it and paid ATT
v CA gr 89741, Mar 13 91 195s193) for it. On the other hand, ATT has no conflict of interest
because SAM and CNI are on the same side — their
Insurance; Return of Premiums (2000) interests being congruent with each other, namely, to
Name at least three instances when an insured is entitled oppose POS's claim. It cannot be said that ATT has used
to a return of the premium paid. the information to the disadvantage or prejudice of SAM.
SUGGESTED ANSWER:
Three instances when an insured is entitled to a return of However, in Finman General Assurance Corp. v. Court of Appeals,
premium paid are: 213 SCRA 493 (1992), it was explained that there is no
1. To the WHOLE PREMIUM, if no part of his "accident" in the context of an accident policy, if it is the
interest in the thing insured be exposed to any of the natural result of the insured's voluntary act,
perils insured against. unaccompanied by anything unforeseen except the injury.
There is no accident when a deliberate act is performed,
2. Where the insurance is made for a definite period of unless some additional and unforeseen happening occurs
time and the insured surrenders his policy, to such that brings about the injury. This element of
portion of the premium as corresponds with the deliberateness is not clearly shown from the facts of the
unexpired time at a pro rata rate, unless a short case, especially considering the fact that BOY is a minor,
period rate has been agreed upon and appears on the and the injured parties are also children. Accordingly, it is
face of the policy, after deducting from the whole possible that CNI may not prosper. ATT's report is not
premium any claim for loss or damage under the conclusive on POS or the court.
policy which has previously accrued.
3. When the contract is voidable on account of Luis was the holder of an accident insurance policy
the fraud or misrepresentation of the insurer or effective Nov 1, 1988 to Oct 31, 1989. At a boxing
of his agent or on account of facts the existence of contest held on Jan 1, 1989 and sponsored by his
which the insured was ignorant without his fault; or employer, he slipped and was hit on the fact by his
when, by any default of the insured other than opponent so he fell and his head hit one of the posts of
actual fraud, the insurer never incurred any the boxing ring. He was rendered unconscious and was
liability under the policy. dead on arrival at the hospital due to “intra-cranial
ALTERNATIVE INSTANCE:
hemorrhage.”
In case of an over insurance by several insurers, the Can his father who is a beneficiary under said insurance
insured is entitled to a ratable return of the policy successfully claim indemnity from the
premium, proportioned to the amount by which the insurance company? Explain.
aggregate sum insured in all the policies exceeds the SUGGESTED ANSWER:
insurable value of the thing at risk. Yes, the father who is a beneficiary under the accidental
insurance can successfully claim indemnity for the death
Insured; Accident Policy (2004) of the insured. Clearly, the proximate cause of death was
CNI insure SAM under a homeowner's policy against the boxing contest. Death sustained in a boxing contest
claims for accidental injuries by neighbors. SAM's minor is an accident. (De la Cruz v Capital Ins & Surety Co 17s559)
Mercantile Law Bar Examination Q & A (1990-2006) Page 56 of 103 or willful
exposure to needless peril which are excepted risks. The
Insured; Accident vs. Suicide (1993) insured’s act was purely an act of negligence which
S Insurance Co issued a personal accident policy to Bob is covered by the policy and for which the insured got
Tan with a face value of P500th. In the evening of Sep 5, the insurance for his protection. In fact, he removed the
1992, after his birthday party, Tan was in a happy mood magazine from the gun and when he pointed the gun to
but not drunk. He was playing with his hand gun, from his temple he did so because he thought that it was
which he previously removed the magazine. As safe for him to do so. He did so to assure his sister that
his secretary was watching television, he stood in the gun was harmless. There is none in the policy
front of her and pointed the gun at her. She pushed it that would relieve the insurer of liability for the death of
aside and said that it may be loaded. He assured her that the insured since the death was an accident.
it was not and then pointed it at his temple. The
next moment, there was an explosion and Tan Insurer: Effects: Several Insurers (2005)
slumped to the floor lifeless. What is the nature of the liability of the several insurers
in double insurance? Explain. (2%)
The wife of the deceased sought payment on the policy SUGGESTED ANSWER:
but her claim was rejected. The insurance company The nature of the liability of the several insurers in
agreed that there was no suicide. However, it was double insurance is that each insurer is bound to the
the submission of the insurance company that there was contribute ratably to the loss in proportion to the amount
no accident. In support thereof, it contended a) that for which he is liable under his contract as provided for by
there was no accident when a deliberate act was Sec 94 of ICP par. The ratable contribution of each of each
performed unless some additional, unexpected, insurer will be determined based on the following
independent and unforeseen happening occur which formula: AMOUNT OF POLICY divided by TOTAL
produces or brings about the injury or death; and b) INSURANCE TAKEN multiplied by LOSS =
that the insured willfully exposed himself to needless LIABILITY OF THE INSURER.
peril and thus removed himself from the coverage ALTERNATIVE ANSWER:
of the insurance policy. Are the two contentions of Each insurer is bound, as between himself and
the insurance company tenable? Explain. other insurers, to contribute ratably to the loss in
SUGGESTED ANSWER: proportion to the amount for which he is liable under
No. These two contentions are not tenable. The insurer his contract. (Sec. 94, Insurance Code)
is liable for injury or death even due to the
insured’s gross negligence. The fact that the insured Insurer; 3rd Party Liability (1996)
removed the magazine from the hand gun means that While driving his car along EDSA, Cesar sideswiped
the insured did not willfully expose himself to Roberto, causing injuries to the latter, Roberto sued
needless peril. At most, the insured is only guilty of Cesar and the third party liability insurer for
negligence (Sun Ins v CA 211 s 554) damages and/or insurance proceeds. The insurance
company moved to dismiss the complaint,
Insured; Accident vs. Suicide (1995) contending that the liability of Cesar has not yet
Sun-Moon Insurance issued a Personal Accident Policy been determined with finality.
to Henry Dy with a face value of P500th. A provision in a) Is the contention of the insurer correct? Explain.
the policy states that “the company shall not be liable in b) May the insurer be held liable with Cesar?
respect of “bodily injury’ consequent upon the insured SUGGESTED ANSWER:
person attempting to commit suicide or willfully No, the contention of the insurer is not correct. There is
exposing himself to needless peril except in an attempt to no need to wait for the decision of the court determining
save human life.” Six months later Henry Dy died of Cesar’s liability with finality before the third party liability
a bullet wound in his head. Investigation showed that one insurer could be sued. The occurrence of the injury
evening Henry was in a happy mood although he was not to Roberto immediately gave rise to the liability of
drunk. He was playing with his handgun from which he had the insurer under its policy. In other words,
previously removed its magazine. He pointed the gun where an insurance policy insures directly against
at his sister who got scared. He assured her it was liability, the insurer’s liability accrues immediately
not loaded. He then pointed the gun at his temple upon the occurrence of the injury or event upon
and pulled the trigger. The gun fired and Henry slumped on which the liability depends (Sherman Shafer v Judge RTC
the floor. Olongapo City Branch 75 GR l-78848, Nov 14 88 167s386)
Henry’s wife Beverly, as the designated beneficiary, The insurer cannot be held solidarily liable with Cesar.
sought to collect under the policy. Sun-Moon Insurance The liability of the insurer is based on contract while that of
rejected her claim on the ground that the death of Henry Cesar is based on tort. If the insurer were solidarily
was not accidental. Beverly sued the insurer. liable with Cesar, it could be made to pay more than the
amount stated in the policy. This would, however, be
Decide and Discuss fully.
SUGGESTED ANSWER: contrary to the principles underlying insurance contracts.
Beverly can recover the proceeds of the policy from the On the other hand, if the insurer were solidarily liable
insurer. The death of the insured was not due to suicide with Cesar and it is made to pay only up to the amount
stated in the insurance policy, the principles underlying Luz P4,500 for the damage to the car as evidenced by a
solidary obligations would be violated. (Malayan Ins Co v CA release of claim executed by Luz discharging Raul.
GR L-36413 Sep 26, 88 165s536; Figuracion vda de Maglana v
Consolacion GR 60506 Aug 6, 92 212s268) So Cala demanded reimbursement from Luz, who
refused to pay, saying that the total damage to the
Insurer; 3rd Party Liability (2000) car was P9,500.00 Since Cala paid P5,000 only, Luz
X was riding a suburban utility vehicle (SUV) covered by a contends that she was entitled to go after Raul to
comprehensive motor vehicle liability insurance claim the additional P4,500.00
(CMVLI) underwritten by FastPay Insurance Company 1) Is Cala, as subrogee of Luz, entitled to reimbursement
when it collided with a speeding bus owned by RM from Raul?
Travel Inc. The collision resulted in serious injuries to X; Y, 2) May Cala recover what it has paid Luz?
a passenger of the bus; and Z, a pedestrian waiting for a SUGGESTED ANSWER:
ride at the scene of the collision. The police report 1) No. Luz executed a release in favor of Raul
established that the bus was the offending vehicle. The (Manila Mahogany Mfg Corp v CA GR 52756, 12 Oct 1987)
bus had CMVLI policy issued by Dragon Ins Co. X, Y, and
Z jointly sued RM Travel and Dragon Ins for 2) Yes. Cala lost its right against Raul because of
indemnity under the Insurance Code of the Phils the release executed by Luz. Since the release was
(PD1460). The lower court applied the “no fault” made without the consent of Cala, Cala may
indemnity policy of the statute, dismissed the suit against recover the amount of P5,000 form Luz (Manila Mahogany
RM Travel, and ordered Dragon Ins to pay indemnity to all Mfg Corp v CA GR 52756, 12 Oct 1987).
three plaintiffs. Do you agree with the court’s
judgment? Explain (2%) Insurer; Authorized Driver Clause (1991)
SUGGESTED ANSWER: Sheryl insured her newly acquired car, a Nissan Maxima
No. The cause of action of Y is based on the contract of against any loss or damage for P50th and against 3rd
carriage, while that of X and Z is based on torts. party liability for P20th with the XYZ Ins Co. Under the
The court should not have dismissed the suit against policy, the car must be driven only by an authorized
RM Travel. The court should have ordered Dragon Ins driver who is either: 1) the insured, or 2) any person
to pay each of X, Y , and Z to the extent of the driving on the insured’s order or with his permission:
insurance coverage, but whatever amount is agreed provided that the person driving is permitted in
upon in the policy should be answered first by RM accordance with the licensing or other laws or regulations to
Travel and the succeeding amount should be paid by drive the motor vehicle and is not disqualified from
Dragon Insurance up to the amount of the insurance driving such motor vehicle by order of a court.
coverage. The excess of the claims of X, Y, and Z,
over and above such insurance coverage, if any, should During the effectivity of the policy, the car, then driven by
be answered or paid by RM Travel. Sheryl herself, who had no driver’s license, met an
accident and was extensively damaged. The estimated
Insurer; 3rd Party Liability; No Fault Indemnity (1994) cost of repair was P40th. Sheryl immediately notified
What is your understanding of a “no fault XYZ, but the latter refused to pay on the policy alleging
indemnity” clause found in an insurance policy? that Sheryl violated the terms thereof when she drove it
SUGGESTED ANSWER: without a driver’s license. Is the insurer correct?
Under the “NO FAULT INDEMNITY” clause, any SUGGESTED ANSWER:
claim for death or injury of any passenger or third party The insurer was not correct in denying the claim
shall be paid without the necessity of proving fault or since the proviso “that the person driving is
negligence of any kind. The indemnity in respect of any one permitted in accordance with the licensing, etc.”
person shall not exceed P5,000.00, provided they are under qualified only a person driving the vehicle other than
oath, the following proofs shall be sufficient: the insured at the time of the accident (Palermo v Pyramid
1. police report of the accident; and Ins Co GR 36480 31 May 88)
2. death certificate and evidence sufficient to establish ALTERNATIVE ANSWER:
the proper payee; or The insurer is correct. The clause “authorized driver” in
3. medical report and evidence of medical or hospital the policy evidently applies to both the insured and any
disbursement in respect of which refund is claimed. other person driving the vehicle at the time of the
4. Claim may be made against one motor vehicle only. accident. The term “authorized driver” should be
construed as a person who is authorized by law to driver
Insurer; 3rd Party Liability; Quitclaim (1994) the vehicle (Peza v Alikpala 160s31)
Raul’s truck bumped the car owned by Luz. The car was
insured by Cala Insurance. For the damage caused, Cala Insurer; Authorized Driver Clause (2003)
paid Luz P5,000.00 in amicable settlement. Luz executed a Rick de la Cruz insured his passenger jeepney with
release of claim, subrogating Cala to all her rights Asiatic Insurers, Inc. The policy provided that the
against Raul. When Cala demanded reimbursement from authorized driver of the vehicle should have a valid and
Raul, the latter refused saying that he had already paid existing driver’s license. The passenger jeepney of Rick
de la Cruz which was at the time driven by Jay Cruz,
Mercantile Law Bar Examination Q & A (1990-2006) Page 58 of 103 unpaid
figured in an accident resulting in the death of a balance on the promissory note should be paid and
passenger. At the time of the accident, Jay Cruz was not only the installments due and payable before the loss
licensed to drive but it was confiscated by an LTO agent of the car.
who issued him a Traffic Violation Report (TVR) just
minutes before the accident. Could Asiatic Insurers, Inc., Insurer; Group Insurance; Employer-Policy Holder (2000)
be made liable under its policy? Why? (6%) X company procured a group accident insurance policy
SUGGESTED ANSWER: for its construction employees variously assigned to its
Asiatic Insurers, Inc., should be made liable under provincial infrastructure projects. Y Insurance Company
the policy. The fact that the driver was merely holding a underwrote the coverage, the premiums of which were
TVR does not violate the condition that the driver paid for entirely by X Company without any employee
should have a valid and existing driver’s license. contributions. While the policy was in effect, five of the
covered employees perished at sea on their way to their
Besides, such a condition should be disregarded because provincial assignments. Their wives sued Y Insurance
what is involved is a passenger jeepney, and what is Company for payment of death benefits under the policy.
involved here is not own damage insurance but While the suit was pending, the wives signed a power of
third party liability where the injured party is a third attorney designating X Company executive, PJ, as their
party not privy to the contract of insurance. authorized representative to enter into a settlement with the
insurance company. When a settlement was reached, PJ
Insurer; Authorized Driver Clause; vehicle is instructed the insurance company to issue the
stolen (1993) settlement check to the order of X Company, which will
HL insured his brand new car with P Ins Co for undertake the payment to the individual claimants of
comprehensive coverage wherein the insurance company their respective shares. PJ misappropriated the settlement
undertook to indemnify him against loss or damage to amount and the wives pursued their case against Y
the car a) by accidental collision ... b) by fire, external Insurance Co. Will the suit prosper? Explain (3%)
explosion, burglary, or theft, and c) malicious act. SUGGESTED ANSWER:
Yes. The suit will prosper. Y Ins Co is liable. X Co,
After a month, the car was carnapped while parked in the through its executive, PJ, acted as agent of Y Ins Co. The
parking space in front of the Intercontinental Hotel latter is thus bound by the misconduct of its agent. It is the
in Makati. HL’s wife who was driving said car before it usual practice in the group insurance business that the
was carnapped reported immediately the incident to employer-policy holder is the agent of the insurer.
various government agencies in compliance with the
insurance requirements. Insurer; Liability of the Insurers (1990)
a) Suppose that Fortune owns a house valued at P600th
Because the car could not be recovered, HL filed a claim and insured the same against fire with 3
for the loss of the car with the insurance company but it insurance companies as follows:
was denied on the ground that his wife who was driving X – P400th
the car when it was carnapped was in the possession of Y – P200th
an expired driver’s license, a violation of the “authorized Z – P600th
driver” clause of the insurance company.
1) May the insurance company be held liable In the absence of any stipulation in the policies from
to indemnify HL for the loss of the insured which insurance company or companies may Fortune
vehicle? Explain. recover in case fire should destroy his house completely?
2) Supposing that the car was brought by HL on SUGGESTED ANSWER:
installment basis and there were installments due Fortune may recover from the insurers in such order as
and payable before the loss of the car as well as he may select up to their concurrent liability (Sec 94 Ins
installments not yet payable. Because of the loss of the Code)
car, the vendor demanded from HL the unpaid
balance of the promissory note. HL resisted the Valued Policy
demand and claimed that he was only liable for the b) If each of the fire insurance policies obtained by
installments due and payable before the loss of the car Fortune in the problem (a) is a valued policy and
but no longer liable for other installments not yet the value of his house was fixed in each of the
due at the time of the loss of the car. Decide. policies at P1m, how much would Fortune recover
SUGGESTED ANSWER: from X if he has already obtained full payment on
1) Yes. The car was lost due to theft. What applies in this the insurance policies issued by Y and Z?
case is the “theft” clause, and not the “authorized driver” SUGGESTED ANSWER:
clause. It is immaterial that HL’s wife was driving the car Fortune may still recover only the balance of
with an expired driver’s license at the time it P200,000 from X insurance company since the
was carnapped. (Perla Compania de Seguros v CA 208 s 487) insured may only recover up to the extent of his loss.
ALTERNATIVE:
2) The promissory note is not affected by whatever
befalls the subject matter of the accessory contract. The
Mercantile Law Bar Examination Q & A (1990-2006) Page 59 of 103 hired
Having already obtained full payment on the professionals to afloat the vessel for P900,000.00.
insurance policies issued by Y and Z, Fortune may When re-floated, the vessel needed repairs estimated
no longer recover from X insurance policy. at P2,000,000.00. The insurance company refused to
pay the claim of the ship owner, stating that there
Open Policy was “no constructive total loss.”
c) If each of the policies obtained by Fortune in a) Was there “constructive total loss” to entitle the ship
the problem (a) above is an open policy and it owner to recover from the insurance company?
was immediately determined after the fire that the Explain.
value of Fortune’s house was P2.4m, how much b) Was it proper for the ship owner to send a notice of
may he collect from X,Y and Z? abandonment to the insurance company? Explain.
SUGGESTED ANSWER: (5%)
In an open policy, the insured may recover his total loss SUGGESTED ANSWER:
up to the amount of the insurance cover. Thus, the No, there was no "constructive total loss" because the
extent of recovery would be P400th from X, P200th vessel was refloated and the costs of refloating plus the
from Y, and P600th from Z. needed repairs (P 2.9 Million) will not be more than
three-fourths of the value of the vessel. A constructive
d) In problem (a), what is the extent of the liability of the total loss is one which gives to a person insured a right to
insurance companies among themselves? abandon. (Sec, 131, Insurance Code) There would have
SUGGESTED ANSWER: been a constructive total loss had the vessel MN Pearly
In problem (a), the insurance companies Shells suffer loss or needed refloating and repairs of
among themselves would be liable, viz: more than the required three-fourths of its value, i.e.,
X – 4/12 of P600th = P200th more than P30.0 Million (Sec. 139, Insurance Code, cited in
Y – 2/12 of P600th = P100th Oriental Assurance v. Court of Appeals and Panama Saw Mill, G.R.
Z – 6/12 of P600th = P300th No. 94052, August 9, 1991)
e) Supposing in problem (a) above, Fortune was able to However, the insurance company shall pay for the total
collect from both Y and Z, may he keep the entire costs of refloating and needed repairs (P2.9 Million).
amount he was able to collect from the said 2 insurance
companies? c) Was it proper for the ship owner to send a notice of
SUGGESTED ANSWER: abandonment to the insurance company? Explain.
No, he can only be indemnified for his loss, not SUGGESTED ANSWER:
profit thereby; hence he must return P200th of the No, it was not proper for the ship owner to send a notice of
P800th he was able to collect. abandonment to the insurance company because
abandonment can only be availed of when, in a marine
Loss: Actual Total Loss (1996) insurance contract, the amount to be expended to
RC Corporation purchased rice from Thailand, which it recover the vessel would have been more than three-
intended to sell locally. Due to stormy weather, the ship fourths of its value. Vessel MN Pearly Shells needed only
carrying the rice became submerged in sea water, and P2.9 Million, which does not meet the required three-
with it the rice cargo. When the cargo arrived in Manila, RC fourths of its value to merit abandonment. (Section 139,
filed a claim for total loss with the insurer, because the rice Insurance Code, cited in Oriental Assurance v. Court of Appeals and
was no longer fit for human consumption. Admittedly, Panama Saiv Mill, G.R. No. 94052, August 9, 1991)
the rice could still be used as animal feed. Is RC’s claim for
total loss justified? Explain. Loss: Total Loss Only (1992)
SUGGESTED ANSWER: An insurance company issued a marine insurance policy
Yes, RC’s claim for total loss is justified. The rice, which covering a shipment by sea from Mindoro to Batangas of
was imported from Thailand for sale locally, is obviously 1,000 pieces of Mindoro garden stones against “total loss
intended for consumption by the public. The complete only.” The stones were loaded in two lighters, the first
physical destruction of the rice is not essential to with 600 pieces and the second with 400 pieces. Because of
constitute an actual total loss. Such a loss exists in this rough seas, damage was caused the second lighter
case since the rice, having been soaked in sea water and resulting in the loss of 325 out of the 400 pieces. The
thereby rendered unfit for human consumption, has owner of the shipment filed claims against the insurance
become totally useless for the purpose for which it was company on the ground of constructive total loss
imported (Pan Malayan Ins Co v CA gr 95070 Sep 5, 1991) inasmuch as more than ¾ of the value of the stones had
been lost in one of the lighters.
Loss: Constructive Total Loss (2005) Is the insurance company liable under its policy? Why?
M/V Pearly Shells, a passenger and cargo vessel, was SUGGESTED ANSWER:
insured for P40,000,000.00 against “constructive total The insurance company is not liable under its policy
loss.” Due to a typhoon, it sank near Palawan. Luckily, covering against “total loss only” the shipment of 1,000
there were no casualties, only injured passengers. The pieces of Mindoro garden stones. There is no
ship owner sent a notice of abandonment of his interest constructive total loss that can claimed since the ¾ rule is
over the vessel to the insurance company which then to be computed on the total 1,000 pieces of Mindoro
garden stones covered by the single policy coverage a. to print, reprint, publish, copy, distribute,
(see Oriental Assurance Co v CA 200 s 459) multiply, sell and make photographs, photo
engravings, and pictorial illustrations of the works;
Marine Insurance; Implied Warranties (2000)
What warranties are implied in marine insurance? b. to make any translation or other version or extracts
SUGGESTED ANSWER: or arrangements or adaptation thereof; to dramatize
The following warranties are implied in marine insurance: if it be a non-dramatic work; to convert it into
1) That the ship is seaworthy to make the voyage a non-dramatic work if it be a drama; to complete
and/or to take in certain cargoes or execute it if it be a model or design;
2) That the ship shall not deviate from the voyage
insured; c. to exhibit, perform, represent, produce or reproduce
3) That the ship shall carry the necessary documents to the work in any manner or by any method whatever
show nationality or neutrality and that it will for profit or otherwise; if not reproduced in copies
not carry any document which will cast for sale, to sell any manuscripts or any
reasonable suspicion thereon; record whatsoever thereof;
4) That the ship shall not carry contraband, especially if
it is making a voyage through belligerent waters. d. to make any other use or disposition of the
work consistent with the laws of the land
Marine Insurance; Peril of the Ship vs. Peril of the
Sea (1998) Copyright; Commissioned Artist (1995)
A marine insurance policy on a cargo states that “the Solid Investment House commissioned Mon Blanco and
insurer shall be liable for losses incident to perils of the his son Steve, both noted artists, to paint a mural for the
sea.” During the voyage, seawater entered the Main Lobby of the new building of Solid for a contract
compartment where the cargo was stored due to the price of P2m.
defective drainpipe of the ship. The insured filed an a) who owns the mural? Explain
action on the policy for recovery of the damages caused to b) Who owns the copyright of the mural? Explain.
the cargo. May the insured recover damages? (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: a) Solid owns the mural. Solid was the one
No. The proximate cause of the damage to the who commissioned the artists to do the work and paid
cargo insured was the defective drainpipe of the for the work in the sum of P2m
ship. This is peril of the ship, and not peril of the sea.
The defect in the drainpipe was the result of the b)Unless there is a stipulation to the contrary in the
ordinary use of the ship. To recover under a marine contract, the copyright shall belong in joint ownership to
insurance policy, the proximate cause of the loss or Solid and Mon and Steve.
damage must be peril of the sea.
Copyright; Commissioned Artist (2004)
Mutual Insurance Company; Nature & Definition (2006) BR and CT are noted artists whose paintings are highly
What is a mutual insurance company or association? prized by collectors. Dr. DL commissioned them to
SUGGESTED ANSWER:
paint a mural at the main lobby of his new hospital
A mutual life insurance corporation is a cooperative that
for children. Both agreed to collaborate on the project
promotes the welfare of its own members, with the
for a total fee of two million pesos to be equally
money collected from among themselves and solely for
divided between them. It was also agreed that Dr.
their own protection and not for profit. Members are
DL had to provide all the materials for the painting and
both the insurer and insured. A mutual life insurance
pay for the wages of technicians and laborers needed
company has no capital stock and relies solely upon its
for the work on the project.
contributions or premiums to meet unexpected losses,
contingencies and expenses (Republic v. Sunlife, G.R. No Assume that the project is completed and both BR and
158085, October 14, 2005). CT are fully paid the amount of P2M as artists' fee
by DL. Under the law on intellectual property, who will
own the mural? Who will own the copyright in the
Intellectual Property mural? Why? Explain. (5%)
SUGGESTED ANSWER:
Under Section 178.4 of the Intellectual Property Code, in
Copyright (1995)
case of commissioned work, the creator (in the absence
What intellectual property rights are protected by of a written stipulation to the contrary) owns
copyright?
SUGGESTED ANSWER:
the copyright, but the work itself belongs to the person
Sec 5 of PD 49 provides that Copyright shall consist in who commissioned its creation. Accordingly, the
the exclusive right: mural belongs to DL. However, BR and CT own the
copyright, since there is no stipulation to the contrary.
Copyright; Infringement (1994)
The Victoria Hotel chain reproduces Liza cannot be held liable for infringement of copyright
videotapes, distributes the copies thereof to its since under the Intellectual Property Code, one of the
hotels and makes them available to hotel guests for limitations to the copyright is the making of quotations
viewing in the hotel guest rooms. It charges a separate from a published work for purpose of any judicial
nominal fee for the use of the videotape player. proceedings or for giving of professorial advice by legal
1) Can the Victoria Hotel be enjoined for infringing practitioner, provided that the source and name of the
copyrights and held liable for damages? author are identified (See Section 184.1[k] of the
2) Would it make any difference if Victoria Hotel Intellectual Property Code of the Philippines).
does not charge any fee for the use of the videotape?
SUGGESTED ANSWER: Copyright; Photocopy; when allowed (1998)
1) Yes. Victoria Hotel has no right to use such May a person have photocopies of some pages of
video tapes in its hotel business without the consent the book of Professor Rosario made without
of the creator/ owner of the copyright. violating the copyright law? (3%)
SUGGESTED ANSWER:
2) No. The use of the videotapes is for business and not Yes. The private reproduction of a published work in a
merely for home consumption. (Filipino Society of Composers, single copy, where the reproduction is made by a natural
Authors Publishers v Tan 148 s 461; pd 1988) person exclusively for research and private study, is
permitted, without the authorization of the owner of the
Copyright; Infringement (1997) copyright in the work.
In an action for damages on account of an infringement of
a copyright, the defendant (the alleged pirate) raised Infringement vs. Unfair Competition (1996)
the defense that he was unaware that what he had copied What is the distinction between infringement and unfair
was a copyright material. Would this defense be valid? competition?
No. An intention to pirate is not an element The distinction between infringement (presumably
of infringement. Hence, an honest intention is no trademark) and unfair competition are as follows:
defense to an action for infringement. 1) Infringement of trademark is the unauthorized use
ALTERNATIVE ANSWER: of a trademark, whereas unfair competition is the
Yes. The owner of the copyright must make others aware
passing off of one’s goods as those of another;
that the material in question is under or covered by a
copyright. This is done by the giving of such notice at a 2) Fraudulent intent is unnecessary in infringement of
prominent portion of the copyright material. When the trademark, whereas fraudulent intent is essential
alleged pirate is thus made aware thereof, his act of in unfair competition;
pirating the copy material will constitute infringement.
3) The prior registration of the trademark is a
Copyright; Infringement (1998) prerequisite to an action for infringement of
Juan Xavier wrote and published a story similar to trademark, whereas registration of the trademark
an unpublished copyrighted story of Manoling is not necessary in unfair competition. (Del Monte
Santiago. It was, however, conclusively proven that Corp v CA 78325 Jan 25,90 181s410)
Juan Xavier was not aware that the story of
Manoling Santiago was protected by copyright. Infringement vs. Unfair Competition (2003)
Manoling Santiago sued Juan Xavier for infringement In what way is an infringement of a trademark similar to
of copyright. Is Juan Xavier liable? (2%) that which pertains to unfair competition?
Yes. Juan Xavier is liable for infringement of copyright.
It is not necessary that Juan Xavier is aware that the story Infringement; Jurisdiction (2003)
of Manoling Santiago was protected by copyright. K-9 Corporation, a foreign corporation alleging itself to be
The work of Manoling Santiago is protected at the time the registered owner of trademark “K-9” and logo
of its creation. “K”, filed an Inter Partes case with the Intellectual
Property Office against Kanin Corporation for the
Copyright; Infringement (2006) cancellation of the latter’s mark “K-9” and logo “K.”
In a written legal opinion for a client on the During the pendency of the case before the IPO, Kanin
difference between apprenticeship and learnership, Corporation brought suit against K-9 Corporation before
Liza quoted without permission a labor law the RTC for infringement and damages. Could the action
expert's comment appearing in his book entitled before the RTC prosper? Why?
"Annotations on the Labor Code." SUGGESTED ANSWER:
Can the labor law expert hold Liza liable for
infringement of copyright for quoting a portion of Patent; Non-Patentable Inventions (2006)
his book without his permission? (5%) Supposing Albert Einstein were alive today and he filed
SUGGESTED ANSWER: with the Intellectual Property Office (IPO) an application
for patent for his theory of relativity expressed in the
Mercantile Law Bar Examination Q & A (1990-2006) Page 62 of 103 invention
formula E=mc2. The IPO disapproved Einstein's did not fall within their regular duties. What prevails
application on the ground that his theory of relativity is is the provision of the Intellectual Property Code that
not patentable. holds that the invention belongs to the employee, if the
Is the IPO's action correct? (5%) inventive activity is not a part of his regular duties,
SUGGESTED ANSWER: even if he uses the time, facilities and materials of
Yes, the IPO is correct because under the the employer.
Intellectual Property Code, discoveries, scientific
theories and mathematical methods, are classified to Patents: Infringement; Remedies & Defenses (1993)
be as "non- patentable inventions." Eintein's theory of Ferdie is a patent owner of a certain invention. He
relativity falls within the category of being a non- discovered that his invention is being infringed
patentable "scientific theory." by Johann.
1) What are the remedies available to Ferdie against
Patents: Gas-Saving Device: first to file rule (2005) Johann?
Cezar works in a car manufacturing company owned by 2) If you were the lawyer of Johann in the infringement
Joab. Cezar is quite innovative and loves to tinker with suit, what are the defenses that your client can assert?
things. With the materials and parts of the car, he was SUGGESTED ANSWER:
able to invent a gas-saving device that will enable cars to 1) The following remedies are available to Ferdie against
consume less gas. Francis, a co-worker, saw how Cezar Johann.
created the device and likewise, came up with a similar a. seize and destroy
gadget, also using scrap materials and spare parts of the b. injunction
company. Thereafter, Francis filed an application for c. damages in such amount may have been
registration of his device with the Bureau of Patents. obtained from the use of the invention
Eighteen months later, Cezar filed his application for the if properly transacted which can be more
registration of his device with the Bureau of Patents. than what the infringer (Johann ) received.
d. Attorney’s fees and cost
1) Is the gas-saving device patentable? Explain.
SUGGESTED ANSWER: 2) These are the defenses that can be asserted in
Yes, the gas-saving device is patentable because an infringement suit:
it provides a technical solution to a problem in a a. Patent is invalid (Sec 45 RA 165, as amended)
field of human activity. It is new and involves an b. Patent is not new or patentable
inventive step, and certainly industrially applicable. It c. Specification of the invention does not comply
therefore fulfills the requisites mandated by the with Sec 14
intellectual Property Code for what is patentable. d. Patent was issued not to the true and actual
inventor, designer or author of the utility model
2) Assuming that it is patentable, who is entitled to the or the plaintiff did not derive his rights from the
patent? What, if any, is the remedy of the losing true and actual inventor, designer or author of the
party? utility model (Sec 28 RA 165 as amended)
SUGGESTED ANSWER:
Cezar is entitled to the patent because he was the real Patents; Infringement (1992)
inventor. Francis, copying from the work of Cezar, In an action for infringement of patent, the alleged
cannot claim the essential criteria of an inventor, who infringer defended himself by stating 1) that the
must possess essential elements of novelty, originality patent issued by the Patent Office was not really an
and precedence to be entitled to protection. invention which was patentable; 2) that he had no intent
Nevertheless, under the "first to file rule," Francis to infringe so that there was no actionable case for
application would have to be given priority. Cezar, infringement; and 3) that there was no exact
however, has within three months from the decision, to duplication of the patentee’s existing patent but only a
have it cancelled as the rightful inventor; or within one minor improvement. With those defenses, would you
year from publication, to file an action to prove his exempt the alleged violator from liability? Why?
priority to the invention, which has been taken from him SUGGESTED ANSWER:
and fraudulently registered by Francis. I would not exempt the alleged violator from liability for
the following reasons:
3) Supposing Joab got wind of the inventions of his 1) A patent once issued by the Patent Office
employees and also laid claim to the patents, raises a presumption that the article is
asserting that Cezar and Francis were using his patentable; it can, however be shown otherwise
materials and company time in making the devices, will (Sec 45 RA 165). A mere statement or
his claim prevail over those of his employees? allegation is not enough to destroy that
Explain. presumption. (Aquas v de Leon 30 Jan 82 L- 32160)
SUGGESTED ANSWER:
No, Joab's claim cannot prevail over those of his 2) An intention to infringe is not necessary nor an
employees. In the first place, Joab did not commission
element in a case for infringement of a patent.
any of the two employees to invent the device, and its
Mercantile Law Bar Examination Q & A (1990-2006) Page 63 of 103 deception
3) There is no need of exact duplication of the could be rather remote. Since it cannot really be said that
patentee’s existing patent such as when the physicians can be so easily deceived by such trademark
improvement made by another is merely minor as “Axilon,” it may be hard to expect an opposition
(Frank v Benito, 51p713). To be thereto to succeed.
independently patentable, an improvement of an ANOTHER ANSWER:
existing patented invention must be a major The application for registration of Turbo
improvement (Aquas v de Leon L-32160 30Jan82) Corporation may be contested. The factual settings
do not indicate that there had been prior use for at least
Patents; Rights over the Invention (1990) 2 months of the trademark “Axilon.”
Cheche invented a device that can convert rainwater into
automobile fuel. She asked Macon, a lawyer, to assist in Trademark (1994)
getting her invention patented. Macon suggested that Laberge, Inc., manufactures and markets after-shave
they form a corporation with other friends and have the lotion, shaving cream, deodorant, talcum powder and
corporation apply for the patent, 80% of the shares toilet soap, using the trademark “PRUT”, which is
of stock thereof to be subscribed by Cheche and registered with the Phil Patent Office. Laberge does not
5% by Macon. The corporation was formed and the manufacture briefs and underwear and these items are
patent application was filed. However, Cheche died not specified in the certificate of registration.
3 months later of a heart attack.
JG who manufactures briefs and underwear, wants
Franco, the estranged husband of Cheche, contested the to know whether, under our laws, he can use and
application of the corporation and filed his own register the trademark “PRUTE” for his
patent application as the sole surviving heir of Cheche. merchandise. What is your advice?
Decide the issue with reasons. SUGGESTED ANSWER:
SUGGESTED ANSWER: Yes. The trademark registered in the name of
The estranged husband of Checke cannot Laberge Inc covers only after-shave lotion,
successfully contest the application. The right over shaving cream, deodorant, talcum powder and toilet
inventions accrue from the moment of creation and soap. It does not cover briefs and underwear.
as a right it can lawfully be assigned. Once the title
thereto is vested in the transferee, the latter has the The limit of the trademark is stated in the
right to apply for its registration. The estranged certificate issued to Laberge Inc. It does not include
husband of Cheche, if not disqualified to inherit, briefs and underwear which are different products
merely would succeed to the interest of Cheche. protected by Larberge’s trademark.
Note: An examinee who answers on the basis of the issue of
validity of the transfer of patent as a valid consideration for JG can register the trademark “PRUTE” to cover
subscription of the shares of stocks should be given due credit. its briefs and underwear (Faberge Inc v IAC 215 s 316)
Trademark (1990) Trademark, Test of Dominancy (1996)
In 1988, the Food and Drug Administration approved What is the “test of dominancy?”
the labels submitted by Turbo Corporation for its new SUGGESTED ANSWER:
drug brand name, “Axilon.” Turbo is now applying with The test of dominancy requires that if the competing
the Bureau of Patents, Trademarks and Technology trademark contains the main or essential features of
Transfer for the registration of said brand name. It was another and confusion and deception is likely to result,
subsequently confirmed that “Accilonne” is a generic infringement takes place. Duplication or imitation is not
term for a class of anti-fungal drugs and is used as such by necessary; not is it necessary that the infringing label
the medical profession and the pharmaceutical should suggest an effort to imitate. Similarity in size,
industry, and that it is used as a generic chemical name in form and color, while relevant, is not conclusive. (Asia
various scientific and professional publications. A Brewery v CA GR 103543 Jul5,93 224s437)
competing drug manufacturer asks you to contest the
registration of the brand name “Axilon” by Turbo. Trademark; Infringement (1991)
What will you advice be? Sony is a registered trademark for TV, stereo, radio,
SUGGESTED ANSWER: cameras, betamax and other electronic products. A local
The application for registration by Turbo company, Best Manufacturing Inc produced electric fans
Corporation may be contested. The Trademark Law which it sold under the trademark Sony without the
would not allow the registration of a trademark which, consent of Sony. Sony sued Best Manufacturing for
when applied to or used in connection with his infringement. Decide the case.
products, is merely descriptive or deceptively SUGGESTED ANSWER:
misdescriptive of them. Confusion can result from There is no infringement. In order that a case for
the use of “Axilon” as the generic product itself. infringement of trademark can prosper, the products on
ALTERNATIVE ANSWER: which the trademark is used must be of the same kind.
Medical drugs may be procured only upon prescription The electric fans produced by Best Manufacturing cannot
made by a duly licensed physician. The possibility of
be said to be similar to such products as TV, stereo and the law are conferred by the fact of registration and not
radio sets or cameras or betamax products of Sony. by use. Although Shangrila Corporation's parent had
ALTERNATIVE ANSWER: used the tradename and logo long before, the protection
There is infringement. If the owner of a trademark which of the laws will be for S Development Corporation
manufactures certain types of goods could reasonably be because it was the first entity to register the
expected to engage in the manufacture of another intellectual properties.
product using the same trademark, another party who
uses the trademark for that product can be held liable for How does the international affiliation of
using that trademark. Using this standard, infringement Shangrila Corporation affect the outcome of
exists because Sony can be reasonably expected to use the dispute? Explain. (5%)
such trademark on electric fans. SUGGESTED ANSWER:
The international affiliation of Shangrila Corporation
Trademark; Test of Dominancy (1996) may be critical in the event that its affiliates or parent
N Corporation manufactures rubber shoes under the company abroad had registered in a foreign jurisdiction
trademark “Jordann” which hit the Phil market in 1985, the tradename and the logo. A well-known mark and
and registered its trademark with the Bureau of Patents, tradename is subject to protection under Treaty of Paris for
Trademarks and Technology (BPTTT) in 1990. the Protection of Intellectual Property to which the
PK Company also manufactures rubber shoes Philippines is a member.
with the trademark “Javorski” which it registered with
BPTTT in 1978.
Insolvency & Corporate
In 1992, PK Co adopted and copied the design of
N Corporation’s “Jordann” rubber shoes, both as to Recovery
shape and color, but retained the trademark
“Javorski” on its products. Insolvency vs. Suspension of Payment (1998)
Distinguish insolvency from suspension of payments.
May PK Company be held liable to N Co? Explain. (3%)
PK Co may be liable for unfairly competing against N a) In insolvency, the liabilities of the debtor are more
Co. By copying the design, shape and color of N than his assets, while in suspension of payments,
Corporation’s “Jordann” rubber shoes and using the
assets of the debtor are more than his liabilities.
same in its rubber shoes trademarked “Javorski,” PK is
obviously trying to pass off its shoes for those of N. It is of b) In insolvency, the assets of the debtor are to be
no moment that he trademark “Javorski” was converted into cash for distribution among his
registered ahead of the trademark “Jordann.” Priority in creditors, while in suspension of payments, the
registration is not material in an action for unfair debtor is only asking for time within which to
competition as distinguished from an action for
convert his frozen assets into liquid cash with which to
infringement of trademark. The basis of an action for
pay his obligations when the latter fall due.
unfair competition is confusing and misleading similarity in
general appearance, not similarity of trademarks Insolvency: Voluntary Insolvency (2005)
(Converse Rubber Co v Jacinto Rubber & Plastics Co GR 27425 and Aaron, a well-known architect, is suffering from financial
30505, Apr28,80 97s158)
reverses. He has four creditors with a total claim of P26
Tradename: International Affiliation (2005) Million. Despite his intention to pay these obligations, his
current assets are insufficient to cover all of them. His
S Development Corporation sued Shangrila Corporation
creditors are about to sue him. Consequently, he was
for using the “S” logo and the tradename
constrained to file a petition for insolvency. (5%)
“Shangrila”. The former claims that it was the first to
a) Since Aaron was merely forced by circumstances to
register the logo and the tradename in the Philippines
petition the court to declare him insolvent, can the
and that it had been using the same in its restaurant
judge properly treat the petition as one for
business. Shangrila Corporation counters that it
involuntary insolvency? Explain.
is an affiliate of an international organization SUGGESTED ANSWER:
which has been using such logo and tradename No. This is a case for voluntary insolvency because this
“Shangrila” for over 20 years. However, was filed by an insolvent debtor owing debts exceeding
Shangrila Corporation registered the tradename the amount of P1,000.00 under Section 14 of
and logo in the Philippines only after the suit was filed. the Insolvency Law. Under Section 20 of the
Insolvency Law, the petition must be filed by
Which of the two corporations has a better right to use
three or more creditors. In the case at bar, it is Aaron,
the logo and the tradename? Explain. the debtor, who filed the insolvency proceedings.
SUGGESTED ANSWER:
S Development Corporation has a better right to use the
logo and the tradename, since the protective benefits of
Mercantile Law Bar Examination Q & A (1990-2006) Page 65 of 103 petition.
b) If Aaron is declared an insolvent by the court, what In the meantime, the case filed by Vicente
would be the effect, if any, of such declaration on proceeded and resulted in a judgment award in favor of
his creditors? Explain. Vicente.
SUGGESTED ANSWER: May the judgment obtained by Vicente be enforced
A declaration by the court that the petitioner is insolvent independently of the insolvency proceedings? Explain.
will have the following effects: SUGGESTED ANSWER:
1) The sheriff shall take possession of all assets of The judgment obtained by Vicente can be enforced
the debtor until the appointment of a independently of the insolvency proceedings. Under Sec 32
receiver or assignee; of the Insolvency Law, the assignment to the assignee of all
2) Payment to the debtor of any debts due to him the real and personal property, estate and effects of the
and the delivery to the debtor of any property debtor made by the clerk of the court shall vacate and set
belonging to him, and the transfer of any aside any judgment entered in any action commenced with
property by him are forbidden; 30 days immediately prior to the commencement of
3) All civil proceedings pending against the insolvency proceedings. In this case, however, the action
insolvent shall be stayed; and filed by Vicente against Carlito was commenced by
4) Mortgages and pledges are not affected by Vicente not later than June 16, 1995 (the facts on this
the order declaring a person insolvent. (Sec. point are not clear) when Vicente obtained a writ of
59, Insolvency Law) preliminary attachment against Carlito or more than 30
days before the petition for involuntary insolvency was
c) Assuming that, Aaron has guarantors for his debts, are filed against Carlito by his other creditors. (i.e. on July 29,
the guarantors released from their obligations once 1995) (Radiola-Toshiba Phil v IAC GR 75222 July18,91 199s373)
Aaron is discharged from his debts? Explain.
SUGGESTED ANSWER: Insolvency; Effect; Declaration of Insolvency (1991)
No, precisely under the principle of excussion, What are the effects of a judgment in insolvency in
the liability of the guarantors arises only after the Voluntary Insolvency cases?
exhaustion of the assets of the principal obligor. SUGGESTED ANSWER:
The effect of discharge merely confirms exhaustion of The adjudication or declaration of insolvency by the
the assets of the obligor available to his creditors. court, after hearing or default, shall have the
ALTERNATIVE ANSWER: following effects:
Yes. Article 2076 of the Civil Code provides: a) Forbid the payment to the debtor of any debt due to
The obligation of the guarantor is extinguished at him and the delivery to him of any
the same time as that of the debtor, and for the same property belonging to him;
causes as all other obligations. b) Forbid the transfer of any property by him; and
c) Stay of all civil proceedings against the insolvent but
d) What remedies are available to the guarantors in case foreclosure may be allowed (Secs 18 &
they are made to pay the creditors? Explain. 24 Insolvency Law)
SUGGESTED ANSWER:
Under Article 2081, the guarantor may set up against the Insolvency; Fraudulent Payment (2002)
creditor all the defenses that pertain to the principal As of June 1, 2002, Edzo Systems Corporation
debtor. The discharge obtained by Aaron on the (Edzo) was indebted to the following creditors:
principal obligation can now be used as a a) Ace Equipment Supplies – for various personal
defense by the guarantors against the creditors. The computers and accessories sold to Edzo on
guarantors are also entitled to indemnity under Article credit amounting to P300,000.
2066 of the Civil Code. b) Handyman Garage – for mechanical repairs
Insolvency; Assets vs. Liabilities (1998) (parts and service) performed on Edzo’s
Horacio opened a coffee shop using money company car amounting to P10,000.
borrowed from financial institutions. After 3 months, c) Joselyn Reyes – former employee of Edzo who sued
Horacio left for the US with the intent of Edzo for unlawful termination of employment
defrauding his creditors. While his liabilities are worth and was able to obtain a final judgment against
P1.2m, his assets, however are worth P1.5m. May Edzo for P100,000.
Horacio be declared insolvent? (2%) d) Bureau of Internal Revenue – for unpaid value-
SUGGESTED ANSWER:
No. Horacio may not be declared insolvent. His assets added taxes amounting to P30,000.
e) Integrity Bank – which granted Edzo a loan in 2001
worth P1.5m are more than his liabilities worth P1.2m.
in the amount of P500,000. The loan was
Insolvency; Assignees (1996) not secured by any asset of Edzo, but it was
On June 16, 1995, Vicente obtained a writ of preliminary guaranteed unconditionally and solidarily by
attachment against Carlito. The levy on Carlito’s property Edzo’s President and controlling stockholder,
occurred on June 25, 1995. On July 29, 1995, another Eduardo Z. Ong, as accommodation surety.
creditor filed a petition for involuntary insolvency against The loan due to Integrity Bank fell due on June 15, 2002.
Carlito. The insolvency court gave due course to the
Despite pleas for extension of payment by Edzo, the
bank demanded immediate payment. Because the An insolvent debtor, after lawful discharge following an
bank threatened to proceed against the surety, adjudication of insolvency, is released from, generally, all
Eduardo Z. Ong, Edzo decided to pay up all its debts, claims, liabilities and demands which are or
obligations to Integrity Bank. On June 20, 2002, Edzo have been proved against his estate. Give 5 obligations
paid to Integrity Bank the full principal amount of of the insolvent debtor to survive.
P500,000, plus accrued interests amounting to SUGGESTED ANSWER:
P55,000. As a result, Edzo had hardly any cash left The 5 obligations of the insolvent debtor that survive are
for operations and decided to close its business. After as follows:
paying the unpaid salaries of its employees, Edzo 1. Taxes and assessments due the government, national
filed a petition for insolvency on July 1, 2002. or local;
2. Obligations arising from embezzlement or fraud;
In the insolvency proceedings in court, the assignee 3. Obligation of any person liable with the
in insolvency sought to invalidate the payment made insolvent debtor for the same debt, either as a
by Edzo to Integrity Bank for being a fraudulent solidary co- debtor, surety, guarantor, partner,
transfer because it was made within 30 days before the indorser or otherwise.
filing of the insolvency petition. In defense, 4. Alimony or claim for support; and
Integrity Bank asserted that the payment to it was for a 5. Debts not provable against the estate (such as after-
legitimate debt that was not covered by the prohibition incurred obligations) of, or not included in the
because it was “a valuable pecuniary consideration schedule submitted by, the insolvent debtor.
made in good faith,” thus falling within the
exception specified in the Insolvency Law. Insolvency; Voluntary Insolvency Proceeding (1991)
As judge in the pending insolvency case, how would you Is the issuance of an order, declaring a petition in a
decide the respective contentions of the assignee in Voluntary Insolvency proceeding insolvent, mandatory
insolvency and of Integrity Bank? Explain (5%) upon the court?
The contention of the assignee in insolvency is Assuming that the petition was in due form
correct. The payment made by Edzo to Integrity and substance and that the assets of the petitioner
Bank was a fraudulent preference or payment, being are less than his liabilities, the court must
made within thirty (30) days before the filing of adjudicate the insolvency (Sec 18 Insolvency Law)
the insolvency petition.
Insolvency; Voluntary vs. Involuntary Solvency (1995)
Insolvency; Jurisdiction; Sole Proprietorship (1990) Distinguish between voluntary insolvency
One day Jerry Haw, doing business under the name and involuntary insolvency.
SUGGESTED ANSWER:
Starlight Enterprise, a sole proprietorship, finds himself
In voluntary insolvency, it is the debtor himself who files
short on cash and unable to pay his debts as they fall due
although he has sufficient property to cover such debts. the petition for insolvency, while in involuntary
He asks you, as his retained counsel, for advice on insolvency, at least 3 creditors are the ones who file the
the following queries: petition for insolvency against the insolvent debtor.
ALTERNATIVE ANSWER:
a) Should he file a petition with the SEC to be declared The following are the distinctions:
in a state of suspension of payments in view of the
1. In involuntary insolvency, 3 or more creditors
said financial condition he faces? Explain your answer.
are required, whereas in voluntary insolvency,
b) Should he sell profit participation certificates to his 10
one creditor may be sufficient;
brothers and sisters in order to raise cash for his
2. In involuntary insolvency, the creditors must be
business? Explain.
SUGGESTED ANSWER:
residents of the Philippines, whose credits or
a) I would counsel Jerry to file the Petition for demand accrued in the Philippines, and none of the
Suspension of Payment with the ordinary courts, rather creditors has become a creditor by
than the SEC. SEC’s jurisdiction over such cases is assignment within 30 days prior to the filing of
confined only to petitions filed by corporations and the petition, whereas in voluntary insolvency,
partnerships under its regulatory powers. these are not required.
3. In involuntary insolvency, the debtor must have
b) Instead of selling profit participation certificates, I done any of the acts of insolvency as enumerated by
would urge Jerry to enter into a partnership or Sec 20, whereas in voluntary insolvency, the debtor
to incorporate in order to raise cash for his business. must not have done any of said acts.
ALTERNATIVE ANSWER: 4. In involuntary insolvency, the amount of
b) Jerry may sell profit participation certificates to indebtedness must not be less than P1,000 whereas in
his brothers and sisters without registering the same voluntary insolvency, it must exceed P1,000.
with the SEC because his sale is an exempted 5. In involuntary insolvency, the petition must
transaction being isolated and not a sale to the public. be accompanied by a bond, whereas such is
not required in voluntary insolvency.
Insolvency; obligations that survive (1997)
Law on Corporate Recovery (2003) 1. In suspension of payments, the debtor has sufficient
X Corporation applied for its rehabilitation and property to cover all his debts but foresees the
submitted a rehabilitation plan which called for the entry by impossibility of meeting them when
it into a joint venture agreement with Y Corporation. they respectively fall due, whereas, in insolvency,
Under the agreement, Y Corporation was to lend to X the debtor does not have sufficient property to
Corporation its credit facilities with certain banks to pay all his debts in full;
obtain funds not only to operate X Corporation but also 2. In suspension of payments, the purpose is to
for a part thereof in the amount of P1 million as initial suspend or delay payment of debts which remain
deposit in a sinking fund to be augmented annually in unaffected although a postponement of payment is
amounts equivalent to 10% of the yearly income from its declared, whereas, in insolvency, the object is to
operation of the business of X Corporation. From this obtain discharge from all debts and liability;
fund the creditors of X Corporation were to be paid 3. In suspension of payments, no limit for the amount
annually, starting from the second year of operations, of indebtedness is required, whereas, in
with the entire indebtedness to be liquidated in 15 years. insolvency, the debts must exceed P1,000 in
The creditors of X Corporation objected to the plan case of voluntary insolvency, or must not be less
because Y Corporation would be taking over the than P1,000 in case of involuntary insolvency.
business and assets of X Corporation. Could the court
approve the plan despite the objections of the creditors of Suspension of Payments vs. Stay Order (2003)
X Corporation and could the creditors be compelled to Distinguish the stay order in corporate rehabilitation
follow the plan? Could Y Corporation, in managing the from a declaration in a state of suspension of payments?
business of X Corporation in the meantime, be (4%)
deemed to have taken-over X Corporation itself? (6%) SUGGESTED ANSWER:
SUGGESTED ANSWER:
Suspension of Payments; Rehabilitation Receiver (1999)
Rehabilitation; Stay Order (2006) Debtor Corporation and its principal stockholders
The Blue Star Corporation filed with the Regional Trial filed with the Securities and Exchange Commission
Court a petition for rehabilitation on the ground that it (SEC) a petition for rehabilitation and declaration of
foresaw the impossibility of paying its obligations as they a state of suspension of payments under PD 902-A.
fall due. Finding the petition sufficient in form and The objective was for SEC to take control of the
substance, the court issued an Order appointing corporation and all its assets and liabilities, earnings
a rehabilitation receiver and staying the enforcement of and operations, and to determine the feasibility of
all claims against the corporation. continuing operations and rehabilitating the company
What is the rationale for the Stay Order? (5%) for the benefit of investors and creditors.
SUGGESTED ANSWER:
The purpose of the stay order is intended to give the Generally, the unsecured creditors had manifested
management committee or rehabilitation receiver the willingness to cooperate with Debtor Corporation.
leeway to make the business viable again, without having to The secured creditors, however, expressed serious
divert attention and resources to litigation in various objections and reservations.
fora (Philippine Airlines v. Spouses Kurangking, et al, G.R. No.
146698, September 24, 2002; BF Homes, Inc. v. Court of Appeals, First Bank had already initiated judicial
G.R. Nos. 76879 & 77143, October 3, 1990; Rubberworld [Phils.] foreclosure proceedings on the mortgage constituted on
Inc. v. NLRC, G.R. No. 126773, April 14, 1999; Sobrejuanite v.
the factory of Debtor Corporation.
ASB Dev. Corp., G.R. No. 165675, September 30, 2005). It also
prevents a creditor from obtaining an advantage or Second Bank had already initiated foreclosure
preference over another with respect to actions against proceedings on a third-party mortgage constituted on
the corporation (Finasia Investments and Finance Corp v. Court of
certain assets of the principal stockholders.
Appeals, G. R. No. 107002, October 7,1994).
Third Bank had already filed a suit against the principal
stockholders who had held themselves liable jointly and
Suspension of Payment vs. Insolvency (1995)
severally for the loans of Debtor Corporation with said
Distinguish between suspension of payments
Bank.
and insolvency.
SUGGESTED ANSWER:
In suspension of payments, the debtor is not insolvent. After hearing, the SEC directed the appointment of
He only needs time within which to convert his asset/s into a rehabilitation receiver and ordered the suspension of
cash with which to pay his obligations when they fall due. all actions and claims against the Debtor corporation as
In the case of insolvency, the debtor is insolvent, that well as against the principal stockholders.
is, his assets are less than his liabilities. a) Discuss the validity of the SEC order or suspension?
ALTERNATIVE ANSWER: (2%)
The following are the distinctions:
b) Discuss the effects of the SEC order of suspension rehabilitation in accordance with a rehabilitation plan
on the judicial foreclosure proceedings initiated approved by the SEC.
by First Bank. (2%)
c) Would the order of suspension have any effect on SUGGESTED ANSWER:
the foreclosure proceedings initiated by f. To preserve the assets of the Debtor Corporation, the
Second Bank? Explain (2%) receiver may take custody of, and control over, all the
d) Would the order of suspension have any effect existing assets and property of the corporation; evaluate
on the suit filed by Third Bank? Explain. (2%) existing assets and liabilities, earnings and operations of the
e) What are the legal consequences of a corporation; and determine the best way to salvage and
rehabilitation receivership? (2%) protect the interest of the investors and creditors.
f) What measures may the receiver take to preserve the
assets of Debtor Corporation? (2%) Suspension of Payments; Remedies (2003)
When is the remedy of declaration in a state
SUGGESTED ANSWER: of suspension of payments available to a corporation?
a. The SEC order of suspension of payment is valid with SUGGESTED ANSWER:
respect to the debtor corporation, but not with respect to (per dondee) This remedy is available to a corporation
the principal stockholders. The SEC has jurisdiction when it experiences inability to pay one's debts and
to declare suspension of payments with respect liabilities, and where the petitioning corporation either:
to corporations, partnership or associations, but not 1. has sufficient property to cover all its debts but
with respect to individuals. foresees the impossibility of meeting them when
they fall due (solvent but illiquid) or
SUGGESTED ANSWER: 2. has no sufficient property (insolvent) but is under
b. The SEC order of suspension of payment suspended the management of a rehabilitation receiver or a
the judicial proceedings initiated by the First management committee, the applicable law is P.D.
Bank. According to the Supreme Court in a line of No. 902-A pursuant to Sec. 5 par.
cases, the suspension order applies to secured creditors
and to the action to enforce the security against the
corporation regardless of the stage thereof. Letters of Credit
SUGGESTED ANSWER:
c. The order of suspension of payments suspended the Letter of Credit: Mortgage (2005)
foreclosure proceedings initiated by the Second Bank. Ricardo mortgaged his fishpond to AC Bank to secure a
While the foreclosure is against the property of a third P1 Million loan. In a separate transaction, he
party, it is in reality an action to collect the principal opened a letter of credit with the same bank for
obligation owned by the corporation. During the time $500,000.00 in favor of HS Bank, a foreign bank, to
that the payment of the principal obligation is suspended, purchase outboard motors. Likewise, Ricardo executed a
the debtor corporation is considered to be not in default Surety Agreement in favor of AC Bank.
and, therefore, even the right to enforce the security,
whether owned by the debtor-corporation or of a third The outboard motors arrived and were delivered to
party, has not yet arisen. Ricardo, but he was not able to pay the purchase
ALTERNATIVE ANSWER:
price thereof.
c. The suspension order does not apply to a third party a) Can AC Bank take possession of the outboard
mortgage because in such a case, the credit is not motors? Why?
yet being enforced against the corporation but b) Can AC Bank also foreclose the mortgage over the
against the third party mortgagor’s property. fishpond? Explain. (5%)
SUGGESTED ANSWER:
SUGGESTED ANSWER:
a) No, for AC Bank has no legal standing, much less a
d. For the same reason as in (c), the order of suspension lien, on the outboard motors. Insofar as AC Bank is
of payments suspended the suit filed by Third Bank
concerned, it has privity with the person of Ricardo
against the principal stockholders.
ALTERNATIVE ANSWER:
under the Surety Agreement, and a lien on the
d. The action against the principal stockholders’ surety in fishpond based on the real estate
favor of the corporation is not suspended as it is not an mortgage constituted therein.
action against the corporation but against the b) Yes, but only to enforce payment of the
stockholders whose personality is separate from that
principal loan of P1million secured by the real
of the corporation.
estate mortgage on the fishpond
SUGGESTED ANSWER:
e. Under PD 902A, the appointment of a rehabilitation
receiver will suspend all actions for claims against the Letter of Credit; Certification from Consignee (1993)
corporation and the corporation will be placed under
BV agreed to sell to AC, a Ship and Merchandise Broker, SUGGESTED ANSWER:
2,500 cubic meters of logs at $27 per cubic meter FOB. It incurs no liability unless it is also the negotiating bank
After inspecting the logs, CD issued a purchase order.
b) Bravo Bank received from Cisco Bank by registered
On the arrangements made upon instruction of the mail an irrevocable letter of credit issued by Delta
consignee, H&T Corporation of LA, California, the SP Bank for the account of Y Company in the amount of
Bank of LA issued an irrevocable letter of credit available at US$10,000,000 to cover the sale of canned fruit
sight in favor of BV for the total purchase price of the logs. juices. The beneficiary of the letter of credit was X
The letter of credit was mailed to FE Bank with the Corporation which later on partially availed itself of
instruction “to forward it to the beneficiary.” The letter of the letter of credit by submitting to Bravo Bank all
credit provided that the draft to be drawn is on SP documents relative to the shipment of the cans of
Bank and that it be accompanied by, among other things, a fruit juices. Bravo Bank paid X Corporation for its
certification from AC, stating that the logs have been partial availment. Later, however, it refused further
approved prior shipment in accordance with the terms availment because of suspicions of fraud being
and conditions of the purchase order. practiced upon it and, instead , sued X Corporation to
recover what it had paid the latter. How would
Before loading on the vessel chartered by AC, the logs you rule if you were the judge to decide the
were inspected by custom inspectors and representatives of controversy? (6%)
the Bureau of Forestry, who certified to the good SUGGESTED ANSWER:
condition and exportability of the logs. After the loading
was completed, the Chief Mate of the vessel issued a Letters of Credit; Three Distinct Contract
mate receipt of the cargo which stated that the logs are in Relationships (2002)
good condition. However, AC refused to issue the Explain the three (3) distinct but intertwined
required certification in the letter of credit. Because of contract relationships that are indispensable in a
the absence of certification, FE Bank refused to advance letter of credit transaction.
SUGGESTED ANSWER:
payment on the letter of credit.
The three (3) distinct but intertwined contract
1) May Fe Bank be held liable under the letter of credit?
relationships that are indispensable in a letter of
Explain.
credit transaction are:
2) Under the facts above, the seller, BV, argued that FE 1) Between the applicant/buyer/importer and the
Bank, by accepting the obligation to notify him that the beneficiary/seller/exporter – The
irrevocable letter of credit has been transmitted to it on
applicant/buyer/importer is the one who procures
his behalf, has confirmed the letter of
the letter of credit and obliges himself to reimburse
credit. Consequently, FE Bank is liable under the letter
the issuing bank upon receipt of the documents of
of credit. Is the argument tenable? Explain.
SUGGESTED ANSWER: title, while the beneficiary/seller/exporter is the one
1) No. The letter of credit provides as a condition a who in compliance with the contract of sale ships
certification of AC. Without such certification, there is the goods to the buyer and delivers the documents of
no obligation on the part of FE Bank to advance title and draft to the issuing bank to recover
payment of the letter of credit. (Feati Bank v CA 196 S 576) payment for the goods. Their relationship is
governed by the contract of sale.
2) No. FE Bank may have confirmed the letter of credit
when it notified BV, that an irrevocable letter of credit 2) Between the issuing bank and the
has been transmitted to it on its behalf. But the beneficiary/seller/exporter – The issuing bank is the
conditions in the letter of credit must first be complied one that issues the letter of credit and undertakes to
with, namely that the draft be accompanied by a pay the seller upon receipt of the draft and
certification from AC. Further, confirmation of a letter of proper documents of title and to surrender the
credit must be expressed. (Feati Bank v CA 196 s 576) documents to the buyer upon reimbursement. Their
relationship is governed by the terms of the letter of
Letters of Credit; Liability of a confirming and notifying credit issued by the bank.
bank (1994)
3) Between the issuing bank and the
In letters of credit in banking transactions, distinguish
the liability of a confirming bank from a notifying bank. applicant/buyer/importer – Their relationship
SUGGESTED ANSWER: is governed by the terms of the application
In case anything wrong happens to the letter of credit, a and agreement for the issuance of the letter of credit
confirming bank incurs liability for the amount of by the bank.
the letter of credit, while a notifying bank does not incur
any liability.
Maritime Commerce
Letters of Credit; Liability of a Notifying Bank (2003)
Average; Particular Average vs. General Average (2003)
a) What liability, if any is incurred by an advising
or notifying bank in a letter of credit transaction?
M/V Ilog de Manila with a cargo of 500 tons of iron ore The insurance company should bear the loss to the cargo
left the Port of Zamboanga City bound for Manila. For because the deviation of the vessel was proper in order to
one reason or another, M/V Ilog de Manila hit avoid a peril, which was the strong typhoon. The running
a submerged obstacle causing it to sink along with out of provisions was a direct consequence of the proper
its cargo. A salvor, Salvador, Inc., was contracted to deviation in order to avoid the peril of the typhoon.
refloat the vessel for P1 Million. What kind of average ALTERNATIVE ANSWER:
was the refloating fee of P1 million, and for whose The owner of the cargo bears the loss because in the case
account should it be? Why? (4%) at bar, they stayed too long at the island, making it
SUGGESTED ANSWER: an improper deviation. Every deviation not specified in
Particular Average. The owner of the vessel shall Sec. 124 is improper. (Sec. 125, Insurance Code)
shoulder the average. Generally speaking, simple or
particular averages include all expenses and damages
caused to the vessel or cargo which have not inured to Carriage of Goods; Deviation; When Proper (2005)
the common benefit (Art. 809, and are, therefore, to be Under what circumstances can a vessel properly proceed
borne only by the owner of the property which gave rise to to a port other than its port of destination? Explain. (4%)
the same (Art. 810) while general or gross averages SUGGESTED ANSWER:
include "all the damages and expenses which are Deviation is proper:
deliberately caused in order to save the vessel, its cargo, or a) when caused by circumstances over which
both at the same time, from a real and known risk" neither the master nor the owner of the ship
(Art. 811). Being for the common benefit, gross averages has any control;
are to be borne by the owners of the articles saved (Art. b) when necessary to comply with a warranty or avoid
812). In the present case there is no proof that the vessel a peril, whether or not the peril is insured against;
had to be put afloat to save it from an imminent danger. c) when made in good faith, and upon reasonable
grounds of belief in its necessity to avoid a peril; or
Bottomry (1994) d) when in good faith, for the purpose of saving
Gigi obtained a loan from Jojo Corporation, payable in human life, or relieving another vessel in distress.
installments. Gigi executed a chattel mortgage in favor of (Sec. 124, Insurance Code)
Jojo whereby she transferred “in favor of Jojo, its
successors and assigns, all her title, rights ... to a vessel of Carriage of Goods; Exercise Extraordinary
which Gigi is the absolute owner.” The chattel mortgage Diligence (2005)
was registered with the Philippine Coast Guard pursuant to Star Shipping Lines accepted 100 cartons of sardines
PD 1521. Gigi defaulted and had a total accountability of from Master to be delivered to 555 Company in Manila.
P3M. But Jojo could not foreclose the mortgage on Only 88 cartons were delivered, however, these were in
the vessel because it sank during a typhoon. bad condition. 555 Company claimed from Star Shipping
Meanwhile, Lutang Corporation which rendered Lines the value of the missing goods, as well as the
salvage services for refloating the vessel sued Gigi. damaged goods. Star Shipping Lines refused because the
Whose lien should be given preference, that of Jojo former failed to present a bill of lading. Resolve
or Lutang? with reasons the claim of 555 Company. (4%)
Lutang Corporation’s lien should be given The claim of 555 Company is meritorious, even if it fails to
preference. The lien of Jojo by virtue of a loan of present a bill of lading. Although a bill of lading is the best
bottomry was extinguished when the vessel sank. Under evidence of the contract of carriage for cargo,
such loan on bottomry Jojo acted not only as nevertheless such contract can exist even without a bill of
creditor but also as insurer. Jojo’s right to recover the lading. Like any other contract, a contract of carriage is a
amount of the loan is predicated on the safe arrival of meeting of minds that gives rise to an obligation on the part
the vessel at the port of destination. The right was lost of the carrier to transport the goods. Jurisprudence has held
when the vessel sank (Sec 17 PD 1521) that the moment the carrier receives the cargo for
transport, then its duty to exercise extraordinary
Carriage of Goods: Deviation: Liability (2005) diligence arises. (Cia. Maritima v. Insurance Co. of North America,
On a clear weather, M/V Sundo, carrying insured cargo, G.R. No. L-18965, October 30, 1964; Negre v. Cabahug Shipping &
Co., G.R. No. L-19609, April 29, 1966)
left the port of Manila bound for Cebu. While at sea, the ALTERNATIVE ANSWER:
vessel encountered a strong typhoon forcing the captain Star Shipping Lines can refuse to honor 555 Company's
to steer the vessel to the nearest island where it stayed claim for the missing and damaged goods. The Bill of
for seven days. The vessel ran out of provisions for Lading is the document of title that legally establishes the
its passengers. Consequently, the vessel proceeded to ownership of 555 Company over said goods. 555 needs to
Leyte to replenish its supplies. present the Bill of Lading to legally claim said goods.
(National Union Fire Insurance of Pittsburg v. Stolt-Nielaen, G.R. No.
Assuming that the cargo was damaged because of 87958, April 26, 1990)
such deviation, who between the insurance company
and the owner of the cargo bears the loss? Explain. Charter Party (1991)
SUGGESTED ANSWER:
The Saad Dev Co enters into a voyage charter with XYZ AA entered into a contract with BB thru CC to transport
over the latter’s vessel, the MV LadyLove. Before ladies' wear from Manila to France with transhipment at
the Saad could load it, XYZ sold Lady Love to Taiwan. Somehow the goods were not loaded at Taiwan
Oslob Maritime Co which decided to load it for on time. Hence, when the goods arrived in France, they
its own account. arrived "off-season" and AA was paid only for one-half
a) May XYZ Shipping Co validly ask for the rescission of the value by the buyer. AA claimed damages from
the charter party? If so, can Saad recover damages? the shipping company and its agent. The defense of
To what extent? the respondents was prescription. Considering that the
b) If Oslob did not load it for its own account, is ladies' wear suffered "loss of value," as claimed by AA,
it bound by the charter party? should the prescriptive period be one year under the
c) Explain the meaning of “owner pro hac vice of the Carriage of Goods by Sea Act, or ten years under
vessel.” In what kind of charter party does this obtain? the Civil Code? Explain briefly. (5%)
SUGGESTED ANSWER:
SUGGESTED ANSWER: The applicable prescriptive period is ten years under the
a) XYZ may ask for the rescission of the charter party if, Civil Code. The one-year prescriptive period under the
as in this case, it sold the vessel before the charterer has Carriage of Goods by Sea Act applies in cases of loss or
begun to load the vessel and the purchaser loads it for his damages to the cargo. The term "loss" as interpreted by the
own account. Saad may recover damages to the extent of Supreme Court in Mitsui O.S.K. Lines Ltd. v. Court of
its losses (Art 689 Code of Commerce) Appeals, 287 SCRA 366 (1998), contemplates a situation
where no delivery at all was made by the carrier of
b) If Oslob did not load Lady Love for its own account, the goods because the same had perished or gone out
it would be bound by the charter party, but XYZ would of commerce deteriorated or decayed while in transit. In the
have to indemnify Oslob if it was not informed of present case, the shipment of ladies' wear was actually
the Charter Party at the time of sale. (Art 689 delivered. The "loss of value" is not the total loss
Code of Commerce) contemplated by the Carriage of Goods by Sea Act.
c) The term “Owner Pro Hac Vice of the Vessel,” COGSA; Prescription of Claims (1992)
is generally understood to be the charterer of the vessel A local consignee sought to enforce judicially a claim
in the case of bareboat or demise charter (Litonjua Shipping against the carrier for loss of a shipment of drums of
Co v National Seamen’s Board GR 51910 10Aug1989) lubricating oil from Japan under the Carriage of Goods by
Sea Act (COGSA) after the carrier had rejected its
Charter Party (2004) demand. The carrier pleaded in its Answer the
Under a charter party, XXO Trading Company shipped affirmative defense of prescription under the provisions of
sugar to Coca-Cola Company through SS Negros said Act inasmuch as the suit was brought by the
Shipping Corp., insured by Capitol Insurance Company. consignee after one (1) year from the delivery of the
The cargo arrived but with shortages. Coca-Cola goods. In turn, the consignee contended that the period of
demanded from Capitol Insurance Co. P500.000 in prescription was suspended by the written extrajudicial
settlement for XXO Trading. The MM Regional Trial demand it had made against the carrier within the one-
Court, where the civil suit was filed, "absolved the year period, pursuant to Article 1155 of the Civil Code
insurance company, declaring that under the Code of providing that the prescription of actions is interrupted
Commerce, the shipping agent is civilly liable for when there is a written extrajudicial demand by the
damages in favor of third persons due to the conduct of the creditors.
carrier's captain, and the stipulation in the charter party a) Has the action in fact prescribed? Why?
exempting the owner from liability is not against public b) If the consignee’s action were predicated on
policy. Coca-Cola appealed. Will its appeal prosper? misdelivery or conversion of the goods, would your
Reason briefly. (5%) answer be the same? Explain briefly.
No. The appeal of Coca-Cola will not prosper. Under a) The action taken by the local consignee has, in
Article 587 of the Code of Commerce, the shipping agent is fact, prescribed. The period of one year under the
civilly liable for damages in favor of third persons due to Carriage of Goods by Sea Act (COGSA) is not
the conduct of the carrier's captain, and the shipping agent interrupted by a written extrajudicial demand. The
can exempt himself therefrom only by abandoning the provisions of Art 1155 of the NCC merely apply
vessel with all his equipment and the freight he may have to prescriptive periods provided for in said Code and
earned during the voyage. On the other hand, not to special laws such as COGSA except when
assuming there is bareboat charter, the stipulation in the otherwise provided. (Dole v Maritime Co 148 s 118).
charter party exempting the owner from liability is not
against public policy because the public at large is not b) If the consignee’s action were predicated on
involved (Home Insurance Co. v. American Steamship Agencies, Inc., 23 misdelivery or conversion of goods, the provisions of the
SCRA25 (1968). COGSA would be inapplicable. In these cases, the NCC
prescriptive periods, including Art 1155 of the NCC will
COGSA: Prescription of Claims/Actions (2004) apply (Ang v Compania Maritama 133 s 600)
SUGGESTED ANSWER:
COGSA; Prescription of Claims (2000) Under the “doctrine of inscrutable fault,” where fault is
RC imported computer motherboards from the established but it cannot be determined which of the two
United States and had them shipped to Manila aboard an vessels were at fault, both shall be deemed to have been
ocean- going cargo ship owned by BC Shipping at fault.
Company. When the cargo arrived at Manila seaport and
delivered to RC, the crate appeared intact; but upon Doctrine of Inscrutable Fault (1998)
inspection of the contents, RC discovered that the items A severe typhoon was raging when the vessel
inside had all been badly damaged. He did not file SS Masdaam collided with MV Princes. It is conceded
any notice of damage or anything with anyone, least that the typhoon was the major cause of the
of all with BC Shipping Company. What he did was to collision, although there was a very strong possibility
proceed directly to your office to consult you about that it could have been avoided if the captain of SS
whether he should have given a notice of damage and Masdaam was not drunk and the captain of the MV
how long a time he had to initiate a suit under the Princes was not asleep at the time of collisions.
provisions of the Carriage of Goods by Sea Act (CA 65). Who should bear the damages to the vessels and
What would your advice be? (2%) their cargoes? (5%)
My advice would be that RC should give notice of The shipowners of SS Masdaam and MV Princess
the damage sustained by the cargo within 3 days and that shall each bear their respective loss of vessels. For the
he has to file the suit to recover the damage sustained by losses and damages suffered by their cargoes both
the cargo within one year from the date of the delivery shipowners are solidarily liable.
of the cargo to him.
COGSA; Prescriptive Period (1995) Toni, a copra dealer, loaded 1000 sacks of copra on
What is the prescriptive period for actions involving lost board the vessel MV Tonichi (a common carrier engaged in
or damaged cargo under the Carriage of Goods by coastwise trade owned by Ichi) for shipment from
Sea Act? Puerto Galera to Manila. The cargo did not reach Manila
SUGGESTED ANSWER: because the vessel capsized and sank with all its cargo.
ONE YEAR after the delivery of the goods or the date
when the goods should have been delivered (Sec When Toni sued Ichi for damages based on breach
3(6), COGSA) of contract, the latter invoked the “limited liability rule.”
1) What do you understand of the “rule” invoked
Doctrine of Inscrutable Fault (1995) by Ichi?
1. 2 vessels coming from the opposite directions collided 2) Are there exceptions to the “limited liability rule”?
SUGGESTED ANSWER:
with each other due to fault imputable to both. What are
the liabilities of the two vessels with respect to the 1) By “limited liability rule” is meant that the liability of a
damage caused to them and their cargoes? Explain. shipowner for damages in case of loss is limited to
the value of the vessel involved. His other properties
2. If it cannot be determined which of the two cannot be reached by the parties entitled to damages.
vessels was at fault resulting in the collision, which party
2) Yes. When the ship owner of the vessel involved is
should bear the damage caused to the vessels and the
guilty of negligence, the “limited liability rule” does not
cargoes? Explain. apply. In such case, the ship owner is liable to the full
3. Which party should bear the damage to the vessels and extent of the damages sustained by the aggrieved parties
(Mecenas v CA 180 s 83)
the cargoes if the cause of the collision was a fortuitous
event? Explain. Limited Liability Rule (1997)
SUGGESTED ANSWER: Explain the doctrine in Maritime accidents –
1. Each vessel must bear its own damage. Both of them The Doctrine of Limited Liability
SUGGESTED ANSWER:
were at fault. (Art 827, Code of Commerce)
Under the “doctrine of limited liability” the
2. Each of them should bear their respective damages. exclusively real and hypothecary nature of maritime law
Since it cannot be determined as to which vessel is at operates to limit the liability of the shipowner to the
value of the vessel, earned freightage and proceeds of
fault. This is the doctrine of “inscrutable fault.”
the insurance. However, such doctrine does not apply if
3. No party shall be held liable since the cause of the the shipowner and the captain are guilty of negligence.
collision is fortuitous event. The carrier is not an insurer. Limited Liability Rule (1999)
Doctrine of Inscrutable Fault (1997) Thinking that the impending typhoon was still 24 hours
Explain the doctrine in Maritime accidents – Doctrine away, MV Pioneer left port to sail for Leyte. That was a
of Inscrutable Fault miscalculation of the typhoon signals by both the ship-
owner and the captain as the typhoon came earlier Claro already sighted Manila on its radar screen. Manila
and overtook the vessel. The vessel sank and a had no radar equipment. As for speed, Don Claro
number of passengers disappeared with it. was twice as fast as Manila.
Relatives of the missing passengers claimed damages At the time of the collision, Manila failed to follow Rule 19
against the shipowner. The shipowner set up the defense of the International Rules of the Road which requires 2
that under the doctrine of limited liability, his liability was vessels meeting head on to change their course by each
co-extensive with his interest in the vessel. As the vessel vessel steering to starboard (right) so that each vessel
was totally lost, his liability had also been extinguished. may pass on the port side (left) of the other. Manila
a. How will you advice the claimants? Discuss signaled that it would turn to the port side and steered
the doctrine of limited liability in maritime law. (3%) accordingly, thus resulting in the collision. Don Claro’s
b. Assuming that the vessel was insured, may the captain was off-duty and was having a drink at the ship’s
claimants go after the insurance proceeds? (3%) bar at the time of the collision.
SUGGESTED ANSWER: a) Who would you hold liable for the collision?
a. Under the doctrine of limited liability in maritime law, b) If Don Claro was at fault, may the heirs of the
the liability of the shipowner arising from the operation passengers who died and the owners of the cargoes
of a ship is confined to the vessel, equipment, and recover damages from the owner of said vessel?
freight, or insurance, if any, so that if the SUGGESTED ANSWER:
shipowner abandoned the ship, equipment, and freight, I can hold the 2 vessels liable. In the problem
his liability is extinguished. However, the doctrine of given, whether on the basis of the factual settings or
limited liability does not apply when the shipowner or under the doctrine of inscrutable fault, both vessels can
captain is guilty of negligence. be said to have been guilty of negligence. The
liability of the 2 carriers for the death or injury of
b. Yes. In case of a lost vessel, the claimants may go after passengers and for the loss of or damage to the goods
the proceeds of the insurance covering the vessel. arising from the collision is solidary. Neither carrier may
invoke the doctrine of last clear chance which can only
Limited Liability Rule (2000) be relevant, if at all, between the two vessels but not on
MV Mariposa, one of five passenger ships owned by the claims made by passengers or shippers (Litonjua
Marina Navigation Co, sank off the coast of Mindoro Shipping v National Seamen Board GR 51910 10Aug1989)
while en route to Iloilo City. More than 200 passengers SUGGESTED ANSWER:
perished in the disaster. Evidence showed that the ship Yes, but subject to the doctrine of limited liability.
captain ignored typhoon bulletins issued by Pag-asa The doctrine is to the effect that the liability of
during the 24-hour period immediately prior to the the shipowners would only be to the extent of any
vessel’s departure from Manila. The bulletins warned all remaining value of the vessel, proceeds of insurance,
types of sea crafts to avoid the typhoon’s expected path if any, and earned freightage. Given the factual
near Mindoro. To make matters worse, he took more settings, the shipowner himself was not guilty of
load than was allowed for the ship’s rated capacity. Sued for negligence and, therefore, the doctrine can well apply
damages by the victim’s surviving relatives, Marina Nav (Amparo de los Santos v CA 186 s 69)
Co contended 1) that its liability, if any, had been
extinguished with the sinking of MV Mariposa; and 2)
that assuming it had not been so extinguished, such X Shipping Company spent almost a fortune in refitting
liability should be limited to the loss of the cargo. Are and repairing its luxury passenger vessel, the MV Marina,
these contentions meritorious in the context of which plied the inter-island routes of the company from
applicable provisions of the Code of Commerce? (3%) La Union in the north to Davao City in the south. The
SUGGESTED ANSWER: MV Marina met an untimely fate during its post-
Yes. The contentions of Marina Nav Co are meritorious. repair voyage. It sank off the coast of Zambales while en
The captain of MV Mariposa is guilty of negligence route to La Union from Manila. The investigation
in ignoring the typhoon bulletins issued by PAGASA showed that the captain alone was negligent. There were
and in overloading the vessel. But only the captain of the no casualties in that disaster. Faced with a claim for
vessel MV Mariposa is guilty of negligence. The ship the payment of the refitting and repair, X Shipping
owner is not. Therefore, the ship owner can invoke company asserted exemption from liability on the basis
the doctrine of limited liability. of the hypothecary or limited liability rule under Article
587 of the Code of Commerce. Is X Shipping
Limited Liability Rule; Doctrine of Inscrutable Fault Company’s assertion valid? Explain (3%).
SUGGESTED ANSWER:
(1991)
In a collision between M/T Manila, a tanker, and M/V No. The assertion of X Shipping Company is not valid.
Don Claro, an inter-island vessel, Don Claro sank and The total destruction of the vessel does not affect
many of its passengers drowned and died. All its cargoes the liability of the ship owner for repairs on the
were lost. The collision occurred at nighttime but the sea vessel completed before its loss.
was calm, the weather fair and visibility was good. Prior to
the collision and while still 4 nautical miles apart, Don
Mercantile Law Bar Examination Q & A (1990-2006) Page 74 of 103 and also
MV SuperFast, a passenger-cargo vessel owned by SF the fact that A does not have the means and
Shipping Company plying the inter-island routes, was on its resources to invest P500th in the security agency.
way to Zamboanga City from the Manila port when it ALTERNATIVE ANSWER:
accidentally, and without fault or negligence of anyone 1) The prosecutor may establish the fact that the P500th
on the ship, hit a huge floating object. The accident would constitute a major investment and yet A is not
caused damage to the vessel and loss of an accompanying even elected member of the BOD or one of the officers.
crated cargo of passenger PR. In order to lighten the Furthermore, it may also be shown that A does not even
vessel and save it from sinking and in order to avoid risk of have the means to raise the amount of P500th and that the
damage to or loss of the rest of the shipped items officers or majority of the directors are foreigners.
(none of which was located on the deck), some had to be
SUGGESTED ANSWER:
jettisoned. SF Shipping had the vessel repaired at its port of
destination. SF Shipping thereafter filed a complaint 2) No. The mere fact of being a common law wife of a
demanding all the other cargo owners to share in the foreigner does not bring her within the ambit of
total repair costs incurred by the company and in the the Anti-Dummy Law.
ALTERNATIVE ANSWER:
value of the lost and jettisoned cargoes. In answer to the
2) Yes. Being a common law wife, it can be
complaint, the shippers’ sole contention was that, under the
presumed that she is the one running the business,
Code of Commerce, each damaged party should bear its or
his own damage and those that did not suffer any loss or which raises a prima facie presumption of violation of
damage were not obligated to make any
the Anti-dummy Law, (RA 6084).
contribution in favor of those who did. Is the shippers’
Nationalized Activities or Undertakings (1994)
contention valid? Explain (2%)
SUGGESTED ANSWER:
Celeste, a domestic corporation wholly owned by
No. The shippers’ contention is not valid. The owners of Filipino citizens, is engaged in trading and operates
the cargo jettisoned, to save the vessel from sinking and as general contractor. It buys and resells the products of
to save the rest of the cargoes, are entitled to Matilde, a domestic corporation, 90% of whose
contribution. The jettisoning of said cargoes capital stock is owned by aliens. All of Matilde’s goods
constitute general average loss which entitles the owners are made in the Philippines from materials found or
thereof to contribution from the owner of the vessel and produced in the Philippines.
also from the owners of the cargoes saved. On the other hand, ECQ Integrated is a 100% Filipino
owned corporation and manufacturer of
SF Shipping is not entitled to asbestos products.
contribution/ reimbursement for the costs of repairs on Celeste and ECQ took part in a public bidding
the vessel from the shippers. conducted by MWSS for its asbestos pipe requirements.
Celeste won the bid, having offered 13% lower than that
offered by ECQ; and MWSS awarded the contract
Nationalized Activities to supply its asbestos pipes to Celeste. ECQ sought
to nullify the award in favor of Celeste.
or Undertakings 1) Is Celeste barred under the Flag Law from taking part
in biddings to supply the government?
Nationalized Activities or Undertakings (1993) 2) Did Celeste and Matilde violate the Anti-Dummy
1) A invested P500th in a security agency on October 30, Law?
1990. He was charged with being a dummy of his friend, 3) Did Celeste and Matilde violate the Retail Trade
a foreigner. If you were the prosecutor, what Nationalization Law? Explain.
evidence can you present to prove violation of the
Anti-Dummy Law? SUGGESTED ANSWER:
2) Juana de la Cruz, a common law wife of a 1) No. The materials offered in the bids submitted are
foreigner wrested the control of a television firm. At the made in the Philippines from articles produced or grown in
instance of the minority group of the firm, she was the Philippines, and the bidder, Celeste, is a domestic entity.
charged with violation of the Anti-Dummy Law. May The Flag Law does not apply. It can be invoked only
she be convicted by the mere fact that she is a against a bidder who is not a domestic entity, or
common law wife of a foreigner? Explain. against a domestic entity who offers imported materials.
SUGGESTED ANSWER:
1) A allows or permits the use or exploitation or 2) No, since Celeste is merely a dealer of Matilde and not
enjoyment of a right, privilege or business, the exercise or an alter ego of the latter. Celeste buys and sells on
enjoyment of which is expressly reserved by the its own account the products of Matilde.
Constitution or the laws to citizens of the Philippines, by
the foreigner not possessing the requisites prescribed by the 3) Matilde did not violate the Retail Trade Law since it
Constitution or the laws of the Philippines. The does not sell its products to consumers, but to dealers
prosecutor should prove the above elements of the crime who resell them. Neither did Celeste violate the Retail
Trade Law since, in the first place, it is not prohibited to
Mercantile Law Bar Examination Q & A (1990-2006) 103 requires
Page 75 of
engage in retail trade. Besides, Matilde’s sale of the 60% Filipino holding in land corporate
asbestos products to Celeste, being wholesale, the ownership.
transaction is not covered by the Retail Trade Law
(Asbestos Integrated v Peralta 155 S 213) c) The Anti-dummy Law allows board representation to
the extent of actual and permissible foreign investments
Nationalized Activities or Undertakings (1995) in corporations. Accordingly, the President of Acme may
Global KL Malaysia, a 100% Malaysian no sit in the BOD of the department store corporation
owned corporation, desires to build a hotel beach resort but can do so in the realty corporation.
in Samal Island, Davao City, to take advantage of
the increased traffic of tourists and boost the tourism d) The Treasurer of Acme may not hold that
industry of the Philippines. position either in the department store corporation or in
1. Assuming that Global has US$100M to invest in the realty corporation since the Anti-Dummy Law
a hotel beach resort in the Philippines, may it be allowed prohibits the employment of aliens in such
to acquire the land on which to build the resort? If nationalized areas of business except those that
so, under what terms and conditions may Global acquire call for highly technical qualifications.
the land? Discuss fully.
2. May Global be allowed to manage the hotel
beach resort? Explain. Retail Trade Law (1991)
3. May Global be allowed to operate restaurants Is the Filipino common-law wife of a foreigner
within the hotel beach resort? Explain. barred from engaging in the retail business?
1. Global can secure a lease on the land. As a corporation A Filipino common-law wife of a foreigner is not barred
with a Malaysian nationality, Global cannot own the land. from engaging in retail business. On the assumption that
she acts for and in her own behalf, and absent a violation
2. Yes, Global can manage the hotel beach resort. There of the Anti-Dummy Law which prohibits a foreigner
is no law prohibiting it from managing the resort. from being either the real proprietor or an employee of a
person engaged in the retail trade, she would be violating
3. Global may be allowed to operate restaurants the Retail Trade Act.
within the beach resort. This is part of the ALTERNATIVE ANSWER:
operation of the resort. An engagement by a wife (including common-law
relationships) of a foreigner in the retail trade
Retail Trade Law (1990) business, raises the presumption that she has violated
Acme Trading Co Inc, a trading company wholly owned the Anti- Dummy Law. Hence, the wife is barred from
by foreign stockholders, was persuaded by Paulo Alva, a engaging in the retail trade business.
Filipino, to invest in 20% of the outstanding shares
of stock of a corporation he is forming which will Retail Trade Law (1992)
engage in the department store business (the A Cooperative purchased from Y Co on installments a
“department store corporation”). Paulo also urged rice mill and made a down payment therefore. As security
Acme to invest in 40% of the outstanding shares for the payment of the balance, the Cooperative executed a
of stock of the realty corporation he is putting up chattel mortgage in favor of Y Corporation. Y Co in
to own the land on which the department store turn assigned its rights to the chattel mortgage to Z Co a
will be built (the “realty corporation”). 5% foreign owned company doing business in the
a) May Acme invest in the said department Philippines. The cooperative thereafter made installment
store corporation? Explain your answer. payments to Z Co.
b) May Acme invest in the realty corporation? Discuss.
c) May the President of Acme, a foreigner, sit in the Because the Cooperative was unable to meet its
BOD of the said department store corporation? May obligations in full, Z Co filed against it a court suit
he be a director of the realty corporation? Discuss. for collection. The Coop resisted contending that Z Co
d) May the Treasurer of Acme, another foreigner, was illegally engaged in the retail trade business for
occupy the same position in the said department having sold a consumer good as opposed to a
store corporation? May he be the treasurer of the producer item. The Coop also alleged that Z had
said realty corporation? Explain. violated the Anti- Dummy Law.
SUGGESTED ANSWER: Is Z guilty of violating the Retail Trade Law and
a) Acme may not invest in the department the Anti-Dummy Law? Why?
store corporation since the Retail Trade Act allows, in SUGGESTED ANSWER:
the case of corporations, only 100% Filipino owned Z Co is not guilty of violating the Retail Trade Law and the
companies to engage in retail trade. Anti-Dummy Law. The term RETAIL under the Retail
Trade Act requires that the seller must be
b) Acme may invest in the realty corporation, on the habitually engaged in selling to the general public
assumption that the balance of 60% of ownership of the consumption goods. By consumption goods are meant
latter corporation, is Filipino owned since the law merely “personal, family and household” purposes. A Rice Mill
Mercantile Law Bar Examination Q & A (1990-2006) Page 76 of 103 backup in
does not fall under the category. Neither does it appear the processing of goods, c) factories, and d) its own
that Z is habitually engaged in selling to the general employees.
public that commodity. Since there is no violation of the Is EL engaged in retail trade? Explain.
Retail Trade Law, there would likewise by no violation of SUGGESTED ANSWER:
the Anti-Dummy Law. The sale by EL of generators to government offices,
agricultural enterprises and factories are outside the
Retail Trade Law (1993) scope of the term “retail business” and may, therefore, be
A foreign firm is engaged in the business made by the said corporation. However, sales of
of manufacturing and selling rubber products to generators by EL to its own employees constitute retail
dealers who in turn sell them to others. It also sells sales and are proscribed. Under the amendment to the
directly to agricultural enterprises, automotive Retail Trade Law introduced by PD 714, the term “retail
assembly plants, public utilities which buy them in business” shall not include a manufacturer (such as EL)
large bulk, and to its officers and employees. selling to industrial and commercial users or consumers
1) Is there violation of the Retail Trade Law? Explain. who use the products bought by them to render service to
2) May said firm operate a canteen inside the premises of the general public (eg government offices) and/or to
its plant exclusively for its officials and employees produce or manufacture goods which are in turn sold by
without violating the Retail Trade Act? Explain. them (eg agricultural enterprises and factories). (Goodyear
SUGGESTED ANSWER: Tires v Reyes Sr Gr 30063, Jly 2, 83 123s273).
1) On the assumption that the foreign firm is doing
business in the Philippines, the sale to the dealers of Retail Trade Law; Consignment (1991)
agricultural enterprises, automotive assembly plants, and ABC Manufacturing Inc, a company wholly owned
public utilities is wholesale and, therefore, not in by foreign nationals, manufactures typewriters which
violation of the Retail Trade Act (BF Goodrich v Reyes 121 s ABC distributes to the general public in 2 ways:
363) 1. ABC consigns its typewriters to independent dealers
who in turn sell them to the public; and,
2) Yes. The operation of the canteen inside the premises 2. Through individuals, who are not employees of
exclusively for its officers and employees, would amount ABC, and who are paid strictly on a commission
to an input in the manufacturing process and, therefore, basis for each sale.
does not violate the Retail Trade Act. Do these arrangements violate the Retail Trade Law?
Retail Trade Law (1996) SUGGESTED ANSWER:

With a capital of P2th Maria operates a stall at a public a) The first arrangement would not be in violation of the
market. She manufactures soap that she sells to the Retail Trade Law. The law applies only when the sale is
general public. Her common law husband, MaLee, who direct to the general public. A dealer buys and sells
has a pending petition for naturalization, occasionally for and in his own behalf and, therefore, the sale
finances the purchase of goods for resale, and assists in to the general public is made by the dealer and not
the management of the business. by the manufacturer (Marsman & Co v First Coconut
Is there a violation of the Retail Trade Law? Explain. Control Co GR39841 20June1988)
No, there is no violation of the Retail Trade Law. Maria is a a) The first arrangement violates the Retail Trade Law
manufacturer who sells to the general public, through her because when ABC “consigned” the typewriters, the
stall in the public market, the soap which she transaction was one of consignment sale. In consignment
manufactures. Inasmuch as her capital does not exceed sale, an agency relationship is created so it is as if ABC sells
P5th (it is only P2th) then she is considered under Sec 4a of directly to the public through its agents.
the Retail Trade Law as not engaged in the “retail SUGGESTED ANSWER:
business.” Inasmuch as Maria’s business is not a “retail b) The second arrangement would be violative of
business,” then the requirement in Sec 1 of the Retail the Retail Trade Law, since the sale is done
Trade Law that only Philippine nationals shall engage, through individuals being paid strictly on a commission
directly, or indirectly, in the retail business is inapplicable. basis. The said individuals would then be acting merely
For this reason, the participation of Ma Lee, Maria’s as agents of the manufacturer. Sales, therefore, made by
common Law husband, in the management of the such agents are deemed direct sales by the manufacturer.
business would not be a violation of the Retail Trade ALTERNATIVE ANSWER:
Law in relation to the Anti-Dummy Law. b) The 2nd arrangement is not violative of the Retail
Trade Law because typewriters are not consumption
Retail Trade Law (1996) goods or goods for personal, household and family use.
EL Inc, a domestic corporation with foreign equity,
manufactures electric generators, and sells them to the
following customers: a) government offices which use Negotiable Instruments Law
the generators during brownouts to render public service,
b) agricultural enterprises which utilize the generators as Bond: Cash Bond vs. Surety Bond (2004)
Distinguish clearly cash bond from surety bond.
SUGGESTED ANSWER: Civil Code and other laws of general application can still
A SURETY BOND is issued by a surety or apply suppletorily.
insurance company in favor of a designated beneficiary, ALTERNATIVE ANSWER:
pursuant to which such company acts as a surety to The dismissal by the court was correct. A check whether or
the debtor or obligor of such beneficiary. A CASH not post-dated or crossed, is still a negotiable
BOND is a security in the form of cash established by a instrument and unless Pablo is a general indorser, which is
guarantor or surety to secure the obligation of another. not expressed in the factual settings, he cannot be held
liable for the dishonor of the instrument. In State Investment
Checks: Crossed Checks (2005) House v IAC (GR 72764 13Jul1989), the court did not go so far
What is a crossed check? What are the effects of crossing as to hold that the fact of crossing would render the
a check? Explain. instrument non-negotiable.
A Crossed Check under accepted banking practice, In State Investment House v IAC (GR 72764 13Jul1989), the
crossing a check is done by writing two parallel lines SC considered a crossed check as subjecting a
diagonally on the left top portion of the checks. The subsequent holder thereof to the contractual covenants
crossing is special where the name of the bank or a of the payor and the payee. If such were the case, then
business institution is written between the two parallel the instrument is not one which can still be said
lines, which means that the drawee should pay only with to contain an unconditional promise to pay or
the intervention of that company. order a sum certain in money. In the transfer of
non-negotiable credits by assignment, the transferor
Effects of Crossed Checks does not assume liability for the fault of the debtor or
1) The check may not be encashed but only deposited obligor. Accordingly the court’s decision was correct.
in the bank. ALTERNATIVE ANSWER:
2) The check may be negotiated only once— to Yes. The check is crossed. It should have forewarned Mr.
one who has an account with a bank. Noble that it was issued for a specific purpose. Hence,
3) The act of crossing the check serves as a warning to Mr Noble could not be a holder in due course. He is
the holder that the check has been issued for a subject to the personal defense of breach of trust/
definite purpose, so that he must inquire if he agreement by Mr. Pablo. Such defense is available in
has received the check pursuant to that favor of Mr Carlos against Mr Noble.
purpose; otherwise, he is not a holder in due course.
Checks: Crossed Checks vs. Cancelled Checks (2004) Po Press issued in favor of Jose a postdated crossed
Distinguish clearly (1) crossed checks from cancelled check, in payment of newsprint which Jose promised to
checks; deliver. Jose sold and negotiated the check to Excel Inc.
SUGGESTED ANSWER: at a discount. Excel did not ask Jose the purpose
A crossed check is one with two parallel lines of crossing the check. Since Jose failed to
drawn diagonally across its face or across a corner deliver the newsprint, Po ordered the drawee bank to
thereof. On the other hand, a cancelled check is one stop payment on the check.
marked or stamped "paid" and/or "cancelled" by or on Efforts of Excel to collect from Po failed. Excel wants to
behalf of a drawee bank to indicate payment thereof. know from you as counsel:
1) What are the effects of crossing a check?
Checks; Crossed Check (1991) 2) Whether as second indorser and holder of
Mr Pablo sought to borrow P200th from Mr Carlos. the crossed check, is it a holder in due course?
Carlos agreed to loan the amount in the form of a post- 3) Whether Po’s defense of lack of consideration
dated check which was crossed (i.e. 2 parallel lines as against Jose is also available as against Excel?
diagonally drawn on the top left portion of the
check). Before the due date of the check, Pablo SUGGESTED ANSWER:
discounted it with Noble On due date, Noble deposited 1) The effects of crossing a check are:
the check with his bank. The check was dishonored. a. The check is for deposit only in the account of
Noble sued Pablo. The court dismissed Noble’s the payee
complaint. Was the court’s decision correct? b. The check may be indorsed only once in favor
SUGGESTED ANSWER: of a person who has an account with a bank
The court’s decision was incorrect. Pablo and Carlos, c. The check is issued for a specific purpose and
being immediate parties to the instrument, are governed by the person who takes it not in accordance with
the rules of privity. Given the factual circumstances of the said purpose does not become a holder in due
problem, Pablo has no valid excuse from denying course and is not entitled to
liability, (State investment House v IAC GR 72764 13July1989). payment thereunder.
Pablo undoubtedly had benefited in the transaction. To
hold otherwise would also contravene the basic rules of 2) No. It is a crossed check and Excel did not take it in
unjust enrichment. Even in negotiable instruments, the accordance with the purpose for which the check was
issued. Failure on its part to inquire as to said purpose,
prevented Excel from becoming a holder in due course,
as such failure or refusal constituted bad faith. On April 1, 1996, Pentium stopped payment of the
check for failure of CD Bytes to deliver the
3) Yes. Not being a holder in due course, Excel is subject computer. Thus, when Fund House deposited the
to the personal defense which Po Press can set up against check, the drawee bank dishonored it.
Jose (State Investment House v IAC 175 S 310)
If Fund House files a complaint against Pentium and CD
Checks; Crossed Check (1995) Bytes for the payment of the dishonored check, will the
On Oct 12, 1993, Chelsea Straights, a corp engaged complaint prosper? Explain.
in the manufacture of cigarettes, ordered from Moises SUGGESTED ANSWER::
2,000 bales of tobacco. Chelsea issued to Moises The complaint filed by Fund House against Pentium will
two crossed checks postdated 15 Mar 94 and 15 not prosper but the one against CD Bytes will. Fund
Apr 94 in full payment therefor. On 19 Jan 94 Moises House is not a holder in due course and, therefore,
sold to Dragon Investment House at a discount the two Pentium can raise the defense of failure of consideration
checks drawn by Chelsea in his favor. against it. The check in question was issued by Pentium to
Moises failed to deliver the bales of tobacco as pay for a computer that it ordered from CD Bytes.
agreed despite Chelsea’s demand. Consequently, on 1 The computer not having been delivered, there was a
Mar 94 Chelsea issued a “stop payment” order on the 2 failure of consideration. The check discounted with Fund
checks issued to Moises. Dragon, claiming to be a holder House by CD Bytes is a crossed check and this should
in due course, filed a complaint for collection against have put Fund House on inquiry. It should have
Chelsea for the value of the checks. ascertained the title of CD Bytes to the check or the
Rule on the complaint of Dragon. Give your legal basis. nature of the latter’s possession. Failing in this respect,
SUGGESTED ANSWER: Fund House is deemed guilty of gross negligence
Dragon cannot collect from Chelsea. The instruments amounting to legal absence of good faith and, thus, not a
are crossed checks which were intended to pay for the holder in due course. Fund House can collect from CD
2,000 bales of tobacco to be delivered to Moises. It Bytes as the latter was the immediate indorser of the
was therefore the obligation of Dragon to inquire as check. (See Bataan Cigar and Cigarette Factory v CA et al 230 s 643
to the purpose of the issuance of the 2 crossed checks GR 93048 Mar 3, 94)
before causing them to be discounted. Failure on its
part to make such inquiry, which resulted in its Checks; Effect; Acceptance by the drawee bank (1998)
bad faith, Dragon cannot claim to be a holder in X draws a check against his current account with
due course. Moreover, the checks were sold, not the Ortigas branch of Bonifacio Bank in favor
endorsed, by him to Dragon which did not become a of B. Although X does not have sufficient funds,
holder in due course. Not being a holder in due the bank honors the check when it is presented for
course, Dragon is subject to the personal defense on the payment. Apparently, X has conspired with the bank’s
part of Chelsea concerning the breach of trust on the bookkeeper so that his ledger card would show that
part of Moises Lim in not complying with his he still has sufficient funds.
obligation to deliver the 2000 bales of tobacco.
The bank files an action for recovery of the amount paid
Checks; Crossed Check (1996) to B because the check presented has no sufficient funds.
What are the effects of crossing a check? Decide the case (5%)
The effects of crossing a check are as follows: The bank cannot recover the amount paid to B for the
a. The check may not be encashed but only deposited check. When the bank honored the check, it became an
in a bank; acceptor. As acceptor, the bank became primarily
b. The check may be negotiated only once to one who and directly liable to the payee/holder B.
has an account with a bank;
c. The act of crossing a check serves as a warning The recourse of the bank should be against X and
to the holder thereof that the check has been issued its bookkeeper who conspired to make X’s ledger show
for a definite purpose so that the holder must that he has sufficient funds.
inquire if he has received the check pursuant to that ALTERNATIVE ANSWER:
purpose, otherwise he is not a holder in due course The bank can recover from B. This is solutio indebiti
(See Bataan Cigar and Cigarette Factory, Inc. v CA GR 93048, because there is payment by the bank to B when
Mar 3, 1994; 230 s 643) such payment is not due. The check issued by X to B as
payee had no sufficient funds.
On March 1, 1996, Pentium Company ordered a Checks; Effects; Alterations; Prescriptive Period (1996)
computer from CD Bytes, and issued a crossed check in William issued to Albert a check for P10,000 drawn on XM
the amount of P30,000 post-dated Mar 31, 1996. Upon Bank. Albert altered the amount of the check to
receipt of the check, CD Bytes discounted the check with P210,000 and deposited the check to his account with
Fund House. ND Bank. When ND Bank presented the check for
payment through the Clearing House, XM Bank honored drawee-bank bears the loss (BPI Family Bank v. Buenaventura,
it. Thereafter, Albert withdrew the P210,000 and closed G.R. No. 148196, September 30, 2005). A drawee-bank paying on
his account. a forged check must be considered as paying out of its
funds and cannot charge the amount to the drawer
When the check was returned to him after a (Samsung Construction Co. Phils, v. Far East Bank, G.R.
month, William discovered the alteration. XM Bank No. 129015, August 13, 2004). If the drawee-bank has
recredited P210,000 to William’s current account, charged drawer's account, the latter can recover such
and sought reimbursement from ND Bank. ND amount from the drawee-bank (Associated Bank v. Court
Bank refused, claiming that XM Bank failed to return of Appeals, G.R. No. 107382, January 31, 1996; Bank of P. I. v.
the altered check to it within 24 hour clearing period. Case Montessori Internationale, G.R. No. 149454, May 28, 2004).
Who, as between, XM Bank and ND Bank, should bear
the loss? Explain. However, the drawer may be precluded or estopped from
SUGGESTED ANSWER: setting up the defense of forgery as against the drawee-
ND Bank should bear the loss if XM Bank returned the bank, when it is shown that the drawer himself had been
altered check to ND Bank within twenty four hours after guilty of gross negligence as to have facilitated
its discovery of the alteration. Under the given facts, the forgery (Metropolitan Waterworks v. Court of Appeals, G.R.
William discovered the alteration when the altered check No. L- 62943, 143 SCRA 20, July 14, 1986).
was returned to him after a month. It may safely be (NOTA BENE: The question does not qualify the term
assumed that William immediately advised XM Bank of "forged check". An answer addressing the liabilities of a
such fact and that the latter promptly notified ND Bank drawer should be deemed sufficient. Answers addressing
thereafter. Central Bank Circular No. 9, as amended, on liabilities of parties should likewise be given full credit)
which the decisions of the Supreme Court in Hongkong & Drawee Bank versus Collecting Bank — When the
Shanghai Banking Corp v People’s Bank & Trust Co and signature of the drawer is forged, as between the drawee-
Republic Bank vs CA were based was expressly cancelled bank and collecting bank, the drawee-bank sustains the
and superseded by CB No 317 dated Dec 23 1970. The
loss, since the collecting bank does not guarantee the
latter was in turn amended by CB Circular No 580, dated
signature of the drawer. The payment of the check by the
Sept 19, 1977. As to altered checks, the new rules provide
drawee bank constitutes the proximate negligence since it
that the drawee bank can still return them even after 4:00
has the duty to know the signature of its client-drawer.
pm of the next day provided it does so within 24 hours
(Philippine National Bank v. Court of Appeals, G.R. No. L-
from discovery of the alteration but in no event beyond the
26001, October 29, 1968).
period fixed or provided by law for filing of a legal action
by the returning bank against the bank sending the same. (b) Forged Payee's Signature: When drawee-bank pays
Assuming that the relationship between the drawee bank the forged check, it must be considered as paying out of its
and the collecting bank is evidenced by some written funds and cannot charge the amount so paid to the
document, the prescriptive period would be 10 years. account of the depositor. In such case, the bank becomes
(Campos, NIL 5th ed 454-455) liable since its primary duty is to verify the authenticity of
ALTERNATIVE ANSWER:
the payee's signature (Traders Royal Bank v. Radio Philippines
XM Bank should bear the loss. When the drawee bank
Network, G.R. No. 138510, October 10, 2002; Westmont Bank v.
(XM Bank) failed to return the altered check to the
Ong, G.R. No. 132560, January 30, 2002).
collecting bank (ND Bank) within the 24 hour clearing
period provided in Sec 4c of CB Circular 9, dated Feb 17, (c) Forged Indorsement:
1949, the latter is absolved from liability. (See HSBC v • Drawer's account cannot be charged, and if
PB&T Co GR L-28226 Sep 30 1970; 35 s 140; also Rep Bank
charged, he can recover from the drawee-bank
v CA GR 42725 Apr 22, 1991 196 s 100)
(Associated Bank v. Court of Appeals, G.R. No.
107382 January 31,1996).
Checks; Forged Check; Effects (2006)
• Drawer has no cause of action against collecting
Discuss the legal consequences when a bank honors bank, since the duty of collecting bank is only to
a forged check. (5%) the payee. A collecting bank is not guilty of
SUGGESTED ANSWER:
negligence over a forged indorsement on checks
The legal consequences when a bank honors a
for it has no way of ascertaining the authority of
forged check are as follows:
the endorsement and when it caused the checks to
(a) When Drawer's Signature is Forged: Drawee-bank
pass through the clearing house before
by accepting the check cannot set up the defense of
allowing withdrawal of the proceeds thereof
forgery, because by accepting the instrument, the drawee
(Manila Lighter Transportation, Inc. v. Court of Appeals,
bank admits the genuineness of signature of drawer (BPI
G.R. No. 50373, February 15, 1990). On the other
Family Bank vs. Buenaventura G.R. No. 148196, September 30, 2005;
Section 23, Negotiable Instruments Law). hand, a collecting bank which endorses a check
bearing a forged endorsement and presents it to
Unless a forgery is attributable to the fault or negligence the drawee bank guarantees all prior
of the drawer himself, the remedy of the drawee-bank is endorsements including the forged
against the party responsible for the forgery. Otherwise, endorsement itself and should be held liable
Mercantile Law Bar Examination Q & A (1990-2006) therefor Page 80 of 103 alteration
(Traders Royal Bank v. RPN, G.R. No. 138510, of the instrument. The serial number is not material
October 10, 2002). to the negotiability of the instrument.
• Drawee-bank can recover from the collecting
bank (Great Eastern Life Ins. Co. v. Hongkong & b. Yes. As a general rule, the drawee is not liable under
Shanghai Bank, G.R. No. 18657, August 23,1922) the check because there is no privity of contract between
because even if the indorsement on the check XYZ Marketing, as payee, and ABC Bank as the drawee
deposited by the bank's client is forged, bank. However, if the action taken by the bank is
collecting bank is bound by its warranties as an an abuse of right which caused damage not only to
indorser and cannot set up defense of forgery as the issuer of the check but also to the payee, the payee
against drawee bank (Associated Bank v. Court of has a cause of action under quasi-delict.
Appeals, G.R. No. 107382, January 31, 1996).
Checks; Liability; Drawee Bank (1995) Gemma drew a check on September 13, 1990. The
Mario Guzman issued to Honesto Santos a check for holder presented the check to the drawee bank only on
P50th as payment for a 2nd hand car. Without the March 5, 1994. The bank dishonored the check on
knowledge of Mario, Honesto changed the amount to the same date. After dishonor by the drawee bank, the
P150th which alteration could not be detected by the holder gave a formal notice of dishonor to Gemma
naked eye. Honesto deposited the altered check with through a letter dated April 27, 1994.
Shure Bank which forwarded the same to Progressive 1) What is meant by “unreasonable time” as applied
Bank for payment. Progressive Bank without noticing the to presentment?
alteration paid the check, debiting P150th from the 2) Is Gemma liable to the holder?
account of Mario. Honesto withdrew the amount of SUGGESTED ANSWER:
P15th from Shure Bank and disappeared. After receiving 1) As applied to presentment for payment,
his bank statement, Mario discovered the alteration and “reasonable time: is meant not more than 6 months
demanded restitution from Progressive Bank. from the date of issue. Beyond said period, it is
Discuss fully the rights and the liabilities of the “unreasonable time” and the check becomes stale.
parties concerned.
SUGGESTED ANSWER: 2) No. Aside form the check being already stale, Gemma is
The demand of Mario for restitution of the amount of also discharged form liability under the check, being a
P150,000 to his account is tenable. Progressive Bank has no drawer and a person whose liability is secondary, this is due
right to deduct said amount from Mario’s account to the giving of the notice of dishonor beyond the
since the order of Mario is different. Moreover, period allowed by law. The giving of notice of dishonor on
Progressive Bank is liable for the negligence of its April 27, 1994 is more than one (1) month from
employees in not noticing the alteration which, though it March 5, 1994 when the check was dishonored. Since it is
cannot be detected by the naked eye, could be detected by a not shown that Gemma and the holder resided in the
magnifying instrument used by tellers. same place, the period within which to give notice of
dishonor must be the same time that the notice would
As between Progressive Bank and Shure Bank, it is the reach Gemma if sent by mail. (NIL Sec 103 & 104; Far
former that should bear the loss. Progressive Bank failed to East Realty Investment Inc v CA 166 S 256)
notify Shure Bank that there was something wrong ALTERNATIVE ANSWER:
with the check within the clearing hour rule of 24 hours. 2) Gemma can still be liable under the original contract
for the consideration of which the check was issued.
Checks; Material Alterations; Liability (1999)
A check for P50,000.00 was drawn against drawee bank Checks; Presentment (2003)
and made payable to XYZ Marketing or order. The A bank issues its own check. May the holder hold
check was deposited with payee’s account at ABC Bank the bank liable thereunder if he fails to –
which then sent the check for clearing to drawee bank. • prove presentment for payment, or
Drawee bank refused to honor the check on ground that • present the bill to the drawee for
the serial number thereof had been altered. XYZ acceptance? Explain your answers. (4%)
marketing sued drawee bank. SUGGESTED ANSWER:
a. Is it proper for the drawee bank to dishonor
the check for the reason that it had been
altered? Explain (2%)
b. In instant suit, drawee bank contended that XYZ Checks; Validity; Waiver of Bank’s liability
Marketing as payee could not sue the drawee bank as for negligence (1991)
there was no privity between then. Drawee theorized Mr. Lim issued a check drawn against BPI Bank in favor
that there was no basis to make it liable for the of Mr Yu as payment of certain shares of stock which he
check. Is this contention correct? Explain. (3%) purchased. On the same day that he issued the check to
SUGGESTED ANSWER:
Yu, Lim ordered BPI to stop payment. Per standard
a. No. The serial number is not a material particular of
banking practice, Lim was made to sign a waiver of BPI’s
the check. Its alteration does not constitute material
liability in the event that it should pay Yu through e) May Pablo recover from either Mario or Jose?
oversight or inadvertence. Despite the stop order by Lim,
BPI nevertheless paid Yu upon presentation of SUGGESTED ANSWER:
the check. Lim sued BPI for paying against his order. a) Camilo may not enforce said promissory note against
Decide the case. Mario and Jose. The promissory note at the time of
SUGGESTED ANSWER: forgery being payable to order, the signature of
In the event that Mr. Lim, in fact, had sufficient legal Pablo was essential for the instrument to pass
reasons to issue the stop payment order, he may sue BPI title to subsequent parties. A forged signature was
for paying against his order. The waiver executed by Mr inoperative (Sec 23 NIL). Accordingly, the parties before
Lim did not mean that it need not exercise due diligence to the forgery are not juridically related to parties after
protect the interest of its account holder. It is not the forgery to allow such enforcement.
amiss to state that the drawee, unless the instrument has
earlier been accepted by it, is not bound to honor b) Camilo may not go against Pablo, the latter not having
payment to the holder of the check that thereby excludes it indorsed the instrument.
from any liability if it were to comply with its stop
payment order (Sec 61 NIL) c) Camilo may enforce the instrument against Julian
ALTERNATIVE ANSWER: because of his special indorsement to Camilo,
1991 6b) BPI would not be liable to Mr Lim. Mr Lim and thereby making him secondarily liable, both being
BPI are governed by their own agreement. The waiver parties after the forgery.
executed by Mr Lim, neither being one of future fraud or
gross negligence, would be valid. The problem does not d) Julian, in turn, may enforce the instrument against Bert
indicate the existence of fraud or gross negligence on the who, by his forgery, has rendered himself primarily liable.
part of BPI so as to warrant liability on its part.
e) Pablo preserves his right to recover from either Mario or
Defenses; Forgery (2004) Jose who remain parties juridically related to him.
CX maintained a checking account with UBANK, Mario is still considered primarily liable to Pablo. Pablo
Makati Branch. One of his checks in a stub of fifty was may, in case of dishonor, go after Jose who, by his special
missing. Later, he discovered that Ms. DY forged indorsement, is secondarily liable.
his signature and succeeded to encash P15,000 from Note: It is possible that an answer might
another branch of the bank. DY was able to encash the distinguish between blank and special indorsements of
check when ET, a friend, guaranteed due execution, prior parties which can thereby materially alter the
saying that she was a holder in due course. above suggested answers. The problem did not clearly
Can CX recover the money from the bank? Reason indicate the kind of indorsements made.
briefly. (5%)
SUGGESTED ANSWER: Forgery; Liabilities; Prior & Subsequent Parties (1995)
Yes, CX can recover from the bank. Under Section 23 of Alex issued a negotiable PN (promissory note) payable to
the Negotiable Instruments Law, forgery is a Benito or order in payment of certain goods. Benito
real defense. The forged check is wholly indorsed the PN to Celso in payment of an existing
inoperative in relation to CX. CX cannot be held obligation. Later Alex found the goods to be
liable thereon by anyone, not even by a holder in defective. While in Celso’s possession the PN was stolen
due course. Under a forged signature of the by Dennis who forged Celso’s signature and
drawer, there is no valid instrument that would give discounted it with Edgar, a money lender who did not
rise to a contract which can be the basis or source of make inquiries about the PN. Edgar indorsed the PN to
liability on the part of the drawer. The drawee bank Felix, a holder in due course. When Felix demanded
has no right or authority to touch the drawer's payment of the PN from Alex the latter refused to pay.
funds deposited with the drawee bank. Dennis could no longer be located.
1. What are the rights of Felix, if any, against Alex,
Benito, Celso and Edgar? Explain
Jose loaned Mario some money and, to evidence his 2. Does Celso have any right against Alex, Benito and
indebtedness, Mario executed and delivered to Jose a Felix? Explain.
promissory note payable to his order. SUGGESTED ANSWER:
1. Felix has no right to claim against Alex, Benito and
Jose endorsed the note to Pablo. Bert Celso who are parties prior to the forgery of Celso’s
fraudulently obtained the note from Pablo and endorsed signature by Dennis. Parties to an instrument who are
it to Julian by forging Pablo’s signature. Julian endorsed such prior to the forgery cannot be held liable by any
the note to Camilo. party who became such at or subsequent to the forgery.
a) May Camilo enforce the said promissory note against However, Edgar, who became a party to the instrument
Mario and Jose? subsequent to the forgery and who indorsed the same to
b) May Camilo go against Pablo? Felix, can be held liable by the latter.
c) May Camilo enforce said note against Julian?
d) Against whom can Julian have the right of recourse?
Mercantile Law Bar Examination Q & A (1990-2006) Page 82 of 103 delivered
2. Celso has the right to collect from Alex and it to Marie. She accepted the check in good faith
Benito. Celso is a party subsequent to the two. However, as payment for goods she delivered to Ruth.
Celso has no right to claim against Felix who is a Eventually, Ruth regretted what she did and
party subsequent to Celso (Sec 60 and 66 NIL) apologized to Jun. Immediately he directed the
drawee bank to dishonor the check. When Marie
Incomplete & Delivered (2004) encashed the check, it was dishonored.
AX, a businessman, was preparing for a business trip 1. Is Jun liable to Marie? (5%)
abroad. As he usually did in the past, he signed SUGGESTED ANSWER:
several checks in blank and entrusted them to his secretary Yes. This covers the delivery of an incomplete instru-
with instruction to safeguard them and fill them out ment, under Section 14 of the Negotiable Instruments
only when required to pay accounts during his absence. Law, which provides that there was prima facie authority
OB, his secretary, filled out one of the checks by placing on the part of Ruth to fill-up any of the material
her name as the payee. She filled out the amount, endorsed particulars thereof. Having done so, and when it is first
and delivered the check to KC, who accepted it in good completed before it is negotiated to a holder in due
faith for payment of gems that KC sold to OB. Later, course like Marie, it is valid for all purposes, and Marie may
OB told AX of what she did with regrets. AX timely enforce it within a reasonable time, as if it had been filled
directed the bank to dishonor the check. Could AX be up strictly in accordance with the authority given.
held liable to KC? Answer and reason briefly. (5%)
SUGGESTED ANSWER: 2. Supposing the check was stolen while in Ruth's pos-
Yes. AX could be held liable to KC. This is a case of an session and a thief filled the blank check, endorsed and
incomplete check, which has been delivered. delivered it to Marie in payment for the goods he
Under Section 14 of the Negotiable Instruments Law, purchased from her, is Jun liable to Marie if the check is
KC, as a holder in due course, can enforce payment of dishonored? (5%)
the check as if it had been filled up strictly in accordance
with the authority given by AX to OB and within a SUGGESTED ANSWER:
reasonable time. No. Even though Marie is a holder in due course, this is an
incomplete and undelivered instrument, covered by
Incomplete and Delivered (2005) Section 15 of the Negotiable Instruments Law. Where an
Brad was in desperate need of money to pay his debt to incomplete instrument has not been delivered, it will not, if
Pete, a loan shark. Pete threatened to take Brad’s life if he completed and negotiated without authority, be a valid
failed to pay. Brad and Pete went to see Señorita Isobel, contract in the hands of any holder, as against any
Brad’s rich cousin, and asked her if she could sign a person, including Jun, whose signature was placed
promissory note in his favor in the amount of P10,000.00 thereon before delivery. Such defense is a real defense
to pay Pete. Fearing that Pete would kill Brad, Señorita even against a holder in due course, available to a party like
Isobel acceded to the request. She affixed her signature Jun whose signature appeared prior to delivery.
on a piece of paper with the assurance of Brad that he
will just fill it up later. Brad then filled up the blank Indorser: Irregular Indorser vs. General Indorser (2005)
paper, making a promissory note for the amount of Distinguish an irregular indorser from a general indorser.
P100,000.00. He then indorsed and delivered the same to (3%)
SUGGESTED ANSWER:
Pete, who accepted the note as payment of the debt.
Irregular Indorser is not a party to the instrument but he
What defense or defenses can Señorita Isobel set up places his signature in blank before delivery. He is not a
against Pete? Explain. (3%) party but he becomes one because of his signature in the
SUGGESTED ANSWER: instrument. Because his signature he is considered an
The defense (personal defense) which Señorita Isobel can indorser and he is liable to the parties in the instrument.
set up against Pete is that the amount of P100,000.00 is not
in accordance with the authority given to her to Brad (in While, a General Indorser warrants that the instrument is
the presence of Pete) and that Pete was not a holder in due genuine, that he has a good title to it, that all prior parties
course for acting in bad faith when accepted the note as had capacity to contract; that the instrument at the time
payment despite his knowledge that it was only 10,000.00 of the indorsement is valid and subsisting; and that
that was allowed by Señorita Isobel during their on due presentment, the instrument will be accepted or
meeting with Brad. paid or both accepted and paid according to its tenor,
and that if it is dishonored, he will pay if the
Incomplete Instruments; Incomplete Delivered necessary proceedings for dishonor are made.
Instruments vs. Incomplete Undelivered
Instrument (2006) Negotiability (1993)
Jun was about to leave for a business trip. As his usual Discuss the negotiability or non-negotiability of
practice, he signed several blank checks. He instructed the following notes
Ruth, his secretary, to fill them as payment for his
obligations. Ruth filled one check with her name as 1) Manila, September 1, 1993
payee, placed P30,000.00 thereon, endorsed and
P2,500.00 b) Paragraph 2 – negotiability is “NOT AFFECTED”
I promise to pay Pedro San Juan or order the sum The interest is to be computed at a particular
of P2,500. time and is determinable. It does not make the
sum uncertain or the promise conditional.
(Sgd.) Noel Castro c) Paragraph 3 – negotiability is “AFFECTED.”
Giving the maker the option renders the
2) Manila, June 3, 1993 promise conditional
d) Paragraph 4 – negotiability is “NOT AFFECTED.”
P10,000.00 Giving the option to the holder does not make the
For value received, I promise to pay Sergio Dee or order promise conditional.
the sum of P10,000.00 in five (5) installments, with
the first installment payable on October 5, 1993 and Negotiability; Holder in Due Course (1992)
the other installments on or before the fifth day of Perla brought a motor car payable on installments from
the succeeding month or thereafter. Automotive Company for P250th. She made a down
payment of P50th and executed a promissory note
(Sgd.) Lito Villa for the balance. The company subsequently indorsed
the note to Reliable Finance Corporation which financed
SUGGESTED ANSWER: the purchase. The promissory note read:
The promissory note is negotiable as it complies with Sec “For value received, I promised to pay Automotive
1, NIL. Company or order at its office in Legaspi City, the sum of
• Firstly, it is in writing and signed by the maker, Noel P200,000.00 with interest at twelve (12%) percent per
Castro. annum, payable in equal installments of P20,000.00
• Secondly, the promise is unconditional to pay a sum monthly for ten (10) months starting October 21, 1991.
certain in money, that is, P2,500.00
• Thirdly, it is payable on demand as no date of Manila September 21, 1991.
maturity is specified.
(sgd) Perla
• Fourth, it is payable to order.
The promissory note is negotiable. All the requirements Pay to the order of Reliable Finance Corporation.
of Sec 1 NIL are complied with. The sum to be paid is Automotive Company
still certain despite that the sum is to be paid
by installments (Sec 2b NIL) By: (Sgd) Manager
Negotiability (2002) Because Perla defaulted in the payment of her

Which of the following stipulations or features of a installments, Reliable Finance Corporation initiated a
promissory note (PN) affect or do not affect its case against her for a sum of money. Perla argued that
negotiability, assuming that the PN is otherwise the promissory note is merely an assignment of credit, a
negotiable? Indicate your answer by writing the non-negotiable instrument open to all defenses available to
paragraph number of the stipulation or feature of the PN as the assignor and, therefore, Reliable Finance
shown below and your corresponding answer, either Corporation is not a holder in due course.
“Affected” or “Not affected.” Explain (5%). a) Is the promissory note a mere assignment of credit or
a negotiable instrument? Why?
a) The date of the PN is “February 30, 2002.” b) Is Reliable Finance Corp a holder in due course?
b) The PN bears interest payable on the last day Explain briefly.
SUGGESTED ANSWER:
of each calendar quarter at a rate equal to five
a) The promissory note in the problem is a
percent (5%) above the then prevailing 91-day
negotiable instrument, being in compliance with the
Treasury Bill rate as published at the beginning of
provisions of Sec 1 NIL. Neither the fact that the
such calendar quarter.
c) The PN gives the maker the option to payable sum is to be paid with interest nor that the
make payment either in money or in quantity of maturities are in stated installments renders uncertain
palay or equivalent value. the amount payable (Sec 2 NIL)
d) The PN gives the holder the option either to require b) Yes, Reliable Finance Corporation is a holder in due
payment in money or to require the maker to serve course given the factual settings. Said corporation
as the bodyguard or escort of the holder for 30 days. apparently took the promissory note for value, and there
SUGGESTED ANSWER: are no indications that it acquired it in bad faith (Sec 52
a) Paragraph 1 – negotiability is “NOT AFFECTED.” NIL see Salas v CA 181 s 296)
The date is not one of the requirements
for negotiability. Negotiability; Requisites (2000)
a) MP bought a used cell phone from JR. JR preferred Negotiable Instrument: Definition &
cash but MP is a friend so JR accepted MR’s promissory Characteristics (2005)
note for P10,000. JR thought of converting the note into What is a negotiable instrument? Give the characteristics
cash by endorsing it to his brother KR. The promissory of a negotiable instrument. (2%)
note is a piece of paper with the following hand-printed SUGGESTED ANSWER:
notation: “MP WILL PAY JR TEN THOUSAND Negotiable Instrument is a written contract for
PESOS IN PAYMENT FOR HIS CELLPHONE 1 the payment of money which is intended as a substitute
WEEK FROM TODAY.” Below this notation MP’s for money and passes from one person to another as
signature with “8/1/00” next to it, indicating the date of money, in such a manner as to give a holder in due
the promissory note. When JR presented MP’s note to course the right to hold the instrument free from
KR, the latter said it was not a negotiable instrument defenses available to prior parties. Such instrument must
under the law and so could not be a valid substitute for comply with Sec. 1 of the Negotiable Instrument Law
cash. JR took the opposite view, insisting on the note’s to be considered negotiable.
negotiability. You are asked to referee. Which of the
opposing views is correct? The characteristics of a negotiable instrument are;
1) Negotiability - That quality or attribute whereby
b) TH is an indorsee of a promissory note that simply a bill, note or check passes or may pass from hand
states: “PAY TO JUAN TAN OR ORDER 400 to hand, similar to money, so as to give the holder
PESOS.” The note has no date, no place of payment and in due course the right to hold the instrument
no consideration mentioned. It was signed by MK and and collect the sum payable for himself free
written under his letterhead specifying the address, which from defenses.
happens to be his residence. TH accepted the promissory
note as payment for services rendered to SH, who in turn 2) Accumulation of Secondary Contracts as they
received the note from Juan Tan as payment for a are transferred from one person to another.
prepaid cell phone card worth 450 pesos. The payee
acknowledged having received the note on August 1, Negotiable Instrument: Identification (2005)
2000. A Bar reviewee had told TH, who happens to be your State and explain whether the following are negotiable
friend, that TH is not a holder in due course under Article instruments under the Negotiable Instruments Law: (5%)
52 of the Negotiable Instruments Law (Act 2031) and 1) Postal Money Order;
therefore does not enjoy the rights and protection 2) A certificate of time deposit which states “This is to
under the statute. TH asks for our advice specifically in certify that bearer has deposited in this bank the sum
connection with the note being undated and not of FOUR THOUSAND PESOS (P4,000.00) only,
mentioning a place of payment and any consideration. repayable to the depositor 200 days after date.”
What would your advice be? (2%). 3) Letters of credit;
4) Warehouse receipts;
SUGGESTED ANSWER: 5) Treasury warrants payable from a specific fund.
a) KR is right. The promissory note is not negotiable. It
is not issued to order or bearer. There is no word SUGGESTED ANSWER:
of negotiability containing therein. It is not 1) Postal Money Order – Non-Negotiable as it
issued in accordance with Section 1 of the Negotiable is governed by postal rules and regulation which
Instruments Law may be inconsistent with the NIL and it can
only be negotiated once.
b) The fact that the instrument is undated and does not
mention the place of payment does not militate 2) A certificate of time deposit which states “This is to
against its being negotiable. The date and place of certify that bearer has deposited in this bank the
payment are not material particulars required to make sum of FOUR THOUSAND PESOS
an instrument negotiable. (P4,000.00) only, repayable to the depositor 200
days after date.” – Non-Negotiable as it does
The fact that no mention is made of any consideration is not comply with the requisites of Sec. 1 of NIL
not material. Consideration is presumed.
3) Letters of credit - Non-Negotiable
Negotiable Instrument: Ambiguous Instruments (1998)
How do you treat a negotiable instrument that is so 4) Warehouse receipts - Non-Negotiable for the same
ambiguous that there is doubt whether it is a bill as Bill of Lading it merely represents good, not
or a note? (5%) money.
SUGGESTED ANSWER:
1. Where a negotiable instrument is so ambiguous 5) Treasury warrants payable from a specific fund -
that there is doubt whether it is a bill or a note, Non-Negotiable being payable out of a
the holder may treat it either as a bill of exchange or a particular fund.
promissory note at his election.
Mercantile Law Bar Examination Q & A (1990-2006) Page 85 of 103 latter
Negotiable Instrument: Negotiable Document vs. became a holder thereof. As such holder, Napoleon can
Negotiable Instrument (2005) proceed against Richard Clinton.
Distinguish a negotiable document from a negotiable
instrument. (2%) Negotiable Instruments; Bearer Instruments (1997)
SUGGESTED ANSWER: A delivers a bearer instrument to B. B then
Negotiable Instrument have requisites of Sec. 1 of specially indorses it to C and C later indorses it in blank
the NIL, a holder of this instrument have right of to D. E steals the instrument from D and, forging the
recourse against intermediate parties who are signature of D, succeeds in “negotiating” it to F who
secondarily liable, Holder in due course may have acquires the instrument in good faith and for value.
rights better than transferor, its subject is money and a) If, for any reason, the drawee bank refuses to honor
the Instrument itself is property of value. the check, can F enforce the instrument against the
drawer?
On the other hand, negotiable document does not b) In case of the dishonor of the check by both the
contain requisites of Sec. 1 of NIL, it has no secondary drawee and the drawer, can F hold any of B, C and D
liability of intermediate parties, transferee merely steps liable secondarily on the instrument?
into the shoes of the transferor, its subject are goods and SUGGESTED ANSWER:
the instrument is merely evidence of title; thing of value are a) Yes. The instrument was payable to bearer as it was a
the goods mentioned in the document. bearer instrument. It could be negotiated by
mere delivery despite the presence of special
Negotiable Instrument; Negotiability (1997) indorsements. The forged signature is unnecessary to
Can a bill of exchange or a promissory note qualify as a presume the juridical relation between or among the
negotiable instrument if – parties prior to the forgery and the parties after the
a. it is not dated; or forgery. The only party who can raise the defense
b. the day and the month, but not the year of its of forgery against a holder in due course is the
maturity, is given; or person whose signature is forged.
c. it is payable to “cash”’ or
d. it names two alternative drawees b) Only B and C can be held liable by F. The instrument
at the time of the forgery was payable to bearer, being a
SUGGESTED ANSWER: bearer instrument. Moreover, the instrument
a) Yes. Date is not a material particular required by Sec 1 was indorsed in blank by C to D. D, whose
NIL for the negotiability of an instrument. signature was forged by E cannot be held liable by F.
b) No. The time for payment is not determinable in this Negotiable Instruments; bearer instruments; liabilities of
case. The year is not stated. maker and indorsers (2001)
A issued a promissory note payable to B or bearer.
c) Yes. Sec 9d NIL makes the instrument payable A delivered the note to B. B indorsed the note to
to bearer because the name of the payee does not C. C placed the note in his drawer, which was
purport to be the name of any person. stolen by the janitor X. X indorsed the note to D
by forging C’s signature. D indorsed the note to E who
d) A bill may not be addressed to two or more drawees in turn delivered the note to F, a holder in due
in the alternative or in succession, to be negotiable (Sec course, without indorsement. Discuss the individual
128 NIL). To do so makes the order conditional. liabilities to F of A, B and C. (5%)
SUGGESTED ANSWER:
Negotiable Instruments; Bearer Instrument (1998) A is liable to F. As the maker of the promissory note, A
Richard Clinton makes a promissory note payable to is directly or primarily liable to F, who is a holder in due
bearer and delivers the same to Aurora Page. course. Despite the presence of the special indorsements
Aurora Page, however, endorses it to X in this manner: on the note, these do not detract from the fact that
“Payable to X. Signed: Aurora Page.” a bearer instrument, like the promissory note in
question, is always negotiable by mere delivery, until it is
Later, X, without endorsing the promissory note, indorsed restrictively “For Deposit Only.”
transfers and delivers the same to Napoleon. The note is
subsequently dishonored by Richard Clinton. May B, as a general indorser, is liable to F secondarily, and
Napoleon proceed against Richard Clinton for the note? warrants that the instrument is genuine and in all respects
(5%) what it purports to be; that he has good title to it; that all
SUGGESTED ANSWER: prior parties had capacity to contract; that he has no
Yes. Richard Clinton is liable to Napoleon under the knowledge of any fact which would impair the validity of
promissory note. The note made by Richard Clinton is a the instrument or render it valueless; that at the time of his
bearer instrument. Despite special indorsement made by indorsement, the instrument is valid and subsisting; and
Aurora Page thereon, the note remained a bearer that on due presentment, it shall be accepted or paid, or
instrument and can be negotiated by mere delivery. When both, according to its tenor, and that if it be
X delivered and transferred the note to Napoleon, the dishonored and the necessary proceedings on dishonor
be duly taken, he will pay the amount thereof to A, single proprietor of a business concern, is about to
the holder, or to any subsequent indorser who may leave for a business trip and, as he so often does on these
be compelled to pay. occasions, signs several checks in blank. He instructs B, his
secretary, to safekeep the checks and fill them out
C is not liable to F since the latter cannot trace his title to when and as required to pay accounts during his absence. B
the former. The signature of C in the supposed fills out one of the checks by placing her name as
indorsement by him to D was forged by X. C can raise payee, fills in the amount, endorses and delivers the
the defense of forgery since it was his signature that was check to C who accepts it in good faith as payment for
forged. goods sold to B. B regrets her action and tells A what she
ALTERNATIVE ANSWER: did. A directs the Bank in time to dishonor the check.
As a general endorser, B is secondarily liable to F. C When C encashes the check, it is dishonored.
is liable to F since it is due to the negligence of C in Can A be held liable to C?
placing the note in his drawer that enabled X to steal the SUGGESTED ANSWER:
same and forge the signature of C relative to the Yes, A can be held liable to C, assuming that the latter
indorsement in favor of D. As between C and F gave notice of dishonor to A. This is a case of an
who are both innocent parties, it is C whose incomplete instrument but delivered as it was entrusted
negligence is the proximate cause of the loss. Hence to B, the secretary of A. Moreover, under the doctrine of
C should suffer the loss. comparative negligence, as between A and C, both
innocent parties, it was the negligence of A in entrusting
Negotiable Instruments; incomplete and undelivered the check to B which is the proximate cause of the loss.
instruments; holder in due course (2000)
PN makes a promissory note for P5,000.00, but leaves Negotiable Instruments; kinds of negotiable
the name of the payee in blank because he wanted to instrument; words of negotiability (2002)
verify its correct spelling first. He mindlessly left the note A. Define the following: (1) a negotiable promissory
on top of his desk at the end of the workday. When he note, (2) a bill of exchange and (3) a check. (3%)
returned the following morning, the note was missing. It
turned up later when X presented it to PN for payment. B. You are Pedro Cruz. Draft the appropriate
Before X, T, who turned out to have filched the note contract language for (1) your negotiable promissory
from PN’s office, had endorsed the note after inserting note and (2) your check, each containing the essential
his own name in the blank space as the payee. PN elements of a negotiable instrument (2%)
dishonored the note, contending that he did not
authorize its completion and delivery. But X said he had no SUGGESTED ANSWER:
participation in, or knowledge about, the pilferage and A. (1) A negotiable promissory note is an unconditional
alteration of the note and therefore he enjoys the rights of promise in writing made by one person to another,
a holder in due course under the Negotiable signed by the maker, engaging to pay on demand or at a
Instruments Law. Who is correct and why? (3%) fixed or determinable future time, a sum certain in
money to order or bearer.
b) Can the payee in a promissory note be a “holder in
due course” within the meaning of the Negotiable (2) A bill of exchange is an unconditional order in writing
Instruments Law (Act 2031)? Explain your answer. (2%) addressed by one person to another, signed by the person
giving it, requiring the person to whom it is addressed to
SUGGESTED ANSWER: pay on demand or at a fixed or determinable future time a
a) PN is right. The instrument is incomplete and sum certain in money to order or to bearer.
undelivered. It did not create any contract that would
bind PN to an obligation to pay the amount thereof. (3) A check is a bill of exchange drawn on a bank payable
on demand.
b) A payee in a promissory note cannot be a “holder in due
course” within the meaning of the Negotiable B. (1) Negotiable promissory note -
Instruments Law, because a payee is an immediate party in
relation to the maker. The payee is subject to whatever
defenses, real of personal, available to the maker of the “September 15, 2002
promissory note.
ALTERNATIVE ANSWER: “For value received, I hereby promise to pay Juan Santos
b) A payee can be a “holder in due course.” A holder is or order the sum of TEN THOUSAND
defined as the payee or indorsee of the instrument who is PESOS (P10,000) thirty (30) days from date hereof.
in possession of it. Every holder is deemed prima facie to
be a holder in due course.
(Signed) Pedro Cruz
Negotiable Instruments; Incomplete Delivered
Instruments; Comparative Negligence (1997) to: Philippine National Bank
Escolta, Manila Branch”
Commercial Banking Co. The By-laws of Saad requires
Negotiable Instruments; Requisites (1996) that checks issued by it must be signed by the President and
What are the requisites of a negotiable instrument? the Treasurer or the Vice-President. Since the
SUGGESTED ANSWER: Treasurer was absent, C requested the Vice-President to co-
The requisites of a negotiable instrument are as follows: sign the check, which the latter reluctantly did. The
a) It must be in writing and signed by the maker check was delivered to B. The check was dishonored
or drawer; upon presentment on due date for insufficiency of funds.
b) It must contain an unconditional promise or a) Is Saad liable on the check as an accommodation
order to pay a sum certain in money; party?
c) It must be payable to order or to bearer; and b) If it is not, who then, under the above facts, is/are the
d) Where the instrument is addressed to a drawee, accommodation party?
he must be named or otherwise indicated therein SUGGESTED ANSWER:
with reasonable certainty. (Sec 1 NIL) a.) Saad is not liable on the check as an accommodation
party. The act of the corporation in accommodating
Notice Dishonor (1996) a friend of the President, is ultra vires (Crisologo-Jose v CA
When is notice of dishonor not required to be given to GR 80599, 15Sep1989). While it may be legally possible for
the drawer? the corporation, whose business is to provide
SUGGESTED ANSWER: financial accommodations in the ordinary course of
Notice of dishonor is not required to be given to business, such as one given by a financing
the drawer in any of the following cases: company to be an accommodation party, this
a) Where the drawer and drawee are the same person; situation, however, is not the case in the bar problem.
b) When the drawee is a fictitious person or a person
not having capacity to contract; b) Considering that both the President and Vice-
c) When the drawer is the person to whom President were signatories to the accommodation, they
the instrument is presented for payment; themselves can be subject to the liabilities of
d) Where the drawer has no right to expect or require accommodation parties to the instrument in their
that the drawee or acceptor will honor the personal capacity (Crisologo-Jose v CA 15Sep1989)
instrument;
e) Where the drawer has countermanded payment (Sec Parties; Accommodation Party (1996)
114 NIL) Nora applied for a loan of P100th with BUR Bank.
By way of accommodation, Nora’s sister, Vilma,
Parties; Accommodation Party (1990) executed a promissory note in favor of BUR Bank.
To accommodate Carmen, maker of a promissory note, When Nora defaulted, BUR Bank sued Vilma, despite
Jorge signed as indorser thereon, and the instrument was its knowledge that Vilma received no part of the loan.
negotiated to Raffy, a holder for value. At the time Raffy May Vilma be held liable? Explain.
took the instrument, he knew Jorge to be an SUGGESTED ANSWER:
accomodation party only. When the promissory note was Yes, Vilma may be held liable. Vilma is an
not paid, and Raffy discovered that Carmen had no accommodation party. As such, she is liable on the
funds, he sued Jorge. Jorge pleads in defense the fact that instrument to a holder for value such as BUR Bank. This is
he had endorsed the instrument without receiving value true even if BUR Bank was aware at the time it took the
therefor, and the further fact that Raffy knew that at the instrument that Vilma is merely an accommodation
time he took the instrument Jorge had not received any party and received no part of the loan (See Sec 29, NIL;
value or consideration of any kind for his indorsement. Eulalio Prudencio v CA GR L-34539, Jul 14, 86 143 s 7)
Is Jorge liable? Discuss.
SUGGESTED ANSWER: Parties; Accommodation Party (1998)
Yes. Jorge is liable. Sec 29 of the NIL provides that an For the purpose of lending his name without receiving
accommodation party is liable on the instrument to value therefore, Pedro makes a note for P20,000 payable to
a holder for value, notwithstanding the holder at the the order of X who in turn negotiates it to Y, the latter
time of taking said instrument knew him to be only knowing that Pedro is not a party for value.
an accommodation party. This is the nature or the 1. May Y recover from Pedro if the latter interposes the
essence of accommodation. absence of consideration? (3%)
2. Supposing under the same facts, Pedro pays the said
Parties; Accommodation Party (1991) P20,000 may he recover the same amount from X? (2%)
On June 1, 1990, A obtained a loan of P100th from B,
payable not later than 20Dec1990. B required A to issue SUGGESTED ANSWER:
him a check for that amount to be dated 20Dec1990. 1. Yes. Y can recover from Pedro. Pedro is an
Since he does not have any checking account, A, with the accommodation party. Absence of consideration is in the
knowledge of B, requested his friend, C, President of nature of an accommodation. Defense of absence of
Saad Banking Corp (Saad) to accommodate him. C consideration cannot be validly interposed by
agreed, he signed a check for the aforesaid amount dated accommodation party against a holder in due course.
20Dec 1990, drawn against Saad’s account with the ABC
2. If Pedro pays the said P20,000 to Y, Pedro can recover YES! Dagul is an accommodation party because in the
the amount from X. X is the accommodated party or the case at bar, he is essentially, a person who signs as maker
party ultimately liable for the instrument. Pedro is only an without receiving any consideration, signs as an
accommodation party. Otherwise, it would be unjust accommodation party merely for the purpose of lending
enrichment on the part of X if he is not to pay Pedro. the credit of his name. And as an accommodation party he
cannot set up lack of consideration against any holder, even
Parties; Accommodation Party (2003) as to one who is not a holder in due course.
Susan Kawada borrowed P500,000 from XYZ Bank
which required her, together with Rose Reyes who Parties; Holder in Due Course (1993)
did not receive any amount from the bank, to Larry issued a negotiable promissory note to Evelyn and
execute a promissory note payable to the bank, or authorized the latter to fill up the amount in blank with his
its order on stated maturities. The note was loan account in the sum of P1,000. However, Evelyn
executed as so agreed. What kind of liability was inserted P5,000 in violation of the instruction. She
incurred by Rose, that of an accommodation party negotiated the note to Julie who had knowledge of the
or that of a solidary debtor? Explain. (4%) infirmity. Julie in turn negotiated said note to Devi for
SUGGESTED ANSWER: value and who had no knowledge of the infirmity.
(per Dondee) Rose may be held liable. Rose is an 1) Can Devi enforce the note against Larry and if
accommodation party. Absence of consideration is in the she can, for how much? Explain.
nature of an accommodation. Defense of absence of 2) Supposing Devi endorses the note to Baby for value
consideration cannot be validly interposed by but who has knowledge of the infirmity, can the
accommodation party against a holder in due course. latter enforce the note against Larry?
SUGGESTED ANSWER:
Parties; Accommodation Party (2003) 1) Yes, Devi can enforce the negotiable promissory note
Juan Sy purchased from “A” Appliance Center one against Larry in the amount of P5,000. Devi is a holder in
generator set on installment with chattel mortgage in due course and the breach of trust committed by Evelyn
favor of the vendor. After getting hold of the generator cannot be set up by Larry against Devi because it
set, Juan Sy immediately sold it without consent of is a personal defense. As a holder in due course, Devi is
the vendor. Juan Sy was criminally charged with estafa. not subject to such personal defense.
To settle the case extra judicially, Juan Sy paid the sum of 2) Yes. Baby is not a holder in due course because
P20,000 and for the balance of P5,000.00 he executed a she has knowledge of the breach of trust committed
promissory note for said amount with Ben Lopez as an by Evelyn against Larry which is just a personal defense.
accommodation party. Juan Sy failed to pay the balance. But having taken the instrument from Devi, a holder in
1) What is the liability of Ben Lopez as due course, Baby has all the rights of a holder in due
an accommodation party? Explain. course. Baby did not participate in the breach of trust
2) What is the liability of Juan Sy? committed by Evelyn who filled the blank but
SUGGESTED ANSWER: filled up the instrument with P5,000 instead of P1,000
1) Ben Lopez, as an accommodation party, is liable as as instructed by Larry (Sec 58 NIL)
maker to the holder up to the sum of P5,000 even if he did
not receive any consideration for the promissory note. Parties; Holder in Due Course (1996)
This is the nature of accommodation. But Ben Lopez What constitutes a holder in due course?
can ask for reimbursement from Juan Sy, the SUGGESTED ANSWER:
accommodation party. A holder in due course is one who has taken the
instrument under the following conditions:
2) Juan Sy is liable to the extent of P5,000 in the hands of a 1. That it is complete and regular upon its face;
holder in due course (Sec 14 NIL). If Ben Lopez paid the 2. That he became holder of it before it was
promissory note, Juan Sy has the obligation to overdue and without notice that it had been
reimburse Ben Lopez for the amount paid. If Juan Sy previously dishonored, if such was the fact;
pays directly to the holder of the promissory note, or he 3. That he took it in good faith and for value;
pays Ben Lopez for the reimbursement of the payment 4. That at the time it was negotiated to him, he had no
by the latter to the holder, the instrument is discharged. notice of any infirmity in the instrument or defect in
the title of the person negotiating it. (Sec 52, NIL)
Dagul has a business arrangement with Facundo. Parties; Holder in Due Course (1996)
The latter would lend money to another, through 1996 2.2) Eva issued to Imelda a check in the amount of
Dagul, whose name would appear in the promissory P50th post-dated Sep 30, 1995, as security for a diamond
note as the lender. Dagul would then immediately ring to be sold on commission. On Sep 15, 1995, Imelda
indorse the note to Facundo. Is Dagul an negotiated the check to MT investment which paid
accommodation party? Explain. (2%) the amount of P40th to her.
SUGGESTED ANSWER: Eva failed to sell the ring, so she returned it to Imelda on
Sep 19, 1995. Unable to retrieve her check, Eva withdrew
Mercantile Law Bar Examination Q & A (1990-2006) Page 89 of 103 gave him
her funds from the drawee bank. Thus, when the note in payment for two cavans of rice. AB therefore
MT Investment presented the check for payment, the paid GH P1,00 on the same date. On
drawee bank dishonored it. Later on, when MT September 15, 2002, EF discovered that the note of AB
Investment sued her, Eva raised the defense of absence was not in his possession and he went to AB. It was then
of consideration, the check having been issued merely that EF found out that AB had already made payment on
as security for the ring that she could not sell. the note. Can EF still claim payment from AB?
Does Eva have a valid defense? Explain. Why? (3%)
SUGGESTED ANSWER: B. As a sequel to the same facts narrated above, EF, out
No. Eva does not have a valid defense. First, MT of pity for AB who had already paid P1,000.00 to
Investment is a holder in due course and, as such, holds the GH, decided to forgive AB and instead go after CD
postdated check free from any defect of title of prior who indorsed the note in blank to him. Is CD still liable
parties and from defenses available to prior parties to EF by virtue of the indorsement in blank? Why? (2%)
among themselves. Eva can invoke the defense of
absence of consideration against MT Investment only if the SUGGESTED ANSWER:
latter was privy to the purpose for which the checks were A. No. EF cannot claim payment from AB. EF is not a
issued and, therefore, not a holder in due course. holder of the promissory note. To make the presentment
Second, it is not a ground for the discharge of the post- for payment, it is necessary to exhibit the
dated check as against a holder in due course that it was instrument, which EF cannot do because he is not
issued merely as security. The only grounds for the in possession thereof.
discharge of negotiable instruments are those set forth in
Sec 119 of the NIL and none of those grounds are B. No, because CD negotiated the instrument
available to Eva. The latter may not unilaterally discharge by delivery.
herself from her liability by the mere expediency of
withdrawing her funds from the drawee bank. (State Place of Payment (2000)
Investments v CA GR 101163, Jan 11, 93 217s32). PN is the holder of a negotiable promissory note within
the meaning of the Negotiable Instruments Law (Act
Parties; Holder in Due Course (1998) 2031). The note was originally issued by RP to XL
X makes a promissory note for P10,000 payable to A, a as payee. XL indorsed the note to PN for goods bought
minor, to help him buy school books. A endorses by XL. The note mentions the place of payment on
the note to B for value, who in turn endorses the note to the specified maturity date as the office of the
C. C knows A is a minor. If C sues X on the note, can X corporate secretary of PX Bank during banking hours.
set up the defenses of minority and lack of ON maturity date, RP was at the aforesaid office ready
consideration? (3%) to pay the note but PN did not show up. What PN later
SUGGESTED ANSWER: did was to sue XL for the face value of the note, plus
Yes. C is not a holder in due course. The interest and costs. Will the suit prosper? Explain. (5%)
promissory note is not a negotiable instrument as it does SUGGESTED ANSWER:
not contain any word of negotiability, that is, order or Yes. The suit will prosper as far as the face value of the
bear, or words of similar meaning or import. Not being note is concerned, but not with respect to the interest
a holder in due course, C is to subject such personal due subsequent to the maturity of the note and the costs of
defenses of minority and lack of consideration. C is collection. RP was ready and willing to pay the note at the
a mere assignee who is subject to all defenses. specified place of payment on the specified maturity date,
ALTERNATIVE ANSWER: but PN did not show up. PN lost his right to recover
X cannot set up the defense of the minority of A. the interest due subsequent to the maturity of the note and
Defense of minority is available to the minor only. Such the costs of collection.
defense is not available to X.
X cannot set up the defense against C. Lack Public Service Law

of consideration is a personal defense which is
only available between immediate parties or against Certificate of public Convenience (1998)
parties who are not holders in due course. C’s The Batong Bakal Corporation filed with the Board
knowledge that A is a minor does not prevent C from of Energy an application for a Certificate of
being a holder in due course. C took the promissory Public Convenience for the purpose of supplying electric
note from a holder for value, B. power and lights to the factory and its employees living
within the compound. The application was opposed
Parties; Holder in Due Course; Indorsement in blank by the Bulacan Electric Corporation contending that the
(2002) Batong Bakal Corporation has not secured a franchise to
A. AB issued a promissory note for P1,000 payable to operate and maintain an electric plant.
CD or his order on September 15, 2002. CD indorsed Is the opposition’s contention correct? (5%)
the note in blank and delivered the same to EF. GH stole SUGGESTED ANSWER:
the note from EF and on September 14, 2002 presented it No. A certificate of public convenience may be granted to
to AB for payment. When asked by AB, GH said CD Batong Bakal Corporation, though not possessing a
Mercantile Law Bar Examination Q & A (1990-2006) Page 90 of 103 who had
legislative franchise, if it meets all the other requirements. a certificate of public convenience to operate auto-
There is nothing in the law nor the Constitution, which trucks with fixed routes from certain towns in Bulacan
indicates that a legislative franchise is necessary and Rizal to Manila and within Manila. Firstly, he
or required for an entity to operate as supplier of claimed that the ordinance was null and void because,
electric power and light to its factory and its among other things, it in effect amends his certificate of
employees living within the compound. public convenience, a thing which only the Public Service
Commission can do under Sec 16 (m) of the Public
Certificate of Public Convenience; inseparability Service Act. Under said section, the Commission is
of certificate and vessel (1992) empowered to amend, modify, or revoke a certificate of
Antonio was granted a Certificate of Public Convenience public convenience after notice and hearing. Secondly, he
(CPC) in 1986 to operate a ferry between Mindoro and contended that even if the ordinance was valid, it is only the
Batangas using the motor vessel “MV Lotus.” Commission which can require compliance with its
He stopped operations in 1988 due to unserviceability of provisions under Sec 17 (j) of said Act and since the
the vessel. implementation of the ordinance was without sanction or
In 1989, Basilio was granted a CPC for the same route. approval of the Commission, its enforcement was
After a few months, he discovered that Carlos was unauthorized and illegal.
operating on his route under Antonio’s CPC. 1) May the reliance of X on Section 16 (m) of the Public
Because Basilio filed a complaint for illegal Service Act be sustained? Explain.
operations with the Maritime Industry Authority, 2) Was X correct in his contention that under Section 17
Antonio and Carlos jointly filed an application for sale (j) of the Public Service Act it is only the Commissioner
and transfer of Antonio’s CPC and substitution of which can require compliance with the provisions of the
the vessel “MV Lotus” with another owned by Carlos. ordinance? Explain.
Should Antonio’s and Carlos’ joint application be SUGGESTED ANSWER:
approved? Giver your reasons. 1) No. The power vested in the Public Service
SUGGESTED ANSWER: Commission under Sec 16m is subordinate to
The joint application of Antonio and Carlos for the sale the authority of the City of Manila under Sec 18 (hh) of
and transfer of Antonio’s CPC and substitution of the its revised charter to superintend, regulate or control
vessel MV Lotus with another vessel owned by the the streets of the city of Manila. (Lagman v City of
transferee should not be approved. The certificate of Manila 17 s 579)
public convenience and MV Lotus are inseparable. The 2) No. The powers conferred by law upon the Public
unserviceability of the vessel covered by the certificate Service Commission were not designed to deny or
had likewise rendered ineffective the certificate itself, and supersede the regulatory power of local governments
the holder thereof may not legally transfer the same to over motor traffic in the streets subject to their control.
another. (Cohon v CA 188 s 719). (Lagman v City of Manila 17 s 579)
Certificate of Public Convenience; Requirements (1995) Public utilities (2000)

What requirements must be met before a certificate WWW Communications Inc. is an e-commerce company
of public convenience may be granted under the whose present business activity is limited to providing its
Public Service Act? clients with all types of information technology hardware. It
SUGGESTED ANSWER: plans to re-focus its corporate direction of gradually
The following are the requirements for the granting of a converting itself into a full convergence organization.
certificate of public convenience, to wit: Towards this objective, the company has been
a) The applicant must be a citizen of the Philippines, aggressively acquiring telecommunications businesses
or a corporation, co-partnership or and broadcast media enterprises, and consolidating their
association organized under the laws of the corporate structures. The ultimate plan is to have only
Philippines and at least 60% of the stock of two organizations: one to own the facilities of the
paid-up capital of which must belong to citizens combined businesses and to develop and produce
of the Philippines. (Sec 16a, CA 146, as amended) content materials, and another to operate the facilities
b) The applicant must prove public necessity. and provide mass media and commercial
c) The applicant must prove that the operation of the telecommunications services. WWW Communications
public service proposed and the authorization to do will be the flagship entity which will own the facilities of
business will promote the public interest in a proper the conglomerate and provide content to the other new
and suitable manner. (Sec 16a CA 146 as amended) corporation which, in turn, will operate those facilities
d) The applicant must be financially capable of and provide the services. WWW Communications seeks
undertaking the proposed service and meeting your professional advice on whether or not its
the responsibilities incident to its operation. reorganized business activity would be considered a
public utility requiring a franchise or certificate or any
Powers of the Public Service Commission (1993) other form of authorization from the government. What
The City of Manila passed an ordinance banning will be your advice? Explain (5%)
provincial buses from the city. The ordinance was
challenged as invalid under the Public Service Act by X SUGGESTED ANSWER:
Mercantile Law Bar Examination Q & A (1990-2006) Page 91 of 103 course of
The reorganized business activity of WWW her work the plans of WIC. By herself and thru
Communications Inc. would not be considered a public associates, she purchased DOP stocks available at
utility requiring a franchise or certificate or any the stock exchange priced at P20 per share. When
other form of authorization from the government. It WIC's tender offer was announced, DOP stocks jumped
owns the facilities, but does not operate them. to P30 per share. Thus OB earned a sizable profit. Is OB
liable for breach and misuse of confidential or
Revocation of Certificate (1993) insider information gained from her employment? Is
1) Robert is a holder of a certificate of public she also liable for damages to sellers or buyers with
convenience to operate a taxicab service in Manila whom she traded? If so, what is the measure of
and suburbs. One evening, one of his taxicab units such damages? Explain briefly. (5%)
was boarded by three robbers as they escaped after SUGGESTED ANSWER:
staging a hold-up. Because of said incident, the OB is an insider (as defined in Subsection 3.8(3) of the
LTFRB revoked the certificate of public convenience Securities Regulation Code) since she is an employee of the
of Robert on the ground that said operator failed to Bank, the financial adviser of DOP, and this
render safe, proper and adequate service as required relationship gives her access to material information
under Sec 19a of the Public Service Act. about the issuer (DOP) and the latter's securities (shares),
a) Was the revocation of the certificate of which information is not generally available to the public.
public convenience of Robert justified? Explain. Accordingly, OB is guilty of insider trading under Section
b) When can the Commission (Board) exercise its power 27 of the Securities Regulation Code, which requires
to suspend or revoke certificate of public convenience? disclosure when trading in securities.
SUGGESTED ANSWER:
1a) No. A single hold-up incident which does not OB is also liable for damages to sellers or buyers
link Robert’s taxicab cannot be construed that he with whom she traded. Under Subsection 63.1 of
rendered a service that is unsafe, inadequate and the Securities Regulation Code, the damages awarded
improper (Manzanal v Ausejo 164 s 36) could be an amount not exceeding triple the amount
of the transaction plus actual damages. Exemplary
1b) Under Sec 19a of the Public Service Act, damages may also be awarded in case of bad faith, fraud,
the Commission (Board) can suspend or revoke a malevolence or wantonness in the violation of
certificate of public convenience when the operator fails the Securities Regulation Code or its implementing
to provide a service that is safe, proper or adequate, and rules. The court is also authorized to award attorney's
refuses to render any service which can be fees not exceeding 30% of the award.
reasonably demanded and furnished.
Revocation of Certificate (1993) Insider Trading (1995)

Pepay, a holder of a certificate of public convenience, Under the Revised Securities Act, it is unlawful for an
failed to register to the complete number of units insider to sell or buy a security of the issuer if he knows a
required by her certificate. However, she tried to justify fact of special significance with respect to the issuer or
such failure by the accidents that allegedly befell her, the security that is not generally available, without
claiming that she was so shocked and burdened by the disclosing such fact to the other party.
successive accidents and misfortunes that she did not 3.a) What does the term “insider” mean as used in
know what she was doing, she was confused and thrown the Revised Securities act?
off tangent momentarily, although she always had the 3.b) When is a fact considered to be “of
money and financial ability to buy new trucks and repair the special significance” under the same Act?
destroyed one. Are the reasons given by Pepay 3.c) What are the liabilities of a person who violates the
sufficient grounds to excuse her from completing units? pertinent provisions of the Revised Securities Act
Explain. regarding the unfair use of inside information?
No. The reasons given by Pepay are not 3a. “Insider” means 1) the issuer, 2) a director or officer
sufficient grounds to excuse her from completing of, or a person controlling, controlled by, or under
her units. The same could be undertaken by her common control with, the issuer, 3) a person whose
children or by other authorized representatives (Sec relationship or former relationship to the issuer gives or
16n Pub Serv Act; Halili v Herras 10 s 769) gave him access to a fact of special significance about the
issuer or the security that is not generally available, or 4) a
person who learns such a fact from any of the foregoing
Securities Regulation insiders with knowledge that the person from whom he
learns the fact is such an insider (Sec 30b, RSA)
Insider (2004)
Ms. OB was employed in MAS Investment Bank. WIC, a 3b. It is one which, in addition to being material, would be
medical drug company, retained the Bank to assess likely to affect the market price of a security to a
whether it is desirable to make a tender offer for DOP significant extent on being made generally available, or
company, a drug manufacturer. OB overheard in the one which a reasonable person would consider especially
important under the circumstances in determining his A connives with B by which A will offer for sale some of
course of action in the light of such factors as the degree his securities and B will buy them at a certain fixed price,
of its specificity, the extent of its difference with the understanding that although there would be an
from information generally available previously, and its apparent sale, A will retain the beneficial ownership
nature and reliability. (Sec. 30c, RSA) thereof.
a) Is the arrangement lawful? (3%)
3c. The person may be liable to 1) a fine of not less than b) If the sale materializes, what is it called? (2%)
P5th nor more than P500th or 2) imprisonment of not SUGGESTED ANSWER:
less than 7 years nor more than 21 years, 3) or both such a) No. The arrangement is not lawful. It is an
fine and imprisonment in the discretion of the court. artificial manipulation of the price of securities. This is
prohibited by the Securities Regulation Code.
If the person is a corporation, partnership, association or b) If the sale materializes, it is called a wash sale
other juridical entity, the penalty shall be imposed upon or simulated sale.
the officers of the corporation, etc. responsible for the
violation. And if such an officer is an alien, he shall, in Securities Regulation Code; Purpose (1998)
addition to the penalties prescribed, be deported without What is the principal purpose of laws and
further proceedings after service of sentence. (Sec 56 regulations governing securities in the Philippines? (2%)
SUGGESTED ANSWER:
RSA)
The principal purpose of laws and regulations governing
Insider Trading; Manipulative Practices (1994) securities in the Philippines is to protect the public
1) Give a case where a person who is not an issuing against the nefarious practices of unscrupulous
corporation, director or officer thereof, or a person brokers and salesmen in selling securities.
controlling, controlled by or under common control with
the issuing corporation, is also considered an “insider.” Securities; Definition (1996)
2) In Securities Law, what is a “shortswing” transaction. Define securities
SUGGESTED ANSWER:
3) In “insider trading,” what is a “fact of Stocks, bonds notes, convertible debentures, warrants or
special significance”? other documents that represent a share in a company or a
SUGGESTED ANSWER:
1) It may be a case where a person, whose relationship or debt owned by a company or government entity.
former relationship to the issuer gives or gave him access to Evidences of obligations to pay money or of rights to
participate in earnings and distribution of corporate
a fact of special significance about the issuer or the
assets. Instruments giving to their legal holders rights to
security that is not generally available, or a person, who
money or other property; they are therefore instruments
learns such a fact from any of the insiders, with
which have intrinsic value and are recognized and used as
knowledge that the person from whom he learns the fact, is
such in the regular channels of commerce.
such an insider (Sec 30, par (b) Rev Securities Act)
(Note: Sec 2a of the Revised Securities Act does not
2) A “shortswing” is a transaction where a person buys really define the term ‘securities.’)
securities and sells or disposes of the same within a
Securities; Selling of Securities; Meaning (2002)
period of six (6) months.
2002 (18) Equity Online Corporation (EOL), a New
ALTERNATIVE ANSWER:
2) It is a purchase by any person for the issuer or York corporation, has a securities brokerage service on
the Internet after obtaining all requisite U.S. licenses and
any person controlling, controlled by, or under
permits to do so. EOL’s website (www.eonline..com),
common control with the issuer, or a purchase
which is hosted by a server in Florida, enables Internet
subject to the control of the issuer or any such
users to trade on-line in securities listed in the various
person, resulting in beneficial ownership of more
stock exchanges in the U.S. EOL buys and sells U.S.
than 10% of any class of shares (Sec 32 R Sec Act)
listed securities for the accounts of its clients all over the
3) In “insider trading,” a “fact of special significance” is, world, who convey their buy and sell instructions to
in addition to being material, such fact as would likely, on EOL through the Internet. EOL has no offices,
being made generally available, to affect the market price employees or representatives outside the U.S. The
of a security to a significant extent, or which a reasonable website has icons for many countries, including an icon
person would consider as especially important under the “For Filipino Traders” containing the day’s prices of U.S.
circumstances in determining his course of action in the listed securities expressed in U.S. dollars and their
light of such factors as the degree of its specificity, Philippine peso equivalent. Grace Gonzales, a resident of
Makati, is a regular customer of the website and has been
the extent of its difference from information
purchasing and selling securities through EOL with the
generally available previously, and its nature and
use of her American Express credit card. Grace has never
reliability (Sec 30 par c RSecAct)
traveled outside the Philippines. After a series of
Manipulative Practices (2001) erroneous stock picks, she had incurred a net
Suppose A is the owner of several inactive securities. To indebtedness of US$30,000. with EOL, at which time she
create an appearance of active trading for such securities, cancelled her American Express credit card. After a
number of demand letters sent to Grace, all of them passenger, Pietro. The heirs of Pietro sued Yellow
unanswered, EOL, through a Makati law firm, filed a Cab Company for damages, but the latter refused to pay
complaint for collection against Grace with the Regional the heirs, insisting that it is not liable because Baldo is
Trial Court of Makati. Grace, through her lawyer, filed a not its employee. Resolve with reasons. (2%)
motion to dismiss on the ground that EOL (a) was doing SUGGESTED ANSWER:
business in the Philippines without a license and was Yellow Cab Company shall be liable with Baldo, on a
therefore barred from bringing suit and (b) violated the solidary basis, for the death of passenger Pietro. Baldo is an
Securities Regulation Code by selling or offering to sell employee of Yellow Cab under the boundary system. As
securities within the Philippines without registering the such, the death of passenger Pietro is breach of
securities with the Philippine SEC and thus came to contract of carriage, making both the common carrier
court “with unclean hands.” EOL opposed the motion to Yellow Cab and its employee, Baldo, solidarily liable.
dismiss, contending that it had never established a (Hernandez v. Dolor, G.R, No. 160286, July 30, 2004)
physical presence in the Philippines, and that all of the
activities related to plaintiffs trading in U.S. securities all Carriage; Breach of Contract; Presumption
transpired outside the Philippines. If you are the judge, of Negligence (1990)
decide the motion to dismiss by ruling on the respective Peter so hailed a taxicab owned and operated by Jimmy
contentions of the parties on the basis of the facts Cheng and driven by Hermie Cortez. Peter asked Cortez
presented above. (10%) to take him to his office in Malate. On the way to Malate,
SUGGESTED ANSWER: the taxicab collided with a passenger jeepney, as a result
The grounds of the motion to dismiss are both of which Peter was injured, i.e., he fractured his left leg.
untenable. EOL is not doing business in the Philippines, Peter sued Jimmy for damages, based upon a contract of
and it did not violate the Securites Act, because it carriage, and Peter won. Jimmy wanted to challenge the
was not selling securities in the country. decision before the SC on the ground that the trial court
erred in not making an express finding as to whether or
The contention of EOL is correct, because it never did not Jimmy was responsible for the collision and, hence,
any business in the Philippines. All its transactions civilly liable to Peter. He went to see you for
in question were consummated outside the Philippines. advice. What will you tell him? Explain.
SUGGESTED ANSWER:
Tender Offer (2002) I will counsel Jimmy to desist from challenging the
2002 (6) decision. The action of Peter being based on culpa
A. What is a tender offer? contractual, the carrier’s negligence is presumed upon the
B. In what instances is a tender offer required to be breach of contract. The burden of proof instead
made? would lie on Jimmy to establish that despite an
SUGGESTED ANSWER: exercise of utmost diligence the collision could
A. Tender offer is a publicly announced intention of a not have been avoided.
person acting alone or in concert with other persons to
acquire equity securities of a public company. It may also Carriage; Breach of Contract; Presumption
be defined as a method of taking over a company by of Negligence (1997)
asking stockholders to sell their shares at a price higher In a court case involving claims for damages arising from
than the current market price and on a particular date. death and injury of bus passengers, counsel for the bus
operator files a demurrer to evidence arguing that
B. Instances where tender offer is required to be made: the complaint should be dismissed because the plaintiffs
a) The person intends to acquire 15% or more of did not submit any evidence that the operator
the equity share of a public company pursuant or its employees were negligent. If you were the judge,
to an agreement made between or among would you dismiss the complaint?
the person and one or more sellers. SUGGESTED ANSWER:
b) The person intends to acquire 30% or more of No. In the carriage of passengers, the failure of the
the equity shares of a public company within a common carrier to bring the passengers safely to their
period of 12 months. destination immediately raises the presumption that such
c) The person intends to acquire equity shares of a failure is attributable to the carrier’s fault or negligence. In
public company that would result in ownership the case at bar, the fact of death and injury of the bus
of more than 50% of the said shares. passengers raises the presumption of fault or negligence on
the part of the carrier. The carrier must rebut such
presumption. Otherwise, the conclusion can be properly
Transportation Law made that the carrier failed to exercise extraordinary
diligence as required by law.
Boundary System (2005) Carriage; Fortuitous Event (1995)

Baldo is a driver of Yellow Cab Company under the M. Dizon Trucking entered into a hauling contract with
boundary system. While cruising along the South Fairgoods Co whereby the former bound itself to haul
Expressway, Baldo’s cab figured in a collision, killing his the latter’s 2000 sacks of Soya bean meal from Manila
Port Area to Calamba, Laguna. To carry out faithfully its 1. The stipulation is considered unreasonable,
obligation Dizon subcontracted with Enrico Reyes unjust and contrary to public policy under Article
the delivery of 400 sacks of the Soya bean meal. Aside 1745 of the Civil Code.
from the driver, three male employees of Reyes 2. The stipulation limiting the carrier’s liability to
rode on the truck with the cargo. While the truck was the value of the goods appearing in the bill of
on its way to Laguna two strangers suddenly stopped lading unless the shipper or owner declares a higher
the truck and hijacked the cargo. Investigation by the value, is expressly recognized in Article 1749 of
police disclosed that one of the hijackers was armed the Civil Code.
with a bladed weapon while the other was unarmed.
For failure to deliver the 400 sacks, Fairgoods sued Carriage; Valuation of Damaged Cargo (1993)
Dizon for damages. Dizon in turn set up a 3rd party A shipped thirteen pieces of luggage through LG Airlines
complaint against Reyes which the latter registered on from Teheran to Manila as evidenced by LG Air Waybill
the ground that the loss was due to force majeure. which disclosed that the actual gross weight of the
Did the hijacking constitute force majeure to exculpate luggage was 180 kg. Z did not declare an inventory of the
Reyes from any liability to Dizon? Discuss fully. contents or the value of the 13 pieces of luggage. After the
SUGGESTED ANSWER: said pieces of luggage arrived in Manila, the
No. The hijacking in this case cannot be considered force consignee was able to claim from the cargo broker only 12
majeure. Only one of the two hijackers was armed with a pieces, with a total weight of 174 kg. X advised the
bladed weapon. As against the 4 male employees of airline of the loss of one of the 13 pieces of luggage and of
Reyes, 2 hijackers, with only one of them being the contents thereof. Efforts of the airline to trace the
armed with a bladed weapon, cannot be missing luggage were fruitless. Since the airline failed to
considered force majeure. The hijackers did not comply with the demand of X to produce the missing
act with grave or irresistible threat, violence or force. luggage, X filed an action for breach of contract with
damages against LG Airlines. In its answer, LG Airlines
Carriage; Liability; Lost Baggage or Acts of alleged that the Warsaw Convention which limits the
Passengers (1997) liability of the carrier, if any, with respect to cargo to a
1997 (15) Antonio, a paying passenger, boarded a bus sum of $20 per kilo or $9.07 per pound, unless a higher
bound for Batangas City. He chose a seat at the front value is declared in advance and additional charges are
row, near the bus driver, and told the bus driver that he had paid by the passenger and the conditions of the contract as
valuable items in his hand carried bag which he then placed set forth in the air waybill, expressly subject the
beside the driver’s seat. Not having slept for 24 hours, contract of the carriage of cargo to the Warsaw
he requested the driver to keep an eye on the bag should Convention. May the allegation of LG Airlines be
he doze off during the trip. While Antonio was asleep, sustained? Explain.
another passenger took the bag away and alighted at SUGGESTED ANSWER:
Calamba, Laguna. Could the common carrier be held liable Yes. Unless the contents of a cargo are declared or the
by Antonio for the loss? contents of a lost luggage are proved by the satisfactory
SUGGESTED ANSWER: evidence other than the self-serving declaration of one
Yes. Ordinarily, the common carrier is not liable for acts of party, the contract should be enforced as it is the only
other passengers. But the common carrier cannot reasonable basis to arrive at a just award. The passenger or
relieve itself from liability if the common carrier’s shipper is bound by the terms of the passenger ticket or the
employees could have prevented the act or omission by waybill. (Panama v Rapadas 209 s 67)
exercising due diligence. In this case, the passenger asked
the driver to keep an eye on the bag which was Common Carrier (1996)
placed beside the driver’s seat. If the driver exercised Define a common carrier?
due diligence, he could have prevented the loss of the bag. SUGGESTED ANSWER:
A common carrier is a person, corporation, firm or
Carriage; Prohibited & Valid Stipulations (2002) association engaged in the business of carrying
Discuss whether or not the following stipulations in or transporting passengers or goods or both, by land,
a contract of carriage of a common carrier are valid: water or air for compensation, offering its services to the
1. a stipulation limiting the sum that may be recovered public (Art 1732, Civil Code)
by the shipper or owner to 90% of the value of the
goods in case of loss due to theft. Common Carrier; Breach of Contract; Damages (2003)
2. a stipulation that in the event of loss, destruction or Vivian Martin was booked by PAL, which acted as a
deterioration of goods on account of the defective ticketing agent of Far East Airlines, for a round trip flight
condition of the vehicle used in the contract of on the latter’s aircraft, from Manila-Hongkong-Manila.
carriage, the carrier’s liability is limited to the value of The ticket was cut by an employee of PAL. The ticket
the goods appearing in the bill of lading unless showed that Vivian was scheduled to leave Manila at 5:30
the shipper or owner declares a higher value (5%) p.m. on 05 January 2002 aboard Far East’s Flight F007.
SUGGESTED ANSWER: Vivian arrived at the Ninoy Aquino International Airport
an hour before the time scheduled in her ticket, but was
told that Far East’s Flight F007 had left at 12:10 p.m. It
turned out that the ticket was inadvertently cut and X did not declare a greater value despite the fact that the
wrongly worded. PAL employees manning the airport’s clerk had called his attention to the stipulation in
ground services nevertheless scheduled her to fly two the ticket. Decide the case (5%)
hours later aboard their plane. She agreed and arrived in SUGGESTED ANSWER:
Hongkong safely. The aircraft used by Far East Airlines Even if he did not sign the ticket, X is bound by
developed engine trouble, and did not make it to the stipulation that any claim for loss cannot exceed
Hongkong but returned to Manila. Vivian sued both P250 for each luggage. He did not declare a higher
airlines, PAL and Far East, for damages because of her value. X is entitled to P500 for the two luggages lost.
having unable to take the Far East flight. Could either or
both airlines be held liable to Vivian? Why? (6%) Common Carrier; Defenses; Limitation of Liability (2001)
SUGGESTED ANSWER: Suppose A was riding on an airplane of a common
(per dondee) No, there was breach of contract and that carrier when the accident happened and A suffered
she was accommodated well with the assistance of PAL serious injuries. In an action by A against the
employees to take the flight without undue delay. common carrier, the latter claimed that
1) there was a stipulation in the ticket issued to A
Common Carrier; Defenses (2002) absolutely exempting the carrier from liability from
Why is the defense of due diligence in the selection and the passenger’s death or injuries ad notices were
supervision of an employee not available to a posted by the common carrier dispensing with the
common carrier? (2%) extraordinary diligence of the carrier, and
SUGGESTED ANSWER: 2) A was given a discount on his plane fare thereby
The defense of due diligence in the selection reducing the liability of the common carrier with respect
and supervision of an employee is not available to a to A in particular.
common carrier because the degree of diligence a) Are those valid defenses? (1%)
required of a common carrier is not the diligence of a b) What are the defenses available to any common carrier
good father of a family but extraordinary diligence, to limit or exempt it from liability? (4%)
i.e., diligence of the greatest skill and utmost foresight. SUGGESTED ANSWER:
a) No. These are not valid defenses because they
Common Carrier; Defenses; Fortuitous Events (1994) are contrary to law as they are in violation of
Marites, a paying bus passenger, was hit above her the extraordinary diligence required of common
left eye by a stone hurled at the bus by an carriers. (Article 1757, 1758 New Civil Code)
unidentified bystander as the bus was speeding through
the National Highway. The bus owner’s personnel b) The defenses available to any common carrier to limit
lost no time in bringing Marites to the provincial or exempt it from liability are:
hospital where she was confined and treated. 1. observance of extraordinary diligence,
Marites wants to sue the bus company for damages and 2. or the proximate cause of the incident is a
seeks your advice whether she can legally hold the fortuitous event or force majeure,
bus company liable. What will you advise her? 3. act or omission of the shipper or owner of the
SUGGESTED ANSWER: goods,
Marites can not legally hold the bus company liable. 4. the character of the goods or defects in the
There is no showing that any such incident previously packing or in the containers, and
happened so as to impose an obligation on part of the 5. order or act of competent public authority,
personnel of the bus company to warn the passengers without the common carrier being guilty of
and to take the necessary precaution. Such hurling of a even simple negligence (Article 1734, NCC).
stone constitutes fortuitous event in this case. The bus
company is not an insurer. (Pilapil v CA 180 s 346) Common Carrier; Duration of Liability (1996)
A bus of GL Transit on its way to Davao stopped to
Common Carrier; Defenses; Limitation of Liability (1998) enable a passenger to alight. At that moment, Santiago,
X took a plane from Manila bound for Davao via Cebu who had been waiting for a ride, boarded the bus.
where there was a change of planes. X arrived in Davao However, the bus driver failed to notice Santiago who
safely but to his dismay, his two suitcases were left was still standing on the bus platform, and stepped on
behind in Cebu. The airline company assured X that the the accelerator. Because of the sudden motion, Santiago
suitcases would come in the next flight but they slipped and fell down suffering serious injuries.
never did. May Santiago hold GL Transit liable for breach of
X claimed P2,000 for the loss of both suitcases, but the contract of carriage? Explain.
airline was willing to pay only P500 because the airline SUGGESTED ANSWER:
ticket stipulated that unless a higher value was declared, any Santiago may hold GL Transit liable for breach of
claim for loss cannot exceed P250 for each piece of contract of carriage. It was the duty of the driver, when he
luggage. X reasoned out that he did not sign the stopped the bus, to do no act that would have the
stipulation and in fact had not even read it. effect of increasing the peril to a passenger such as
Santiago while he was attempting to board the same.
When a bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to On one occasion, Reynaldo contracted AM to transport
board. A public utility bus, once it stops, is in effect making for a fee, 100 sacks of rice from Manila to Tarlac.
a continuous offer to bus riders. It is the duty of common However, AM failed to deliver the cargo, because its
carriers of passengers to stop their conveyances for a truck was hijacked when the driver stopped in Bulacan to
reasonable length of time in order to afford visit his girlfriend.
passengers an opportunity to board and enter, and they are a) May Reynaldo hold AM liable as a
liable for injuries suffered by boarding passengers common carrier?
resulting from the sudden starting up or jerking of their b) May AM set up the hijacking as a defense to
conveyances while they are doing so. Santiago, by defeat Reynaldo’s claim?
stepping and standing on the platform of the bus, is SUGGESTED ANSWER:
already considered a passenger and is entitled to all the a) Reynaldo may hold AM Trucking liable as a common
rights and protection pertaining to a contract of carriage. carrier. The facts that AM Trucking operates only
(Dangwa Trans Co v CA 95582 Oct 7,91 202s574) two trucks for hire on a selective basis, caters only to a
few customers, does not make regular or scheduled
Common Carrier; Duty to Examine Baggages; trips, and does not have a certificate of public
Railway and Airline (1992) convenience are of no moment as
Marino was a passenger on a train. Another passenger, • the law does not distinguish between one whose
Juancho, had taken a gallon of gasoline placed in a plastic principal business activity is the carrying of persons
bag into the same coach where Marino was riding. The or goods or both and anyone who does
gasoline ignited and exploded causing injury to Marino such carrying only as an ancillary activity,
who filed a civil suit for damages against the railway
company claiming that Juancho should have been • the law avoids making any distinction between a
subjected to inspection by its conductor. person or enterprise offering transportation
The railway company disclaimed liability resulting service on a regular or scheduled basis and one
from the explosion contending that it was unaware offering such service on an occasional,
of the contents of the plastic bag and invoking the episodic or unscheduled basis, and
right of Juancho to privacy.
a) Should the railway company be held liable • the law refrains from making a distinction between a
for damages? carrier offering its services to the general public and
b) If it were an airline company involved, would your one who offers services or solicits business only
answer be the same? Explain briefly. from a narrow segment of the general population
SUGGESTED ANSWER: (Pedro de Guzman v CA L-47822 Dec 22,88 168s612)
a) No. The railway company is not liable for damages. In
overland transportation, the common carrier is SUGGESTED ANSWER:
not bound nor empowered to make an examination b) AM Trucking may not set up the hijacking as a
on the contents of packages or bags, defense to defeat Reynaldo’s claim as the facts given do not
particularly those handcarried by passengers. indicate that the same was attended by the use of
grave or irresistible threat, violence, or force. It would
b) If it were an airline company, the common carrier appear that the truck was left unattended by its driver
should be made liable. In case of air carriers, it is not and was taken while he was visiting his girlfriend. (Pedro de
lawful to carry flammable materials in passenger aircrafts, Guzman v CA L-47822 Dec 22,88 168 scra 612).
and airline companies may open and investigate
suspicious packages and cargoes (RA 6235) Common Carriers; Liability for Loss (1991)
Alejandor Camaling of Alegria, Cebu, is engaged in
Common Carrier; Test (1996) buying copra, charcoal, firewood, and used bottles and in
What is the test for determining whether or not one is a reselling them in Cebu City. He uses 2 big Isuzu trucks for
common carrier? the purpose; however, he has no certificate of public
SUGGESTED ANSWER: convenience or franchise to do business as a common
The test for determining whether or not one is carrier. On the return trips to Alegria, he loads his trucks
a common carrier is whether the person or entity, for with various merchandise of other merchants in Alegria and
some business purpose and with general or limited the neighboring municipalities of Badian and
clientele, offers the service of carrying or transporting Ginatilan. He charges them freight rates much lower than
passengers or goods or both for compensation. the regular rates. In one of the return trips, which left
Cebu City at 8:30 p.m. 1 cargo truck was loaded with
Common Carriers; Defenses (1996) several boxes of sardines, valued at P100th, belonging to
1) AM Trucking, a small company, operates two one of his customers, Pedro Rabor. While passing the
trucks for hire on selective basis. It caters only to a zigzag road between Carcar and Barili, Cebu, which is
few customers, and its trucks do not make midway between Cebu City and Alegria, the truck was
regular or scheduled trips. It does not even have a hijacked by 3 armed men who took all the boxes of
certificate of public convenience.
Mercantile Law Bar Examination Q & A (1990-2006) Page 97 of 103 policy
sardines and kidnapped the driver and his and therefore void and inexistent. (Art. 1409[1], Civil
helper, releasing them in Cebu City only 2 days later. Code)
Pedro Rabor sought to recover from Alejandro the value Kabit System; Agent of the Registered Owner (2005)
of the sardines. The latter contends that he is not liable Procopio purchased an Isuzu passenger jeepney from
therefore because he is not a common carrier under the Enteng, a holder of a certificate of public convenience
Civil Code and, even granting for the sake of argument for the operation of public utility vehicle plying the
that he is, he is not liable for the occurrence of the loss Calamba-Los Baños route. While Procopio continued
as it was due to a cause beyond his control. offering the jeepney for public transport services, he did not
If you were the judge, would you sustain the contention have the registration of the vehicle transferred in his name.
of Alejandro? Neither did he secure for himself a certificate of public
SUGGESTED ANSWER: convenience for its operation. Thus, per the records
If I were the Judge, I would hold Alejandro as of the Land Transportation Franchising and Regulatory
having engaged as a common carrier. A person who Board, Enteng remained its registered owner and operator.
offers his services to carry passengers or goods for One day, while the jeepney was traveling southbound,
a fee is a common carrier regardless of whether he has it collided with a ten-wheeler truck owned by
a certificate of public convenience or not, whether it Emmanuel. The driver of the truck admitted
is his main business or incidental to such business, responsibility for the accident, explaining that the truck
whether it is scheduled or unscheduled service, and lost its brakes.
whether he offers his services to the general public or to
a limited few (De Guzman v CA GR 47822 27Dec1988) Procopio sued Emmanuel for damages, but the latter
moved to dismiss the case on the ground that Procopio is
I will however, sustain the contention of Alejandro that he
not the real party in interest since he is not the registered
is not liable for the loss of the goods. A common owner of the jeepney.
carrier is not an insurer of the cargo. If it can be Resolve the motion with reasons. (3%)
established that the loss, despite the exercise of SUGGESTED ANSWER:
extraordinary diligence, could not have been avoided, The motion to dismiss should be denied because
liability does not ensue against the carrier. The hijacking by Procopio, as the real owner of the jeepney, is the real
3 armed men of the truck used by Alejandro is one of such party in interest. Procopio falls under the Kabit system.
cases (De Guzman v CA GR 47822 27Dec1988). However, the legal restriction as regards the Kabit system
does not apply in this case because the public at large is not
Common vs. Private Carrier; Defenses (2002) deceived nor involved. (Lim v. Court of Appeals, G.R. No.
Name two (2) characteristics which differentiate a 125817, January 16, 2002, citing Baliwag Transit v. Court of
common carrier from a private carrier. (3%). Appeals, G.R. No. 57493, January 7, 1987)
SUGGESTED ANSWER:
Two (2) characteristics that differentiate a In any event, Procoprio is deemed to be "the agent" of
common carrier from a private carrier are: the registered owner. (First Malayan Leasing v. Court of
1. A common carrier offers its service to the public; a Appeals, G.R. No. 91378, June 9,1992; and "F" Transit Co.,
private carrier does not. Inc. v. NLRC, G.R. Nos, 88195-96, January 27, 1994)
2. A common carrier is required to observe Maritime Commerce; Bareboat (2003)
extraordinary diligence; a private carrier is not For the transportation of its cargo from the Port of
so required. Manila to the Port of Kobe, Japan, Osawa & Co.,
chartered “bareboat” M/V Ilog of Karagatan
Kabit System (2005) Corporation. M/V Ilog met a sea accident resulting in
Discuss the “kabit system” in land transportation and its the loss of the cargo and the death of some of the
legal consequences. (2%) seamen manning the vessel. Who should bear the loss of
SUGGESTED ANSWER:
the cargo and the death of the seamen? Why? (4%)
The kabit system is an arrangement where a person SUGGESTED ANSWER:
granted a certificate of public convenience allows other (per Dondee) Osawa and Co. shall bear the loss because
persons to operate their motor vehicles under his license, under a demise or bareboat charter, the charterer (Osawa
for a fee or percentage of their earnings (Lim v. Court of & Co.) mans the vessel with his own people
Appeals and Gonzalez, G.R, No. 125817, January 16, 2002, citing
and becomes, in effect, the owner for the voyage or
Baliwag Trannit v. Court of Appeals, G.R. No. 57493, January 7,
service stipulated, subject to liability for damages
1987) The law enjoining the kabit system aims to identify
caused by negligence.
the person responsible for an accident in order to protect
the riding public. The policy has no force when the Prior Operator Rule (2003)
public at large is neither deceived nor involved.
Bayan Bus Lines had been operating satisfactorily a bus
The law does not penalize the parties to a kabit service over the route Manila to Tarlac and vice versa via
the McArthur Highway. With the upgrading of the new
agreement. But the kabit system is contrary to public
North Expressway, Bayan Bus Lines service became
seemingly inadequate despite its efforts of improving the “received for shipment” and contained an
same. Pasok Transportation, Inc., now applies for the entry indicating transshipment in Hongkong. The
issuance to it by the Land Transportation Franchising President of JRT personally received and signed the bill
and Regulatory Board of a certificate of public of lading and despite the entries, he delivered the
convenience for the same Manila-Tarlac-Manila route. corresponding check in payment of the freight.
Could Bayan Bus Lines, Inc., invoke the “prior operator” The shipment was delivered at the port of discharge but
rules against Pasok Transportation, Inc.? Why? (6%) the buyer refused to accept the anahaw fans because
SUGGESTED ANSWER: there was no on-board bill of lading, and there was
(per Dondee) No, Bayan Bus Lines, Inc., cannot invoke the transshipment since the goods were transferred
“prior operator” rules against Pasok Transportation, Inc. in Hongkong from MV Pacific, the feeder vessel, to
because such “Prior or Old Operator Rule” under the MV Oriental, a mother vessel. JRT argued that the
Public Service Act only applies as a policy of the law of the same cannot be considered transshipment because both
Public Service Commission to issue a certificate of public vessels belong to the same shipping company.
convenience to a second operator when prior operator 1) Was there transshipment? Explain
is rendering sufficient, adequate and satisfactory service, 2) JRT further argued that assuming that there was
and who in all things and respects is complying with the transshipment, it cannot be deemed to have agreed
rule and regulation of the Commission. In the facts of thereto even if it signed the bill of lading containing such
the case at bar, Bayan Bus Lines service became seemingly entry because it was made known to the shipping lines
inadequate despite its efforts of improving the same. from the start that transshipment was prohibited under
Hence, in the interest of providing efficient public the letter of credit and that, therefore, it had no intention to
transport services, the use of the 'prior operator' and the allow transshipment of the subject cargo. Is the
'priority of filing' rules shall is untenable n this case. argument tenable? Reason.
SUGGESTED ANSWER:
Registered Owner; Conclusive Presumption (1990) 1) Yes. Transshipment is the act of taking cargo out of
Johnny owns a Sarao jeepney. He asked his neighbor Van one ship and loading it in another. It is immaterial
if he could operate the said jeepney under whether or not the same person, firm, or entity owns the
Van’s certificate of public convenience. Van two vessels. (Magellan v CA 201 s 102)
agreed and, accordingly, Johnny registered his
jeepney under Van name. 2) No. JRT is bound by the terms of the bill of lading
On June 10, 1990, one of the passenger jeepneys when it accepted the bill of lading with full knowledge of its
operated by Van bumped Tomas. Tomas was injured and contents which included transshipment in Hongkong.
in due time, he filed a complaint for damages against Van Acceptance under such circumstances makes the bill of
and his driver for the injuries he suffered. The court lading a binding contract. (Magellan v Ca 201 s 102)
rendered judgment in favor of Tomas and ordered Van and
his driver, jointly and severally, to pay Tomas actual and Trust Receipts Law
moral damages, attorney’s fees, and costs.
Trust Receipts Law; Acts & Omissions; Covered (2006)
The Sheriff levied on the jeepney belonging to Johnny
but registered in the name of Van. Johnny filed a 3rd What acts or omissions are penalized under the
party claim with the Sheriff alleging ownership of the Trust Receipts Law? (2.5%)
SUGGESTED ANSWER:
jeepney levied upon and stating that the jeepney was The Trust Receipts Law (P.D. No. 115) declares the fail-
registered in the name of Van merely to enable Johnny to ure to turn over goods or proceeds realized from sale
make use of Van’s certificate of public convenience. thereof, as a criminal offense under Art. 315(l)(b) of
May the Sheriff proceed with the public auction of Revised Penal Code. The law is violated whenever the
Johnny’s jeepney. Discuss with reasons. entrustee or person to whom trust receipts were issued
SUGGESTED ANSWER:
fails to: (a) return the goods covered by the trust receipts;
Yes, the Sheriff may proceed with the auction sale of
or (b) return the proceeds of the sale of said goods
Johnny’s jeepney. In contemplation of law as regards the
(Metropolitan Bank v. Tonda, G.R. No. 134436, August 16, 2000).
public and third persons, the vehicle is considered the
property of the registered operator (Santos v Sibug 104 S 520) Is lack of intent to defraud a bar to the prosecution
of these acts or omissions? (2.5%)
Trans-Shipment; Bill of Lading; binding contract (1993) SUGGESTED ANSWER:
JRT Inc entered into a contract with C Co of Japan to No. The Trust Receipts Law is violated whenever the
export anahaw fans valued at $23,000. As payment entrustee fails to: (1) turn over the proceeds of the sale of
thereof, a letter of credit was issued to JRT by the buyer. The the goods, or (2) return the goods covered by the trust
letter of credit required the issuance of an on-board bill of receipts if the goods are not sold. The mere failure to
lading and prohibited the transshipment. The President of account or return gives rise to the crime which is malum
JRT then contracted a shipping agent to ship the anahaw fans prohibitum. There is no requirement to prove intent to
through O Containers Lines, specifying the requirements of defraud (Ching v. Secretary of Justice, G.R. No. 164317, February 6,
the letter of credit. However, the bill of lading issued by the 2006; Colinares v. Court of Appeals, G.R. No. 90828, September 5,
shipping lines bore the notation 2000; Ong v. Court of Appeals, G.R. No. 119858, April 29, 2003).
Trusts Receipt Law (2003)
Trust Receipts Law; Liability for estafa (1991) PB & Co., Inc., a manufacturer of steel and steel
Mr. Noble, as the President of ABC Trading Inc products, imported certain raw materials for use by it in the
executed a trust receipt in favor of BPI Bank to secure the manufacture of its products. The importation was
importation by his company of certain goods. After release effected through a trust receipt arrangement with AB
and sale of the imported goods, the proceeds from the Banking corporation. When it applied for the issuance by
sale were not turned over to BPI. Would BPI be justified in AB Banking Corporation of a letter of credit, PB & Co.,
filing a case for estafa against Noble? Inc., did not make any representation to the bank that it
SUGGESTED ANSWER: would be selling what it had imported. It failed to pay the
BPI would be justified in filing a case for estafa bank. When demand was made upon it to account for
under PD 115 against Noble. The fact that the trust the importation, to return the articles, or to turn-over the
receipt was issued in favor of a bank, instead of a seller, proceeds of the sale thereof to the bank, PB & Co., Inc.,
to secure the importation of the goods did not preclude also failed. The bank sued PB & Co.’s President who was
the application of the Trust Receipt Law. (PD 115) the signatory of the trust receipt for estafa. The President
Under the law, any officer or employee of a corporation put up the defense that he could not be made liable
responsible for the violation of a trust receipt is subject because there was no deceit resulting in the violation of the
to the penal liability thereunder (Sia v People 166s655) trust receipt. He also submitted that there was no
ALTERNATIVE ANSWER: violation of the trust receipt because the raw materials
The filing of a case for estafa under the penal provisions were not sold but used by the corporation in the
of the RPC would not be justified. It has been held in Sia manufacture of its products. Would those defenses be
v People (161 s 655) that corporate officers and sustainable? Why? (6%)
directors are not criminally liable for a violation of SUGGESTED ANSWER:
said Code. 2 conditions are required before a corporate No, the defenses are not sustainable. The lack of deceit
officer may be criminally liable for an offense should not be sustained because the mere failure to
committed by the corporation; viz: account for the importation, or return the
1. There must be a specific provision of articles constitutes the abuse of confidence in the crime
law mandating a corporation to act or not of estafa. The fact that the goods aren’t sold but are
to act; and used in the manufacture of its products is
immaterial because a violation of the trust receipts law
2. There must be an explicit statement in the law happened when it failed to account for the goods or
itself that, in case of such violation by return them to the Bank upon demand.
a corporation, the officers and directors
thereof are to be personally and Usury Law
criminally liable therefore.
Usury Law (199)
These conditions are not met in the penal provisions of Borrower obtained a loan from a money lending
the RPC on trust receipts. enterprise for which he issued a promissory
note undertaking to pay at the end of a period of 30 days
Trust Receipts Law; Liability for Estafa (1997) the principal plus interest at the rate 5.5% per
A buys goods from a foreign supplier using his credit line month plus 2% per annum as service charge.
with a bank to pay for the goods. Upon arrival of the
goods at the pier, the bank requires A to sign a trust On maturity of the loan, borrower failed to pay the
receipt before A is allowed to take delivery of the goods. principal debt as well as the stipulated interest and service
The trust receipt contains the usual language. A disposes of charge. Hence, he was sued.
the goods and receives payment but does not pay the bank. 1. How would you dispose of the issues raised by
The bank files a criminal action against A for violation the borrower?
of the Trust Receipts Law. A asserts that the trust 2. That the stipulated interest rate is excessive and
receipt is only to secure his debt and that a criminal action unconscionable? (3%)
cannot lie against him because that would be violative 3. Is the interest rate usurious? (3%)
of his constitutional right against
“imprisonment for nonpayment of a debt.” Is he correct? Recommendation: Since the subject matter of these two (2) questions
SUGGESTED ANSWER: is not included within the scope of the Bar Questions in Mercantile
No. Violation of a trust receipt is criminal as it is Law, it is suggested that whatever answer is given by the examinee,
punished as estafa under Art 315 of the RPC. There is a or the lack of answer should be given full credit. If the examinee gives
public policy involved which is to assure the entruster the a good answer, he should be given additional credit.
reimbursement of the amount advanced or the balance SUGGESTED ANSWER:
thereof for the goods subject of the trust receipt. The a. The rate of interest of 5.5% per month is excessive
execution of the trust receipt or the use thereof promotes
and unconscionable.
the smooth flow of commerce as it helps the importer or
buyer of the goods covered thereby.
b. The interest cannot be considered usurious. The Usury 3. and readiness and willingness to sign when the
Law has been suspended in its application, and the goods are delivered if so requested by the
interest rates are made “floating.” warehouseman (Sec 8 Warehouse Receipts Law).
Garnishment or Attachment of Goods (1999)

Warehouse Receipts Law A Warehouse Company received for safekeeping
1000 bags of rice from a merchant. To
evidence the transaction, the Warehouse Company
Bill of Lading (1998) issued a receipt expressly providing that the goods
1. What do you understand by a “bill of lading?” (2%) be delivered to the order of said merchant.
2. Explain the two-fold character of a “bill of A month after, a creditor obtained judgment against the
lading.” (3%) said merchant for a sum of money. The sheriff
SUGGESTED ANSWER:
proceeded to levy on the rice and directed the Warehouse
1. A bill of lading may be defined as a written
Company to deliver to him the deposited rice.
acknowledgement of the receipt of goods and an
agreement to transport and to deliver them at a specified a. What advice will you give the Warehouse
place to a person named therein or on his order. Company? Explain (2%)
2. A bill of lading has a two-fold character, namely, a) it b. Assuming that a week prior to the levy, the receipt was
sold to a rice mill on the basis of which it filed a claim
is a receipt of the goods to be transported; and b)
with the sheriff. Would the rice mill have better rights to
it constitutes a contract of carriage of the goods.
the rice than the creditor? Explain your answer. (2%)
SUGGESTED ANSWER:
Delivery of Goods; Requisites (1998) a. The 1000 bags of rice were delivered to the Warehouse
Luzon Warehousing Co received from Pedro 200 cavans of Company by a merchant, and a negotiable receipt was
rice for deposit in its warehouse for which a issued therefor. The rice cannot thereafter, while in the
negotiable receipt was issued. While the goods were possession of the Warehouse Company, be attached by
stored in said warehouse, Cicero obtained a judgment garnishment or otherwise, or be levied upon under an
against Pedro for the recover of a sum of money. The execution unless the receipt be first surrendered to the
sheriff proceeded to levy upon the goods on a writ of warehouseman, or its negotiation enjoined. The
execution and directed the warehouseman to deliver the
Warehouse Company cannot be compelled to deliver the
goods. Is the warehouseman under obligation to comply
actual possession of the rice until the receipt is
with the sheriffs order? (5%)
SUGGESTED ANSWER:
surrendered to it or impounded by the court.
No. There was a valid negotiable receipt as there was a b. Yes. The rice mill, as a holder for value of the receipt,
valid delivery of 200 cavans of rice for deposit. In such has a better right to the rice than the creditor. It is
case, the warehouseman (LWC) is not obliged to deliver the rice mill that can surrender the receipt which is
the 200 cavans of rice deposited to any person, except to
in its possession and can comply with the other
the one who can comply with sec 8 of the
requirements which will oblige the warehouseman to
Warehouse Receipts Law, namely:
deliver the rice, namely, to sign a receipt for the
1. surrender the receipt of which he is a holder;
delivery of the rice, and to pay the warehouseman’s
2. willing to sign a receipt for the delivery of the
goods; and liens and fees and other charges.
3. pays the warehouseman’s liens that is, his Negotiable Documents of Title (1992)
fees and advances, if any. For a cargo of machinery shipped from abroad to a sugar
The sheriff cannot comply with these requisites especially central in Dumaguete, Negros Oriental, the Bill
of Lading (B/L) stipulated “to shipper’s order,” with
the first, as he is not the holder of the receipt.
notice of arrival to be addressed to the Central. The
Delivery of the Goods (1991) cargo arrived at its destination and was released to the
Central without surrender of the B/L on the basis of the
When is a warehouseman bound to deliver the
latter’s undertaking to hold the carrier free and
goods, upon a demand made either by the holder of a
harmless from any liability.
receipt for the goods or by the depositor?
SUGGESTED ANSWER:
Subsequently, a Bank to whom the central was indebted,
The warehouseman is bound to deliver the goods upon
demand made either by the holder of the receipt for the claimed the cargo and presented the original of the B/L
goods or by the depositor if the demand is accompanied stating that the Central had failed to settle its obligations
by with the Bank.
1. an offer to satisfy the warehouseman’s lien,
Was there misdelivery by the carrier to the sugar central
2. an offer to surrender the receipt, if negotiable, with
considering the non-surrender of the B/L? Why?
such indorsements as would be necessary for SUGGESTED ANSWER:
the negotiation thereof,
Mercantile Law Bar Examination Q & A (1990-2006)
Page 101 of 103
There was no misdelivery by the carrier since the cargo SN Warehouse can file an INTERPLEADER to compel
was considered consigned to the Sugar central per EJ and Melchor to litigate against each other for
the “Shipper’s Order” (Eastern Shipping Lines v CA the ownership of the goods. Sec. 17 of the
190 s 512) Warehouse Receipts Law states, "If more than one
ALTERNATIVE ANSWER:
There was misdelivery. The B/L was a negotiable person claims the title or possession of the goods,
document of title because it was to the “Shipper’s the warehouse may, either as a defense to an action
Order.” Hence, the common carrier should have brought against him for non-delivery of the goods
delivered the cargo to the Central only upon surrender of or as an original suit, whichever is appropriate,
the B/L. The non-surrender of the B/L will make it require all known claimants to interplead."
liable to holders in due course.
Unpaid Seller; Negotiation of the Receipt (1993)
Ownership of Goods Stored (1992) A purchased from S 150 cavans of palay on credit.
A deposited the palay in W’s warehouse. W issued to A
To guarantee the payment of a loan obtained from
a negotiable warehouse receipt in the name of
a bank, Raul pledged 500 bales of tobacco deposited in a
A. Thereafter, A negotiated the receipt to B who
warehouse to said bank and endorsed in blank the
purchased the said receipt for value and in good faith.
warehouse receipt. Before Raul could pay for the
loan, the tobacco disappeared from the warehouse. c) Who has a better right to the deposit, S, the
Who should bear the loss – the pledgor or the unpaid vendor or b, the purchaser of the receipt for
bank? Why? value and in good faith? Why?
SUGGESTED ANSWER: d) When can the warehouseman be obliged to deliver the
The pledgor should bear the loss. In the pledge of palay to A?
SUGGESTED ANSWER:
a warehouse receipt the ownership of the goods
7. B has a better right than S. The right of the
remain with depositor or his transferee. Any
contract or real security, among them a pledge, does unpaid seller, S, to the goods was defeated by the
not amount to or result in an assumption of risk of act of A in endorsing the receipt to B.
loss by the creditor. The Warehouse Receipts Law did 8. The warehouseman can be obliged to deliver the palay
not deviate from this rule.
to A if B negotiates back the receipt to A. In that case, A
Right to the Goods (2005) becomes a holder again of the receipt, and A can comply
Jojo deposited several cartons of goods with SN with Sec 8 of the Warehouse Receipts Law.
Warehouse Corporation. The corresponding warehouse
Validity of stipulations excusing warehouseman
receipt was issued to the order of Jojo. He endorsed the
warehouse receipt to EJ who paid the value of the goods from negligence (2000)
deposited. Before EJ could withdraw the goods, Melchor S stored hardware materials in the bonded warehouse of W,
informed SN Warehouse Corporation that the goods a licensed warehouseman under the General Bonded
belonged to him and were taken by Jojo without his Warehouse Law (Act 3893 as amended). W issued the
corresponding warehouse receipt in the form he
consent. Melchor wants to get the goods, but EJ also
wants to withdraw the same. (5%) ordinarily uses for such purpose in the course of his
business. All the essential terms required under Section 2 of
• Who has a better right to the goods? Why? the Warehouse Receipts Law (Act 2137 as amended) are
SUGGESTED ANSWER:
EJ has a better right to the goods, being covered by a embodied in the form. In addition, the receipt issued to S
negotiable document of title, namely the warehouse contains a stipulation that W would not be
receipts issued to the "order of Jojo." Under the Sales responsible for the loss of all or any portion of the
provisions of the Civil Code on negotiable documents of hardware materials covered by the receipt even if such
title, and under the provisions of the Warehouse Receipts loss is caused by the negligence of W or his
Law, when goods deposited with the bailee are covered by representatives or employees. S endorsed and negotiated
the warehouse receipt to B, who demanded delivery of
a negotiable document of title, the endorsement and
the goods. W could not deliver because the goods were
delivery of the document transfers ownership of the
nowhere to be found in his warehouse. He claims he is not
goods to the transferee. By operation of law, the
liable because of the free-from-liability clause
transferee obtains the direct obligation of the bailee to
stipulated in the receipt. Do you agree with W’s
hold the goods in his name." (Art. 1513, Civil Code;
contention? Explain. (5%)
Section 41, Warehouse Receipts Law) Since EJ is the
SUGGESTED ANSWER:
holder of the warehouse receipt, he has the better right to No. I do not agree with the contention of W. The
the goods. SN Warehouse is obliged to hold the goods in stipulation that W would not be responsible for the loss of
his name. all or any portion of the hardware materials covered
by the receipt even if such loss is caused by the
(6) If SN Warehouse Corporation is uncertain as to who negligence of W or his representative or employees is
is entitled to the property, what is the proper void. The law requires that a warehouseman should
recourse of the corporation? Explain. exercise due diligence in the care and custody of the
SUGGESTED ANSWER:
things deposited in his warehouse.
2. The Chief Justice also said that the judiciary
must "safeguard the liberty" and "nurture the
Miscellaneous prosperity" of our people. Explain this philosophy.
Cite Decisions of the Supreme Court implementing
each of these twin beacons of the Chief Justice. (2.5%)
Energy Regulatory Commission: Jurisdiction & SUGGESTED ANSWER:
Power (2004) The Chief Justice's philosophy "Safeguarding Liberty,
CG, acustomer, sued MERALCO in the MM Regional Nurturing Prosperity" embodies the Supreme Court's
Trial Court to disclose the basis of the computation of approach in decision-making in the exercise of its
the purchased power adjustment (PPA). The trial court constitutional power of judicial review which provides: In
ruled it had no jurisdiction over the case because, as cases involving liberty, the scales of justice should weight
contended by the defendant, the customer not only heavily against government and in favor of the poor, the
demanded a breakdown of MERALCO's bill with respect oppressed, the marginalized, the dispossessed and the
to PPA but questioned as well the imposition of the weak; and that laws and action that restrict fundamental
PPA, a matter to be decided by the Board of Energy, the rights come to the court "with a heavy presumption
regulatory agency which should also have jurisdiction against their constitutional validity. On the other hand, as a
over the instant suit. Is the trial court's ruling correct or general rule, the Supreme Court must adopt a
not? Reason briefly. (5%) deferential or respectful attitude towards actions taken by
SUGGESTED ANSWER: the governmental agencies that have primary
The trial court's ruling is correct. As held in Manila responsibility for the economic development of the
Electric Company v. Court of Appeals, 271SCRA country; and only when an act has been clearly made or
417 (1997), the Board of Energy had the power to executed with grave abuse of discretion does the Court
regulate and fix power rates to be charged by franchised get involved in policy issues.
electric utilities like MERALCO. In fact pursuant to
Executive Order No. 478 (April 17, 1998), this Decisions implementing the "safeguarding of liberty" in-
power has been transferred to the Energy Regulatory clude those involving the constitutionality of Presidential
Board (now the Energy Regulatory Commission). Proclamation No. 1017 (David v. Arroyo, G.R. No.
Under Section 43(u) of the Electric Power Industry 171390, May 3, 2006); the validity of Calibrated Pre-
Reform Act of 2001, the Energy Regulatory emptive Response (CPR) and B.P. Big. 880 or the Public
Commission has original and exclusive Assembly Act (Bayan v. Ermita, G.R. No. 169848, April 25,
jurisdiction over all cases contesting power rates. 2006); and the legality of Executive Order No. 464 and the
President's exercise of Execu- tive Privilege (Senate of the
Four ACID Problems of Philippine Judiciary (2006) Philippines v. Ermita, G.R. No. 169777, April 20, 2006).
In several policy addresses extensively covered by media
since his appointment on December 21, 2005, Chief On the other hand, cases that relate to "nurturing the
Justice Artemio V. Panganiban vowed to leave a judiciary prosperity" of the people include the question the
characterized by "four Ins" and to focus in solving constitutionality of the Mining Law (La Bugal-B'Laan v.
the "four ACID" problems that corrode the Ramos, G.R. No. 127882, Dec. 1, 2004) and the WTO
administration of justice in our country. Agreement (Tanada v. Angara, G.R. 118295, May 2,1997).
Explain this "four Ins" and "four ACID" problems. Government Deregulation vs. Privatization of an
SUGGESTED ANSWER:
Industry (2004)
Upon assuming his office, Chief Justice Panganiban What is the difference between government deregulation
vowed to lead a judiciary characterized by the "four Ins:" and the privatization of an industry? Explain briefly. (2%)
Integrity, Independence, Industry and Intelligence; one SUGGESTED ANSWER:
that is morally courageous to resist influence, Government deregulation is the relaxation or removal of
interference, indifference and insolence. He envisions a regulatory constraints on firms or individuals, with a view
judiciary that is impervious to the plague of undue to promoting competition and market-oriented
influence brought about by kinship, relationship, approaches toward pricing, output, entry, and
friendship and fellowship. He calls on the judiciary to other related economic decisions.
battle the "Four ACID" problems corroding our justice
system: (1) limited access to justice by the poor; (2) Privatization of an industry refers to the transfer of
corruption; (3) incompetence; and (4) delay in the ownership and control by the government of assets,
delivery of quality judgments. The judicial department firms and operations in an industry to private investors.
should discharge its functions with transparency,
accountability and dignity. Political Law; WTO (1999)
(NOTA BENE: It is respectfully Government plans to impose an additional duty on
suggested that all Bar Candidates
imported sugar on top of the current tariff rate. The
receive a 2.5% bonus for the above
intent is to ensure that the landed cost of sugar shall not be
question regardless of the answer)
lower than P800 per bag. This is the price at which
locally produced sugar would be sold in order to enable
sugar producers to realize reasonable profits. Without
this additional duty, the current low price of sugar in the equal protection of law clause of the
world market will surely pull the domestic price to levels Constitution. Fourth, there is no impairment of due
lower than the cost to producer domestic sugar – a process here because violators of the law will be
situation that could spell the demise of the Phil punished only after "proper trial." Fifth, the issue of
sugar industry. "just compensation" does not arise, because the
6. Discuss the validity of this proposal to impose property of Mrs. BC is not being expropriated. On
an additional levy on imported sugar (3%) the contrary, as a citizen of LVM, Mrs. BC is freely
7. Would the proposal be consistent with the tenets allowed to engage in domestic timber trade in LVM.
of the World Trade Organization (WTO)? (3%)
Tariff and Customs Code: Violation of Customs Laws
Recommendation: Since the subject matter of (2004)
these two (2) questions is not included within the The Collector of Customs ordered the seizure
scope of the Bar Questions in Mercantile Law, it is and forfeiture of new electronic appliances shipped by
suggested that whatever answer is given by the
TON Corp. from Hongkong for violation of
examinee, or the lack of answer should be given
full credit. If the examinee gives a good answer, customs laws because they were falsely declared
he should be given additional credit. as used office equipment and then undervalued
for purposes of customs duties. TON filed a
SUGGESTED ANSWER: complaint before the MM Regional Trial Court for
3. The proposal to impose an additional duty replevin, alleging that the Customs officials erred in
on imported sugar on top of the current tariff rate is the classification and valuation of its shipment, as well as
valid, not being prohibited by the Constitution. It would in the issuance of the warrant of seizure. The Collector
enable producers to realize reasonable profits, and moved to dismiss the suit for lack of jurisdiction on
would allow the sugar industry of the country to survive. the part of the trial court. Should the Collector's
motion be granted or denied? Reason briefly. (5%)
4. No. The proposal would not be consistent with SUGGESTED ANSWER:
the tenets of the WTO which call for the The Collector's motion should be granted. Under Section
liberalization of trade. However, such proposal may be 602(g) of the Tariff and Customs Code, the Bureau of
acceptable within the allowable period under the WTO Customs has exclusive original jurisdiction over seizure
and forfeiture cases under the tariff and customs laws.
for adjustment of the local industry
NOTE: (This question is outside the coverage of the
Power of the State: Regulating of Domestic Trade (2004) Bar Examinations. It is therefore recommended that
whatever answer made by the candidate should
In its exercise of police power and business be given full credit.)
regulation, the legislature of LVM State passed a law
prohibiting aliens from engaging in domestic timber
trade. Violators including dummies would, after proper
trial, be fined and imprisoned or deported. Mrs. BC, a
citizen of LVM but married to ZC, an alien merchant of
PNG, filed suit to invalidate the law or exempt from
its coverage their timber business.
She contended that the law is, inter alia, gravely

oppressive and discriminatory. It violated the Universal
Declaration of Human Rights (UDHR) passed in 1948 by
the United Nations, of which LVM is a member, she
said, as well as the reciprocity provisions of the World
Trade Organization (WTO) Agreement of 1994, of
which PNG and LVM are parties. Aside from denying
them equal protection, according to BC, the law will also
deprive her family their livelihood without due process
nor just compensation. Assuming that the legal system of
LVM is similar to ours, would Mrs. BC's contention be
tenable or not? Reason briefly. (5%)
SUGGESTED ANSWER:
Mrs. BC's contention is not tenable. First, the UDHR
does not purport to limit the right of states (like LVM) to
regulate domestic trade. Second, the WTO Agreement
involves international trade between states or
governments, not domestic trade in timber or other
commodities. Third, nationality is an accepted norm for
making classifications that do not run counter to the
SUGGESTED ANSWERS
TO BAR EXAMINATION
IN
POLITICAL LAW
ARRANGED BY TOPIC
(1987 – 2006)
(Silliman University College of Law) July 26,
2005
Updated by:
Romualdo L. Señeris II, LLB.
April 19, 2007

QUESTIONS in POLITICAL LAW by the
UP LAW COMPLEX and
BAR Q&A (as arranged by Topics) – POLITICAL LAW (1987-2006) 1

FORWARD
This work is not intended for sale or commerce. This work is freeware. It may
be freely copied and distributed. It is primarily intended for all those who desire to
have a deeper understanding of the issues touched by the Philippine Bar Examinations
and its trend. It is specially intended for law students from the provinces who, very
often, are recipients of deliberately distorted notes from other unscrupulous law
schools and students. Share to others this work and you will be richly rewarded by God
in heaven. It is also very good karma.
ignorantly phrased, for the authors are just Bar Reviewees who have prepared
this work while reviewing for the Bar Exams under time constraints and within
their limited knowledge of the law. We would like to seek the reader’s indulgence for a
lot of typographical errors in this work.
The Authors

TABLE OF CONTENTS
1987 CONSTITUTION OF THE PHILIPPINES ................................................................. 14
Phil Con 87; New Features (1991)................................................................................... 14
Phil Con 87; People Power (1987) .................................................................................. 14
Nature of the Constitution: Constitutional Supremacy (2004) ..................................... 15
Government Presidential Form vs. Parliamentary Form (Q6-2006) ........................... 15
ARTICLE I National Territory......................................................................................... 16
Archipelagic Doctrine (1989)............................................................................................. 16
Contiguous Zone vs. Exclusive Economic Zone (2004) ............................................... 16
Exclusive Economic Zone; Rights of the Coastal State (1994) ................................... 16
Exclusive Economic Zone; Rights of the Coastal State (Q1-2005) ............................ 17
Flag State vs. Flag of Convenience (2004) .................................................................... 17
Territory & Government (1996)......................................................................................... 17
Territorial Sea vs. Internal Waters (2004) ....................................................................... 17
ARTICLE II Declaration of Principles and State Policies........................................ 18
Armed Forces; Servant of the People (2003)................................................................. 18
Doctrine of Incorporation; Constitutional Law (1997) .................................................... 18
Doctrine of Incorporation; Pacta Sunt Servanda (2000) .............................................. 18
Freedom from Nuclear Weapons; Foreign Military Bases (1988) .............................. 18
Philippine Flag (Q4-2006) ................................................................................................. 19
Principle of Civilian Supremacy (Q6-2006)..................................................................... 19
State Immunity from Suit (1991)....................................................................................... 19
State Immunity from Suit (1989) ..................................................................................... 20
State Immunity vs. Waiver of Immunity (1997) .............................................................. 22
State Principles & Policies (1994) .................................................................................... 23
Transparency; Matters of Public Interest (1989) ........................................................... 24
Transparency; Matters of Public Interest (2000) ........................................................... 25
ARTICLE III Bill of Rights ................................................................................................. 25
Bill of Attainder (1987) ....................................................................................................... 25
Bill of Attainder (1990) ....................................................................................................... 26
Custodial Investigation; Extrajudicial Confession (2001) ............................................. 26
Custodial Investigation; Extrajudicial Confession; Police Line-Up (1994) ................. 26
Custodial Investigation; Police Line-Up (1997) .............................................................. 27
Custodial Investigation; Right to Counsel (1988) .......................................................... 27
Custodial Investigation; Right to Counsel; Receipt of Property Seized (2002) ........ 28
Custodial Investigation; Rights (1990) ............................................................................ 29
Double Jeopardy (1988) .................................................................................................... 30
Double Jeopardy (1993) .................................................................................................... 31
Double Jeopardy (1997) .................................................................................................... 31
Double Jeopardy (1999) .................................................................................................... 32
Double Jeopardy (1999) .................................................................................................... 32
Double Jeopardy (2000) .................................................................................................... 32
Double Jeopardy (2001) .................................................................................................... 32
Double Jeopardy (2002) .................................................................................................... 33
Double Jeopardy; Requisites (1999) ............................................................................... 33
Due Process; Absence of Denial (1999) ......................................................................... 33
Due Process; Deportation (1994)..................................................................................... 34
Due Process; Forfeiture Proceedings (1993) ................................................................. 35
Due Process; Media Coverage during Hearing (1996)................................................. 35
Due Process; Meeting vs. Hearing (1999) ...................................................................... 35
Due Process; Notice by Publication (1988) .................................................................... 35
Due Process; Permit to Carry Firearm Outside Residence (Q6-2006) ...................... 36
Due Process; PPA-Pilots (2001) ...................................................................................... 36
Due Process; Procedural vs. Substantive (1999) .......................................................... 37
Due Process; Provisional Order (1991) .......................................................................... 37
Due Process; Public School Teachers (2002) ............................................................... 37
Due Process; Radio Station (1987) ................................................................................. 38
Due Process; Represented by a Non-Lawyer (1988) ................................................... 38
Due Process; Substantive (2003) .................................................................................... 38
Due Process; Suspension of Driver's License (1992) .................................................. 38
Due Process; Urgent Public Need (1987)....................................................................... 39
Eminent Domain; Garnishment (1994) ............................................................................ 39
Eminent Domain; Garnishment (1998) ............................................................................ 40
Eminent Domain; immunity from suit (2001) .................................................................. 40
Eminent Domain; Indirect Public Benefit (1990) ............................................................ 40
Eminent Domain; Just Compensation (1988) ................................................................ 40
Eminent Domain; Legal Interest (1993) .......................................................................... 41
Eminent Domain; Non-observance of the policy of "all or none" (2000) .................... 42
Eminent Domain; Power to Exercise (2005) .................................................................. 42
Eminent Domain; Public Use (1987) ............................................................................... 42
Eminent Domain; Socialized Housing (1996)................................................................. 43
Eminent Domain; Writ of Possession (1993) ................................................................. 43
Equal Protection; Alien Employment (1989)................................................................... 44
Equal Protection; Invidious Discrimination (1987) ......................................................... 44
Equal Protection; Invidious Discrimination (1987) ......................................................... 45
Equal Protection; Police Power (2000) ........................................................................... 45
Equal Protection; Right to Education (1994) .................................................................. 45
Equal Protection; Subsidiary Imprisonment (1989) ....................................................... 45
Freedom of Expression; Censorship (2003)................................................................... 46
Freedom of Expression; Prior Restraint (1988) ............................................................. 46
Freedom of Religion; Convicted Prisoners (1989) ........................................................ 46
Freedom of Religion; Flag Salute (1997) ........................................................................ 47
Freedom of Religion; Flag Salute (2003) ........................................................................ 48
Freedom of Religion; Non-Establishment Clause (1988) ............................................. 48
Freedom of Religion; Non-Establishment Clause (1992) ............................................. 48
Freedom of Religion; Non-Establishment Clause (1997) 49
Freedom of Speech; Ban on Tobacco AD (1992) 49
Freedom of the Press; Actual Malice (2004) 50
Freedom of the Press; Wartime Censorship (1987) 50
Impairment Clause; Basic Human Rights (1992) 51
Involuntary Servitude (1993) 51
Liberty of Abode; Limitations (1998) 51
Liberty of Abode; Temporary (1996) 52
Non-Imprisonment for Non-Payment of Debt (1993) 52
Police Power; Abatement of Nuisance (2004) 52
Police Power; Ban on Tobacco AD (1992) 52
Police Power; Zoning Ordinance vs. Non-Impairment of Contracts (1989) 53
Police Power; Zoning Ordinance vs. Non-Impairment of Contracts (2001) 53
Privacy of Communication (2001) 53
Privacy of Correspondence (1998) 54
Privacy of Correspondence; Jail (1989) 54
Right to Assembly; Permit Application; Freedom Parks (Q2-2006) 54
Right to Assembly; Permit Requirements (1992) 55
Right to Assembly; Public Teachers (2000) 55
Right to Assembly; Public Teachers (2002) 56
Right to Travel; Order of Arrest (1991) 56
Rights of the Accused; Counsel of his Choice (Q8-2005) 56
Rights of the Accused; Presumption of Innocence vs. Presumption of Theft (2004) 57
Rights of the Accused; Right to Bail (1993) 57
Rights of the Accused; Right to Bail; Capital Offense (Q4-2006) 58
Rights of the Accused; Right to Bail; Deportation Case (1989) 58
Rights of the Accused; Right to Bail; Matter of Right or a Matter of Discretion (Q7-
2005) 58
Rights of the Accused; Right to Speedy Trial (2000) 59
Rights of the Accused; Self-Incrimination (1988) 59
Rights of the Accused; Self-Incrimination (Q7-2006) 61
Searches and Seizure; Private Individuals (Q8-2005) 61
Searches and Seizures; Aliens (2001) 61
Searches and Seizures; Breathalyzer Test (1992) 62
Searches and Seizures; Immediate Control (1987) 62
Searches and Seizures; Incidental to Valid Search (1990) 62
Searches and Seizures; Place of Search (2001) 63
Searches and Seizures; search made by a private citizen (1993) 63
Searches and Seizures; search made by a private citizen (2002) 64
Searches and Seizures; Valid Warrantless Search (2000) 64
Searches and Seizures; Visual Search (1992) 65
Searches and Seizures; Waiver of Consent (1989) 65
Searches and Seizures; Warrantless Arrests (1993) 66
Searches and Seizures; Warrants of Arrest (1991) 66
ARTICLE IV Citizenship 66
Action for Cancellation; Prescription & Effect of Death (1994) 66
Citizenship; Elected Official (1993) 67
Dual Allegiance vs. Dual Citizenship (1987) 67
Dual Allegiance vs. Dual Citizenship (1988) 68
Dual Citizenship (1994) 68
Effect of Marriage; Filipino (1989) 69
Effect of Oath of Allegiance (2004) 69
Effect of Repatriation (1999) 70
Effects of Marriages (1999) 70
Effects of Philippine Bill of 1902 (2001) 71
Elected Official (1992) 71
Electing Philippine Citizenship (Q8-2006) 71
Electing Philippine Citizenship; When Proper (Q8-2006) 72
Natural Born Filipino (1989) 72
Natural Born Filipino (1998) 72
Natural-Born Filipino(1993) 73
Naturalization; Cancellation of Citizenship (1998) 73
Residency Requirements; Elective Official (Q9-2005) 73
Status; Illegitimate Child (1990) 74
Status; Illegitimate Child; Dual Citizenship (1996) 74
Status; Legitimate Child (2003) 74
Ways of Reacquiring Citizenship (2000) 75
ARTICLE VI Legislative Department 75
Appropriation of Public Funds (1988) 75
Appropriation of Public Funds; Debt Servicing (1992) 75
Appropriation of Public Funds; Public Purposes (1988) 75
Commission on Appointments (2002) 76
Delegation of Powers (2002) 76
Delegation of Powers; (Q6-2005) 76
Delegation of Powers; Completeness Test; Sufficient Standard Test (Q6-2005) 77
Discipline; Modes of Removal (1993) 77
Discipline; Suspension of a Member of the Congress (2002) 77
Elected Official; De Facto Officer (2004) 78
Electoral Tribunal; HRET Members’ Right & Responsibilities (2002) 78
Electoral Tribunal; Senate; Jurisdiction (1990) 79
Foreign Affairs; Role of House of Rep (1996) 79
Foreign Affairs; Role of Senate (1994) 79
Investigations in Aid of Legislation (1992) 79
Law Making; Process & Publication (1993) 80
Law-Making; Appropriation Bill (1996) 80
Law-Making; Appropriation Law; Automatic Renewal & Power of Augmentation
(1998) 80
Law-Making; Appropriation Law; Rider Provision (2001) 81
Law-Making; Foreign Affairs; Treaties (1996) 81
Law-Making; Overriding the Presidential Veto (1991) 81
Law-Making; Passage of a Law (1988) 82
Legislative Power; Pres. Aquino’s Time (1990) 82
Legislative Powers (1989) 82
Loans Extended to Members of Congress (1991) 82
Multi-Party System (1999) 83
Non-Legislative Powers (1988) 83
Non-Legislative Powers; Emergency Powers; Requisites (1997) 83
Prohibitions and Inhibitions of Public Office (2004) 83
Qualifications; Congressmen (1988) 84
Qualifications; Congressmen; (1993) 84
Qualifications; Congressmen; (1999) 85
Separation of Powers (1988) 85
Separation of Powers (2003) 85
Three-Term Limit: Congressmen (1996) 86
Three-Term Limit; Congressmen (2001) 86
ARTICLE VII Executive Department 86
Appointing Power; Acting vs. Permanent Appointment (2003) 86
Appointing Power; ad interim appointments (1991) 86
Appointing Power; Ad Interim Appointments (1994) 87
Appointing Power; Appointments Requiring Confirmation; RA 6975-Unconstitutional
(2002) 87
Appointing Power; Categories of Officials (1999) 88
Appointing Power; Kinds of Appointments (1994) 88
Appointing Power; Limitations on Presidential Appointments (1997) 89
Appointing Powers; Ad Interim Appointments (Q4-2005) 90
Cabinet Members; limitation on accepting additional duties (1996) 90
Calling-out Power; President (Q1-2006) 91
Declaration; State of Calamity; Legal Effects (Q1-2005) 91
Declaration; State of National Emergency (Q1-2006) 91
Enter into Contract or Guarantee Foreign Loans (1994) 91
Enter into Contract or Guarantee Foreign Loans (1999) 92
Enter into Executive Agreements (2003) 92
Impose Tariff Rates, Import and Export Quotas (1999) 92
Martial Law & Suspension of Writ of Habeas Corpus (1987) 92
Martial Law; Limitations (2000) 93
Martial Law; Sufficiency of the Factual Basis (Q3-2006) 94
Pardoning Power; Amnesty (1993) 95
Pardoning Power; Amnesty (1995) 95
Pardoning Power; Breach of Condition; Revocation (Q5-2005) 95
Pardoning Power; Exec Clemency; Pardon (1995) 95
Pardoning Power; Executive Clemency (1997) 96
Pardoning Power; Executive Clemency (1999) 96
Pardoning Power; Kinds (1988) 96
Pardoning Power; Pardon, Conditional (1997) 97
President; Participation; Legislative Process (1996) 97
Presidential Immunity from Suit (1997) 97
Prohibition Against Multiple Positions & Additional Compensation (2002) 97
Prohibition against Multiple Positions by Gov’t Officials (1987) 98
Suspension of Writ of Habeas Corpus (1997) 99
ARTICLE VIII Judicial Department 99
Cases to be Heard En Banc; Supreme Court (1999) 99
Contempt Powers (1996) 99
Finality of Void Judgments (1993) 99
Fiscal Autonomy (1999) 100
Function; Continuing Constitutional Convention (2000) 100
Issuance of Restraining Orders and Injunctions (1992) 100
Judicial & Bar Council (1988) 101
Judicial & Bar Council (1999) 101
Judicial Department; Writ of Amparo (1991) ..................................................................... 101
Judicial Independence; Safeguard (2000) ...................................................................... 101
Judicial Power (1989) ......................................................................................................... 102
Judicial Power (1992) ......................................................................................................... 102
Judicial Power (1998) ......................................................................................................... 103
Judicial Power; Scope (1994) ............................................................................................. 103
Judicial Review; Locus Standi (1992) ................................................................................ 104
Judicial Review; Requisites (1994) .................................................................................. 104
Jurisdiction of HLURB (1993) ........................................................................................... 104
Mandatory Period For Deciding Cases (1989) ............................................................... 105
Political Question (1995) .................................................................................................... 105
Political Question Doctrine (1997) ...................................................................................... 105
Political Question: Separation of Powers (2004) ............................................................... 106
Political Question; To Settle Actual Controversies (2004) ........................................... 106
Political Questions (1988) .................................................................................................. 106
Pro Hac Vice Cases (1999) ............................................................................................... 107
Removal of Lower Court Judges (1993) ......................................................................... 107
Review Executive Acts (1996) .......................................................................................... 107
Supervision; Courts & its Personnel (Q5-2005) ................................................................ 108
Taxpayer's Suit; Locus Standi (1995) .............................................................................. 108
Term of Office; Justices (1996) ........................................................................................... 108
Votes required for declaring a law unconstitutional (1996) .......................................... 109
ARTICLE IX Constitutional Commissions .................................................................. 109
Rotational Scheme (1999)................................................................................................... 109
Constitutional Commissions & Council (Q7-2006) ............................................................ 109
ARTICLE IX Civil Service Commission........................................................................ 109
Career Service; Characteristics (1999) .............................................................................. 109
Civil Service Commission vs. COA (2004) ..................................................................... 109
Function of CSC (1994) ....................................................................................................... 110
GOCCs Without Original Charter vs. GOCCs With Original Charter (1998) ............. 110
Jurisdiction over the GOCCs (1999) .................................................................................. 111
Jurisdiction over the GOCCs (2003) .................................................................................. 111
Modes of Removal from Office (1993) ............................................................................... 111
Receiving of Indirect Compensation (1997) ................................................................... 111
Security of Tenure (1988) .................................................................................................... 112
Security of Tenure (Q5-2005) ............................................................................................. 112
Security of Tenure; Meaning (1999) ................................................................................... 113
ARTICLE IX COMELEC ...................................................................................................... 113
Electoral Tribunal; Functions & Composition (Q5-2006) .............................................. 113
Fair Election; Equal Space & Time in Media (1989) ..................................................... 113
Grant of Pardon in Election Offenses (1991) ................................................................. 114
Judicial Review of Decisions (2001) ................................................................................ 114
Removal from Office; Commissioners (1998) ................................................................ 114
Right to Vote; Jurisdiction (2001)........................................................................................ 114
Election Laws.......................................................................................................................... 114
2nd Placer Rule (2003) ..................................................................................................... 114
2nd Placer Rule (1990) ...................................................................................................... 115
2nd Placer Rule; in Quo Warranto Cases (1992) .......................................................... 115
2nd Placer Rule; Rule of Succession (1996) .................................................................... 115
Appreciation of Ballots (1994) ........................................................................................... 116
Disqualification; Grounds (1991) ...................................................................................... 116
Disualifications (1999) 116
Effect of Filing of Certificate of Candidacy; Appointive Officer vs Elective Officer
(2002) 116
Effect of Filing of Certificate of Candidacy; Fair Election Act (2003) 117
Election Offenses; Conspiracy to Bribe Voters (1991) 117
Election Protest (1990) 117
Election Protest vs. Quo Warranto (2001) 118
Election Protest vs. Quo Warranto (Q5-2006) 118
Election Protest; Jurisdiction (1996) 118
Expiration of term bars service thereof (2000) 118
Petition to Declare Failure of Elections; Requisites & Effects (1995) 118
Pre-Proclamation Contest (1987) 119
Pre-Proclamation Contest (1988) 119
Pre-Proclamation Contest vs. Election Contests (1997) 120
Pre-Proclamation Contest; Proper Issues (1996) 121
Process; Illiterate Voters (1987) 121
Process; Principle of Idem Sonans (1994) 121
Process; Stray Ballot (1994) 121
Recall (2002) 122
Three-Term Limit Rule (2001) 122
Three-Term Limit; from Municipality to Newly-Created City (Q9-2005) 122
Vacancy; Effect of Vice-Mayor Acting As Mayor (2002) 123
Vacancy; Rule of Succession (1995) 123
Vacancy; SB; Rule on Succession (2002) 124
ARTICLE IX Commission on Audit 124
COA; Jurisdiction (2001) 124
COA; Money Claims (1998) 124
ARTICLE X Local Government 125
Appointment of Budget Officer; control vs supervision (1999) 125
Boundary Dispute Resolution; LGU; RTC’s Jurisdiction (Q10-2005) 126
Boundary Dispute Settlement; Authority; Jurisdiction (1999) 126
Creation of New Local Government Units; Plebiscite Requirement (2004) 126
De Facto Public Corporations; Effect (2004) 126
Devolution of Power (1999) 126
Franchise; prior approval of LGU necessary (1988) 126
Law fixing the terms of local elective officials (Q4-2006) 127
Ordinance; Use & Lease of Properties; Public Use (1997) 127
Ordinance; Validity; Closure or Lease of Properties for Public Use (2003) 127
Ordinance; Validity; Compensation; Tortuous Act of an Employee (1994) 127
Ordinance; Validity; Local Taxation vs. Special Assessment (1987) 128
Ordinance; Validity; Preventing Immorality (1987) 128
Ordinance; Validity; Utilization & Development; National Wealth (1991) 128
Ordinances; Validity; Amending Nat’l Laws (1988) 128
Ordinances; Validity; Gambling Prohibition (1995) 129
Ordinances; Validity; Limitation of Penalties (1991) 129
Ordinances; Veto Power (1996) 129
Police Power; LLDA (1995) 130
Power to Issue Subpoena & Cite For Contempt (1993) 130
Power; Eminent Domain; LGU; Right to Exercise (Q10-2005) 131
Powers of Barangay Assembly (2003) 131
Powers; Liga ng mga Barangay (2003) 131
Requisites; Contracts Involving LGU (1991) ..................................................................... 131
Requisites; Contracts involving LGU (1995) ...................................................................... 132
Taxation; GOCC Liability For Real Estate Tax (1999) ...................................................... 132
Taxation; Sources of Revenue (1999) ............................................................................. 132
Withdrawal of Public Property from Public Use (1990) ................................................. 132
ARTICLE XI Accountability of Public Officers ........................................................... 133
Abandonment of Office (2000) ............................................................................................ 133
Discipline; Clemency; Doctrine of Condonation (2000) ................................................ 133
Discipline; Effect of Pardon Granted in Favor of Public Officers (1999) .................... 134
Discipline; Preventive Suspension & Appeal; entitlement to salary pendente (2001)
134
Discipline; Preventive Suspension (1990) ......................................................................... 134
Discipline; Preventive Suspension (2002) ......................................................................... 135
Elective and Appointive Officials: disciplinary authority (2004) ........................................ 135
Elective Public Officer; De Facto Officer (2000) ................................................................ 135
Elective Public Officers; De Facto Officer; effects (2004) ................................................ 136
Graft and Corruption; Prescription of Crime (2002) .......................................................... 136
Impeachment; Cronyism (2000).......................................................................................... 137
Impeachment; Grounds (1999) ......................................................................................... 137
Impeachment; Nature; Grounds; PD 1606 (1988) ......................................................... 137
Law of Public Officers; Next-in-Rank Rule (1994)............................................................. 137
Liability For Damages in Performance of Official Functions (1990) ........................... 138
Local Elective Officials; Limitations On Additional Duties (1995) .................................... 139
Ombudsman: Power to Suspend; Preventive Suspension (2004) .................................. 139
Ombudsman; Power to Investigate (2003) ........................................................................ 139
Ombudsman; Power to Suspend; Preventive Suspension (1996) .................................. 140
Power to Issue Subpoena; validity of delegation (1989) .................................................. 140
Prohibition On Elective Officer to Hold Public Office (2002) ............................................ 140
Public Office; Public Trust (1998) ..................................................................................... 140
Retirement Benefits (1996) ............................................................................................... 141
ARTICLE XII National Economy and Patrimony ......................................................... 142
Acquisition and Lease of Public Lands (1998) .................................................................. 142
Acquisition of Lands (1987) ............................................................................................... 142
Acquisition of Lands (2000) ............................................................................................... 143
Acquisition of Lands by Hereditary Succession (2002) .................................................... 143
Acquisition of Lands; Citizenship issue (1989) .................................................................. 143
Acquisition of Lands; Prohibition; acquisition of private lands by aliens (1994) ....... 145
Citizenship Requirement in Management of Advertising Industry (1989) ....................... 145
Engagement in Business & Exercise of Profession (1987) .............................................. 145
Exploration and Development of Minerals (1994) ......................................................... 146
Expropriation of Public Utilities (1992) ............................................................................... 146
Lease of Private Agricultural Lands (2001)........................................................................ 146
National Economy & Patrimony; Constitutional Prohibition (2004) ............................. 147
National Patrimony; definition (1999) ................................................................................. 147
Nationalized Activities (1994) ............................................................................................ 147
Ownership Requirement of Mass Media (1989) ................................................................ 148
Chinese citizens; engaging in retail trade (Q4-2006)........................................................ 148
Exploration, development, and utilization of natural resources (Q4-2006) ..................... 148
ARTICLE XIII Social Justice and Human Rights ......................................................... 148
Agrarian Reform Law; Coverage (1992) ............................................................................ 148
Commission on Human Rights; Power to investigate (1992)........................................... 149
Commission on Human Rights; Power to issue TRO (1997) ........................................... 149
Commission on Human Rights; Power to issue TRO (2001) ........................................... 149
Commission on Human Rights; Power; Limitations (Q4-2005) ....................................... 150
Labor; Right to Self-Organization (1988) ........................................................................... 151
Labor; Right to Strike (1988) ............................................................................................. 151
Labor; Right to Strike (1993) ............................................................................................. 151
Social Justice under the Present Constitution (1995) ....................................................... 152
Women (2000) ...................................................................................................................... 152
ARTICLE XIV Education, Science and Technology, Arts ......................................... 153
Education; Academic Freedom (1987)............................................................................... 153
Education; Academic Freedom; Extent (1999) .................................................................. 154
Education; Alien Enrollees & Donors (1999) .................................................................. 154
Education; Duties of State in Re Education (1999)........................................................... 154
Education; Flag Salute (1987) ............................................................................................ 155
Education; Right to Choose Profession (2000) ................................................................. 155
Education; Right to Quality Education (2003).................................................................... 156
Education; Teaching of Religion (1999) .......................................................................... 156
Education; Validity of Academic Requirements (1994) .................................................... 156
ARTICLE XVI General Provisions ..................................................................................... 156
General Provisions; Local Dialect (1987)........................................................................... 156
AFP; limitation on accepting additional duties (1996) ....................................................... 157
ARTICLE XVII Amendments or Revisions ........................................................................ 157
People’s Initiative (2004) ................................................................................................... 157
Amendments and Revisions; Modes (1997) ...................................................................... 157
REFERENDUM vs. INITIATIVE (Q1-2005) .................................................................... 157
ARTICLE XVIII Transitory Provisions ................................................................................. 158
Transitory Provisions; Foreign Military Bases (1996) ................................................... 158
Transitory Provisions; Foreign Military Bases (1988) ................................................... 158
PUBLIC INTERNATIONAL LAW ........................................................................................ 158
Basic Principles in Public Int’l Law (1991) ......................................................................... 158
Constitutive Theory vs. Declaratory Theory (2004) ....................................................... 160
Contiguous Zone vs. Exclusive Economic Zone (2004) .................................................. 160
Diplomatic Immunity (2000)................................................................................................. 160
Diplomatic Immunity; Ambassador (Q3-2005)................................................................... 162
Diplomatic Immunity; Ambassadors (1990) ....................................................................... 162
Diplomatic Immunity; Coverage (Q3-2005) .................................................................... 163
Diplomatic Immunity; Diplomatic Envoy and Consular Officers (1995)........................... 164
Diplomatic Immunity; Diplomatic Envoy and Consular Officers (1997)........................... 165
Exclusive Economic Zone (2000) ..................................................................................... 165
Executive Agreements; Binding Effect (2003) ................................................................... 165
Extradition vs. Deportation (1993) ...................................................................................... 166
Extradition; Doctrine of Specialty (1993) ......................................................................... 166
Extradition; Effectivity of treaty (1996) ............................................................................. 166
Extradition; Grounds (2002) .............................................................................................. 167
Extradition; Retroactive Application (Q2-2005) 167
Flag State vs. Flag of Convenience (2004) 168
Genocide (1988) 168
Human Rights (1999) 168
Human Rights; Civil and Political Rights (1992) 168
Human Rights; Civil and Political Rights (1996) 169
Int’l Court of Justice; Jurisdiction Over States 170
Int’l Court of Justice; Jurisdiction Over States (1994) 170
Int’l Court of Justice; Limitations On Jurisdiction (1999) 170
Int’l Court of Justice; Parties; Pleadings and Oral Argument (1994) 170
International Convention; Law of the Sea (2004) 171
International Court of Justice (Q9-2006) 171
International Law vs. Municipal Law; Territorial Principle; International Crimes (Q2-
2005) 171
Mandates and Trust Territories (2003) 172
Municipal Law vs. International Law (2003) 173
Neutrality of States (1988) 173
Outer Space; Jurisdiction (2003) 174
Principle of Auto-Limitation (Q10-2006) 174
Reciprocity v. Principle of Auto-Limitation (Q10-2006) 174
Recognition of States; De Facto vs. De Jure Recognition (1998) 174
Reparations Agreement; Validity (1992) 175
Right to Innocent Passage (1999) 175
Right to Transit and Innocent Passage (2004) 176
Rights and Obligation under UN Charter (1991) 176
Sources of International Law; Primary & Subsidiary Sources (2003) 177
Sovereign Immunity of States; Absolute vs. Restrictive (1998) 177
Sovereignty of States; Natural Use of Territory (1989) 178
Sovereignty; Definition; Nature (Q10-2006) 178
State Liabilities (1995) 179
State Sovereignty; Effective Occupation; Terra Nullius (2000) 179
Stateless Persons; Effects; Status; Rights (1995) 179
Territorial Sea vs. Internal Waters (2004) 180
Use of Force; Exceptions (2003) 180
Use of Force; Principle of Non-Intervention (1994) 181
Use of Force; Right of Self-defense (2002) 182
Use of Force; Self-Defense; Waging War (1998) 182
Use of Force; When allowed (1988) 183
War; Combatants/ Prisoners of War vs. Mercenaries (1993) 183
Wilson doctrine vs. Estrada doctrine (2004) 184
ADMINISTRATIVE LAW 184
Admin Law; Exhaustion of Administrative Remedies (1991) 184
Admin Law; Exhaustion of Administrative Remedies (2000) 184
Admin Law; Exhaustion of Administrative Remedies vs Doctrine of Primary
Jurisdiction (1996) 185
Admin Law; Exhaustion of Administrative Remedies; Exceptions (1991) 185
Admin Law; Judicial Review of Administrative Action (2001) 186
Admin Law; Judicial Review of Administrative Decisions (1988) 186
Admin Law; Meaning of “Government of the Philippines” (1997) 187
Admin Law; Power of the President to Reorganize Administrative Structure (2003)
............................................................................................................................................... 187
Admin Law; Rules and Regulations; Due Process (2000) ............................................... 187
Government Agency vs. Government Instrumentality (Q7-2005).................................... 188
Quasi-Judicial Body or Agency (Q5-2006) ..................................................................... 188

1987 CONSTITUTION OF THE 7. The Supreme Court is empowered to adopt
rules for the protection and enforcement
PHILIPPINES
of constitutional rights.
Phil Con 87; New Features (1991)
8. Art. II. Sec. 11 commits the State to a policy
No 1: How is the Bill of Rights strengthened in
which places value on the dignity of
the 1987 Constitution? every human person and guarantees full
SUGGESTED ANSWER: respect for human rights.
There are several ways in which the Bill of 9. A Commission on Human Rights is created.
Rights is strengthened in the 1987 Constitution. 10. Under Article XVI. Sec. 5(2) the State is
1. New rights are given explicit recognition mandated to promote respect for the
such as, the prohibition against detention by people's rights among the members of the
reason of political beliefs and aspirations. military in the performance of their duty.
The waiver of Miranda rights is now
required to be made in writing with the Phil Con 87; People Power (1987)
assistance of counsel. The use of solitary,
incommunicado and secret detention places is No. XVIII: The framers of the 1987 Constitution
prohibited, while the existence of and the people who ratified it made sure
substandard and inadequate penal facilities is that provisions institutionalizing people power
made the concern of legislation. were incorporated in the fundamental law,
Briefly discuss at least two such provisions.
2. There is also recognition of the right of
expression, an express prohibition against SUGGESTED ANSWER:
the use of torture, a mandate to the State to Art. VI, Sec. 1, while vesting in Congress the
provide compensation and rehabilitation for legislative power, nonetheless states that such
victims of torture and their families. conferment of power shall be subject to the
3. Some rights have been expanded. reservation made in favor of the people by
For instance, free access to courts provisions on initiatives and referendum. For this
now includes access to quasi-judicial purpose, Congress is required, as early as possible,
to provide for a system of initiative of referendum
bodies and to adequate legal assistance.
whereby the people can directly propose and
4. The requirements for interfering with some enact laws or approve or reject an act or law or
rights have been made more strict. For part thereof passed by the Congress or the
instance, only judges can now issue search legislative bodies after the registration of a
warrants or warrants of arrest. There must petition therefor, signed by at least 10% of the
be a law authorizing the Executive total number of registered voters, of which every
Department to interfere with the privacy of legislative district must be represented by at least
communication, the liberty of abode, and the 3% of the registered voters. (Id., sec. 32) The
right to travel before these rights may be Constitution also provides that through initiative,
impaired or curtailed. upon a petition of at least 12% of the total
5. The Constitution now provides that numbers of registered voters, of which every
the suspension of the privilege of the legislative district must be represented by at
writ of habeas corpus does not suspend least 3% of the registered voters therein,
the right to bail, thus resolving a doctrinal amendments to the Constitution may be directly
dispute of long standing. proposed by the people.
6. The suspension of the privilege of the writ
of habeas corpus and the proclamation of Art, XIII, sec. 15 states that the state shall
martial law have been limited to sixty (60) respect the role of independent people's
days and are now subject to the power of organization to enable them to pursue and
Congress to revoke. In addition, the protect, within the democratic framework, their
Supreme Court is given the jurisdiction, legitimate and collective interests and
upon the petition of any citizen to determine the aspirations through peaceful lawful means. For this
sufficiency of the factual basis of the purpose, the Constitution guarantees to such
suspension of the privilege of the writ of organizations the right to participate at all levels of
habeas corpus and the proclamation of social, political and economic decision- making and
martial law. the state is required to validate the

establishment of adequate mechanism for Article XIII, Section 16 of the 1987 Constitution
this purpose. (Id., sec, 16) provides that the right of the people and their
organizations to participate at all levels of
Phil Con 87; People Power (2000) social, political, and economic decision-making
shall not be abridged and that the State shall,
No IX. Is the concept of People Power by law, facilitate the establishment of adequate
recognized in the Constitution? Discuss briefly. consultation mechanisms.
(3%) Article XVII, Section 2 of the 1987 Constitution
SUGGESTED ANSWER: provides that subject to the enactment of
Yes, the concept of People Power is an implementing law, the people may
recognized in the Constitution. directly propose amendments to the
Under Section 32. Article VI of the Constitution, Constitution through initiative.
through initiative and referendum, the people can
directly propose and enact laws or approve or
Nature of the Constitution: Constitutional
reject any act or law or part thereof passed by
Supremacy (2004)
the Congress or local legislative body after the
(10-a) BNN Republic has a defense treaty with
registration of a petition therefor signed by at
EVA Federation. According to the Republic's
least ten per centum of the total number of
Secretary of Defense, the treaty allows
registered voters, of which every legislative
temporary basing of friendly foreign troops in
district must be represented by at least three
case of training exercises for the war on
per centum of the registered voters thereof.
terrorism. The Majority Leader of the Senate
Under Section 16, Article XIII of the
contends that whether temporary or not, the
Constitution, the right of the people and their
basing of foreign troops however friendly is
organizations to effective and reasonable
prohibited by the Constitution of BNN which
participation at all levels of social, political and
provides that, "No foreign military bases shall be
economic decision-making shall not be
allowed in BNN territory."
abridged. The State shall, by law facilitate the
establishment of adequate consultation
In case there is indeed an irreconcilable conflict
mechanisms.
between a provision of the treaty and a
provision of the Constitution, in a jurisdiction
Under Section 2. Article XVII of
and legal system like ours, which should
the Constitution, the people may directly
prevail: the provision of the treaty or of the
propose amendments to the Constitution
Constitution? Why? Explain with
through initiative upon a petition of at least
reasons, briefly. (5%)
twelve per centum of the total number of
SUGGESTED ANSWER:
registered voters, of which every legislative In case of conflict between a provision of a
district must be represented by at least three treaty and a provision of the Constitution, the
per centum of the registered voters therein.
provision of the Constitution should prevail.
Phil Con 87; People Power (2003) Section 5(2)(a), Article VIII of the 1987
Constitution authorizes the nullification of a
No I - Is "people power" recognized by the treaty when it conflicts with the Constitution.
1987 Constitution? Explain fully. (Gonzales v. Hechanova, 9 SCRA 230 [1963]).
SUGGESTED ANSWER:
Government Presidential Form vs. Parlia-
"People power" is recognized in mentary Form (Q6-2006)
the Constitution. 1. a) What is the principal identifying feature
Article III, Section 4 of the 1987 of a presidential form of government?
Explain. (2.5%)
Constitution guarantees the right of the people
SUGGESTED ANSWER:
peaceable to assemble and petition the The principal identifying feature of a presidential
government for redress of grievances. form of government is embodied in the
Article VI, Section 32 of the 1987 Constitution separation of powers doctrine. Each
requires Congress to pass a law allowing the department of government exercises powers
people to directly propose and enact laws granted to it by the Constitution and may not
through initiative and to approve or reject any control, interfere with or encroach upon the acts
act or law or part of it passed by Congress or a local done within the constitutional competence of the
legislative body. others. However, the Constitution also gives each
department certain powers by which it

may definitely restrain the others from prevent infringement of its customs, fiscal,
improvident action, thereby maintaining a immigration or sanitary laws and regulations
system of checks and balances among them, within its territory or territorial sea. (Article 33 of the
thus, preserving the will of the sovereign Convention on the Law of the Sea.)
expressed in the Constitution.
The EXCLUSIVE ECONOMIC ZONE is a zone
b) What are the essential characteristics of a extending up to 200 nautical miles from the
parliamentary form of government? (2.5%) baselines of a state over which the coastal state has
SUGGESTED ANSWER: sovereign rights for the purpose of
The essential characteristics of a parliamentary exploring and exploiting, conserving and
form of government are: the fusion of the managing the natural resources, whether living or
legislative and executive branches in nonliving, of the waters superjacent to the
parliament; the prime minister, who is the head of seabed and of the seabed and subsoil, and with
government, and the members of the cabinet, regard to other activities for the economic
are chosen from among the members of exploitation and exploration of the zone.
parliament and as such are accountable to the (Articles 56 and 57 of the Convention on the
latter; and the prime minister may be Law of the Sea.)
removed from office by a vote of loss of
confidence of parliament. There may be a head of Exclusive Economic Zone; Rights of
state who may or may not be elected. the Coastal State (1994)
No. 11: In the desire to improve the fishing
ARTICLE I National Territory methods of the fishermen, the Bureau of
Archipelagic Doctrine (1989) Fisheries, with the approval of the President,
No. 20: What do you understand by entered into a memorandum of agreement to
the archipelagic doctrine? Is this reflected in allow Thai fishermen to fish within 200 miles
the 1987 Constitution? from the Philippine sea coasts on the condition that
SUGGESTED ANSWER: Filipino fishermen be allowed to use Thai fishing
The ARCHIPELAGIC DOCTRINE emphasizes the
equipment and vessels, and to learn modern
unity of land and waters by defining an
technology in fishing and canning.
archipelago either as a group of islands
surrounded by waters or a body of waters 1) Is the agreement valid?
studded with islands. For this purpose, it SUGGESTED ANSWER:
requires that baselines be drawn by connecting the 1) No. the President cannot authorize the
appropriate points of the "outermost islands to Bureau of Fisheries to enter into a
encircle the islands within the archipelago. The memorandum of agreement allowing Thai
waters on the landward side of the baselines fishermen to fish within the exclusive economic
regardless of breadth or dimensions are merely zone of the Philippines, because the
internal waters. Constitution reserves to Filipino citizens the use and
enjoyment of the exclusive economic zone of the
Yes, the archipelagic doctrine is reflected in the
Philippines.
1987 Constitution. Article I, Section 1 provides
that the national territory of the Philippines Section 2. Article XII of the Constitution
includes the Philippine archipelago, with all the provides: “The State shall protect the nation's
islands and waters embraced therein; and the marine part in its archipelagic waters, territorial sea,
waters around, between, and connecting the and exclusive economic zone, and reserve its use
islands of the archipelago, regardless of their and enjoyment to Filipino citizens."
breadth and dimensions, form part of the Section 7, Article XIII of the Constitution
internal waters of the Philippines. provides: "The State shall protect the rights of
subsistence fishermen, especially of local
Contiguous Zone vs. Exclusive Economic communities, to the preferential use of the
Zone (2004) communal marine and fishing resources, both
(2-a-2) Distinguish: The contiguous zone inland and offshore. It shall provide support to
and the exclusive economic zone. such fishermen through appropriate technology and
SUGGESTED ANSWER: research, adequate financial, production, and
CONTIGUOUS ZONE is a zone contiguous to marketing assistance, and other services. The
the territorial sea and extends up to 12 nautical State shall also protect, develop, and
miles from the territorial sea and over which the conserve such resources. The protection shall
coastal state may exercise control necessary to extend to offshore fishing grounds of
subsistence fishermen against foreign intrusion. such as low or non-existent taxation or low
Fishworkers shall receive a just share from their operating costs although the ship has no
labor in the utilization of marine and fishing genuine link with that state. (Harris, Cases and
resources. Materials on International Law, 5th ed., 1998, p. 425.)
Exclusive Economic Zone; Rights of Territory & Government (1996)

the Coastal State (Q1-2005) No. 8: A law was passed dividing the
(c) Enumerate the rights of the coastal state Philippines into three regions (Luzon, Visayas,
in the exclusive economic zone. (3%) and Mindanao), each constituting an
ALTERNATIVE ANSWER: independent state except on matters of foreign
In the EXCLUSIVE ECONOMIC ZONE, the relations, national defense and national
coastal State has sovereign rights for the taxation, which are vested in the Central
purpose of exploring and exploiting, conserving and government. Is the law valid? Explain.
managing the natural resources, whether living or SUGGESTED ANSWER:
non-living, of the waters superjacent to the seabed The law dividing the Philippines into three
and of the seabed and its subsoil, and with regions, each constituting an independent state and
regard to other activities for the economic vesting in a central government matters of foreign
exploitation and exploration of the zone, such as relations, national defense, and national taxation, is
the production of energy from the water, currents unconstitutional.
and winds in an area not extending more than
200 nautical miles beyond the baseline from First, it violates Article I, which guarantees
which the territorial sea is measured. Other the integrity of the national territory of
rights include the production of energy from the the Philippines because it divided the
water, currents and winds, the establishment and Philippines into three states.
use of artificial islands, installations and
structures, marine scientific research and the Second, it violates Section 1, Article II of
protection and preservation of the marine the Constitution, which provides for
environment. (Art. 56, U.N. Convention on the the establishment of democratic and
Law of the Sea) republic States by replacing it with
ALTERNATIVE ANSWER: three States organized as a confederation.
SOVEREIGN RIGHTS — for the purpose of
exploring and exploiting, conserving and Third, it violates Section 22, Article II of the
managing the natural resources, whether living or Constitution, which, while recognizing
non-living, of the seabed and subsoil and the and promoting the rights of indigenous
superjacent waters, and with regard to other cultural communities, provides for national
activities such as the production of energy from the unity and development.
water, currents and winds in an area not
extending more than 200 nautical miles beyond the Fourth, it violates Section 15, Article X of the
baseline from which the territorial sea is Constitution, which, provides for autonomous
measured. (See Art. 56, UNCLOS) regions in Muslim Mindanao and in the
Jurisdiction, inter alia, with regard to: Cordilleras within the framework of national
(1) the establishment and use of artificial sovereignty as well as territorial integrity of the
islands, installations and structures; Republic of the Philippines.
(2) marine scientific research; and
(3) the protection and preservation of Fifth, it violates the sovereignty of the Republic
the marine environment. of the Philippines.
Flag State vs. Flag of Convenience (2004) Territorial Sea vs. Internal Waters (2004)
(2-a-3) Distinguish: The flag state and the flag (2-a-1) Distinguish: The territorial sea and
of convenience. the internal waters of the Philippines.
FLAG STATE means a ship has the nationality of TERRITORIAL SEA is an adjacent belt of sea
the flag of the state it flies, but there must be a with a breadth of 12 nautical miles measured
genuine link between the state and the ship. from the baselines of a state and over which the
(Article 91 of the Convention on the Law of the Sea.) state has sovereignty. (Articles 2 and 3 of the
Convention on the Law of the Sea.) Ship of all
FLAG OF CONVENIENCE refers to a state with states enjoy the right of innocent passage
which a vessel is registered for various reasons
through the territorial sea. (Article 14 of the No. 1; What do you understand by the "Doctrine
Convention on the Law of the Sea.) of Incorporation" in Constitutional Law?
SUGGESTED ANSWER:
Under Section 1, Article I of the 1987 The DOCTRINE OF INCORPORATION means that
Constitution, the INTERNAL WATERS of the the rules of International law form part of the
Philippines consist of the waters around, law of the land and no legislative action is
between and connecting the islands of the required to make them applicable to a country. The
Philippine Archipelago, regardless of their Philippines follows this doctrine, because Section
breadth and dimensions, including the waters in 2. Article II of the Constitution states that the
bays, rivers and lakes. No right of innocent Philippines adopts the generally accepted
passage for foreign vessels exists in the case of principles of international law as part of the law
internal waters. (Harris, Cases and Materials on of the land.
International Law, 5th ed., 1998, p. 407.)
Internal waters are the waters on the landward side Doctrine of Incorporation; Pacta Sunt
of baselines from which the breadth of the territorial Servanda (2000)
sea is calculated. (Brownlie, Principles of Public No X. The Philippines has become a member of the
International Law, 4th ed., 1990, p. 120.) World Trade Organization (WTO) and
resultantly agreed that it "shall ensure the
conformity of its laws, regulations and
ARTICLE II Declaration of administrative procedures with its obligations as
provided in the annexed Agreements." This is
Principles and State Policies assailed as unconstitutional because this
undertaking unduly limits, restricts and impairs
Armed Forces; Servant of the People (2003) Philippine sovereignty and means among
No I - Article II. Section 3, of the 1987 others that Congress could not pass legislation that
Constitution expresses, in part, that the "Armed will be good for our national interest and
Forces of the Philippines is the protector of the general welfare if such legislation will not
people and (of) the State." Describe briefly what this conform with the WTO Agreements. Refute this
provision means. Is the Philippine National Police argument. (5%)
covered by the same mandate? SUGGESTED ANSWER:
FIRST ALTERNATIVE ANSWER: According to Tanada v. Angara, 272 SCRA 18
Article II, Section 3 of the 1987 Constitution (1997), the sovereignty of the Philippines is
means that the Armed Forces of the Philippines subject to restriction by its membership in the
should not serve the interest of the President family of nations and the limitations imposed of
but of the people and should not commit treaty limitations. Section 2. Article II of the
abuses against the people. (Record of the Constitution adopts the generally accepted
Constitutional Commission, Vol. V, p. 133.) This principles of international law as part of the law of
provision is specifically addressed to the Armed
the land. One of such principles is pacta sunt
Forces of the Philippines and not to the
servanda. The Constitution did not envision a
Philippine National Police, because the latter is
hermit-like isolation of the country from the rest of
separate and distinct from the former. (Record
the world.
of the Constitutional Commission, Vol. V, p. 296;
Manalo v. Sistoza. 312 SCR A 239 [1999].) Freedom from Nuclear Weapons; Foreign
SECOND ALTERNATIVE ANSWER: Military Bases (1988)
Article II, Section 3 of the 1987 Constitution can be No. 22: The Secretary of Justice had recently
interpreted to mean that the Armed Forces of ruled that the President may negotiate for a
the Philippines can be a legitimate instrument for modification or extension of military bases
the overthrow of the civilian government if it has agreement with the United States regardless of the
ceased to be the servant of the people. "no nukes" provisions in the 1987
(Bernas, The 1987 Constitution of the Philippines: A Constitution. The President forthwith
Commentary, 2003 ed., p. 66.) This provision
announced that she finds the same opinion
does not apply to the Philippine National Police, "acceptable" and will adopt it. The Senators on the
because it is separate and distinct from the other hand, led by the Senate President, are
Armed Forces of the Philippines. (Record of the skeptical, and had even warned that no treaty
Constitutional Commission, Vol. V, p. 296, Manalo v.
Sistoza. 312 SCRA 239 [1999].)
or international agreement may go into effect
without the concurrence of two-thirds of all
Doctrine of Incorporation; Constitutional members of the Senate.
Law (1997)
A former senator had said, "it is completely the flag must be recognized by law, it
wrong, if not erroneous," and "is an amendment of implies that certain aspects of the flag are
the Constitution by misinterpretation." Some subject to change through legislative action.
members of the Lower House agree with
Secretary Ordonez, while others lament the Principle of Civilian Supremacy (Q6-2006)
latter's opinion as "questionable, unfortunate, and 2. What Constitutional provisions institutionalize
without any basis at all." the principle of civilian supremacy? (2.5%)
Do you or do you not agree with SUGGESTED ANSWER:
the aforementioned ruling of the The following constitutional
Department of Justice? Why? provisions institutionalize the principle
SUGGESTED ANSWER: of civilian supremacy:
No. The Constitution provides that if foreign a. Civilian authority is at all times supreme
military bases, troops or facilities are to be over the military. [Article II, Section 3]
allowed after the expiration of the present b. The installation of the President,
Philippine-American Military Bases Agreement in the highest civilian authority, as
1991, it must be "under a treaty duly the Commander-in-Chief of the military.
concurred in by the Senate and, when the [Ar- ticle VII, Section 18]
Congress so requires, ratified by a majority of c. The requirement that members of
the votes cast by the people in a national the AFP swear to uphold and
referendum." (Art. XVIII, sec. 25) A mere defend the Constitution, which is the
agreement, therefore, not a treaty, without the fundamental law of the civil
concurrence of at least 2/3 of all the members government. [Article XVI, Section 5(1)]
of the Senate will not be valid (Art. VII, sec. 21, Art. d. The requirement that members of
XVIII, sec. 4). With respect to the provision allowing the AFP shall have respect for people's
nuclear weapons within the bases, the Constitution rights in the performance of their duty.
appears to ban such weapons from the Philippine [Article XVI, Section 5(2)]
territory. It declares as a state policy that "the e. Professionalism in the armed forces.
Philippines, consistent with the national interest, [Article XVI, Section 5(3)]
adopts and pursues a policy of freedom from f. Insulation of the AFP from partisan
nuclear weapons in its territory." (Art, II, sec. 8) politics. [Article XVI, Section 5(3)]
However, the deliberations of the Constitutional g. Prohibition against the appointment of an
Commission would seem to indicate that this AFP member in the active service to a
provision of the Constitution is "not something civilian position. [Article XVI, Section 5(4)]
absolute nor 100 percent without exception." h. Compulsory retirement of officers
It may therefore be that circumstances may without extension of service. [Article XVI,
justify a provision on nuclear weapons. Section 5(5)]
i. Requirement of proportional recruitment
from all provinces and cities, so as to
Philippine Flag (Q4-2006) avoid any regional clique from forming
State whether or not the law is within the AFP. [Article XVI, Section 5(7)]
constitutional. Explain briefly. j. A 3-year limitation on the tour of duty of
1. A law changing the design of the Chief of Staff, which although
the Philippine flag. (2%) extendible in case of emergency by the
ALTERNATIVE ANSWER: President, depends on Congressional
The law is invalid considering that under Article declaration of emergency. [Article XVI,
XVI, Section 1 of the 1987 Constitution, the flag Section 5(6)]
of the Philippines shall be red, white, and blue, The establishment of a police force that is
with a sun and three stars, as consecrated and not only civilian in character but also under the
honored by the people and recognized by local executives. [Article XVI, Section 5(7)]
law. Since the Constitution itself
prescribes the design, it can only be changed State Immunity from Suit (1991)
by constitutional amendment. No. 13; In February 1990, the Ministry of the
ALTERNATIVE ANSWER: Army. Republic of Indonesia, invited bids for the
The law is valid, provided that the new design supply of 500,000 pairs of combat boots for the use
does not change the elements and color of the Indonesian Army. The Marikina Shoe
scheme of the flag as stated in the Constitution, and Corporation, a Philippine corporation, which has no
the flag is consecrated and honored by the people. branch office and no assets in Indonesia,
Since the Constitution itself states that submitted a bid to supply 500,000 pairs of
combat boots at U.S. $30 per pair delivered in Consent to the exercise of jurisdiction of
Jakarta on or before 30 October 1990. The a foreign court does not include waiver of
contract was awarded by the Ministry of the the separate immunity from execution.
Army to Marikina Shoe Corporation and was (Brownlie, Principles of Public International
signed by the parties in Jakarta. Marikina Shoe Law, 4th ed., p. 344.) Thus, in Dexter vs.
Corporation was able to deliver only 200,000 Carpenter vs. Kunglig Jarnvagsstyrelsen, 43
pairs of combat boots in Jakarta by 30 October Fed 705, it was held the consent to be sued
1990 and it received payment for 100,000 pairs or a does not give consent to the attachment of
total of U.S. $3,000,000.00. The Ministry of the the property of a sovereign government.
Army promised to pay for the other 100,000 pairs
already delivered as soon as the State Immunity from Suit (1996)
remaining 300,000 pairs of combat boots are No. 6; The Republic of the Balau (formerly
delivered, at which time the said 300,000 pairs will Palau Islands) opened and operated in Manila
also be paid for. Marikina Shoe Corporation failed to an office engaged in trading Balau products with
deliver any more combat boots. Philippine products. In one transaction, the
local buyer complained that the Balau goods
On 1 June 1991, the Republic of Indonesia filed an delivered to him were substandard and he sued
action before the Regional Trial Court of Pasig. the Republic of Balau, before the Regional
Rizal, to compel Marikina Shoe Corporation Trial Court of Pasig, for damages.
to perform the balance of its obligations under a) How can the Republic of Balau invoke its
the contract and for damages. In its Answer, sovereign immunity? Explain.
Marikina Shoe Corporation sets up a b) Will such defense of sovereign
counterclaim for U.S. $3,000,000.00 immunity prosper? Explain.
representing the payment for the 100,000 pairs of SUGGESTED ANSWER:
combat boots already delivered but unpaid. A) The Republic of Balau can invoke
Indonesia moved to dismiss the counterclaim, its sovereign Immunity by filing a motion to
asserting that it is entitled to sovereign dismiss in accordance with Section l(a), Rule
Immunity from suit. The trial court denied the 16 of the Rules of Court on the ground that the
motion to dismiss and issued two writs of court has no jurisdiction over its person.
garnishment upon Indonesian Government
funds deposited in the Philippine National Bank and According to the Holy See vs. Rosario, 238
Far East Bank. Indonesia went to the Court of SCRA 524, in Public International Law, when a
Appeals on a petition for certiorari under Rule 65 of State wishes to plead sovereign immunity in a
the Rules of Court. foreign court, it requests the Foreign Office of
How would the Court of Appeals decide the the State where it is being sued to convey to
case? the court that it is entitled to immunity. In the
SUGGESTED ANSWER: Philippines, the practice is for the foreign
The Court of Appeals should dismiss the government to first secure an executive
petition insofar as it seeks to annul the order endorsement of its claim of sovereign immunity. In
denying the motion of the Government of some cases, the defense of sovereign
Indonesia to dismiss the counterclaim. The immunity is submitted directly to the local court by
counterclaim in this case is a compulsory the foreign government through counsel by filing
counterclaim since it arises from the same a motion to dismiss on the ground that the court has
contract involved in the complaint. As such it no Jurisdiction over its person.
must be set up otherwise it will be barred.
Above all, as held in Froilan vs. Pan Oriental b) No, the defense of sovereign Immunity will
Shipping Co., 95 Phil. 905, by filing a complaint, the not prosper. The sale of Balau products is a
state of Indonesia waived its immunity from suit. It contract involving a commercial activity. In
is not right that it can sue in the courts but it United States vs. Ruiz, 136SCRA487 and
cannot be sued. The defendant therefore acquires United States vs. Guinto, 182 SCRA 644, it was
the right to set up a compulsory stated that a foreign State cannot invoke
counterclaim against it. Immunity from suit if it enters into a commercial
contract. The Philippines adheres to
However, the Court of Appeals should grant the RESTRICTIVE SOVEREIGN IMMUNITY.
petition of the Indonesian government insofar as
it sought to annul the garnishment of the funds State Immunity from Suit (1989)
of Indonesia which were deposited in the Philippine No. 13: A property owner filed an action directly
National Bank and Far East Bank. in court against the Republic of the Philippines
seeking payment for a parcel of land which the SUGGESTED ANSWER:
national government utilized for a road 1) Yes, the Municipality of Calumpit is liable for
widening project. the negligence of its driver Johnny.
(1) Can the government invoke the doctrine of Under Section 24 of the Local Government
non-suitability of the state? Code, local government units are not
(2) In connection with the preceding question, exempt from liability for death or injury to
can the property owner garnish public persons or damage to property.
funds to satisfy his claim for ALTERNATIVE ANSWER:
payment? Explain your answers. No, the municipality is not liable for the
SUGGESTED ANSWER: negligence of Johnny, the prevailing rule in the
(1) No, the government cannot invoke the law of municipal corporations is that
doctrine of state of immunity from suit. As held in a municipality is not liable for the torts
Ministerio vs. Court of First Instance of Cebu, 40 committed by its regular employees in the
SCRA 464, when the government discharge of governmental functions. The
expropriates property for public use without municipality is answerable only when it
paying just compensation, it cannot invoke its is acting in a proprietary capacity.
immunity from the suit. Otherwise, the right
guaranteed in Section 9, Article III of the 1987 In the case at bar, Johnny was a regular
Constitution that private property shall not be employee of the Municipality of Calumpit as
taken for public use without just compensation driver of its dump truck; he committed a tortious act
will be rendered nugatory. while discharging a governmental function for the
municipality, ie., driving recklessly the said truck
(2) No, the owner cannot garnish public funds to loaded with sand for the repair of municipal
satisfy his claim for payment, Section 7 of Act No. streets. Undoubtedly then, Johnny as driver of the
3083 prohibits execution upon any judgment dump truck was performing a duty or task pertaining
against the government. As held in Republic vs. to his office. The construction or maintenance of
Palacio, 23 SCRA 899, even if the government may public streets are admittedly governmental
be sued, it does not follow that its properties may be activities. At the time of the accident, Johnny
seized under execution. was engaged in the discharge of governmental
ALTERNATIVE ANSWER: functions.
(2) No, funds of the government on deposit in
the bank cannot be garnished for two reasons: 1. Hence, the death of the two passengers of the
Under Art. II, Sec. 29 (1) public funds jeepney -tragic and deplorable though it may be -
cannot be spent except in pursuance of an imposed on the municipality no duty to pay
appropriation made by law, and monetary compensation, as held in Municipality of
2. essential public services will be impaired if San. Fernando v. Firme, 195 SCRA 692.
funds of the government were subject
to execution, (Commissioner of State Immunity from Suit (1992)
Public Highways vs. San Diego, 31 No. 9: The Northern Luzon Irrigation Authority
SCRA 616 (1970)). The remedy of the (NLIA) was established by a legislative charter
prevailing party is to have the judgment to strengthen the irrigation systems that supply
credit in his favor included in the general water to farms and commercial growers in the
appropriations law for the next year. area. While the NLIA is able to generate
revenues through its operations, it receives an
State Immunity from Suit (1994) annual appropriation from Congress. The NLIA is
No. 6; Johnny was employed as a driver by the authorized to "exercise all the powers of a
Municipality of Calumpit, Bulacan. While driving corporation under the Corporation Code."
recklessly a municipal dump truck with its
load of sand for the repair of municipal Due to a miscalculation by some of its
streets, Johnny hit a jeepney. Two employees, there was a massive irrigation
passengers of the jeepney were killed. overflow causing a flash flood in Barrio Zanjera. A
child drowned in the incident and his parents now
The Sangguniang Bayan passed an file suit against The NLIA for damages.
ordinance appropriating P300,000 as
compensation for the heirs of the victims. May the NLIA validly invoke the immunity of the
1) Is the municipality liable for the negligence State from suit? Discuss thoroughly.
of Johnny? SUGGESTED ANSWER:
2) Is the municipal ordinance valid?
No, the Northern Luzon Irrigation Authority may not economic conditions of those engaged in
invoke the immunity of the State from suit, the tobacco industry.
because, as held in Fontanilla vs. Maliaman,
179 SCRA 685 and 194 SCRA 486, irrigation is a State Immunity from Suit (1987)
proprietary function. Besides, the Northern Luzon (a) "X" filed a case against the Republic of the
Irrigation Authority has a juridical personality Philippines for damages caused his yacht,
separate and distinct from the government, a which was rammed by a navy vessel.
suit against it is not a suit against the (b) "X" also sued in another case the
State. Since the waiver of the immunity from Secretary of Public Works and the
suit is without qualification, as held in Rayo vs. Republic of the Philippines for payment of
Court of First Instance of Bulacan, 110 SCRA the compensation of the value of his land,
456, the waiver includes an action based on a which was used as part of the tarmac of
quasi-delict. the Cebu International Airport, without prior
expropriation proceedings.
State Immunity from Suit (1999)
A. 1.) What do you understand by The Solicitor General moved to dismiss the two
state immunity from suit? Explain. (2%) cases invoking state immunity from suit Decide.
2.) How may consent of the state to be SUGGESTED ANSWER:
sued be given? Explain. (2%) (a) The government cannot be sued for
SUGGESTED ANSWER: damages considering that the agency which
1.) STATE IMMUNITY FROM SUIT means caused the damages was the Philippine Navy.
that the State cannot be sued without its Under Art. 2180 of the Civil Code, the state
consent. A corollary of such principle is that consents to be sued for a quasi-delict only
properties used by the State in the performance of when the damage is caused by its special
its governmental functions cannot be subject to agents. Hence, the Solicitor General's motion
judicial execution. should be granted and the suit brought by "X"
be dismissed.
2.) Consent of the State to be sued may be
made expressly as in the case of a specific, (b) But the government CANNOT INVOKE the
express provision of law as waiver of State state's immunity from suit. As held in Ministerio v.
immunity from suit is not inferred lightly (e.g. C.A. Court of First Instance. 40 SCRA 464 (1971), which
327 as amended by PD 1445} or impliedly as also involved the taking of private property
when the State engages in proprietary functions without the benefit of expropriation proceeding,
v. Ruiz, U.S. v. Guinto) (U.S. "The doctrine of governmental immunity from
or when it files a suit in suit cannot serve as an instrument for
which case the adverse party may file perpetrating an injustice on a citizen. . . . When
a counterclaim (Froilan v. Pan Oriental Shipping) the government takes any property for public
or when the doctrine would in effect be use, which is conditional upon the payment of
used to perpetuate an injustice (Amigable v. just compensation, to be judicially ascertained, it
Cuenca, 43 SCRA 360). makes manifest that it submits to the jurisdiction
of the court." The Solicitor General's motion to
State Immunity from Suit (1999)
dismiss should, therefore, be denied.
No VI - B. The employees of the Philippine
Tobacco Administration (PTA) sued to recover
overtime pay. In resisting such claim, the PTA State Immunity vs. Waiver of Immunity
theorized that it is performing governmental (1997)
functions. Decide and explain. (2%)
No, 6: It is said that "waiver of immunity by the
SUGGESTED ANSWER: State does not mean a concession of
As held in Philippine Virginia Tobacco
its liability". What are the implications of
Administration v. Court of Industrial Relations, 65
this phrase?
SCRA 416, the Philippine Tobacco SUGGESTED ANSWER:
Administration is not liable for overtime pay, The phrase that waiver of immunity by the State
since it is performing governmental functions. does not mean a concession of liability means
Among its purposes are to promote the that by consenting to be sued, the State does
effective merchandising of tobacco so that not necessarily admit it is liable. As stated in
those engaged in the tobacco industry will have Philippine Rock Industries, Inc. vs. Board of
economic security, to stabilize the price of Liquidators, 180 SCRA 171, in such a case the
tobacco, and to improve the living and State is merely giving the plaintiff a chance to
prove that the State is liable but the State
retains the right to raise all lawful defenses. c) Section 1, Article XVII of the Constitution
provides: "The FLAG OF THE PHILIPPINES
State Immunity from Suit (1993) shall be red, white, and blue, with a sun and
No 19: Devi is the owner of a piece of land. three stars, as consecrated and honored by the
Without prior expropriation or negotiated sale, people and recognized by law."
the national government used a portion thereof for
the widening of the national highway. Devi filed Section 2, Article XVI of the Constitution states:
a money claim with the Commission on Audit The Congress may by law, adopt a new
which was denied. Left with no other recourse, name for the country, a national anthem, or a
Devi filed a complaint for recovery of property national seal, which shall all be truly
and/or damages against the Secretary of Public reflective and symbolic of the ideals, history,
Works and Highways and the Republic of and traditions of the people. Such law shall
the Philippines, The defendant moved for take effect only upon its ratification by the
dismissal of the complaint contending that people in a national referendum."
the government cannot be sued without its
consent. The RTC dismissed the complaint. On d) Section 22, Article II of the Constitution
appeal, how would you decide the case. provides: The State recognizes and promotes
the rights of INDIGENOUS CULTURAL
SUGGESTED ANSWER: COMMUNITIES within the framework of
The order dismissing the complaint should be national unity and development."
reversed. In Ministerio v. Court of First Instance of
Cebu, 40 SCRA 464, it was held that when the Section 5, Article XII of the Constitution reads:
government takes property from a private The State, subject to the provisions of this
landowner without prior expropriation or Constitution and national development policies
negotiated sale, the landowner may maintain a suit and programs, shall protect the rights of
against the government without violating the indigenous cultural communities to their
doctrine of government Immunity from suit. The ancestral lands to ensure their economic, social and
government should be deemed to have waived cultural well-being.
impliedly its immunity from suit. Otherwise,
the constitutional guarantee that private The Congress may provide for the applicability
property shall not be taken for public use without of customary laws governing property rights or
just compensation will be rendered nugatory. relations in determining the ownership and
extent of the ancestral domains."
State Principles & Policies (1994) Section 6, Art. XIII of the Constitution provides: The
No. 1; What is the state policy on: State shall apply the principles of
a) working women? AGRARIAN REFORM or stewardship,
b) ecology? whenever applicable in accordance with law, in the
c) the symbols of statehood? disposition or utilization of other natural
d) cultural minorities? resources, including lands of the public domain
e) science and technology? under lease or concession suitable to
agriculture, subject to prior rights, homestead
SUGGESTED ANSWER: rights of small settlers, and the rights of
a) Section 14, Article XIII of the Constitution indigenous communities to their ancestral
provides: "The State shall protect WORKING lands.
WOMEN by providing safe and healthful
working conditions, taking into account their The State may resettle landless farmers
maternal functions, and such facilities and and farm workers in its own agricultural
opportunities that will enhance their welfare and estates which shall be distributed to them in
enable them to realize their full potential in the the manner provided by law."
service of the nation."
Section 17. Article XIV of the Constitution
b) Section 16, Article II of the Constitution states: "The State shall recognize, respect and
provides: The State shall protect and advance protect the rights of indigenous cultural
the right of the people and their posterity to a communities to preserve and develop their
balanced and healthful ECOLOGY in accord with cultures, traditions, and institutions. It shall
the rhythm and harmony of nature."
consider these rights in the formulation Section 12, Article XIV of the Constitution
of national plans and policies." reads: The State shall regulate the transfer and
promote the adaptation of technology from all
e) Section 17, Article II of the Constitution sources for the national benefit. It shall
provides: "The State shall give priority to encourage widest participation of private
EDUCATION, SCIENCE and TECHNOLOGY, groups, local governments, and community-
ARTS, CULTURE, and SPORTS to foster based organizations in the generation and
patriotism and nationalism, accelerate social utilization of science and technology."
progress, and promote total human liberation
NOTE: It is suggested that if an examinee gave a substantive
and development." answer without giving the exact provisions of the Constitution,
then he should be given full credit. Further, one provision
Section 14, Article XII of the Constitution reads in quoted/discussed by the examinee should be sufficient for him to
part: "The sustained development of a be given full credit.
reservoir of NATIONAL TALENTS consisting of
Filipino scientists, entrepreneurs, professionals, Transparency; Matters of Public
managers, high-level technical manpower and Interest (1989)
skilled workers and craftsmen shall be No. 3: Does the 1987 Constitution provide for a
promoted by the State, The State shall policy of transparency in matters of
encourage appropriate technology and regulate Its public interest? Explain.
transfer for the national benefit. SUGGESTED ANSWER:
Yes, the 1987 Constitution provides for a policy
Sub-section 2, Section 3. Article XIV of the of transparency in matters of public interest.
Constitution states: "They (EDUCATIONAL Section 28, Article II of the 1987
INSTITUTIONS) shall inculcate patriotism and Constitution provides:
nationalism, foster love of humanity, respect for 1. "Subject to reasonable conditions
human rights, appreciation of the role of prescribed by law, the State adopts and
national heroes in the historical development of the implements a policy of full disclosure of all
country, teach the rights and duties of its transactions involving public interest,"
citizenship, strengthen ethical and spiritual
values, develop moral character and personal 2. Section 7, Article III of the 1987 Constitution
discipline, encourage critical and creative states: "The right of the people
thinking, broaden scientific and technological to information on matters of public
knowledge, and promote vocational efficiency." concern shall be recognized, Access
to official records, and to documents,
Section 10. Article XIV of the Constitution and papers pertaining to official acts,
declares: "SCIENCE and TECHNOLOGY are transactions, or decisions, as well as
essential for national development and to government research data used as
progress. The State shall give priority to basis for policy development, shall be
research and development, invention, afforded the citizen, subject to such
innovation, and their utilization; and to science limitations as may be provided by law."
and technology education, training, services. It
shall support indigenous, appropriate, and self- 3. Section 20, Article VI of the 1987
reliant scientific and cultural capabilities, and Constitution reads: "The records and books of
their application to the country's productive account of the Congress shall be
systems and national life." preserved and be open to the public in
accordance with law, and such books shall be
Section 11, Article XIV of the Constitution audited by the Commission on Audit which
provides: "The Congress may provide for shall publish annually an itemized list of
incentives, including TAX DEDUCTIONS, to amounts paid to and expenses incurred for
encourage private participation in programs of each member."
basic and applied scientific research.
Scholarships, grants-in-aid or other forms of 4. Under Section 17, Article XI of the 1987
Incentives shall be provided to deserving Constitution, the sworn statement of assets,
science students, researchers, scientists, liabilities and net worth of the President, the
investors, technologists, and specially gifted Vice-President, the Members of the
citizens." Cabinet, the Congress, the Supreme Court, the
Constitutional Commission and other
constitutional offices, and officers of the

armed forces with general or flag rank filed
upon their assumption of office shall be 5. "A public officer or employee shall, upon
disclosed to the public in the assumption of office, and as often as thereafter may
manner provided by law. be required by law, submit a declaration under
oath of his assets, liabilities, and net worth. In
5. Section 21, Article XII of the Constitution the case of the President, the Vice President,
declares: "Information on foreign loans the Members of the Cabinet, the Congress,
obtained or guaranteed by the government the Supreme Court, the Constitutional
shall be made available to the public." Commissions and other constitutional
offices, and officers of the armed forces with
6. As held in Valmonte vs. Belmonte, G.R. No. general or flag rank, the declaration shall be
74930, Feb. 13, 1989, these provisions disclosed to the public in the manner provided
on public disclosures are intended to by law." (Section 17, Article XI)
enhance the role of the citizenry in
governmental decision-making as well 6. "Information on foreign loans obtained or
as in checking abuse in government. guaranteed by the Government shall be made
available to the public." (Section 21 Article XII)
Transparency; Matters of Public As explained In Valmonte v. Belmonte,
Interest (2000) 170 SCRA 256 (1989), the purpose of
No V. State at least three constitutional the policy is to protect the people from
provisions reflecting the State policy on abuse of governmental power. If access to
transparency in matters of public interest. What is information of public concern is
the purpose of said policy? (5%) denied, the postulate "public office is a
SUGGESTED ANSWER: public trust" would be mere empty
The following are the constitutional words.
provisions reflecting the State policy on {Note: The examinee should be given
transparency in matters of public interest: full credit if he gives any three of the
1. "Subject to reasonable conditions above-mentioned provisions.}
prescribed by law, the State adopts and
Implements a policy of full public disclosure of ARTICLE III Bill of Rights
all its transactions involving public interest."
(Section 28, Article II) Bill of Attainder (1987)
2. The right of the people to information on No. XI: Congress passed a law relating
matters of public concern shall be recognized.
to officials and employees who had served
in the Government for the period from
Access to official records, and to documents,
September 21, 1972 up to February 25, 1986.
and papers pertaining to official acts,
(a) One provision of the law declared all
transactions, or decisions, as well as to officials from the rank of assistant head of a
government research data used as basis for department, bureau, office or agency
policy development, shall be afforded to citizen, "Unfit" for continued service in the
subject to such limitations as may be provided government and declared their respective
by law." (Section 7, Article III) positions vacant.
(b) Another provision required all the other
3. The records and books of accounts of the
officials and employees to take an oath of
Congress shall be preserved and be open to
loyalty to the flag and government as a
the public in accordance with law, and such
condition for their continued employment.
books shall be audited by the Commission on
Are the two provisions valid? Why?
Audit which shall publish annually an itemized
SUGGESTED ANSWER:
list of amounts paid to and expenses incurred (a) The law is a bill of attainder by
for each Member." (Section 20. Article VI) which Congress, by assuming judicial
magistracy, in effect declares all officials
4. The Office of the Ombudsman shall have
and employees during martial law
the following powers, functions, and duties:
(September 21, 1972- February 25, 1986)
XXX XXX
(6) Publicize matters covered by its
as disloyal and, on this basis, removes
investigation when circumstances so
some while subjecting others to a loyalty test.
warrant and with due prudence," With respect to the provision declaring positions
(Section 12, Article XI) vacant, even the power to reorganize can not
be invoked because under the Freedom
Constitution such power can be exercised only by Custodial Investigation;
the President and only up to February 25, 1987. Extrajudicial Confession (2001)
Since the law under question was presumably No IX - Rafael, Carlos and Joseph were
passed after February 25, 1987 and by accused of murder before the Regional Trial
Congress, it is unconstitutional. Court of Manila. Accused Joseph turned state
witness against his co-accused Rafael and
(b) With respect to the provision requiring Carlos, and was accordingly discharged from the
the loyalty test, loyalty as a general rule information. Among the evidence presented by
is a relevant consideration in assessing the prosecution was an extrajudicial
employees' fitness. However, the requirement confession made by Joseph during the
in this case is not a general requirement custodial Investigation, implicating Rafael and
but singles out "martial law" employees Carlos who, he said, together with him
and therefore is administered in a (Joseph), committed the crime. The
discriminatory manner. Loyalty, therefore, extrajudicial confession was executed without the
while a relevant consideration in other assistance of counsel.
circumstances, is being employed in this
case for an unconstitutional purpose. Accused Rafael and Carlos
vehemently objected on the ground that
Bill of Attainder (1990) said extrajudicial confession was
No. 1; Executive Orders Nos. 1 and 2 issued by inadmissible in evidence against them.
President Corazon C. Aquino created the
Presidential Commission on Good Government Rule on whether the said
(PCGG) and empowered it to sequester any extrajudicial confession is admissible in
property shown prima facie to be ill-gotten evidence or not. (5%)
wealth of the late President Marcos, his FIRST ALTERNATIVE ANSWER:
relatives and cronies. Executive Order No. 14 According to People vs. Balisteros, 237 SCRA
vests on the Sandiganbayan jurisdiction to try 499 (1994), the confession is admissible. Under
hidden wealth cases. On April 14, 1986, after Section 12, Article III of the Constitution, the
an investigation, the PCGG sequestered the confession is inadmissible only against the one who
assets of X Corporation, Inc. confessed. Only the one whose rights were violated
(1) X Corporation, Inc. claimed that can raise the objection as his right is personal.
President Aquino, as President, could
not lawfully issue Executive Orders SECOND ALTERNATIVE ANSWER;
Nos. 1, 2 and 14, which have the force According to People us. Jara, 144
of law, on the ground that legislation is a SCRA 516(1986), the confession is
function of Congress. Decide. inadmissible. If it is inadmissible against the
(2) Said corporation also questioned the one who confessed, with more reason it
validity of the three executive orders on the should be inadmissible against others.
ground that they are bills of attainder and,
therefore, unconstitutional. Decide. Custodial Investigation; Extrajudicial
SUGGESTED ANSWER: Confession; Police Line-Up (1994)
(1) Executive Orders Nos. 1, 2 and 14 No. 10: An information for parricide was filed
were issued in 1986. At that time President against Danny. After the NBI found an
Corazon Aquino exercised legislative power .... eyewitness to the commission of the crime.
Danny was placed in a police line-up where he was
(2) Executive Orders Nos. 1, 2 and 14 are not identified as the one who shot the victim. After
bills of attainder. A bill of attainder is a the line-up, Danny made a confession to a
legislative act which inflicts punishment without newspaper reporter who interviewed him.
judicial trial. Accordingly, it was held in Bataan 1) Can Danny claim that his identification
Shipyards and Engineering company. Inc. v. by the eyewitness be excluded on the
Presidential Commission on Good Government, that ground that the line-up was made
Executive Orders Nos. 1, 2 and 14 are not bills of without benefit of his counsel?
attainder, because they do not inflict any 2) Can Danny claim that his confession be
punishment. On the contrary, they expressly excluded on the ground that he was
provide that any judgment that the property not afforded his "Miranda" rights?
sequestered is ill-gotten wealth is to be made SUGGESTED ANSWER:
by a court (the Sandiganbayan) only after trial.
1) No, the identification of Danny, a private valid under Section 5(b).Rule 113 of the Rules
person, by an eyewitness during the line-up on Criminal Procedure. According to People vs.
cannot be excluded in evidence. In accordance with Lamsing, 248 SCRA 471, the right to counsel
the ruling in People vs. Hatton, 210 SCRA 1, the does not extend to police line-ups, because they
accused is not entitled to be assisted by counsel are not part of custodial investigations. However,
during a police line-up, because it is not part of according to People vs. Macan 238 SCRA 306,
custodial investigation. after the start of custodial investigation, if
the accused was not assisted by counsel, any
ALTERNATIVE ANSWER; identification of the accused in a police line-up is
Yes, in United States v. Wade, 338 U.S. 218 inadmissible.
(1967) and Gilbert v. California, 338 U.S. 263
(1967). it was held that on the basis of the Custodial Investigation; Right to Counsel
Sixth, rather than the Fifth Amendment (1988)
(equivalent to Art. III, Sec. 14 (2) rather than No. 15: Armando Salamanca, a notorious
Sec. 12(1)), the police line-up is such a critical stage police character, came under custodial
that it carries "potential substantial investigation for a robbery in Caloocan City.
prejudice" for which reason the accused is From the outset, the police officers informed
entitled to the assistance of Counsel. him of his right to remain silent, and also
his right to have a counsel of his choice, if
2) No. Danny cannot ask that his confession to he could afford one or if not, the government
a newspaper reporter should be excluded in would provide him with such counsel.
evidence. As held in People vs. Bernardo, 220
SCRA 31, such an admission was not He thanked the police investigators, and
made during a custodial interrogation but a declared that he fully understands the rights
voluntary statement made to the media. enumerated to him, but that, he is voluntarily
waiving them. Claiming that he sincerely
Custodial Investigation; Police Line-Up desires to atone for his misdeeds, he gave a
(1997) written statement on his participation in the
No. 10: A, while on board a passenger jeep one crime under investigation.
night, was held up by a group of three
teenagers who forcibly divested her of her In the course of the trial of the criminal case for the
watch, necklace and wallet containing P100.00. same robbery, the written admission of
That done, the trio jumped off the passenger Salamanca which he gave during the custodial
jeep and fled. B, the jeep driver, and A investigation, was presented as the only
complained to the police to whom they gave evidence of his guilt. If you were his counsel,
description of the culprits. According to the jeep what would you do? Explain your answer.
driver, he would be able to identify the culprits if SUGGESTED ANSWER:
presented to him. Next morning A and B were I would object to it on the ground that the waiver of
summoned to the police station where five the rights to silence and to counsel is void,
persons were lined up before them for having been made without the presence of
identification. A and B positively identified C and counsel. (Art. III, sec. 12(1); People v. Galit,
D as the culprits. After preliminary 135 SCRA 465 (1980). The waiver must also be in
investigation. C and D and one John Doe were writing, although this requirement might
charged with robbery in an information filed possibly have been complied with in this case
against them in court. C and D set up, in by embodying the waiver in the written
defense, the illegality of their apprehension, confession. It should also be noted that under
arrest and confinement based on the Rule 134, sec. 3, even if the extrajudicial
identification made of them by A and B at a confession is valid, it is not a sufficient ground
police line-up at which they were not assisted for conviction if it is not corroborated by
by counsel. How would you resolve the issues evidence of corpus delicti.
raised by C and D?
SUGGESTED ANSWER: Custodial Investigation; Right to Counsel
The arguments of the accused are untenable. (1993)
As held in People vs. Acot, 232 SCRA 406, the No. 17; In his extrajudicial confession executed
warrantless arrest of accused robbers before the police authorities, Jose Walangtakot
Immediately after their commission of the crime by admitted killing his girlfriend in a fit of jealousy.
police officers sent to look for them on the This admission was made after the
basis of the information related by the victims is following answer and question to wit:
T - Ikaw ay may karapatan pa rin kumuha ng SUGGESTED ANSWER:
serbisyo ng isang abogado para makatulong mo
sa imbestigasyong ito at kung wala kang
The confession of Ramos is not admissible,
makuha, ikaw ay aming bibigyan ng libreng since the counsel assigned to him did
abogado, ano ngayon ang iyong masasabi?" not advise him of his rights. The fact
"S - Nandiyan naman po si Fiscal (point that his confession was taken before the
to Assistant Fiscal Aniceto Malaputo) kaya effectivity of the 1987 Constitution is of no
hindi ko na kinakailanganang abogado." moment. Even prior to the effectivity of the
1987 Constitution, the Supreme Court
During the trial. Jose Walangtakot repudiated his already laid down strict rules on waiver of
confession contending that it was made without the rights during investigation in the case of
the assistance of counsel and therefore People v. Galit, 135 SCRA 465 (1985).
Inadmissible in evidence. Decide.
SUGGESTED ANSWER: Custodial Investigation; Right to Counsel;
The confession of Jose Walangtakot is Receipt of Property Seized (2002)
inadmissible in evidence. The warning given to him No VIII. One day a passenger bus conductor
is insufficient in accordance with the ruling in found a man's handbag left in the bus. When
People v. Duero, 104 SCRA 379, he should the conductor opened the bag, he found inside a
have been warned also that he has the right to catling card with the owner's name (Dante
remain silent and that any statement he makes may Galang) and address, a few hundred peso bills, and
be used as evidence against him. Besides, under a small plastic bag containing a white
Art. III, Sec. 12(1) of the Constitution, the counsel powdery substance. He brought the powdery
assisting a person being investigated must be substance to the National Bureau of
independent. Assistant Fiscal Aniceto Malaputo Investigation for laboratory examination and it
could not assist Jose Walangtakot. As held in was determined to be methamphetamine
People v. Viduya, 189 SCRA 403, his function is hydrochloride or shabu, a prohibited drug.
to prosecute criminal cases. To allow him to act as Dante Galang was subsequently traced and
defense counsel during custodial investigations found and brought to the NBI Office where he
would render nugatory the constitutional admitted ownership of the handbag and its
rights of the accused during custodial contents. In the course of the interrogation by
investigation. What the Constitution requires is NBI agents, and without the presence and
a counsel who will effectively undertake the assistance of counsel, Galang was made to sign
defense of his client without any conflict of a receipt for the plastic bag and its shabu contents.
interest. The answer of Jose Walangtakot Galang was charged with illegal possession
indicates that he did not fully understand his of prohibited drugs and was convicted.
rights. Hence, it cannot be said that he knowingly
and intelligently waived those rights. On appeal he contends that -
A. The plastic bag and its contents are
inadmissible in evidence being the product of
Custodial Investigation; Right to Counsel an illegal search and seizure; (3%) and
(2000) B. The receipt he signed is also inadmissible
No XI. On October 1, 1985, Ramos was as his rights under custodial investigation
arrested by a security guard because he were not observed. (2%)
appeared to be "suspicious" and brought to a Decide the case with reasons.
police precinct where in the course of the SUGGESTED ANSWER:
investigation he admitted he was the killer in an A. It is admissible...
unsolved homicide committed a week earlier. B. The receipt which Galang signed
The proceedings of his investigation were put in without the assistance of counsel is not
writing and dated October 1, 1985, and the only admissible in evidence. As held in People
participation of counsel assigned to him was his v. Castro, 274 SCRA 115 {1997), since
mere presence and signature on the statement. The the receipt is a document admitting the
admissibility of the statement of Ramos was offense charged, Galang should have been
placed in issue but the prosecution claims that the assisted by counsel as required by Article
confession was taken on October 1, 1985 and III, Section 11 of the Constitution.
the 1987 Constitution providing for the right to
counsel of choice and opportunity to retain, took Custodial Investigation; Police Line-up
effect only on February 2, 1987 and cannot be given (1993)
retroactive effect. Rule on this. (3%) No. 9: Johann learned that the police were
looking for him in connection with the rape of an
18-year old girl, a neighbor. He went to the Boulevard, which is also owned by
police station a week later and presented X. May they lawfully seize the
himself to the desk sergeant. Coincidentally, the said unlicensed firearms? Explain
rape victim was in the premises executing an your answer.
extrajudicial statement. Johann, along with six SUGGESTED ANSWER:
(6) other suspects, were placed in a police line- up (1) Yes, the police operatives may
and the girl pointed to him as the rapist. lawfully seize the cocaine, ....
Johann was arrested and locked up in a cell.
Johann was charged with rape in court but prior to (2) No, X cannot successfully challenge
arraignment invoked his right to preliminary the legality of the search simply because the
investigation. This was denied by the judge, and peace officers did not inform him about his
thus, trial proceeded. After the prosecution right to remain silent and his right to
presented several witnesses, Johann through counsel. Section 12(1), Article III of the
counsel, invoked the right to bail and filed a 1987 Constitution provides:
motion therefor, which was denied outright by "Any person under investigation for
the Judge. Johann now files a petition for the commission of an offense shall
certiorari before the Court of Appeals arguing have the right to be informed of
that: his right to remain silent and to
2) He should have been informed of his right have competent and independent
to be represented by counsel prior to counsel preferably of his own choice."
his identification via the police line up. Decide.
SUGGESTED ANSWER: As held in People v. Dy, 158 SCRA 111. for this
2} Pursuant to the decision in People us. provision to apply, a suspect must be
Castmillo. 213. SCRA 777, Johann need not be under investigation. There was no
informed of his right to counsel prior to his investigation involved in this case.
identification during the police line-up. The
police line-up is not part of custodial (3) The unlicensed firearms stored at 12 Shaw
investigation, since Johann was not being Boulevard may lawfully be seized ...
questioned but was merely being asked to
exhibit his body for identification by a witness. Custodial Investigation; Rights (1993)
ALTERNATIVE ANSWER No. 4: Larry was an overnight guest in a motel. After
It may be argued that in United States vs. he checked out the following day, the
Wade. 388 U.S. 218 (1967) and Gilbert vs. chambermaid found an attache case which she
California. 388 U.S. 263 (1967) It was held that on surmised was left behind by Larry. She turned it
the basis of the Sixth, rather than the Fifth over to the manager who, to determine the
Amendment (equivalent to Art. III. sec. 14 (2) name and address of the owner, opened the
rather than sec. 12 (1)), the police lineup is attache case and saw packages which had a
such a "critical stage" that it carries "potential peculiar smell and upon squeezing felt like
substantial prejudice" for which reason the dried leaves. His curiosity aroused, the
accused is entitled to the assistance of counsel. manager made an opening on one of the
packages and took several grams of the
Custodial Investigation; Rights (1990) contents thereof. He took the packages to the
No. 9; Some police operatives, acting under NBI, and in the presence of agents, opened the
a lawfully issued warrant for the purpose packages, the contents of which upon
of searching for firearms in the House of X laboratory examination, turned out to be
located at No. 10 Shaw Boulevard, marijuana flowering tops, Larry was
Pasig, Metro Manila, found, instead of subsequently found, brought to the NBI Office
firearms, ten kilograms of cocaine. where he admitted ownership of the attache
(1) May the said police operatives lawfully case and the packages. He was made to sign a
seize the cocaine? Explain your answer. receipt for the packages. Larry was charged in court
(2) May X successfully challenge the legality for possession of prohibited drugs. He was
of the search on the ground that the convicted. On appeal, he now poses the
peace officers did not inform him following issues:
about his right to remain silent and his 1) The packages are inadmissible in evidence
right to counsel? Explain your answer. being the product of an illegal search
(3) Suppose the peace officers were able to find and seizure;
unlicensed firearms in the house in an
adjacent lot, that is. No, 12 Shaw
2) Neither is the receipt he signed admissible, passing motor vehicles. A 19-year old boy, who
his rights under custodial investigation finished fifth grade, while driving, was stopped
not having been observed. Decide. by the authorities at the checkpoint. Without any
SUGGESTED ANSWER: objection from him, his car was inspected, and
On the assumption that the issues were the search yielded marijuana leaves hidden in the
timely raised the answers are as follows: trunk compartment of the car. The prohibited
1) The packages are admissible in evidence. ... drug was promptly seized, and the boy was
brought to the police station for questioning.
2) The receipt is not admissible in evidence.
According to the ruling in People vs. Mirantes, (1) Was the search without warrant legal?
209 SCRA 179, such receipt is in effect an (2) Before interrogation, the policeman on duty
extrajudicial confession of the commission of an informed the boy in English that he does "have
offense. Hence, if it was signed without the a right to remain silent and the right to counsel."
assistance of counsel, in accordance with However, there was no counsel available as
Section 12(3), Article IV of the Constitution, it is it was midnight. He declared orally that he did
inadmissible in evidence. [People v. Duhan, not need any lawyer as he was innocent, since
142 SCRA 100 (1986)]. he was only bringing the marijuana leaves
to his employer in Quezon City and was
Custodial Investigation; Rights (1996) not a drug user. He was charged with illegal
No. 3: 1) A, who was arrested as a suspect in a possession of prohibited drugs. Is his waiver
murder case was not represented by counsel of the right to counsel valid?
during the "question and answer" stage. SUGGESTED ANSWER:
However, before he was asked to sign his (1) No, the search was not valid, because there
statements to the police investigator, the latter was no probable cause ....
provided A with a counsel, who happened to be at
the police station. After conferring with A, the (2) No, the waiver of the right to counsel is not
counsel told the police investigator that A was valid, since it was not reduced in writing
ready to sign the statements. and made in the presence of counsel.
Under Section 12(1), Article III of the 1987
Can the statements of A be presented in court Constitution to be valid, the waiver must be
as his confession? Explain. made in writing and in the presence of counsel.
SUGGESTED ANSWER:
1) No, the statements of A cannot be presented in Double Jeopardy (1988)
court as his confession. He was not assisted by No. 21: The Filipino seamen detained at Kota
counsel during the actual questioning. There is no Kinabalu, allegedly fishing in Malaysian
showing that the lawyer who belatedly conferred territorial waters, had been acquitted, after trial, by
with him fully explained to him the nature and the sessions court in the same city. They could
consequences of his confession. In People vs. not be released and returned to the
Compil 244 SCRA 135, the Supreme Court Philippines, because the prosecution had
held that the accused must be assisted by appealed the judgment of acquittal to the
counsel during the actual questioning and Supreme Court of Malaysia.
the belated assistance of counsel before he
signed the confession does not cure the defect. Assume the situations had been reversed and a
Malaysian had been apprehended in Shasi,
ALTERNATIVE ANSWER: Sulu, for an alleged offense, charged before the
Yes, the statements of A can be presented in Regional Trial Court and after trial acquitted.
court as his confession. As held in People vs.
Rous, 242 SCRA 732, even if the accused was not May the Provincial Fiscal of Sulu appeal
assisted by counsel during the questioning, his such judgment of acquittal to the Supreme
confession is admissible if he was able to Court, like what the Malaysians did in the
consult a lawyer before he signed. case of the Filipino fishermen at Kota
Kinabalu? Explain your answer.
Custodial Investigation; Rights (1989) SUGGESTED ANSWER:
No. 7: Pursuing reports that great quantities of No, because it would place the accused in
prohibited drugs are being smuggled at double jeopardy, contrary to Art. III, sec. 21 of
nighttime through the shores of Cavite, the our Constitution. PD No. 1599 prohibits any
Southern Luzon Command set up checkpoints at person not a citizen to explore or exploit any of the
the end of the Cavite coastal road to search resources of the exclusive economic zone
and makes violation of the prohibition a crime crime falling under the chapter on criminal
punishable by a fine of P2,000.00 to negligence, while abandonment of one's victim is
P100,000.00 and/or imprisonment of not less a crime falling under the chapter on crimes
than 6 months nor more than 10 years. If aliens are against security. The former is committed by
arrested for fishing within this zone but for means of culpa, while the latter is committed by
some reason are acquitted, the decision against means of dolo. Failure to help one's victim is
them cannot be appealed to the Court of not an offense by itself nor an element of
Appeals because that would place them in reckless imprudence. It merely Increases the
double jeopardy. This is so well established that the penalty by one degree.
Supreme Court turned down many pleas for re-
examination of the doctrine first announced in Double Jeopardy (1997)
Kepner v. United States. 11 Phil. 669 (1904). The No. 2: The Sangguniang Panlungsod of Manila
doctrine is said to be part and parcel not only approved an ordinance (No. 1000) prohibiting
of settled jurisprudence but also of the operation in the streets within the city limits of
constitutional law. Nor does it matter that the taxicab units over eight years old (from year of
accused are aliens. This guarantee has been manufacture). The imposable penalty for
applied even to aliens without thought of their violation thereof is a fine of P4,000.00 or
citizenship. (See e.g., People v. Ang Chio Kio, 95 Phil. 475 imprisonment for one year upon the erring
(1954) (Chinese previously convicted of murder); People v. operator. Thereafter and while the city
Pomeroy, 97 Phil 927 (1955) ( American previously convicted of
rebellion with murder, arson and robbery).
ordinance was already in effect. Congress
enacted a law (Republic Act No. 500)
Double Jeopardy (1993) prohibiting the operation in the streets of cities
No. 13: A Pajero driven by Joe sideswiped a throughout the country of taxicab units beyond
motorcycle driven by Nelson resulting in ten years old. The imposable penalty for
damage to the motorcycle and injuries to violation thereof is the same as in Ordinance
Nelson. Joe sped on without giving assistance No. 1000. A, an owner/operator of a taxicab unit
to Nelson. The Fiscal filed two informations operating in the City of Manila, was charged
against Joe, to wit: (1) reckless imprudence with violation of the city ordinance. Upon
resulting in damage to property with physical arraignment, he pleaded not guilty; whereupon, trial
injuries under Art. 365, RPC, before the RTC; was set five days thereafter. For failure of the
and (2) abandonment of one's victim under par. 2 witnesses to appear at the trial, the City Court
Art 275, before the MTC. dismissed the case against A. The City
Prosecutor of Manila forthwith filed another
Joe was arraigned, tried and convicted information in the same court charging A with
for abandonment of one's victim in the violation of Republic Act No. 500 for operating
MTC. He appealed to the RTC. It was only the taxicab unit subject of the information in the first
a year later that he was arraigned in case. The accused moved to dismiss the
the reckless imprudence charge before second case against him invoking double
the RTC. He pleaded not guilty. Jeopardy.
Subsequently, the RTC affirmed the decision of the How would you rule on A's motion if you
MTC relative to the abandonment of one's victim were the Judge?
charge. Joe filed a petition for review before the SUGGESTED ANSWER:
Court of Appeals, invoking his right to double If I were the judge, I would grant the motion.
Jeopardy, contending that the prosecution for The dismissal of the first case for failure of the
abandonment under Art. 275 of the Revised witnesses to appear terminated the first
Penal Code is a bar to the prosecution for jeopardy. As held in Caes vs. Intermediate
negligence under Article 365 of the same Code. Appellate Court, 179 SCRA 54, the dismissal of a
Decide. case for failure of the witnesses for the
SUGGESTED ANSWER: prosecution to appear constitutes an acquittal.
Joe cannot claim that his conviction for The acquittal of A for violation of Ordinance No.
abandoning his victim in violation of Article 275 of 1000 bars his prosecution for violation of
the Revised Penal Code is a bar to his Republic Act No. 500. Under Section 21, Article in
prosecution for negligence under Article 365 of the of the Constitution, if an act is punished by a law
Revised Penal Code. As held in Lamera v. Court of and an ordinance, conviction or acquittal under
Appeals, 198 SCRA 186, there is no double either bars another prosecution for the same act.
jeopardy, because these two offenses are not
identical. Reckless imprudence is a ALTERNATIVE ANSWER:
If I were the judge, I would deny the motion. the offended party. How would you resolve
The dismissal of the first case is void and does not Gerald's contentions? Explain. (4%)
give rise to double jeopardy. The dismissal of the SUGGESTED ANSWER:
first case is arbitrary and denied the prosecution Geralde cannot invoke double jeopardy.
due process of law. The trial was set five days According to Perez v. Court of Appeals, 168
after the arraignment. There was no sufficient SCRA 236, there is no identity between
time to subpoena the witnesses and this was consented abduction and qualified seduction.
the first time the witnesses failed to appear. As
held in People vs. Declaro 170 SCRA 142, the CONSENTED ABDUCTION requires that the
dismissal of a case for failure of the witnesses to taking away of the offended party must be with
appear at the initial hearing is arbitrary and void her consent, after solicitation or cajolery
and does not give rise to double jeopardy. from the offender, and the taking away
of the offended party must be with lewd
designs. On the other hand,
Double Jeopardy (1999) QUALIFIED SEDUCTION requires that the
A. Discuss the right of every accused crime be committed by abuse of authority,
against double jeopardy? (2%) confidence or relationship and the offender
SUGGESTED ANSWER: had sexual intercourse with the woman.
According to Melo v. People, 85 Phil. 766,
the rule of double jeopardy means that The delay in filing the second case does
when a person was charged with an not constitute pardon, according to Article
offense and the case was terminated by 344 of the Revised Penal Code, to be valid the
acquittal or conviction or in any other manner pardon of the offender by the offended
without his consent, he cannot again be party must be expressly given.
charged with the same or identical offense.
Double Jeopardy (2000)
Double Jeopardy (1999) No XV. Charged by Francisco with libel, Pablo
C. On October 21, 1986, 17 year old Virginia was arraigned on January 3, 2000, Pre-trial was
Sagrado brought a complaint against Martin dispensed with and continuous trial was set for
Geralde for consented abduction. With the March 7, 8 and 9, 2000. On the first setting, the
accused pleading not guilty upon arraignment, prosecution moved for its postponement and
trial ensued. After trial, a judgment of cancellation of the other settings because its
conviction was rendered against Geralde. principal and probably only witness, the private
When the case was appealed to it, the Court of complainant Francisco, suddenly had to go
Appeals reversed the judgment of the Trial abroad to fulfill a professional commitment. The
Court, ratiocinating and ruling as follows: "This judge instead dismissed the case for failure to
is not to say that the appellant did nothing prosecute.
wrong...she was seduced by the appellant with b) Would the reversal of the trial
promises (of marriage) just to accomplish his court's assailed dismissal of the case
lewd designs." Years later, Virginia brought place the accused in double jeopardy? (3%)
another complaint for Qualified Seduction. SUGGESTED ANSWER:
Geralde presented a Motion to Quash on the b) Since the postponement of the case would not
ground of double jeopardy, which motion and violate the right of the accused to speedy trial,
his subsequent motion for reconsideration were the precipitate dismissal of the case is void.
denied: Question: May Geralde validly invoke The reversal of the dismissal will not place the
double jeopardy in questioning the institution of the accused in double Jeopardy.
case for Qualified Seduction? He placed reliance ALTERNATIVE ANSWER:
principally on the "same evidence" test to b) Since the dismissal of the case is valid,
support his stance. He asserted that the its reversal will place the accused in
offenses with which he was charged arose from double jeopardy.
the same set of facts. Furthermore, he averted
that the complaint for Qualified Seduction is Double Jeopardy (2001)
barred by waiver and estoppel on the part of the No X - For the death of Joey, Erning was
complainant, she having opted to consider the charged with the crime of homicide before the
case as consented abduction. Finally, he Regional Trial Court of Valenzuela. He was
argued that her delay of more than eight (8) arraigned. Due to numerous postponements of
years before filing the second case against him the scheduled hearings at the instance of the
constituted pardon on the part of prosecution, particularly based on the ground of
unavailability of prosecution witnesses an ordinance, conviction or acquittal under
who could not be found or located, the criminal either shall constitute a bar to another
case was pending trial for a period of prosecution for the same act. In this case, the
seven years. Upon motion of accused same act is involved in the two cases. The
Erning who invoked his right to speedy trial, reckless imprudence which resulted in physical
the court dismissed the case. injuries arose from the same act of driving
under the influence of liquor. In Yap v. Lutero,
Eventually, the prosecution witnesses surfaced, and G.R. No. L-12669, April 30, 1959, the Supreme
a criminal case for homicide, involving the same Court held that an accused who was acquitted
incident was filed anew against Erning. Accused of driving recklessly in violation of an ordinance
Erning moved for dismissal of the case on could not be prosecuted for damage to property
the ground of double jeopardy. The prosecution through reckless imprudence because the two
objected, submitting the reason that it was charges were based on the same act. In People v,
not able to present the said witnesses earlier Relova, 148 SCRA 292 (1987), it was held that
because the latter went into hiding out of fear. when there is identity in the act punished by a
Resolve the motion. (5%) law and an ordinance, conviction or acquittal
SUGGESTED ANSWER: under either shall bar prosecution under the
The motion should be granted. As held in Caes us. other.
Intermediate Appellate Court, 179 SCRA 54 (1989), SECOND ALTERNATIVE ANSWER:
the dismissal of a criminal case predicated There is no double jeopardy because the act
on the right of the accused to a speedy trial penalized under the Revised Penal Code is
amounts to an acquittal for failure of the different from the act penalized by the
prosecution to prove his guilt and bars his ordinance of Makati City. The Revised Penal
subsequent prosecution for the same offense. Code penalizes reckless imprudence resulting in
physical injuries, while the ordinance of
Double Jeopardy (2002) Makati City penalizes driving under the
No IX. A Tamaraw FX driven by Asiong influence of liquor.
Cascasero, who was drunk, sideswiped a
pedestrian along EDSA in Makati City, resulting in Double Jeopardy; Requisites (1999)
physical injuries to the latter. The public B. What are the requisites of double jeopardy?
prosecutor filed two separate informations (2%)
against Cascasero, the first for reckless SUGGESTED ANSWER:
imprudence resulting in physical injuries under As held in Cuison v. Court of Appeals, 289
the Revised Penal Code, and the second for SCRA 159, for a claim of double jeopardy to
violation of an ordinance of Makati City prosper, the following requisites must concur:
prohibiting and penalizing driving under the (1) a first jeopardy has attached;
influence of liquor. (2) the first jeopardy was validly terminated; and
Cascasero was arraigned, tried and convicted for (3) the second is for the same offense.
reckless imprudence resulting in physical injuries
under the Revised Penal Code. With regard to A first jeopardy attaches:
the second case (i.e., violation of the city 1. upon a valid complaint or information;
ordinance), upon being arraigned, he filed a motion 2. before a competent court;
to quash the information invoking his right 3. after arraignment;
against double jeopardy. He contended that, 4. a valid entry of plea; and
under Art. III, Section 21 of the 5. the dismissal or termination of the case
Constitution, if an act is punished by a law and an without the express consent of the accused.
ordinance, conviction or acquittal under either
shall constitute a bar to another Due Process; Absence of Denial (1999)
prosecution for the same act He argued that the two No VIII - B. On April 6, 1963, Police Officer
criminal charges against him stemmed from the Mario Gatdula was charged by the Mayor with
same act of driving allegedly under the influence Grave Misconduct and Violation of Law before
of liquor which caused the accident. the Municipal Board. The Board investigated
Was there double jeopardy? Explain your Gatdula but before the case could be decided,
answer (5%) the City charter was approved. The City Fiscal,
FIRST ALTERNATIVE ANSWER: citing Section 30 of the city charter, asserted
Yes, there is double jeopardy. Under the that he was authorized thereunder to
second sentence of Article III, Section 21 of the investigate city officers and employees. The
Constitution, if an act is punished by a law and case against Gatdula was then forwarded to
him, and a re-investigation was conducted. The received the evidence, in violation of the
office of the Fiscal subsequently recommended "He who decides must hear" rule. Is he
dismissal. On January 11, 1966, the City Mayor correct? 2) On the ground that there was a
returned the records of the case to the City violation of due process because the
Fiscal for the submission of an appropriate complainants, the prosecutor and the
resolution but no resolution was submitted. On hearing officers were all subordinates of the
March 3, 1968, the City Fiscal transmitted the BID Commissioners who rendered the
records to the City Mayor recommending that deportation decision. Is he correct?
final action thereon be made by the City Board of SUGGESTED ANSWER:
Investigators (CBI). Although the CBI did not 1) No, Stevie is not correct. As held in Adamson A
conduct an investigation, the records show that Adamson, Inc. vs. Amores, 152 SCRA 237,
both the Municipal Board and the Fiscal's Office administrative due process does not require that
exhaustively heard the case with both parties the actual taking of testimony or the
afforded ample opportunity to adduce their presentation of evidence before the same
evidence and argue their cause. The Police officer who will decide the case.
Commission found Gatdula guilty on the basis of
the records forwarded by the CBI. Gatdula In American Tobacco Co. v. Director of Patents, 67
challenged the adverse decision of the Police SCRA 287, the Supreme Court has ruled that so
Commission theorizing that he was deprived long as the actual decision on the merits of the
of due process. Questions: Is the Police cases is made by the officer authorized by law
Commission bound by the findings of the City to decide, the power to hold a hearing on the basis
Fiscal? Is Gatdula's protestation of lack or non- of which his decision will be made can be
observance of due process well-grounded? Explain delegated and is not offensive to due
your answers. (4%) process. The Court noted that: "As long as a
SUGGESTED ANSWER: party is not deprived of his right to present his
The Police Commission is not bound by the own case and submit evidence in support
findings of the City Fiscal. In Mangubat v. de thereof, and the decision is supported by the
Castro, 163 SCRA 608, it was held that the evidence in the record, there is no question that the
Police Commission is not prohibited from requirements of due process and fair trial are
making its own findings on the basis of its own fully met. In short, there is no abrogation of
evaluation of the records. Likewise, the responsibility on the part of the officer
protestation of lack of due process is not well- concerned as the actual decision remains with
grounded, since the hearings before the and is made by said officer. It is, however,
Municipal Board and the City Fiscal offered required that to give the substance of a hearing,
Gatdula the chance to be heard. There is no which is for the purpose of making
denial of due process if the decision was determinations upon evidence the officer who
rendered on the basis of evidence contained in the makes the determinations must consider and
record and disclosed to the parties affected. appraise the evidence which justifies them.
Due Process; Deportation (1994) 2) No, Stevie was not denied due process
No. 9: A complaint was filed by Intelligence simply because the complainants, the
agents of the Bureau of Immigration and prosecutor, and the hearing officers were all
Deportation (BID) against Stevie, a German subordinates of the Commissioner of the
national, for his deportation as an undesirable Bureau of Immigration and Deportation. In
alien. The Immigration Commissioner directed accordance with the ruling in Erianger &
the Special Board of Inquiry to conduct an Galinger, Inc. vs. Court of Industrial Relations,
Investigation. At the said Investigation, a lawyer 110 Phil. 470, the findings of the subordinates
from the Legal Department of the BID are not conclusive upon the Commissioners,
presented as witnesses the three Intelligence who have the discretion to accept or reject
agents who filed the complaint. On the basis of the them. What is important is that Stevie was not
findings, report and recommendation of the Board deprived of his right to present his own case
of Special Inquiry, the BID and submit evidence in support thereof, the
Commissioners unanimously voted for Stevie's decision is supported by substantial evidence,
deportation. Stevie's lawyer questioned the and the commissioners acted on their own
deportation order independent consideration of the law and facts of
1) On the ground that Stevie was denied due the case, and did not simply accept the views of
process because the BID Commissioners who their subordinates in arriving at a decision.
rendered the decision were not the ones who
Due Process; Forfeiture Proceedings (1993) the proceedings, and in the last analysis to
No. 14: The S/S "Masoy" of Panamanian avoid a miscarriage of justice.
registry, while moored at the South Harbor, was
found to have contraband goods on board. The Due Process; Meeting vs. Hearing (1999)
Customs Team found out that the vessel did not No VIII - C. On November 7, 1990, nine
have the required ship's permit and shipping lawyers of the Legal Department of Y Bank who
documents. The vessel and its cargo were held and were all under Fred Torre, sent a complaint to
a warrant of Seizure and Detention was issued management accusing Torre of abusive
after due investigation. In the course of the conduct and mismanagement. Furnished with a
forfeiture proceedings, the ship captain and the copy of the complaint, Torre denied the
ship's resident agent executed sworn charges. Two days later, the lawyers and
statements before the Custom legal officer Torre were called to a conference in the office
admitting that contraband cargo were found of the Board Chairman to give their respective
aboard the vessel. The shipping lines object to the sides of the controversy. However, no
admission of the statements as evidence agreement was reached thereat. Bank Director
contending that during their execution, the Romulo Moret was tasked to look further into
captain and the shipping agent were not the matter. He met with the lawyers together
assisted by counsel, in violation of due process. with Torre several times but to no avail. Moret
Decide. then submitted a report sustaining the charges
SUGGESTED ANSWER: of the lawyers. The Board Chairman wrote
The admission of the statements of the captain Torre to inform him that the bank had chosen
and the shipping agent as evidence did not the compassionate option of "waiting" for
violate due process even if they were Torre's resignation. Torre was asked, without
not assisted by counsel. In Feeder being dismissed, to turn over the documents of all
International Line, Pts. Ltd. v. Court of cases handled by him to another official of the
Appeals, 197 SCRA 842, It was held that the bank but Torre refused to resign and
assistance of counsel is not indispensable to requested for a "full hearing". Days later, he
due process in forfeiture proceedings since reiterated his request for a "full hearing",
such proceedings are not criminal in nature. claiming that he had been "constructively
dismissed". Moret assured Torre that he is "free to
Moreover, the strict rules of evidence and remain in the employ of the bank" even if he has
procedure will not apply in administrative no particular work assignment. After another
proceedings like seizure and forfeiture request for a "full hearing" was ignored, Torre filed
proceedings. What is important is that the a complaint with the arbitration branch of
parties are afforded the opportunity to be heard and NLRC for illegal dismissal. Reacting thereto, the
the decision of the administrative authority is based bank terminated the services of Torre. Questions:
on substantial evidence. (a) Was Torre "constructively dismissed" before he
filed his complaint? (b) Given the multiple
Due Process; Media Coverage during meetings held among the bank officials, the
Hearing (1996) lawyers and Torre, is it correct for him to say
No 2: At the trial of a rape case where the that he was not given an opportunity to be heard?
victim-complainant was a well known Explain your answers. (4%)
personality while the accused was a popular
movie star, a TV station was allowed by the trial SUGGESTED ANSWER:
judge to televise the entire proceedings like the O.J. a) Torre was constructively dismissed, as
Simpson trial. The accused objected to the TV held in Equitable Banking Corporation v.
coverage and petitioned the Supreme Court to National Labor Relations Commission, 273
prohibit the said coverage. SCRA 352. Allowing an employee to report for
As the Supreme Court, how would you rule on work without being assigned any
the petition? Explain. work constitutes constructive dismissal.
SUGGESTED ANSWER:
The Supreme Court should grant the petition. In its b) Torre is correct in saying that he was not
Resolution dated October 22, 1991, the given the chance to be heard. The meetings in the
Supreme Court prohibited live radio and nature of consultations and conferences cannot
television coverage of court proceedings to be considered as valid substitutes for the proper
protect the right of the parties to due process, to observance of notice and hearing.
prevent the distraction of the participants in
Due Process; Notice by Publication (1988)
No. 9: Macabebe, Pampanga has several No, it is not a property right under the due
barrios along the Pampanga river. To service process clause of the Constitution. Just like
the needs of their residentst the municipality has ordinary licenses in other regulated fields, it
been operating a ferry service at the same river, for may be revoked any time. It does not confer an
a number of years already. absolute right, but only a personal privilege,
subject to restrictions. A licensee takes
Sometime in 1987, the municipality was served a his license subject to such conditions as
copy of an order from the Land Tansportation the Legislature sees fit to impose, and may
Franchising and Regulatory Board (LTFRB), be revoked at its pleasure without depriving
granting a certificate of public convenience to the licensee of any property (Chavez v.
Mr. Ricardo Macapinlac, a resident of Romulo, G.R. No. 157036, June 9, 2004).
Macabebe, to operate ferry service across the
same river and between the same barrios being Due Process; PPA-Pilots (2001)
serviced presently by the municipality's ferry No XIII - The Philippine Ports Authority (PPA)
boats. A check of the records of the application of General Manager issued an administrative
Macapinlac shows that the application was filed order to the effect that all existing regular
some months before, set for hearing, and appointments to harbor pilot positions shall
notices of such hearing were published in two remain valid only up to December 31 of the
newspapers of general circulation in the town of current year and that henceforth all
Macabebe, and in the province of Pampanga. appointments to harbor pilot positions shall be
The municipality had never been directly served a only for a term of one year from date of
copy of that notice of hearing nor had the effectivity, subject to yearly renewal or
Sangguniang Bayan been requested by cancellation by the PPA after conduct of a rigid
Macapinlac for any operate. The municipality evaluation of performance. Pilotage as a
immediately filed a motion for reconsideration profession may be practiced only by duly
with the LTFRB which was denied. It went to licensed individuals, who have to pass five
the Supreme Court on a petition for certiorari to government professional examinations.
nullify the order granting a certificate of public
convenience to Macapinlac on two grounds: The Harbor Pilot Association challenged the
1. Denial of due process to the municipality; validity of said administrative order arguing that it
2. For failure of Macapinlac to secure approval violated the harbor pilots' right to exercise their
of the Sangguniang Bayan for him profession and their right to due process of law and
to operate a ferry service in Macabebe, that the said administrative order was issued
Resolve the two points in the petition without prior notice and hearing. The PPA
with reasons. countered that the administrative order was valid
SUGGESTED ANSWER: as it was issued in the exercise of its administrative
The petition for certiorari should be granted, control and supervision over harbor pilots
1. As a party directly affected by the operation of under PPA's legislative charter, and that in
the ferry service, the Municipality of issuing the order as a rule or regulation, it
Macabebe, Pampanga was entitled to be was performing its executive or legislative, and
directly notified by the LTFRB of its not a quasi-Judicial function.
proceedings relative to Macapinlac's
application, even if the Municipality had not Due process of law is classified into two kinds,
notified the LTFRB of the existence of the namely, procedural due process
municipal ferry service. Notice by publication and substantive due process of law. Was
was not enough. (Municipality of Echague v. there, or, was there no violation of the harbor
Abellera, 146 SCRA 180 (1986)). pilots' right to exercise their profession and
their right to due process of law? (5%)
2. Where a ferry operation lies entirely within SUGGESTED ANSWER:
the municipality, the prior approval of The right of the harbor pilots to due process
the Municipal government is necessary. .... was violated. Am held in Corona vs. United
Harbor Pilots Association of the Philippines,
Due Process; Permit to Carry Firearm 283 SCRA 31 (1997) pilotage as a profession is a
Outside Residence (Q6-2006) property right protected by the guarantee of due
3. Does a Permit to Carry Firearm Outside process. The pre-evaluation cancellation of the
Residence (PTCFOR) constitute a property licenses of the harbor pilots every year is
right protected by the Constitution? (2.5%) unreasonable and violated their right to
SUGGESTED ANSWER: substantive due process. The renewal is
dependent on the evaluation after the licenses issued after appropriate notice and hearing to
have been cancelled. The issuance of the affected parties. The ruling in Philippine
administrative order also violated procedural Communications Satellite Corporation vs.
due process, since no prior public hearing was Alcuaz, 180 SCRA 218, to the effect that an
conducted. As hold in Commissioner of Internal order provisionally reducing the rates which a
Revenue vs. Court of Appeals, 261 SCRA 237 public utility could charge, could be issued
(1998), when a regulation is being issued under the without previous notice and hearing, cannot
quasi-legislative authority of an apply.
administrative agency, the requirements of
notice, hearing and publication must be Due Process; Public School Teachers (2002)
observed. No X - Ten public school teachers of Caloocan
City left their classrooms to join a strike, which
Due Process; Procedural vs. lasted for one month, to ask for
Substantive (1999) teachers' benefits.
No VIII - A. Give examples of acts of the state
which infringe the due process clause: The Department of Education, Culture and
1. in its substantive aspect and (1%) Sports charged them administratively, for which
2. in its procedural aspect? (1%) reason they were required to answer and
SUGGESTED ANSWER: formally investigated by a committee composed of
1.) A law violates substantive due process the Division Superintendent of Schools as
when it is unreasonable or unduly oppressive. Chairman, the Division Supervisor as member
For example, Presidential Decree No. 1717, and a teacher, as another member. On the
which cancelled all the mortgages and liens of a basis of the evidence adduced at the formal
debtor, was considered unconstitutional for investigation which amply established their
being oppressive. Likewise, as stated in guilt, the Director rendered a decision meting
Ermita-Malate Hotel and Motel Operators out to them the penalty of removal from office.
Association, Inc. v. City Mayor of Manila, 20 The decision was affirmed by the DECS
SCRA 849, a law which is vague so that men of Secretary and the Civil Service Commission.
common intelligence must guess at its meaning and
differ as to its application violates On appeal, they reiterated the arguments they
substantive due process. As held in Tanada v. raised before the administrative bodies, namely: (b)
Tuvera, 146 SCRA 446, due process requires They were deprived of due process of law as
that the law be published. the Investigating Committee was improperly
constituted because it did not include a teacher in
2.) In State Prosecutors v. Muro, 236 SCRA representation of the teachers' organization as
505, it was held that the dismissal of a case required by the Magna Carta for Public
without the benefit of a hearing and without any School Teachers (R.A. No. 4670, Sec. 9).
notice to the prosecution violated due process. SUGGESTED ANSWER:
Likewise, as held in People v. Court of Appeals, 262 The teachers were deprived of due process of
SCRA 452, the lack of impartiality of the judge law. Under Section 9 of the Magna Carta for
who will decide a case violates procedural Public School Teachers, one of the members of the
due process. committee must be a teacher who is a
representative of the local, or in its absence,
Due Process; Provisional Order (1991) any existing provincial or national organization of
No 7 - On 29 July 1991. the Energy Regulatory teachers. According to Fabella v. Court of
Board (ERB), in response to public clamor, Appeals, 283 SCRA 256 (1997), to be
issued a resolution approving and adopting a considered the authorized representative of
schedule for bringing down the prices of such organization, the teacher must be chosen by
petroleum products over a period of one (1) the organization itself and not by the
year starting 15 August 1991, over the objection of Secretary of Education, Culture and Sports.
the oil companies which claim that the period Since in administrative proceedings, due
covered is too long to prejudge and foresee. Is the process requires that the tribunal be vested with
resolution valid? jurisdiction and be so constituted as to afford a
SUGGESTED ANSWER: person charged administratively a reasonable
No, the resolution is invalid, since the Energy guarantee of impartiality, if the teacher who is a
Regulatory Board issued the resolution without a member of the committee was not appointed in
hearing. The resolution here is not a accordance with the law, any proceeding before
provisional order and therefore it can only be
it is tainted with deprivation of procedural defense presented in his behalf will be
due process. inadequate considering the legal requisite and
skill needed in court proceedings. There would
Due Process; Radio Station (1987) certainly be a denial of due process. (Delgado
No. XIV: In the morning of August 28, 1987, v. Court of Appeals, 145 SCRA 357 (1986)).
during the height of the fighting at Channel 4
and Camelot Hotel, the military closed Radio Due Process; Substantive (2003)
Station XX, which was excitedly reporting the 2003 No XII - The municipal council of the
successes of the rebels and movements municipality of Guagua, Pampanga, passed an
towards Manila and troops friendly to the ordinance penalizing any person or entity
rebels. The reports were correct and factual. On engaged in the business of selling tickets
October 6, 1987, after normalcy had returned to movies or other public exhibitions, games
and the Government had full control of the or performances which would charge
situation, the National Telecommunications children between 7 and 12 years of age the full
Commission, without notice and hearing, but price of admission tickets instead of only one-
merely on the basis of the report of the military, half of the amount thereof. Would you hold
cancelled the franchise of station XX. the ordinance a valid exercise of legislative
Discuss the legality of: power by the municipality? Why?
(b) The cancellation of the franchise of the SUGGESTED ANSWER:
station on October 6, 1987. The ordinance is void. As held in Balacuit v.
SUGGESTED ANSWER: Court of First Instance of Agusan del Norte. 163
The cancellation of the franchise of the station SCRA 182 [1988], the ordinance is
on October 6, 1987, without prior notice and unreasonable. It deprives the sellers of the
hearing, is void. As held in Eastern tickets of their property without due process. A ticket
Broadcasting Corp. (DYRE) v. Dans, 137 SCRA is a property right and may be sold for such
647 (1985), the cardinal primary requirements in price as the owner of it can obtain. There is nothing
administrative proceedings (one of which is that pernicious in charging children the same price as
the parties must first be heard) as laid down in adults.
Ang Tibay v. CIR, 69 Phil. 635 (1940) must be
observed in closing a radio station because Due Process; Suspension of Driver's
radio broadcasts are a form of License (1992)
constitutionally-protected expression. No, 3; Congress is considering a law against
drunken driving. Under the legislation, police
Due Process; Represented by a Non-Lawyer authorities may ask any driver to take a
(1988) "breathalyzer test", wherein the driver exhales
No. 5: Norberto Malasmas was accused of several times into a device which can determine
estafa before the Regional Trial Court of whether he has been driving under the
Manila. After the trial, he was found guilty. On influence of alcohol. The results of the test can be
appeal, his conviction was affirmed by the Court of used, in any legal proceeding against him.
Appeals. After the records of his case had been Furthermore, declaring that the issuance of a
remanded to the Regional Trial Court for driver's license gives rise only to a privilege to
execution, and after the latter Court had set the date drive motor vehicles on public roads, the law
for the promulgation of judgment, the accused provides that a driver who refuses to take the
filed a motion with the Court of Appeals to test shall be automatically subject to a 90-day
set aside the entry of judgment, and to remand the suspension of his driver's license,
case to the Regional Trial Court for new trial on
the ground that he had just discovered that "Atty. Cite two [2] possible constitutional objections to
Leonilo Maporma" whom he had chosen and this law. Resolve the objections and explain
who had acted as his counsel before the trial whether any such infirmities can be cured.
court and the Court of Appeals, is not a lawyer. SUGGESTED ANSWER:
Resolved the motion of the accused with reasons. Possible objections to the law are that requiring a
driver to take the breathalyzer test will violate his
SUGGESTED ANSWER: right against self-incrimination, that providing
The motion should be granted and the entry of for the suspension of his driver's license
judgment should be set aside. An accused is without any hearing violates due process,
entitled to be heard by himself or counsel. (Art. III, and that the proposed law will violate the right
sec. 14(2)). Unless he is represented by an against unreasonable searches and seizures,
attorney, there is a great danger that any because it allows police authorities to
require a drive to take the breathalyzer test Electric Light Co, v. PSC, 10 SCRA 46 (1964) it
even if there is no probable cause was held that a rate order, which
ALTERNATIVE ANSWER: applies exclusively to a particular party
Requiring a driver to take a breathalyzer test and is predicated on a finding of fact,
does not violate his right against self- partakes of the nature of a quasi judicial,
incrimination, because he is not being rather than legislative, function.
compelled to give testimonial evidence. He is
merely being asked to submit to a physical test. The first order, granting a provisional rate
This is not covered by the constitutional increase without hearing, is valid if justified by
guarantee against self-incrimination. Thus, in URGENT PUBLIC NEED, such as increase in
South Dakota vs. Neville, 459 U.S. 553, it was held the cost of fuel. The power of the Public Service
for this reason that requiring a driver to take a Commission to grant such increase was upheld in
blood-alcohol test is valid. several cases. (Silva v. Ocampo, 90 Phil. 777
(1952); Halili v. PSC, 92 Phil. 1036(1953))
As held in Mackey vs. Afontrya 443 U.S. 1,
because of compelling government interest in The second order requiring the company to pay
safety along the streets, the license of a driver who unpaid supervisory fees under the Public
refuses to take the breathalyzer test may be Service Act cannot be sustained. The company
suspended immediately pending a post- has a right to be heard, before it may
suspension hearing, but there must be a be ordered to pay. (Ang Tibay v. CIR, 69 Phil.
provision for a post-suspension hearing. Thus, to 635 (1940))
save the proposed law from The third order can be justified. The fact
unconstitutionally on the ground of denial of due that the TRB has allowed a provisional rate
process, it should provide for an immediate increase does not bind it to make the order
hearing upon suspension of the driver's license. The permanent if the evidence later submitted
proposed law violates the right against does not justify increase but, on the
unreasonable searches and seizures. It will contrary, warrants the reduction of rates.
authorize police authorities to stop any driver
and ask him to take the breathalyzer test even in Eminent Domain; Garnishment (1994)
the absence of a probable cause. No. 14: The Municipality of Antipolo, Rizal,
expropriated the property of Juan Reyes for use as
Due Process; Urgent Public Need (1987) a public market. The Municipal Council
No. II: The Manila Transportation Company appropriated Pl,000,000.00 for the purchase of
applied for upward adjustment of its rates the lot but the Regional Trial Court, on the basis of
before the Transportation Regulatory Board. the evidence, fixed the value at
Pending the petition, the TRB, without previous P2,000,000.00.
hearing, granted a general nationwide 1) What legal action can Juan Reyes take to
provisional increase of rates. In another Order, TRB collect the balance?
required the company to pay the unpaid 2) Can Juan Reyes ask the Regional Trial
supervisory fees collectible under the Public Court to garnish the Municipality's account
Service Law. After due notice and hearing, on with the Land Bank?
the basis of the evidence presented by Manila SUGGESTED ANSWER:
Transportation Company and the Oppositors, 1) To collect the balance of Judgment, as
TRB issued an Order reducing the rates applied for stated in Tan Toco vs. Municipal Counsel of
by one-fourth. Iloilo, 49 Phil. 52, Juan Reyes may levy on
patrimonial properties of the Municipality of
Characterize the powers exercised by the TRB Antipolo. If it has no patrimonial properties, in
in this case and determine whether under accordance with the Municipality of Makati vs.
the present constitutional system Court of Appeals, 190 SCRA 206, the remedy
the Transportation Regulatory Board can be of Juan Reyes is to file a petition for mandamus to
validly conferred the powers exercised by it in compel the Municipality of Antipolo to
issuing the Orders given above. Explain. appropriate the necessary funds to satisfy the
SUGGESTED ANSWER: judgment.
The orders in this case involve the exercise of
judicial function by an administrative agency, and 2) Pursuant to the ruling in Pasay City
therefore, as a general rule, the cardinal primary Government vs. Court of First Instance of
rights enumerated in Ang Tibay v. CIR, 69 Phil. 635 Manila, 132 SCRA 156, since the Municipality of
(1940) must be observed. In Vigart Antipolo has appropriated P1,000,000 to pay
for the lot, its bank account may be (2) As the judge, rule on the said objections.
garnished but up to this amount only. SUGGESTED ANSWER:
(1) As counsel for C Company, I will argue that
Eminent Domain; Garnishment (1998) the taking of the property is not for a public use
No VI - 2, If the City of Cebu has money and that the ordinance cannot fix the
in bank, can it be garnished? [2%] compensation to be paid C Company, because
SUGGESTED ANSWER: this is a judicial question that is for the courts to
2. No, the money of the City of Cebu in the decide.
bank cannot be garnished if it came from public
funds. As held in Municipality of Makati vs. (2) As judge, I will sustain the contention that
Court of Appeals, 190 SCRA 206, 212, the taking of the property of C Company to
public funds are exempted from garnishment. operate the commercial center established
within it to finance a housing project for city
Eminent Domain; immunity from suit (2001) employees is not for a public use but for a
No III - The Republic of the Philippines, through the private purpose. As the Court indicated in a
Department of Public Works and Highways dictum in Manotok. v. National Housing
(DPWH), constructed a new highway linking Authority, 150 SCRA 89, that the expropriation
Metro Manila and Quezon province, and which of a commercial center so that the profits
major thoroughfare traversed the land owned by derived from its operation can be used for
Mang Pandoy. The government neither filed any housing projects is a taking for a private
expropriation proceedings nor paid any purpose.
compensation to Mang Pandoy for the land thus
taken and used as a public road. I will also sustain the contention that the
ordinance, even though it fixes the
Mang Pandoy filed a suit against the compensation for the land on the basis of the
government to compel payment for the value of prevailing land value cannot really displace
his land. The DPWH filed a motion to judicial determination of the price for the simple
dismiss the case on the ground that the reason that many factors, some of them
State is immune from suit. Mang Pandoy supervening, cannot possibly be considered by the
filed an opposition. legislature at the time of enacting the
Resolve the motion. (5%) ordinance. There is greater reason for nullifying the
SUGGESTED ANSWER: use of the cost of construction in the
The motion to dismiss should be denied. As ordinance as basis for compensation for the
held in Amigable v. Cuenca, 43 SCRA 300 improvements. The fair market value of the
(1972), when the Government expropriates improvements may not be equal to the cost of
private property without paying compensation, it is construction. The original cost of construction
deemed to have waived its immunity from suit. may be lower than the fair market value, since the
Otherwise, the constitutional guarantee that cost of construction at the time of
private property shall not be taken for public expropriation may have increased.
use without payment of just ALTERNATIVE ANSWER:
compensation will be rendered nugatory. The taking of the commercial center is justified
by the concept of indirect public benefit since its
Eminent Domain; Indirect Public operation is intended for the development of the
Benefit (1990) vacant portion for socialized housing, which
No. 2: The City of Cebu passed an ordinance is clearly a public purpose.
proclaiming the expropriation of a ten (10)
hectare property of C Company, which property is Eminent Domain; Just Compensation (1988)
already a developed commercial center. The City No. 8: Mr. Roland Rivera is the owner of four
proposed to operate the commercial center in order lots sought to be expropriated by the Export
to finance a housing project for city employees Processing Zone Authority for the expansion of the
in the vacant portion of the said property. The export processing zone at Baguio City. The same
ordinance fixed the price of the land and the parcels of land had been valued by the
value of the improvements to be paid C Assessor at P120.00 per square meter, while
Company on the basis of the prevailing land value Mr. Rivera had previously fixed the market
and cost of construction. value of the same at P100 per square meter.
(1) As counsel for C Company, give The Regional Trial Court decided for
two constitutional objections to the expropriation and ordered the payment to Mr.
validity of the ordinance. Rivera at the rate of P100 a square meter
pursuant to Presidential Decree No. 1533, wrong. Secondly, the determination of just
providing that in determining just compensation for compensation in expropriation cases is a
private property acquired through eminent judicial function. Since under Section 9, Article
domain proceedings, the compensation to be III of the 1987 Constitution private property shall not
paid shall not exceed the value declared by the be taken for public use without just
owner or determined by the Assessor, pursuant to compensation, no law can mandate that its
the Real Property Tax Code, whichever value is determination as to the just compensation shall
lower, prior to the recommendation or prevail over the findings of the court.
decision of the appropriate government office to
acquire the property. Eminent Domain; Just Compensation (1998)
No VI. The City of Cebu expropriated the
Mr. Rivera appealed, insisting that just property of Carlos Topico for use as a municipal
compensation for his property should be parking lot. The Sangguniang Panlungsod
determined by Commissioners who could appropriated P10 million for this purpose but the
evaluate all evidence on the real value of the Regional Trial Court fixed the compensation for the
property, at the time of its taking by the taking of the land at P15 million.
government. He maintains that the lower court 1. What legal remedy, if any, does Carlos
erred in relying on Presidential Decree No, Topico have to recover the balance of P5
1533, which he claims is unconstitutional. million for the taking of his land?
[3%] SUGGESTED ANSWER:
How would you decide the appeal? Explain 1. The remedy of Carlos Toplco is to levy on
your answer. the patrimonial properties of the City of Cebu.
SUGGESTED ANSWER: In Municipality of Paoay vs Manaois, 86 Phil
The decision of the lower court should be 629. 632, the Supreme Court held:
reversed. In EPZA v, Dulay, 149 SCRA 305 "Property, however, which is patrimonial
(1987) the Supreme Court declared PD No. and which is held by a municipality in its
1533 to be an unconstitutional encroachment on proprietary capacity as treated by the
the prerogatives of the judiciary. It was great weight of authority as the private
explained that although a court would asset of the town and may be levied upon and
technically have the power to determine the just sold under an ordinary execution."
compensation for property under the Decree, the
If the City of Cebu does not have patrimonial
court's task would be relegated to simply stating
properties, the remedy of Carlos Topico is to file a
the lower value of the property as declared
petition for mandamus to compel it to
either by the owner or by the assessor.
appropriate money to satisfy the Judgment. In
Just compensation means the value of the
Municipality Makati vs. Court of Appeals, 190
property at the time of the taking. It means a
SCRA 206, 213. the Supreme Court said:
fair and full equivalent for the loss sustained.
To determine it requires consideration "Where a municipality falls or refuses,
without justifiable reason, to effect
of the condition of the property and its
payment of a final money judgment
surrounding, its improvements and capabilities.
rendered against it, the claimant may
avail of the remedy of mandamus in order
to compel the enactment and approval of
Eminent Domain; Just Compensation (1989)
the necessary appropriation ordinance,
No, 6: A law provides that in the event of
and the corresponding disbursement of
expropriation, the amount to be paid to a
municipal funds therefor."
landowner as compensation shall be either the
sworn valuation made by the owner or the ALTERNATIVE ANSWER:
official assessment thereof, whichever is lower. Can 1. He can file the money claim with
the landowner successfully challenge the law in
the Commission on Audit.
court? Discuss briefly your answer.
SUGGESTED ANSWER: Eminent Domain; Legal Interest (1993)
Yes, the landowner can successfully challenge No, 5: In expropriation proceedings:
the law in court. According to the decision in 1) What legal interest should be used in the
Export Processing Zone Authority vs. Dulay, 149 computation of interest on just compensation?
SCRA 305, such a law is unconstitutional. First SUGGESTED ANSWER:
of all, it violates due process, because it denies As held in National Power Corporation vs.
to the landowner the opportunity to prove that Angas. 208 SCRA 542, in accordance with
the valuation in the tax declaration is Article 2209 of the Civil Code, the legal interest
should be SIX per cent (6%) a year. Central be other available lots in Santa for a sports
Bank Circular No. 416, which increased the center.
legal interest to twelve percent (12%) a year is not
applicable to the expropriation of property and is Nonetheless, the Municipality of Santa, through
limited to loans, since its issuance is based on its Mayor, filed a complaint for eminent domain.
Presidential Decree No, 116, which amended the Christina opposed this on the
Usury Law. following grounds:
1. the Municipality of Santa has no power
Eminent Domain; Non-observance of to expropriate;
the policy of "all or none" (2000) 2. Resolution No. 1 has been voided since the
No VIII. Madlangbayan is the owner of a 500 Sangguniang Panlalawigan disapproved it
square meter lot which was the birthplace of the for being arbitrary; and
founder of a religious sect who admittedly 3. the Municipality of Santa has other and
played an important role in Philippine history better lots for that purpose.
and culture. The National Historical Resolve the case with reasons. (5%)
Commission (NHC) passed a resolution
declaring it a national landmark and on its SUGGESTED ANSWERS:
recommendation the lot was subjected to a) Under Section 19 of R.A. No. 7160, the
expropriation proceedings. This was opposed by power of eminent domain is
Madlangbayan on the following grounds: a) that explicitly granted to the municipality, but
the lot is not a vast tract; b) that those to be must be exercised through an ordinance
benefited by the expropriation would only be the rather than through a resolution.
members of the religious sect of its founder, (Municipality ofParanaque v. V.M. Realty
and c) that the NHC has not initiated the Corp., G.R. No. 127820, July 20, 1998)
expropriation of birthplaces of other more
deserving historical personalities. Resolve the b) The Sangguniang Panlalawigan of Ilocos Sur
opposition raised by Madlangbayan. (5%) was without the authority to disapprove
SUGGESTED ANSWER: Resolution No. 1 as the municipality clearly has
The arguments of Madlangbayan are not the power to exercise the right of
meritorious. According to Manosca v. Court of eminent domain and its Sangguniang
Appeals, 252 SCRA 412 (1996), the power of Bayan the capacity to promulgate said
eminent domain is not confined to expropriation of resolution. The only ground upon which a
vast tracts of the land. The expropriation of the provincial board may declare any municipal
lot to preserve it as the birthplace of the resolution, ordinance or order invalid is
founder of the religious sect because of his role in when such resolution, ordinance or order is
Philippine history and culture is for a public beyond the powers conferred upon the
purpose, because public use is no longer council or president making the same. Such is
restricted to the traditional concept. The fact that not the situation in this case. (Moday v.
the expropriation will benefit the members of the Court of Appeals, G.R. No. 107916,
religious sect is merely incidental. The fact that February 20, 1997)
other birthplaces have not been expropriated
is likewise not a valid basis for opposing the c) The question of whether there is genuine
expropriation. As held in J.M. Tuason and necessity for the expropriation of Christina's lot
Company, Inc. v. Land Tenure Administration, or whether the municipality has other and
31 SCRA 413 (1970), the expropriating better lots for the purpose is a matter that
authority is not required to adhere to the policy of will have to be resolved by the Court upon
"all or none". presentation of evidence by the parties to
the case.
Eminent Domain; Power to Exercise (2005)
(10-2) The Sangguniang Bayan of the Eminent Domain; Public Use (1987)
Municipality of Santa, Ilocos Sur passed No. XVI: In January 1984, Pasay City
Resolution No. 1 authorizing its Mayor to initiate a filed expropriation proceedings against
petition for the expropriation of a lot owned by several landowners for the construction of an
Christina as site for its municipal sports center. This aqueduct for flood control in a barangay.
was approved by the Mayor. However, the Clearly, only the residents of that barangay
Sangguniang Panlalawigan of Ilocos Sur would be benefited by the project.
disapproved the Resolution as there might still As compensation, the city offered to pay only
the amount declared by the owners in their tax
declarations, which amount was lower than the expropriation is to use the land as a relocation
assessed value as determined by the assessor. site for 200 families squatting along the
The landowners oppose the expropriation on Pasig river.
the grounds that: a) Can the owner of the property oppose the
(a) the same is not for public use; and expropriation on the ground that only 200
(b) assuming it is for public use, the out of the more than 10,000 squatter
compensation must be based on the families in Pasig City will benefit from the
evidence presented in court and not, as expropriation? Explain.
provided in presidential decrees prescribing b) Can the Department of Agrarian Reform
payment of the value stated in the owner's tax require the City of Pasig to first secure
declarations or the value determined by the authority from said Department before
assessor, whichever is lower. converting the use of the land
from agricultural to housing? Explain.
If you were judge, how would you rule on SUGGESTED ANSWER:
the issue? Why? a) No, the owner of the property cannot oppose the
SUGGESTED ANSWER: expropriation on the ground that only 200 out of
(a) The contention that the taking of private more than 10,000 squatter families in Pasig City
property for the purpose of constructing an will benefit from the expropriation. As held in
aqueduct for flood control is not for public use" is Philippine Columbian Association vs. Pants, 228
untenable- The idea that "PUBLIC USE" SCRA 668, the acquisition of private property for
means exclusively use by the public has been socialized housing is for public use and the fact
discarded. As long as the purpose of the taking is that only a few and not everyone will benefit
public, the exercise of power of eminent from the expropriation does not detract from
domain is justifiable. Whatever may be the nature of the public use.
beneficially employed for the general welfare
satisfies the requirement of public use. (Heirs of b) No, the Department of Agrarian Reform
Juancho Ardona v. Reyes, 123 SCR A 220 (1983)) cannot require Pasig City to first secure
authority from it before converting the use of the
(b) But the contention that the Presidential land from agricultural to residential. According to
Decrees providing that in determining just Province of Camarines Sur vs. Court of
compensation the value stated by the owner in his Appeals, 222 SCRA 173, there is no provision
tax declaration or that determined by the in the Comprehensive Agrarian Reform Law
assessor, whichever is lower, in which subjects the expropriation of agricultural
unconstitutional is correct. In EPZA v. Dulay. lands by local government units to the control of the
G.R. No. 59603, April 29, 1987, it was held that this Department of Agrarian Reform and to
method prescribed for ascertaining just require approval from the Department of
compensation constitutes an impermissible Agrarian Reform will mean that it is not the local
encroachment on the prerogatives of courts. It government unit but the Department of Agrarian
tends to render courts inutile in a matter which, Reform who will determine whether or not the
under the Constitution, is reserved to them for expropriation is for a public use.
final determination. For although under the
decrees the courts still have the power to Eminent Domain; Writ of Possession (1993)
determine just compensation, their task is No, 5: In expropriation proceedings: Can
reduced to simply determining the lower value of the judge validly withhold issuance of the
the property as declared either by the owner or by writ of possession until full payment of the
the assessor. "JUST COMPENSATION" means final value of the expropriated property?
the value of the property at the time of the SUGGESTED ANSWER:
taking. Its determination requires that all facts as No, the judge cannot validly withhold the
to the condition of the property and its surroundings issuance of the writ of possession until full
and its improvements and capabilities must payment of the final value of the expropriated
be considered, and this can only be done in a property. As held in National Power Corporation vs.
judicial proceeding. Jocson, 206 SCRA 520. it is the rninisterial duty of
the Judge to issue the writ of possession
Eminent Domain; Socialized Housing (1996) upon deposit of the provisional value of the
No. 4 - The City of Pasig initiated expropriation expropriated property with the National or
proceedings on a one-hectare lot which is part Provincial Treasurer.
of a ten-hectare parcel of land devoted to the ALTERNATIVE ANSWER:
growing of vegetables. The purpose of the

(per Dondee) in Republic vs. Gingoyon, Marina feels very aggrieved over the denial and
GR no. 166429, Dec. 19, 2005, the SC held has come to you for advice. She wants to know:
that RA 8974 now requires full payment (1) Whether the Board of Examiners had any
before the State may exercise proprietary plausible or legal basis for rejecting her
rights in an expropriation proceeding and application in 1986. Explain briefly.
making the previous ruling obiter dictum. (2) Whether the 1987 Constitution guarantees her
the right to admission to take the
Equal Protection; Alien Employment (1989) coming January 1988 marine officers
No 18: An ordinance of the City of examinations. Explain and cite
Manila requires every alien desiring relevant provisions.
to obtain employment of whatever kind, SUGGESTED ANSWER:
including casual and part-time employment, in (a) The disqualification of females from the
the city to secure an employment permit from practice of marine profession constitutes as
the City Mayor and to pay a work permit invidious discrimination condemned by the
fee of P500. Is the ordinance valid? Equal Protection Clause of that Constitution
SUGGESTED ANSWER: (Art. IV, Sec. 1) In the United States, under a
No, the ordinance is not valid. In Villegas vs. similar provision, while earlier decisions of the
Hiu Chiong Tsai Pao Ho, 86 SCRA 270, it was held Supreme Court upheld the validity of a statute
that such an ordinance violates equal prohibiting women from bartending unless she
protection. It failed to consider the valid was the wife or daughter of a male owner
substantial differences among the aliens (Goesart v. Cleary, 335 U.S. 464 (1948) and denying
required to pay the fee. The same among it to women the right to practice law (Bradwell v.
being collected from every employed alien, State, 83 U.S. (16 Wall) 130 (1873), recent
whether he is casual or permanent, part-time or full- decisions have invalidated statutes or
time. The ordinance also violates due regulations providing for differential treatment of
process, because it does not contain any females based on nothing stereotypical and
standard to guide the mayor in the exercise of inaccurate generalizations. The Court
the power granted to him by the ordinance. held that "classification based on sex, like
Thus, it confers upon him unrestricted power to classifications based upon race, alienage, or
allow or prevent an activity which is lawful per national origin, are inherently suspect, and must
se. therefore be subjected to strict judicial scrutiny."
Accordingly, the Court invalidated a statute
Equal Protection; Invidious Discrimination permitting a male serviceman to claim his spouse as
(1987) a dependent to obtain increased quarter
No. VI: Marina Neptunia, daughter of a sea allowance, regardless of whether the wife is
captain and sister to four marine officers actually dependent on him, while denying the same
decided as a child to follow in her father's right to a servicewoman unless her husband
footsteps. In her growing up years she was as was in fact dependent on her for over one half
much at home on board a boat as she was in of his support. (Frontierro v Richardson, 411 U.S.
the family home by the sea. In time she earned a 687 (1973); Accord Craig, v. Boren, 429 U.S. 190 (1976)
Bachelor of Science degree in Marine (providing for sale of beer to males under
Transportation, major in Navigation and 21 and to females under 18); Reed v.
Seamanship. She served her apprenticeship for a Reed. 404 U.S. 71 (1971) (preference given
year in a merchant marine vessel registered for to men over women for appointment as
foreign trade and another year on a administrators of estates invalid).
merchant marine vessel registered for
coastwise trade. But to become a full-fledged (b) In addition to the Equal Protection Clause,
marine officer she had to pass the appropriate the 1987 Constitution now requires the State to
board examinations before she could get her "ensure the fundamental equality before the law of
professional license and registration. She women and men" (Art II, Sec. 14) and to
applied in January 1986 to take examination for provide them with "such facilities and
marine officers but her application was rejected for opportunities that will enhance their welfare and
the reason that the law Regulating the enable them to realize their full potential in the
Practice of Marine Profession in the Philippines service of the nation." (Art. XIII, Sec. 14). These
(Pres. Dec. No. 97 (1973) ) specifically provisions put in serious doubt the validity of
prescribes that "No person shall be qualified for PD 97 limiting the practice of marine profession to
examination as marine officer unless he is: males.

Equal Protection; Invidious Discrimination professions, the medical profession
(1987) directly affects the lives of the people.
No. 10: "X", a son of a rich family, applied for
enrolment with the San Carlos Seminary in Equal Protection; Right to Education (1994)
Mandaluyong, Metro Manila. Because he had No. 12; The Department of Education,
been previously expelled from another Culture and Sports Issued a circular
seminary for scholastic deficiency, the Rector of disqualifying anyone who fails for the fourth
San Carlos Seminary denied the application time in the National Entrance Tests from
without giving any grounds for the denial. After "X" admission to a College of Dentistry. X
was refused admission, the Rector admitted another who was thus disqualified, questions the
applicant, who is the son of a poor farmer who constitutionality of the circular.
was also academically deficient. 1) Did the circular deprive her of
(a) Prepare a short argument citing rules, laws, her constitutional right to education?
or constitutional provisions in support of 2) Did the circular violate the equal protection
"X's" motion for reconsideration of the clause of the Constitution?
denial of his application. SUGGESTED ANSWER:
SUGGESTED ANSWER: 1) No, because it is a permissive limitation to
The refusal of the seminary to admit "X" right to education, as it is intended to
constitutes invidious discrimination, violative of ensure that only those who are qualified to be
the Equal Protection Clause (Art. III, Sec. 1) of the dentists are admitted for enrollment....
Constitution. The fact, that the other applicant
is the son of a poor farmer does not make the 2) No, the circular did not violate the equal
discrimination any less invidious since the other protection clause of the Constitution. There is a
applicant is also academically deficient. The substantial distinction between dentistry
reverse discrimination practiced by the seminary students and other students. The dental
cannot be justified because unlike the race profession directly affects the lives and health of
problem in America, poverty is not a condition of people. Other professions do not involve the same
inferiority needing redress. delicate responsibility and need not be similarly
treated. This is in accordance with the ruling in
Equal Protection; Police Power (2000) Department of Education, Culture and Sports vs.
No IV. Undaunted by his three failures in the San Diego, 180 SCRA 533.
National Medical Admission Test (NMAT), Cruz
applied to take it again but he was refused Equal Protection; Subsidiary
because of an order of the Department of Imprisonment (1989)
Education, Culture and Sports (DECS) No. 4: "X" was sentenced to a penalty of 1 year and
disallowing flunkers from taking the test a fourth 5 months of prision correctional and to pay a fine
time. Cruz filed suit assailing this rule raising of P8,000.00, with subsidiary imprisonment
the constitutional grounds of accessible quality in case of solvency. After serving his prison term,
education, academic freedom and equal "X" asked the Director of Prisons whether he
protection. The government opposes this, could already be released. "X" was asked to pay
upholding the constitutionality of the rule on the the fine of P5,000.00 and he said he could not
ground of exercise of police power. Decide the case afford it, being an indigent. The Director informed
discussing the grounds raised. (5%) him he has to serve an additional prison term at
SUGGESTED ANSWER: the rate of one day per eight pesos in accordance
As held in Department of Education, Culture and with Article 39 of the Revised Penal Code, The
Sports v. San Diego,180 SCRA 533 (1989), the lawyer of "X" filed a petition for habeas corpus
rule is a valid exercise of police power to contending that the further incarceration of his
ensure that those admitted to the medical client for unpaid fines violates the equal
profession are qualified. The arguments of Cruz are protection clause of the Constitution. Decide.
not meritorious. The right to quality
education and academic freedom are not SUGGESTED ANSWER:
absolute. Under Section 5(3), Article XIV of the (1) The petition should be granted, because
Constitution, the right to choose a profession is Article 39 of the Revised Penal Code is
subject to fair, reasonable and equitable unconstitutional. In Tate vs. Short, 401 U.S.
admission and academic requirements. The 395, the United States Supreme Court held that
rule does not violate equal protection. There is a imposition of subsidiary imprisonment upon a
substantial distinction between medical convict who is too poor to pay a fine violates
students and other students. Unlike other equal protection, because economic status
cannot serve as a valid basis for distinguishing Communications. What would you do regarding
the duration of the imprisonment between a that ban on the sale of blocked time?
convict who is able to pay the fine and a convict Explain your answer.
who is unable to pay it. SUGGESTED ANSWER:
I would challenge its validity in court on the
(2) On the other hand, in United States ex rel. ground that it constitutes a prior restraint on
Privitera vs. Kross, 239 F Supp 118, it was held that freedom of expression. Such a limitation is valid
the imposition of subsidiary imprisonment for only in exceptional cases, such as where the
inability to pay a fine does not violate equal purpose is to prevent actual obstruction to
protection, because the punishment should be recruitment of service or the sailing dates of
tailored to fit the individual, and equal protection transports or the number and location of troops, or
does not compel the eradication of every for the purpose of enforcing the primary
disadvantage caused by indigence. The requirements of decency or the security of
decision was affirmed by the United States community life. (Near v. Minnesota, 283 U.S,
Circuit Court of Appeals in 345 F2d 533, and 697 (1931)). Attacks on the government, on the
the United States Supreme Court denied the other hand, cannot justify prior restraints. For as has
petition for certiorari in 382 U.S. 911. This been pointed out, "the interest of society and
ruling was adopted by the Illinois Supreme the maintenance of good government demand
Court in People vs. Williams, 31 ALR3d 920. a full discussion of public affairs. Complete
liberty to comment on the conduct of public men is
Freedom of Expression; Censorship (2003) a scalpel in the case of free speech. The sharp
No IX - May the COMELEC (COMELEC) incision of its probe relieves the abscesses of
prohibit the posting of decals and stickers on officialdom. Men in public life may suffer under a
"mobile" places, public or private, such as on a hostile and an unjust accusation; the wound
private vehicle, and limit their location only to can be assuaged with the balm of a clear
the authorized posting areas that the conscience," (United States v Bustos, 37 Phil. 741
COMELEC itself fixes? Explain. (1918)).
SUGGESTED ANSWER:
According to Adiong v. COMELEC. 207 SCRA The parties adversely affected may also
712 [1992], the prohibition is unconstitutional. It disregard the regulation as being on its face
curtails the freedom of expression of individuals void. As has been held, "any system of prior
who wish to express their preference for a restraints of expression comes to the court
candidate by posting decals and stickers on bearing a heavy presumption against its
their cars and to convince others to agree with constitutional validity," and the government
them. It is also overbroad, because it "thus carries a heavy burden of showing
encompasses private property and constitutes justification for the imposition of such a
deprivation of property without due process of restraint." (New York Times Co. v. United
law. Ownership of property includes the right to use. States, 403 U.S. 713 (1971)).
The prohibition is censorship, which cannot
be justified. The usual presumption of validity that inheres in
legislation is reversed in the case of
Freedom of Expression; Prior Restraint laws imposing prior restraint on
(1988) freedom of expression.
No. 16: The Secretary of Transportation and
Communications has warned radio station Freedom of Religion; Convicted Prisoners
operators against selling blocked time, on the (1989)
claim that the time covered thereby are often No. 5: "X" is serving his prison sentence in
used by those buying them to attack the Muntinlupa. He belongs to a religious sect that
present administration. Assume that the prohibits the eating of meat. He asked the
department implements this warning and orders Director of Prisons that he be served with
owners and operators of radio stations not to meatless diet. The Director refused and "X"
sell blocked time to interested parties without sued the Director for damages for violating his
prior clearance from the Department of religious freedom. Decide.
Transportation and Communications. SUGGESTED ANSWER:
Yes, the Director of Prison is liable under Article 32
You are approached by an interested party of the Civil Code for violating the religious
affected adversely by that order of the freedom of "X". According to the decision of the
Secretary of Transportation and United States Supreme Court in the case of
O'Lone vs. Estate of Shabazz, 107 S. Ct. 2400, of action. The right to act on one's
convicted prisoners retain their right to free religious belief is not absolute and is
exercise of religion. At the same time, lawful subject to police power for the protection of
incarceration brings about necessary limitations of the general welfare. Hence the tapes may
many privileges and rights justified by the be required to be reviewed prior to airing.
considerations underlying the penal system. In
considering the appropriate balance between In Iglesia ni Cristo vs. Court of Appeals,
these two factors, reasonableness should be the 259 SCRA 529, 544, the Supreme Court held:
test. Accommodation to religious freedom can be "We thus reject petitioner's postulate that Its
made if it will not involve sacrificing the interests of religious program is per se beyond review by the
security and it will have no impact on the respondent Board. Its public broadcast on TV
allocation of the resources of the penitentiary. of its religious program brings it out of the bosom
In this case, providing "X" with a meatless diet of internal belief. Television is a medium that
will not create a security problem or unduly reaches even the eyes and ears of children. The
increase the cost of food being served to the Court reiterates the rule that the exercise of
prisoners. In fact, in the case of O' Lone vs. Estate religions freedom can be regulated by the
of Shabazz, it was noted that the Moslem State when it will bring about the CLEAR
prisoners were being given a different meal AND PRESENT DANGER of some substantive
whenever pork would be served. evil which the State is duty bound to prevent,
ALTERNATIVE ANSWER: i.e., serious detriment to the mere overriding
The suit should be dismissed. The Free Interest of public health, public morals, or
Exercise Clause of the Constitution is public welfare."
essentially a restraint on governmental
interference with the right of individuals to However, the Movie and Television Review and
worship as they please. It is not a mandate to Classification Board cannot ban the tapes on
the state to take positive, affirmative action to the ground that they attacked other religions. In
enable the individual to enjoy his freedom. It Iglesia ni Cristo vs. Court of Appeals,. 259
would have been different had the Director of SCRA 529, 547, the Supreme Court held:
Prisons prohibited meatless diets in the penal "Even a side glance at Section 3 of PD No.
institution. 1986 will reveal that it is not among the
grounds to justify an order prohibiting the
Freedom of Religion; Limitations (1998) broadcast of petitioner's television program."
No XV. - A religious organization has a weekly
television program. The program presents Moreover, the broadcasts do not give rise to a
and propagates its religious, doctrines, clear and present danger of a substantive
and compares their practices with those of evil. In the case of Iglesia ni Cristo vs. Court of
other religions. Appeals, 259 SCRA 529, 549:
As the Movie and Television Review and "Prior restraint on speech, including the
Classification Board (MTRCB) found as religious speech, cannot be justified by
offensive several episodes of the program hypothetical fears but only by the showing of a
which attacked other religions, the MTRCB substantive and imminent evil which has
required the organization to submit its tapes for taken the reality already on the ground."
review prior to airing.
Freedom of Religion; Flag Salute (1997)
The religious organization brought the case No. 12: Section 28. Title VI, Chapter 9, of the
to court on the ground that the action Administrative Code of 1987 requires all
of the MTRCB suppresses its freedom of educational institutions to observe a simple and
speech and interferes with its right to dignified flag ceremony, including the playing or
free exercise of religion. Decide. [5%] singing of the Philippine National Anthem,
SUGGESTED ANSWER: pursuant to rules to be promulgated by the
The religious organization cannot invoke Secretary of Education. Culture and Sports,
freedom of speech and freedom of religion as The refusal of a teacher, student or pupil to
grounds for refusing to submit the tapes to the attend or participate in the flag ceremony is a
Movie and Television Review and Classification ground for dismissal after due investigation.
Board for review prior to airing. When the The Secretary of Education Culture and Sports
religious organization started presenting its issued a memorandum implementing said
program over television, it went into the realm provision of law. As ordered, the flag ceremony
would be held on Mondays at 7:30 a.m. during class discretionary funds. Recently, however,
days. A group of teachers, students and pupils the Sangguniang Panlalawigan passed a
requested the Secretary that they be exempted resolution appropriating P100,000 as
from attending the flag ceremony on the ground that a special discretionary fund of the
attendance thereto was against their religious Governor to be spent by him in leading
belief. The Secretary denied the request. The a pilgrimage of his provincemates to
teachers, students and pupils concerned went Mecca, Saudi Arabia, Islam's holiest city.
to Court to have the memorandum circular
declared null and void. Philconsa, on constitutional grounds, has
Decide the case. filed suit to nullify the resolution of the
SUGGESTED ANSWER: Sangguniang Panlalawigan giving the special
The teachers and the students should be discretionary fund to the Governor for the
exempted from the flag ceremony. As held in stated purpose. How would you decide the
Ebralinag vs. Division Superintendent of case? Give your reasons.
Schools of Cebu, 251 SCRA 569. to compel SUGGESTED ANSWER:
them to participate in the flag ceremony will The resolution is unconstitutional First, it
violate their freedom of religion. Freedom of violates art. VI, sec. 29(2) of the Constitution
religion cannot be impaired except upon the which prohibits the appropriation of public
showing of a clear and present danger of a money or property, directly or indirectly, for the use,
substantive evil which the State has a right to benefit or support of any system of religion,
prevent. The refusal of the teachers and the and, second, it contravenes art. VI, sec, 25(6)
students to participate in the flag ceremony which limits the appropriation of discretionary
does not pose a clear and present danger. funds only for public purposes. The use of
discretionary funds for purely religious purpose
Freedom of Religion; Flag Salute (2003) is thus unconstitutional, and the fact that the
No III - Children who are members of a religious disbursement is made by resolution of a local
sect have been expelled from their respective legislative body and not by Congress does not make
public schools for refusing, on account of their it any less offensive to the Constitution. Above
religious beliefs, to take part in the flag all, the resolution constitutes a clear
ceremony which includes playing by a band or violation of the Non- establishment Clause
singing the national anthem, saluting the (art. III, sec. 5) of the Constitution.
Philippine flag and reciting the patriotic pledge. The
students and their parents assail the
expulsion on the ground that the school Freedom of Religion; Non-Establishment
authorities have acted in violation of their right Clause (1992)
to free public education, freedom of speech, and No. 10: Recognizing the value of education in
religious freedom and worship. Decide the case. making the Philippine labor market attractive to
foreign investment, the Department of
SUGGESTED ANSWER: Education, Culture and Sports offers subsidies to
The students cannot be expelled from school. accredited colleges and universities in order to
As held in Ebralinag v. The Division promote quality tertiary education. The DECS
Superintendent of Schools of Cebu. 219 SCRA 256 grants a subsidy to a Catholic school which
[1993], to compel students to take part in the requires its students to take at least 3 hours a
flag ceremony when it is against their week of religious instruction.
religious beliefs will violate their religious a) Is the subsidy permissible? Explain,
freedom. Their expulsion also violates the duty of b) Presuming that you answer in the negative,
the State under Article XIV, Section 1 of the would it make a difference if the subsidy
Constitution to protect and promote the right of all were given solely in the form of laboratory
citizens to quality education and make such equipment in chemistry and physics?
education accessible to all. c) Presume, on the other hand, that the
subsidy is given in the form of scholarship
Freedom of Religion; Non-Establishment vouchers given directly to the student and
Clause (1988) which the student can use for paying tuition in
No. 7: - Tawi-Tawi is a predominantly Moslem any accredited school of his choice,
province. The Governor, the Vice-Governor, whether religious or non-sectarian.
and members of its Sang-guniang Panlalawigan are Will your answer be different?
all Moslems. Its budget provides the SUGGESTED ANSWER:
Governor with a certain amount as his
a) No, the subsidy is not permissible. It will Was the Commission on Audit correct in
foster religion, since the school gives religious disallowing the vouchers in question?
instructions to its students. Besides, it will SUGGESTED ANSWER:
violate the prohibition in Section 29[2J, Article VI Yes, the Commission on Audit was correct in
of the Constitution against the use of public disallowing the expenditures. Section 29(2),
funds to aid religion. In Lemon vs Kurtzman. Article VI of the Constitution prohibits the
403 U.S. 602, it was held that financial expenditure of public funds for the use, benefit, or
assistance to a sectarian school violates the support of any priest. The only exception is
prohibition against the establishment of religion if when the priest is assigned to the armed forces, or
it fosters an excessive government to any penal institution or government
entanglement with religion. Since the school orphanage or leprosarium. The sending of a
requires its students to take at least three hours a priest to minister to the spiritual needs of
week of religious instructions, to ensure that the overseas contract workers does not fall within
financial assistance will not be used for religious the scope of any of the exceptions.
purposes, the government will have to conduct a
continuing surveillance. This involves excessive Freedom of Speech; Ban on Tobacco AD
entanglement with religion. (1992)
No. 1: Congress passes a law
b) If the assistance would be in the form of prohibiting television stations from airing any
laboratory equipment in chemistry and physics, it commercial advertisement which promotes
will be valid. The purpose of the assistance is tobacco or in any way glamorizes the
secular, i.e., the improvement of the quality of consumption of tobacco products.
tertiary education. Any benefit to religion is
merely incidental. Since the equipment can This legislation was passed in response
only be used for a secular purpose, it is to findings by the Department of Health about
religiously neutral. As held in Tilton vs. the alarming rise in lung diseases in the
Richardson, 403 U.S. 672, it will not involve country. The World Health Organization
excessive government entanglement with has also reported that U.S. tobacco
religion, for the use of the equipment will not companies have- shifted marketing efforts to
require surveillance. the Third World due to dwindling sales in
the health-conscious American market.
c) In general, the giving of scholarship
vouchers to students is valid. Section Cowboy Levy's, a Jeans company,
2(3), Article XIV of the Constitution recently released an advertisement
requires the State to establish a system of featuring model Richard Burgos wearing
subsidies to deserving students in both public Levy's jackets and jeans and holding a
and private schools. However, the law is vague and pack of Marlboro cigarettes.
over-broad. Under it, a student who wants to
study for the priesthood can apply for the The Asian Broadcasting Network (ABN), a
subsidy and use it for his studies. This will privately owned television station, refuses to air the
involve using public funds to aid religion. advertisement in compliance with the law.
a) Assume that such refusal abridges the
Freedom of Religion; Non-Establishment freedom of speech. Does the constitutional
Clause (1997) prohibition against the abridgement of the
No. 4: Upon request of a group of overseas freedom of speech apply to acts done by
contract workers in Brunei, Rev. Father Juan de la ABN, a private corporation? Explain.
Cruz, a Roman Catholic priest, was sent to that b) May Cowboy Levy's, a private
country by the President of the Philippines to corporation, invoke the free speech
minister to their spiritual needs. The travel guarantee in its favor? Explain.
expenses, per diems, clothing allowance and c) Regardless of your answers above, decide
monthly stipend of P5,000 were ordered the constitutionality of the law in question.
charged against the President's discretionary SUGGESTED ANSWER:
fund. Upon post audit of the vouchers therefor, the a) The constitutional prohibition against the
Commission on Audit refused approval thereof freedom of speech does not apply to ABN, a
claiming that the expenditures were in violation private corporation. As stated in Hudgens vs.
of the Constitution. National Labor Relations Board, 424 U.S. 507,
the constitutional guarantee of freedom of
speech is a guarantee only against
abridgement by the government. It does not knowledge that it was false or with reckless
therefore apply against private parties. disregard of whether it was false or not (Borja v.
ALTERNATIVE ANSWER: Court of Appeals, 301 SCRA 1 /1999). Since there
Since ABN has a franchise, it may be is no proof that the report was published with
considered an agent of the government by knowledge that it is false or with reckless
complying with the law and refusing to air the disregard of whether it was false or not, the
advertisement, it aligned itself with the defendants are not liable for damage.
government. Thus it rendered itself liable for a
lawsuit which is based on abridgement of the SECOND ALTERNATIVE ANSWER:
freedom of speech. Under Article 32 of the Civil Since Senator XX is a public person and the
Code, even private parties may be liable for questioned imputation is directed against him in his
damages for impairment of the freedom of public capacity, in this case actual malice
speech. means the statement was made with
knowledge that it was false or with reckless
b) Cowboy Levy's may invoke the disregard of whether it was false or not (Borjal
constitutional guarantee of freedom of speech v. Court of Appeals, 301 SCRA 1 /1999]). Since it is
in its favor. In First National Bank of Boston vs. a matter of public knowledge that there is no
Bellotti, 435 U.S. 765, it was ruled that this YY Street in Makati, the publication was made
guarantee extends to corporations. In Virginia with reckless disregard of whether or not it is false.
State Board of Pharmacy vs. Virginia Citizens The defendants may be held liable for damages.
Consumer Council Inc., 425 U.S. 748, it was held
that this right extends to commercial
advertisements. In Ayer Productions Pty, Ltd. vs. Freedom of the Press; Wartime Censorship
Capulong, 160 SCRA 861, the Supreme Court held (1987)
that even if the production of a film is a No. XIV: In the morning of August 28, 1987,
commercial activity that is expected to yield during the height of -the fighting at Channel 4
profits, it is covered by the guarantee of and Camelot Hotel, the military closed Radio
freedom of speech. Station XX, which was excitedly reporting the
successes of the rebels and movements
c) The law is constitutional. It is a valid towards Manila and troops friendly to the
exercise of police power, .... rebels. The reports were correct and factual. On
October 6, 1987, after normalcy had returned
Freedom of the Press; Actual Malice (2004) and the Government had full control of the
(5-a) The STAR, a national daily newspaper, situation, the National Telecommunications
carried an exclusive report stating that Senator XX Commission, without notice and hearing, but
received a house and lot located at YY Street, merely on the basis of the report of the military,
Makati, in consideration for his vote cutting cancelled the franchise of station XX.
cigarette taxes by 50%. The Senator sued the Discuss the legality of:
STAR, its reporter, editor and publisher for (a) The action taken against the station on
libel, claiming the report was completely false August 28, 1987;
and malicious. According to the Senator, there (b) The cancellation of the franchise of the
is no YY Street in Makati, and the tax cut was station on October 6, 1987.
only 20%. He claimed one million pesos in SUGGESTED ANSWER:
damages. The defendants denied "actual (a) The closing down of Radio Station XX
malice," claiming privileged communication and during the fighting is permissible. With respect
absolute freedom of the press to report on public news media, wartime censorship has been
officials and matters of public concern. If there upheld on the ground that "when a nation is at war
was any error, the STAR said it would many things that might be said in time of peace
publish the correction promptly. Is there "actual are such a hindrance to its efforts that their
malice" in STAR'S reportage? How is "actual utterance will not be endured so long as men
malice" defined? Are the defendants liable for fight and that no Court could regard them as
damages? (5%) protected by any constitutional right." The
security of community life may be protected
FIRST ALTERNATIVE ANSWER: against incitements to acts of violence and the
Since Senator XX is a public person and the overthrow by force of orderly government.
questioned imputation is directed against him in his (Near v. Minnesota, 283 U.S. 697 (1931),
public capacity, in this case actual malice quoting Justice Holme's opinion in Schenck v.
means the statement was made with United States, 249 U.S. 47 (1919); New York
Times v. United States, 403 U.S. 713 (1971) ) does not entail enforcement of the stipulation
With greater reason then may censorship in not to marry and not to have a baby. It is limited to
times of emergency be justified in the case of a refund of a portion of the promotion
broadcast media since their freedom is expenses incurred by Solidaridad Films.
somewhat lesser in scope. The impact of the
vibrant speech, as Justice Gutierrez said, is Involuntary Servitude (1993)
forceful and immediate. Unlike readers of the No. 16; - Joy, an RTC stenographer, retired at
printed work, a radio audience has lesser the age of 65. She left unfinished the
opportunity to cogitate, analyze and reject the transcription of her notes in a criminal case
utterance. (Eastern Broadcasting Corp (DYRE) v, which was on appeal. The Court of Appeals
Dans, 137 SCRA 647 (1985) ). In FCC v. ordered Joy to transcribe her notes. She
Pacifica Foundation, 438 U.S. 726 (1978), it was refused to comply with the order reasoning that she
held that "of all forms of communication, it is was no longer in the government service. The
broadcasting which has received the most CA declared Joy in contempt of court and she
limited First Amendment Protection." was incarcerated. Joy filed a petition for habeas
corpus arguing that her incarceration is tantamount
Impairment Clause; Basic Human to illegal detention and to require her to work
Rights (1992) sans compensation would be involuntary
No. 2: Sheila, an actress, signed a two-year servitude. Decide.
contract with Solidaridad Films, The film SUGGESTED ANSWER:
company undertook to promote her career and to Joy can be incarcerated for contempt of court
feature her as the leading lady in at least four for refusing to transcribe her stenographic
movies. In turn, Sheila promised that, for the notes. As held In Adoracion v. Gatmaitan, 64
duration of the contract, she shall not get SCRA 132, her incarceration does not
married or have a baby; otherwise, she shall be constitute illegal detention. It is lawful, because it is
liable to refund to the film company a portion of its the consequence of her disobedience of the court
promotion expenses. order. Neither can she claim that to require
a) Does this contract impair, or impinge upon, her to work without compensation is tantamount
any constitutionally protected liberty to involuntary servitude. Since courts have
of Sheila? Explain. the Inherent power to Issue such orders as are
b) If Solidaridad Films tries to enforce this necessary for the administration of Justice, the
contract judicially, will this constitutionally Court of Appeals may order her to transcribe her
protected liberty prevail? Explain. stenographic notes even if she is no longer In the
SUGGESTED ANSWER: government service.
a) Yes, the contract impairs the right of Sheila to
marry and to procreate. The case of Loving vs. Liberty of Abode; Limitations (1998)
Virginia, 388 U.S. 1 and Zablocki vs. Redhail No VIII - Juan Casanova contracted Hansen's
434 U.S. 374 recognized the right to marry is a disease (leprosy) with open lesions. A law
basic civil right. Likewise, the case of Skinner requires that lepers be isolated upon petition of the
vs Oklahoma, 316 U.S. 535 recognized that City Health Officer. The wife of Juan
the right to procreate is a basic civil right. These Casanova wrote a letter to the City Health
rights are part of the liberty protected by the due Officer to have her formerly philandering
process clause in Section 1. Article 1 of the husband confined in some isolated leprosarium.
Constitution. Juan Casanova challenged the constitutionality of
the law as violating his liberty of abode. Will the suit
b) Yes, the constitutionally protected liberty of prosper? [5%]
Sheila will prevail, because it involves basic SUGGESTED ANSWER:
human rights. The waiver of these basic No, the suit will not prosper. Section 6, Article
human rights is void. What Solidaridad Films III of the Constitution provides:
is seeking to recover are promotion expenses. "The liberty of abode and of changing
These involve property rights. As held in the same within the limits prescribed by law
Philippine Blooming Mills Employees shall not be impaired except upon lawful
Organization vs. Philippine Blooming Mills, Inc., 51 order of the court."
SCRA 189, civil rights are superior to
property rights. The liberty of abode is subject to the police
ALTERNATIVE ANSWER; power of the State. Requiring the segregation of
The waiver of the right to marry and the right to lepers is a valid exercise of police power. In
procreate is valid. Enforcement of the contract
Lorenzo us. Director of Health. 50 Phil 595, a valid exercise of police power. (See also
598, the Supreme Court held: People vs. Nitafan, 207 SCRA 730)
"Judicial notice will be taken of the fact that
leprosy is commonly believed to be an Police Power; Abatement of Nuisance (2004)
infectious disease tending to cause one (9-b) The City of San Rafael passed an
afflicted with it to be shunned and excluded ordinance authorizing the City Mayor, assisted
from society, and that compulsory by the police, to remove all advertising signs
segregation of lepers as a means of displayed or exposed to public view in the main city
preventing the spread of the disease is street, for being offensive to sight or
supported by high scientific authority." otherwise a nuisance. AM, whose advertising
agency owns and rents out many of the
Liberty of Abode; Temporary (1996) billboards ordered removed by the City Mayor,
No 2: The military commander-in charge of the claims that the City should pay for the
operation against rebel groups directed destroyed billboards at their current market
the inhabitants of the island which would value since the City has appropriated them for
be the target of attack by government the public purpose of city beautification. The
forces to evacuate the area and offered Mayor refuses to pay, so AM is suing the City
the residents temporary military hamlet. and the Mayor for damages arising from the
taking of his property without due process nor
Can the military commander force the residents just compensation. Will AM prosper? Reason
to transfer their places of abode without a court briefly. (5%)
order? Explain. FIRST ALTERNATIVE ANSWER:
SUGGESTED ANSWER: The suit of AM will not prosper. The removal of the
No, the military commander cannot compel the billboards is not an exercise of the power of eminent
residents to transfer their places of abode domain but of police power (Churchill v. Rafferty,
without a court order. Under Section 6, Article 32 Phil. 580 [19150- The abatement of a nuisance
III of the Constitution, a lawful order of the court is in the exercise of police power does not
required before the liberty of abode and of constitute taking of property and does not entitle the
changing the same can be impaired. owner of the property involved to compensation.
ALTERNATIVE ANSWER; (Association of Small Landowners in the
Yes, the military commander can compel Philippines, Inc. v. Secretary of Agrarian Reform,
the residents to transfer their places of 175 SCRA 343 [1989]).
abode without a court order. If there is no
reasonable time to get a court order and SECOND ALTERNATIVE ANSWER:
the change of abode is merely temporary, The removal of the billboards for the purpose of
because of the exigency, this exercise of beautification permanently deprived AM of
police power may be justified. the right to use his property and amounts
to its taking. Consequently, he should be
Non-Imprisonment for Non-Payment of Debt paid just compensation. (People v. Fajardo,
(1993) 104 Phil. 443 11958]).
No 12: Sec. 13 of PD 115 (Trust Receipts Law)
provides that when the entrustee in a trust Police Power; Ban on Tobacco AD (1992)
receipt agreement fails to deliver the No. 1: Congress passes a law
proceeds of the sale or to return the goods if prohibiting television stations from airing any
not sold to the entrustee-bank, the entrustee commercial advertisement which promotes
is liable for estafa under the RPC. Does tobacco or in any way glamorizes the
this provision not violate the consumption of tobacco products.
constitutional right against imprisonment
for non-payment of a debt? Explain. This legislation was passed in response
SUGGESTED ANSWER: to findings by the Department of Health about
No, Section 13 of Presidential Decree No. 115 the alarming rise in lung diseases in the
does not violate the constitutional right against country. The World Health Organization
imprisonment for non-payment of a debt. As has also reported that U.S. tobacco
held in Lee vs. Rodil, 175 SCRA 100, the companies have- shifted marketing efforts to
criminal liability arises from the violation of the the Third World due to dwindling sales in
trust receipt, which is separate and distinct from the the health-conscious American market,
loan secured by it. Penalizing such an act is

Cowboy Levy's, a Jeans company, of the ordinance is a valid exercise of police
recently released an advertisement power. It is hazardous to health and comfort to use
featuring model Richard Burgos wearing the lot for residential purposes, since a highway
Levy's jackets and jeans and holding a crosses the subdivision and the area has
pack of Marlboro cigarettes. become commercial.
The Asian Broadcasting Network (ABN), a Police Power; Zoning Ordinance vs. Non-
privately owned television station, refuses to air the Impairment of Contracts (2001)
advertisement in compliance with the law. No XVIII In the deeds of sale to, and in the land
Decide the constitutionality of the law in titles of homeowners of a residential subdivision in
question. Pasig City, there are restrictions annotated
SUGGESTED ANSWER: therein to the effect that only residential houses or
The law is constitutional. It is a valid exercise of structures may be built or constructed on the lots.
police power, because smoking is harmful to health. However, the City Council of Pasig enacted
In Posadas de Puerto Rico Associates vs. an ordinance amending the existing zoning
Tourism Company of Puerto Rico, 478 U.S. 328, it ordinance by changing the zone
was ruled that a law prohibiting certain types of classification in that place from purely
advertisements is valid if it was adopted in residential to commercial.
the interest of the health, safety, and welfare
of the people. In Capital Broadcasting "A", a lot owner, sold his lot to a banking firm
Company us. Mitchell 333 F Supp 582, a law and the latter started constructing a commercial
making it unlawful to advertise cigarettes on building on the lot to house a bank inside the
any medium of electronic communication was subdivision. The subdivision owner and the
upheld. The United States Supreme Court homeowners' association filed a case in court to
summarily sustained this ruling in Capita! stop the construction of the building for banking
Broadcasting Company us, Acting Attorney business purposes and to respect the
General 405 U.S. 1000. The law in question restrictions embodied in the deed of sale by the
was enacted on the basis of the legislative finding subdivision developer to the lot owners, as well as
that there is a need to protect public health, the annotation in the titles.
because smoking causes lung diseases.
Cowboy Levy's has not overthrown this finding. If you were the Judge, how would you
resolve the case? (5%)
SUGGESTED ANSWER:
Police Power; Zoning Ordinance vs. Non- If I were the judge, I would dismiss the case. As
Impairment of Contracts (1989) held in Ortigas and Company
No. 12: Pedro bought a parcel of land from Limited Partnership vs. FEATI Bank
Smart Corporation, a realty firm engaged in and Trust Company. 94 SCRA 633 (1979),
developing and selling lots to the public. One of the the zoning ordinance is a valid exercise of
restrictions in the deed of sale which was police power and prevails over the
annotated in the title is that the lot shall be used by contractual stipulation restricting the use
the buyer exclusively for residential of the lot to residential purposes.
purposes. A main highway having been
constructed across the subdivision, the area Privacy of Communication (2001)
became commercial in nature. The municipality later No XII - "A" has a telephone line with
passed a zoning ordinance declaring the area an extension. One day, "A" was talking to "B"
as a commercial bank building on his lot. Smart over the telephone. "A" conspired with his
Corporation went to court to stop the friend "C", who was at the end of the
construction as violative of the building extension line listening to "A's" telephone
restrictions imposed by it. The corporation conversation with "B" in order to overhear
contends that the zoning ordinance cannot and tape-record the conversation wherein
nullify the contractual obligation assumed by the "B" confidentially admitted that with evident
buyer. Decide the case. premeditation, he (B) killed "D" for having
SUGGESTED ANSWER: cheated him in their business partnership.
The case must be dismissed. As held in Ortigas and "B" was not aware that the telephone
Company, Limited Partnership vs. FEATIi Bank conversation was being tape- recorded.
and Trust Company, 94 SCRA 533, such a
restriction in the contract cannot prevail over the
zoning ordinance, because the enactment
In the criminal case against "B" for murder, is moved for its return on the ground that
the tape-recorded conversation containing his it violates the right of "X" against unlawful
admission admissible in evidence? Why? (5%) search and seizure. Decide.
The tape-recorded conversation is not The objection of the lawyer must be sustained,
admissible in evidence. As held in Salcedo- Section 3(1), Article IV of the 1987 Constitution
Ortanez vs. Court of Appeals, 235 SCRA 111 provides:
(1994). Republic Act No. 4200 makes the tape- "The privacy of communication
recording of a telephone conversation done and correspondence shall be inviolable
without the authorization of all the parties to the except upon lawful order of the court, or when
conversation, inadmissible in evidence. In public safety or order requires
addition, the taping of the conversation violated the otherwise as prescribed by law."
guarantee of privacy of communications
enunciated in Section 3, Article III of the There was no court order which authorized the
Constitution. warden to read the letter of "X". Neither is there
any law specifically authorizing the Bureau
Privacy of Correspondence (1998) of Prisons to read the letter of "X", Under
No VII. - The police had suspicions that Juan Section 3(1), Article III of the 1987
Samson, member of the subversive New Constitution, to interfere with any
Proletarian Army, was using the mail for correspondence when there is no court
propaganda purposes in gaining new adherents to order, there must be a law authorizing it
its cause. The Chief of Police of Bantolan, in the interest of public safety or order.
Lanao del Sur ordered the Postmaster of the
town to intercept and open all mail addressed to The ruling of the United States Supreme Court in
and coming from Juan Samson in the interest of the the case of Stroud vs. United States, 251 U.S.
national security. Was the order of the Chief of 15 is not applicable here, because Section 3(1),
Police valid? (5%) Article III of the 1987 Constitution has no
SUGGESTED ANSWER: counterpart in the American Constitution.
No, the order of the Chief of Police is not valid, Hence, in accordance with Section 3(2), Article III
because there is no law which authorizes him of the 1987 Constitution, the letter is
to order the Postmaster to open the inadmissible in evidence.
letters addressed to and coming from Juan
Samson. An official in the Executive ALTERNATIVE ANSWER:
Department cannot interfere with the privacy The objection of the lawyer must be overruled. In
of correspondence and communication in Hudson vs. Palmer, 468 U.S. 517, it was held that
the absence of a law authorizing him to do the constitutional prohibition against illegal
so or a lawful order of the court. Section 3(1), searches and seizures does not extend to the
Article III of the Constitution provides: confines of the prison. In Stroud vs. United
"The privacy of communication and States, 251 U.S. 15, the United States Supreme
correspondence shall be inviolable Court held that letters voluntarily written by a
except upon lawful order of the court, or prisoner and examined by the warden which
when public safety or order requires contained incriminatory statements were
otherwise as prescribed by law." admissible in evidence. Their inspection by the
prison authorities did not violate the
Privacy of Correspondence; Jail (1989) constitutional prohibition against illegal
No. 8: While serving sentence in Muntinlupa for the searches and seizures. This is an established
crime of theft, "X" stabbed dead one of his guards, practice reasonably designed to promote
"X" was charged with murder. During his trial, the discipline within the penitentiary.
prosecution introduced as evidence a letter written
in prison by "X" to his wife tending to establish Right to Assembly; Permit Application;
that the crime of murder was the result of Freedom Parks (Q2-2006)
premeditation. The letter was written voluntarily. In The Samahan ng mga Mahihirap (SM) filed with the
the course of inspection, it was opened and read by Office of the City Mayor of Manila an
a warden pursuant to the rules of discipline of the application for permit to hold a rally on Mendiola
Bureau of Prisons and considering its contents, Street on September 5, 2006 from 10:00 a.m. to
the letter was turned over to the prosecutor. The 3:00 p.m. to protest the political killings of
lawyer of "X" objected to the presentation of the journalists. However, the City Mayor denied
letter and their application on the ground that a rally at the

time and place applied for will block the traffic in SUGGESTED ANSWER:
the San Miguel and Quiapo Districts. He The arrests are unlawful. What is prohibited
suggested the Liwasang Bonifacio, which and penalized under Sec. 13 (a) and 14 (a) of
has been designated a Freedom Park, as B.P. Big 880 is "the holding of any public
venue for the rally. assembly as defined in this Act by any leader
or organizer without having first secured that
1. Does the SM have a remedy to written permit where a permit is required
contest the denial of its application for from the office concerned x x x Provided,
a permit? (2.5%) however, that no person can be punished or
SUGGESTED ANSWER: held criminally liable for participating in or
Yes, SM has a remedy. Under B.P. Big. 880 attending an otherwise peaceful assembly."
(The Public Assembly Act of 1985), in the event of
denial of the application for a permit, the Thus, only the leader or organizer of the rally
applicant may contest the decision in an without a permit may be arrested without a
appropriate court of law. The court must decide warrant while the members may not be
within twenty-four (24) hours from the date of arrested, as they can not be punished or held
filing of the case. Said decision may be criminally liable for attending the rally. However,
appealed to the appropriate court within forty- under Section 12 thereof, when the public
eight (48) hours after receipt of the same. In all assembly is held without a permit where a
cases, any decision may be appealed to the permit is required, the said public assembly may
Supreme Court (Bayan Muna v. Ermita, G.R. be peacefully dispersed.
No. 169838, April 25, 2006).
Right to Assembly; Permit
2. Does the availability of a Freedom Requirements (1992)
Park justify the denial of SM's application No. 4: Olympia Academy, a private
for a permit? (2.5%) university, issued a student regulation for
SUGGESTED ANSWER: maintaining order in the school campus and
No, the availability of a freedom park does not to ensure that academic activities shall
justify the denial of the permit. It does imply that no be conducted effectively.
permits are required for activities in freedom parks.
Under B.P. Big. 880, the denial may be justified Henceforth, every student organization
only if there is clear and convincing evidence intending to hold any symposium, convocation, rally
that the public assembly will create a clear and or any assembly within school property and
present danger to public order, public safety, involving at least 20 people must file, for the
public convenience, public morals or public prior approval of the Dean of Students, an
health (Bayan Muna v. Ermita, G.R. No. 169838, Application setting forth the time, place,
April 25, 2006). expected size of the group, and the subject-
matter and purpose of the assembly.
3. Is the requirement to apply for a permit to
hold a rally a prior restraint on freedom of The League of Nationalist Students questions
speech and assembly? (2.5%) the validity of the new regulation. Resolve.
No, the requirement for a permit to hold a rally is The regulation is valid. As held In Rarnento us. Mal-
not a prior restraint on freedom of speech and abanan, 129 SCRA 359, if an assembly will be held
assembly. The Supreme Court has held that the by students in school premises, permit must be
permit requirement is valid, referring to it as sought from the school authorities, who are devoid
regulation of the time, place, and manner of of the power to deny such request arbitrarily or
holding public assemblies, but not the content unreasonably. In granting such permit, there
of the speech itself. Thus, there is no prior may be conditions as to the time and place of
restraint, since the content of the speech is not the assembly to avoid disruption of classes or
relevant to the regulation (Bayan Muna v. Ermita, stoppage of work of the non- academic
G.R. No. 169838, April 25, 2006). personnel.
4. Assuming that despite the denial of SM's Right to Assembly; Public Teachers (2000)
application for a permit, its members hold No XII - Public school teachers staged for days
a rally, prompting the police to mass actions at the Department of Education,
arrest them. Are the arrests without Culture and Sports to press for the immediate
judicial warrants lawful? (2.5%) grant of their demand for additional pay. The
DECS Secretary issued to them a notice of the (a) Their strike was an exercise of their
illegality of their unauthorized action, ordered constitutional right to peaceful assembly and to
them to immediately return to work, and warned petition the government for redress
them of imposable sanctions. They ignored this and of grievances.
continued with their mass action. The DECS SUGGESTED ANSWER:
Secretary issued orders for their preventive (a) According to De la Cruz v. Court of
suspension without pay and charged the teachers Appeals, 305 SCRA 303 (1999), the argument
with gross misconduct and gross neglect of duty of the teachers that they were merely exercising
for unauthorized abandonment of teaching posts their constitutional right to peaceful assembly
and absences without leave. and to petition the government for redress of
a) Are employees in the public sector allowed grievance cannot be sustained, because such
to form unions? To strike? Why? (3%) rights must be exercised within reasonable
b) The teachers claim that their right to limits. When such rights were exercised on
peaceably assemble and petition the regular school days instead of during the free
government for redress of grievances has time of the teachers, the teachers committed
been curtailed. Are they correct? Why? acts prejudicial to the best interests of the
(2%) service.
SUGGESTED ANSWER:
a) Section 8, Article III of the Constitution allows Right to Travel; Order of Arrest (1991)
employees in the public sector to form unions. No. 6: Mr. Esteban Krony, a Filipino citizen, is
However, they cannot go on strike. As arrested for the crime of smuggling. He posts
explained in Social Security System Employees bail for his release. Subsequently, he jumps bail and
Association v. Court of Appeals. 175 SCRA 686 is about to leave the country when the
[1989], the terms and conditions of their Department of Foreign Affairs (DFA) cancels his
employment are fixed by law. Employees in passport. He sues the DFA, claiming violation
the public sector cannot strike to secure of his freedom to travel, citing the new provision in
concessions from their employer. the Bill of Rights of the 1987 Constitution, to
wit: "Neither shall the right to travel be
b. The teachers cannot claim that their right to impaired except in the interest of national
peaceably assemble and petition for the security, public safety, or public health, as may be
redress of grievances has been curtailed. provided by law. Decide the case.
According to Bangalisan v. Court of Appeals. SUGGESTED ANSWER:
276 SCRA 619 (1997), they can exercise this The case should be dismissed. Any person
right without stoppage of classes. under an order of arrest is under restraint and
therefore he can not claim the right to travel. If he is
Right to Assembly; Public Teachers (2002) admitted to bail his freedom of movement is
No X - Ten public school teachers of Caloocan confined within the country. Therefore, if he
City left their classrooms to join a strike, which subsequently jumps bail, he cannot demand
lasted for one month, to ask for passport which in effect will facilitate his escape
teachers' benefits. from the country; he is in fact liable to be
arrested anytime. Indeed, the right to travel
The Department of Education, Culture and under the Constitution presupposes that the
Sports charged them administratively, for which individual is under no restraint such as that
reason they were required to answer and which would follow from the fact that one has a
formally investigated by a committee composed of pending criminal case and has been placed
the Division Superintendent of Schools as under arrest.
Chairman, the Division Supervisor as member
and a teacher, as another member. On the Rights of the Accused; Counsel of
basis of the evidence adduced at the formal his Choice (Q8-2005)
investigation which amply established their (1) Mariano was arrested by the NBI as a
guilt, the Director rendered a decision meting suspect in the shopping mall bombings.
out to them the penalty of removal from office. Advised of his rights, Mariano asked for the
The decision was affirmed by the DECS assistance of his relative, Atty. Santos. The NBI
Secretary and the Civil Service Commission. noticed that Atty. Santos was
On appeal, they reiterated the arguments they inexperienced, incompetent and inattentive.
raised before the administrative bodies, namely: Deeming him unsuited to protect the rights
of Mariano, the NBI dismissed Atty. Santos.
Appointed in his place was Atty. Barroso, a
bar topnotcher who was in the premises once the prosecution shows there was
visiting a relative. Atty. Barroso compliance with the constitutional requirement on
ably assisted Mariano when the latter pre-interrogation advisories, a confession is
gave a statement. However, Mariano presumed to be voluntary and the declarant
assailed the investigation claiming that he bears the burden of proving that his confession is
was deprived of counsel of his choice. involuntary and untrue. A confession is
admissible until the accused successfully
Was the NBI correct in dismissing Atty. proves that it was given as a result of violence,
Santos and appointing Atty. Barroso in his intimidation, threat or promise of reward or
stead? Is Mariano's statement, made with leniency which are not present in this case.
the assistance of Atty. Barroso, admissible Accordingly, the statement is admissible.
in evidence? (5%) (People v. Jerez, G.R. No. 114385, January 29, 1998)
ALTERNATIVE ANSWER: Rights of the Accused; Presumption of

The NBI was not correct in dismissing Atty. Innocence vs. Presumption of Theft (2004)
Santos and appointing Atty. Barroso in his (5-b) OZ lost five head of cattle which he
stead. Article III, Section 12(1) of the 1987 reported to the police as stolen from his barn.
Constitution requires that a person under He requested several neighbors, including RR,
investigation for the commission of an offense for help in looking for the missing animals. After an
shall have no less than "competent and extensive search, the police found two head in RR's
independent counsel preferably of his own farm. RR could not explain to the police how they
choice " This is meant to stress the primacy got hidden in a remote area of his farm.
accorded to the voluntariness of the choice Insisting on his innocence, RR consulted a
under the uniquely stressful conditions of a lawyer who told him he has a right to be
custodial investigation' Thus, the lawyer called to presumed innocent under the Bill of Rights. But
be present during such investigation should be there is another presumption of theft arising
as far as reasonably possible, the choice of the from his unexplained possession of stolen
individual undergoing questioning. The cattle— under the penal law.
appointment of Atty. Barroso is questionable Are the two presumptions capable
because he was visiting a relative working in of reconciliation In this case? If so, how can
the NBI and thus his independence is doubtful. they be reconciled? If not, which should
Lawyers engaged by the police, whatever prevail? (5%)
testimonials are given as proof of their probity SUGGESTED ANSWER:
and supposed independence, are generally The two presumptions can be reconciled. The
suspect, as in many areas, the relationship presumption of innocence stands until the
between lawyers and law enforcement contrary is proved. It may be overcome by a
authorities can be symbiotic. Considering that contrary presumption founded upon human
Mariano was deprived of counsel of his own experience. The presumption that RR is the one
choice, the statement is inadmissible in who stole the cattle of OZ is logical, since he
evidence. (People v. Januario, G.R. No. 98252, was found in possession of the stolen cattle.
February 7, 1997) RR can prove his innocence by presenting
evidence to rebut the presumption. The burden of
ALTERNATIVE ANSWER: evidence is shifted to RR, because how he
The NBI was correct in dismissing Atty. Santos as came into possession of the cattle is peculiarly
he was incompetent. The 1987 Constitution within his knowledge. (Dizon-Pamintuan v.
requires counsel to be competent and People, 234 SCRA 63 (1994)).
independent. Atty. Barroso, being a bar
topnotcher ably assisted Mariano and there is Rights of the Accused; Right to Bail (1993)
no showing that his having a relative in the NBI No. 9: Johann learned that the police were
affected his independence. Moreover, the looking for him in connection with the rape of an 18-
accused has the final choice of counsel as he year old girl, a neighbor. He went to the police
may reject the one chosen for him and ask for station a week later and presented himself to
another. A lawyer provided by the investigators is the desk sergeant. Coincidentally. the rape victim
deemed engaged by the accused where he was in the premises executing an extrajudicial
raises no objection against the lawyer during the statement. Johann, along with six (6) other
course of the investigation, and the accused suspects, were placed in a police line- up and the
thereafter subscribes to the truth of his girl pointed to him as the rapist. Johann was
statement before the swearing officer. Thus, arrested and locked up in a cell.

Johann was charged with rape in court but prior No. 15: May an alien invoke the
to arraignment invoked his right to constitutional right to bail during the pendency
preliminary investigation. This was denied of deportation proceedings?
by the judge, and thus, trial proceeded. After SUGGESTED ANSWER:
the prosecution presented several witnesses, No. an alien may not invoke the constitutional
Johann through counsel, invoked the right right to bail during the pendency of deportation
to ball and filed a motion therefor, which proceedings. In Harvey vs Santiago, 162 SCRA
was denied outright by the Judge. Johann 840, it was held that the constitutional
now files a petition for certiorari before guarantee to bail may not be invoked in
the Court of Appeals arguing that: deportation proceedings, because they do not
3) He is entitled to bail as a matter of partake of the nature of a criminal action.
right, thus the Judge should not have
denied his motion to fix ball outright. Decide. Rights of the Accused; Right to Bail; Matter
SUGGESTED ANSWER: of Right or a Matter of Discretion (Q7-2005)
3) In accordance with Art. III. sec. 13 of the a) State with reason(s) whether bail is a matter of
Constitution, Johann may be denied bail if the right or a matter of discretion in the
evidence of his guilt is strong considering that following cases: (4%)
the crime with which he is charged is a) The imposable penalty for the
punishable by reclusion perpetua. It is thus not a crime charged is reclusion perpetua
matter of right for him to be released on bail in such and the accused is a minor;
case. The court must first make a
determination of the strength of the evidence on the SUGGESTED ANSWER:
basis of evidence already presented by the If the accused is a minor where the imposable
prosecution, unless it desires to present some penalty for the crime charged is reclusion
more, and give the accused the opportunity to perpetua, bail would be a matter of right. Under
present countervailing evidence. If having done this Article 68 of the Revised Penal Code, when the
the court finds the evidence not to be offender is a minor under eighteen years of
strong, then it becomes the right of Johann to age, he is entitled to a penalty, depending on
be admitted to bail. The error of the trial court his age, lower by one or two degrees than that
lies in outrightly denying the motion for bail of prescribed by law for the crime committed. The
Johann. Constitution withholds the guaranty of bail from one
who is accused of a capital offense where the
Rights of the Accused; Right to Bail; Capital evidence of guilt is strong. The obvious reason
Offense (Q4-2006) is that one who faces a probable death sentence
State whether or not the law is has a particularly strong temptation to flee. This
constitutional. Explain briefly. reason does not hold where the accused has
2. A law denying persons charged with been established without objection to be a minor
crimes punishable by reclusion who by law cannot be sentenced to death. (Bravo
perpetua or death the right to bail. (2%) v. Borja, G.R. No. L-65228, February 18, 1985)
SUGGESTED ANSWER:
The law is invalid as it contravenes
Section 13, Article III of the 1987 b) The imposable penalty for the
Constitution which provides that "all crime charged is life imprisonment
persons, except those charged with and the accused is a minor;
offenses punishable by reclusion perpetua
when evidence of guilt is strong, shall, ALTERNATIVE ANSWER:
before conviction, be bailable by sufficient If the accused is a minor and the imposable
sureties, or be released on recognizance penalty for the crime charged is life
as may be provided by law." The accused may imprisonment, bail would not be a matter of
not be deprived of his constitutional right to right. In the instant case, assuming that
bail even if charged with a capital offense evidence of guilt strong, bail shall be denied as the
where the evidence of guilt is not strong. privileged mitigating circumstance of minority
is not available for violation of special laws
penalized by life imprisonment.
Rights of the Accused; Right to Bail;
Deportation Case (1989) ALTERNATIVE ANSWER:
Although the Constitution mentions only
reclusion perpetua, Rule 114 of the Rules of
Court adds life imprisonment, and therefore, private complainant, the judge properly
applying the PRO REO DOCTRINE, bail would dismissed the case for failure to prosecute.
still be a matter of right, since it is favorable to
the accused. Rights of the Accused; Self-Incrimination
(1988)
c) The accused has been convicted of No. 3: Dr. Juan Sto. Tomas is a practicing
homicide on a charge of murder and dentist in Marikina, Metro Manila. He
sentenced to suffer an indeterminate was charged with immorality before the
penalty of from eight (8) years and one (1) day Board of Dentistry by a lady patient, who
of prision mayor, as minimum, to twelve claims that Dr. Sto. Tomas took liberties with
(12) years and four (4) months of reclusion her person and kissed her while she was
temporal, as maximum. under the treatment at the latter's clinic.
SUGGESTED ANSWER: At the initial hearing of the administrative

If the accused has been convicted of homicide on a complaint, the complainant's counsel called the
charge of murder and sentenced to suffer respondent as his first witness. The respondent
imprisonment of from 8 to 12 years, bail is a through counsel, objected vigorously, claiming his
matter of discretion. Under Rule 114, Sec. 5, constitutional right to be exempt from being a
par. 1 of the Rules of Court, if the decision of witness against himself. The Board noted the
the trial court convicting the accused changed objection, but ruled that in the next scheduled
the nature of the offense from non-bailable to hearing, a month and a half later, the
bailable, the application for bail may be filed respondent would be called to testify as a
and acted upon by the appellate court. witness, as the right he claims is not available
Admission to bail is discretionary. in administrative investigations, but only in
criminal prosecutions.
Rights of the Accused; Right to Speedy Trial
(2000) Dr. Sto. Tomas is decided not to testify. As his
No XV. Charged by Francisco with libel, Pablo lawyer, what would you do? Why?
was arraigned on January 3, 2000, Pre-trial was SUGGESTED ANSWER:
dispensed with and continuous trial was set for I will file a petition for prohibition with prayer for
March 7, 8 and 9, 2000. On the first setting, the preliminary injunction with the Regional Trial
prosecution moved for its postponement and Court. The privilege against self incrimination is
cancellation of the other settings because its available not only in judicial proceedings but
principal and probably only witness, the private also in administrative investigations. In Pascual v.
complainant Francisco, suddenly had to go Board of Medical Examiners, 28 SCRA 344
abroad to fulfill a professional commitment. The (1969), it was held that the revocation of a
judge instead dismissed the case for failure to license as a medical practitioner can be an
prosecute. even greater deprivation than mere forfeiture of
a) Would the grant of the motion property. In some aspects it is similar to
for postponement have violated the accused's criminal proceedings and, therefore, the
right to speedy trial? (2%) respondent can not be made to testify as a
SUGGESTED ANSWER: witness for the complainant.
The grant of the motion for postponement
would not have violated the right of the accused to Rights of the Accused; Self-Incrimination
speedy trial. As held In People v. Leviste, 255 (1990)
SCRA 238 (1996). since the motion for No. 4: The privilege of self-incrimination
postponement was the first one requested, the must be timely invoked, otherwise it is
need for the offended party to attend to a deemed waived.
professional commitment is a valid reason, no 1. In a CIVIL CASE, the plaintiff called
substantial right of the accused would be the defendant a hostile witness
prejudiced, and the prosecution should be and announced that the defendant
afforded a fair opportunity to prosecute its case, the would be asked incriminating questions
motion should be granted. in the direct examination. When should
ALTERNATIVE ANSWER: the defendant invoke the privilege
Since continuous trial of cases is required and against self- incrimination?
since the date of the initial hearing was set 2. In a CRIMINAL CASE, the prosecution
upon agreement of all parties, including the called the accused to the witness stand as the
first witness in view of certain facts
admitted by the accused at the pre-trial. Cite two [2] possible constitutional objections to
When should the accused invoke the this law. Resolve the objections and explain
privilege against self-incrimination? whether any such infirmities can be cured.
3. In an administrative case for malpractice SUGGESTED ANSWER:
and the cancellation of license to practice Possible objections to the law are that requiring a
medicine filed against C, the complainant driver to take the breathalyzer test will violate his
called C to the witness stand. When right against self-incrimination, that providing
should C invoke the privilege against self- for the suspension of his driver's license
incrimination? without any hearing violates due process,
Explain your answers to the three questions. and that the proposed law will violate the right
SUGGESTED ANSWER: against unreasonable searches and seizures,
(1) As held in Bagadiong v, De Guzman, 94 because it allows police authorities to require a
SCRA 906, the defendant should take the drive to take the breathalyzer test even if there is
witness stand and object when a question no probable cause.
calling for an incriminating question is
propounded. Unlike in proceedings which are Requiring a driver to take a BREATHALYZER
criminal in character in which the accused can TEST does not violate his right against self-
refuse to testify, the defendant must wait until a incrimination, because he is not being
question calling for an incriminatory answer is compelled to give testimonial evidence. He is
actually asked. (Suarez v. Tongco, 2 SCRA 71) merely being asked to submit to a physical test.
This is not covered by the constitutional
(2) As held in Chavez v. Court of Appeals, 24 guarantee against self-incrimination. Thus, in
SCRA 663, in a criminal case the accused may South Dakota vs. Neville, 459 U.S. 553, it was held
altogether refuse to take the witness and refuse to for this reason that requiring a driver to take a
answer any question, because the purpose of blood-alcohol test is valid.
calling him as a witness for the prosecution has
no other purpose but to incriminate him. As held in Mackey vs. Afontrya 443 U.S. 1,
because of compelling government interest in
(3) As in a criminal case, C can refuse to take safety along the streets, the license of a driver who
the witness stand and refuse to answer any refuses to take the breathalyzer test may be
question. In Pascual v. Board of Medical suspended immediately pending a post-
Examiners, 28 SCRA 344, it was held that suspension hearing, but there must be a
an administrative case for malpractice provision for a post-suspension hearing. Thus, to
and cancellation of the license to practice save the proposed law from
medicine is penal in character, because an unconstitutionally on the ground of denial of due
unfavorable decision would result in the process, it should provide for an immediate
revocation of the license of the respondent to hearing upon suspension of the driver's license. The
practice medicine. Consequently, he can proposed law violates the right against
refuse to take the witness stand. unreasonable searches and seizures. It will
authorize police authorities to stop any driver
Rights of the Accused; Self-Incrimination and ask him to take the breathalyzer test even in
(1992) the absence of a probable cause.
No, 3; Congress is considering a law against
drunken driving. Under the legislation, police Rights of the Accused; Self-Incrimination
authorities may ask any driver to take a (2000)
"breathalyzer test", wherein the driver exhales No XI. b) A man was shot and killed and his
several times into a device which can determine killer fled. Moments after the shooting, an
whether he has been driving under the eyewitness described to the police that the
influence of alcohol. The results of the test can be slayer wore white pants, a shirt with floral
used, in any legal proceeding against him. design, had boots and was about 70 kilos and
Furthermore, declaring that the issuance of a 1.65 meters. Borja, who fit the description
driver's license gives rise only to a privilege to given, was seen nearby. He was taken into
drive motor vehicles on public roads, the law custody and brought to the police precinct
provides that a driver who refuses to take the where his pants, shirt and boots were forcibly
test shall be automatically subject to a 90-day taken and he was weighed, measured,
suspension of his driver's license, photographed, fingerprinted and subjected to
paraffin testing. At his trial, Borja objected to
the admission in evidence of the apparel, his

height and weight, his photographs, fingerprints proof. One day, Emilio broke open the desk of
comparison and the results of the paraffin test, Alvin and discovered a letter wherein Randy
asserting that these were taken in violation thanked Alvin for having passed on to him
of his right against self-incrimination. Rule vital trade secrets of Emilio. Enclosed
on the objection. (2%) in the letter was a check for P50,000.00
SUGGESTED ANSWER: drawn against the account of Randy and
b) The objection of Borja is not tenable. As held in payable to Alvin. Emilio then dismissed
People v. Paynor, 261 SCRA 615 (1996), the rights Alvin from his employment. Emilio's proof
guaranteed by Section 12, Article in of the of Alvin's perfidy are the said letter and check
Constitution applies only against testimonial which are objected to as inadmissible for
evidence. An accused may be compelled to be having been obtained through an illegal
photographed or measured, his garments may search. Alvin filed a suit assailing his
be removed, and his body may be examined. dismissal.
Rule on the admissibility of the letter
Rights of the Accused; Self-Incrimination and check. (5%)
(Q7-2006)
Select the best answer and explain. ALTERNATIVE ANSWER:
1. An accused's right against self-incrimination is As held in People v. Marti (G.R. No. 81561,
violated in the following cases: (5%) January 18, 1991), the constitution, in laying
a. When he is ordered by the trial court to down the principles of the government and
undergo a paraffin test to prove he is guilty fundamental liberties of the people, does not
of murder; govern relationships between individuals. Thus, if
b. When he is compelled to produce the search is made at the behest or initiative of the
his bankbooks to be used as evidence proprietor of a private establishment for its own
against his father charged with plunder; and private purposes and without the
c. When he is ordered to produce a sample of intervention of police authorities, the right
his handwriting to be used as evidence that against unreasonable search and seizure
he is the author of a letter wherein cannot be invoked for only the act of private
he agreed to kill the victim; individuals, not the law enforcers, is involved. In
d. When the president of a corporation is sub- sum, the protection against unreasonable
poenaed to produce certain documents searches and seizures cannot be extended to
as proofs he is guilty of illegal recruitment. acts committed by PRIVATE INDIVIDUALS so
as to bring it within the ambit of alleged unlawful
SUGGESTED ANSWER: intrusion by the government. Accordingly, the
The best answer is c) when he is ordered to letter and check are admissible in evidence.
produce a sample of his handwriting to be used as (Waterous Drug Corp. v. NLRC, G.R. No.
evidence that he is the author of a letter 113271, October 16, 1997)
wherein he agreed to kill the victim. Under
Article HI, Section 17 of the 1987 Constitution, ALTERNATIVE ANSWER:
"no person shall be compelled to be a witness The letter is inadmissible in evidence. The
against himself." Since the provision prohibits constitutional injunction declaring the privacy of
compulsory testimonial incrimination, it does not communication and correspondence to be
matter whether the testimony is taken by oral or inviolable is no less applicable simply because it
written means as either way it involves the USE OF is the employer who is the party against whom
INTELLECTUAL FACULTIES. The purpose of the the constitutional provision is to be enforced.
privilege is to avoid and prohibit thereby the The only exception to the prohibition in the
repetition and recurrence of compelling a person, Constitution is if there is a lawful order from the
in a criminal or any other case, to furnish the court or when public safety or order requires
missing evidence necessary for his conviction otherwise, as prescribed by law. Any violation of
(Bermudez v. Castillo, Per Rec. No. 714-A, July this provision renders the evidence obtained
26, 1937; Beltran v. Samson, G.R. No. 32025, inadmissible for any purpose in any proceeding.
September 23,1929). (Zulueta v. Court of Appeals, G.R. No. 107383,
February 20, 1996)
Searches and Seizure; Private Individuals
(Q8-2005) Searches and Seizures; Aliens (2001)
(2) Emilio had long suspected that Alvin, his No IV - A is an alien. State whether, in the
employee, had been passing trade secrets Philippines, he: Is entitled to the right against
to his competitor, Randy, but he had no
illegal searches and seizures and against illegal to save the proposed law from
arrests. (2%) unconstitutionally on the ground of denial of due
SUGGESTED ANSWER: process, it should provide for an immediate
Aliens are entitled to the right against hearing upon suspension of the driver's license. The
illegal searches and seizures and illegal proposed law violates the right against
arrests. As applied in People v. Chua Ho unreasonable searches and seizures. It will
San, 307 SCRA 432 (1999), these rights authorize police authorities to stop any driver
are available to all persons, including aliens. and ask him to take the breathalyzer test even in
the absence of a probable cause.
Searches and Seizures; Breathalyzer Test
(1992) Searches and Seizures; Immediate
No, 3; Congress is considering a law against Control (1987)
drunken driving. Under the legislation, police No. III: "X" a Constabulary Officer, was arrested
authorities may ask any driver to take a pursuant to a lawful court order in Baguio City
"breathalyzer test", wherein the driver exhales for murder. He was brought to Manila where a
several times into a device which can determine warrantless search was conducted in his official
whether he has been driving under the quarters at Camp Crame, The search team
influence of alcohol. The results of the test can be found and seized the murder weapon in a
used, in any legal proceeding against him. drawer of "X". Can "X" claim that the search
Furthermore, declaring that the issuance of a and seizure were illegal and move for exclusion
driver's license gives rise only to a privilege to from evidence of the weapon seized? Explain.
drive motor vehicles on public roads, the law SUGGESTED ANSWER:
provides that a driver who refuses to take the Yes, "X" can do so. The warrantless search
test shall be automatically subject to a 90-day cannot be justified as an incident of a valid
suspension of his driver's license, arrest, because considerable time had elapsed after
Cite two [2] possible constitutional objections to his arrest in Baguio before the search of his
this law. Resolve the objections and explain quarters in Camp Crame, Quezon City was made,
whether any such infirmities can be cured. and because the distance between the place of
SUGGESTED ANSWER: arrest and the place of search negates any claim
Possible objections to the law are that requiring a that the place searched is within his "immediate
driver to take the breathalyzer test will violate his control" so as to justify the apprehension
right against self-incrimination, that providing that he might destroy or conceal evidence of
for the suspension of his driver's license crime before a warrant can be obtained. (Chimel
without any hearing violates due process, v. California, 395 U.S. 752 (1969) ) in Nolasco
and that the proposed law will violate the right v. Cruz Pano, 147 SCRA 509 (1987), the
against unreasonable searches and seizures, Supreme Court reconsidered its previous decision
because it allows police authorities to require a holding that a warrantless search, made after 30
drive to take the breathalyzer test even if there is minutes from the time of arrest, and, in a place
no probable cause several blocks away from the place of arrest, was
valid. It held that a warrantless search is limited
Requiring a driver to take a breathalyzer test to the search of the person of the arrestee at
does not violate his right against self- the time and incident to his arrest and for
incrimination, because he is not being dangerous weapons or anything which may be
compelled to give testimonial evidence. He is used as proof of the offense. A contrary rule
merely being asked to submit to a physical test. would justify the police in procuring a warrant of
This is not covered by the constitutional arrest and, by virtue thereof, not only arrest
guarantee against self-incrimination. Thus, in the person but also search his dwelling. A
South Dakota vs. Neville, 459 U.S. 553, it was held warrant requires that all facts as to the condition of
for this reason that requiring a driver to take a the property and its surroundings and
blood-alcohol test is valid. its improvements and capabilities must be
considered, and this can only be done in a
As held in Mackey vs. Afontrya 443 U.S. 1, judicial proceeding.
because of compelling government interest in
safety along the streets, the license of a driver who
refuses to take the breathalyzer test may be Searches and Seizures; Incidental to
suspended immediately pending a post- Valid Search (1990)
suspension hearing, but there must be a No. 9; Some police operatives, acting under a
provision for a post-suspension hearing. Thus, lawfully issued warrant for the purpose of
searching for firearms in the House of X located ALTERNATIVE ANSWER:
at No. 10 Shaw Boulevard, Pasig, Metro In accordance with the rulings in Uy Keytin
Manila, found, instead of firearms, v, Villareal, 42 Phil. 886 and People v. Sy
ten kilograms of cocaine. Juco, 64 Phil. 667, the unlicensed firearms
(1) May the said police operatives lawfully found in the house at 12 Shaw Boulevard
seize the cocaine? Explain your answer. may not be lawfully seized, since they were
(2) May X successfully challenge the legality not included in the description of the articles
of the search on the ground that the to be seized by virtue of the search
peace officers did not inform him warrant. The search warrant described the
about his right to remain silent and his articles to be seized as firearms in the
right to counsel? Explain your answer. house of X located at 10 Shaw Boulevard.
(3) Suppose the peace officers were able to find
unlicensed firearms in the house in an Searches and Seizures; Place of
adjacent lot, that is. No, 12 Shaw Search (2001)
Boulevard, which is also owned by X. No XI - Armed with a search and
May they lawfully seize the said seizure warrant, a team of policemen led
unlicensed firearms? Explain by Inspector Trias entered a compound and
your answer. searched the house described therein as
SUGGESTED ANSWER: No. 17 Speaker Perez St., Sta. Mesa
(1) Yes, the police operatives may lawfully Heights, Quezon City, owned by Mr. Ernani
seize the cocaine, because it is an item whose Pelets, for a reported cache of firearms and
possession is prohibited by law, it was in plain ammunition. However, upon thorough search
view and it was only inadvertently discovered in the of the house, the police found nothing.
course of a lawful search. The possession of
cocaine is prohibited by Section 8 of the Then, acting on a hunch, the policemen
Dangerous Drugs Act. As held in Magoncia v. proceeded to a smaller house inside the same
Palacio, 80 Phil. 770, an article whose compound with address at No. 17-A Speaker
possession is prohibited by law may be seized Perez St., entered it, and conducted a search
without the need of any search warrant if it was therein over the objection of Mr. Pelets who
discovered during a lawful search. The happened to be the same owner of the first
additional requirement laid down in Roan v. house. There, the police found the unlicensed
Gonzales, 145 SCRA 687 that the discovery of the firearms and ammunition they were looking for. As
article must have been made inadvertently was a result. Mr. Ernani Pelets was criminally
also satisfied in this case. charged in court with Illegal possession of
firearms and ammunition as penalized under
(2) No, X cannot successfully challenge the P.D. 1866, as amended by RA. 8294. At the
legality of the search simply because the peace trial, he vehemently objected to the
officers did not inform him about his right to presentation of the evidence against him for
remain silent and his right to counsel. Section being inadmissible. Is Mr. Emani Pelet's
12(1), Article III of the 1987 Constitution contention valid or not? Why? (5%)
provides: "Any person under investigation for the SUGGESTED ANSWER:
commission of an offense shall have the right to The contention of Ernani Pelet is valid. As held in
be informed of his right to remain silent and to People vs. Court of Appeals, 291SCRA 400
have competent and independent counsel (1993), if the place searched is different from
preferably of his own choice." that stated in the search warrant, the evidence
As held in People v. Dy, 158 SCRA 111. for seized is inadmissible. The policeman cannot
this provision to apply, a suspect must modify the place to be searched as set out in
be under investigation. There was the search warrant.
no investigation involved in this case.
Searches and Seizures; search made by
(3) The unlicensed firearms stored at 12 Shaw a private citizen (1993)
Boulevard may lawfully be seized since their No. 4: Larry was an overnight guest in a motel. After
possession is illegal. As held in Magoncia a he checked out the following day, the
Palacio, 80 Phil. 770, when an individual chambermaid found an attache case which she
possesses contraband (unlicensed firearms surmised was left behind by Larry. She turned it
belong to this category), he is committing a over to the manager who, to determine the
crime and he can be arrested without a warrant and name and address of the owner, opened the
the contraband can be seized. attache case and saw packages which had a
peculiar smell and upon squeezing felt like possession of prohibited drugs and
dried leaves. His curiosity aroused, the was convicted.
manager made an opening on one of the On appeal he contends that -
packages and took several grams of the (1) The plastic bag and its contents are
contents thereof. He took the packages to the inadmissible in evidence being the product
NBI, and in the presence of agents, opened the of an illegal search and seizure; (3%) and
packages, the contents of which upon (2) The receipt he signed is also inadmissible
laboratory examination, turned out to be as his rights under custodial investigation
marijuana flowering tops, Larry was were not observed. (2%)
subsequently found, brought to the NBI Office Decide the case with reasons.
where he admitted ownership of the attache SUGGESTED ANSWER:
case and the packages. He was made to sign a A. The plastic bag and its contents are
receipt for the packages. Larry was charged in court admissible in evidence, since it was not the
for possession of prohibited drugs. He was National Bureau of Investigation but the bus
convicted. On appeal, he now poses the conductor who opened the bag and brought it to the
following issues: National Bureau of Investigation. As held In
1) The packages are inadmissible in evidence People v. Marti, 193 SCRA 57 (1991), the
being the product of an illegal search constitutional right against unreasonable search and
and seizure; . seizure is a restraint upon the government. It does
2) Neither is the receipt he signed admissible, not apply so as to require exclusion of evidence
his rights under custodial investigation which came into the possession of the Government
not having been observed. Decide. through a search made by a private citizen.
SUGGESTED ANSWER:
On the assumption that the issues were B. It is inadmissible....
timely raised the answers are as follows:
1) The packages are admissible in evidence. Searches and Seizures; Valid Warrantless
The one who opened the packages was the Search (2000)
manager of the motel without any interference of a) Crack officers of the Anti-Narcotics Unit
the agents of the National Bureau of were assigned on surveillance of the environs of
Investigation. As held in People vs. Marti, 193 a cemetery where the sale and use of
SCRA 57, the constitutional right against dangerous drugs are rampant. A man with
unreasonable searches and seizures refers to reddish and glassy eyes was walking unsteadily
unwarranted intrusion by the government and moving towards them but veered away when he
does not operate as a restraint upon private sensed the presence of policemen. They
individuals. approached him, introduced themselves as
2) The receipt is not admissible in evidence. ... police officers and asked him what he had
clenched in his hand. As he kept mum, the
Searches and Seizures; search made by policemen pried his hand open and found a
a private citizen (2002) sachet of shabu, a dangerous drug. Accordingly
No VIII. One day a passenger bus conductor charged in court, the accused objected to the
found a man's handbag left in the bus. When admission in evidence of the dangerous drug
the conductor opened the bag, he found inside a because it was the result of an illegal search
catling card with the owner's name (Dante and seizure. Rule on the objection. (3%)
Galang) and address, a few hundred peso bills, and b) What are the instances when warrantless
a small plastic bag containing a white searches may be effected? (2%)
powdery substance. He brought the powdery SUGGESTED ANSWER:
substance to the National Bureau of a) The objection is not tenable.
Investigation for laboratory examination and it In accordance with Manalili v. Court of
was determined to be methamphetamine Appeals, 280 SCRA 400 (1997). since the
hydrochloride or shabu, a prohibited drug. accused had red eyes and was walking
Dante Galang was subsequently traced and unsteadily and the place is a known hang-out
found and brought to the NBI Office where he of drug addicts, the police officers had
admitted ownership of the handbag and its sufficient reason to stop the accused and to
contents. In the course of the interrogation by frisk him. Since shabu was actually found
NBI agents, and without the presence and during the investigation, it could be seized
assistance of counsel, Galang was made to sign without the need for a search warrant.
a receipt for the plastic bag and its shabu contents.
Galang was charged with illegal
b) A warrantless search may be effected in were found after a more extensive search of the
the following cases: various compartments of the car. As held
a) Searches incidental to a lawful arrest: in Valmonte vs. De Villa, 185 SCRA 665, for
b) Searches of moving vehicles; such a search to be valid, there must be a
c) Searches of prohibited articles in plain view: probable cause. In this case, there was
d) Enforcement of customs law; no probable cause, as there was nothing to
e) Consented searches; indicate that Antonio had prohibited
f) Stop and frisk (People v. Monaco, drugs inside the compartments of his car.
285 SCRA 703 [1998]);
g) Routine searches at borders and ports of Searches and Seizures; Waiver of
entry (United States v. Ramsey, 431 U.S. Consent (1989)
606 [1977]); and No. 7: Pursuing reports that great quantities of
h) Searches of businesses in the exercise of prohibited drugs are being smuggled at
visitorial powers to enforce police nighttime through the shores of Cavite, the
regulations (New York v. Burger, 482 U.S. Southern Luzon Command set up checkpoints at
691 (1987]). the end of the Cavite coastal road to search passing
motor vehicles. A 19-year old boy, who finished fifth
Searches and Seizures; Visual Search (1992) grade, while driving, was stopped by the
No. 5: During the recent elections, checkpoints authorities at the checkpoint. Without any
were set up to enforce the election period objection from him, his car was inspected, and
ban on firearms. the search yielded marijuana leaves hidden in the
trunk compartment of the car. The prohibited
During one such routine search one night, while drug was promptly seized, and the boy was
looking through an open window with brought to the police station for questioning.
a flashlight, the police saw firearms at Was the search without warrant legal?
the backseat of a car partially covered by
papers and clothes. SUGGESTED ANSWER:
Antonio, owner and driver of the car in question, No, the search was not valid, because there
was charged for violation of the firearms was no probable cause for conducting the
ban. Are the firearms admissible in search. As held in Almeda Sanchez vs. United
evidence against him? Explain. States, 413 U.S. 266, while a moving vehicle
If, upon further inspection by the police, can be searched without a warrant, there must still
prohibited drugs were found inside the be probable cause. In the case in question, there
various compartments of Antonio's car, was nothing to indicate that marijuana leaves
can the drugs be used in evidence were hidden in the trunk of the car. The mere fact
against Antonio if he is prosecuted for that the boy did not object to the inspection of
possession of prohibited drugs? Explain. the car does not constitute consent to the
SUGGESTED ANSWER: search. As ruled in People vs. Burgos, 144
a) Yes, the firearms are admissible in SCRA 1, the failure to object to a warrantless
evidence, because they were validly seized. In search does not constitute consent, especially in the
Valmonte vs. De Villa, 178 SCRA 211 and 185 light of the fact.
SCRA 665, the Supreme Court held that ALTERNATIVE ANSWER:
checkpoints may be set up to maintain peace Yes. The requirement of probable cause differs from
and order for the benefit of the public and case to case. In this one, since the police
checkpoints are a security measure against agents are confronted with large-scale
unauthorized firearms. Since the search which smuggling of prohibited drugs, existence of
resulted in the discovery of the firearms was which is of public knowledge, they can set up
limited to a visual search of the car, it was checkpoints at strategic places, in the same way
reasonable. Because of the ban on firearms, the that of in a neighborhood a child is
possession of the firearms was prohibited. Since kidnapped, it is lawful to search cars and
they were found in plain view in the course of vehicles leaving the neighborhood or village:
a lawful search, in accordance with the decision This situation is also similar to warrantless
in Magancia vs. Palacio, 80 Phil. 770, they are searches of moving vehicles in customs area,
admissible in evidence. which searches have been upheld. (Papa vs.
Mago, 22 SCRA 857 (1968). The rule is based on
b) No, the drugs cannot be used in evidence practical necessity.
against Antonio if he is prosecuted for
possession of prohibited drugs. The drugs
Searches and Seizures; Warrantless Arrests equipment. The warrant particularly describes the
(1993) electronic equipment and specifies the
No. 9: Johann learned that the police were provisions of the Tariff and Customs Code
looking for him in connection with the rape of an 18- which were violated by the importation.
year old girl, a neighbor. He went to the police
station a week later and presented himself to The warrant was served and implemented
the desk sergeant. Coincidentally. the rape victim in the afternoon of 2 January 1988 by
was in the premises executing an extrajudicial Customs policemen who then seized the
statement. Johann, along with six (6) other described equipment. The inventory of the
suspects, were placed in a police line- up and the seized articles was signed by the Secretary
girl pointed to him as the rapist. Johann was of the Tikasan Corporation. The following
arrested and locked up in a cell. Johann was day, a hearing officer in the Office of the
charged with rape in court but prior to arraignment Collector of Customs conducted a hearing on
invoked his right to preliminary investigation. the confiscation of the equipment.
This was denied by the judge, and thus, trial
proceeded. After the prosecution presented several Two days thereafter, the corporation filed with
witnesses, Johann through counsel, invoked the the Supreme Court a petition for certiorari,
right to bail and filed a motion therefor, which prohibition and mandamus to set aside the
was denied outright by the Judge. Johann now warrant, enjoin the Collector and his agents
files a petition for certiorari before the Court of from further proceeding with the forfeiture
Appeals arguing that: His arrest was not in hearing and to secure the return of the
accordance with law. Decide. confiscated equipment, alleging therein that the
warrant issued is null and void for the reason
SUGGESTED ANSWER: that, pursuant to Section 2 of Article III of the
Yes, the warrantless arrest of Johann was not 1987 Constitution, only a judge may issue a
in accordance with law. As held in Go v. Court of search warrant. In his comment to the petition, the
Appeals, 206 SCRA 138, his case does not fall Collector of Customs, through the Office of the
under the Instances in Rule 113, sec. 5 (a) of the Solicitor General, contends that he is
1985 Rules of Criminal Procedure authorizing authorized under the Tariff and Custom Code to
warrantless arrests. It cannot be considered a order the seizure of the equipment whose
valid warrantless arrest because Johann did not duties and taxes were not paid and that the
commit a crime in the presence of the police corporation did not exhaust administrative
officers, since they were not present when remedies. Should the petition be granted?
Johann had allegedly raped his neighbor. Neither Decide.
can It be considered an arrest under Rule 113 SUGGESTED ANSWER:
sec. 5 (b) which allows an arrest without a The petition should not be granted. Under Secs.
warrant to be made when a crime has in fact 2205 and 2208 of the Tariff and Customs Code,
just been committed and the person making customs officials are authorized to enter any
the arrest has personal knowledge offsets warehouse, not used as dwelling, for the
indicating that the person to be arrested purpose of seizing any article which is subject
committed it. Since Johann was arrested a week to forfeiture. For this purpose they need no
after the alleged rape, it cannot be deemed to be a warrant issued by a court. As stated in Viduya
crime which "has just been committed". Nor did vs. Berdiago, 73 SCRA 553. for centuries the
the police officers who arrested him have seizure of goods by customs officials to enforce the
personal knowledge of facts indicating that Johann customs laws without need of a search warrant
raped his neighbor. has been recognized.
Searches and Seizures; Warrants of ARTICLE IV Citizenship

Arrest (1991) Action for Cancellation; Prescription
No. 8: On the basis of a verified report and & Effect of Death (1994)
confidential information that various electronic No. 7: - Enzo, a Chinese national, was granted
equipment, which were illegally imported into the Philippine citizenship in a decision rendered by the
Philippines, were found in the bodega of the Court of First Instance of Pampanga on January
Tikasan Corporation located at 1002 Binakayan St., 10, 1956. He took his oath of office on June 5,
Cebu City, the Collector of Customs of Cebu 1959. In 1970, the Solicitor General filed a
issued, in the morning of 2 January 1988, a Warrant petition to cancel his citizenship on the ground
of Seizure and Detention against the corporation that in July 1969 the Court of Tax Appeals
for the seizure of the electronic found that Enzo had cheated the
government of income taxes for the years 1956 to (2) Whether or not Ferdie's act of filing his
1959. Said decision of the Tax Court was certificate of candidacy constitutes waiver of his
affirmed by the Supreme Court in 1969. status as a permanent resident of the
Between 1960 and 1970, Enzo had acquired United States.
substantial real property In the Philippines, SUGGESTED ANSWER:
(1) Has the action for cancellation of Enzo's 1) According to the ruling in Coast vs. Court of
citizenship prescribed? Appeals, 191 SCRA 229, a green card is proof
(2) Can Enzo ask for the denial of the petition that the holder is a permanent resident of
on the ground that he had availed of the the United States, for it identifies the holder
Tax Amnesty for his tax liabilities? as a resident of the United States and states
(3) What is the effect on the petition for that the holder is entitled to reside
cancellation of Enzo's citizenship if Enzo permanently and work in the United States.
died during the pendency of the hearing on
said petition? 2) The filing of a certificate of candidacy does
SUGGESTED ANSWER: not constitute a waiver of the status of the
1) No, the action has not prescribed. As held in holder of a green card as a permanent resident of
Republic vs. Li Yao, 214 SCRA 748, a the United States. As held in Coast vs. Court of
certificate of naturalizalion may be cancelled at Appeals, 191 SCRA229, the waiver should be
any time if it was fraudulently obtained manifested by an act independent of and prior to
by misleading the court regarding the the filing of his certificate of candidacy.
moral character of the petitioner.
Dual Allegiance vs. Dual Citizenship (1987)
2) No, Enzo cannot ask for the denial of the No. VIII: "A" was born in 1951 in the
petition for the cancellation of his certificate of United States of a Chinese father and a
naturalization on the ground that he had availed of Filipina mother. Under Chinese laws, "A's"
the tax amnesty. In accordance with the ruling mother automatically became a Chinese
in Republic vs. Li Yao, 224 SCRA 748, the tax national by her marriage.
amnesty merely removed all the civil, criminal
and administrative liabilities of Enzo. It did not In 1973, upon reaching the age of majority, "A"
obliterate his lack of good moral character elected to acquire Philippine citizenship.
and irreproachable conduct. However, "A" continued to reside in California
3) On the assumption that he left a family, the and to carry an American passport. He also
death of Enzo does not render the petition for paid allegiance to the Taipei government. In the
the cancellation of his certificate of 1987 Philippine National elections, he was
naturalization moot. As held in Republic vs. Li elected Senator. His opponent moved to
Yao, 224 SCRA 748, the outcome of the case disqualify him on the grounds:
will affect his wife and children. a) That he was not a natural born citizen; and
b) That he had "dual allegiance" not only to
Citizenship; Elected Official (1993) the United States but also to the Republic
No. 7: Ferdie immigrated to the United States in the of China.
1980s. Thereafter, he visited his hometown, Decide.
Makahoy, every other year during town fiestas. In SUGGESTED ANSWER:
January 1993. Ferdie came home and filed his The electoral contest must be dismissed.
certificate of candidacy for Mayor of (a) "A" is a natural born citizen. Art. IV, Sec. 2 of
Makahoy. He won in the elections. Joe, the the 1987 Constitution provides that "those who
defeated candidate, learned that Ferdie is a elect Philippine citizenship in accordance with
greencard holder which on its face identifies paragraph (3), Sec. 1 hereof shall be
Ferdie as a "resident alien" and on the back deemed natural born citizens." The purpose of
thereof is clearly printed: this provision is to equalize the status of those who
"Person identified by this card is entitled to elected Philippine citizenship before and those
reside permanently and work in the United who did so after January 17, 1973 when the
States." Joe filed a case to disqualify Ferdie previous Constitution took effect.
from assuming the mayorship of Maka-hoy.
Questions: (b) The "DUAL ALLEGIANCE" declared
(1) Whether or not a green card is proof inimical to national interest in Art. IV, Sec. 5
that the holder is a permanent resident refers to the dual allegiance of some such as
of the United States. naturalized Filipino citizens (mostly Chinese)
who maintain allegiance to Nationalist China as
shown in some cases by their membership in of the Philippines (Art. IV, sec. 1(3)). Under Art.
the legislative Yuan after their naturalization as IV, sec, 2 he is also deemed a natural-
citizens of the Philippines. The prohibition does not born citizen.
apply in situations brought about by dual
citizenship, such as the one involved in the 2. The Constitution requires, among other
problem. Indeed, a Filipino woman can have things, that a candidate for member of the
dual allegiance resulting from her marriage to a House of Representatives must be at least 25
foreigner under Sec. 4, so long as she does not do years of age "on the day of the election." (Art.
or omit to do an act amounting to VI, sec. 6). As Brown was born on May 15,
renunciation under Commonwealth Act. No. 1962, he did not become 25 years old until May 15,
63, Sec. 1(2). Under this law, express 1987. Hence on May 11, 1987, when the
renunciation is different from an act of election was held, he was 4 days short of the
allegiance to a foreign power as a ground for required age.
loss of Philippine citizenship. Moreover, what
constitutes "dual allegiance" inimical to national 3. The Constitution provides that those who
interest is and what the sanctions for such dual seek either to change their citizenship or to
allegiance will be, will still have to be defined by law acquire the status of an immigrant of another
pending adoption of such legislation, country "during their tenure" shall be dealt with by
objection based on dual allegiance will be law (Art. XI, sec. 17). The provision cannot
premature. apply to Brown for the following reasons: First,
Brown is in addition an American citizen and
Dual Allegiance vs. Dual Citizenship (1988) thus has a dual citizenship which is allowed by the
No. 13: Robert Brown was born in Hawaii on Constitution. (Cf. Art. IV, sec. 4), Second, Brown
May 15, 1962, of an American father and a did not seek to acquire the status of an immigrant,
Filipina mother. On May 16, 1983 while holding an but is an American by birth under the principle
American passport, he registered as a Filipino of jus soli obtaining in the United States. Third,
with the Philippine Consulate at Honolulu, he did not seek to change his status during his
Hawaii. In September, 1983 he returned to tenure as a public officer. Fourth, the provision
the Philippines, and took up residence at of Art. XI, sec. 17 is not self-executing but
Boac, Marinduque, hometown of his mother. He requires an implementing law. Fifth, but above
registered as a voter, voted, and even participated all, the House Electoral Tribunal has no
as a leader of one of the candidates in that jurisdiction to decide this question since it
district in the 1984 Batasan elections. In the does not concern the qualification of a
elections of 1987, he ran for Congressman, and member-elect.
won. His sole opponent is now questioning his
qualifications and is trying to oust him on two Dual Citizenship (1994)
basic claims: No. 8: In 1989, Zeny Reyes married Ben Tulog, a
(1) He is not a natural born Filipino citizen, but national of the State of Kongo. Under the laws of
is in fact, an American, born in Hawaii, Kongo, an alien woman marrying a Kongo
an integral portion of the U.S.A., who holds national automatically acquires Kongo
an American passport; citizenship. After her marriage, Zeny resided in
(2) He did not meet the age requirement; and Kongo and acquired a Kongo passport. In 1991,
(3) He has a "green card" from the Zeny returned to the Philippines to run for
U.S. Government. Governor of Sorsogon.
(1) Was Zeny qualified to run for Governor?
Assume that you are a member of the (2) Suppose instead of entering politics. Zeny
House Electoral Tribunal where the petition for just got herself elected as vice-president of the
Brown's ouster is pending. How would you Philippine Bulletin, a local newspaper. Was
decide the three issues raised against him? she qualified to hold that position?
The first and third grounds have no merit. 1) Under Section 4, Article IV of the
But the second is well taken and, therefore, Constitution. Zeny retained her Filipino
Brown should be disqualified. citizenship. Since she also became a citizen of
1. Robert Brown is a natural born citizen of the Kongo, she possesses dual citizenship.
Philippines. A person born of a Filipino mother Pursuant to Section 40 (d) of the Local
and an alien father before January 17, 1973, Government Code, she is disqualified to run for
who thereafter upon reaching the age of governor. In addition, if Zeny returned to the
majority elect Philippine citizenship, is a citizen Philippines, less than a year immediately before
the day of the election, Zeny is not qualified to run not qualify to participate in the management of
for Governor of Sorsogon. Under Section 39(a) the Bulletin as Vice-President thereof.
of the Local Government Code, a
candidate for governor must be a resident in the Effect of Marriage; Filipino (1989)
province where he intends to run at least one No, 2: (1) Lily Teh arrived in Manila on one of
(1) year immediately preceding the day of the her regular tours to the Philippines from Taipeh.
election. By residing in Kongo upon her She met Peter Go, a naturalized Filipino citizen.
marriage in 1989, Zeny abandoned her After a whirlwind courtship, Lily and Peter were
residence in the Philippines. married at the San Agustin Church. A week
This is in accordance with the decision in Caasi after the wedding, Lily Teh petitioned in
vs. Court of Appeals, 191 SCRA 229. administrative proceedings before immigration
ALTERNATIVE ANSWER: authorities to declare her a Filipino citizen
No. Zeny was not qualified to run for Governor. stating that she had none of the
Under the Constitution, "citizens of the disqualifications provided in the Revised
Philippines who marry aliens shall retain their Naturalization Law. The jilted Filipino girlfriend of
citizenship, unless by their act or omission they are Peter Go opposed the petition claiming that Lily
deemed, under the law to have renounced it." Teh was still a minor who had not even
(Sec. 4, Art. IV, Constitution). Her residing in Kongo celebrated her 21st birthday, who never resided in
and acquiring a Kongo passport are indicative the Philippines except during her one-week visit
of her renunciation of Philippine citizenship, as tourist from Taipeh during the Chinese New
which is a ground for loss of her citizenship Year, who spoke only Chinese, and who had
which she was supposed to have retained. radical ideas liked advocating unification of Taiwan
When she ran for Governor of Sorsogon, with mainland China. Lily Teh, however, swore that
Zeny was no longer a Philippine citizen and, she was renouncing her Chinese allegiance and
hence, was disqualified for said position. while she knew no Filipino customs and
traditions as yet, she evinced a sincere desire
to learn and embrace them. Would Lily Teh
2) Although under Section 11(1), Article XVI of the succeed in becoming a Filipino citizen through
Constitution, mass media must be wholly owned her marriage to Peter Go? Explain.
by Filipino citizens and under Section 2 of the
Anti-Dummy Law aliens may not intervene SUGGESTED ANSWER:
in the management of any nationalized Yes, Lily Teh ipso facto became a Philippine
business activity. Zeny may be elected vice citizen upon her marriage to Peter Go, who is a
president of the Philippine Bulletin, because she Philippine citizen, provided she possesses none of
has remained a Filipino citizen. Under Section 4, the disqualifications laid down in Section 4 of the
Article IV of the Constitution, Filipino citizens Revised Naturalization Law. According to to the
who marry aliens retains their citizenship unless ruling in Moy Ya Lim Yao vs. Commissioner of
by their act or omission they are deemed, under the Immigration, 41 SCRA 292, an alien woman who
law, to have renounced it. The acts or omission marries a Filipino husband ipso facto
which will result in loss of citizenship are becomes a Filipino citizen without having to
enumerated in Commonwealth Act No, 63. possess any of the qualifications prescribed in
Zeny is not guilty of any of them. As held in Section 2 of the Revised Naturalization Law
Kawakita vs. United States, 343 U.S. 717, a provided she possesses none of the
person who possesses dual citizenship like Zeny disqualifications set forth in Section 4 of the
may exercise rights of citizenship in both countries same law. All of the grounds invoked by the
and the use of a passport pertaining to one former girlfriend of Peter Go for opposing the
country does not result in loss of citizenship in the petition of Lily Teh, except for the last one, are
other country. qualifications, which Lily Teh need not possess. The
ALTERNATIVE ANSWER: fact that Lily Teh is advocating the
Neither, was Zeny qualified to hold the position of unification of Taiwan with mainland China is not a
vice-president of Philippine Bulletin. Under the ground for disqualification under Section 4 of the
Constitution, "the ownership and Revised Naturalization Law.
management of mass media shall be limited to
citizens, of the Philippines, or to corporation, Effect of Oath of Allegiance (2004)
cooperatives or associations wholly owned and (4-a) TCA, a Filipina medical technologist, left
managed by such citizens" (Section XI [1], Art. XVI), in 1975 to work in ZOZ State. In 1988 she
Being a non-Philippine citizen, Zeny can married ODH, a citizen of ZOZ. Pursuant to
ZOZ's law, by taking an oath of allegiance, she
acquired her husband's citizenship. ODH died in Effect of Repatriation (2002)
2001, leaving her financially secured. She No I - A was born in the Philippines of Filipino
returned home in 2002, and sought elective parents. When martial law was declared in the
office in 2004 by running for Mayor of APP, her Philippines on September 21, 1972, he went to the
hometown. Her opponent sought to have her United States and was naturalized as an
disqualified because of her ZOZ citizenship. She American citizen. After the EDSA Revolution, he
replied that although she acquired ZOZ's came home to the Philippines and later on
citizenship because of marriage, she did not reacquired Philippine citizenship by repatriation.
lose her Filipino citizenship. Both her parents, Suppose in the May 2004 elections he is
she said, are Filipino citizens. Is TCA qualified elected Member of the House of
to run for Mayor? (5%) Representatives and a case is filed seeking his
disqualification on the ground that he is not a
SUGGESTED ANSWER: natural-born citizen of the Philippines, how
On the assumption that TCA took an oath of should the case against him be decided?
allegiance to ZOZ to acquire the citizenship of Explain your answer. (5%)
her husband, she is not qualified to run for SUGGESTED ANSWER:
mayor. She did not become a citizen of ZOZ The case should be decided in favor of A. As
merely by virtue of her marriage, she also took an held In Bengson v. House of Representatives
oath of allegiance to ZOZ. By this act, she lost Electoral Tribunal, 357 SCRA 545 (2001),
her Philippine citizenship. (Section 1 [3], repatriation results in the recovery of the
Commonwealth Act No. 63.) original nationality. Since A was a natural-born
Filipino citizen before he became a naturalized
Effect of Repatriation (1999) American citizen, he was restored to his former
No III - B. Julio Hortal was born of Filipino status as a natural-born Filipino when he
parents. Upon reaching the age of majority, he repatriated.
became a naturalized citizen in another country.
Later, he reacquired Philippine citizenship. Effect of Repatriation (2003)
Could Hortal regain his status as natural born No IV - Juan Cruz was born of Filipino parents in
Filipino citizen? Would your answer be the 1960 in Pampanga. In 1985, he enlisted in the
same whether he reacquires his Filipino- U.S. Marine Corps and took an oath of
citizenship by repatriation or by act of allegiance to the United States of America. In
Congress? Explain. (3%) 1990, he was naturalized as an American
FIRST ALTERNATIVE ANSWER: citizen. In 1994, he was repatriated under
Julian Mortal can regain his status as a natural born Republic Act No. 2430. During the 1998
citizen by repatriating. Since repatriation involves National Elections, he ran for and was elected
restoration of a person to citizenship previously representative of the First District of Pampanga
lost by expatriation and Julian Mortal was previously where he resided since his repatriation. Was he
a natural born citizen, in case he repatriates he will qualified to run for the position? Explain.
be restored to his status as a natural born citizen. SUGGESTED ANSWER:
If he reacquired his citizenship by an act of Cruz was qualified to run as representative of
Congress, Julian Hortal will not be a natural born the First District of Pampanga. Since his
citizen, since he reacquired his citizenship parents were Filipino citizens, he was a natural-
by legislative naturalization. born citizen. Although he became a
naturalized American citizen, under the ruling in
Bengson v. House of Representatives Electoral
SECOND ALTERNATIVE ANSWER: Tribunal. 357 SCRA 545 [2001], by virtue of his
Julian Hortal cannot regain his status as a repatriation, Cruz was restored to his original
natural born citizen by repatriating. He had to status as a natural-born Filipino citizen.
perform an act to acquire his citizenship, i.e.,
repatriation. Under Section 2, Article IV of the Effects of Marriages (1999)
Constitution, natural born citizens are those No III- What are the effects of marriages of:
who are citizens from birth without having to 1. a citizen to an alien; (1%)
perform an act to acquire or perfect their 2. an alien to a citizen; on their spouses
citizenship. If he reacquired his citizenship by an and children? Discuss. (1%)
act of Congress, Julian Hortal will not be a SUGGESTED ANSWER:
natural born citizen since he reacquired his 1.) According to Section 4, Article IV of the
citizenship by legislative naturalization. Constitution, Filipino citizens who marry aliens
retain their citizenship, unless by their act or
omission they are deemed, under the law,
to have renounced it. Elected Official (1992)
No. 16: Edwin Nicasio, born in the
2) According to Mo Ya Lim Yao v. Philippines of Filipino parents and raised in the
Commissioner of Immigration, 41 SCRA 292, province of Nueva Ecija, ran for Governor of
under Section 15 of the Revised Naturalization his home province. He won and he was sworn
Law, a foreign woman who marries a Filipino into office. It was recently revealed, however,
citizen becomes a Filipino citizen provided she that Nicasio is a naturalized American citizen.
possesses none of the disqualifications for a) Does he still possess Philippine citizenship?
naturalization. A foreign man who marries a b) If the second-placer in the gubernatorial
Filipino citizen does not acquire Philippine elections files a quo warranto suit against
citizenship. However, under Section 3 of the Nicasio and he is found to be disqualified
Revised Naturalization Act, in such a case the from office, can the second-placer be sworn
residence requirement for naturalization will be into office as governor?
reduced from ten (10) to five (5) years. Under c) If, instead, Nicasio had been born (of the
Section 1(2), Article IV of the Constitution, the same set of parents) in the United States
children of an alien and a Filipino citizen are and he thereby acquired American
citizens of the Philippines. citizenship by birth, would your answer be
different?
Effects of Philippine Bill of 1902 (2001) SUGGESTED ANSWER:
No I - From mainland China where he was born of a) No, Nicasio no longer possesses
Chinese parents, Mr Nya Tsa Chan migrated to the Philippine citizenship. As held in Frivaldo vs.
Philippines in 1894. As of April 11, 1899, he was COMELEC, 174 SCRA 245, by becoming
already a permanent resident of the Philippine a naturalized American citizen, Nicasio
Islands and continued to reside in this country lost his Philippine citizenship. Under
until his death. During his lifetime and when he Section 1(1) of Commonwealth Act
was already in the Philippines, Mr. Nya Tsa Chan No. 63, Philippine citizenship is lost by
married Charing, a Filipina, with whom he begot naturalization in a foreign country,
one son, Hap Chan, who was born on October
18. 1897. Hap Chan got married also to b) 2nd placer can’t be sworn to office...
Nimfa, a Filipina, and one of their children was
Lacqui Chan who was born on September 27, c) If Nicasio was born in the United States, he
1936. Lacqui Chan finished the course Bachelor would still be a citizen of the Philippines, since his
of Science in Commerce and eventually engaged parents are Filipinos. Under Section 1(2), those
in business. whose fathers or mothers are citizens of the
Philippines are citizens of the Philippines.
In the May 1989 election, Lacqui Chan ran for Nicasio would possess dual citizenship, since
and was elected Representative under American Law persons born in the United
(Congressman). His rival candidate, Ramon States are American citizens. As held in Aznor vs.
Deloria, filed a quo warranto or disqualification COMELEC. 185 SCRA 703, a person who
case against him on the ground that he was not a possesses both Philippine and American
Filipino citizen. It was pointed out in particular, that citizenship is still a Filipino and does not lose
Lacqui Chan did not elect Philippine his Philippine citizenship unless he renounces it.
citizenship upon reaching the age of 21.
Decide whether Mr. Lacqui Chan suffers from a Electing Philippine Citizenship (Q8-2006)
disqualification or not. (5%) 1. Atty. Emily Go, a legitimate daughter of a
SUGGESTED ANSWER: Chinese father and a Filipino mother, was
Lacqui Chan is a Filipino citizen and need not born in 1945. At 21, she elected
elect Philippine citizenship. His father, Hap Philippine citizenship and studied law.
Chan, was a Spanish subject, was residing in She passed the bar examinations and
the Philippines on April 11, 1899, and continued to engaged in private practice for many
reside in the Philippines. In accordance with Section years. The Judicial and Bar Council
4 of the Philippine Bill of 1902, he was a Filipino nominated her as a candidate for the
citizen. Hence, in accordance with Section 1(3} position of Associate Justice of the
of the 1935 Constitution, Lacqui Chan is a natural Supreme Court. But her nomination is
born Filipino citizen, since his father was a Filipino being contested by Atty. Juris Castillo,
citizen. also an aspirant to the position. She
claims that Atty. Emily Go is not a natural- No, 2: (2) A child was born to a Japanese father
born citizen, hence, not qualified to be and a Filipina mother. Would he be eligible
appointed to the Supreme Court. Is this to run for the position of Member of the House
contention correct? (5%) of Representatives upon reaching
SUGGESTED ANSWER: twenty-five years of age?
The contention is not correct. Under Article IV, SUGGESTED ANSWER:
Section 1(3) of the 1987 Constitution, it is The child can run for the House of
provided that those born before January 17, Representatives provided upon reaching the
1973 of Filipino mothers, who elect Philippine age of majority he elected Philippine
Citizenship upon reaching the age of majority citizenship. Under Section 6, Article VI of the
are Filipino citizens. Atty. Emily Go was born of a 1987 Constitution, to qualify to be a member of the
Filipino mother in 1945 and elected House of Representatives, one must be a
citizenship upon reaching the age of 21. She is a natural-born Philippine citizen. According to
natural born Filipino citizen as provided by Section 1 (3), Article IV of the 1987
Article IV, Section 2 of the Constitution — "x x x Constitution, children born before January 17,
those who elect Philippine citizenship in 1973 of Filipino mothers, who elect Philippine
accordance with paragraph (3), Section 1 citizenship upon reaching the age of majority
hereof shall be deemed natural-born citizens." are Philippine citizens.
Hence she is qualified to be appointed to the
Supreme Court. Section 2, Article IV of the 1987 Constitution
provides: "Those who elect Philippine
Electing Philippine Citizenship; When citizenship in accordance with paragraph (3),
Proper (Q8-2006) Section 1 hereof shall be deemed natural-born
2. Atty. Richard Chua was born in 1964. He is citizens." On the other hand, if the child was
a legitimate son of a Chinese father and a born after January 17, 1973, he would be
Filipino mother. His father became a considered a natural born citizen without need
naturalized Filipino citizen when Atty. Chua of election pursuant to Art. IV, Sec. 1(2).
was still a minor. Eventually, he studied
law and was allowed by the Supreme Natural Born Filipino (1998)
Court to take the bar examinations, No IV - Andres Ang was born of a Chinese
subject to his submission to the Supreme father and a Filipino mother in Sorsogon,
Court proof of his Philippine citizenship. Sorsogon. On January 20, 1973, in 1988, his
Although he never complied with such father was naturalized as a Filipino citizen. On
requirement, Atty. Chua practiced law for May 11, 1998, Andres Ang was elected
many years until one Noel Eugenio filed Representative of the First District of Sorsogon.
with the Supreme Court a complaint for Juan Bonto who received the second highest
disbarment against him on the ground that number of votes, filed a petition for Quo
he is not a Filipino citizen. He then filed Warranto against Ang. The petition was filed
with the Bureau of Immigration an with the House of Representative Electoral
affidavit electing Philippine citizenship. Tribunal (HRET). Bonto contends that Ang is not
Noel contested it a natural born citizen of the Philippines and
claiming it was filed many years therefore is disqualified to be a member of the
after Atty. Chua reached the age of House.
majority. Will Atty. Chua be disbarred?
Explain. (5%) The HRET ruled in favor of Ang. Bonto
SUGGESTED ANSWER: filed a petition for certiorari in the Supreme
No, Atty. Chua will not be disbarred. Atty. Chua is Court. The following issues are raised:
already a Filipino citizen and there was no need (1) Whether the case is justiciable
for him to file the affidavit electing Filipino considering that Article VI. Section
citizenship. An election of Philippine citizenship 17 of the Constitution declares the
presupposes that the person electing is an HRET to be the "sole Judge" of all
alien. His father, however, already became a contests relating to the election returns
Filipino citizen when Atty. Chua was still a and disqualifications of members of the
minor and thus, he was already a Filipino be- House of Representatives. [5%]
fore the age of majority (Co v. HRET, G.R. Nos. (2) Whether Ang is a natural bom citizen of the
92191-92, July 30,1991). Philippines. |5%]
How should this case be decided?
Natural Born Filipino (1989) SUGGESTED ANSWER:
1. The case is justiciable. (grave abuse with Section 2, Article IV of the
of discretion)... Constitution, which reads:
2. Andres Ang should be considered a natural Those who elect Philippine citizenship in
born citizen of the Philippines. He was born of a accordance with paragraph (3), Section 1
Filipino mother on January 20, 1973. This hereof shall be deemed natural born citizens."
was after the effectivity of the 1973 Constitution on
January 17, 1973. Under Section (1), Article III of 2) Ernest is not under-aged. (minimum 25 yrs
the 1973 Constitution, those whose fathers or old)....
mothers are citizens of the Philippines are
citizens of the Philippines. Andres Ang Naturalization; Cancellation of Citizenship
remained a citizen of the Philippines after the (1998)
effectivity of the 1987 Constitution. Section 1, No X. - Lim Tong Biao, a Chinese citizen
Article IV of the 1987 Constitution provides: applied for and was granted Philippine
"The following are citizens of the Philippines: citizenship by the court. He took his oath as
"(l) Those who are citizens of the Philippines at citizen of the Philippines to July 1963, in 1975, the
the time of the adoption of this Constitution;" Office of the Solicitor General filed a petition to
cancel his Philippine citizenship for the
Natural-Born Filipino(1993) reason that in August 1963, the Court of Tax
No. 1: In 1964, Ruffa, a Filipina domestic helper Appeals found him guilty of tax evasion for
working in Hongkong, went to Taipei for a deliberately understating his income taxes for the
vacation, where she met Cheng Sio Pao, whom she years 1959-1961.
married. Under Chinese Law, Ruffa (1) Could Lim Tong Biao raise the defense
automatically became a Chinese citizen. The of prescription of the action for cancellation
couple resided in Hongkong, where on May 9, of his Filipino citizenship? [3%]
1965, Ruffa gave birth to a boy named Ernest. Upon (2) Supposing Lim Tong Biao had availed of
reaching the age of majority, Ernest elected the Tax Amnesty of the government for his tax
Philippine citizenship. After the EDSA Revolution, liabilities, would this constitute a valid
Ernest decided to live permanently in the defense to the cancellation of his Filipino
Philippines, where he prospered as a citizenship? [2%]
businessman. During the May 11, 1993 SUGGESTED ANSWER:
election, Ernest ran and won as a 1. No, Lim Tong Biao cannot raise the
congressman. His opponent, noting Ernest's defense of prescription. As held in Republic us. Go
Chinese ancestry, filed a petition to disqualify Bon Lee, 1 SCRA 1166, 1170, a decision
the latter on the following grounds; (1) Ernest granting citizenship is not res judicata and the
Cheng is not a natural born Filipino; and (2) he is right of the government to ask for the
under-aged. Decide. cancellation of a certificate cancellation is not
SUGGESTED ANSWER: barred by the lapse of time.
1) Ernest cannot be disqualified. Section 1,
Article IV of the Constitution provides: "The 2. The fact that Lim Tong Biao availed of the
following are citizens of the Philippines; XXX tax amnesty is not a valid defense to
XXX XXX "(3) Those born before the cancellation of his Filipino
January 17, 1973, of Filipino mothers, who citizenship. In Republic vs. Li Yao, 214
elect Philippine citizenship upon reaching the SCRA 748, 754, the Supreme Court held:
age of majority;" Ernest could elect Philippine "In other words, the tax amnesty does not
citizenship since he was born before January have the effect of obliterating his lack of good
17, 1973 and his mother is a Filipino. As stated moral character and irreproachable conduct
in the cases of Torres vs. Tan Chim, 69 Phil. which are grounds for denaturalization,"
518 and Cu vs. Republic, 83 Phil. 473, for this
provision to apply, the mother need not be a Residency Requirements; Elective Official
Filipino citizen at the time she gave birth to (Q9-2005)
the child in question. It is sufficient that she (1) In the May 8,1995 elections for local
was a Filipino citizen at the time of her officials whose terms were to commence
marriage. Otherwise, the number of persons who on June 30, 1995, Ricky filed on March
would be benefited by the foregoing provision would 20, 1995 his certificate of candidacy for
be limited. the Office of Governor of Laguna. He
won, but his qualifications as an elected
Having elected Philippine citizenship, Ernest is a official was questioned. It is admitted that
natural-born Filipino citizen in accordance
he is a repatriated Filipino citizen and Status; Illegitimate Child; Dual Citizenship
a resident of the Province of Laguna. To (1996)
be qualified for the office to which a No. 8: 2) X was born in the United States of a
local official has been elected, when Filipino father and a Mexican mother.
at the latest should he be: (5%) He returned to the Philippines when he was
twenty- six years of age, carrying an American
(a) A Filipino Citizen? Explain. passport and he was registered as an alien
with the Bureau of Immigration.
SUGGESTED ANSWER:
The citizenship requirement is to be possessed by Was X qualified to run for membership in
an elective official at the latest as of the time he is the House of Representatives in the
proclaimed and at the start of the term of office to 1995 elections? Explain.
which he has been elected. Section 39 of the SUGGESTED ANSWER:
Local Government Code, which enumerates Whether or not X was qualified to run
the qualifications of elective local government for membership in the House of
officials, does not specify any particular date or Representatives in the 1995 election
time when the candidate must possess citizenship. depends on the circumstances.
(Frivaldo v. COMELEC, G.R. No. 120295, June
28,1996) If X was an Illegitimate child, he is not qualified to
run for the House of Representatives.
(b) A resident of the locality? Explain. According to the case of in re Mallare, 59 SCRA 45,
an illegitimate child follows the citizenship of the
SUGGESTED ANSWER: mother. Since the mother of X is a Mexican, he will
Under Section 39 of the Local be a Mexican citizen if he is an illegitimate
Government Code, an individual must possess child, even if his father is a Filipino.
the residency requirement in the locality
where he intends to run at least one year If X is a legitimate child, he is a Filipino citizen.
immediately preceding the day of election. Under Section 2(2), Article IV of the
Constitution, those whose fathers are citizens of the
Status; Illegitimate Child (1990) Philippines are Filipino citizens. Since X was
No. 3: Y was elected Senator in the May 1987 born in the United States, which follows jus soli, X
national elections. He was born out of wedlock in is also an American citizen. In accordance
1949 of an American father and a naturalized with Aznar vs. Commission, on Elections, 185
Filipina mother. Y never elected Philippine SCRA 703, the mere fact a person with dual
citizenship upon reaching the age of majority. citizenship registered as an alien with the
(1) Before what body should T, the losing Commission on Immigration and Deportation does
candidate, question the election of not necessarily mean that he is renouncing his
Y? State the reasons for your answer. Philippine citizenship. Likewise, the mere fact
(2) Is Y a Filipino citizen? Explain that X used an American passport did not
your answer. result in the loss of his Philippine citizenship. As
SUGGESTED ANSWER: held in Kawakita vs. Untied States, 343 U.S. 717,
(1) T, the losing candidate, should question the since a person with dual citizenship has the rights of
election of Y before the Senate citizenship in both countries, the use of a passport
Electoral Tribunal, .... issued by one country is not inconsistent
with his citizenship in the other country.
(2) Yes, Y is a Filipino citizen. More than that he is
a natural born citizen of the Philippines ALTERNATIVE ANSWER:
qualified to become a Senator. Since Y is an If X has taken an oath of allegiance to the U.S.
illegitimate child of a Filipino mother, he follows the he will be deemed to have renounced
citizenship of his mother. He need not elect his Philippine citizenship. Consequently,
Philippine citizenship upon reaching the age of he is disqualified to run for the
majority as held In re Mallare. 59 SCRA 45. In House of Representatives.
Osias v. Antonino, Electoral Case No. 11,
August 6, 1971, the Senate Electoral Tribunal Status; Legitimate Child (2003)
held that the illegitimate child of an alien father and No IV - Miguel Sin was born a year ago in
a Filipino mother is a Filipino citizen and is qualified China to a Chinese father and a Filipino mother His
to be a Senator. parents met in Shanghai where they were

lawfully married just two years ago. Is of public funds by PAGCOR, not being
Miguel Sin a Filipino citizen? made pursuant to an appropriation made
SUGGESTED ANSWER: by law, violates the Constitution.
Miguel Sin is a Filipino citizen because he is the
legitimate child of a Filipino mother. Under Appropriation of Public Funds;
Article IV, Section 4 of the 1987 Constitution, Debt Servicing (1992)
his mother retained her Philippine citizenship No 13: Explain how the automatic appropriation of
despite her marriage to an alien husband, and public funds for debt servicing can be
according to Article IV, Section 1(2) of the 1987 reconciled with Article VI, Section 29(1) of the
Constitution, children born of a Filipino mother Constitution. Said provision says that "no
are Filipino citizens. money shall be paid out of the Treasury except in
pursuance of an appropriation made by law".
Ways of Reacquiring Citizenship (2000) SUGGESTED ANSWER:
No XVIII. - Cruz, a Filipino by birth, became an As stated in Guingona vs. Carague, 196 SCRA 221,
American citizen. In his old age he has returned to the presidential decrees providing for the
the country and wants to become a Filipino appropriation of funds to pay the public debt do not
again. As his lawyer, enumerate the ways by violate Section 29(1), Article VI of the
which citizenship may be reacquired. (2%) Constitution. They provide for a continuing
SUGGESTED ANSWER: appropriation, there is no constitutional
Cruz may reacquire Philippine citizenship in the prohibition against this. The presidential
following ways: decrees appropriate as much money as is
1. By naturalization; needed to pay the principal, interest, taxes and
2. By repatriation pursuant to Republic Act No. other normal banking charges on the loan.
8171; and Although no specific amounts are mentioned, the
3. By direct act of Congress (Section 2 amounts are certain because they can be
of Commonwealth Act No. 63). computed from the books of the National
Treasury.
ARTICLE VI Legislative
Appropriation of Public Funds;
Department Public Purposes (1988)
No. 7: - Tawi-Tawi is a predominantly Moslem
Appropriation of Public Funds (1988) province. The Governor, the Vice-Governor,
No. 6: - Metropolitan newspapers have reported that and members of its Sangguniang Panlalawigan are
the Philippine Games and Amusement all Moslems. Its budget provides the
Corporation (PAGCOR) gives hefty Governor with a certain amount as his
contributions to Malacanang, to fund "socio- discretionary funds. Recently, however, the
economic and civic projects" of the President, Sangguniang Panlalawigan passed a resolution
The reports add that for 1988 alone, some six appropriating P100,000 as a special
hundred million (P600M) pesos have already discretionary fund of the Governor, to. be spent by
been earmarked for remittance to the Office of him in leading a pilgrimage of his
the President. PAGCOR had also been provincemates to Mecca, Saudi Arabia, Islam's
reported to have funded, as coordinated by a holiest city.
Congressman from Mindanao, special projects of
quite a number of members of the House of Philconsa, on constitutional grounds, has filed
Representatives. suit to nullify the resolution of the Sangguniang
Panlalawigan giving the special discretionary
Assuming that money earned by PAGCOR from its fund to the Governor for the stated purpose.
operations are public funds, are such How would you decide the case? Give your
contributions to Malacañang and to certain reasons.
Congressmen and their expenditure as SUGGESTED ANSWER:
reported, legal? Cite constitutional or decisional The resolution is unconstitutional First, it
rules in support of your answer. violates art. VI, sec. 29(2) of the Constitution
SUGGESTED ANSWER: which prohibits the appropriation of public
The contributions made to Malacañang and to money or property, directly or indirectly, for the use,
certain congressmen are Illegal. Under art. VI, benefit or support of any system of religion,
sec. 29(1) no money can be paid out of the and, second, it contravenes art. VI, sec, 25(6)
Treasury except in pursuance of an which limits the appropriation of discretionary
appropriation made by law. The disbursement funds only for public purposes.
The use of discretionary funds for purely Commission on Appointments, Otherwise,
religious purpose is thus unconstitutional, the Commission on Appointments will have
and the fact that the disbursement is to be reorganized as often as votes shift
made by resolution of a local legislative body from one side to another in the
and not by Congress does not make it any less House of Representatives.
offensive to the Constitution. Above all,
the resolution constitutes a clear Delegation of Powers (2002)
violation of the Non- establishment No XVII. - Suppose that Congress passed a law
Clause (art. III, sec. 5) of the Constitution. creating a Department of Human Habitat and
authorizing the Department Secretary to
Commission on Appointments (2002) promulgate implementing rules and regulations.
No III - Suppose there are 202 members in the Suppose further that the law declared that
House of Representatives. Of this number, 185 violation of the implementing rules and
belong to the Progressive Party of regulations so issued would be punishable as a
the Philippines or PPP, while 17 belong crime and authorized the Department Secretary to
to the Citizens Party or CP. How would prescribe the penalty for such violation. If the law
you answer the following questions defines certain acts as violations of the law and
regarding the representation of the House makes them punishable, for example, with
in the Commission on Appointments? imprisonment of three (3) years or a fine in the
A. A How many seats would the PPP amount of P10,000.00, or both such
be entitled to have in the Commission imprisonment and fine, in the discretion of the
on Appointments? Explain your answer court, can it be provided in the implementing
fully. (5%) rules and regulations promulgated by the
B. Suppose 15 of the CP representatives, while Department Secretary that their violation will also
maintaining their party affiliation, entered be subject to the same penalties as those provided
into a political alliance with the PPP in order to in the law itself? Explain your answer fully. (5%)
form the "Rainbow Coalition'' in the House.
What effect, if any, would this have on the SUGGESTED ANSWER:
right of the CP to have a seat or seats The rules and regulations promulgated by the
in the Commission on Appointments? Secretary of Human Habitat cannot provide that the
Explain your answer fully. (5%) penalties for their violation will be the same as the
SUGGESTED ANSWER: penalties for the violation of the law. As held in
A. The 185 members of the Progressive Party of United States v. Barrias, 11 Phil. 327 (1908),
the Philippines represent 91.58 per cent of the the fixing of the penalty for criminal offenses
202 members of the House of involves the exercise of legislative power and
Representatives. In accordance with Article cannot be delegated. The law itself must
VI, Section 18 of the Constitution, it is entitled to prescribe the penalty.
have ten of the twelve seats in the Commission on
Appointments. Although the 185 members of Delegation of Powers; (Q6-2005)
Progressive Party of the Philippines represent (2) Section 32 of Republic Act No. 4670
10.98 seats in the Commission on (The Magna Carta for Public School
Appointments, under the ruling in Guingona v. Teachers) reads:
Gonzales, 214 SCRA 789 (1992), a fractional Sec. 32. Penal Provision. — A person who
membership cannot be rounded off to full shall willfully interfere with, restrain or coerce any
membership because it will result in over- teacher in the exercise of his rights
representation of that political party and under- guaranteed by this Act or who shall in any
representation of the other political parties. other manner commit any act to defeat any of the
provisions of this Act shall, upon
B. The political alliance formed by the 15 conviction, be punished by a fine of not less
members of the Citizens Party with the than one hundred pesos nor more than one
Progressive Party of the Philippines will not thousand pesos, or by imprisonment, in the
result in the diminution of the number of seats discretion of the court.
in the Commission on Appointments to which
the Citizens Party is entitled. As held in Is the proviso granting the court the authority to
Cunanan v. Tan, 5 SCRA 1 (1962), a temporary impose a penalty or imprisonment in its
alliance between the members of one political discretion constitutional? Explain briefly. (4%)
party and another political party does not SUGGESTED ANSWER:
authorize a change in the membership of the
The proviso is unconstitutional. Section 32 of when it reaches him except to enforce it.
R.A. No. 4670 provides for an indeterminable (See ITS v. Ang Tang Ho, G.R. No. L-
period of imprisonment, with neither a minimum nor 17122, February 27, 1922)
a maximum duration having been set by the
legislative authority. The courts are thus given SUFFICIENT STANDARD TEST. A sufficient
wide latitude of discretion to fix the term of standard is intended to map out the boundaries
imprisonment, without even the benefit of any of the delegate's authority by defining
sufficient standard, such that the duration the legislative policy and indicating
thereof may range, in the words of respondent the circumstances under which it is to be
judge, from one minute to the life span of the pursued and effected; intended to prevent
accused. This cannot be allowed. It vests in the a total transference of legislative power
courts a power and a duty essentially legislative in from the legislature to the delegate. The
nature and which, as applied to this case, does standard is usually indicated in the
violence to the rules on separation of powers law delegating legislative power. (See
as well as the non-delegability of legislative Ynot u. Intermediate Appellate Court, G.R.
powers. (People v. Judge Dacuycuy, G.R. No. L- No. 74457, March 20, 1987)
45127, May 5, 1989)
Discipline; Modes of Removal (1993)
Delegation of Powers; Completeness No. 11: - How may the following be
Test; Sufficient Standard Test (Q6-2005) removed from office:
(1) The two accepted tests to 1) Senators & Congressmen
determine whether or not there is a valid 2) Judges of lower courts
delegation of legislative power are the 3) Officers and employees in the Civil Service
Completeness Test and the Sufficient SUGGESTED ANSWER:
Standard Test. Explain each. (4%) 1) In accordance with Art. III, section 16(3), of the
Constitution, Senators and Congressmen may
ALTERNATIVE ANSWER: be removed by their EXPULSION for
Under the COMPLETENESS TEST, a law must be disorderly behavior, with the concurrence of at
complete in all its terms and provisions when it least two-thirds of all the members of the House to
leaves the legislature that nothing is left to the which they belong. In addition, they may also be
judgment of the delegate. The legislature does removed in consequence of an election
not abdicate its functions when it describes contest filed with the Senate or House of
what job must be done, who is to do it, and Representatives Electoral Tribunal.
what is the scope of his authority. However, a
delegation of power to make the laws which 2) As to Judges, Art. VIII, sec. 11 of the
necessarily involves a discretion as to what it Constitution, ....
shall be may not constitutionally be done. (Edu v.
Ericta, G.R. No. L-32096, October 24, 1970) 3) As to Civil Service Employees, Art. IX-
B. Sec. 2(3) of the Constitution....
Under the SUFFICIENCY OF STANDARDS
TEST, the statute must not only define a Discipline; Suspension of a Member of
fundamental legislative policy, mark its limits and the Congress (2002)
boundaries, and specify the public agency to No II. - Simeon Valera was formerly a Provincial
exercise the legislative power. It must also Governor who ran and won as a Member of the
indicate the circumstances under which the House of Representatives for the Second
legislative command is to be effected. To avoid the Congressional District of lloilo. For violation of
taint of unlawful delegation, there must be a Section 3 of the Anti-Graft and Corrupt
standard, which implies at the very least that Practices Act (R.A. No.3019), as amended,
the legislature itself determines matters of allegedly committed when he was still a
principle and lays down fundamental policy. Provincial Governor, a criminal complaint was
(Free Telephone Workers Union v. Minister of filed against him before the Office of the
Labor, G.R. No. L-58184, October 30, 1981) Ombudsman for which, upon a finding of
probable cause, a criminal case was filed with
ALTERNATIVE ANSWER: the Sandiganbayan. During the course of trial,
COMPLETENESS TEST. The law must be the Sandiganbayan issued an order of
complete in all its essential terms and preventive suspension for 90 days against him.
conditions when it leaves the legislature so that
there will be nothing left for the delegate to do
Representative Valera questioned the validity of the was a de facto officer while he was in
Sandiganbayan order on the ground that, under possession of the office. To allow AVE to collect the
Article VI, Section 16(3) of the salaries and allowances will result in making the
Constitution, he can be suspended only by the government pay a second time. (Mechem, A
House of Representatives and that the criminal Treatise on the Law of Public Offices and
case against him did not arise from his Public Officers, [1890] pp. 222-223.)
actuations as a member of the House of
Representatives. Is Representative Valera's BART is not required to refund to the
contention correct? Why? (5%) government the salaries and allowances he
SUGGESTED ANSWER: received. As a de facto officer, he is entitled to the
The contention of Representative Valera is not salaries and allowances because he
correct As held in Santiago v. Sandiganbayan, rendered services during his incumbency.
356 SCRA 636, the suspension contemplated in (Rodriguez v. Tan, 91 Phil. 724 [1952])
Article VI, Section 16(3) of the Constitution is a
punishment that is imposed by the Senate or House The bills which BART alone authored and were
of Representatives upon an erring member, it approved by the House of Representatives are valid
is distinct from the suspension under Section 13 because he was a de facto officer during his
of the Anti-Graft and Corrupt Practices Act, incumbency. The acts of a de facto officer are
which is not a penalty but a preventive valid insofar as the public is concerned. (People
measure. Since Section 13 of the Anti-Graft and v. Garcia, 313 SCRA 279 [1999]).
Corruption Practices Act does not state that
the public officer must be suspended only in Electoral Tribunal; HRET Members’ Right &
the office where he is alleged to have Responsibilities (2002)
committed the acts which he has been charged, it No IV. In an election case, the House
applies to any office which he may be holding. of Representatives Electoral Tribunal
rendered a decision upholding the election
protest of protestant A, a member of the
Elected Official; De Facto Officer (2004) (10-b) Freedom Party, against protestee B, a
AVE ran for Congressman of QU province. member of the Federal Party. The deciding
However, his opponent, BART, was the one vote in favor of A was cast by Representative
proclaimed and seated as the winner of the X, a member of the Federal Party .
election by the COMELEC. AVE filed
seasonably a protest before HRET (House of For having voted against his party mate,
Representatives Electoral Tribunal). After two Representative X was removed by Resolution of
years, HRET reversed the COMELEC's the House of Representatives, at the
decision and AVE was proclaimed finally as the duly instance of his party (the Federal Party), from
elected Congressman. Thus, he had only one membership in the HRET. Representative X
year to serve in Congress. protested his removal on the ground that he
voted on the basis of the evidence presented
Can AVE collect salaries and allowances and contended that he had security of tenure as a
from the government for the first two years HRET Member and that he cannot be
of his term as Congressman? removed except for a valid cause.
Should BART refund to the government the With whose contention do you agree, that of the
salaries and allowances he had received as Federal Party or that of Representative
Congressman? X? Why? (5%)
SUGGESTED ANSWER:
What will happen to the bills that BART I agree with the contention of Representative X. As
alone authored and were approved by the held In Bondoc v. Pineda, 201 SCRA 792
House of Representatives while he was (1991), the members of the House of
seated as Congressman? Reason and Representatives Electoral Tribunal are entitled to
explain briefly. (5%) security of tenure like members of the
judiciary. Membership in it may not be
SUGGESTED ANSWER: terminated except for a just cause. Disloyalty to
AVE cannot collect salaries and allowances party is not a valid ground for the expulsion of a
from the government for the first two years of member of the House of Representatives
his term, because in the meanwhile BART Electoral Tribunal. Its members must discharge their
collected the salaries and allowances. BART functions with impartiality and
independence from the political party to agreement must be concurred in by at least
which they belong. two-thirds of all the Members of the Senate.
Electoral Tribunal; Senate; Jurisdiction Section 4, Article XVIII of the Constitution

(1990) provides: "All existing treaties or international
No. 3: Y was elected Senator in the May 1987 agreements which have not been ratified shall
national elections. He was born out of wedlock in not be renewed or extended without the
1949 of an American father and a naturalized concurrence of at least two-thirds of all the
Filipina mother. Y never elected Philippine Members of the Senate.”
citizenship upon reaching the age of majority.
Before what body should T, the losing Investigations in Aid of Legislation (1992)
candidate, question the election of Y? No. 8: A case was filed before the
State the reasons for your answer. Sandiganbayan regarding a questionable
Is Y a Filipino citizen? Explain your answer. government transaction. In the course of the
SUGGESTED ANSWER: proceedings, newspapers linked the name of
(1) T, the losing candidate, should question the Senator J. de Leon to the scandal.
election of Y before the Senate Electoral
Tribunal, because the issue involved is the Senator de Leon took the floor of the Senate to
qualification of Y to be a Senator. Section 17, speak on a "matter of personal privilege" to
Article VI of the 1987 Constitution provides that. The vindicate his honor against those "baseless and
Senate and the House of Representatives shall malicious" allegations. The matter was referred to
each-have an Electoral Tribunal which shall be the Committee on Accountability of Public
the sole judge of all contests relating to the Officers, which proceeded to conduct a
election, returns, and qualifications of their legislative inquiry. The Committee asked Mr.
respective Members." Vince Ledesma, a businessman linked to the
transaction and now a respondent before the
(2) Yes, Y is a natural born Filipino citizen. .... Sandiganbayan, to appear and to testify before the
Committee.
Foreign Affairs; Role of House of Rep (1996)
No. 7: 5) Can the House of Representatives Mr Ledesma refuses to appear and file suit
take active part in the conduct of foreign before the Supreme Court to challenge
relations, particularly in entering into treaties and the legality of the proceedings before
international agreements? Explain. the Committee. He also asks
SUGGESTED ANSWER: whether the Committee had the power to
No, the House of Representatives cannot take require him to testify.
active part in the conduct of foreign relations,
particularly in entering into treaties and Identify the issues Involved and resolve them.
international agreements. As held in United SUGGESTED ANSWER:
States vs. Curtiss-Wright Export Corporation, 299 The issues involved in this case are
U.S. 304, the President alone is the the following:
representative of the nation in the conduct of 1. Whether or not the Supreme Court
foreign affairs. Although the Senate has the has jurisdiction to entertain the case;
power to concur in treaties, the President alone 2. Whether or not the Committee on
negotiates treaties and Congress is powerless to Accountability of Public Officers has the
intrude into this. However, if the matter power to investigate a matter which is
involves a treaty or an executive agreement, the involved in a case pending in court; and
House of Representatives may pass a 3. Whether or not the petitioner can invoke his
resolution expressing its views on the matter. right against self-incrimination.
Foreign Affairs; Role of Senate (1994) All these Issues were resolved in the case
No. 13: 1) Under the Constitution, what is of Bengzon vs. Senate Blue Ribbon
the role of the Senate in the conduct of Committee, 203 SCRA 767.
foreign affairs?
SUGGESTED ANSWER: The Supreme Court has jurisdiction over
The Senate plays a role in the conduct of the case (determination of grave
foreign affairs, because of the requirement in abuse of discretion)....
Section 21, Article VII of the Constitution that to be
valid and effective a treaty or international
The Committee on Accountability of Public measure if the appropriation of public funds is
Officers has no power to investigate the not its principal purpose and the appropriation is
scandal. (no judicial functions)... only incidental to some other objective.
The petitioner can invoke his right against self- Law-Making; Appropriation Law; Automatic
incrimination, because this right is available Renewal & Power of Augmentation (1998)
in all proceedings. Since the petitioner is No XI. - Suppose the President submits
a respondent in the case pending before a budget which does not contain provisions
the Sandiganbayan, he may refuse to testify. for CDF (Countrywide Development
Funds), popularly known as the pork
Law Making; Process & Publication (1993) barrel, and because of this Congress does
No. 2; Ernest Cheng, a businessman, has no not pass the budget.
knowledge of legislative procedure. Cheng 1. Will that mean paralization of government
retains you as his legal adviser and asks operations in the next fiscal year for lack of an
enlightenment on the following matters: appropriation law? (2%)
(1) When does a bill become a law even
without the signature of the President? 2. Suppose in the same budget, there is a
(2) When does the law take effect? special provision in the appropriations for the
SUGGESTED ANSWER: Armed Forces authorizing the Chief of Staff,
1) Under Section 27(1), Article VI of the AFP, subject to the approval of the Secretary of
Constitution, a bill becomes a law even without the National Defense, to use savings in the
signature of the President if he vetoed it but his veto appropriations provided thereto to cover up
was overriden by two-thirds vote of all the members whatever financial losses suffered by the AFP
of both the Senate and the House of Retirement and Separation Benefits System
Representatives and If the President failed to (RSBS) in the last five (5) years due to alleged bad
communicate his veto to the House from which the business judgment. Would you question the
bill originated, within thirty days after the date of constitutionality validity of the special
receipt of the bill by the President. provision? [3%]
SUGGESTED ANSWER:
2) As held in Tanada vs. Tuvera, 146 SCRA 1. No, the failure of Congress to pass
446, a law must be published as a condition for its the budget will not paralyze the operations
effectivity and in accordance with Article 2 of the of the Government.
Civil Code, it shall take effect fifteen days Section 25(7), Article VI of the Constitution
following the completion of its publication in the provides: "If, by the end of any fiscal year, the
Official Gazette or in a newspaper of general Congress shall have failed to pass the
circulation unless it is otherwise provided. general appropriations bill for the ensuing
(Executive Order No. 292, Revised fiscal year, the general appropriations law for the
Administrative Code of 1989) preceding fiscal year shall be deemed
reenacted and shall remain in force and effect
Law-Making; Appropriation Bill (1996) until the general appropriations bill is passed
No 5: Are the following bills filed in by the Congress.
Congress constitutional?
A bill originating from the Senate which SUGGESTED ANSWER:
provides for the creation of the Public Utility 2. Yes, the provision authorizing the Chief of
Commission to regulate public service Staff, with the approval of the Secretary of
companies and appropriating the initial funds National Defense, to use savings to cover the
needed to establish the same. Explain. losses suffered by the AFP Retirement and
SUGGESTED ANSWER: Separation Benefits System is unconstitutional.
A bill providing for the creation of the Public
Utility Commission to regulate public service Section 25(5], Article VI of the
companies and appropriating funds needed to Constitution provides:
establish it may originate from the Senate. It is not "No law shall be passed authorizing any
an appropriation bill, because the transfer of appropriations; however, the
appropriation of public funds is not the principal President, the President of the Senate, the
purpose of the bill. In Association of Small Speaker of the House of Representatives, the
Landowners of the Philippines, Inc. vs. Chief Justice of the Supreme Court, and the
Secretary of Agrarian Reform 175 SCRA 343, it was heads of Constitutional Commissions may, by
held that a law is not an appropriate law, be authorized to augment any item in the
general appropriation law for their entered into by the President. The bill contains
respective offices from savings in other the guidelines to be followed by the commission
Items of their respective appropriations." In the discharge of its functions. Explain.
SUGGESTED ANSWER:
In Philippine Constitution vs Enriquez, 235 A bill creating a joint legislative-executive
SCRA 506, 544, the Supreme Court held that a commission to give, on behalf of the Senate, its
provision in the General Appropriation Act advice, consent and concurrence to treaties
authorizing the Chief of Staff to use savings to entered into by the President. The Senate
augment the funds of the AFP Retirement and cannot delegate this function to such a
Separation Benefits Systems was commission, because under Section 21, Article VII
unconstitutional. "While Section 25(5) allows as an of the Constitution, the concurrence of at least
exception the realignment of savings to two-thirds of the Senate itself is required for the
augment items in the general appropriations law ratification of treaties.
for the executive branch, such right must and
can be exercised only by the President pursuant Law-Making; Overriding the
to a specific law." Presidential Veto (1991)
No. 2: The President signs into law the
Law-Making; Appropriation Law; Rider Appropriations Act passed by Congress but she
Provision (2001) vetoes separate items therein, among which
No VII - Suppose that the forthcoming General is a provision stating that the President
Appropriations Law for Year 2002, in the portion may not increase an item of appropriation by
pertaining to the Department of Education, transfer of savings from other items.
Culture and Sports, will contain a provision to
the effect that the Reserve Officers Training The House of Representatives chooses not
Course (ROTC) in all colleges and universities to override this veto. The Senate,
is hereby abolished, and in lieu thereof all male however, proceeds to consider two
college students shall be required to plant ten options: (1) to override the veto and (2)
(10) trees every year for two (2) years in areas to to challenge the constitutionality of the veto
be designated by the Department of before the Supreme Court.
Environment and Natural Resources in a) Is option (1) viable? If so. what is the
coordination with the Department of Education, vote required to override the veto?
Culture and Sports and the local government b) Is option (2) viable? If not. why not? If
unit concerned. It further provides that the same viable, how should the Court decide the
provision shall be incorporated In future case?
General appropriations Acts. There is no SUGGESTED ANSWER:
specific item of appropriation of funds for the (a) Option 1 is not viable in as much as the
purpose.Comment on the constitutionality of House of Representatives, from which the
said provision. (5%) Appropriations Act originated and to which the
SUGGESTED ANSWER: President must have returned the law, is
The provision is unconstitutional, because it is a unwilling to override the presidential veto. There is,
rider. Section 25(2), Article VI of the therefore, no basis for the Senate to even
Constitution provides, "No provision or consider the possibility of overriding the
enactment shall be embraced in the general President's veto. Under the Constitution the
appropriations bill unless it relates specifically to vote of two-third of all the members of the
some particular appropriation therein." The House of Representatives and the Senate,
abolition of the Reserve Officers Training voting separately, will be needed to override the
Course involves a policy matter. As held in presidential veto.
Philippine Constitution Association vs.
Enriquez, 235 SCRA 506 (1994), this cannot be (b) It is not feasible to question the
incorporated in the General Appropriations Act constitutionality of the veto before the Supreme
but must be embodied in a separate law. Court. In Gonzales vs. Macaraig, 191 SCRA
152, the Supreme Court upheld the
Law-Making; Foreign Affairs; Treaties (1996) constitutionality of a similar veto. Under Article VI,
No 5: Are the following bills filed in Sec. 27(2) of the Constitution, a distinct and
Congress constitutional? severable part of the General Appropriations act
2) A bill creating a joint legislative-executive may be the subject of a separate veto.
commission to give, on behalf of the Senate, its Moreover, the vetoed provision does not relate to
advice, consent and concurrence to treaties any particular appropriation and is more an
expression of a congressional policy in respect of (1) The contention of X Corporation should
augmentation from savings than a budgetary be rejected. Executive Orders Nos. 1, 2
provision. It is therefore an inappropriate and 14 were issued in 1986. At that time
provision and it should be treated as an item for President Corazon Aquino exercised
purposes of the veto power of the President. legislative power Section 1, Article II
of the Provisional Constitution established
The Supreme Court should uphold the by Proclamation No, 3, provided:
validity of the veto in the event the question is "Until a legislature is elected and convened
brought before it. under a new constitution, the President shall
continue to exercise legislative power."
Law-Making; Passage of a Law (1988)
No. 12: - 2. A bill upon filing by a Senator or a Likewise, Section 6, Article XVIII of the
Member of the House of Representatives goes 1987 Constitution reads:
through specified steps before it leaves the The incumbent President shall continue to
House of Representatives or the Senate, as the exercise legislative power until the
case may be. After leaving the first Congress is convened."
legislature, please name the three methods
by which said bill may become a law. In the case of Kapatiran ng mga Naglilingkod sa
SUGGESTED ANSWER: Pama-halaan ng Pilipinas. Inc. v. Tan, 163
A bill passed by Congress may become a law SCRA 371. the Supreme Court ruled that the
in any of the following cases: Provisional Constitution and the 1987
If it is signed into law by the President. (Art. VI, Constitution, both recognized the power of the
sec. 27(1)). president to exercise legislative powers until the first
Congress created under the 1987
If it is re-passed over the President's veto Constitution was convened on July 27, 1987.
by the vote of two thirds of all the members (2) Executive Orders Nos. 1, 2 and 14 are
of the House of Representatives and of not bills of attainder. ....
the Senate. (Id.)
Legislative Powers (1989)
If the President fails to veto it within thirty days No. 14: An existing law grants government
after receipt thereof and communicate employees the option to retire upon reaching the
the veto to the House from which it age of 57 years and completion of at least 30
originated, (Id.) years of total government service. As a fiscal
retrenchment measure, the Office of the
Legislative Power; Pres. Aquino’s Time President later issued a Memorandum Circular
(1990) requiring physical incapacity as an additional
No. 1; - Executive Orders Nos. 1 and 2 issued by condition for optional retirement age of 65
President Corazon C. Aquino created the years. A government employee, whose
Presidential Commission on Good Government application for optional retirement was denied
(PCGG) and empowered it to sequester any because he was below 65 years of age and
property shown prima facie to be ill-gotten was not physically incapacitated, filed an action in
wealth of the late President Marcos, his court questioning the disapproval of his
relatives and cronies. Executive Order No. 14 application claiming that the Memorandum
vests on the Sandiganbayan jurisdiction to try Circular is void. Is the contention of the
hidden wealth cases. On April 14, 1986, after employee correct? Explain.
an investigation, the PCGG sequestered the SUGGESTED ANSWER:
assets of X Corporation, Inc. Yes, the contention of the employee is correct. In
X Corporation, Inc. claimed that Marasigan vs. Cruz, 150 SCR A 1, it was held
President Aquino, as President, could that such a memorandum circular is void. By
not lawfully issue Executive Orders introducing physical capacity as an
Nos. 1, 2 and 14, which have the force additional condition for optional retirement, the
of law, on the ground that legislation is a memorandum circular tried to amend the law.
function of Congress. Decide. Such a power is lodged with the legislative
Said corporation also questioned the validity of the branch and not with the executive branch.
three executive orders on the ground that
they are bills of attainder and, Loans Extended to Members of Congress
therefore, unconstitutional. Decide. (1991)
SUGGESTED ANSWER:
No. 9: A. After 2 February 1987, the Philippine (1) To act as national board of canvassers for
National Bank (PNB) grants a loan President and Vice President. (Art. VII, sec. 4).
to Congressman X. Is the loan violative of
the Constitution? (2) To decide whether the President is
temporarily disabled in the event he
Suppose the loan had instead been granted reassumes his office after the Cabinet, by a
before 2 February 1987, but was outstanding on majority of vote of its members, declared
that date with a remaining balance on the that he is unable to discharge the powers
principal in the amount of P50,000.00, can the and duties of his office and now within five days
PNB validly give Congressman X an extension of insists that the President is really unable
time after said date to settle the obligation? to discharge the powers and duties of the
SUGGESTED ANSWER: presidency. (Art. VII, sec. 11)
A. Whether or not the loan is violative of the
1987 Constitution depends upon its purpose. If it (3) To concur in the grant of amnesty by
was obtained for a business purpose, it is the President. (Art. VII, sec. 19),
violative of the Constitution. If it was obtained
for some other purpose, e.g., for housing. It is (4) To initiate through the House of
not violative of the Constitution because under Representatives and, through the Senate, to
Section 16, Article XI. Members of Congress try all cases of impeachment against the
are prohibited from obtaining loans from President, Vice President, the Members of
government-owned banks only if it is for a the Supreme Court, the Members of the
business purpose. Constitutional Commissions and the
Ombudsman, for culpable violation of the
If the loan was granted before the effectivity of the Constitution, treason, bribery, graft and
Constitution on February 2, 1987, the corruption, other high crimes, or betrayal of
Philippine National Bank cannot extend its public trust. (Art. XI, secs. 2-3).
maturity after February 2, 1987, if the loan was
obtained for a business purpose. In such a case the (5) To act as a constituent assembly for the
extension is a financial accommodation which revision or amendment of the Constitution.
is also prohibited by the Constitution. (Art. XVII).
Multi-Party System (1999) Non-Legislative Powers; Emergency

No XIV - Discuss the merits and demerits of the Powers; Requisites (1997)
multi-party system. (2%) No. 11: During a period of national emergency.
SUGGESTED ANSWER: Congress may grant emergency powers to
A multi-party system provides voters with a the President, State the conditions under
greater choice of candidates, ideas, and which such vesture is allowed.
platforms instead of limiting their choice to two SUGGESTED ANSWER:
parties, whose ideas may be sterile. It also Under Section 23(2), Article VI of
leaves room for deserving candidates who are the Constitution. Congress may grant the
not acceptable to those who control the two President emergency powers subject to
dominant parties to seek public office. the following conditions:
(1) There is a war or other national emergency:
On the other hand, a multi-party system may (2) The grant of emergency powers must be for
make it difficult to obtain a stable and workable a limited period;
majority, since probably no party will get a (3) The grant of emergency powers is
majority. Likewise, the opposition will be subject to such restrictions as
weakened if there are several minority parties. Congress may prescribe; and
(4) The emergency powers must be exercised
Non-Legislative Powers (1988) to carry out a declared national policy.
No. 12: Legislative powers had been vested by the
Constitution in the Congress of the Prohibitions and Inhibitions of Public Office
Philippines. In addition, the Constitution also (2004)
granted the lawmaking body, non-legislative (3-a) JAR faces a dilemma: should he accept a
powers. Kindly name five of the latter. Cabinet appointment now or run later for
SUGGESTED ANSWER: Senator? Having succeeded in law practice as
Congress has the following non- well as prospered in private business where he and
legislative powers: his wife have substantial investments, he

now contemplates public service but without Assume that you are a member of the
losing the flexibility to engage in House Electoral Tribunal where the petition for
corporate affairs or participate in Brown's ouster is pending. How would you
professional activities within ethical bounds. decide the three issues raised against him?
SUGGESTED ANSWER:
Taking into account the prohibitions The first and third grounds have no merit.
and inhibitions of public office whether as But the second is well taken and, therefore,
Senator or Secretary, he turns to you for Brown should be disqualified.
advice to resolve his dilemma. What is 1. Robert Brown is a natural born citizen of the
your advice? Explain briefly. (5%) Philippines. A person born of a Filipino
SUGGESTED ANSWER: mother and an alien father before January
I shall advise JAR to run for SENATOR. As a 17, 1973, who thereafter upon reaching
Senator, he can retain his investments in his the age of majority elect Philippine
business, although he must make a full citizenship, is a citizen of the Philippines (Art.
disclosure of his business and financial IV, sec. 1(3)). Under Art. IV, sec, 2 he is
interests and notify the Senate of a potential also deemed a natural-born citizen.
conflict of interest if he authors a bill. (Section
12, Article VI of the 1987 Constitution.) He can 2. The Constitution requires, among other
continue practicing law, but he cannot things, that a candidate for member of the
personally appear as counsel before any court House of Representatives must be at least 25
of justice, the Electoral Tribunals, or quasi- years of age "on the day of the election." (Art.
judicial and other administrative bodies. VI, sec. 6). As Brown was born on May 15,
(Section 14, Article VI of the 1987 Constitution.) 1962, he did not become 25 years old until May 15,
1987. Hence on May 11, 1987, when the
As a member of the Cabinet, JAR cannot election was held, he was 4 days short of the
directly or indirectly practice law or participate in any required age.
business. He will have to divest himself of his
investments in his business. (Section 13, Article 3. The Constitution provides that those who
VII of the 1987 Constitution.) In fact, the seek either to change their citizenship or to
Constitutional prohibition imposed on members of acquire the status of an immigrant of another
the Cabinet covers both public and private office country "during their tenure" shall be dealt with by
or employment. (Civil Liberties Union v. law (Art. XI, sec. 17). The provision cannot
Executive Secretary, 194 SCRA 317) apply to Brown for the following reasons: First,
Brown is in addition an American citizen and
Qualifications; Congressmen (1988) thus has a dual citizenship which is allowed by the
No. 13: - Robert Brown was born in Hawaii on May Constitution. (Cf. Art. IV, sec. 4), Second, Brown
15, 1962, of an American father and a Filipina did not seek to acquire the status of an immigrant,
mother. On May 16, 1983 while holding an but is an American by birth under the principle
American passport, he registered as a Filipino of jus soli obtaining in the United States. Third,
with the Philippine Consulate at Honolulu, he did not seek to change his status during his
Hawaii. In September, 1983 he returned to tenure as a public officer. Fourth, the provision
the Philippines, and took up residence at of Art. XI, sec. 17 is not self-executing but
Boac, Marinduque, hometown of his mother. He requires an implementing law. Fifth, but above
registered as a voter, voted, and even participated all, the House Electoral Tribunal has no
as a leader of one of the candidates in that jurisdiction to decide this question since it
district in the 1984 Batasan elections. In the does not concern the qualification of a
elections of 1987, he ran for Congressman, and member-elect.
won. His sole opponent is now questioning his
qualifications and is trying to oust him on two Qualifications; Congressmen; (1993)
basic claims: No. 1: In 1964. Ruffa, a Filipina domestic helper
He is not a natural born Filipino citizen, but is in working in Hongkong, went to Taipei for a
fact, an American, born in Hawaii, vacation, where she met Cheng Sio Pao. whom she
an integral portion of the U.S.A., who holds married. Under Chinese Law, Ruffa
an American passport; automatically became a Chinese citizen. The
He did not meet the age requirement; and He couple resided in Hongkong, where on May 9,
has a "green card" from the U.S. 1965, Ruffa gave birth to a boy named Ernest. Upon
Government. reaching the age of majority, Ernest elected
Philippine citizenship. After the EDSA
Revolution, Ernest decided to live permanently in Philippine citizenship upon reaching the age of
the Philippines, where he prospered as a majority to be considered a natural born citizen and
businessman. During the May 11, 1993 qualified to run for Congress. Republic Act No. 6809
election, Ernest ran and won as a reduced the majority age to eighteen (18) years.
congressman. His opponent, noting Ernest's Cuenco v. Secretary of Justice, 5 SCRA 108
Chinese ancestry, filed a petition to disqualify recognized three (3) years from reaching the
the latter on the following grounds; (1) Ernest age of majority as the reasonable period for
Cheng is not a natural bom Filipino; and (2) he is electing Philippine citizenship. Since Republic Act
underaged. Decide. No. 6809 took effect in 1989 and there is no
SUGGESTED ANSWER: showing that Victor Ahmad elected Philippine
1) Ernest cannot be disqualified..... citizenship within three (3) years from the time he
reached the age of majority on December 16,
2) Ernest is not under-aged. Having been born on 199C, he is not qualified to run for Congress.
May 9, 1965, he was over twenty-five years old on
the date of the May 11, 1993 election. (Election
was held on May 11, 1992). Section 6, Article VI If he consulted me on December 16, 1991,
of the Constitution, requires congressmen to I would inform him that he should elect
be at least twenty-five years of age on the day of Philippine citizenship so that he can be
the election. considered a natural born citizen.
Qualifications; Congressmen; (1999) Separation of Powers (1988)

No III - C. Victor Ahmad was born on December No. 25: Can any other department or agency of
16, 1972 of a Filipino mother and an alien the Government review a decision of
father. Under the law of his father's country, his the Supreme Court? Why or why not?
mother did not acquire his father's SUGGESTED ANSWER:
citizenship. Victor consults you on December No. The Supreme Court is the highest arbiter of
21, 1993 and informs you of his intention to run legal questions. (Javier v. Comelec, 144 SCRA 194
for Congress in the 1995 elections. Is he (1986)) To allow review of its decision by the
qualified to run? What advice would you other departments of government would upset
give him? Would your answer be the the classic pattern of separation of powers
same if he had seen and consulted you and destroy the balance between the judiciary
on December 16, 1991 and informed you and the other departments of government.
of his desire to run for Congress in the As the Justices said in their answer to the
1992 elections? Discuss your answer. (3%) complaint for impeachment in the Committee on
FIRST ALTERNATIVE ANSWER: Justice of the House of Representatives,
C. No, Victor Ahmad is not qualified to run for "Just as it is completely unacceptable to file
Congress in the 1995 elections. Under charges against the individual members of
Section 6, Article VI of the Constitution, a Congress for the laws enacted by them upon the
member of the House of Representatives must be argument that these laws are violative of the
at least twenty-five (25) years of age on the day of Constitution, or are a betrayal of public trust, or
the election. Since he will be less than twenty-five are unjust. So too, should it be equally
(25) years of age in 1995, Victor Ahmad is not impermissible to make the individual members
qualified to run. of the Supreme Court accountable for the
court's decisions or rulings.
Under Section 2, Article IV of the Constitution,
to be deemed a natural-born citizen, Victor Separation of Powers (2003)
Ahmad must elect Philippine citizenship upon No II - A group of losing litigants in a case
reaching the age of majority. I shall advise him to decided by the Supreme Court filed a complaint
elect Philippine citizenship, if he has not yet done before the Ombudsman charging the Justices
so, and to wait until the 1998 elections. with knowingly and deliberately rendering an
unjust decision in utter violation of the penal
My answer will be the same if he consulted me laws of the land. Can the Ombudsman validly
in 1991 and informed me of his desire to run in take cognizance of the case? Explain.
the 1992 elections. SUGGESTED ANSWER:
No, the Ombudsman cannot entertain the
SECOND ALTERNATIVE ANSWER: complaint. As stated in the case of In re:
C. Under Section 2, Article IV of the Laureta. 148 SCRA 382 [1987], pursuant to the
Constitution, Victor Ahmad must have elected principle of separation of powers, the
correctness of the decisions of the Supreme Representatives for a third term. This
Court as final arbiter of all justiciable disputes is term should be included in the computation
conclusive upon all other departments of of the term limits, even if "A" did not serve
the government; the Ombudsman has no for a full term. (Record of the
power to review the decisions of the Constitutional Commission, Vol. n, p. 592.)
Supreme Court by entertaining a complaint He remained a Member of the House of
against the Justices of the Supreme Court for Representatives even if he was suspended.
knowingly rendering an unjust decision.
SECOND ALTERNATIVE ANSWER:
Article XI, Section 1 of the 1987 Constitution ARTICLE VII Executive
provides that public officers must at all times be
accountable to the people. Section 22 of the
Department
Ombudsman Act provides that the Office of the
Ombudsman has the power to investigate any
Appointing Power; Acting vs.
serious misconduct allegedly committed by Permanent Appointment (2003)
No V - What is the nature of an "acting
officials removable by impeachment for the
appointment" to a government office? Does
purpose of filing a verified complaint for
such an appointment give the appointee the
impeachment if warranted. The Ombudsman can
right to claim that the appointment will, in time, ripen
entertain the complaint for this purpose.
into a permanent one? Explain.
Three-Term Limit: Congressmen (1996) SUGGESTED ANSWER:
No. 13: - X, a member of the House of According to Sevilla v. Court of Appeals. 209
Representatives, was serving his SCRA 637 [1992], an acting appointment is
third consecutive term in the House. In merely temporary. As held in Marohombsar v.
June 1996 he was appointed Secretary Alonto, 194 SCRA 390 [1991], a temporary
of National Defense. appointment cannot become a permanent
Can he run for election to the Senate in appointment, unless a new appointment which is
the 1998 elections? Explain. permanent is made. This holds true unless the
SUGGESTED ANSWER: acting appointment was made because of a
Yes, X can run for the Senate in the 1988 temporary vacancy. In such a case, the
election. Under Section 7, Article X of temporary appointee holds office until the
the Constitution, having served for assumption of office by the permanent
three consecutive terms as Member of the appointee.
House of Representatives. X is only
Appointing Power; ad interim appointments
prohibited from running for the same position.
(1991)
Three-Term Limit; Congressmen (2001) No. 3: - On 3 May 1992, while Congress is on a
No V - During his third term, "A", a Member of the short recess for the elections, the president
House of Representatives, was suspended from appoints Renato de Silva to the rank of General
office for a period of 60 days by his (4-star) in the Armed Forces. She
colleagues upon a vote of two-thirds of all the also designates him as Chief of Staff of the
Members of the House. In the next succeeding AFP. He immediately takes his oath and
election, he filed his certificate of candidacy for the assumes that office, with the rank of 4-star
same position. "B", the opposing candidate, filed an General of the AFP.
action for disqualification of "A" on the ground
that the latter's, candidacy violated Section 7. When Congress resumes its session on 17 May
Article VI of the Constitution which provides that 1992, the Commission on Appointments
no Member of the House of Representatives informs the Office of the President that it has
shall serve for more than three consecutive terms. received from her office only the appointment of De
"A" answered that he was not barred from Silva to the rank of 4-star General and that unless
running again for that position because his his appointment to the Office of the Chief of
service was interrupted by his 60- day suspension Staff of the AFP is also submitted, the Commission
which was involuntary. will not act on the matter.
Can 'A', legally continue with his candidacy or is
he already barred? Why? (5%) The President maintains that she has submitted
SUGGESTED ANSWER: to the Commission all that the Constitution calls
"A" cannot legally continue with his candidacy. for.
He was elected as Member of the House of (a) Who is correct?

(b) Did Gen. de Silva violate the Constitution in SUGGESTED ANSWER:
immediately assuming office prior to a 1) A is senior to B. In accordance with the
confirmation of his appointment? ruling in Summers vs. Ozaeta. 81 Phil. 754, the ad
(c) Are the appointment and designation valid? interim appointment extended to A is
SUGGESTED ANSWER: permanent and is effective upon his acceptance
(a) The President is correct. Under Presidential although it is subject to confirmation by the
Decree No. 360, the grade of four-star general is Commission on Appointments.
conferred only upon the Chief of Staff.
Hence, the appointment of Renato de Silva as a 2) If Congress adjourned without
four-star general must be deemed to carry with it his the appointments of A and B having
appointment as Chief of Staff of the AFP, been confirmed by the Commission on
Appointments, A cannot return to his old
(b) Gen. Renato de Silva did not violate the position. As held in Summers vs. Qzaeta,
Constitution when he immediately assumed 81 Phil. 754, by accepting an ad interim
office before the confirmation of his appointment to a new position, A waived
appointment, since his appointment was an ad his right to hold his old position. On the
interim appointment. Under Article VI I, Sec. 16 of other hand, since B did not assume the
the Constitution, such appointment is new position, he retained his old position.
immediately effective and is subject only to
disapproval by the Commission on Appointing Power; Appointments Requiring
Appointments or as a result of the next Confirmation; RA 6975-
adjournment of the Congress. Unconstitutional (2002)
No V - On December 13, 1990, the President
(c) The appointment and designation of Gen. de signed into law Republic Act No. 6975
Silva are valid for reasons given above. (subsequently amended by RA No. 8551)
However, from another point of view they are creating the Department of Interior and Local
not valid because they were made within the Government. Sections 26 and 31 of the law
period of the ban for making appointments. provide that senior officers of the Philippine
Under Article VII, Sec. 15 the President is National Police (PNP), from Senior
prohibited from making appointments within the Superintendent, Chief Superintendent, Deputy
period of two (2) months preceding the election for Director General to Director General or Chief of
President and Vice President. The PNP shall, among others, be appointed by the
appointment in this case will be made on May President subject to confirmation by the
3, 1992 which is just 8 days away from the Commission on Appointments.
election for President and Vice President on
May 11, 1992. For this reason the appointment and In 1991 the President promoted Chief
designation of Gen. de Silva are after all Superintendent Roberto Matapang and Senior
invalid. Superintendent Conrado Mahigpit to the
[Note: May 3, 1991 and May 17, 1992 are positions of Director and Chief Superintendent of
Sundays. However the Committee finds no the PNP, respectively. Their appointments were
relevance in the fact that these are holidays in a permanent capacity. Without
and therefore decided to ignore this fact.]
undergoing confirmation by the Commission on
Appointing Power; Ad Interim Appointments Appointments, Matapang and Mahigpit took
(1994) their oath of office and assumed their
No. 16; In December 1988, while Congress was in respective positions. Thereafter, the
recess, A was extended an ad interim Department of Budget and Management
appointment as Brigadier General of the authorized disbursements for their salaries and
Philippine Army, in February 1989. When other emoluments.
Congress was in session, B was nominated as
Juan Bantay filed a taxpayer's suit questioning
Brigadier General of the Philippine Army. B's
the legality of the appointments and
nomination was confirmed on August 5, 1989
disbursements made. Bantay argues that the
while A's appointment was confirmed on
September 5, 1989. appointments are invalid inasmuch as the same
have not been confirmed by the Commission on
Who is deemed more senior of the two, A or B?
Suppose Congress adjourned without Appointments, as required under Sections 26
the Commission on Appointments acting and 31 of R.A. No. 6975.
on both appointments, can A and B retain their
original ranks of colonel?
Determine with reasons the legality of the confirmation by the Commission on
appointments and the disbursements for Appointments are
salaries by discussing the constitutional validity of the head of executive departments,
Sections 26 and 31 of R.A. No. 6975. (5%) ambassadors,
SUGGESTED ANSWER: other public ministers and consuls,
The appointments of Matapang and Mahigpit are officers of the armed forces from the rank
valid even if they were not confirmed by the of colonel or naval captain,
Commission on Appointments, because they are and other officials whose appointments are
not among the public officials whose vested in the President by the Constitution.
appointments are required to be confirmed by
the first sentence of Article VII, Section 16 of Appointing Power; Kinds of
the Constitution. According to Manalo v. Appointments (1994)
Sistoza, 312 SCRA 239 (1999), Sections 26 and When is an appointment in the civil service
31 of Republic Act 6975 are permanent?
unconstitutional, because Congress cannot by Distinguish between an "appointment in an
law expand the list of public officials required to be acting capacity" extended by a Department
confirmed by the Commission on Secretary from an ad interim appointment
Appointments. Since the appointments of extended by the President.
Matapang and Mahigpit are valid, the Distinguish between a provisional and
disbursements of their salaries and emoluments are a temporary appointment.
valid. SUGGESTED ANSWER:
1) Under Section 25(a) of the Civil Service
Appointing Power; Categories of Officials Decree, an appointment in the civil service is
(1999) PERMANENT when issued to a person who
A. 1.) What are the six categories meets all the requirements for the position to
of officials who are subject to the which he is being appointed, including the
appointing power of the President? (2%) appropriate eligibility prescribed, in accordance with
the provisions of law, rules and standards
2.) Name the category or categories of promulgated in pursuance thereof.
officials whose appointments need confirmation by
the Commission on Appointments? (2%) 2) An appointment in an ACTING CAPACITY
extended by a Department Secretary is not
SUGGESTED ANSWER: permanent but temporary. Hence, the
Under Section 16, Article VII of the Constitution, Department Secretary may terminate the
the six categories of officials who are subject to services of the appointee at any time. On the
the appointing power of the President are other hand, an AD INTERIM APPOINTMENT
the following: extended by the President is an appointment
1. Head of executive departments; which is subject to confirmation by the
2. Ambassadors, other public ministers and Commission on Appointments and was made
consuls; during the recess of Congress. As held in
3. Officers of the armed forces from the Summers vs. Qzaeta, 81 Phil. 754, an ad
rank of colonel or naval captain; interim appointment is permanent.
4. Other officers whose appointments are
vested in him by the Constitution; 3) In Section 24 (d) of the Civil Service Act of
5. All other officers of the government 1959, a TEMPORARY APPOINTMENT is one
whose appointments are not otherwise issued to a person to a position needed only for a
provided by law; and limited period not exceeding six months.
6. Those whom he may be authorized by law Under Section 25(b) of the Civil Service
to appoint. (Cruz, Philippine Political Law, Decree, a temporary appointment is one issued to a
1998 ed., pp. 204-205) person who meets all the requirements for the
(It is suggested that if the examinee followed the position to which he is being appointed except
classification in Sarmiento v. Mison, 156 SCRA 549
and named only four categories, because he the appropriate civil service eligibility because of
combined the first three categories into one, he be the absence of appropriate eligibles and it is
given full credit.) necessary in the public Interest to fill the
vacancy.
2.) According to Sarmiento v. Mison, 156 SCRA
549, the only officers whose appointments need On the other hand. Section 24(e) of the Civil
Service Act of 1959 defined a PROVISIONAL
APPOINTMENT as one Issued upon the prior to be finished in not more than six months but
authorization of the Civil Service Commission in because the interest of the service requires that
accordance with its provisions and the rules and certain work be done by a regular employee,
standards promulgated in pursuance thereto only that no one with appropriate eligibility can
to a person who has not qualified in an appropriate be appointed to it. Hence, any other eligible
examination but who otherwise meets the may be appointed to do such work in the
requirements for appointment to a regular meantime that a suitable eligible does not
position in the competitive service, whenever qualify for the position.
a vacancy occurs and the filling thereof is
necessary in the interest of the service and To be more precise, a provisional appointment
there is no appropriate register of eligibles at the may be extended only to a person who has not
time of appointment. qualified in an appropriate examination but who
otherwise meets the requirements for
Provisional appointments in general appointment to a regular position in the
have already been abolished by Republic competitive service, meaning one who must any
Act 6040. However, it still applies with regard way be a civil service eligible.
to teachers under the Magna Carta for
Public School Teachers. In the case of a temporary appointment, all that the
ALTERNATIVE ANSWER: law enjoins is that "preference in filling such position
The case of Regis vs. Osmena, 197 SCRA 308, be given to persons on appropriate eligible
laid down the distinction between a lists." Merely giving preference presupposes
provisional and a temporary appointment. that even a non-eligible may be appointed.
Under the law, even if the appointee has the
A PROVISIONAL APPOINTMENT is extended to required civil service eligibility, his appointment
a person who has not qualified in an is still temporary simply because such is the
appropriate examination but who otherwise nature of the work to be done.
meets the requirements for appointment to a NOTE: Since provisional appointments have
regular position in the competitive service already been abolished examinees should
whenever a vacancy occurs and the filling be given full credit for whatever answer they
may or may not give.
thereof is necessary in the interest of the
service and there is no appropriate register of Appointing Power; Limitations on
eligible at the time of the appointment. On the Presidential Appointments (1997)
other hand, a TEMPORARY APPOINTMENT No. 7: A month before a forthcoming election,
given to a non-civil service eligible is without a "A" one of the incumbent Commissioners of the
definite tenure and is dependent on the COMELEC, died while in office and "B", another
pleasure of the appointing power. Commissioner, suffered a severe stroke. In
view of the proximity of the elections and to
A provisional appointment is good only until
avoid paralyzation in the COMELEC, the
replacement by a civil service eligible and in no
President who was not running for any office,
case beyond 30 days from date of receipt appointed Commissioner C of the Commission
by the appointing officer of the certificate on Audit, who was not a lawyer but a certified
of eligibility. (Sec. 24 [c|. Republic Act 2260). public accountant by profession, ad interim
A provisional appointment contemplates a Commissioner to succeed Commissioner A and
designated by way of a temporary measure.
different situation from that of a temporary
Associate Justice D of the Court of Appeals as
appointment. Whereas a temporary
acting Associate Commissioner during the
appointment is designed to fill a position
absence of Commissioner B.
needed only for a limited period not exceeding
six (6) months, a provisional appointment, on Did the President do the right thing in extending
the other hand, is intended for the contingency that such ad interim appointment in favor of
"a vacancy occurs and the filling thereof is Commissioner C and designating Justice D
necessary in the interest of the service and acting Commissioner of the COMELEC?
there is no appropriate register of eligibles at SUGGESTED ANSWER:
the time of the appointment." No. The President was wrong in extending an
ad interim appointment in favor of
In other words, the reason for extending a
Commissioner C. In Summers vs. Ozaeta, 81
provisional appointment is not because there is an
Phil. 754, it was held that an ad interim
occasional work to be done and is expected appointment is a permanent appointment.
Under Section 15, Article VII of the Constitution, adjournment of Congress. A temporary or
within two months immediately before the acting appointee does not enjoy any security of
next presidential elections and up to the tenure, no matter how briefly. (Matibag
end of his term, the President cannot make v. Benipayo, G.R. No. 149036, April 2, 2002)
permanent appointments. ALTERNATIVE ANSWER:
The designation of Justice D as acting An ad interim appointment is a
Associate Commissioner is also invalid. Section permanent appointment and does not violate
1(2). Article IX-C of the Constitution prohibits the Section 1(2), Article IX-C of the Constitution.
designation of any Commissioner of the (Pamantasan ng Lungsod ng Maynila v.
COMELEC in a temporary or acting capacity. IAC, G.R. No. L- 65439, November 13,1985)
Section 12, Article VIII of the Constitution
prohibits the designation of any member of the (b) Assuming the legality of the first ad
Judiciary to any agency performing quasi- interim appointment and assumption of
judicial or administrative functions. office by Santos, were his second ad
interim appointment and subsequent
Appointing Powers; Ad Interim assumption of office to the same
Appointments (Q4-2005) position violations of the prohibition on
(1) In March 2001, while Congress was reappointment under Section 1(2),
adjourned, the President appointed Santos Article IX-C of the Constitution?
as Chairman of the COMELEC. Santos SUGGESTED ANSWER:
immediately took his oath and assumed No, the second ad interim appointment and
office. While his appointment was promptly subsequent assumption of office does not
submitted to the Commission on violate the Constitution. The prohibition on
Appointments for confirmation, it was not reappointment in Section 1(2), Article IX-C of
acted upon and Congress again adjourned. In the Constitution does not apply to by-passed ad
June 2001, the President extended a second interim appointments. It can be revived by a
ad interim appointment to Santos for the new ad interim appointment because there is no
same position with the same term, and this final disapproval under Section 16, Article VII
appointment was again submitted to the of the Constitution, and such new
Commission on Appointments for appointment will not result in the appointee
confirmation. Santos took his oath anew and serving beyond the fixed term of seven years.
performed the functions of his office. The phrase "without reappointment" applies
only to one who has been appointed by the
Reyes, a political rival, filed a suit assailing President and confirmed by the Commission on
certain orders issued by Santos. He Appointments, whether or not such person
also questioned the validity of completes his term of office. To hold otherwise will
Santos' appointment. Resolve the lead to absurdities and negate the
following issues: (5%) President's power to make ad interim
appointments. (Matibag v. Benipayo, G.R. No.
(a) Does Santos' assumption of office on 149036, April 2, 2002)
the basis of the ad interim appointments
issued by the President amount to a Cabinet Members; limitation on accepting
temporary appointment which additional duties (1996)
is prohibited by Section 1(2), Article 1996 No. 7: Can the Secretary of Finance be
IX-C of the Constitution? elected Chairman of the Board of Directors of
ALTERNATIVE ANSWER: the San Miguel Corporation? Explain.
No, Santos' appointment does not amount to a SUGGESTED ANSWER:
temporary appointment. An ad interim No, the Secretary of Finance cannot be elected
appointment is a permanent appointment Chairman of the Board of Directors of the San
because it takes effect immediately and can no Miguel Corporation. Under Section 13, Article VII
longer be withdrawn by the President once the of the Constitution, members of the Cabinet cannot
appointee has qualified into office. The fact that it is hold any other office or employment during their
subject to confirmation by the Commission on tenure unless it is otherwise provided in the
Appointments does not alter its permanent Constitution. They shall not also during said
character. The Constitution itself makes an ad tenure participate in any business or be
interim appointment permanent in character by financially interested in any contract with, or in
making it effective until disapproved by the any franchise, or special privilege granted by the
Commission on Appointments or until the next Government or any
subdivision, agency or instrumentality 7. A crime committed during the state
thereof, including government-owned or of calamity will be considered
controlled corporations or their subsidiaries. aggravated under Art. 14, par. 7 of the
They shall strictly avoid conflict of interest in Revised Penal Code.
the conduct of their office.
Declaration; State of National Emergency
Calling-out Power; President (Q1-2006) (Q1-2006)
1. What do you mean by the "Calling-out 2. On February 24, 2006, President Gloria
Power" of the President under Section Macapagal-Arroyo issued Proclamation
18, Article VII of the Constitution? (5%) No. 1017 declaring a state of national
SUGGESTED ANSWER: emergency. Is this Proclamation constitu-
Under Article VII, Sec. 18 of the tional? Explain. (2.5%)
1987 Constitution, whenever it becomes SUGGESTED ANSWER:
necessary, the President, as Commander- The proclamation is constitutional insofar as
in-Chief, may call out the armed forces it constitutes a call by the President for the
to aid him in preventing or suppressing AFP to prevent or suppress lawless violence
lawless violence, invasion or rebellion (David as this is sustained by Section 18, Article
v. Arroyo, G.R. No. 171396, May 3, 2006). VII of the Constitution.
Declaration; State of Calamity; Legal Effects However, PP 1017's provisions giving the
(Q1-2005) President express or implied power (1) to issue
(b) To give the much needed help to the decrees; (2) to direct the AFP to enforce
Province of Aurora which was devastated by obedience to all laws even those not related to
typhoons and torrential rains, the President lawless violence as well as decrees
declared it in a "state of calamity." Give at least four promulgated by the President; and (3) to
(4) legal effects of such declaration. (4%) impose standards on media or any form of prior
SUGGESTED ANSWER: restraint on the press, are ultra vires and
Declaration of a state of calamity produces, unconstitutional. Likewise, under Section 17,
inter alia, these legal effects within the Province Article XII of the Constitution, the President, in
of Aurora — the absence of legislation, cannot take over
1. Automatic Price Control — under R.A. privately-owned public utilities and businesses
No. 7581, The Price Act; affected with the public interest (David v.
2. Authorization for the importation of Arroyo, G.R. No. 171396, May 3, 2006).
rice under R.A. No. 8178, The
Agricultural Tarrification Act; 3. During the effectivity of this Proclamation,
3. Automatic appropriation under R.A. Gener, Lito and Bong were arrested by
No. 7160 is available for the police for acts of terrorism. Is the
unforeseen expenditures arising from the arrest legal? Explain. (2.5%)
occurrence of calamities in areas declared SUGGESTED ANSWER:
to be in a state of calamity; The arrest, apparently done without a valid
4. Local government units may enact warrant, is illegal. However, a warrantless
a supplemental budget for supplies arrest would be valid if those accused are
and materials or payment of services to caught committing crimes en flagrante delicto.
prevent danger to or loss of life or On the other hand, if the arrest is made
property, under R.A. No. 7160; pursuant to a valid warrant, then it is lawful. The
5. Entitlement to hazard allowance for Public term "acts of terrorism" has not been legally
Health Workers (under R.A. No. 7305, defined and made punishable by Congress. No law
Magna Carta for Public Health Workers), has been enacted to guide the law
who shall be compensated hazard enforcement agents, and eventually the courts, to
allowances equivalent to at least twenty-five determine the limits in making arrests for the
percent (25%) of the monthly basic salary of commission of said acts of terrorism (David v.
health workers receiving salary grade 19 Arroyo, G.R. No. 171396, May 3, 2006).
and below, and five percent (5%) for health Enter into Contract or Guarantee Foreign
workers with salary grade 20 and above; Loans (1994)
6. Entitlement to hazard allowance for science No. 13: The President of the Philippines
and technological personnel of authorized the Secretary of Public Works and
the government under R.A. No. 8439; and Highways to negotiate and sign a loan
agreement with the German Government for
the construction of a dam. The Senate, by No I - What are the limitations/restrictions
a resolution, asked that the agreement provided by the Constitution on the power of
be submitted to it for ratification. The Congress to authorize the President to fix tariff
Secretary of Foreign Affairs advised the rates, import and export quotas, tonnage and
Secretary of Public Works and Highways wharfage dues. Explain. (2%)
not to comply with the request of the Senate. SUGGESTED ANSWER:
2) Is the President bound to submit According to Section 28(2), Article VI of the
the agreement to the Senate for ratification? Constitution, Congress may, by law, authorize
SUGGESTED ANSWER: the President to fix within specified limits, and
No, the President is not bound to submit subject to such limitations and restrictions it may
the agreement to the Senate for ratification. impose, tariff rates, import and export quotas,
Under Section 20, Article VII of the tonnage and wharfage dues and other duties or
Constitution, only the prior concurrence of the imposts within the framework of the national
Monetary Board is required for the President development program of the Government.
to contract foreign loans on behalf of
the Republic of the Philippines.
Martial Law & Suspension of Writ of Habeas
Enter into Contract or Guarantee Foreign Corpus (1987)
Loans (1999) No. XVII: One of the features of the government
No I - What are the restrictions prescribed established under the 1987 Constitution is the
by the Constitution on the power of the restoration of the principle of checks and
President to contract or guarantee foreign balances. This is especially noteworthy in the
loans on behalf of the Republic of the Commander-in-Chief powers of the President
Philippines? Explain. (2%) which substantially affects what was styled
SUGGESTED ANSWER: under the past dispensation as the "calibrated
Under Section 20, Article VII of the Constitution, the response" to national emergencies, (a) Discuss
power of the President to contract or fully the provisions of the 1987 Constitution,
guarantee loans on behalf of the Republic of giving the scope, limits and the role of the
the Philippines is subject to the prior principle of checks and balances on the President's
concurrence of the Monetary Board and subject to exercise of the power:
such limitations as may be prescribed by law. To suspend the privilege of the writ
of habeas corpus
Enter into Executive Agreements (2003) Proclamation of martial law.
No XX - An Executive Agreement was executed
between the Philippines and a neighboring (b) Considering the pressing problems of
State. The Senate of the Philippines took it insurgency, rebel activities, liberation
upon itself to procure a certified true copy of the movements and terrorist violence, which in your
Executive Agreement and, after deliberating on it, considered opinion among the options available to
declared, by a unanimous vote, that the the President as Commander-in-Chief would be
agreement was both unwise and against the the most effective in meeting the
best interest of the country. Is the Executive emergencies by the nation? Explain.
Agreement binding (a) from the standpoint of SUGGESTED ANSWER:
Philippine law and (b) from the standpoint of (a) The President's power to suspend the
international law? Explain privilege of the writ of habeas corpus and to
SUGGESTED ANSWER: proclaim martial law is subject to several
(a) From the standpoint of Philippine law, the checks by Congress and by the Supreme
Executive Agreement is binding. According to Court. The President is required to report to
Commissioner of Customs v. Eastern Sea Congress within 48 hours his action in declaring
Trading. 3 SCRA 351 [1961], the President can martial law or suspending the privilege of the
enter into an Executive Agreement without the writ, and Congress is in turn required to
necessity of concurrence by the Senate. convene, if it is not in session, within 24 hours
following the proclamation of martial law or the
(b) The Executive Agreement is also binding suspension of the privilege without need of any call,
from the standpoint of international law... in accordance with its rules. The
proclamation of martial law or suspension of the writ
Impose Tariff Rates, Import and is effective for 60 days only, but Congress can cut
Export Quotas (1999) short its effectivity by revoking the
proclamation by the vote of at least a majority of
all its members, voting, jointly. Any extension of movements, and terrorism is to simply call
the proclamation of martial law or suspension of out the armed forces for the following reasons:
the writ can only be granted by Congress which 1) the exigencies to be met are not solely
will determine also the period of those caused by invasion or rebellion
such extension. but terrorism and other crimes.
2) Suspension of the privilege will only be for
On the other hand, the Supreme Court a limited period and then the period of
exercises a check on Executive action in the retention is limited to 3 days which may not
form of judicial review at the instance of any really be effective. On the other
citizen. The Constitution embodies in this hand, public criticism of the action
respect the ruling in Garcia v. Lansang, 42 may only erode the President's authority.
SCRA 448 (1971) that the Court can determine the 3) There is practically little difference, as far
sufficiency of the factual basis of the as the ability of the President to meet an
proclamation of martial law or the suspension of the emergency is concerned, between option 1,
privilege or the extension thereof not for the on the other hand, the options 2 and 3.
purpose of supplanting the judgment of the
President but to determine whether the latter did The President may well take comfort in the
not act arbitrarily. Indeed, Art. VIII, Sec. 1 following thought: "Government of limited power
imposes upon the courts the duty of need not be anemic government. Assurance
determining whether or not there has been that rights are secure tends to diminish fear and
grave abuse of discretion amounting to lack or jealousy of strong government, and, by making
excess of jurisdiction on the part of the other us feel safe to live under it makes for its better
branches of the government, in this case, the support." (West Vs. State Brd. of Educ.
President. v. Barnette, 319 U.S. 624 (1943))
The President cannot, by means of the Martial Law; Limitations (2000)

proclamation of martial law, suspend the No XVII. Declaring a rebellion, hostile
Constitution or supplant the courts and the groups have opened and maintained armed
legislature. Neither can he authorize the trial of conflicts on the Islands of Sulu and Basilan.
civilians by military tribunals so long as courts a) To quell this, can the President place under
are open and functioning, thus overruling the martial law the islands of Sulu and Basilan?
case of Aquino v. Military Commission No. 2, 63 Give your reasons? (3%)
SCRA 546 (1975). His proclamation of martial b) What are the constitutional safeguards on
law does not carry with it the suspension of the writ the exercise of the President's power to
of habeas corpus, so that the decision on proclaim martial law? (2%)
Aquino v. Ponce Enrile, 59 SCRA 183 (1973) is now SUGGESTED ANSWER:
overruled. Nor does the suspension of the writ a) If public safety requires it, the President
deprive courts of their power to admit can place Sulu and Basilan under martial law
persons to bail, where proper. The Constitution thus since there is an actual rebellion. Under Section 18,
overrules the cases of Garcia-Padilla v. Ponce Article VII of the Constitution, the President can
Enrile, 121 SCRA 472 (1983) and Morales v. place any part of the Philippines under martial
Ponce Enrile. 121 SCRA 538 (1983). law in case of rebellion, when public safety
requires it.
(b) The President has three options: (1) TO
CALL OUT the armed forces to prevent b) The following are the
or suppress lawless violence, invasion constitutional safeguards on the exercise of the
or rebellion; (2) TO SUSPEND the privilege of power of the President to proclaim martial law:
the writ of habeas corpus or (3) TO a) There must be actual invasion or rebellion;
PROCLAIM martial law. The last two b) The duration of the proclamation shall not
options can be resorted to only in cases of exceed sixty days:
invasion or rebellion when public safety c) Within forty-eight hours, the President shall
requires either the supension of the report his action to Congress. If Congress
privilege or the proclamation of martial law. is not in session, it must convene within
twenty-four hours;
It is submitted that the most effective means of d) Congress may by majority vote of all its
meeting the current emergency which is members voting Jointly revoke
brought about by rebellion, liberation the proclamation, and the President cannot
set aside the revocation;
e) By the same vote and in the same manner, suspend the privilege of the writ of habeas
upon Initiative of the President, corpus and the power to impose martial law
Congress may extend the proclamation If involve the curtailment and suppression of
the invasion or rebellion continues and certain basic civil rights and individual
public safety requires the extension; freedoms, and thus necessitate safeguards by
f) The Supreme Court may review the factual Congress and review by the Supreme Court
sufficiency of the proclamation, and (IBP v. Zamora, G.R. No. 141284, August 15,
the Supreme Court must decide the case 2000).
within thirty days from the time it was filed;
g) Martial law does not automatically suspend 3. The Solicitor General argues that, in any
the privilege of the writ of habeas corpus or event, the determination of whether the
the operation of the Constitution. rebellion poses danger to public safety
h) It does not supplant the functioning of involves a question of fact and the
the civil courts and of Congress. Military Supreme Court is not a trier of facts. What
courts have no Jurisdiction over civilians should be the ruling of the Court? (2.5%)
where civil courts are able to SUGGESTED ANSWER:
function. (Cruz, Philippine Political Law, Judicial power includes the duty of the courts of
1995 ed., pp. 213- 214.) justice to settle actual controversies involving
rights which are legally demandable and
Martial Law; Sufficiency of the Factual Basis enforceable, and to determine whether or not
(Q3-2006) there has been a grave abuse of discretion
The President issued a Proclamation No. 1018 amounting to lack or excess of jurisdiction on
placing the Philippines under Martial Law on the the part of any branch or instrumentality of the
ground that a rebellion staged by lawless Government (Art. Vin, Sec. 1, par. 2,1987
elements is endangering the public safety. Constitution). When the grant of power is
Pursuant to the Proclamation, suspected rebels qualified, conditional or subject to limitations, the
were arrested and detained and military issue of whether the prescribed
tribunals were set up to try them. Robert dela qualifications or conditions have been met or the
Cruz, a citizen, filed with the Supreme Court a limitations respected, is justiciable — the
petition questioning the validity of Proclamation No. problem being one of legality or validity, not its
1018. wisdom.
1. Does Robert have a standing to challenge
Proclamation No. 1018? Explain. (2.5%) Article VII, Section 18 of the 1987 Constitution
SUGGESTED ANSWER: specifically grants the Supreme Court the
Yes, Robert has standing. Under Article VIII, power to review, in an appropriate proceeding
Section 17 of the 1987 Constitution, the filed by any citizen, the sufficiency of the factual
Supreme Court may review, in an appropriate basis of the proclamation of martial law. Thus,
proceeding filed by any citizen, the sufficiency of in the matter of such declaration, two conditions
the factual basis of the proclamation of must concur: (1) there must be an actual
martial law. As citizen therefore, Robert may file the invasion or rebellion; and (2) public safety must
petition questioning Proclamation No. 1018. require it. The Supreme Court cannot renege on
its constitutional duty to determine whether or
2. In the same suit, the Solicitor General not the said factual conditions exist (IBP v.
contends that under the Constitution, the Zamora, G.R. No. 141284, August 15, 2000).
President as Commander-in-Chief,
determines whether the exigency has 4. Finally, the Solicitor General maintains
arisen requiring the exercise of his power that the President reported to Congress
to declare Martial Law and that his such proclamation of Martial Law, but
determination is conclusive upon the Congress did not revoke the proclamation.
courts. How should the Supreme Court What is the effect of the inaction of
rule? (2.5%) Congress on the suit brought by Robert to
SUGGESTED ANSWER: the Supreme Court? (2.5%)
The Supreme Court should rule that his deter- SUGGESTED ANSWER:
mination is not conclusive upon the courts. The The inaction of Congress has no effect on the
1987 Constitution allows a citizen, in an suit brought by Robert to the Supreme Court as
appropriate proceeding, to file a petition Article VIII, Section 18 provides for checks on
questioning the sufficiency of the factual basis of the President's power to declare martial law to
said proclamation. Moreover, the power to be exercised separately by Congress and the
Supreme Court. Under said provision, the
duration of martial law shall not exceed sixty 4. No, the accused cannot avail of the benefits
days but Congress has the power to revoke the of amnesty if he continues to profess
proclamation or extend the period. On the other his innocence. In Vera vs. People, 7 SCRA
hand, the Supreme Court has the power to 152. since amnesty presupposes the
review the said proclamation and promulgate its commission of a crime. It is inconsistent for
decision thereon within thirty days from its filing an accused to seek forgiveness for something
(Article VIII, Section 18). which he claims he has not committed.
Pardoning Power; Amnesty (1993) Pardoning Power; Breach of Condition;

No 20: - The National Unification Commission Revocation (Q5-2005)
has recommended the grant of absolute and (1) Bruno still had several years to serve on his
unconditional amnesty to all rebels. There is the sentence when he was conditionally
view that it is not necessary for the rebels to pardoned by the President. Among the
admit the commission of the crime charged, it conditions imposed was that he would "not
being enough that the offense falls within the again violate any of the penal laws of the
scope of the amnesty proclamation following the Philippines." Bruno accepted all of the
doctrine laid down in Barrioquinto vs. conditions and was released. Shortly
Fernandez, 82 Phil. 642. In other words, thereafter, Bruno was charged with 2
admission of guilt is not a condition sine qua counts of estafa. He was then incarcerated to
non for the availment of amnesty. Is this serve the i expired portion of his
correct? Explain. sentence following the revocation by the
SUGGESTED ANSWER: President of the pardon.
The view that it is not necessary for rebels to
admit the commission of the crime charged in Bruno's family filed a petition for habeas
order to avail themselves of the benefits of corpus, alleging that it was error to have
amnesty is not correct. As stated in Vera v. him recommitted as the charges were false, in
People, 7 SCRA 156, the doctrine laid down in fact, half of them were already dismissed.
Borrioquinto vs. Fernandez, 82 Phil. 642 has Resolve the petition with reasons. (4%)
been overturned. Amnesty presupposes the SUGGESTED ANSWER:
commission of a crime. It is inconsistent for The petition should not be given due course.
someone to seek for forgiveness for a crime The grant of pardon and the determination of
which he denies having committed. (People vs. the terms and conditions of a conditional
Pasilan, 14 SCRA 694). pardon are PURELY EXECUTIVE ACTS which are
not subject to judicial scrutiny. The
Pardoning Power; Amnesty (1995) acceptance thereof by the convict or prisoner
No. 5: Lucas, a ranking member of the NDF, carried with it the authority or power of the
was captured by policemen while about to Executive to determine whether a condition or
board a passenger bus bound for Sorsogon. conditions of the pardon has or have been
Charged with rebellion he pleaded not guilty violated. Where the President opts to revoke the
when arraigned. Before trial he was granted conditional pardon given, no judicial
absolute pardon by the President to allow him pronouncement of guilt of a subsequent crime is
to participate in the peace talks between the necessary, much less conviction therefor by final
government and the communist rebels. judgment of a court, in order that a convict may be
recommended for the violation of his conditional
3. Instead of a pardon, may the President grant the pardon. The determination of the occurrence of
accused amnesty if favorably recommended by the a breach of a condition of a pardon, and the
National Amnesty Commission? Explain. proper consequences of such breach, is a purely
executive act, not subject to judicial scrutiny.
4. May the accused avail of the benefits (Torres v. Gonzales, G.R. No. 76872, July 23,
of amnesty despite the fact the he 1987)
continued to profess innocence? Explain.
SUGGESTED ANSWER: Pardoning Power; Exec Clemency;
3. The President may grant the accused Pardon (1995)
amnesty. According to Barrioquinto No. 5: Lucas, a ranking member of the NDF,
vs. Fernandez, 82 Phil. 642, Amnesty was captured by policemen while about to
may be granted before or after the board a passenger bus bound for Sorsogon.
institution of the criminal prosecution. Charged with rebellion he pleaded not guilty
when arraigned. Before trial he was granted in criminal cases, it would have been
absolute pardon by the President to allow him unnecessary to exclude impeachment cases
to participate in the peace talks between the from this scope. If the President can grant
government and the communist rebels. pardons in criminal cases, with more reason he can
(1) Is the pardon of the President valid? grant executive clemency in administrative cases,
Explain. which are less serious.
(2) Assuming that the pardon is valid, can
Lucas reject it? Explain. Pardoning Power; Executive Clemency
1. The pardon is not valid. Under Section A. What are the constitutional limitations on the
19, Article VII of the 1987 Constitution, pardon pardoning power of the President? (2%)
may be granted only after conviction
by final Judgment. B. Distinguish between pardon and
2. Yes, Lucas can reject the pardon As held in amnesty. (2%)
United States vs. Wilson, 7 Pet. 150 and SUGGESTED ANSWER:
Burdick vs. United States, 274 U.S. 480. A. The following are the limitations on
acceptance is essential to complete the pardon and the pardoning power of the President.
the pardon may be rejected by the person to whom 1) It cannot be granted in cases of
it is tendered, for it may inflict consequences impeachment;
of greater disgrace than those from which it 2) Reprieves, commutations, pardon,
purports to relieve. and remission of fines and forfeitures
ALTERNATIVE ANSWER: can be granted only after conviction
No, Lucas cannot reject the pardon. by final judgment.
According to Biddle vs. Perovich, 274 3) The favorable recommendation of the
U.S. 480, acceptance is not necessary, for COMELEC is required for violation of
the grant of pardon involves a election laws, rules and regulations.
determination by the President that
public welfare will be better served by B. According to Barrioquinto v. Fernandez, 82
inflicting less than what the judgment fixed. Phil. 642, the following are the
distinctions between pardon and amnesty.
Pardoning Power; Executive Clemency 1. Pardon is a private act and must be
(1997) pleaded and proved by the person
No. 15; Governor A was charged pardoned; while amnesty is a public act of
administratively with oppression and was which courts take judicial notice;
placed under preventive suspension from office 2. Pardon does not require the concurrence of
during the pendency of his case. Found guilty of the Congress, while amnesty requires
charge, the President suspended him from office the concurrence of Congress;
for ninety days. Later, the President granted 3. Pardon is granted to individuals,
him clemency by reducing the period of his while amnesty is granted to classes of
suspension to the period he has already served. persons or communities;
The Vice Governor questioned the validity of 4. Pardon may be granted for any offense,
the exercise of executive clemency on the while amnesty is granted for
ground that it could be granted only in criminal, political offenses;
not administrative, cases. 5. Pardon is granted after final
How should the question be resolved? conviction, while amnesty may be granted
SUGGESTED ANSWER: at any time; and
The argument of the Vice Governor should be 6. Pardon looks forward and relieves the
rejected. As held in Llamas vs. Orbos, 202 offender from the consequences of his
SCRA 844. the power of executive clemency offense, while amnesty looks backward and the
extends to administrative cases. In granting the person granted it stands before the law as
power of executive clemency upon the though he had committed no offense.
President, Section 19, Article VII of the
Constitution does not distinguish between Pardoning Power; Kinds (1988)
criminal and administrative cases. Section 19, No. 24: The first paragraph of Section 19 of
Article VII of the Constitution excludes Article VII of the Constitution providing for the
impeachment cases, which are not criminal pardoning power of the President, mentions
cases, from the scope of the power of executive reprieve, commutation, and pardon. Please
clemency. If this power may be exercised only
define the three of them, and differentiate No. 7: Can the President take active part in the
one from the others. legislative process? Explain.
The terms were defined and distinguished from Yes, The President can take active part in the
one another in People v. Vera, 65 Phil. 56, 111- legislative process to the extent allowed by the
112 (1930), as follows: Constitution. He can address Congress at any time
(1) REPRIEVE is a postponement of the to propose the enactment of certain laws. He
execution of a sentence to a day certain, recommends the general appropriations bill. He
(2) COMMUTATION is a remission of a part of can call a special session of Congress at any
the punishment, a substitution of less time. He can certify to the necessity of the
penalty for the one originally imposed. immediate enactment of a bill to meet a public
(3) A PARDON, on the other hand, is an act of calamity or emergency. He can veto a bill.
grace, proceeding from the power entrusted
with the execution of the laws which Presidential Immunity from Suit (1997)
exempts the individual on whom it is No. 13: Upon complaint of the incumbent
bestowed from the punishment the President of the Republic, "A" was charged with libel
law inflicts for a crime he has committed. before the Regional Trial Court. "A" moved to
dismiss the information on the ground that the
Pardoning Power; Pardon, Conditional Court had no jurisdiction over the offense
(1997) charged because the President, being immune
No. 16; A while serving imprisonment for estafa. from suit, should also be disqualified from filing a
upon recommendation of the Board of Pardons and case against "A" in court.
Parole, was granted pardon by the Resolve the motion.
President on condition that he should not again SUGGESTED ANSWER:
violate any penal law of the land. Later, the The motion should be denied according to
Board of Pardons and Parole recommended to the Soliven us. Makasiar, 167 SCRA 393, the
President the cancellation of the pardon granted immunity of the President from suit is personal to
him because A had been charged with estafa on the President. It may be invoked by the
20 counts and was convicted of the offense President only and not by any other person.
charged although he took an appeal therefrom
which was still pending. As Prohibition Against Multiple Positions
recommended, the President canceled the & Additional Compensation (2002)
pardon he had granted to A. A was thus No VI. M is the Secretary of the Department of
arrested and imprisoned to serve the balance of his Finance. He is also an ex-officio member of the
sentence in the first case. A claimed in his Monetary Board of the Bangko Sentral
petition for habeas corpus filed in court that his ng Pilipinas from which he receives an
detention was illegal because he had not yet additional compensation for every
been convicted by final judgment and was not Board meeting attended.
given a chance to be heard before he was
recommitted to prison. N, a taxpayer, filed a suit in court to declare
Is A's argument valid? Secretary M's membership in the Monetary
SUGGESTED ANSWER: Board and his receipt of additional
The argument of A is not valid. As held in compensation illegal and in violation of the
Torres vs. Gonzales. 152 SCRA 272 a judicial Constitution. N invoked Article VII, Section 13 of the
pronouncement that a convict who was granted a Constitution which provides that the
pardon subject to the condition that he should not President, Vice-President, the Members of the
again violate any penal law is not necessary before Cabinet, and their deputies or assistants shall
he can be declared to have violated the condition of not, unless otherwise provided in the
his pardon. Moreover, a hearing is not necessary Constitution, hold any other office or
before A can be recommitted to prison. By employment during their tenure. N also cited
accepting the conditional pardon, A, agreed that Article IX-B, Section 8 of the Constitution, which
the determination by the President that he provides that no elective or appointive public
violated the condition of his pardon shall be officer or employee shall receive additional,
conclusive upon him and an order for his arrest double, or indirect compensation, unless
should at once issue. specifically authorized by law.
If you were the judge, how would you
President; Participation; Legislative Process decide the following:
(1996)
a) the issue regarding the holding of as Secretary of Trade and Industry. The
multiple positions? (3%) provision of Art, VII, Sec, 13, prohibiting
b) the issue on the payment of additional or Cabinet members from holding any other office
double compensation?(2%) or employment, is subject to the exceptions
Explain your answers fully. in Art. IX, B, Sec. 7.
SUGGESTED ANSWER:
(a) If I were the judge, I would uphold the b. Dean Sinco believes that members of
validity of the designation of Secretary M as ex Congress cannot be members of the Board of
officio member of the Monetary Board, As Regents of the University of the Philippines
stated in Civil Liberties Union v. Executive under the Incompatibility Clause of the 1935
Secretary, 194 SCRA 317 (1991), the Constitution which is similar to the provision of
prohibition against the holding of multiple Art. VI, Sec. 13 of the present Constitution.
positions by Cabinet Members in Article VII, Under this view, the membership of the
Section 13 of the Constitution does not apply to Chairman of the Senate Committee on Trade
positions occupied in an ex officio capacity as and Industry in the Export Control Board cannot be
provided by law and as required by the primary sustained. (Sinco, Philippine Political Law 136
functions of their office. (llth Ed. 1962).
(b) If I were the Judge, I would rule that Moreover, since the apparent justification for
Secretary M cannot receive any additional the membership of the Chairman of the Senate
compensation. As stated in Civil Liberties Committee is to aid him in his
Union v. Executive Secretary, 194 SCRA 317 legislative functions, this purpose can easily
(1991), a Cabinet Member holding an ex-officio be achieved through legislative investigations
position has no right to receive additional under Art. VI, Sec.21.
compensation, for his services in that position
are already paid for by the compensation On the other hand, Dean Cortes appears to
attached to his principal office. suggest a contrary view, noting that after the
decision in Government of the Philippine
Prohibition against Multiple Positions Islands v. Springer 50 Phil. 259 (1927), in
by Gov’t Officials (1987) validating the law designating the Senate
No. I: Assume that a law has been passed President and Speaker as members of the
creating the Export Control Board composed of: Board of Control of government corporations, no
a. The Secretary of Trade and Industry other decision has been rendered. On the
as Chairman and as Members: contrary, laws have been enacted, making
b. The Chairman of the Senate members of Congress members of various
Committee on Trade and Industry boards.
c. An Associate Justice of the Supreme
Court designated by the Chief Justice Indeed, the membership of the Chairman of the
d. The Commissioner of Customs, and Senate Committee on Trade and Industry
e. The President of the Philippine may be upheld as being in aid of his
Chamber of Commerce and Industry, legislative functions since what is prohibited
by Art. VI, Sec. 13 is the acceptance of an
The National Constitutional Association of incompatible office or employment in
the Philippines has filed suit to challenge the government. (Cortes, Philippine
the constitutionality of the law. Presidency, pp. 111- 112(1966))
Determine whether the membership of each (c) The designation of an Associate Justice
of the above in the Board can be upheld. of the Supreme Court cannot be sustained
Cite relevant constitutional provisions. being the imposition on the members of the
SUGGESTED ANSWER: Court, of non-judicial duties, contrary to the
a. The chairmanship of the Secretary of Trade principle of separation of powers. It is
and Industry in the Board can be upheld on the judicial power and judicial power only which
basis of Art. IX, B, Sec. 7, which allows the Supreme Court and its members may
appointive officials to hold other offices if exercise. (Art VIII. Sec. 1; Manila Electric Co.
allowed by law (such as the law in this case v. Pasay Trans. Co., 57 Phil. 600 (1932))
creating the Export Control Board) or justified by
the primary functions of their offices. The (d) The Commissioner of Customs may be
functions of the Board is related to his functions made member of the Board for the same
reason in the case of the Secretary of (4) Cases heard by a division when the
Trade and Industry, under Art. IX, B, Sec. 7. required majority is not obtained;
(5) Cases where a doctrine or principle
(e) The membership of the President of the
Philippine Chamber of Commerce may also be
of law previously laid down will
upheld on the ground that Congress has the be modified or reversed;
power to prescribe qualifications for the office. (6) Administrative cases against judges
when the penalty is dismissal; and
Suspension of Writ of Habeas Corpus (1997)
(7) Election contests for President or
(a) When may the privilege of the writ of
habeas corpus be suspended? Vice- President.
(b) If validly declared, what would be the
full consequences of such suspension? Contempt Powers (1996)
SUGGESTED ANSWER: No. 3: 2) On the first day of the trial of a rape-
(a) Under Section 16, Article VII of murder case where the victim was a popular TV
the Constitution, the privilege of the writ of star, over a hundred of her fans rallied at the
habeas corpus may be suspended when entrance of the courthouse, each carrying a
there is an invasion or rebellion and public placard demanding the conviction of the
safety requires it. accused and the imposition of the death penalty on
(b) According to Section 18, Article VII of the him. The rally was peaceful and did not disturb
Constitution, the suspension of the privilege of the proceedings of the case.
the writ of habeas corpus shall apply only to a) Can the trial court order the dispersal of the
persons judicially charged with rebellion or rallyists under pain of being punished for
offenses Inherent to or directly connected with contempt of court, if they fail to do so? Explain.
invasion. Any person arrested or detained b) If instead of a rally, the fans of the
should be judicially charged within three days. victim wrote letters to the newspaper
Otherwise, he should be released. Moreover, editors demanding the conviction of the
under Section 13. Article III of the Constitution, the accused, can the trial court punish them
right to bail shall not be impaired even when the for contempt? Explain.
privilege of the writ of habeas corpus is SUGGESTED ANSWER:
suspended. 2. a) Yes, the trial court can order the dispersal of
the rally under pain of being cited for
contempt. The purpose of the rally is to attempt to
ARTICLE VIII Judicial influence the administration of Justice. As stated
in People vs. Flores, 239 SCRA 83, any conduct by
Department any party which tends to directly or indirectly
Impede, obstruct or degrade the administration
Cases to be Heard En Banc; Supreme Court of justice is subject to the contempt powers of
(1999) the court.
No XI - Enumerate the cases required by
the Constitution to be heard en banc by b) No, the trial court cannot punish for contempt the
the Supreme Court? (2%) fans of the victim who wrote letters to the
SUGGESTED ANSWER: newspaper editors asking for the conviction of
The following are the cases required by the the accused. Since the letters were not
Constitution to be heard en banc by addressed to the Judge and the publication of
the Supreme Court: the letters occurred outside the court, the fans
cannot be punished in the absence of a clear
(1) Cases involving the constitutionality of a
and present danger to the administration of
treaty, international or
Justice. In Cabansag vs. Fernandez, 102 Phil
executive agreement, or law; 152, it was held that a party who wrote to the
(2) Cases which under the Rules of Court Presidential Complaints and Action Committee to
are required to be heard en banc. complain about the delay in the disposition of his
(3) Cases involving the constitutionality, case could not be punished for contempt in the
application, or operation of absence of a clear and present danger to the
fair administration of Justice.
presidential decrees,
proclamations, orders, instructions, Finality of Void Judgments (1993)
ordinances, and other regulations;

No. 8; The ABC Realty, Inc, filed a complaint plans of the government and allocate
against Rico for the collection of unpaid and disburse such sums as may be provided
installments on a subdivision lot purchased by by law or prescribed by it in the course
the latter, Rico failed to file an answer, was of the discharge of its functions.
declared in default; and after reception of
plaintiffs evidence ex parte, judgment was Function; Continuing Constitutional
rendered against him. The decision became Convention (2000)
final, and upon motion by ABC Realty, the No I. - - One Senator remarked that the
judge issued a writ of execution. Supreme Court is a continuing Constitutional
Convention. Do you agree? Explain. (2%)
Rico now files a motion to quash the writ and to SUGGESTED ANSWER:
vacate the Judgment contending that it is the I do not agree that the Supreme Court is a
Housing and Land Use Regulatory Board continuing Constitutional Convention. The
(HLURB) which is vested with original and criticism is based on the assumption that in
exclusive Jurisdiction over cases involving the exercising its power of judicial review the
real estate business. Rico prays for the Supreme Court Is not merely interpreting the
dismissal of the complaint and for the nullity of the Constitution but is trying to remake the
decision. The realty firm opposes the motion Government on the basis of the personal
arguing that under BP 129, RTCs have exclusive predilections of the Members of the Supreme
and original jurisdiction over cases in which the Court, this is a power that properly belongs to
amount of controversy exceeds P20,000.00. the people and their elected representatives.
Answer the following queries:
1) Who has jurisdiction over the collection suit? The Supreme Court cannot decide cases
2) The RTC decision, having become final and merely on the basis of the letter of the
executory, can it still be vacated? Constitution. It has to interpret the Constitution to
SUGGESTED ANSWER: give effect to the intent of its framers and of the
1} The HLURB people adopting it. In Interpreting the
2) Yes, the decision of the Regional Trial Court Constitution, the Supreme Court has to adopt it to
can still be vacated, even if it has become final the ever-changing circumstances of society.
and executory. Since the Regional Trial When the Supreme Court strikes down an act
Court had no jurisdiction over the case, the of the Legislative or the Executive Department, it is
decision is void. merely discharging its duty under the
Constitution to determine conflicting claims of
Fiscal Autonomy (1999) authority.
No XI - What do you understand by ALTERNATIVE ANSWER:
the mandate of the Constitution that the To a certain extent, the Supreme Court is a
judiciary shall enjoy fiscal autonomy? continuing Constitutional Convention. When a
Cite the constitutional provisions case is brought in court involving a
calculated to bring about the realization of constitutional issue. It becomes necessary to
the said constitutional mandate. (2%) interpret the Constitution, Since the Supreme
SUGGESTED ANSWER: Court is supreme within its own sphere, its
Under Section 3, Article VIII of the Constitution, interpretation of the Constitution will form part of the
the fiscal autonomy of the Judiciary means that law of the land.
appropriations for the Judiciary may not
be reduced by the legislature below the Issuance of Restraining Orders
amount appropriated for the previous year and Injunctions (1992)
and, after approval, shall be automatically No. 7: Congress is considering new measures
and regularly released. to encourage foreign corporations to bring their
investments to the Philippines. Congress has
In Bengzon v. Drilon, 208 SCRA 133, the found that foreign investments are deterred by
Supreme Court explained that fiscal autonomy the uncertain investment climate in the
contemplates a guarantee of full flexibility to Philippines. One source of such uncertainty is
allocate and utilize resources with the wisdom the heightened judicial intervention in
and dispatch that the needs require. It investment matters.
recognizes the power and authority to deny,
assess and collect fees, fix rates of One such measure provides that "no court or
compensation not exceeding the highest rates administrative agency shall issue any
authorized by law for compensation and pay restraining order or injunction against the
Central Bank" in the Bank's exercise of (4) The Secretary of Justice as ex
its regulatory power over specific foreign officio member;
exchange transactions. (5) A representative of Congress as ex
officio member;
Would this be a valid measure? Explain. (6) A representative of the Integrated Bar;
SUGGESTED ANSWER: (7) A professor of law;
Yes, the measure is valid. In Mantruste (8) A retired Justice of the Supreme Court; and
Systems, Inc. vs. Court of Appeals, 179 SCRA 136, (9) A representative of the private sector.
the Supreme Court held that a law (Section 8 (1), Article VIII of
prohibiting the issuance of an injunction is valid, the Constitution)
because under Section 2, Article VIII of the The term of office of the regular members
Constitution, the jurisdiction of the courts may is four (4) years. (Section 8(2), Article VIII
be defined by law. of the Constitution)
ALTERNATIVE ANSWER:
Since under Sections 1 and 5(2), Article VIII of Judicial Department; Writ of Amparo (1991)
the Constitution, the courts are given the power No 1: What is a Constitutional writ of
of Judicial review, the measure is void, Amparo and what is the basis for such a
Such power must be preserved. The remedy under the Constitution?
issuance of restraining orders and Injunctions SUGGESTED ANSWER:
is in aid of the power of judicial review. The writ of Amparo in Mexican law is an
extraordinary remedy whereby an interested
Judicial & Bar Council (1988) party may seek the invalidation of any
No. 11: A novel feature of the executive, legislative or judicial act deemed in
present Constitution is the Judicial and Bar violation of a fundamental right. The adoption of
Council. Please state: such a remedy in the Philippines may be based on
7. Its principal function; Article VIII, Sec. 5(5) of the Constitution, which
8. Its composition; and empowers the Supreme Court to promulgate
9. Who supervises it, and takes care of rules concerning the protection and enforcement of
its appropriations? constitutional rights.
SUGGESTED ANSWER:
11. The Judicial and Bar Council has the Judicial Independence; Safeguard (2000)
principal function of recommending appointees to No I. Name at least three
the Judiciary. It may exercise such other constitutional safeguards to maintain judicial
functions and duties as the Supreme Court may independence. (3%)
assign to it. (Art. VIII, sec. 8(5)). SUGGESTED ANSWER:
The following are the constitutional
2. The JBC is composed of the Chief safeguards to maintain judicial independence:
Justice as ex officio Chairman, the Secretary of
k. The Supreme Court is a
Justice and a representative of the
Congress as ex officio Members, a constitutional body and cannot be
representative of the Integrated Bar, a abolished by mere legislation.
professor of law, a retired Member of the l. The members of the Supreme Court
Supreme Court, and a representative of cannot be removed except
the private sector. (Art. VIII, sec. 8(1)). by impeachment.
3, The Supreme Court supervises the JBC and
m. The Supreme Court cannot be deprived
of its minimum jurisdiction prescribed in
provides in the annual budget of the Court the
Section 5, Article X of the Constitution.
appropriations of the JBC. (Art. VIII, sec. 8(4)).
n. The appellate jurisdiction of the
Judicial & Bar Council (1999) Supreme Court cannot be increased by law
No XI - What is the composition of the Judicial without its advice and concurrence.
and Bar Council and the term of office of o. Appointees to the Judiciary
its regular members? (2%)
are nominated by the Judicial and
SUGGESTED ANSWER:
Bar Council and are not
The Judicial and Bar Council is composed
of the following: subject to confirmation by the
1. The Chief Justice as ex officio chairman; Commission on Appointments.

c) The Supreme Court has administrative Senator de Leon took the floor of the Senate to
supervision over all lower courts and speak on a "matter of personal privilege" to
their personnel. vindicate his honor against those "baseless and
malicious" allegations. The matter was referred to
d) The Supreme Court has
the Committee on Accountability of Public
exclusive power to discipline
Officers, which proceeded to conduct a
Judges of lower courts. legislative inquiry. The Committee asked Mr.
e) The Members of the Judiciary Vince Ledesma, a businessman linked to the
have security of tenure, which transaction and now a respondent before the
cannot be undermined by a law Sandiganbayan, to appear and to testify before the
reorganizing the Judiciary. Committee.
f) Members of the Judiciary cannot be
Mr Ledesma refuses to appear and file suit
designated to any agency
before the Supreme Court to challenge
performing quasi-Judicial or the legality of the proceedings before
administrative functions. the Committee. He also asks
(3) The salaries of Members of whether the Committee had the power to
the Judiciary cannot be decreased require him to testify.
during their continuance in office. Identify the issues Involved and resolve them.
(4) The Judiciary has fiscal autonomy. SUGGESTED ANSWER:
The issues involved in this case are
(5) The Supreme Court has the following:
exclusive power to promulgate rules (3) Whether or not the Supreme Court has
of pleading, practice and procedure. jurisdiction to entertain the case;
(4) Whether or not the Committee on
(6) Only the Supreme Court
Accountability of Public Officers has the
can temporarily assign judges to
power to investigate a matter which is
other stations. involved in a case pending in court; and
(7) It is the Supreme Court who appoints all (5) Whether or not the petitioner can
officials and employees of the Judiciary. invoke his right against self-incrimination.
(Cruz, Philippine Political Law, 1995 ed.
(pp. 229-31.) All these Issues were resolved in the case
of Bengzon vs. Senate Blue Ribbon
Committee, 203 SCRA 767.
Judicial Power (1989)
No. 10: Where is judicial power vested? The Supreme Court has jurisdiction over the
What are included in such power? case, because it involves the question of
SUGGESTED ANSWER: whether or not the Committee on Accountability of
According to Section 1, Article VIII of the 1987 Public Officers has the power to conduct the
Constitution, judicial power is vested in one investigation. Under Section 1, Article VIII of the
Supreme Court and in such lower courts as Constitution, judicial power includes the duty of the
may be established by law. It includes the duty of courts to determine whether or not any branch
the courts of justice to settle actual of the government is acting with grave of abuse
controversies involving rights which are legally of discretion amounting to lack of jurisdiction.
demandable and enforceable, and to determine
whether or not there has been a grave abuse of The Committee on Accountability of Public
discretion amounting to lack or excess of Officers has no power to investigate the
jurisdiction on the part of any branch or scandal. Since the scandal is involved in a case
instrumentality of the Government. pending in court, the investigation will encroach
upon the exclusive domain of the court. To
Judicial Power (1992) allow the investigation will create the possibility of
No. 8: A case was filed before the conflicting judgments between the committee and
Sandiganbayan regarding a questionable the court. If the decision of the committee were
government transaction. In the course of the reached before that of the court, it might
proceedings, newspapers linked the name of influence the judgment of the court.
Senator J. de Leon to the scandal.
The petitioner can invoke his right against self-
incrimination, ...
amounting to lack or excess of jurisdiction on
Judicial Power (1998) the part of any branch or instrumentality of the
IV. Andres Ang was born of a Chinese father Government. As held in Marcos us. Manglapus, 177
and a Filipino mother in Sorsogon, Sorsogon. on SCRA 668. this provision limits resort to the political
January 20, 1973. In 1988. his father was question doctrine and broadens the scope of
naturalizedas a Filipino citizen. On May juridical inquiry into areas which the courts
11,1998. Andres Ang was elected under the 1935 and the 1973
Representative of the First District of Sorsogon. Constitutions would normally have left to the
Juan Bonto who received the second highest political departments to decide.
number of votes, filed a petition for Quo ALTERNATIVE ANSWER:
Warranto against Ang. The petition was filed Under the 1935 and 1973 Constitutions,
with the House of Representative Electoral there was no provision defining the scope
Tribunal (HRET). Bonto contends that Ang is not of judicial power as vested in the judiciary.
a natural born citizen of the Philippines and While these Constitutions, both provided
therefore is disqualified to be a member of the for vesture of judicial power "in one
House. Supreme Court and in such inferior courts
as may be established by law," they were
The HRET ruled in favor of Ang. Bonto silent as to the scope of such power.
filed a petition for certiorari in the Supreme
Court. The following issues are raised: The 1987 Constitution, on the other hand,
(3) Whether the case is justiciable considering re- wrote the provisions on the vesture of
that Article VI. Section 17 of the judicial power originally appearing in the
Constitution declares the HRET to be the 1935 and 1973 Constitutions, as follows:
"sole Judge" of all contests relating to the "The judicial power shall be vested in
election returns and disqualifications of one Supreme Court and in such lower
members of the House of courts as may be established by law.
Representatives. [5%]
(4) Whether Ang is a natural bom citizen of "Judicial power includes the duty of the
the Philippines. |5%] courts of justice to settle actual controversies
How should this case be decided? Involving rights which are legally demandable
SUGGESTED ANSWER: and enforceable, and to determine whether or
3. The case is justiciable. As stated In not there has been a grave abuse of
Lazatin vs. House Electoral Tribunal 168 SCRA discretion amounting to lack or excess of
391, 404, since judicial power includes the duty to Jurisdiction on the part of any branch or
determine whether or not there has been a instrumentality of the Government." (Sec. 1.
grave abuse of discretion amounting to lack or Art. VIII)
excess of jurisdiction on the part of any branch or
instrumentality of the Government, the The second paragraph of the cited provision
Supreme Court has the power to review the was not found in the 1935 and 1973
decisions of the House of Representatives Constitution, it contains a new definition of
Electoral Tribunal in case of grave Abuse of judicial power particularly the scope thereof. The
discretion on its part. first portion thereof represents the traditional
4. Andres Ang should be considered a natural concept of Judicial power, involving the
born citizen of the Philippines. .... settlement of conflicting rights as by law, which
presumably was implicit in the 1935 and 1973
Judicial Power; Scope (1994) Constitutions. The second (latter) portion of the
No. 2: 1} What is the difference, if any. between definition represents a broadening of the scope of
the scope of Judicial power under the 1987 judicial power or, in the language of the
Constitution on one hand, and the 1935 Supreme Court, conferment of "expanded
and 1973 Constitutions on the other? Jurisdiction" on the Judiciary (Daza v. Singson, 180
SUGGESTED ANSWER: SCRA 496) to enable the courts to review the
The scope of judicial power under the 1987 exercise of discretion by the political
Constitution is broader than its scope under the departments of government. This new
1935 and 1973 Constitution because of the prerogative of the judiciary as now recognized
second paragraph of Section 1, Article VIII of under the 1987 Constitution was not
the 1987 Constitution, which states that it constitutionally permissible under the 1935 and
includes the duty to determine whether or not 1973 Charters.
there has been a grave abuse of discretion
Judicial Review; Locus Standi (1992) the power plant, because no public funds will
No. 6: The Philippine Environmentalists' be spent for its operation. As held in Gonzales
Organization for Nature, a duly recognized non- vs. Marcos, 65 SCRA 624, a taxpayer
governmental organization, intends to file suit to has no standing to file a case if no
enjoin the Philippine Government from expenditure of public funds is involved.
allocating funds to operate a power plant at
Mount Tuba In a southern island. They claim Since no member or officer of the Philippine
that there was no consultation with the Environmentalists' Organization belongs to the
Indigenous cultural community which will be affected indigenous community, none of the
displaced from ancestral lands essential to their rights of the Philippine Environmentalists'
livelihood and indispensable to their religious Organization and of its officers and members
practices. are affected. In accordance with the ruling in
3) The organization is based in Makati. All its National Economic Protectionism Association
officers live and work in Makati. Not one of its vs. Ongpin, 171 SCRA 657, the organization
officers or members belong to the affected has no standing to file the case.
indigenous cultural community. Do they have
the standing in this dispute? Explain. Judicial Review; Requisites (1994)
No. 2: 2) Assume that the constitutional
4) Would your answer be different if the question raised in a petition before
Philippine Power Corporation, a private the Supreme Court is the Iis mota of the case,
company, were to operate the plant? Explain. give at least two other requirements before the
SUGGESTED ANSWER: Court will exercise its power of judicial review?
a) Under Section 5, Article XII of the SUGGESTED ANSWER:
Constitution, the State should protect the rights of 2) According to Macasiano vs. National
cultural Indigenous communities to their Housing Authority, 224 SCRA 236, in addition to
ancestral lands to ensure their well-being. the requirement that the constitutional
Under Section 17, Article XIV of the question raised be the lis mota of the case, the
Constitution, the State should protect the rights of following requisites must be present for the
indigenous cultural communities to preserve and exercise of the power of judicial review:
develop this cultures, traditions, and (c) There must be an actual case or
institutions and should consider these rights in
controversy involving a conflict of legal
the formulation of national plans and policies.
The government violated these provisions, rights susceptible of Judicial determination;
because it decided to operate the power plant (d) The constitutional question must be
without consulting the indigenous cultural raised by the proper party; and
community and the operation of the power plant will (e) The constitutional question must be
result in its displacement.
raised at the earliest opportunity.
If the projected lawsuit will be based on Jurisdiction of HLURB (1993)

violation of the rights of the indigenous cultural No. 8; The ABC Realty, Inc, filed a complaint
communities, the Philippine Environmentalists against Rico for the collection of unpaid
Organization will have no standing to file the installments on a subdivision lot purchased by
case. None of its officers and members belong to the latter, Rico failed to file an answer, was
the indigenous cultural community. None of their declared in default; and after reception of
rights are affected. plaintiffs evidence ex parte, judgment was
rendered against him. The decision became
If the lawsuit will seek to enjoin the use of final, and upon motion by ABC Realty, the
public funds to operate the power plant, the judge issued a writ of execution.
Philippine Environmentalists' Organization
can file a taxpayer's suit. As held in Rico now files a motion to quash the writ and to
Maceda us. Macaraig, 197 SCRA 771, vacate the Judgment contending that it is the
a taxpayer has standing to question the Housing and Land Use Regulatory Board
illegal expenditure of public funds. (HLURB) which is vested with original and
exclusive Jurisdiction over cases involving the
b) The Philippine Environmentalists real estate business. Rico prays for the
Organization will have no standing to file the dismissal of the complaint and for the nullity of the
case if it is a private company that will operate decision. The realty firm opposes the
motion arguing that under BP 129, RTCs have within three months (Art. X, Sec. 11).
exclusive and original jurisdiction over cases in In Marcelino vs. Cruz, 121 SCRA 51 (1983) it
which the amount of controversy exceeds was held that the periods prescribed are
P20,000.00. Answer the following queries: only directory, not mandatory.
(c) Who has jurisdiction over the
collection suit? Political Question (1995)
(d) The RTC decision, having become final and No. 13: Judicial power as defined in Sec. 1, 2nd
executory, can it still be vacated? par., Art. VIII, 1987 Constitution, now "includes the
SUGGESTED ANSWER: duty of the Courts of Justice to settle actual
1} As held in Estate Developers and Investors controversies involving rights which are legally
Corporation vs. Court of Appeals, 213 SCRA demandable and enforceable, and to determine
353, pursuant to Presidential Decree No. 1344, it is whether or not there has been a grave abuse of
the Housing and Land Use Regulatory Board discretion amounting to lack of excess of
which has jurisdiction over the claim of a developer jurisdiction on the part of any branch or
against a buyer for the payment of the balance instrumentality of the Government. "This
of the purchase price of a lot. The jurisdiction of definition is said to have expanded the power of the
the Regional Trial Court over cases in which judiciary to include political questions formerly
the amount of controversy exceeds P20,000.00 beyond its jurisdiction.
exists only in all cases where the case does f) Do you agree with such as interpretation of the
not otherwise fall within the exclusive jurisdiction constitutional definition of judicial power that
of any other court, tribunal, person or body would authorize the courts to review and, if
exercising Judicial or quasi-judicial functions, warranted, reverse the exercise of discretion
by the political departments (executive
and legislative) of the government,
2) Yes, because it is void.... including the Constitutional Commissions?
Discuss fully,
Mandatory Period For Deciding Cases (1989) g) In your opinion, how should such definition
No. 10: (2) Despite the lapse of 4 months from be construed so as not to erode
the time that the trial was terminated and considerably or disregard entirely the
the case submitted for decision, the trial court existing "political question" doctrine?
failed to decide the case. The defense counsel Discuss fully.
moved to dismiss the case on the ground that SUGGESTED ANSWER:
after the lapse of 90 days, the court had lost c) Yes, the second paragraph of Section 1,
jurisdiction to decide the case. Should Article VIII of the 1987 Constitution has
the motion be granted? expanded the power of the Judiciary to include
SUGGESTED ANSWER: political questions. This was not found in the
No, the motion should not be granted. 1935 and the 1973 Constitution, Precisely, the
Section 15 (4), Article VIII of the 1987 framers of the 1987 constitution intended to
Constitution provides: widen the scope of judicial review.
"Despite the expiration of the
applicable mandatory period, the court, d) As pointed out in Marcos vs. Manglapus, 177
without prejudice to such responsibility as SCRA 668, so as not to disregard entirely the
may have been incurred in consequence political question doctrine, the extent of judicial
thereof, shall decide or resolve the case review when political questions are involved
or matter submitted thereto for should be limited to a determination of whether or
determination, without further delay." not there has been a grave abuse of
discretion amounting to lack or excess of
Thus, the failure of the trial court to decide the jurisdiction on the part of the official whose act is
case within ninety days did not oust it being questioned. If grave abuse of discretion is not
of jurisdiction to decide the case. shown, the courts should not substitute their
ALTERNATIVE ANSWER: judgment for that of the official concerned and
The 1973 Constitution provided for certain decide a matter which by its nature or by law is
consequences on the decisions of courts in for the latter alone to decide.
case of the failure of the Supreme Court and
other inferior collegiate courts to decide cases Political Question Doctrine (1997)
within prescribed periods. But it did not provide for No. 5; To what extent, if at all, has the
consequences on the decisions of trial courts 1987 Constitution affected the "political
as a result of their failure to decide cases question doctrine"?
SUGGESTED ANSWER: The assault of a fellow Senator
Section 1, Article VIII of the Constitution has constitutes disorderly behavior.
expanded the scope of judicial power by
including the duty of the courts of Justice to Political Question; To Settle Actual
settle actual controversies involving rights Controversies (2004)
which are legally demandable and enforceable, and (a) The 1935, 1973 and 1987 Constitutions
to determine whether or not there has been a grave commonly provide that "Judicial power shall be
abuse of discretion amounting to lack or excess vested in one Supreme Court and in such lower
of jurisdiction on the part of any branch or courts as may be established by law."
instrumentality of the Government. In Marcos vs.
Manglapus, 177 SCRA 668, the Supreme Court What is the effect of the addition in the 1987
stated that because of this courts of justice Constitution of the following provision: "Judicial
may decide political questions if there was power includes the duty of the courts of justice to
grave abuse of discretion amounting to lack settle actual controversies involving rights which
or excess of jurisdiction on the part of the are legally demandable and enforceable, and to
official whose action is being questioned. determine whether or not there has been grave
abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or
Political Question: Separation of instrumentality of the government"? Discuss
Powers (2004) briefly, citing at least one illustrative case. (5%)
(b) SDO was elected Congressman. Before the SUGGESTED ANSWER:
end of his first year in office, he inflicted The effect of the second paragraph of Section
physical injuries on a colleague, ET, in the 1, Article VIII of the 1987 Constitution is to limit
course of a heated debate. Charges were filed in resort to the political question doctrine and to
court against him as well as in the House broaden the scope of judicial inquiry into areas
Ethics Committee. Later, the House of which the Judiciary, under the previous
Representatives, dividing along party lines, Constitutions, would have left to the political
voted to expel him. Claiming that his expulsion was departments to decide. If a political question is
railroaded and tainted by bribery, he filed a petition involved, the Judiciary can determine whether or
seeking a declaration by the Supreme Court not the official whose action is being
that the House gravely abused its discretion questioned acted with grave abuse of discretion
and violated the Constitution. He prayed that amounting to lack or excess of jurisdiction
his expulsion be annulled and that he should be (Marcos v. Manglapus, 177 SCRA 668 [1989]);
restored by the Speaker to his position as (Daza v. Singson, 180 SCRA 496 [1989]).
Congressman. Is SDO's petition before the Thus, although the House of Representatives
Supreme Court justiciable? Cite pertinent issues Electoral Tribunal has exclusive jurisdiction to
for consideration. (5%) decide election contests involving members of
the House of Representatives, the Supreme
SUGGESTED ANSWER: Court nullified the removal of one of its
While under Section 1, Article VIII of the 1987 members for voting in favor of the protestant,
Constitution the Supreme Court may inquire who belonged to a different party. (Bondoc v.
whether or not the decision to expel SDO is Pineda, 201 SCRA 792 [1991]).
tainted with grave abuse of discretion
amounting to lack or excess of jurisdiction, the Political Questions (1988)
petition should be dismissed. In Alejandrino v. No. 23: In accordance with the opinion of
Quezon (46 Phil. 83 [1924]), the Supreme Court the Secretary of Justice, and believing that it
held that it could not compel the Senate to would be good for the country, the
reinstate a Senator who assaulted another President enters into an agreement with the
Senator and was suspended for disorderly Americans for an extension for another five
behavior, because it could not compel a (5) years of their stay at their military bases
separate and co-equal department to take any in the Philippines, in consideration of:
particular action. In Osmeña v. Pendatun (109 5. A yearly rental of one billion U.S.
Phil. 863 [1960]), it was held that the Supreme dollars, payable to the Philippine
Court could not interfere with the suspension of a government in advance;
Congressman for disorderly behavior, 6. An undertaking on the part of the American
because the House of Representatives is the government to implement immediately the
judge of what constitutes disorderly behavior. mini-Marshall plan for the country involving

ten billion U.S. dollars in aids No. 11: How may the following be removed
and concessional loans; and from office:
7. An undertaking to help persuade 5. Senators & Congressmen
American banks to condone interests 6. Judges of lower courts
and other charges on the country's 7. Officers and employees in the Civil Service
out-standing loans. SUGGESTED ANSWER:
(c) As to Sen & Cong, Art. III, section 16(3), of
In return, the President agreed to allow the Constitution, ...
American nuclear vessels to stay for short visits at (d) Under Art. VIII, sec. 11 of the
Subic, and in case of vital military need, to Constitution, Judges of lower courts may be
store nuclear weapons at Subic and at Clark removed by dismissal by the Supreme by
Field. A vital military need comes, under the a vote of a majority of the Members who
agreement, when the sealanes from the actually took part in the deliberation on the
Persian Gulf to the Pacific, are threatened by issues in the case and voted thereon.
hostile military forces. (e) As to Civ Service Empl, Art. IX-B. Sec. 2(3)
of the Constitution, ...
The Nuclear Free Philippine Coalition comes to you
for advice on how they could legally prevent Review Executive Acts (1996)
the same agreement entered into by the No. 10: 1) X, a clerk of court of the Regional
President with the US government from going Trial Court of Manila, was found guilty of being
into effect. What would you advise them to do? absent without official leave for 90 days
Give your reasons. and considered dismissed from service by
SUGGESTED ANSWER: the Supreme Court. He appealed to the
If the Agreement is not in the form of a treaty, it is President for executive clemency. Acting on
not likely to be submitted to the Senate for the appeal, the Executive Secretary, by
ratification as required in Art. VII, sec. 21. It order of the President commuted the
may not, therefore, be opposed in that branch penalty to a suspension of six months.
of the government. Nor is judicial review (3) Can the Supreme Court review
feasible at this stage because there is no the correctness of the action of the
justiciable controversy. While Art. VIII, sec. 1, President in commuting the penalty
par. 2 states that judicial power includes the imposed on X? Explain.
duty of court of justice to "determine whether or not (4) Was the action of the President
there has been a grave abuse of discretion constitutional and valid? Explain.
amounting to lack or excess of jurisdiction on SUGGESTED ANSWER:
the part of any branch or instrumentality of the 1. a) Yes, the Supreme Court can review the
government," it is clear that this provision does not correctness of the action of the President In
do away with the political question doctrine. It was commuting the penalty imposed on X. By doing so,
inserted in the Constitution to prevent courts the Supreme Court is not deciding a political
from making use of the doctrine to avoid what question. The Supreme Court is not reviewing
otherwise are justiciable controversies, albeit the wisdom of the commutation of the penalty.
involving the Executive Branch of the What it is deciding is whether or not the
government during the martial law period. On President has the power to commute the
the other hand, at this stage, no justiciable penalty of X, As stated in Daza vs. Singson.
controversy can be framed to justify judicial 180 SCRA 496, it is within the scope of Judicial
review, I would, therefore, advice the Nuclear power to pass upon the validity of the actions of the
Free Philippine Coalition to resort to the media to other departments of the Government.
launch a campaign against the Agreement.
b) The commutation by the President of the
Pro Hac Vice Cases (1999) penalty imposed by the Supreme Court upon X is
No XI What does if mean when a unconstitutional. Section 6. Article VIII of the
Supreme Court Justice concurs in a Constitution vests the Supreme Court with the
decision pro hac vice? (2%) power of administrative supervision over all
SUGGESTED ANSWER: courts and their personnel. In Garcia vs. De la
When a decision is pro hac vice, it means Pena, 229 SCRA 766, it was held that no other
the ruling will apply to this particular case only. branch of the Government may intrude into this
exclusive power of the Supreme Court.
Removal of Lower Court Judges (1993)

Supervision; Courts & its Personnel (Q5- C. No, the court cannot take cognizance of the
2005) case. As held in Joya vs. Presidential
(3) Pedro Masipag filed with the Ombudsman a Commission on Good Government, 225 SCRA
complaint against RTC Judge Jose 569, since the petitioners were not the legal
Palacpac with violation of Article 204 of the owners of paintings and antique silverware,
Revised Penal Code for knowingly they had no standing to question their
rendering an unjust judgment in Criminal disposition. Besides, the paintings and the
Case No. 617. Judge Palacpac filed a antique silverware did not constitute important
motion with the Ombudsman to refer the cultural properties or national cultural treasures, as
complaint to the Supreme Court to they had no exceptional historical and cultural
determine whether an administrative aspect significance to the Philippines.
was involved in the said case. The
Ombudsman denied the motion on the D. According to Joya us. Presidential
ground that no administrative case against Commission on Good Government, 225 SCRA
Judge Palacpac relative to the decision in C. for a taxpayer's suit to prosper,
Criminal Case No. 617 was filed and four requisites must be considered:
pending in his office. (1) the question must be raised by the proper
State with reasons whether party;
the Ombudsman's ruling is correct. (4%) (4) there must be an actual controversy;
(5) the question must be raised at the
SUGGESTED ANSWER: earliest possible opportunity; and
The Ombudsman's ruling is not correct. Under (6) the decision on the constitutional or
Section 6, Article VIII of the Constitution, it is legal question must be necessary
the Supreme Court which is vested with to the determination of the case.
exclusive administrative supervision over all
courts and its personnel. Prescinding from this In order that a taxpayer may have standing
premise, the Ombudsman cannot determine for to challenge the legality of an official act of
itself and by itself whether a criminal complaint the government, the act being questioned
against a judge, or court employee, involves an must involve a disbursement of public funds
administrative matter. The Ombudsman is duty upon the theory that the expenditure of
bound to have all cases against judges and public funds for an unconstitutional act is a
court personnel filed before it, referred to the misapplication of such funds, which may
Supreme Court for determination as to whether an be enjoined at the instance of a taxpayer.
administrative aspect is involved therein.
(Judge Jose Caoibes v. Ombudsman, G.R. No. Term of Office; Justices (1996)
132177, July 19, 2001) No. 9: A, an associate justice of the Supreme
Taxpayer's Suit; Locus Standi (1995) Court reached the age of seventy on July 1,
No. 12: When the Marcos administration was 1996. There was a case calendared for
toppled by the revolutionary government, the deliberation on that day where the vote of A
Marcoses left behind several Old Masters' was crucial. Can A hold over the position and
paintings and antique silverware said to have participate in the deliberation of the case on
been acquired by them as personal gifts. July 1, 1996? Explain.
Negotiations were then made with Ellen Layne SUGGESTED ANSWER:
of London for their disposition and sale at public No. A cannot hold over his position as
auction. Later, the government entered into a Associate Justice of the Supreme Court and
"Consignment Agreement" allowing Ellen Layne of participate in the deliberations of the case on
London to auction off the subject art pieces. Upon July 1, 1996. Under Section 11, Article VIII of
learning of the intended sale, well-known artists, the Constitution, Members of the Supreme
patrons and guardians of the arts of the Philippines Court hold office until they reach the age of
filed a petition in court to enjoin the sale and seventy years or become incapacitated to
disposition of the valued items asserting that discharge their duties. Constitutional officers
their cultural significance must be preserved for the whose terms are fixed by the Constitution have no
benefit of the Filipino people. right to hold over their positions until their
3) Can the court take cognizance of successors shall have been appointed and
the case? Explain. qualified unless otherwise provided in the
4) What are the requisites for a taxpayer's suit Constitution. (Mechem, A Treaties on the Law of
to prosper? Public Offices and Officers, p. 258.)
SUGGESTED ANSWER:
Votes required for declaring a
law unconstitutional (1996) ARTICLE IX Civil Service
No. 7: Can five members of the Supreme Court
declare a municipal ordinance unconstitutional? Commission
Explain.
SUGGESTED ANSWER: Career Service; Characteristics (1999)
Yes. five Members of the Supreme Court sitting en- No IX - What characterizes the career
banc can declare a municipal ordinance service and what are included in the career
unconstitutional. Under Section 4(2). Article VIII of service? (2%)
the Constitution, a municipal ordinance can be SUGGESTED ANSWER:
declared unconstitutional with the According to Section 7, Chapter 2, Title I, Book
concurrence of a majority of the Members of the V of the Administrative Code of 1987,
Supreme Court who actually took part in the the career service is characterized by
deliberation on the issues in the case and voted (1) Entrance based on merit and fitness to
thereon. If only eight Members of the Supreme be determined as far as practicable
Court actually took part in deciding the case, by competitive examination or based on
there will still be a quorum. Five Members will highly technical qualifications;
constitute a majority of those who actually took part (2) opportunity for advancement to
in deciding the case. higher career positions; and
(3) security of tenure.
ARTICLE IX Constitutional The career service includes:

(1) OPEN CAREER POSITIONS for
Commissions appointment to which prior qualifications in
Rotational Scheme (1999) an appropriate examination is required;
No XIII - What are the requisites for (2) CLOSED CAREER POSITIONS which
the effective operation of the so-called are scientific or highly technical in nature;
"Rotational Scheme" for Constitutional (3) Positions in the CAREER EXECUTIVE
Commissions? (2%) SERVICE;
SUGGESTED ANSWER: (4) Career officers other than those in
As held in Republic v. Imperial, 96 Phil. 770, for the career executive service, who
the effective operation of the rotational scheme are appointed by the President;
of the Constitutional Commission, the (5) Commissioned officers and enlisted men of
first Commissioner should start on a the Armed Forces;
common date and any vacancy before the (6) Personnel of government - owned
expiration of the term should be filled only or controlled corporations, whether
for the unexpired balance of the term. performing governmental or proprietary
functions, who do not fall under the
Constitutional Commissions & Council (Q7- non-career service; and
2006) (7) Permanent laborers, whether
(3) The legislature may abolish this body: (5%) skilled, semiskilled, or unskilled.
Commission on Appointments
Ombudsman Civil Service Commission vs. COA (2004) (9-a)
Judicial and Bar Council Former Governor PP of ADS Province had
Court of Tax Appeals dismissed several employees to scale down
Commission on Audit the operations of his Office. The
employees complained to the Merit Systems
SUGGESTED ANSWER: Protection Board, which ruled that the Civil
The legislature may abolish the d) COURT OF TAX Service rules were violated when the
APPEALS since it is merely a creation of law employees were dismissed. The Civil Service
unlike the Commission on Appointments, Commission (CSC) affirmed the MSPB
Ombudsman, Judicial and Bar Council and decision, and ordered ADS to reinstate the
Commission on Audit which are all constitu- employees with full backwages. ADS did not
tional creations. Thus, the latter agencies may appeal and the order became final.
only be abolished by way of an amendment or
revision of the Constitution. Instead of complying immediately, BOP, the
incumbent Governor of ADS, referred the
matter to the Commission on Audit (COA),

which ruled that the amounts due are the 1. The rule prohibiting the appointment
personal liabilities of the former Governor who to certain government positions, of the
dismissed the employees in bad faith. Thus, spouse and relatives of the President
ADS refused to pay. The final CSC decision, within the fourth degree of
however, did not find the former Governor in consanguinity or affinity. [2%]
bad faith. The former Governor was likewise not 2. The rule making it incompatible for
heard on the question of his liability.
members of Congress to hold offices or
Is ADS' refusal justified? Can COA disallow the employment in the government. [2%]
payment of backwages by ADS to 3. The rule prohibiting members of
the dismissed employees due under a final the Constitutional Commissions, during
CSC decision? Decide and reason briefly. (5%) their tenure, to be financially interested
in any contract with or any franchise or
SUGGESTED ANSWER: privilege granted by the government, [2%]
A. The refusal of ADS is not justified, and the
4. The rule providing for post audit by the
Commission on Audit cannot disallow the
payment of backwages by ADS to the COA of certain government agencies. [2%]
dismissed employee. The Commission on 5. The rule requiring Congress to provide for
Audit cannot make a ruling that it is the former the standardization of compensation of
governor who should be personally liable, since the government officials and employees. [2%]
former governor was not given the SUGGESTED ANSWER:
opportunity to be heard. In addition, the
Commission on Audit cannot set aside a final 1. Section 13. Article VII of the Constitution,
decision of the Civil Service Commission. The which prohibits the President from
payment of backwages to illegally dismissed appointing his spouse and relatives within the
government employee is not an irregular, fourth degree of consanguinity or affinity
unnecessary, excessive, extravagant or does not distinguish between
unconscionable expenditure. (Uy v. government corporations with original
Commission on Audit, 328 SCRA 607 [2000]). charters and their subsidiaries, because the
prohibition applies to both.
Function of CSC (1994) 2. Section 13, Article VII of the
No. 15 - 2) Can the Civil Service Constitution, which prohibits Members of
Commission revoke an appointment by the Congress from holding any other office
appointing power and direct the appointment of during their term without forfeiting their
an individual of its choice? seat, does not distinguish
SUGGESTED ANSWER: between government corporations
According to the ruling in Medalla vs. Sto.
with original charters and their subsidiaries,
Tomas, 208 SCRA 351, the Civil Service
because the prohibition applies to both.
Commission cannot dictate to the appointing
power whom to appoint. Its function is limited to 3. Section 2, Article IX-A of the Constitution,
determining whether or not the appointee meets which prohibits Members of the
the minimum qualification requirements Constitutional Commissions from being
prescribed for the position. Otherwise, it would be financially interested in any contract with or any
encroaching upon the discretion of the franchise or privilege granted by the
appointing power. Government, does not distinguish between
government corporations with original
GOCCs Without Original Charter vs. GOCCs charters and their subsidiaries, because the
With Original Charter (1998) prohibition applies to both.
No II.- - The Constitution distinguishes between two 4. Section 2(1), Article IX-D of the Constitution
types of owned and/or controlled which provides for post audit by the
corporations: those with original charters and Commission on audit of government
those which are subsidiaries of such corporations, does not distinguish between
corporations. In which of the following rule/rules is government corporations with original
such a distinction made? Consider each of the
charters and their subsidiaries, because the
following items and explain briefly your
provision applies to both.
answer, citing pertinent provisions of the
5. Section 5, Article IX-B of the Constitution,
Constitution.
which provides for the standardization of the
compensation of government officials and memorandum-order, directs the corporation
employees, distinguishes to comply with Civil Service Rules in
between government corporations the appointment of all of its officers and
and their subsidiaries, for the provision employees. The memorandum-order of the
applies only to government corporations CSC is assailed by the corporation, as well as
with original charters. by its officers and employees, before the
court. How should the case be resolved?
Jurisdiction over the GOCCs (1999) SUGGESTED ANSWER:
No IX - Luzviminda Marfel, joined by eleven
The memorandum-order of the Civil Service
other retrenched employees, filed a complaint
Commission should be declared void. As
with the Department of Labor and Employment
held in Gamogamo v. PNOC Shipping and
(DOLE) for unpaid retrenchment or separation
Transit Corporation. 381 SCRA 742
pay, underpayment of wages and non-payment of
(2002). under Article IX-B, Section 2(1)
emergency cost of living allowance. The of the 1987 Constitution government-
complaint was filed against Food Terminal, Inc.
owned or controlled corporations organized
Food Terminal Inc. moved to dismiss on the under the Corporation Code are not covered
ground of lack of jurisdiction, theorizing that it is a
by the Civil Service Law but by the Labor
government-owned and controlled corporation and
Code, because only government-owned
its employees are governed by the Civil Service or controlled corporations with original
Law and not by the Labor Code. Marfel
charters are covered by the Civil Service.
opposed the motion to dismiss, contending
Modes of Removal from Office (1993)
that although Food Terminal, Inc. is a corporation
No. 11: How may the following be removed
owned and controlled by the government
from office:
earlier created and organized under the
1) Senators & Congressmen
general corporation law as "The Greater
2) Judges of lower courts
Manila Food Terminal, Inc.", it has still the marks
3) Officers and employees in the Civil Service
of a private corporation: it directly hires its
SUGGESTED ANSWER:
employees without seeking approval from the
1) Senators, Cong., Art. III, section 16(3), of the
Civil Service Commission and its personnel
are covered by the Social Security System and Constitution, ...
not the Government Service Insurance
2) Judges, Art. VIII, sec. 11 of the Constitution,
System, The question posed in the petition for
certiorari at bar is whether or not a labor law
3) Under Art. IX-B. Sec. 2(3) of the Constitution,
claim against a government-owned or controlled
officers and employees in the Civil Service may
corporation like the Food Terminal, Inc. falls
only be removed for cause as provided by
within the jurisdiction of the Department of
Labor and Employment or the Civil Service law and after observance of due process.
Commission? Decide and ratiocinate. (4%) Their removal must be effected by the
appropriate disciplinary authority in accordance with
SUGGESTED ANSWER:
Ch. 7 secs. 47-48 of Book V of the
The claim of the retrenched employees falls
Administrative Code of 1987 and the Civil
under the jurisdiction of the National Labor
Relations Commission and not under the Service Rules and Regulations.
jurisdiction of the Civil Service Commission. As held
Receiving of Indirect Compensation (1997)
in Lumanta v. National Labor Relations
No. 18; A, while an incumbent Governor of his
Commission, 170 SCRA 79, since Food
province, was invited by the Government of
Terminal, Inc. was organized under the
Cambodia as its official guest. While there, the
Corporation Law and was not created by a
sovereign king awarded Governor A with
special law in accordance with Section 2(1),
a decoration of honor and gifted him with a
Article IX-B of the Constitution, it is not covered by
gold ring of insignificant monetary value,
the civil service.
both of which he accepted.
Jurisdiction over the GOCCs (2003)
Was Governor A's acceptance of the decoration
No VII - A corporation, a holder of a certificate of
and gift violative of the Constitution?
registration issued by the Securities and
SUGGESTED ANSWER:
Exchange Commission, is owned and
Yes, it violated Section 8, Article IX-B of the
controlled by the Republic of the Philippines.
The Civil Service Commission (CSC), in a Constitution. For his acceptance of the
decoration of honor and the gold ring from the abolition of offices) as distinguished from the
Government of Cambodia to be valid, Governor A reorganization of personnel which is what is
should first obtain the consent of Congress. referred to therein as "the reorganization
pursuant to Proclamation No. 3 dated March 25,
Security of Tenure (1988) 1986." For the power of the government to
No. 10: Exercising power he claims had been terminate the employment of elective and
granted him by the Executive Order on the appointive officials pursuant to Art. III, sec. 2 of
reorganization of the government, the Proclamation No. 3 (otherwise known as the
Commissioner of Customs summarily Provisional Constitution), through the
dismissed two hundred sixty-five officials and appointment or designation of their successors
employees of the Bureau of Customs. Most of has been repeatedly held to have ended on
the ousted employees appealed to the Civil February 2, 1987, when the new Constitution
Service Commission claiming their ouster took effect. (De Leon v. Esguerra, 153 SCRA
illegal. The Civil Service Commission, after 602 (1987); Reyes v. Ferrer G.R. No. 77801,
hearing, later ordered the Commissioner of Dec. 11, 1987; Osias v. Ferrer, G.R, No. 77049,
Customs to reinstate most of those dismissed. March 28, 1988), Moreover, such replacement of
Instead of following the order of the Civil incumbents can only be for cause as
Service Commission, Commissioner Mison prescribed by Executive Order No. 17, dated
intends to bring for review before the Supreme May 28, 1986. Since the summary dismissals in
Court, the same decision of the Commission. question are not for cause, the removal of the
Bureau of Customs officials violates art. IX, B,
1. If you were the counsel for sec, 2(3) of the Constitution.
the Commissioner of Customs, how would
you justify his dismissal of customs officials Security of Tenure (Q5-2005)
and employees? (3) Ricardo was elected Dean of the College of
2. If on the other hand, you were a counsel for Education in a State University for a term of five
the dismissed officials and employees, (5) years unless sooner terminated. Many
how would you sustain the order of the Civil were not pleased with his
Service Commission reinstating most of performance. To appease those critical of
them? State your reasons. him, the President created a new position,
SUGGESTED ANSWER: that of Special Assistant to the President
1. I would invoke the resolution in Jose v. with the rank of Dean, without reduction in
Arroyo, G.R. No. 78435, Aug. 11, 1987, in salary, and appointed Ricardo to said
which the Supreme Court held that under Art. position in the interest of the service.
XVIII, sec, 16 of the Constitution, career service Contemporaneously, the University
employees may be removed "not for cause but as a President appointed Santos as Acting Dean in
result of the reorganization pursuant to place of Ricardo. (5%)
Proclamation No. 3 dated March 25, 1986 and
the reorganization following the ratification of this (a) Does the phrase "unless sooner
Constitution." By virtue of this provision, it was terminated" mean that the position of
held that the reorganization of the Bureau of Ricardo is terminable at will?
Customs under Executive Order No, 127 may ALTERNATIVE ANSWER:
continue even after the ratification of the No, the term "unless sooner terminated"
Constitution, and career service employees could not mean that his position is terminable
may be separated from the service without at will. Security of tenure means that dismissal
cause as a result of such reorganization. should only be for cause, as provided by
law and not otherwise. (Palmera v. CSC, G.R.
2. I would argue that art. XVIII, sec. 16 does No. 110168, August 4, 1994)
not really authorize the removal of career
service employees but simply provides for the ALTERNATIVE ANSWER:
payment of separation, retirement, and other No, his position is not terminable at will.
benefits accruing to them under the applicable Ricardo's contract of employment has a fixed
laws. The reference to career service term of five years. It is not an appointment in an
employees separated "as a result of the acting capacity or as officer-in-charge. A
reorganization following the ratification of this college dean appointed with a term cannot be
Constitution" is only to those separated as a separated without cause. Ricardo, with a
result of reorganization of the structure and definite term of employment, may not thus be
functions of government (e.g., as a result of
removed except for cause. (Sta. Maria v. Each Electoral Tribunal shall be composed of
Lopez, G.R. No. L-30773, February 18,1970) NINE Members, three of whom shall be
Justices of the Supreme Court to be designated by
(b) Was Ricardo removed from his the Chief Justice, and the remaining six shall be
position as Dean of the College of Members of the Senate or the House of
Education or merely transferred to the Representatives, as the case may be, who shall be
position of Special Assistant to the chosen on the basis of proportional
President? Explain. representation from the political parties and the
SUGGESTED ANSWER: parties or organizations registered under the
Ricardo was removed from his position as party-list system represented therein. The
dean. Having an appointment with a fixed term, he senior Justice in the Electoral Tribunal shall be its
cannot, without his consent, be transferred Chairman (Article VI, Section 17,1987
before the end of his term. He cannot be asked to Constitution).
give up his post nor appointed as dean of
another college, much less transferred to Fair Election; Equal Space & Time in Media
another position even if it be dignified with a (1989)
dean's rank. More than this, the transfer was a No. 16: A COMELEC (COMELEC) resolution
demotion because deanship in a university, provides that political parties supporting a
being an academic position which requires common set of candidates shall be allowed to
learning, ability and scholarship, is more purchase jointly air time and the aggregate
exalted than that of a special assistant who amount of advertising space purchased for
merely assists the President, as the title campaign purposes shall not exceed that
indicates. The special assistant does not make allotted to other political parties or groups that
authoritative decisions unlike the dean who nominated only one set of candidates. The
does so in his own name and responsibility. resolution is challenged as a violation of the
The position of dean is created by law, while freedom of speech and of the press. Is the
the special assistant is not so provided by law; it resolution constitutionally defensible? Explain.
was a creation of the university president. (Sta. SUGGESTED ANSWER:
Maria v. Lopez, G.R. No. L-30773, February Yes, the resolution is constitutionally defensible.
18, 1970) Under Section 4, Article IX-C of the 1987
Constitution, during the election period the
Security of Tenure; Meaning (1999) COMELEC may supervise or regulate the
No IX - -What is the meaning and guarantee of media of communication or information to
security of tenure? (2%) ensure equal opportunity, time, and space
SUGGESTED ANSWER: among candidates with the objective of holding free,
According to Palmera v. Civil Service orderly, honest, peaceful, and credible
Commission, 235 SCRA 87, SECURITY OF elections. To allow candidates which are
TENURE means that no officer or employee in the supported by more than one political party to
Civil Service shall be suspended or purchase more air time and advertising space
dismissed except for cause as provided by law and than candidates supported by one political party
after due process. only will deprive the latter of equal time and
space in the media.
ARTICLE IX COMELEC ALTERNATIVE ANSWER:
No. Although the expenditure limitation applies
Electoral Tribunal; Functions &
only to the purchase of air time, thus leaving
Composition (Q5-2006)
political parties free to spend for other forms of
1. What is the function of the Senate Electoral
campaign, the limitation nonetheless results in a
Tribunal and the House of Representatives
direct and substantial reduction of the quantity of
Electoral Tribunal? (2.5%)
political speech by restricting the number of
SUGGESTED ANSWER:
issues that can be discussed, the depth of their
Under Article VI, Section 17 of the
discussion and the size of the audience that
1987 Constitution, the Senate and
can be reached, through the broadcast media.
House of Representatives Electoral Tribunals
Since the purpose of the Free Speech Clause is to
shall be the sole judge of all contests
promote the widest possible dissemination of
relating to the election, returns, and
information, and the reality is that to do this
qualifications of their respective Members.
requires the expenditure of money, a limitation
2. What is the composition of each? (2.5%) on expenditure for this purpose cannot be
SUGGESTED ANSWER: justified, not even for the purpose of equalizing
the opportunity of political candidates. This is Court, from the decision of the COMELEC First
the ruling in Buckley vs. Valeo, 424 U.S. 1 Division? If yes. Why? If not what
(1976), which invalidated a law limiting the procedural step must he undertake first? ( 5%)
expenditures of candidates for campaigning in SUGGESTED ANSWER:
the United States. In the Philippines, a provision of "A" cannot file a petition for certiorari with the
the Tañada-Singson Law, limiting the period for Supreme Court. As held in Mastura vs.
campaigning, was nearly invalidated on this same COMELEC, 285 SCRA 493 (1998), the
principle, except that the majority of court lacked Supreme Court cannot review the decisions or
one more vote to make their decision effective. resolutions of a division of the COMELEC. "A"
(See Gonzalez vs. Comelec, 27 SCRA 835 should first file a motion for reconsideration with the
(1969). COMELEC en banc.
Grant of Pardon in Election Offenses (1991) Removal from Office; Commissioners (1998)
No. 11 - In connection with the May 1987 No IX. - Suppose a Commissioner of the
Congressional elections, Luis Millanes was COMELEC is charged before the
prosecuted for and convicted of an election Sandiganbayan for allegedly tolerating violation of
offense and was sentenced to suffer the election laws against proliferation of
imprisonment for six years. The court did not prohibited billboards and election propaganda
impose the additional penalty of disqualification to with the end in view of removing him from
hold public office and of deprivation of the right office. Will the action prosper? [5%]
of suffrage as provided for in Section 164 of the SUGGESTED ANSWER:
Omnibus Election Code of the Philippines (B.P. Blg. No, the action will not prosper. Under Section 8,
881). Article XI of the Constitution, the
Commissioners of the COMELEC are
In April 1991, the President granted him removable by IMPEACHMENT. As held in the
absolute pardon on the basis of a case of In re Gonzales. 160 SCRA 771, 774-
strong recommendation of the Board of 775, a public officer who is removable by
Pardons and Parole. impeachment cannot be charged before the
Sandiganbayan with an offense which carries
Then for the election in May 1992, Luis Millanes with it the penalty of removal from office unless he
files his certificate of candidacy for the office of is first impeached. Otherwise, he will be
Mayor in his municipality. removed from office by a method other than
Impeachment.
(a) What is the effect of the failure of the court
to impose the additional penalty? Right to Vote; Jurisdiction (2001)
(b) Is the pardon valid? No II - Let us suppose that Congress enacted a law
SUGGESTED ANSWER: which amended the Omnibus Election Code
(a) No need to expressly impose – they (particularly Sections 138, 139, 142, 143) by
are accessory penalties. vesting , in the COMELEC the jurisdiction over
inclusion and exclusion cases filed by voters,
(b) The pardon is void, since Luis Millanes was instead of in the courts (MTC, then RTC).
convicted for the commission of an election Is the law valid or not, and why? (5%)
offense and his pardon was not made upon the SUGGESTED ANSWER:
recommendation of the COMELEC. Under The law granting the COMELEC jurisdiction
Article IX, C, Sec. 5 of the Constitution, no over inclusion and exclusion cases is
pardon for violation of an election law may unconstitutional. Under Section 2(3), Article IX- C of
be granted without the favorable the Constitution, the COMELEC cannot decide
recommendation of the COMELEC the right to vote, which refers to the inclusion
and exclusion of voters. Under Section 2(6),
Judicial Review of Decisions (2001) Article IX-C of the Constitution, it can only file
No XVI - In an election protest involving the petitions in court for inclusion or exclusion of
position of Governor of the Province of Laguna voters.
between "A", the protestee, and "B", the
protestant, the First Division of the COMELEC Election Laws
rendered a decision upholding B's protest 2nd Placer Rule (2003)
No VIII - In the municipal mayoralty elections in
Can "A" file a petition for certiorari with the
1980, the candidate who obtained the highest
Supreme Court under Rule 65 of the Rules of number of votes was subsequently declared to
be disqualified as a candidate and so ineligible b) If the second-placer in the gubematorial
for the office to which he was elected. elections files a quo warranto suit against
Would this fact entitle a competing Nicasio and he is found to be disqualified
candidate who obtained the second highest from office, can the second-placer be sworn
number of votes to ask and to be proclaimed into office as governor?
the winner of the elective office? Reasons. c) If, instead, Nicasio had been born (of the
SUGGESTED ANSWER: same set of parents) in the United States
According to Trinidad v. COMELEC. 315 SCRA 175 and he thereby acquired American
[1999], if the candidate who obtained the citizenship by birth, would your answer
highest number of votes is disqualified, the be different?
candidate who obtained the second highest SUGGESTED ANSWER:
number of votes cannot be proclaimed the a) No, Nicasio no longer possesses Philippine
winner. Since he was not the choice of the citizenship. ...
people, he cannot claim any right to the office.
b) In accordance with the ruling in Abella us.
2nd Placer Rule (1990) COMELEC, 201 SCRA 253, the second placer
No. 7: A filed a protest with the House Electoral cannot be sworn to office, because he lost
Tribunal questioning the election of B as the election. To be entitled to the office, he
Member of the House of Representatives in the must have garnered the majority or plurality
1987 national elections on the ground that B is not of the votes.
a resident of the district the latter is
representing. While the case was pending. B c) Yes because he will be a dual citizen ...
accepted an ad-interim appointment as
Secretary of the Department of Justice. 2nd Placer Rule; Rule of Succession (1996)
No. 13: 1) A and B were the only candidates
(1) May A continue with his election protest in for mayor of Bigaa, Bulacan in the May
order to determine the real winner in the 1995 local elections. A obtained 10,000
said elections? State your reason. votes as against 3,000 votes for B. In
(2) Can A, who got the second highest number the same elections, X got the highest
of votes in the elections, ask that he number of votes among the candidates
be proclaimed elected in place of B? Explain for the Sangguniang Bayan of the same
your answer. town. A died the day before his proclamation.
SUGGESTED ANSWER: a) Who should the Board of Canvassers
(1) No, A may not continue with his protest. .... proclaim as elected mayor, A, B or
X? Explain,
(2) No, A cannot ask that he be proclaimed b) Who is entitled to discharge the functions of
elected in place of B. The votes cast for B the office of the mayor, B or X? Explain.
were not invalid votes. Hence, A garnered only the SUGGESTED ANSWER:
second highest number of votes. Only the In accordance with Benito vs. COMELEC, 235
candidate who obtained the majority or plurality of SCRA 436, it is A who should be proclaimed as
the votes is entitled to be proclaimed elected. On winner, because he was the one who obtained the
this ground, it was held in Labo v. highest number of votes for the position of
COMELEC, 176 SCRA 1, that the fact that the mayor, but a notation should be made that he
candidate who obtained the highest number of died for the purpose of applying the rule on
votes is not eligible does not entitle the succession to office. B cannot be proclaimed,
candidate who obtained the second highest because the death of the candidate who
number of votes to be proclaimed the winner. obtained the highest number of votes does not
entitle the candidate who obtained the next
2nd Placer Rule; in Quo Warranto Cases highest number of votes to be proclaimed the
(1992) winner, since he was not the choice of the
No. 16: Edwin Nicasio, born in the electorate. X is not entitled to be proclaimed
Philippines of Filipino parents and raised in the elected as mayor, because he ran for the
province of Nueva Ecija, ran for Governor of Sangguniang Bayan.
his home province. He won and he was sworn
into office. It was recently revealed, however, Neither B nor X is entitled to discharge the
that Nicasio is a naturalized American citizen. functions of the office of mayor. B is not entitled to
a) Does he still possess Philippine citizenship? discharge the office of mayor, since he was
defeated in the election. X is not entitled to
discharge the office of mayor. Under Section 44 and he receives the winning number of votes,
of the Local Government Code, it is the the hearing on the question of disqualification
vice mayor who should succeed in should continue. Upon motion of the
case of permanent vacancy in the office of complainant or any intervenor, the court or the
the mayor. It is only when the position of COMELEC may order the suspension of the
the vice mayor is also vacant that the proclamation of the winning candidate if the
member of the Sangguniang Bayan who evidence of his guilt is strong.
obtained the highest number of votes will
succeed to the office of mayor. Disualifications (1999)
No V - A.2. Under the Local Government
Appreciation of Ballots (1994) Code, name four persons who are disqualified
No. 3; If a candidate for town mayor is from running for any elective position. (2%)
an engineer by profession, should votes for SUGGESTED ANSWER:
him with the prefix "Engineer" be A2.) Under Section 40 of the Local Government
invalidated as "marked ballots"? Code, the following are disqualified
SUGGESTED ANSWER: from running for any local elective position:
3) No, a ballot in which the name of a 1) Those sentenced by final judgment for
candidate for town mayor who is an engineer an offense involving moral turpitude or
which is prefixed with "engineer" should not be for an offense punishable by one (1) year
invalidated as a marked ballot. Under Rule No. 12 or more of imprisonment, within two (2)
of the rules for the appreciation of ballots, years after serving sentence;
ballots which contain such prefixes are valid. 2) Those removed from office as a result of an
administrative case;
Disqualification; Grounds (1991) 3) Those convicted by final judgment
No. 11 - In connection with the May 1987 for violating the oath of allegiance to
Congressional elections, Luis Millanes was the Republic of the Philippines;
prosecuted for and convicted of an election 4) Those with dual citizenship;
offense and was sentenced to suffer 5) Fugitives from justice in criminal or non-
imprisonment for six years. The court did not political cases here or abroad;
impose the additional penalty of disqualification to 6) Permanent residents in a foreign country or
hold public office and of deprivation of the right those who have acquired the right to reside
of suffrage as provided for in Section 164 of the abroad and continue to avail of the
Omnibus Election Code of the Philippines (B.P. Blg. same right after the effectivity of the
881). Local Government Code; and
7) The insane or feeble-minded.
In April 1991, the President granted him
absolute pardon on the basis of a Effect of Filing of Certificate of Candidacy;
strong recommendation of the Board of Appointive Officer vs Elective Officer (2002)
Pardons and Parole. No XIII. A, a City Legal Officer, and B, a
Then for the election in May 1992, Luis Millanes City Vice-Mayor, filed certificates of
files his certificate of candidacy for the office of candidacy for the position of City Mayor in the
Mayor in his municipality. May 14, 2001 elections.
(c) Is a petition to disqualify Millanes viable? a) Was A ipso facto considered resigned and,
(d) What are the effects of a petition if so, effective on what date? (2%)
to disqualify? b) Was B ipso facto considered resigned and,
SUGGESTED ANSWER: if so, effective on what date? (3%)
(c) In accordance with Sec. 68 of the Omnibus In both cases, state the reason or reasons
Election Code, Luis Millanes may for your answer.
be disqualified from running for mayor as SUGGESTED ANSWER:
he was convicted of an election offense. A) A was considered ipso facto resigned
upon the filing of his certificate of candidacy,
(d) Under Sec. 6 of the Electoral Reforms Law, any because being a City Legal Officer, he is
candidate who has been declared by final an appointive official. Section 66 of the
judgment to be disqualified shall not be voted Omnibus Election Code provides that any
for, and votes cast for him shall not be counted. person holding a public appointive office shall
be considered ipso facto resigned upon the
If before the election he is not declared by final filing of his certificate of candidacy.
judgment to be disqualified and he is voted for
B) B is not considered ipso facto resigned. (b) The answer is the same if Pedro Reyes is a
Section 67 of the Omnibus Election Congressman of Quezon City, because
Code considers any elective official the repeal of Section 67 of the Omnibus
ipso facto resigned from office upon his Election Code covers both elective national
filing of a certificate of candidacy for any and local officials.
office other than the one he is holding
except for President and Vice-President, Election Offenses; Conspiracy to Bribe
was repealed by the Fair Election Act Voters (1991)
No. 12: Discuss the disputable presumptions
Effect of Filing of Certificate of (a) of conspiracy to bribe voters and (b) of the
Candidacy; Fair Election Act (2003) involvement of a candidate and of his principal
No X - (a) Pedro Reyes is an incumbent Vice- campaign managers in such conspiracy.
Mayor of Quezon City. He intends to run in the SUGGESTED ANSWER:
regular elections for the position of City Mayor (a) Under Sec, 28 of the Electoral Reforms
of Quezon City whose incumbent mayor would have Law proof that at least one voter in different
fully served three consecutive terms by 2004. precincts representing at least twenty per cent
Would Pedro Reyes have to give up his of the total precincts in any municipality, city or
position as Vice-Mayor- province was offered, promised or given
(1) Once he files his certificate money, valuable consideration or other
of candidacy; or expenditure by the relatives, leader or
(2) When the campaign period starts; or sympathizer of a candidate for the purpose of
(3) Once and if he is proclaimed winner promoting the candidacy of such candidate,
in the election; or gives rise to a disputable presumption of
(4) Upon his assumption to the conspiracy to bribe voters.
elective office; or
(5) None of the above. (b) Under Sec. 28 if the proof affects at least 20%
Choose the correct answer of the precincts of the municipality, city or province
to which the public office aspired for by the
(b) If Pedro Reyes were, instead, an incumbent favored candidate relates, this shall constitute
Congressman of Quezon City, who intends to a disputable presumption of the involvement
seek the mayoralty post in Quezon City, would your of the candidate and of his principal
choice of answer in no.(1) above be the same? campaign managers in each of the municipalities
If not, which would be your choice? concerned, in the conspiracy.
SUGGESTED ANSWER: Election Protest (1990)

(a) The correct answer is (5). Section 14 of the Fair No. 7: A filed a protest with the House Electoral
Election Act repealed Section 67 of the Tribunal questioning the election of B as
Omnibus Election Code, which provided that any Member of the House of Representatives in the
elected official, whether national or local, who 1987 national elections on the ground that B is not
runs for any office other than the one he is holding a resident of the district the latter is
in a permanent capacity, except for President representing. While the case was pending. B
and Vice President, shall be considered accepted an ad-interim appointment as
ipso facto resigned from his office upon the Secretary of the Department of Justice.
filing of his certificate of candidacy. Section 14 (1) May A continue with his election protest in
of the Fair Election Act likewise rendered order to determine the real winner in the
ineffective the first proviso in the third paragraph of said elections? State your reason.
Section 11 of Republic Act No. 8436. SUGGESTED ANSWER:
(1) No, A may not continue with his protest.
There is no dispute as to who was the winner in the
Consequently, Pedro Reyes can run for election, as it is not disputed that it was B who
Mayor without giving up his position as Vice- obtained the majority. The purpose of the protest
Mayor. He will have to give up his position as is simply to seek the removal of B from office on
Vice-Mayor upon expiration of his term as the ground that he is ineligible. However, B
Vice-Mayor on June 30, 2004. forfeited his claim to the position of congressman
(Note: The question did not ask the examinee by accepting an ad interim appointment as
to explain the reason for his choice and Secretary of Justice, the protest against him has
the general instructions requires such
become moot. Nothing will be gained by resolving
discussion only to a "yes" or "no" answer.)
it. In the case of Purisima v.
Solis, 43 SCRA 123, it was held that where a a) the barangay?
protestant in an election case accepted his b) the municipality?
appointment as judge, he abandoned his claim to c) the province?
the public office involved in the protest. d) the city?
Hence, the protest must be dismissed for e) the House of Representatives?
having become moot. Similarly, in Perez v SUGGESTED ANSWER:
Provincial Board of Nueva Ecija, 113 SCRA 1) In accordance with Section 2(2), Article IX-C of
187, it was held that the claim of a petitioner to an the Constitution an election protest involving the
appointive office had become moot, because the elective position enumerated below should be
petitioner had forfeited his claim to the office by filed in the following courts or tribunals:
filing a certificate of candidacy for mayor. a) Barangay - Metropolitan Trial
Court, Municipal Circuit Trial
Election Protest vs. Quo Warranto (2001) Court, or Municipal Trial Court
No XVII - Under the Omnibus Election b) Municipality - Regional Trial Court
Code (B.P. 881, as amended), briefly c) Province - COMELEC
differentiate an election protest from a quo d) City - COMELEC
warranto case, as to who can file the case e) Under Section 17. Article VI of the
and the respective grounds therefor. (5%) Constitution, an election protest
SUGGESTED ANSWER; involving the position of Member of the
An ELECTION PROTEST maybe filed by a House of Representatives shall be filed in
losing candidate for the same office for which the House of Representatives
the winner filed his certificate of candidacy. A Electoral Tribunal.
QUO WARRANTO CASE may be filed by any
voter who is a registered voter in the Expiration of term bars service thereof
constituency where the winning candidate (2000)
sought to be disqualified ran for office. No XVI. In the elections of May 1992, Cruz and
Santos were the candidates for the office of
In an election contest, the issues are: (a) who Municipal Mayor, the term of which was to
received the majority or plurality of the votes expire on June 30, 1995. Finding that he won
which were legally cast and (b) whether there by a margin of 20 votes, the Municipal Board of
were irregularities in the conduct of the election Canvassers proclaimed Cruz as the duly
which affected its results. elected Mayor. Santos filed an election protest
before the Regional Trial Court (RTC) which
In a quo warranto case, the issue is whether decided that it was Santos who had the plurality of
the candidate who was proclaimed elected 30 votes and proclaimed him the winner. On motion
should be disqualified because of made, the RTC granted execution pending the
ineligibility or disloyalty to the Philippines. appeal of Cruz to the COMELEC (Comelec) and
on this basis. Santos assumed office and served
Election Protest vs. Quo Warranto (Q5-2006) as Municipal Mayor. In time, the Comelec
Differentiate an election protest from an reversed the ruling of the RTC and instead ruled
action for quo warranto. (2.5%) that Cruz won by a margin of 40 votes and
SUGGESTED ANSWER: proclaimed him the duly elected Municipal
An ELECTION PROTEST is a proceeding Mayor.
whereby a losing candidate for a particular a) It is now beyond June 30, 1995.
position contests the results of the election on Can Cruz still hold office for the portion of
grounds of fraud, terrorism, irregularities or the term he has failed to serve? Why? (3%)
illegal acts committed before, during or after the SUGGESTED ANSWER;
casting and counting of votes. On the other a) As held in Malaluan v. COMELEC,
hand, a PETITION FOR QUO WARRANTO is 254 SCRA 397 (1996). Cruz can no longer
filed by any registered voter to contest the hold office for the portion of the term he
election of any candidate on grounds of failed to serve since his term has expired.
ineligibility or disloyalty to the Republic of the
Philippines. Petition to Declare Failure of
Elections; Requisites & Effects (1995)
Election Protest; Jurisdiction (1996) No. 6: Due to violence and terrorism attending
No, 14: 1) As counsel for the protestant, the casting of votes in a municipality in Lanao
where will you file an election protest del Sur during the last 8 May 1995 elections, it
involving a contested elective position in: became impossible to hold therein free, orderly
and honest elections. Several candidates for prevented from casting their votes. The
municipal positions withdrew from the race. COMELEC dismissed the pre-proclamation
One candidate for Mayor petitioned the contest on the ground that all the returns
COMELEC for the postponement of the appear complete and untampered.
elections and the holding of special elections
after the causes of such postponement or Determine if the COMELEC decided
failure of elections shall have ceased. correctly and if "B" has any recourse for
contesting "A's" election.
1. How many votes of the SUGGESTED ANSWER:
COMELEC Commissioners may be cast The COMELEC correctly dismissed "B's" PRE-
to grant the petition? Explain. PROCLAMATION CONTEST. Such a contest is
limited to claims that the election returns are
2. A person who was not a candidate at incomplete or that they contain material defects or
the time of the postponement of the that they have been tampered with, falsified or
elections decided to run for an elective position prepared under duress or that they contain
and filed a certificate of candidacy prior to discrepancies in the votes credited to the
the special elections. May his certificate of candidates, the difference of which affects the
candidacy be accepted? Explain. result of the election. (Omnibus Election Code,
sees. 243, 234-236)
3. Suppose he ran as a substitute for
a candidate who previously withdrew On the other hand, the question whether or not
his candidacy, will your answer be the there was terrorism, vote buying and other
same? Explain. irregularities in the elections cannot be the
SUGGESTED ANSWER: subject of a pre-proclamation contest but must
1. According to Section 7, Article IX-A of the be raised in a regular election protest. (Sanchez v.
1987 Constitution, the COMELEC shall decide COMELEC, GR. No. 78461; Ponce Enrile v.
by a MAJORITY VOTE of all its members any COMELEC, G.R. Nos. 79146 & 79212, Aug. 12,
case or matter brought before it In Cua vs. 1987; Abes v. COMELEC, 21 SCRA 1252
COMELEC, 156 SCRA582, the Supreme Court (1967) ) Since the basis of "B's" petition is that his
stated that a two-to-one decision rendered by a followers had been bought while others had been
Division of the COMELEC and a three-to-two prevented from casting their ballots, his remedy
decision rendered by the COMELEC en banc is to file an election contest and this should be
was valid where only five members took part in brought in the House or Senate Electoral
deciding the case. Tribunal which, under Art. VI, Sec. 17, is the sole
judge of the election, returns and qualifications
2. No, his certificate of candidacy cannot of members of each House of Congress.
be accepted. Under Section 75 of the
Omnibus Election Code, as a rule in
cases of postponement or failure of Pre-Proclamation Contest (1988)
election no additional certificate of No. 18: In election law, what is a pre-
candidacy shall be accepted. proclamation controversy? Where may it
be litigated with finality? After the ultimate
3. No, the answer will be different. Under winner has been duly proclaimed, does the
Section 75 of the Omnibus Election Code, an loser still have any remedy to the end than he
additional certificate of candidacy may be may finally obtain the position he aspired
accepted in cases of postponement or failure of for in the election? Explain.
election if there was a substitution of SUGGESTED ANSWER:
candidates; but the substitute must belong to A PRE-PROCLAMATION CONTROVERSY
and must be endorsed by the same party. refers to any question pertaining to or affecting the
proceedings of the board of canvassers which
Pre-Proclamation Contest (1987) may be raised by any candidate or by any
No. VII: "A" and "B" were candidates for registered political party or coalition of
representatives in the 1987 National Elections, political parties before the board or directly with the
"B" filed a pre-proclamation contest with the COMELEC, or any matter raised under secs.
COMELEC on the ground that rampant vote 233-236 of the Omnibus Election Code in relation
buying and terrorism accompanied the to the preparation, transmission, receipt,
elections. Particulars were supplied of "B's" custody or appreciation of the election returns.
followers bought-off and other followers (Omnibus Election Code, sec, 241).
prejudice to the filing of an election protest.
The COMELEC has exclusive jurisdiction of all However, the proceedings may continue
pre-proclamation controversies. (Id., sec. when on the basis of the evidence
241) Its decisions become executory after presented so far, the COMELEC or
the lapse of 5 days from receipt by the losing the Supreme Court determines that the
party of the decision, unless restrained by petition appears to be meritorious.
the Supreme Court. (Id., sec. 246) (Section 16, Republic Act No. 7166)
A loser may still bring an election contest (B) ELECTION CONTESTS

concerning the election, returns, and An election protest is initiated by filing a protest
qualifications of the candidate proclaimed. In the containing the following allegations:
case of elective barangay officials, the 1. The protestant is a candidate who duly filed
contest may be filed with the municipal trial a certificate of candidacy and was voted for
courts; in the case of elective municipal in the election:
officials, in the Regional Trial Court; in the case of 2. The protestee has been proclaimed; and
elective provincial and city officials, in the 3. The date of the proclamation, (Miro
COMELEC (Art. IX, C, sec. 2(2)); in the case of vs. COMELEC, 121 SCRA 466)
Senators or Congressmen, in the Senate or
House Electoral Tribunals (Art. VI, sec. 17); and in The following have jurisdiction over
the case of the President and Vice President, in the election contests:
Presidential Electoral Tribunal. (Art. VII, sec. 4). a) Barangay officials - Inferior Court;
b) Municipal officials - Regional
Trial Court;
Pre-Proclamation Contest vs. c) Regional, provincial, and city officials
Election Contests (1997) - COMELEC (Section 2(2), Art. IX-C
No, 17: State how (a) pre- of the Constitution);
proclamation controversies, on the one hand, d) Congressman - House
and (b) election protests, on the other, are of Representatives Electoral Tribunal.
initiated, heard and finally resolved. e) Senators - Senate Electoral Tribunal.
SUGGESTED ANSWER: (Section 1. Article VI of
(A) PRE-PROCLAMATION CONTROVERSIES the Constitution);
a) Questions affecting the composition f) President and Vice President
or proceedings of the board of - Supreme Court (Section 4, Article VII
canvassers may be initiated in of the Constitution).
the board of canvassers or
directly with the COMELEC. The decision of the inferior court in election
b) Questions involving the election returns contests involving barangay officials and of the
and the certificates of canvass shall be Regional Trial Court in election contests
brought in the first instance before involving municipal officials are appealable to the
the board of canvassers only, COMELEC. (Section 2(2). Article IX-C of the
(Section 17, Republic Act No, 2166.) Constitution.) The decision of the
c) The board of canvassers should rule on COMELEC may be brought to the Supreme
the objections summarily. (Section Court on certiorari on questions of law. (Rivera vs.
20, Republic Act No. 7166.) COMELEC, 199 SCRA 178)
d) Any party adversely affected
may appeal to the COMELEC. The decision of the COMELEC in election
(Section 20. Republic Act No. 7166.) contests involving regional, provincial and city
e) The decision of the Commission officials may be brought to the Supreme Court
on Election may be brought to on certiorari (Section 7, Article IX-A and Section
the Supreme Court on certiorari 2(2), Article IX-C of the Constitution.)
by the aggrieved party, (Section 7,
Article IX-A of the Constitution.) The decisions of the Senate Electoral
Tribunal and of the House of
All pre-proclamation controversies pending Representatives Electoral Tribunal may be
before the COMELEC shall be deemed elevated to the Supreme Court on certiorari
terminated at the beginning of the term of the if there was grave abuse of discretion.
office involved and the rulings of the board of (Lazatin vs COMELEC 168 SCRA 391)
canvassers shall be deemed affirmed, without
Pre-Proclamation Contest; Proper Issues prepare the affidavit in accordance with the
(1996) data supplied by the applicant. (Id., sec. 127)
No, 14: 2) Give three issues that can
be properly raised and brought in a Process; Principle of Idem Sonans (1994)
pre- proclamation contest. No. 3; 1) What is your understanding of
SUGGESTED ANSWER: the principle of idem sonans as applied
2) According to Section 243 of the in the Election Law?
Omnibus Election Code, the following SUGGESTED ANSWER:
issues can be properly raised. 1) Under Rule No. 7 of the rules for the
1. The composition or proceedings of appreciation of ballots in Section 211 of the
the board of canvassers are illegal; Omnibus Election Code, the idem sonans rule
2. The canvassed election returns means that a name or surname incorrectly
are incomplete, contain material written which, when read, has a sound similar
defects, approved to be tampered with, to the name or surname of a candidate when
or contain discrepancy in the same returns correctly written shall be counted in his favor.
or in other authenticated copies; ALTERNATIVE ANSWERS:
3. The election returns were prepared a) Idem sonans literally means the same or
under duress, threats, coercion, or similar sound. This principle is made manifest in
intimidation, or they are obviously one of the rules for the appreciation of ballots
manufactured or not authentic; and embodied in the Omnibus Election Code (Sec.
4. Substitute or fraudulent returns 211, BP 881) stating that "A name or surname
in controverted polling places incorrectly written which when read, has a
were canvassed, the results of which sound similar to the name or surname of a
materially affected the standing of the candidate when correctly written shall be
aggrieved candidate or candidates. counted in his favor. Thus, if the name as
spelled in the ballot, though different from the
However, according to Section 15 of the correct spelling thereof, conveys to the ears
Synchronized Election Law no pre-proclamation when pronounced according to the commonly
cases shall be allowed on matters relating to accepted methods, a sound practically Identical with
the preparation, transmission, receipt, custody the sound of the correct name as
and appreciation of the election returns or the commonly pronounced, the name thus given is a
certificates of canvass with respect to the sufficient designation of the person referred to.
positions of President, Vice-President, Senator The question whether one name is idem sonans
and Member of the House of Representatives. with another is not a question of spelling
No pre-proclamation case are allowed in the but of pronunciation. (Mandac v. Samonte,
case of barangay elections. 49 Phil. 284). Its application is aimed at
realizing the objective of every election which
Process; Illiterate Voters (1987) is to obtain the expression of the voters will.
No. XII: "A", while of legal age and of sound
mind, is illiterate. He has asked your advice on how
he can vote in the coming election for his b) The term means sounding the same or
brother, who is running for mayor. This will be nearly alike. The rule is based on the Idea that
the first time "A" will vote and he has never the misspelling of a name or lack of skill in
registered as a voter before. What advice will writing should not be taken as a ground for
you give him on the procedure he needs to rejecting the votes apparently intended for a
follow in order to be able to vote? candidate, so long as the intention of the voter
SUGGESTED ANSWER: appears to be clear. The Supreme Court
The Constitution provides that until Congress has ruled that the principle of idem
shall have provided otherwise, illiterate and sonans is liberally construed. Corpuz v. Ibay,
disabled voters shall be allowed to vote under 84 Phil. 184 (1949).
existing laws and regulations (Art, V, Sec. 2). It is
necessary for any qualified voter to register in order Process; Stray Ballot (1994)
to vote. (Omnibus Election Code, Sec. 115) In No. 3; 2) What is a "stray ballot"?
the case of illiterate and disabled voters, their SUGGESTED ANSWER:
voter's affidavit may be prepared by any relative 2) Under Rule No. 19 of the rules for the
within the fourth civil degree of appreciation of ballots in Section 211 of the
consanguinity or affinity or by any member of Omnibus Election Code, stray ballot is one cast in
the board of election inspectors who shall favor of a person who has not filed a
certificate of candidacy or in favor of a Decide whether the disqualification case will
candidate for an office for which he did not prosper or not. (5%)
present himself. Although the Code does SUGGESTED ANSWER:
not provide for stray ballot, it is presumed that The disqualification case should be dismissed.
stray ballot refers to stray vote. As held in Borja vs. COMELEC, 295 SCRA157
(1996), in computing the three-term limitation
Recall (2002) imposed upon elective local officials, only the
No XVI. Suppose the people of a province want term for which he was elected to should be
to recall the provincial governor before the end considered. The term which he served as a
of his three-year term of office, result of succession should not be included. It is not
A. On what ground or grounds can the enough that the official has served three
provincial governor be recalled? (1%) consecutive terms. He must have been elected to
B. How will the recall be initiated? (2%) the same position three consecutive times.
C. When will the recall of an elective
local official be considered effective? {2%} Three-Term Limit; from Municipality
SUGGESTED ANSWER: to Newly-Created City (Q9-2005)
In accordance with Section 69 of the Local 2. Manuel was elected Mayor of the
Government Code, the Governor can Municipality of Tuba in the elections of 1992,
be recalled for LOSS OF CONFIDENCE. 1995 and 1998. He fully served his first two
terms, and during his third term, the muni-
Under Section 70 of the Local Government cipality was converted into the component City
Code, the recall may be initiated by a resolution of Tuba. The said charter provided for a hold-
adopted by a majority of all the members of the over and so without interregnum Manuel went
preparatory recall assembly, which consists of all on to serve as the Mayor of the City of Tuba.
the mayors, the vice-mayors, and the
sangguniang members of the municipalities and In the 2001 elections, Manuel filed his
component cities, or by a written petition signed by certificate of candidacy for City Mayor. He
at least twenty-five per cent (25%) of the total disclosed, though, that he had already served
number of registered voters in the for three consecutive terms as elected Mayor
province. when Tuba was still a municipality. He also
stated in his certificate of candidacy that he is
According to Section 72 of the Local running for the position of Mayor for the first
Government Code, the recall of an elective time now that Tuba is a city.
local official shall take effect upon the election
and proclamation of a successor in the person Reyes, an adversary, ran against Manuel and
of the candidate receiving the highest number of petitioned that he be disqualified because he
votes cast during the election on recall. had already served for three consecutive terms as
Mayor. The petition was not timely acted upon,
Three-Term Limit Rule (2001) and Manuel was proclaimed the winner with
No XIX - In the May 1992 elections, Manuel 20,000 votes over the 10,000 votes received
Manalo and Segundo Parate were elected as by Reyes as the only other candidate. It was only
Mayor and Vice Mayor, respectively. Upon the after Manuel took his oath and assumed office
death of Manalo as incumbent municipal mayor, that the COMELEC ruled that he was
Vice Mayor Segundo Parate succeeded as disqualified for having ran and served for three
mayor and served for the remaining portion of consecutive terms. (5%)
the term of office. In the May 1995 election,
Segundo Parate ran for and won as mayor and then (a) As lawyer of Manuel, present
served for the full term. In the May 1998 the possible arguments to prevent
elections, Parate ran for reelection as Mayor his disqualification and removal.
and won again. In the May 2001 election,
Segundo Parate filed his certificate of SUGGESTED ANSWER:
candidacy for the same position of mayor, but As lawyer of Manuel, I would argue that he
his rival mayoralty candidate sought his should not be disqualified and removed
disqualification alleging violation of the three- because he was a three-term mayor of the
term limit for local elective officials provided for in municipality of Tuba, and, with its conversion to a
the Constitution and in the Local Government Code. component city, the latter has a totally
separate and different corporate personality
from that of the municipality. Moreover, as a
rule, in a representative democracy, the people particular election. The permanent vacancy
should be allowed freely to choose those who in the contested office should be filled
will govern them. Having won the elections, the by succession. (Labo v. COMELEC, G.R.
choice of the people should be respected. No. 105111, July 3,1992)
(b) How would you rule on whether or not ALTERNATIVE ANSWER:

Manuel is eligible to run as Mayor of Reyes could not be proclaimed as winner
the newly-created City of Tuba because he did not win the election. To allow
immediately after having already the defeated candidate to take over the
served for three (3) consecutive terms as Mayoralty despite his rejection by the electorate is
Mayor of the Municipality of Tuba? to disenfranchise the electorate without any fault
on their part and to undermine the
SUGGESTED ANSWER: importance and meaning of democracy and the
Manuel is not eligible to run as mayor of the city of people's right to elect officials of their choice.
Tuba. The 1987 Constitution specifically (Benito v. COMELEC, G.R. No. 106053, August 17,
included an exception to the people's freedom to 1994)
choose those who will govern them in order to
avoid the evil of a single person
accumulating excessive power over a particular Vacancy; Effect of Vice-Mayor Acting As
territorial jurisdiction as a result of a prolonged Mayor (2002)
stay in the same office. To allow Manuel to vie for No XIV. Suppose A, a Municipal Mayor, went
the position of city mayor after having on a sick leave to undergo medical treatment
served for three consecutive terms as a for a period of four (4) months. During that time
municipal mayor would obviously defeat the A. Will B, the Municipal Vice-Mayor, be
very intent of the framers when they wrote this performing executive functions? Why? (2%)
exception. Should he be allowed another three B. Will B at the same time be also performing
consecutive terms as mayor of the City of Tuba, legislative functions as presiding officer
Manuel would then be possibly holding office as of the Sangguniang Bayan? Why? (3%)
chief executive over the same territorial SUGGESTED ANSWER:
jurisdiction and inhabitants for a total of A. Since the Municipal Mayor is temporarily
eighteen consecutive years. This is the very incapacitated to perform his duties,
scenario sought to be avoided by the in accordance with Section 46(a) of the
Constitution, if not abhorred by it. (Latasa v. Local Government Code, the Municipal
COMELEC, G.R. No. 154829, December 10, Vice-Mayor shall exercise his powers and
2003) perform his duties and functions. The
Municipal Vice-Mayor will be performing
(c) Assuming that Manuel is not an executive functions, because the functions
eligible candidate, rebut Reyes' claim of the Municipal Mayor are executive.
that he should be proclaimed as
winner having received the next higher B. The Municipal Vice-Mayor cannot continue as
number of votes. presiding officer of the Sangguniang Bayan while
he is acting Municipal Mayor. In
ALTERNATIVE ANSWER: accordance with Gamboa v. Aguirre, 310 SCRA 867
Reyes cannot be proclaimed winner for (1999), under the Local Government Code, the
receiving the second highest number of votes. Vice-Municipal Mayor was deprived of the power
The Supreme Court has consistently ruled that the to preside over the Sangguniang Bayan and is
fact that a plurality or a majority of the votes are no longer a member of it. The temporary vacancy in
cast for an ineligible candidate at a popular election, the office of the Municipal Mayor creates a
or that a candidate is later declared to be corresponding temporary vacancy in the Office of
disqualified to hold office, does not entitle the the Municipal Vice-Mayor when he acts as
candidate who garnered the second highest number Municipal Mayor. This constitutes inability on his
of votes to be declared elected. The same part to preside over the sessions of the
merely results in making the winning Sangguniang Bayan.
candidate's election a nullity. In the present
case, 10,000 votes were cast for private Vacancy; Rule of Succession (1995)
respondent Reyes as against the 20,000 votes cast No. 7: The Vice Mayor of a municipality filed his
for petitioner Manuel. The second placer is certificate of candidacy for the same office in
obviously not the choice of the people in this the last elections. The Municipal Mayor was
also running for re-election. Both were SUGGESTED ANSWER:
official candidates of the same political party. As held in Farinas v. Barba, 256 SCRA 396
After the last day for the filing of certificates of (1996), neither of the appointments is valid.
candidacy, the Mayor died. Under these facts - Under Section 45 of the Local Government
a) Can the Vice Mayor succeed to the office of Code, in case of a permanent vacancy in the
Mayor pursuant to the provisions of Sangguniang Bayan created by the cessation in
the Local Government Code? Explain. office of a member who does not belong to any
b) Assuming that the Vice Mayor succeeds to political party, the Governor shall appoint a
the position of Mayor after the qualified person recommended by the
incumbent died, which position is now Sangguniang Bayan. Since A was not
different from the one for which he has recommended by the Sangguniang Bayan, his
filed his certificate of candidacy, can he still appointment by the Governor is not valid. Since B
continue to run as Vice Mayor? Explain. was not appointed by the Governor but by the
c) Is there any legal impediment to the Municipal Mayor, his appointment is also not
Vice Mayor to replace the re-electionist valid.
Mayor who died? Explain,
SUGGESTED ANSWER: ARTICLE IX Commission on
Yes, the vice mayor can succeed to the office
of mayor. Under Section 44 of the Audit
Local Government Code, he stands next in line COA; Jurisdiction (2001)
to the office of mayor in case of a permanent No VIII - The Philippine National Bank was then
vacancy in it. His filing of a Certificate of one of the leading government-owned banks
Candidacy for Mayor did not automatically and it was under the audit jurisdiction of
result to his being considered resigned the Commission on Audit (COA). A few years
(Sec. 67, Omnibus Election Code). ago, it was privatized.
Yes, the vice mayor can continue to run as vice What is the effect, if any, of the privatization of
mayor. At the time that he filed his certificate of PNB on the audit Jurisdiction of the COA? (5%)
candidacy, the vice mayor ran for the same SUGGESTED ANSWER:
office he was holding. In determining whether a In accordance with the ruling in Philippine
candidate is running for a position other than the Airlines vs. Commission on Audit, 245 SCRA
one he is holding in a permanent capacity and 39,(1995), since the Philippine National Bank is no
should be considered resigned, it is the office longer owned by the Government, the
he was holding at the time he filed his Commission on Audit no longer has jurisdiction to
certificate of candidacy should be considered. audit it as an institution. Under Section 2(2), Article
There is no legal impediment to the vice mayor IX-D of the Constitution, it is
running as mayor to replace the vice mayor government-owned or controlled corporations
who died under Section 77 of the Omnibus and their subsidiaries which are subject to audit by
Election Code, if a candidate dies after the last day the Commission on Audit. However, in
for filing certificates of candidacy, he may be accordance with Section 2(1), Article IX-D of the
replaced by a person belonging to his Constitution, the Commission on Audit can audit
political party. However, it is required that he the Philippine National Bank with respect to its
should first withdraw his Certificate of accounts because the Government still has
Candidacy for Vice-Mayor and file a new equity in it.
Certificate of Candidacy for Mayor.
COA; Money Claims (1998)
Vacancy; SB; Rule on Succession (2002) No I. - The Department of National Defense
No XV. A vacancy occurred in the sangguniang entered into a contract with Raintree
bayan of a municipality when X, a member, Corporation for the supply of ponchos to the
died. X did not belong to any political party. Armed Forces of the Philippines (AFP),
stipulating that, in the event of breach, action
To fill up the vacancy, the provincial governor may be filed in the proper courts in Manila.
appointed A upon the recommendation of the
sangguniang panlalawigan. On the other hand, for Suppose the AFP fails to pay for delivered
the same vacancy, the municipal mayor ponchos, where must Raintree Corporation
appointed B upon the recommendation of the file its claim? Why? [ 10%]
sangguniang bayan. SUGGESTED ANSWER:
Which of these appointments is valid? (5%) Raintree Corporation must file its claim with the
Commission on Audit, Under Section 2(1) IX-D
of the Constitution, the Commission on Audit
has the authority to settle all accounts
pertaining to expenditure of public funds. ARTICLE X Local Government
Raintree Corporation cannot file a case in court.
Appointment of Budget Officer; control
The Republic of the Philippines did not waive its vs supervision (1999)
immunity from suit when it entered into the No V - D. On May 17, 1988, the position of
contract with Raintree Corporation for the Provincial Budget Officer of Province X became
supply of ponchos for the use of the Armed vacant. Pedro Castahon, governor of the
Forces of the Philippines. The contract involves the province, pursuant to Sec. 1 of E.O. No. 112,
defense of the Philippines and therefore relates submitted the names of three nominees for the
to a sovereign function. aforesaid position to the Department of Budget
Management (DBM), one of whom was that of
In United States vs. Ruiz, 136 SCRA 487,
Marta Mahonhon. A month later, Castahon
492, the Supreme Court held; "The
informed the DBM that Mahonhon had
restrictive application of State immunity is assumed the office of PBO and requested that she
proper only when the proceedings arise out of be extended the appropriate appointment. The
commercial transactions of the foreign DBM Secretary appointed Josefa Kalayon
sovereign. Its commercial activities or instead. Castahon protested the appointment of
economic affairs. Stated differently, a State may Kalayon insisting that it is he who had the right to
be said to have descended to the level of an choose the PBO by submitting the names of his
individual and can thus be deemed to have three nominees and Kalayon was not one of them.
tacitly given its consent to be sued only The DBM countered that none of the governor's
when it enters into business contracts. It does nominees have the necessary qualifications
not apply where the contract relates to the for the position. Specifically, Mahonhon
exercise of its sovereign functions. In this case lacked the five-year experience in budgeting.
the projects are an integral part of the naval Hence, the DBM was left with no alternative but
base which is devoted to the defense of to name one who possesses all the requisite
both the United States and the Philippines, qualifications in the person of Kalayon. It cited
indisputably a function of the government of Section 6.0 of the DBM Local Budget Circular No.
the highest order; they are not utilized for nor 31 which states, "The DBM reserves the right to fill
dedicated to commercial or business purposes." up any existing vacancy where none of the
nominees of the local chief executive meet the
prescribed requirements."
The provision for venue in the contract does not (a) Was the DBM's appointment valid? (2%)
constitute a waiver of the State Immunity (b) What can you say regarding the above-
from suit, because the express waiver of quoted Section 6.0 of DBM's Local Budget
this immunity can only be made by a statute. Circular No. 31? Explain your answers. (2%)
SUGGESTED ANSWER:
In Republic us. Purisima 78 SCRA 470, 474,
D. (a) Under Section 1 of Executive Order No.
the Supreme Court ruled: "Apparently
112, the Provincial Budget Officer must be
respondent Judge was misled by the terms of
recommended by the Governor. Since Josefa
the contract between the private
Kalayon was not recommended by the
respondent, plaintiff in his sala and
Governor, her appointment is not valid. As held in
defendant Rice and Corn Administration
San Juan v. Civil Service Commission, 196
which, according to him, anticipated the
SCRA 69, if the person recommended by the
case of a breach of contract between the
Governor is not qualified, what the Secretary of
parties and the suits that may thereafter
Budget and Management should do is to ask
arise. The consent, to be effective though,
him to recommend someone who is eligible.
must come from the State acting through a duly
enacted statute as pointed out by Justice (b) DBM Local Budget Circular No. 31 is not
Bengzon in Mobil." valid, since it is inconsistent with Executive
Order No. 112, which requires that the
ALTERNATIVE ANSWER: appointee for Provincial Budget Officer be
In accordance with the doctrine of exhaustion of recommended by the Governor. (Under the
administrative remedies, Raintree Corporation Local Government Code, it is now the local
should first file a claim with the Commission on chief executive who is empowered to appoint
Audit. If the claim is denied, it should file a the budget officer).
petition for certiorari with the Supreme Court.
Boundary Dispute Resolution; LGU; A plebiscite is necessary, because this is
RTC’s Jurisdiction (Q10-2005) required for the creation of a new municipality.
1 - There was a boundary dispute between (Section 10, Article X of the 1987 Constitution.) The
Duenas, a municipality, and Passi, an voters of both Madako and Masigla should
independent component city, both of the same participate in the plebiscite, because both are
province. State how the two local government directly affected by the creation of Masigla. The
units should settle their boundary dispute. (5%) territory of Madako will be reduced. (Tan v.
SUGGESTED ANSWER: COMELEC, 142 SCRA 727 [1986).
Boundary disputes between local government
units should, as much as possible, be settled De Facto Public Corporations; Effect (2004)
amicably. After efforts at settlement fail, then the NO. VII - MADAKO is a municipality composed
dispute may be brought to the appropriate of 80 barangays, 30 west of Madako River and
Regional Trial Court in the said province. Since the 50 east thereof. The 30 western
Local Government Code is silent as to what body barangays, feeling left out of economic
has exclusive jurisdiction over the settlement initiatives, wish to constitute themselves into
of boundary disputes between a municipality a new and separate town to be called
and an independent component city of the Masigla. A law is passed creating Masigla
same province, the Regional Trial Courts have and a plebiscite is made in favor of the law.
general jurisdiction to adjudicate the said
controversy. (Mun. of Kananga v. Madrona, B. Suppose that one year after Masigla was
G.R. No. 141375, April 30, 2003) constituted as a municipality, the law creating it is
voided because of defects. Would that
Boundary Dispute Settlement; Authority; invalidate the acts of the municipality and/or its
Jurisdiction (1999) municipal officers? Explain briefly. (5%)
No V - C. What body or bodies are vested by SUGGESTED ANSWER:
law with the authority to settle Although the municipality cannot be considered as
disputes involving: a de facto corporation, because there is no
(1) two or more towns within the valid law under which it was created, the acts of the
same province; (1%) municipality and of its officers will not be
(2) two or more highly urbanized cities. (1%) invalidated, because the existence of the law
SUGGESTED ANSWER: creating it is an operative fact before it was
1.) Under Section 118(b) of the Local declared unconstitutional. Hence, the previous
Government Code, boundary disputes involving acts of the municipality and its officers should
two or more municipalities within the be given effect as a matter of fairness and
same province shall be settled by the justice. (Municipality ofMalabang v. Benito, 27
sangguniang panlalawigan concerned. SCRA 533 [1969]
2.) Under Section 118(d) of the Devolution of Power (1999)

Local Government Code, boundary disputes Define devolution with respect to local
involving two or more highly urbanized government units.
cities shall be settled by the sangguniang SUGGESTED ANSWER:
panlungsod of the parties. Section 17(e) of the Local Government
Code defines devolution as the act by
Creation of New Local Government Units; which the National Government confers
Plebiscite Requirement (2004) power and authority upon the various local
NO. VII - MADAKO is a municipality composed of government units to perform specific
80 barangays, 30 west of Madako River and 50 functions and responsibilities.
east thereof. The 30 western barangays, feeling
left out of economic initiatives, wish to constitute Franchise; prior approval of LGU necessary
themselves into a new and separate town to be (1988)
called Masigla. No. 9: Macabebe, Pampanga has several
barrios along the Pampanga river. To service
A. Granting that Masigla’s proponents the needs of their residents the municipality has
succeed to secure a law in their favor, would a been operating a ferry service at the same river, for
plebiscite be necessary or not? If it is a number of years already.
necessary, who should vote or participate in the
plebiscite? Discuss briefly. (5%) Sometime in 1987, the municipality was served
SUGGESTED ANSWER: a copy of an order from the Land Tansportation
Franchising and Regulatory Board (LTFRB), goes against the aforesaid constitutional
granting a certificate of public convenience to requirement of three year terms for local
Mr. Ricardo Macapinlac, a resident of officials except for barangay officials.
Macabebe, to operate ferry service across the
same river and between the same barrios being Ordinance; Use & Lease of Properties;
serviced presently by the municipality's ferry Public Use (1997)
boats. A check of the records of the application of No. 9: Due to over-crowding in the public
Macapinlac shows that the application was filed market in Paco, Manila, the City Council passed an
some months before, set for hearing, and ordinance allowing the lease to vendors of parts
notices of such hearing were published in two of the streets where the public market is
newspapers of general circulation in the town of located, provided that the lessees pay to the
Macabebe, and in the province of Pampanga. city government a fee of P50 per square meter of
The municipality had never been directly served a the area occupied by the lessees. The
copy of that notice of hearing nor had the residents in the area complained to the Mayor
Sangguniang Bayan been requested by that the lease of the public streets would cause
Macapinlac for any operate. The municipality serious traffic problems to them. The Mayor
immediately filed a motion for reconsideration cancelled the lease and ordered the removal of the
with the LTFRB which was denied. It the went stalls constructed on the streets.
to the Supreme Court on a petition for certiorari to Was the act of the Mayor legal?
nullify the order granting a certificate of public SUGGESTED ANSWER:
convenience to Macapinlac on two grounds: The cancellation of the lease and the
(1) Denial of due process to the removal of the stalls are valid. As held in
municipality; and Macasiano vs. Diokno, 212 SCRA 464, the
(2) For failure of Macapinlac to secure approval lease of public streets is void, since they
of the Sangguniang Bayan for him are reserved for public use and are
to operate a ferry service in Macabebe, outside the commerce of man.
Resolve the two points in the petition
with reasons. Ordinance; Validity; Closure or Lease
SUGGESTED ANSWER: of Properties for Public Use (2003)
The petition for certiorari should be granted, No XI - An aggrieved resident of the City of
1. As a party directly affected by the operation Manila filed mandamus proceedings against the city
of the ferry service, the Municipality mayor and the city engineer to compel these
of Macabebe, Pampanga was entitled to officials to remove the market stalls from certain
be directly notified by the LTFRB .... city streets which they had designated as flea
markets. Portions of the said city streets were
2. It has been held that where a leased or licensed by the respondent officials
ferry operation lies entirely within the to market stallholders by virtue of a city ordinance.
municipality, the prior approval of the Municipal Decide the dispute.
government is necessary. Once approved, FIRST ALTERNATIVE ANSWER:
the operator must then apply with the LTFRB The petition should be granted. In accordance
for a certificate of public convenience and with Macasiano v. Diokno. 212 SCRA 464
shall be subject to LTFRB supervision, [1992], since public streets are properties for
(Municipality of Echague v. Abellera, supra). public use and are outside the commerce of
man, the City Mayor and the City Engineer
Law fixing the terms of local elective cannot lease or license portions of the city
officials (Q4-2006) streets to market stallholders.
State whether or not the law is SECOND ALTERNATIVE ANSWER:
constitutional. Explain briefly. The petition should be denied. Under Section
3. A law fixing the terms of local elective 21(d)of the Local Government Code, a city may by
officials, other than barangay officials, to 6 ordinance temporarily close a street so that a
years. (2%) flea market may be established.
SUGGESTED ANSWER:
The law is invalid. Under Article X, Section 8 of the Ordinance; Validity; Compensation;
1987 Constitution, "the term of office of elective Tortuous Act of an Employee (1994)
local officials, except barangay officials, which shall No. 6; Johnny was employed as a driver by the
be determined by law, shall be three years and no Municipality of Calumpit, Bulacan. While driving
such official shall serve for more than three recklessly a municipal dump truck with its load
consecutive terms." The law clearly of sand for the repair of municipal streets,
Johnny hit a jeepney. Two passengers of be charged to property owners benefited by
the jeepney were killed. public works, because the essential
difference between a tax and such
The Sangguniang Bayan passed an assessment is precisely that the latter is
ordinance appropriating P300,000 as based wholly on benefits received.
compensation for the heirs of the victims.
1) Is the municipality liable for the negligence However, if the ordinance levies a tax on
of Johnny? all business establishments located outside
2) Is the municipal ordinance valid? the private subdivision, then it is
objectionable on the ground that it appropriate
SUGGESTED ANSWER: private funds for a public purpose. (Pascual v.
2) The ordinance appropriating P300,000.00 for the Secretary of Public Works, supra)
heirs of the victims of Johnny is void. This
amounts to appropriating public funds for a Ordinance; Validity; Preventing Immorality
private purpose. Under Section 335 of the Local (1987)
Government Code, no public money shall be (c) An ordinance prohibiting barbershop
appropriated for private purposes. operators from rendering massage service to
their customers in a separate room.
ALTERNATIVE ANSWER; SUGGESTED ANSWER:
Upon the foregoing considerations, the (c) The ordinance is valid. In Velasco
municipal ordinance is null and void for being v, Villegas, 120 SCRA 658 (1983) such
ultra vires. The municipality not being liable to ordinance was upheld on the ground that it is a
pay compensation to the heirs of the victims, means of enabling the City of Manila to
the ordinance is utterly devoid of legal basis. It collect a fee for operating massage clinics
would in fact constitute an illegal use or and of preventing immorality which might
expenditure of public funds which is a criminal be committed by allowing the construction
offense. What is more, the ordinance does not of separate rooms in barber shops.
meet one of the requisites for validity of
municipal ordinances, ie., that it must be in Ordinance; Validity; Utilization
consonance with certain well-established and & Development; National Wealth (1991)
basic principles of a substantive nature, to wit: it No. 5; The province of Palawan passes an
does not contravene the Constitution or the law, it is ordinance requiring all owners/operators of
not unfair or oppressive. It is not partial or fishing vessels that fish in waters
discriminatory. It is consistent with public policy, and surrounding the province to invest ten percent
it is not unreasonable. (10%) of their net profits from operations
therein in any enterprise located in Palawan.
Ordinance; Validity; Local Taxation
vs. Special Assessment (1987) NARCO Fishing Corp., a Filipino corporation
1987 No. V: State whether or not the following with head office in Navotas, Metro
city ordinances are valid and give reasons Manila, challenges the ordinance as
in support of your answers: unconstitutional. Decide the case.
SUGGESTED ANSWER:
(b) An ordinance on business establishments to The ordinance is invalid. The ordinance was
raise funds for the construction and apparently enacted pursuant to Article X, Sec. 7 of
maintenance of roads in private the Constitution, which entitles local
subdivisions, which roads are open for use governments to an equitable share in the
by segments of the public who may have proceeds of the utilization and development of
business inside the subdivision. the national wealth within their respective
SUGGESTED ANSWER: areas. However, this should be made pursuant to
(b) The ordinance is valid. The charge on the law. A law is needed to implement this
business establishments is not a tax but a provision and a local government cannot
SPECIAL ASSESSMENT. Hence, the holding in constitute itself unto a law. In the absence of a law
Pascual v. Secretary of Public Works, 110 Phil. the ordinance in question is invalid.
331 (1960), that public funds cannot be
appropriated for the construction of roads in a Ordinances; Validity; Amending Nat’l
private subdivision, does not apply. As held in Laws (1988)
Apostolic Prefect v. City Treasurer of Baguio, 71 No. 4: Jose Y. Sabater is a real estate
Phil. 547 (1941), special assessments may developer. He acquires raw lands and converts
them into subdivisions. After acquiring a lot of power of Tacloban City to suppress gambling
around 15 hectares in Cabanatuan City, he and prohibited games of chance excludes of
caused the preparation of a subdivision plan for the chance permitted by law. Implied repeals are
property. Before he was able to submit the not favored. (Basco v. PAGCOR)
subdivision plan to the Bureau of Lands and/or Land
Registration Commission for verification and/or Ordinances; Validity; Limitation of Penalties
approval, he was informed that he must first (1991)
present the plan to the City Engineer who No. 10: The municipality of Alcoy, Cebu,
would determine whether the zoning ordinance of passed Ordinance No. 10, series of 1991,
the Cabanatuan City had been observed. He was requiring owners, administrators, or tenants of
surprised when he was asked to pay the city buildings and premises to keep and maintain
government a service fee of P0.30 per square them in sanitary condition, and should they fail to do
meter of land, covered by his subdivision so, cause them to be cleared and kept in sanitary
plan. He was even more surprised when condition and the cost thereof to be assessed
informed that a fine of P200.00 and/or against the owner, administrator or tenant, as
imprisonment for not exceeding six months or the case may be, which cost shall constitute a
both, have been fixed in the ordinance as lien against the property. It further penalizes
penalty for violation thereof. Believing that the violation thereof with a fine not exceeding
city ordinance is illegal, he filed suit to nullify the One Thousand Pesos (P1,000.00) or imprisonment
same. for one (1) year at the discretion of the court. Is
Decide the case with reasons. the ordinance valid?
The ordinance is null and void. In Villacorta v. The ordinance is valid insofar as it requires
Bernardo, 143 SCRA 480 (1986) the Supreme owners, administrators, or tenants of buildings
Court held that a municipal ordinance cannot and premises to keep and maintain them in
amend a national law in the guise of sanitary condition and provides that should they fail
implementing it. In this case, the requirement to do so, the municipality shall cause them to
actually conflicts with sec. 44 of Act No. 496 be cleaned and the cost shall be assessed
because the latter does not require subdivision against the owner, administrator, or tenant and shall
plans to be submitted to the City Engineer be a lien against the property. This is expressly
before they can be submitted for approval to, authorized by Sec. 149(kk) of the Local
and verification by, the Land Registration Government Code.
Commission and/or the Bureau of Lands.
However, the penalty for the violation of the
Ordinances; Validity; Gambling ordinance is invalid, because it is excessive.
Prohibition (1995) The penalty in this case is a fine not exceeding
No. 4: 2. PAGCOR decided to operate a casino in P1,000 or imprisonment for one year, in the
Tacloban City under authority of P.D. No. 1869. discretion of the court. Under Sec. 149 (c) of
It leased a portion of a building belonging to Ellen the Local Government Code, however, the
McGuire renovated and equipped it in penalty for the violation of a municipal
preparation for its inauguration. The ordinance can not exceed a fine of P1,000.00
Sangguniang Panlungsod of Tacloban City or Imprisonment for six months, or both at the
enacted an ordinance prohibiting the operation of discretion of the court.
casinos in the City and providing penalty for its
violation. Ellen McGuire and PAGCOR Ordinances; Veto Power (1996)
assailed the validity of the ordinance in court. (1) How does the local legislative
How would you resolve the issue? Discuss fully. assembly override the veto by the
SUGGESTED ANSWER: local chief executive of an ordinance?
The ordinance should be declared invalid. As (2) On what grounds can a local
held in Magtajas vs. Pryce Properties chief executive veto an ordinance?
Corporation. Inc., 234 SCRA 255. such an (3) How can an ordinance vetoed by a
ordinance contravenes Presidential Decree No. local chief executive become a law
1869, which authorizes the Philippine without it being overridden by the
Amusement and Gaming Corporation to local legislative assembly?
operate casinos within the territorial Jurisdiction of SUGGESTED ANSWER:
the Philippines, because it prevents the said (1) Under Sections 54 (a) and 55 (c) of the
corporation from exercising the power conferred on Local Government Code, the local
it to operate a casino in Tacloban City. The legislative assembly can override the veto
of the local chief executive by two-thirds Lake Development Authority vs. Court of
vote of all its members. Appeals, 231 SCRA 292, under Republic Act
No, 4850, the Laguna Lake Development
(2) Under Section 55[a] of the Local Authority is mandated to promote the
Government Code, the local chief executive development of the Laguna Lake area,
may veto an ordinance on the ground that it is including the surrounding Province of Rizal,
ULTRA VIRES or PREJUDICIAL TO THE with due regard to the prevention of pollution.
PUBLIC WELFARE. The Laguna Lake Development Authority is
mandated to pass upon and approve or
(3) Pursuant to Section 54(b) of the Local disapprove all projects proposed by local
Government Code, an ordinance vetoed by the government offices within the region.
local chief executive shall be deemed
approved if he does not communicate his 2. Yes, the Laguna Lake Development
veto to the local legislative assembly within 15 Authority can justify its order. Since it has been
days in the case of a province and 10 days authorized by Executive Order No. 927 to make
in the case of a city or a municipality. Likewise, orders requiring the discontinuance of pollution, its
if the veto by the local executive has been power to issue the order can be inferred from this.
overridden by the local legislative assembly, a Otherwise, it will be a toothless agency.
second veto will be void. Under Section 55(c) Moreover, the Laguna Lake Development
of the Local Government Code, the local Authority is specifically authorized under its
chief executive may veto an ordinance only Charter to issue cease and desist orders.
once.
Power to Issue Subpoena & Cite For
Police Power; LLDA (1995) Contempt (1993)
No. 9: The Municipality of Binangonan, Rizal, No 6: Mayor Alfredo Lim closed the funhouses in
passed a resolution authorizing the operation of an the Ermita district suspected of being fronts for
open garbage dumpsite in a 9- hectare land in the prostitution. To determine the feasibility of
Reyes Estate within the Municipality's territorial putting up a legalized red light district, the city
limits. Some concerned residents of Binangonan council conducted an inquiry and invited
filed a complaint with the Laguna Lake operators of the closed funhouses to get their
Development Authority (LLDA) to stop the operation views. No one honored the Invitation. The city
of the dumpsite due to its harmful effects on the council issued subpoenas to compel the
health of the residents. The LLDA conducted an attendance of the operators but which were
on-site investigation, monitoring, testing and completely disregarded. The council declared the
water sampling and found that the dumpsite operators guilty of contempt and issued warrants
would contaminate Laguna de Bay and the for their arrest.
surrounding areas of the Municipality. The
LLDA also discovered that no The operators come to you for legal advice,
environmental clearance was secured by the asking the following questions:
Municipality from the Department of (1) Is the council empowered to issue
Environment and Natural Resources (DENR) and subpoenas to compel their attendance?
the LLDA as required by law. The LLDA (2) Does the council have the power to cite for
therefore issued to the Binangonan municipal contempt?
government a cease and desist order to stop SUGGESTED ANSWER:
the operation of the dumpsite. The Municipality of i) The city council is not empowered to issue
Binangonan filed a case to annul the order subpoenas to compel the attendance of the
issued by the LLDA. operators of the fun-houses In the Ermita
(1) Can the Municipality of Binangonan district. There is no provision in the
invoke police power to prevent its Constitution, the Local Government Code, or
residents and the LLDA from interfering any law expressly granting local
with the operation of the dumpsite by legislative bodies the power to subpoena
the Municipality? Explain. witnesses. As held in Negros Oriental II
(2) Can the LLDA justify its order by asserting Electric Cooperative, Inc. vs. Sangguniang
that the health of the residents will be Panlungsod of Dumaguete, 155 SCRA 421,
adversely affected. Explain. such power cannot be implied from the
SUGGESTED ANSWER: grant of delegated legislated power. Such
1. No, the Municipality of Binangonan cannot power is Judicial. To allow local legislative
invoke its police power. According to Laguna bodies to exercise such power without
express statutory basis would violate the of Appeals, G.R. No. 107916, February 20,
doctrine of separation of powers. 1997)
(2) The city council does not have the power to cite The question of whether there is genuine
for contempt. There is likewise no necessity for the expropriation of Christina's lot or
provision in the Constitution, the Local whether the municipality has other and better lots
Government Code, or any other laws for the purpose is a matter that will have to be
granting local legislative bodies the power to resolved by the Court upon presentation of
cite for contempt. Such power cannot be evidence by the parties to the case.
deemed implied in the delegation of
legislative power to local legislative bodies, for Powers of Barangay Assembly (2003)
the existence of such power poses a Can a Barangay Assembly exercise any police
potential derogation of individual rights. power?
SUGGESTED ANSWER:
Power; Eminent Domain; LGU; Right No, the Barangay Assembly cannot exercise
to Exercise (Q10-2005) any police power. Under Section 398 of
The Sangguniang Bayan of the Municipality the Local Government Code, it can
of Santa, Ilocos Sur passed Resolution only recommend to the Sangguniang
No. 1 authorizing its Mayor to initiate a Barangay the adoption of measures for the
petition for the expropriation of a lot owned by welfare of the barangay and decide on the
Christina as site for its municipal sports adoption of an initiative.
center. This was approved by the
Mayor. However, the Sangguniang Powers; Liga ng mga Barangay (2003)
Panlalawigan of Ilocos Sur disapproved Can the Liga ng mga Barangay exercise
the Resolution as there might still be other legislative powers?
available lots in Santa for a sports center. SUGGESTED ANSWER:
The Liga ng Mga Barangay cannot exercise
Nonetheless, the Municipality of Santa, through its legislative powers. As stated in Bito-Onon v.
Mayor, filed a complaint for eminent domain. Fernandez. 350 SCRA 732 [2001], it is not
Christina opposed this on the following a local government unit and its primary
grounds: (a) the Municipality of Santa has no purpose is to determine representation of
power to expropriate; (b) Resolution No. 1 has the mga in the sanggunians; to ventilate,
been voided since the Sangguniang articulate, and crystallize issues
Panlalawigan disapproved it for being arbitrary; and affecting barangay government
(c) the Municipality of Santa has other and better administration; and to secure solutions
lots for that purpose. for them through proper and legal means.
Resolve the case with reasons. (5%)
Requisites; Contracts Involving LGU (1991)
SUGGESTED ANSWER: The Municipality of Sibonga, Cebu, wishes
Under Section 19 of R.A. No. 7160, the power to enter into a contract involving
of eminent domain is explicitly granted to the expenditure of public funds. What are the
municipality, but must be exercised through an legal requisites therefor?
ordinance rather than through a resolution. SUGGESTED ANSWER:
(Municipality ofParanaque v. V.M. Realty Corp., The following are the legal requisites for
G.R. No. 127820, July 20, 1998) the validity of a contract to be entered into
by the Municipality of Sibonga, which
The Sangguniang Panlalawigan of Ilocos Sur involves the expenditure of public funds:
was without the authority to disapprove (1) The contract must be within the power
Resolution No. 1 as the municipality clearly has the of the municipality;
power to exercise the right of eminent (2) The contract must be entered into by
domain and its Sangguniang Bayan the the proper officer, i.e., the mayor,
capacity to promulgate said resolution. The only upon resolution of the Sangguniang
ground upon which a provincial board may Bayan pursuant to Section 142 of
declare any municipal resolution, ordinance or the Local Government Code;
order invalid is when such resolution, ordinance or (3) In accordance with Sec. 606 of the Revised
order is beyond the powers conferred upon the Administrative Code, there must be an
council or president making the same. Such is not appropriation of the public funds; and in
the situation in this case. (Moday v. Court accordance with Sec. 607, there must be a
certificate of availability of funds issued not liable for real estate tax on the property
by the municipal treasurer; and belonging to the government which it occupy.
(4) The contract must conform with the However, Section 234 of the Local Government
formal requisites of written contracts Code subsequently withdrew the exemption
prescribed by law. from real property taxes of government-owned or
controlled corporations. If I were the Judge, I
Requisites; Contracts involving LGU (1995) would hold the National Development
No. 4: 1. What are the conditions under which a Company liable for real estate taxes.
local executive may enter into a contract in
behalf of his government unit? Taxation; Sources of Revenue (1999)
SUGGESTED ANSWER: No V - Under the Constitution, what are
1. The following are the conditions under which the three main sources of revenues of
a local executive may enter into a contract local government units? (2%)
in behalf of the government until: SUGGESTED ANSWER:
(1) The local government unit must have the The following are the main sources of revenues
power to enter into the particular contract; of local government units under the
(2) Pursuant to Section 22(c) of the Local Constitution:
Government Code, there must be a prior 1. Taxes, fees, and charges. (Section 5,
authorization by the sangguniang Article X)
concerned, and a legible copy of the 2. Share in the national taxes. (Section
contract shall be posted at a conspicuous 6, Article X)
place in the provincial capitol or the city, 3. Share in the proceeds of the utilizations and
municipal or barangay hall. development of the national wealth
(3) In accordance with Sections 46 and 47, within their areas. (Section 7, Article X}
Chapter 8, Subtitle B. Book V of the 1987
Administrative Code, if the contract Involves the Withdrawal of Public Property from
expenditure of public funds, there must be an Public Use (1990)
appropriation therefore and a certificate No. 8: XYZ, a corporation organized under
of availability of funds by the treasurer of the laws of Hongkong, with 100% foreign
the local government unit. equity, obtained from the Securities and
(4) The contract must conform with the Exchange Commission a license to
formal requisites of written contracts operate a prawn hatchery project on a piece
prescribed by law. of land leased from the City of Dagupan.
(5) Pursuant to Section 2068 of the Revised The land was formerly a park and plaza
Administrative Code, if a province is a party to a belonging to the City and was converted by
contract conveying title to real property, the the City to derive much needed funds.
contract must be approved by the (1) May the City of Dagupan lawfully
President. Under Section 2196 of the convert the park to prawn ponds and lease
Revised Administrative Code, if a the same? Explain your answer.
municipality is a party to a contract (2) May the City of Dagupan and XYZ
conveying real property or any Interest in it or corporation validly enter into the lease contract for
creating a lien upon it, the contract must be the prawn ponds? Answer with reasons.
approved by the provincial governor. SUGGESTED ANSWER:
(1) Yes, the City of Dagupan may lawfully
Taxation; GOCC Liability For Real Estate convert the park into prawn ponds and lease
Tax (1999) them. A city may close a park and plaza and
No VI - C. The Province of X required once the property has been withdrawn from
the National Development Company to public use, it falls within the commerce of man and
pay real estate taxes on the land being may be leased. Section 10 of the Local
occupied by NDC and the latter argued that Government Code provides:
since it is a government-owned corporation, "A local government unit may likewise,
its properties are exempt from real estate through its head acting pursuant to a
taxes. If you were the Judge, how would resolution of its sanggunian and in
you decide the case? Reason out. (2%) accordance with existing law and the
SUGGESTED ANSWER: provisions of this Code, close any
In National Development Company v. Cebu barangay, municipal, city or provincial
City, 215 SCRA 382, the Supreme Court held road, street, alley park or square. No
that the National Development Company was such way or place or any part thereof
shall be closed without indemnifying Alcantara cannot reassume office as member of the
any person prejudiced thereby. A Sangguniang Bayan. As held in
property thus withdrawn from public use Sangguniang Bayan of San Andres v. Court of
may be used or conveyed for any Appeals, 284 SCRA 276 (1998), Alcantara
purpose for which other real property should be deemed to have abandoned his
belonging to the local unit concerned position as member of the Sangguniang Bayan. His
might be lawfully used or conveyed." intention to abandon his position is shown by his
failure to perform his function as member of the
In Favis v. City Baguio, 27 SCRA 1060, it was held Sangguniang Bayan, his failure to collect the salary
that the City of Baguio could close a street and for the position, his failure to object to the
lease it since it had become patrimonial appointment of his replacement, and his failure
property. Likewise, in Cebu Oxygen and to initiate any act to reassume his post after
Acetylene Company, Inc. a Berceles, 66 SCRA 481, the reorganization of the Sangguniang Bayan
it was held that the City of Cebu could close a was voided.
street and sell it thereafter.
Alcantara effected his intention by his letter of
(2) Since the City of Dagupan has the power to resignation, his assumption of office as member of
convert the park into prawn ponds it can also the Sangguniang Panlalawigan, his
lease it to XYZ even though XYZ is a 100%- discharge of his duties as its member, and his
foreign corporation. The operation of a prawn receipt of the salary for such post.
hatchery does not involve exploitation of natural
resources within the meaning of Sections 2 and 3, Alcantara cannot be deemed to have lost his
Article XII of the 1987 Constitution. office as member of the Sangguniang Bayan by
(Secretary of Justice, Op. No. 3, s. 1988) Since the resignation. Under Section 82 of the Local
portion of the park had been withdrawn from public Government Code, the resignation should be
use, it could be disposed for any lawful purpose submitted to the Sangguniang Bayan. He
including leasing it to a foreign submitted it to the Mayor instead, and the
corporation. resignation was not accepted.
Discipline; Clemency; Doctrine of

ARTICLE XI Accountability of Condonation (2000)
No VI. A provincial governor duly elected to
Public Officers office was charged with disloyalty and
suspended from office pending the outcome of
Abandonment of Office (2000) the formal investigation of the charges against
No VII. Alcantara was elected barangay him. The Secretary of Interior and Local
chairman and later president of the Association of Governments found him guilty as charged and
Barangay Councils in his municipality. In that removed him from office. He filed a petition
capacity, he was appointed by the President as before the Supreme Court questioning his
member of the Sangguniang Bayan of his removal. While the case was pending before the
municipality. Later, the Secretary of Interior and Supreme Court, he filed his certificate of
Local Governments appointed Alcantara as candidacy for the position of Governor and won,
member of the Sanggunlang Panlalawigan of and was proclaimed Governor. He claims his
their province to meet a reorganizational reelection to the position of Governor has
contingency, and Mendoza took his place in the rendered the pending administrative case
Sangguniang Bayan. Alcantara then wrote a against him moot and academic. Is he correct?
letter of resignation from the Sangguniang Explain. (5%)
Bayan addressed to the Mayor of the SUGGESTED ANSWER:
municipality, ceased functioning as member Yes, the re-election of the governor has
thereof and assumed office and performed his rendered the pending administrative
functions as member of the Sanggunlang case against him moot. As explained in
Panlalawigan. Later, the reorganization of the Aguinaldo v. Santos, 212 SCRA 768 (1992), a
Sangguniang Panlalawigan and the local elective official cannot be removed
appointment of Mendoza were voided. Can from office for misconduct committed during
Alcantara reassume office as member of the his previous term, because each term is
Sangguniang Bayan or has he lost it because of separate and the people by re-electing him are
resignation? abandonment? Explain. (5%) deemed to have forgiven his misconduct.
SUGGESTED ANSWER:

Discipline; Effect of Pardon Granted in b) Can he claim salary for the period that his
Favor of Public Officers (1999) case was pending appeal? Why? (2%)
No IV - C. A City Assistant Treasurer was SUGGESTED ANSWER;
convicted of Estafa through falsification of
a) Alfonso Beit cannot claim any
public document. While serving sentence, he salary for the period of his preventive
was granted absolute pardon by the President. suspension during the pendency of the
1. Assuming that the position of Assistant City investigation. As held in Gloria vs. Court of
Treasurer has remained vacant, would he be Appeals, 306 SCRA 287 (1997), under Section
entitled to a reinstatement without the need 52 of the Civil Service Law, the provision
of a new appointment? Explain. (2%) for payment of salaries during the period
2. If later the same position becomes of preventive suspension during the
pendency of the investigation has been
vacant, could he reapply and be
deleted. The preventive suspension was
reappointed? Explain. (2%)
not a penalty. Its imposition was lawful,
SUGGESTED ANSWER: since it was authorized by law.
C. 1.) As held in Monsanto v. Factoran, b) If the penalty was modified
(c) SCRA 190, pardon merely frees the because Alfonso Beit was exonerated of the
individual from all the penalties and legal charge that was the basis for the decision
disabilities imposed upon him because of his ordering his dismissal, he is entitled to back
conviction. It does not restore him to the public wages, otherwise, this would be tantamount to
office relinquished by reason of the conviction. punishing him after exoneration from the charge
which caused his dismissal. [Gloria vs. Court of
FIRST ALTERNATIVE ANSWER:
Appeals, 3O6 SCRA 287 (1997)]. If he was
2.) The Assistant City Treasurer can reprimanded for the same charge which was the
reapply and be appointed to the position, since basis of the decision ordering his dismissal, Alfonso
the pardon removed the disqualification to hold Belt is not entitled to back wages, because
public office. he was found guilty, and the penalty was merely
SECOND ALTERNATIVE ANSWER: commuted. (Dela Cruz vs. Court of Appeals, 305
SCRA 303 (1998)].
2.) The Assistant City Treasurer cannot
reapply and be appointed to the position, Under
Article 36 of the Revised Penal Code, a pardon Discipline; Preventive Suspension (1990)
does not restore the right to hold public No. 6: In 1986, F, then the officer-in-charge of
office unless such right be expressly Botolan, Zambales, was accused of having
restored by the pardon; violated the Anti-Graft and Corrupt Practices Act
before the Sandiganbayan. Before he could be
Discipline; Preventive Suspension arrainged, he was elected Governor of
Zambales, After his arraignment, he was put
& Appeal; entitlement to salary
under preventive suspension by the
pendente (2001)
Sandiganbayan "for the duration of the trial".
No XV - Alfonso Beit, a supply officer in the
Department of Science and Technology
3. Can F successfully challenge
(DOST), was charged administratively. Pending
the legality of his preventive suspension on
investigation, he was preventively suspended for the ground that the criminal case against
90 days. The DOST Secretary found him guilty him involved acts committed during his
and meted him the penalty of removal from term as officer-in-charge and not during his
office. He appealed to the Civil Service term as Governor?
Commission (CSC). In the meantime, the 4. Can F validly object to
decision was executed pending appeal. The the aforestated duration of his suspension?
CSC rendered a decision which modified the SUGGESTED ANSWER:
appealed decision by imposing only a penalty of
reprimand, and which decision became final. (1) No, F cannot successfully challenge the
legality of his preventive suspension on the
a) Can Alfonso Belt claim salary for the period
ground that the criminal case against him
that his case was pending investigation? Why?
involve acts committed during his term as OIC
(3%)
and not during his term as governor because
suspension from office under Republic Act 3019 Section 13 of the Anti-Graft and Corrupt
refers to any office that the respondent is Practices Act, which is not a penalty but a
presently holding and not necessarily to the one preventive measure. Since Section 13 of
which he hold when he committed the crime the Anti-Graft and Corruption Practices Act
with which he is charged. This was the ruling in does not state that the public officer
Deloso v. Sandiganbayan 173 SCRA 409. must be suspended only in the office
(2) Yes, F can validly object to the duration of the where he is alleged to have committed
suspension. In Deloso u. Sandiganbayan, 173 the acts which he has been charged, it
SCRA 409, it was held that the imposition of applies to any office which he may be holding.
preventive suspension for an indefinite period of Elective and Appointive Officials:
time is unreasonable and violates the right of the disciplinary authority (2004)
accused to due process. The people who elected 2004 (3-b) CTD, a Commissioner of the
the governor to office would be deprived of National Labor Relations Commission (NLRC),
his services for an indefinite period, and his right sports a No. 10 car plate. A disgruntled litigant filed
to hold office would be nullified. Moreover, since a complaint against him for violation of the Anti-
under Section 42 of the Civil Service Decree Graft and Corrupt Practices Act before the
the duration of preventive suspension should Ombudsman. CTD now seeks to enjoin the
be limited to ninety (90) days, equal Ombudsman in a petition for prohibition,
protection demands that the duration of alleging that he could be investigated only by
preventive suspension under the Anti-Graft and the Supreme Court under its power of
Corrupt Practices Act he also limited to ninety supervision granted in the Constitution. He
(90) days. contends that under the law creating the NLRC, he
has the rank of a Justice of the Court of
Discipline; Preventive Suspension (2002)
Appeals, and entitled to the corresponding
No II. Simeon Valera was formerly a Provincial privileges. Hence, the OMB has no jurisdiction
Governor who ran and won as a Member of the over the complaint against him.
House of Representatives for the Second Should CTD's petition be granted or dismissed?
Congressional District of lloilo. For violation of Reason briefly. (5%)
Section 3 of the Anti-Graft and Corrupt
Practices Act (R.A. No.3019), as amended, SUGGESTED ANSWER:
allegedly committed when he was still a The petition of CTD should be dismissed.
Provincial Governor, a criminal complaint was Section 21 of the Ombudsman Act vests the
filed against him before the Office of the Office of the Ombudsman with disciplinary
Ombudsman for which, upon a finding of authority over all elective and appointive
probable cause, a criminal case was filed with officials of the government, except officials who may
the Sandiganbayan. During the course of trial, be removed only by impeachment, Members
the Sandiganbayan issued an order of of Congress, and the Judiciary. While CTD has the
preventive suspension for 90 days against him. rank of a Justice of the Court of Appeals, he
Representative Valera questioned the does not belong to the Judiciary but to the
validity of the Sandiganbayan order on the Executive Department. This simply means that he
ground that, under Article VI , Section 16(3) of has the same compensation and privileges as a
Justice of the Court of Appeals. If the Supreme
the Constitution, he can be suspended only by the
Court were to investigate CTD, it would be
House of Representatives and that the
performing a non-judicial function. This will
criminal case against him did not arise from his
violate the principle of separation of powers.
actuations as a member of the House of
(Noblejas v. Teehankee, 23 SCRA 405 [1968])
Representatives.
Is Representative Valera's contention
correct? Why? (5%) Elective Public Officer; De Facto
SUGGESTED ANSWER: Officer (2000)
The contention of Representative Valera is not No XVI. In the elections of May 1992, Cruz and
correct As held in Santiago v. Sandiganbayan, Santos were the candidates for the office of
356 SCRA 636, the suspension contemplated in Municipal Mayor, the term of which was to
Article VI, Section 16(3) of the Constitution is a expire on June 30, 1995. Finding that he won
punishment that is imposed by the Senate or House by a margin of 20 votes, the Municipal Board of
of Representatives upon an erring member, it Canvassers proclaimed Cruz as the duly
is distinct from the suspension under elected Mayor. Santos filed an election protest
before the Regional Trial Court (RTC) which B. AVE cannot collect salaries and allowances
decided that it was Santos who had the plurality of from the government for the first two years of
30 votes and proclaimed him the winner. On motion his term, because in the meanwhile BART
made, the RTC granted execution pending the collected the salaries and allowances. BART
appeal of Cruz to the COMELEC (Comelec) and was a de facto officer while he was in
on this basis. Santos assumed office and served possession of the office. To allow AVE to collect the
as Municipal Mayor. In time, the Comelec salaries and allowances will result in making the
reversed the ruling of the RTC and instead ruled government pay a second time. (Mechem, A
that Cruz won by a margin of 40 votes and Treatise on the Law of Public Offices and
proclaimed him the duly elected Municipal Public Officers, [1890] pp. 222-223.)
Mayor.
BART is not required to refund to the
d) It is now beyond June 30, 1995.
government the salaries and allowances he
Can Cruz still hold office for the portion of the
received. As a de facto officer, he is entitled to the
term he has failed to serve? Why? (3%) salaries and allowances because he
e) Was Santos a usurper and should rendered services during his incumbency.
he pay back what he has received while holding (Rodriguez v. Tan, 91 Phil. 724 119520.
the office as Municipal Mayor? Why? (2%)
The bills which BART alone authored and were
SUGGESTED ANSWER;
approved by the House of Representatives are valid
d) Cruz can no longer hold office for the because he was a de facto officer during his
portion of the term he failed to serve since incumbency. The acts of a de facto officer are
his term has expired. valid insofar as the public is concerned. (People
e) Santos was not a usurper. He was a v. Garcia, 313 SCRA 279 [19990.
de facto officer, since he had a color of election
to the office of Municipal Mayor by virtue of the Graft and Corruption; Prescription of Crime
decision in the election protest. Hence, he
(2002)
is entitled to the emoluments of the office.
No XII. Suppose a public officer has committed
a violation of Section 3 (b) and (c) of the
Elective Public Officers; De Facto Officer; Anti- Graft and Corrupt Practices Act {RA No,
effects (2004) 3019), as amended, by receiving monetary
X-B. AVE ran for Congressman of QU and other material considerations for
province. However, his opponent, BART, was contracts entered into by him in behalf of the
the one proclaimed and seated as the winner of the government and in connection with other
election by the COMELEC. AVE filed transactions, as a result of which he has
seasonably a protest before HRET (House of amassed illegally acquired wealth.
Representatives Electoral Tribunal). After two 2. Does the criminal offense
years, HRET reversed the COMELEC’s committed prescribe? (2%)
decision and AVE was proclaimed finally as the duly
3. Does the right of the government to
elected Congressman. Thus, he had only one year
recover the illegally acquired wealth prescribe?
to serve in Congress.
(3%)
Can AVE collect salaries
SUGGESTED ANSWER:
and allowances from the government for the
first two years of his term as Congressman? 3. A violation of Section 3(b) and (c) of the
Anti-Graft and Corrupt Practices Act prescribes.
Should BART refund to the government
As held in Presidential Ad-Hoc Fact-
the salaries and allowances he had received as
Finding Committee on Behest Loans v.
Congressman?
Desierto, 317 SCRA 272 (1999), Article XI,
What will happen to the bills that BART Section 15 of the Constitution does not apply
alone authored and were approved by to criminal cases for violation of the Anti-Graft
the House of Representatives while he was and Corrupt Practices Act
seated as Congressman? Reason and 4. Article XI, Section 15 of the Constitution
explain briefly. (5%) provides that the right of the State to recover
SUGGESTED ANSWER: properties unlawfully acquired by public officials or
employees, or from them or from their
nominees or transferees, shall not be barred by SUGGESTED ANSWER:
prescription. 1. Impeachment is a method by which persons
holding government positions of high
Impeachment; Cronyism (2000) authority, prestige, and dignity and with
definite tenure may be removed from office
No II. Is cronyism a legal ground for the for causes closely related to their conduct as
impeachment of the President? Explain. (5%) public officials, (V.G. SINCO, PHILIPPINE
SUGGESTED ANSWER: POLITICAL LAW 373 (llth ed. 1962)).
The grounds for impeachment are culpable
Yes, cronyism is a legal ground for the
violation of the Constitution, treason, bribery,
impeachment of the President. Under Section 2,
graft and corruption, other high crimes and
Article XI of the Constitution, betrayal of public
trust is one of the grounds for betrayal of public trust. (Art. XI, sec. 2).
Impeachment. This refers to violation of the oath The officials removable by
of office and includes cronyism which impeachment are the President, Vice
involves unduly favoring a crony to the President, the Members of the Supreme
prejudice of public interest, (Record of the Court, Members of the Constitutional
Constitutional Commission, Vol. II, p. 272) Commissions and the Ombudsman. (Id.)
Impeachment; Grounds (1999)
No XV - What are the grounds 2. PD No. 1606, sec. 1, in so far as it provides for
for impeachment. Explain. (2%) the removal of the members of the
Sandiganbayan only by impeachment must be
SUGGESTED ANSWER:
deemed to have been rendered inoperative by
Under Section 2, Article XI of the the new Constitution which provides that with
Constitution, the grounds for impeachment are the exception of the officials there mentioned,
(3) Culpable violation of the Constitution - "All other public officers and employees may be
means intentional violation of removed from office as provided by law, but not by
the Constitution and not violations impeachment." Moreover, under Art. VIII, sec,
committed in good faith. 11, the power to remove lower court judges
(4) Treason - the same meaning as in is vested in the Supreme Court en banc which, by
the Revised Penal Code the vote of a majority of the members who actually
(5) Bribery - the same meaning as in take part in the deliberation on the issues in the
the Revised Penal Code case and vote thereon, can dismiss lower court
judges.
(6) Graft and Corruption - refers
to prohibited acts enumerated in the
Anti- Graft and Corrupt Practices Act.
Law of Public Officers; Next-in-Rank Rule
(7) other High Crimes - refer to offenses that
(1994)
strike at the very life or orderly working of
the government. No. 15 Pedro Cruz, the City Engineer of
(8) and Betrayal of Public Trust - refers Baguio, retired. To fill the vacant position, the
to any violation of the oath of office. City Mayor appointed Jose Reyes, a civil
(Cruz, Philippine Political Law, 1998 engineer who formerly worked under Cruz but
ed., pp. 336-337; Bernas, The 1987 had been assigned to the Office of the Mayor
Constitution of the Philippines: A for the past five years.
Commentary, 1996 ed., pp. 991-992) Vicente Estrada, the Assistant City
Engineer filed a protest with the Civil
Impeachment; Nature; Grounds; PD
Service Commission claiming that being the
1606 (1988) officer next in rank he should have been
No. 14: 1. What is impeachment, what are appointed as City Engineer.
the grounds therefor, and who are the high 1) Who has a better right to be appointed to the
officials removable thereby?
contested position?
2. Presidential Decree No. 1606
SUGGESTED ANSWER:
provides that Justices of the Sandiganbayan
may be removed only by impeachment. Is this 1) On the assumption that Jose Reyes
Presidential Decree still valid? Why? possesses the minimum qualification
requirements prescribed by law for the position, (1) No, X cannot recover damages from the
the appointment extended to him is Secretary of Public Works. The Secretary of
valid. Consequently, he has a better Public Works ordered the demolition of the
right than Vicente Estrada. fishpond in the performance of his official
duties. He did not act in bad faith or with gross
The claim of Estrada that being the
negligence. He issued the order only after due
officer next in rank he should have been
investigation. In Mabutol v. Pascual, 124 SCRA
appointed as City Engineer is not meritorious. It is a
876, it was held that the members of the Ad
settled rule that the appointing authority is not
Hoc Committee created to implement
limited to promotion in filling up vacancies but
Presidential Decree No. 296 and Letter of
may choose to fill them by the appointment of
Instruction No, 19, which ordered the demolition of
persons with civil service eligibility
structures obstructing public waterways, could'
appropriate to the position. Even if a vacancy
not be sued for damages although they ordered
were to be filled by promotion, the concept of
the demolition of a building that encroached
"next in rank" does not import any mandatory
upon a creek, because the public officers
requirement that the person next in rank must
concerned did not act in bad faith.
be appointed to the vacancy. What the civil
service law provides is that if a vacancy is filled by (2) No, the libel suit will not prosper.
promotion, the person holding the position next The report submitted by the Secretary of
in rank thereto "shall be considered for Public Works to the President constitutes
promotion." Espanol v. Civil Service privileged communication, as it was
Commission 206 SCRA 715, sent in the performance of official duty.
ALTERNATIVE ANSWER; Article 354 of the Revised Penal
Neither Jose Reyes nor Vicente Estrada has a Code provides;
better right to be appointed City Engineer. As "Every defamatory imputation
held in Barrozo vs. Civil Service Commission, is presumed to be malicious, even if it be
198 SCRA 487, the appointing authority is not true, if no good intention and justifiable
required to appoint the one next-in-rank to fill a motive for making it is shown, except in
vacancy. He is allowed to fill it also by the the following cases:
transfer of an employee who possesses civil 1. A private communication made by
service eligibility.
any person to another in the performance
Liability For Damages in Performance of of any legal, moral or social duty;"
Official Functions (1990) In Deano v. Godinez, 12 SCRA 483,
No. 10: The Secretary of Public Works, after an it was held that a report sent by a public official
investigation, ordered the demolition of to his superior is privileged
the fishpond of X as a nuisance per se on communication, because its submission is
the ground that it encroached on navigable pursuant to the performance of a legal duty.
rivers and impeded the use of the Besides, in sending his report, the
rivers. The Secretary submitted to the Secretary of Public Works acted in the
President of the Philippines a report of said discharge of his official duties. Hence, he was
investigation, which report contained acting in behalf of the Republic of the
clearly libelous matters adversely affecting
Philippines and within the scope of his authority
the reputation of X, a well- known civic
According to the ruling in Sanders v. Veridiano, 162
and religious leader in the community.
SCRA 88, a suit brought against a public official
The Supreme Court later found that the for writing a letter which is alleged to be libelous but
rivers were man-made and were which was written while he was acting as agent
constructed on private property owned by X. of the government and within the scope of his
3. May X recover damages from the Secretary authority is actually a suit against the State
of Public Works for the cost involved in without its consent.
rebuilding the fishponds and for lost profits? ALTERNATIVE ANSWER:
State your reason. The question does not specify how the libel was
4. Suppose X files a libel suit against the committed. If the libelous statement was not
Secretary of Public Works. Will the said relevant to the report on the alleged illegal
libel suit prosper? Explain your answer. encroachment of the river, the fact that it was
SUGGESTED ANSWER: made in the course of an official report does not
immunize the Secretary of Public Works Ombudsman: Power to Suspend; Preventive
from liability for libel. Suspension (2004)
(6) Director WOW failed the lifestyle check
conducted by the Ombudsman's Office
Local Elective Officials; Limitations On because WOWs assets were grossly
Additional Duties (1995) disproportionate to his salary and allowances.
No. 10: A City Mayor in Metro Manila was Moreover, some assets were not included in his
designated as Member of the Local Amnesty Statement of Assets and Liabilities. He was
Board (LAB) as allowed under the Rules and charged of graft and corrupt practices and
Regulations Implementing Amnesty pending the completion of investigations, he was
Proclamation Nos. 347 and 348. as amended by suspended from office for six months.
Proclamation No. 377. The LAB is entrusted with
(3) Aggrieved, WOW petitioned the Court of
the functions of receiving and processing
Appeals to annul the preventive suspension
applications for amnesty and recommending to the
order on the ground that the Ombudsman
National Amnesty Commission approval or denial
could only recommend but not impose the
of the applications. The term of the
suspension. Moreover, according to WOW,
Commission and, necessarily, the Local
the suspension was imposed without any
Amnesty Boards under it expires upon the
notice or hearing, in violation of due
completion of its assigned tasks as may be
process. Is the petitioner's contention
determined by the President.
meritorious? Discuss briefly. (5%)
May the City Mayor accept his
designation without forfeiting his elective SUGGESTED ANSWER:
position in the light of the provision of Sec. 7, The contention of Director WOW is not
1st par. Art. IX-B of the 1987 Constitution which meritorious. The suspension meted out to him is
pertinently states that "[N]o elective official shall be preventive and not punitive. Section 24 of
eligible for appointment or designation in any Republic Act No. 6770 grants the Ombudsman the
capacity to any public office or position during power to impose preventive suspension up to six
his tenure?" Discuss fully, months. Preventive suspension maybe imposed
SUGGESTED ANSWER: without any notice or hearing. It is merely a
preliminary step in an administrative investigation
No, the City Mayor may not accept his and is not the final determination of the guilt of
designation without forfeiting his elective the officer concerned. (Garcia v. Mojica, 314
positions. As stated in Flores vs. Drilon 223 SCRA 207 [1999]).
SCRA 568, it is the intention of Section 7,
Article X-B of the 1987 Constitution that local 3. For his part, the Ombudsman moved to
elective officials should devote their full time to their dismiss WOWs petition. According to the
constituents. While second paragraph of Section Ombudsman the evidence of guilt of WOW is
7, Article IX-B of the 1987 Constitution allows strong, and petitioner failed to exhaust
appointive officials to hold other offices when administrative remedies. WOW admitted he
allowed by law or by the primary functions of their filed no motion for reconsideration, but only
positions, no such exception is made in the first because the order suspending him was
paragraph, which deals with elective officials. It immediately executory. Should the motion to
is the Intention of the 1987 Constitution to dismiss be granted or not? Discuss
be more stringent with elective local officials. briefly. (5%)

B. The motion to dismiss should be denied.
Yes, he may accept such designation Since the suspension of Director WOW was
without forfeiting his mayorship. The immediately executory, he would have suffered
Constitutional provision being cited irreparable injury had he tried to exhaust
contemplates a "public office or position". It is administrative remedies before filing a petition in
believed that the Local Amnesty Board is not court (University of the Philippines Board of
such an office since it is merely an ad hoc body. Regents v. Rasul, 200 SCRA 685 [19910-
Besides, it is believed that its functions are not Besides, the question involved is purely legal.
"sovereign" in character which is one of the (Azarcon v. Bunagan, 399 SCRA 365 [2003]).
elements of a public office.
Ombudsman; Power to Investigate (2003)
No II A group of losing litigants in a case his authority. Congress intended to empower the
decided by the Supreme Court filed a complaint Ombudsman to suspend all officers, even if they
before the Ombudsman charging the Justices are employed in other offices in the
with knowingly and deliberately rendering an Government. The words "subordinate" and "in
unjust decision in utter violation of the penal his bureau" do not appear in the grant of such
laws of the land. Can the Ombudsman validly power to the Ombudsman.
take cognizance of the case? Explain.
SUGGESTED ANSWER: Power to Issue Subpoena; validity
of delegation (1989)
No, the Ombudsman cannot entertain the
No. 17: Assume that under the charter of the
complaint. As stated in the case of In re:
Laureta. 148 SCRA 382 [1987], pursuant to the City of Manila, the City Mayor has the power to
principle of separation of powers, the investigate city officials and employees
appointed by him and in connection therewith,
correctness of the decisions of the Supreme
Court as final arbiter of all justiciable disputes is administer oath, take testimony and issue
subpoenas. The mayor issued an executive
conclusive upon all other departments of the
order creating a committee, chaired by "X", to
government; the Ombudsman has no power to
investigate anomalies involving licensed
review the decisions of the Supreme Court by
inspectors of the License Inspection Division of the
entertaining a complaint against the Justices of the
Office of the City Treasurer, In the course of its
Supreme Court for knowingly rendering an unjust
investigation, "X" subpoenaed "Y", a private citizen
decision.
working as bookkeeper of Asia Hardware.
SECOND ALTERNATIVE ANSWER: "Y" refused to appear contending that the
Article XI, Section 1 of the 1987 Constitution Committee of "X" has no power to issue subpoenas.
provides that public officers must at all times be Decide.
accountable to the people. Section 22 of the SUGGESTED ANSWER:
Ombudsman Act provides that the Office of the
Yes, the committee has no power to issue
Ombudsman has the power to investigate any
subpoenas according to Carmelo vs, Ramos, 6
serious misconduct allegedly committed by
SCRA 836. In creating the committee, the
officials removable by impeachment for the
mayor did not grant it the power to issue
purpose of filing a verified complaint for
impeachment if warranted. The Ombudsman can subpoenas. Besides, the mayor cannot
entertain the complaint for this purpose. delegate his power to issue subpoenas.
Prohibition On Elective Officer to Hold
Ombudsman; Power to Suspend; Preventive Public Office (2002)
Suspension (1996) No VII. X was elected provincial governor for a
No. 10: 2) An administrative complaint for term of three years. He was
violation of the Anti-Graft and Corrupt Practices Act subsequently appointed by the President of
against X was filed with the Ombudsman. the Philippines serving at her pleasure,
Immediately after taking cognizance of the case and as concurrent Presidential Assistant for
the affidavits submitted to him, the Political Affairs in the Office of the
Ombudsman ordered the preventive President, without additional compensation.
suspension of X pending preliminary
Is X's appointment valid? (5%)
investigation. X questioned the suspension
order, contending that the Ombudsman can SUGGESTED ANSWER:
only suspend preventively subordinate The appointment of X is not valid, because the
employees in his own office. position of Presidential Assistant for Political
Is X correct? Explain. Affairs is a public office. Article IX-B Section 7
of the Constitution provides that no elective
SUGGESTED ANSWER:
official shall be eligible for appointment or
No, X is not correct. As held in Buenaseda vs. designation in any capacity to any public office or
Flavier, 226 SCRA 645. under Section 24 of position during his tenure. As held in Flores v.
Republic Act No. 6770, the Ombudsman can Drilon, 223 SCRA 568 (1993), since an
place under preventive suspension any officer elective official is ineligible for an appointive
under his disciplinary authority pending an position, his appointment is not valid.
investigation. The moment a complaint is filed Public Office; Public Trust (1998)
with the Ombudsman, the respondent is under
No V. - Suppose Congress passed a law incrimination seeks to prevent is the conviction
to Implement the Constitutional principle that of the witness on the basis of testimony elicited
a public office is a public trust, by from him. The rule is satisfied when he
providing as follows: is granted immunity.
"No employee of the Civil Service shall ALTERNATIVE ANSWER:
be excused from attending and testifying or from
1. In accordance with Evangelista vs. Jarencio, 68
producing books, records,
SCRA 99, 107-108, If Ong is being cited merely
correspondence, documents or other evidence in
as a witness, he may not refuse to answer.
any administrative investigation concerning the
However, if the question tends to violate his
office in which he is employed on the
right against self-incrimination, he may object to
ground that his testimony or the evidence
it. On the other hand, under the ruling in Chavez
required of him may tend to incriminate him or
vs. Court of Appeals, 24 SCRA 663, 680, If he is a
subject him to a penalty or forfeiture; but his
respondent, Ong may refuse to answer any
testimony or any evidence produced by him
shall not be used against him in criminal question because of his right against self-
prosecution based on the transaction, matter or incrimination.
thing concerning which is compelled, after SUGGESTED ANSWER:
invoking his privilege against self-incrimination, to
2. No Ong cannot argue that the
testify or produce evidence. Provided,
Civil Service Commission inferred his guilt
however, that such individual so testifying shall not
from his refusal to answer. He was not
be exempt from prosecution and
dismissed because of his involvement in the
punishment for perjury committed in so
leakage in the medical examination but for
testifying nor shall he be exempt from demotion or
his refusal to answer. This is a violation of the
removal from office. Any employee who
law. He could be compelled to answer the
refuses to testify or produce any documents
question on pain of being dismissed in case of
under this Act shall be dismissed from the
his refusal, because he was granted Immunity.
service,"
In Lefkowitz vs. Turley. 414 U.S. 70, 84,
Suppose further, that Ong, a member of
the Professional Regulatory Board, is the United States Supreme Court held:
required to answer questions in an "Furthermore, the accomodation
investigation regarding a LEAKAGE in between the interest of the State and the Fifth
a medical examination. Amendment requires that the State have means at
its disposal to secure testimony if immunity is
(2) Can Ong refuse to answer questions on the
supplied and testimony is still refused. This is
ground that he would incriminate himself? [4%] recognized by the power of courts to compel
(3) Suppose he refuses to answer, and for that testimony, after a grant of immunity, by use of
reason, is dismissed from the service, can civil contempt and coerced imprisonment.
he pausibly argue that the Civil Shilitani v. United States, 384 US 364. 16 L Ed 2d
Service Commission has inferred his guilt 622. 86 5 Ct 1531 (1966). Also, given
from his refusal to answer in adequate immunity the State may plainly insist
violation of the Constitution? |3%] that employees either answer questions under
(4) Suppose, on the other hand, he oath about the performance of their job or suffer the
answers the question and on the basis of his loss of employment."
answers, he is found guilty and is dismissed. SUGGESTED ANSWER:
Can he plausibly assert that his dismissal is 3. Jes Ong can argue that his dismissal
based on coerced confession? I3%] was based on coerced confession. In Garrity vs.
SUGGESTED ANSWER: New Jersey, 385 U.S. 493, 500, the United States
Supreme Court held: "We now hold the
1. No, Ong cannot refuse to answer the
protection of the individual under the Fourteenth
question on the ground that he would
Amendment against coerced statements
incriminate himself, since the law grants him
prohibits use in subsequent criminal
immunity and prohibits the use against him in a
proceedings of statements obtained under
criminal prosecution of the testimony or
threat of removal from office, and that it extends to
evidence produced by him. As stated by the
all, whether they are policemen or other
United States Supreme Court in Brown vs.
members of the body politic."
Walker. 161 U.S. 591, 597, what the
constitutional prohibition against self- Retirement Benefits (1996)
No. 9: 2) A, an employee of the National 1. I disagree. Under Section 7, Article
Treasurer, retired on January 10, 1996. Before XII of the Constitution, a corporation or
she could collect her retirement benefits, association which is sixty percent owned by
the National Treasurer discovered that A had Filipino citizens can acquire private land,
been negligent in the encashment of falsified because it can lease public land and can
treasury warrants. It appears, however, therefore hold public land. However, it cannot
that A had received all money and acquire public land. Under Section 3, Article XII of
property clearances from the National the Constitution, private corporations and
Treasurer before her retirement. associations can only lease and cannot acquire
Can the National Treasurer withhold public land.
the retirement of A pending determination of Under Section 8, Article XII of
her negligence in the encashment of the the Constitution, a natural-born Filipino citizen
falsified treasury warrants? Explain. who lost his Philippine citizenship may
SUGGESTED ANSWER: acquire private land only and cannot
acquire public land.
2) In accordance with Tantuico vs.
(3) I disagree. The mere fact that a
Domingo, 230 SCRA 391 and Cruz us.
corporation is religious does not entitle it to own
Tantuico, 166 SCRA 670, the National
public land. As held In Register of Deeds vs.
Treasurer cannot withhold the payment of the
Ung Siu Si Temple, 97 Phil. 58, 61, land tenure is
retirement benefits of A pending determination of
not indispensable to the free exercise and
her liability for negligence in the encashment of the
enjoyment of religious profession of worship. The
falsified treasury warrants, because her
religious corporation can own private land only if
retirement benefits are exempt from execution.
it is at least sixty per cent owned by Filipino
citizens.
(4) I disagree. Under Section 1 of
ARTICLE XII National Economy Presidential Decree No. 471, corporations and
associations owned by aliens are allowed to
and Patrimony lease private lands up to twenty-five years,
renewable for another period of twenty-five
Acquisition and Lease of Public Lands years upon agreement of the lessor and the
(1998) lessee. Hence, even if the religious corporation is
Express your agreement or disagreement with owned by aliens, it can lease private lands.
any of the following statements. Begin your (5) I disagree. For a corporation' to
answer with the statement: "I AGREE" or qualify to acquire private lands in
"DISAGREE" as the case may be. the Philippines, under Section 7, Article Xn
of the Constitution in relation to Section 2,
(3) Anyone, whether Individual,
Article XII of the Constitution, only sixty per
corporation or association, qualified to acquire
cent (60%) of the corporation is required to
private lands is also qualified to acquire public
be owned by Filipino citizens for it to qualify to
lands in the Philippines. [2%] acquire private lands.
(4) A religious corporation is qualified t o (6) I agree. A foreign corporation can
have lands in the Philippines on which it may build lease private lands only and cannot lease public
Its church and make other improvements land. Under Section 2, Article XII of the
provided these are actually, directly and Constitution, the exploration, development and
exclusively used for religious purposes. [2%] utilization of public lands may be undertaken
(5) A religious corporation cannot through co-production. Joint venture or
lease private lands In the Philippines. [2%] production-sharing agreements only with
(6) A religious corporation can acquire Filipino citizen or corporations or associations
which are at least sixty per cent owned by
private lands in the Philippines provided all its
Filipino citizen.
members are citizens of the Philippines. [2%]
(7) A foreign corporation can
only lease private lands in the Philippines. [2%] Acquisition of Lands (1987)
SUGGESTED ANSWER: No. XV: On March 1, 1987, "ABC" Corporation,
a company engaged in the export trade, applied
for judicial confirmation of its title over ten accident without leaving a last will
hectares of timber lands. The company bought the and testament.
land from "X" who in turn inherited it from his
Now, X brought suit to recover the land on the
father "Y". The latter had been in open,
ground that B, being an alien, was not qualified
notorious, public and continued possession of
to buy the land when B and A jointly bought the
the land since 1925. On what valid grounds can
land from him and that, upon the death of C,
you, as Solicitor General, oppose the
the land was inherited by his parents but B
application?
cannot legally acquire and/or inherit it.
ANSWER:
How should the case be decided? If X filed the suit
As Solicitor General, I can oppose the against C when the latter was still alive, would
application for confirmation of title on the your answer be the same? Why? (5%)
ground that under Art. XII, Sec. 3 timber lands
SUGGESTED ANSWER:
cannot be alienated. The ruling in Director of
Lands v. IAC, 146 SCRA 509 (1986), and X cannot recover the land whether from C or A and
Director of Lands v, Bengzon, No. 54045, July B. Under Article IV, Section 1 (2) of the
28, 1987, reiterated in Director of Lands v. Constitution, C is a Filipino citizen since his
Manila Electric Co., G.R, No. 57461, Sept. 11, father is a Filipino. When A and B donated the land
1987, to the effect that a corporation is entitled to to C, it became property of a Filipino
the confirmation of imperfect title to lands citizen. As held in Halili v. Court of Appeals, 287
acquired by it from private individuals who have SCRA 465 (1998), the sale of land to an alien
possessed the same for 30 years, under bona can no longer be annulled if it has been
fide claim of ownership, for the reason that such conveyed to a Filipino citizen. Since C left no
persons are presumed to have performed all will and his parents are his heirs, in accordance with
conditions essential to a government grant and, Article XII, Section 7 of the Constitution, B can
therefore, are entitled to the issuance of a acquire the land by hereditary succession.
certificate of title, applies only to agricultural
lands.
Acquisition of Lands; Citizenship issue
(1989)
Acquisition of Lands (2000)
No. 1: Maria, a natural-born Filipino citizen,
No XVIII. - a) Andy Lim, an ethnic Chinese, went to the United States in 1965 to work as a
became a naturalized Filipino in 1935. But later he nurse. With her savings, she bought a parcel of
lost his Filipino citizenship when he became a land consisting of 1,000 square meters in a
citizen of Canada in 1971. Wanting the best of residential subdivision in Metro Manila. She had
both worlds, he bought, in 1987, a residential lot in the said property titled in her name in 1970. In
Forbes Park and a commercial lot in Binondo. July, 1972, Maria acquired American citizenship
Are these sales valid? Why? (3%) by naturalization. Two months later,
SUGGESTED ANSWER: she married her Canadian boyfriend.
4. Can Maria validly sell this parcel of land to
No, the sales are not valid. Under Section
8, Article XII of the Constitution, only a the younger sister of her husband who is also a
natural- born citizen of the Philippines Canadian citizen?
who lost his Philippine citizenship may 5. Supposing Maria's husband dies and
acquire private land. Since Andy Lim was she decides to reside in the
a former naturalized Filipino citizen, he is Philippines permanently, can Maria buy the
not qualified to acquire private lands. parcel of land consisting of 400 square
meters neighboring her own?
ANSWER:
Acquisition of Lands by Hereditary
Succession (2002) (1) No, Maria cannot validly sell the parcel of
land to the younger sister of her husband who
No XI. - A, a Filipino citizen, and his wife B, a
is a Canadian citizen. Under Section 7, Article
Japanese national, bought a five-hectare
XII of the 1987 Constitution, as a general rule,
agricultural land from X, a Filipino citizen. The
aliens cannot acquire private land since
couple later executed a deed of donation over
pursuant to Section 2, in relation to Section 3,
the same land in favor of their only child C. A
Article XII, of the 1987 Constitution they are not
year later, however, C died in vehicular qualified to acquire or hold lands of the public
domain. Under Section 7, Article XII of the 1987 Section 7, Article XII of the Constitution against
Constitution, an alien can acquire public land by the acquisition of private lands by aliens.
hereditary succession. Under Section 8, Article XII
2) Because of the naturalization of Peter Co
of the 1987 Constitution, a natural-born
as a Filipino citizen, he can exercise the option to
Philippine citizen who lost his Philippine
purchase the land. In accordance with the ruling
citizenship may be a transferee of private land. The
in Yap vs. Grageda, 121 SCRA 244. since he
younger sister of the husband of Maria is not
is qualified to own land, the policy to preserve
acquiring the private land by hereditary
succession but by sale. Neither is she a former lands for Filipinos will be achieved.
natural-born Philippine citizen who lost her
Philippine citizenship. Consequently, neither of Acquisition of Lands; Citizenship issue
the exceptions found in the above-mentioned
(1995)
provisions is applicable to her.
No 11; In June 1978 spouses Joel and Michelle
purchased a parcel of land. Lot No. 143,
(2) No, Maria cannot buy the adjoining parcel of Cadastral Survey No. 38-D, with an area of 600
land. Under Section 2 of Batas Pambansa Blg. square meters for their residence in Cainta,
185, a natural-born Philippine citizen who Rizal, from Cecille who by herself and her
lost his Philippine citizenship, may acquire predecessor-in-interest had been in open,
only up to 1,000 square meters of private public, peaceful, continuous and exclusive
urban land. Since Maria has previously possession of the property under a bona fide
acquired a parcel of land with an area of claim of ownership long before 12 June 1945.
1,000 square meters, she can no longer At the time of purchase, the spouses Joel and
purchase any additional parcel of urban land. Michelle were then natural born Filipino
Alternative Answer: citizens.
In February 1987 the spouses filed an
Yes, she can acquire the adjacent land which
application for registration of their title before the
has an area of 400 square meters since the law
proper court. This time however Joel and
limits acquisition of lands to 1,000 square Michelle were no longer Filipino citizens. The
meters after the loss of Philippine citizenship. government opposed their application for
registration alleging that they have not acquired
proprietary rights over the subject lot because of
Acquisition of Lands; Citizenship issue
their subsequent acquisition of Canadian
(1994) citizenship, and that unregistered lands are
No. 17: A and B leased their residential land presumed to be public lands under the principle that
consisting of one thousand (1,000) square lands of whatever classification belong to the
meters to Peter Co, a Chinese citizen, for a State under the Regalian doctrine, hence, they
period of fifty (50) years. In 1992, before the still pertain to the State.
term of the lease expired. Co asked A and B to
How will you resolve the issues raised
convey the land to him as the contract gave him the
by the applicants and the oppositor?
option to purchase said land if he became a
Discuss fully.
naturalized Filipino citizen. Co took his oath as a
Filipino citizen in 1991. ANSWER:
C. Was the contract of lease for a period The argument of the government that
of fifty (50) years valid considering that the unregistered lands are presumed to be public
lessee was an alien? lands is utterly unmeritorious. As held in
Republic vs. Court of Appeals. 235 SCRA 562, in
D. What is the effect of the naturalization
accordance with Section 48 of the Public Land
of Peter Co as a Filipino citizen on the Act, since the predecessors-in- interest of Joel and
validity of the option to purchase given him? Michelle had been in open, public, peaceful,
ANSWER: continuous and exclusive possession of the
1) As held in Philippine Banking Corporation land under a bona fide claim of ownership
long before June 12. 1945, their
vs. Lui She. 21 SCRA 52, the lease of a parcel of
predecessors- in-interest had acquired the land,
land with an option to buy to an alien is a
because they were conclusively presumed to
virtual transfer of ownership to the alien and
have performed all conditions essential to a
falls within the scope of the prohibition in
government grant. The land ceased to be a part

of the public domain. It is alienable and 2) The Deed of Sale cannot be
disposable land. Joel and Michelle acquired the annulled. As held in Cheesman vs. Intermediate
rights of their predecessors-in-interest by virtue Appellate Court, 193 SCRA 93. to accord to
of the sale to them. John Smith, an alien, the right to have a
Joel and Michelle can have the land registered in decisive vote as to the disposition of the land
their names. They were natural-born Filipino would permit an indirect controversion of the
citizens at the time of their acquisition of the constitutional prohibition against the acquisition of
land. In any event they were Filipino citizens at the private lands by aliens.
time of their acquisition of the land. Their
becoming Canadian citizens subsequently is
Citizenship Requirement in Management
immaterial. Article XII, Sec. 8 of the 1987
Constitution presupposes that they purchased the
of Advertising Industry (1989)
land after they lost Filipino citizenship. It does No. 11: (2) May a foreigner who owns
not apply in this case at all. substantial stockholdings in a corporation
engaged in the advertising industry sit as a
treasurer of said corporation? Cite the
Acquisition of Lands; Prohibition; constitutional provision in point.
acquisition of private lands by aliens (1994) SUGGESTED ANSWER:
No.18; John Smith, a US national, was married to
Petra de Jesus, a Filipino citizen, on June 5, 1980.
Section 11(1), Article XVI of the
Two (2) years later, Petra purchased a parcel of 1987 Constitution provides;
residential land from Jose Cruz using her own (2) No, a foreigner who owns shares of stock in
funds. The Deed of Sale states that the land was a corporation engaged in the
sold to "Petra married to John Smith" and was advertising industry cannot serve as
registered as such. With the knowledge of treasurer in the corporation, for a treasurer
John Smith, Petra administered the land, is an executive or managing officer.
leasing parts thereof to several individuals.
Section 11(2), Article XVI of the
Three (3) years later, Petra, without the knowledge
of John Smith, sold the land to David Perez. 1987 Constitution provides:
Upon learning of the transaction, John Smith "The participation of foreign investors in the
filed a case to annul the Deed of Sale. Citing governing body of entities in such
Art. 160 of the Civil Code, he argued that industry shall be limited to their
said sale was without his consent, the property proportionate share in the capital
being conjugal as it was purchased at the time thereof, and all the executive and
he was married to Petra. He presented the managing officers of such entities must be
Deed of Sale executed by Petra stating that she is citizens of the Philippines."
married to John Smith. He wants to recover at
least his conjugal share. Engagement in Business & Exercise
C. Is John Smith entitled to of Profession (1987)
his conjugal share? No. IX: The Philippine entered into a Treaty
D. May the Deed of Sale executed by of Friendship, Comity and Commerce
with Indonesia with the following provisions:
Petra In favor of David Perez be annulled?
(1 ) The nationals of each contracting
ANSWER:
State admitted to the practice of law in said
1) No, John Smith is not entitled to his State, to practice law without taking the bar
conjugal share in the land. Firstly, since it was examinations in the other contracting State.
acquired with the personal funds of Petra de
(2) The nationals of each contracting
Jesus, in accordance with the ruling in Mirasol
State to engage in retail trade business in the
vs. Lim, 59 Phil. 701, the presumption that the
property is conjugal has been rebutted. territory of the other contracting State.
Secondly, a declaration that John Smith is Is the treaty valid?
entitled to a conjugal share in the land will SUGGESTED ANSWER:
violate the prohibition against the conveyance of
private lands to aliens embodied in Section 7, The treaty is valid.
Article XII of the Constitution. (1) Art. XII, Sec. 14 provides that the practice
of all professions in the Philippines shall be
limited to Filipino citizens, save in cases corporation involving technical and financial
prescribed by law. Here the treaty has the force assistance for the exploration and exploitation of
of law. minerals, but there should be no Joint
venture. Section 2, Article XII of the Constitution
(2) Art. XII. Sec. 10 provides that Congress
authorizes the President to enter into
shall reserve to citizens of the Philippines or to
agreements with foreign-owned corporations
corporations or associations at least 60% of the
involving technical or financial assistance for the
capital of which is owned by such citizens
exploration, development, and utilization of
certain areas of investment. There can be no
minerals. However, the same provision states
question then as to the validity of the
the joint venture for the exploration,
Nationalization of Retail Trade Law, the
development and utilization of natural resources
constitutionality of which was sustained in
may be undertaken only with Filipino citizens, or
Ichong v. Hernandez, 101 Phil. 1155 (1957)
corporations or associations at least sixty per
even in the absence of a similar express grant of
cent of whose capital is owned by Filipino
power to Congress under the 1935
citizen.
Constitution. Although Congress can repeal or
amend such law, it may not be amended by a
treaty in view of Art. XII, Sec. 22 which declares
Expropriation of Public Utilities (1992)
acts of circumvent or negate any provisions of
this Art. XII to be inimical to national interest No. 11 - The Philippine Commodities Office
and subject the offenders to criminal and civil (PCO), a government agency, wishes to
sanctions. For then the Retail Trade establish a direct computer and fax linkup with
Nationalization Law becomes part of Art. XII, trading centers in the United States. The
having been passed pursuant to the mandate in advanced technology of a private company,
Sec. 10. Philippine Pacific Telecommunications, is
necessary for that purpose but negotiations
However, it may also be plausibly argued that a
between the parties have failed. The Republic,
treaty may amend a prior law and treaty of
in behalf of the PCO, files suit to compel the
friendship, comity and commerce with
telecommunications company to execute a
Indonesia may be deemed to have created
contract with PCO for PCO's access and use of the
an exception in the Nationalization of Retail
company's facilities.
Trade Law in favor of Indonesian citizen.
Decide. If the case will not prosper, what
Exploration and Development of Minerals alternative will you propose to the Republic?
(1994) SUGGESTED ANSWER:
No. 11: In the desire to improve the fishing
The action will not prosper. As held in Republic of
methods of the fishermen, the Bureau of
the Philippines vs. Philippine Long Distance
Fisheries, with the approval of the President,
Telephone Company, 26 SCRA 620, parties
entered into a memorandum of agreement to
cannot be compelled to enter into a contract.
allow Thai fishermen to fish within 200 miles
However, since under Section 18, Article XII of the
from the Philippine sea coasts on the condition that
Constitution, the State may expropriate public
Filipino fishermen be allowed to use Thai fishing
utilities, the Republic of the Philippines may
equipment and vessels, and to learn modern
compel the Philippine Pacific
technology in fishing and canning. Telecommunications to allow access to its
(2) Is the agreement valid? facilities. If the Republic of the Philippines can
(3) Suppose the agreement is for a joint take title to the facilities of Philippine Pacific
Telecommunications by its power of
venture on the same area with a Thai oil
expropriation, there is no reason why it cannot
corporation for the exploration and exploitation of
use such power to impose only a burden upon
minerals with the Thai corporation providing
Philippine Pacific Telecommunication without
technical and financial assistance. Is the
loss of title.
agreement valid?
ANSWER; Lease of Private Agricultural Lands (2001)
4) No. Only Filipinos may fish in No IV - A is an alien. State whether, in
exclusive economic zone... the Philippines, he:
5) The President can enter into a a) Can be a lessee of a private agricultural
memorandum of agreement with a Thai oil land, (3%)
SUGGESTED ANSWER; According to Manila Prince Hotel v.
Yes, an alien can be a lessee of private
Government Service Insurance System,
267 SCRA 408, the national patrimony
agricultural land. As stated in Krivenko vs.
refers not only to our natural resources but
Register of Deeds of Manila, 79 Phil. 461
also to our cultural heritage.
(1947), aliens can lease private agricultural
Nationalized Activities (1994)
land, because they are granted temporary
rights only and this is not prohibited by the 2) Give a business activity the equity of which
Constitution. must be owned by Filipino citizens:
at least 60%
National Economy & Patrimony; at least 70%
Constitutional Prohibition (2004)
100%
(8-b) B. EAP is a government corporation
created for the purpose of reclaiming 3) Give two cases in which aliens may
lands including foreshore and submerged be allowed to acquire equity in a business
areas, as well as to develop, improve, acquire, activity but cannot participate in the
lease and sell any and all kinds of lands. A management thereof?
law was passed transferring title to EAP of SUGGESTED ANSWER:
lands already reclaimed in the foreshore and
offshore areas of MM Bay, particularly the 1) a) At least sixty per cent (60%) of the equity
so-called Liberty Islands, as alienable and of the entities engaged in the following
disposable lands of the public domain. business must be owned by Filipino citizens
Titles were duly issued in EAP's name. under the Constitution.
1. Co-production, Joint venture,
Subsequently, EAP entered into a joint venture
agreement (JVA) with ARI, a private foreign
or production-sharing agreement
corporation, to develop Liberty Islands.
with the State for the
Additionally, the JVA provided for the exploration, development, and
reclamation of 250 hectares of submerged land in utilization of natural resources
the area surrounding Liberty Islands. EAP (Section 2, Article XII)
agreed to sell and transfer to ARI a portion of 2. Operation of a public utility (Section
Liberty Islands and a portion of the area to be 11, Article XII)
reclaimed as the consideration for ARI's role
3. Education (Section 4(2), Article XIV)
and participation in the joint venture, upon
approval by the Office of the President. Is there any
constitutional obstacle to the sale and transfer b) At least seventy percent (70%) of the equity of
by EAP to ARI of both portions as provided for business entities engaged in advertising must
in the JVA? (5%)
be owned by Filipino citizens under the
SUGGESTED ANSWER: Constitution. (Section 11(2), Article XVI)
B. ARI cannot acquire a portion of Liberty
Islands because, although EAP has title to
c) Mass media must be wholly owned by
Liberty Islands and thus such lands are
Filipino citizens under the Constitution (Section
alienable and disposable land, they cannot be
sold, only leased, to private corporations. The 11(1), Article XVI).
portion of the area to be reclaimed cannot be
sold and transferred to ARI because the seabed is 2) Under the Constitution, aliens may acquire
inalienable land of the public domain. equity but cannot participate in
(Section 3, Article XII of the 1987 Constitution;
the management of business entities
Chavez v. Public Estates Authority, 384 SCRA
engaged in the following activities:
152 [2002]).
(3) Public utilities (Section 11, Article
National Patrimony; definition (1999) XII)
No XII - What is meant by National Patrimony? (4) Education (Section 4(2) .Article XIV)
Explain the concept of National (5) Advertising (Section 11(2),
Patrimony? (2%)
Article XVI)
SUGGESTED ANSWER:
Ownership Requirement of Mass Media SUGGESTED ANSWER:
(1989) The law is valid as under Article XII,
Section 2 of the 1987 Constitution, the
No. 11: (1) A domestic corporation with
30% foreign equity proposes to publish a
natural resources shall be under the full
weekly magazine for general circulation in
control and supervision of the State. It is
Metro Manila which will feature the lifestyles
also provided that the State may directly
of the rich and the famous. May this be done?
undertake such activities or it may enter
Cite the constitutional provision in point.
into co-production, joint venture or sharing
SUGGESTED ANSWER: agreements with Filipino citizens or
(1) No, the corporation cannot publish corporations or associations, at least 60%
a weekly magazine since it is engaged in Filipino-owned.
the operation of a mass media and is not Furthermore, the President may enter into
wholly owned by Philippine citizens. agreements with foreign-owned
corporations involving technical or
Section 11(1), Article XVI of the 1987
financial assistance for large-scale
Constitution provides; "The ownership and
management of mass media shall be limited to
minerals, petroleum and other mineral oils,
citizens of the Philippines, or to corporations,
according to terms and conditions
cooperatives or associations, wholly-owned and
provided by law. A state corporation,
managed by such citizens."
unlike a private corporation, may be
created by special law and placed under
Chinese citizens; engaging in retail trade the control of the President, subject to
(Q4-2006) such conditions as the creating statute
may provide.
State whether or not the following laws are
constitutional. Explain briefly.
3. A law prohibiting Chinese citizens from ARTICLE XIII Social Justice and
engaging in retail trade. (2%)
SUGGESTED ANSWER: Human Rights
The law is invalid as it singles out and Agrarian Reform Law; Coverage (1992)
deprives Chinese citizens from engaging in No. 12: Teodoro Luzung is engaged in the
retail trade. In Ichong v. Hernandez, G.R. business of prawn farming, The prawns are
No. L-7995, May 31,1957, the court held nurtured in his fishponds in Mindoro and, upon
that the Treaty of Amity between the Republic harvest, are immediately frozen for export.
of the Philippines and the Republic of
China guarantees equality of treatment to Congress passed the Comprehensive
the Chinese nationals "upon the same Agrarian Reform Law of 1988 which provides
terms as the nationals of any other among others that all private lands devoted to
country." Thus, the court ruled therein agriculture shall be subject to agrarian reform.
that the nationals of China are not The law includes under the term "agriculture"
discriminated against because nationals of all the following activities: cultivation of the soil,
other countries, except those of the United planting of crops, growing of fruit trees, raising
States, who are granted special rights by of livestock, poultry or fish. The Department of
the Constitution, are all prohibited from Agrarian Reform issued an implementing order
engaging in the retail trade. In the case at which provides that commercial farms used for
bar, the law discriminates only against aqua-culture, including salt-beds, fishponds and
Chinese citizens and thus violates the equal prawn farms are within the scope of the law.
protection clause. Can the law be declared
unconstitutional? Decide.
Exploration, development, and utilization of SUGGESTED ANSWER:
natural resources (Q4-2006) As held in Luz Farms vs. Secretary of the
State whether or not the law is Department of Agrarian Reform, 192 SCRA 51, the
constitutional. Explain briefly. law is unconstitutional insofar as it included
2. A law creating a state corporation livestock, poultry and swine raising. In the
to exploit, develop, and utilize definition of the agricultural land which the
compressed natural gas. (2%) Constitutional Commission adopted in
connection with agrarian reform, lands devoted to the occupants to vacate the structures within
such purposes were not included. However, both five days from notice, otherwise they would be
the law and the implementing order are evicted and relocated and their shanties
constitutional insofar as they included removed, in order that the parcel of land could be
fishponds. The definition of agricultural land converted into a park for public use and
which the Constitutional Commission adopted enjoyment. The inhabitants of the parcel of land
included fishponds. complained to the Commission on Human
Rights urging that the Mayor of Quezon City be
stopped from doing what he has threatened to
Commission on Human Rights; Power to do. The Commission on Human Rights, after
investigate (1992) conducting an investigation and finding that the
No. 15 - Walang Sugat, a vigilante group shanties of petitioners were already being
composed of private businessmen and civic demolished by then, ordered the Quezon City
leaders previously victimized by the Nationalist Mayor and persons Implementing his order to
cease and desist from demolishing petitioners'
Patriotic Army (NPA) rebel group, was
shanties under pain of contempt.
implicated in the torture and kidnapping of Dr.
Mengele, a known NPA sympathizer. What have you to say on the validity of the
actuation of the Commission on Human Rights in
b) Does the Commission on
Human Rights have the power to relation to that of the Quezon City Mayor?
investigate and adjudicate the matter? SUGGESTED ANSWER:
SUGGESTED ANSWER; The actuation of the Commission on Human
Rights is void. In Simon vs. Commission on
b) Under Section 18, Article XIII of the
Human Rights, 229 SCRA 117. the Court held
Constitution, the Commission on Human Rights has
that the Commission on Human Rights has no
the power to investigate all forms of human rights
power to issue a restraining order or a writ of
violations involving civil and political rights and
injunction and has no power to cite for contempt for
to monitor the compliance by the government
violation of the restraining order or a writ of
with international treaty obligations on human
preliminary injunction. The cease and desist
rights. As held in Carino vs. Commission on
order, according to the Court, is a semantic
Human Rights, 204 SCRA 483, the Commission
Interplay for a restraining order. Its power to cite for
on Human Rights has no power to decide
contempt should be understood to apply only to
cases involving violations of civil and political
violations of its adopted operational guidelines
rights. It can only investigate them and then
and rules of procedure essential to carry out its
refer the matter to the appropriate
investigatorial powers, which it is constitutionally
government agency.
authorized to adopt.
ALTERNATIVE ANSWER:
If what is referred to in the problem is the
Commission on Human Rights; Power to
Commission on Human Rights under the United
National Economic and Social Council, the case issue TRO (2001)
may be investigated by the Commission based on No VI - In order to implement a big government
a special procedure for fact-finding and flood control project, the Department of Public
inquiry based on the consent of the States Works and Highways (DPWH) and a local
concerned. However, this does not constitute government unit (LGU) removed squatters from the
investigation in the usual sense of the term, bank of a river and certain esteros for
with no objective of establishing culpability. The relocation to another place. Their shanties were
Commission on Human Rights is not demolished. The Commission on Human Rights
empowered to make adjudications. (CHR) conducted an investigation and issued an
order for the DPWH and the LGU to cease and
desist from effecting the removal of the
Commission on Human Rights; Power to squatters on the ground that the human rights
issue TRO (1997) of the squatters were being violated. The
No. 8 - About a hundred people occupied a DPWH and the LGU objected to the order of the
parcel of land in Quezon City belonging to the CHR
city government and built shanties thereon Resolve which position is correct.
which they utilized for dwelling, sari-sari stores, etc. Reasons (5%)
The City Mayor issued an order directing
SUGGESTED ANSWER; consequent danger to life and limb
cannot be ignored. It is paradoxical that a
The position of the Department of Public Works and
right which is claimed to have been
Highways and of the local government unit is
violated is one that cannot, in the first
correct. As held in Export Processing Zone
place, even be invoked, if it is, in fact,
Authority v. Commission on Human Rights, 208
extant. Based on the circumstances
SCRA125 (1992), no provision in the
obtaining in this instance, the CHR
Constitution or any law confers on the
order for demolition do not fall within the
Commission on Human Rights jurisdiction to
compartment of human rights violations
issue temporary restraining orders or writs of
involving civil and political rights
preliminary injunction. The Commission on
intended by the Constitution. (Simon v.
Human Rights has no judicial power. Its powers are
Commission on Human Rights, G.R.
merely investigatory.
No. 100150, January 5, 1994)
(b) Can the CHR issue an "order to desist"

Commission on Human Rights; Power;
or restraining order? SUGGESTED
Limitations (Q4-2005)
ANSWER:
c) Squatters and vendors have put up
The CHR may not issue an "order to
structures in an area intended for a
desist" or restraining order. The
People's Park, which are impeding the flow of
constitutional provision directing the
traffic in the adjoining highway. Mayor Cruz
CHR to provide for preventive
gave notice for the structures to be
measures to those whose human rights
removed, and the area vacated within a
have been violated or need protection
month, or else, face demolition and
may not be construed to confer
ejectment. The occupants filed a case with
jurisdiction on the Commission to issue a
the Commission on Human Rights (CHR) to
restraining order or writ of injunction for,
stop the Mayor's move.
it that were the intention, the
The CHR then issued an "order to Constitution would have expressly said
desist" against Mayor Cruz with warning so. Jurisdiction is conferred only by the
that he would be held in contempt should Constitution or by law. It is never
he fail to comply with the desistance order. derived by implication. (Export
When the allotted time lapsed, Mayor Cruz Processing Zone Authority v.
Commission on Human Rights, G.R.
caused the demolition and removal of
No. 101476, April 14, 1992)
the structures. Accordingly, the CHR
cited him for contempt. (5%) (c) Is the CHR empowered to
declare Mayor Cruz in contempt?
What is your concept of Human Rights?
Does it have contempt powers at all?
Does this case involve violations
of human rights within the scope of SUGGESTED ANSWER:
The CHR does not possess adjudicative
the CHR's jurisdiction?
functions and therefore, on its own, is
SUGGESTED ANSWER:
not empowered to declare Mayor Cruz
Under the Universal Declaration of
in contempt for issuing the "order to
Human Rights, the International
desist." However, under the 1987
Covenant on Economic, Social and
Constitution, the CHR is constitutionally
Cultural Rights and International
authorized, in the exercise of its
Covenant on Civil and Political Rights,
investigative functions, to "adopt its
the scope of human rights includes
operational guidelines and rules of
"those that relate to an individual's
procedure, and cite for contempt for
social, economic, cultural, political and
violations thereof in accordance with the
civil relations... along with what is
Rules of Court." Accordingly, the CHR,
generally considered to be his inherent
in the course of an investigation, may
and inalienable rights, encompassing
only cite or hold any person in contempt
almost all aspects of life."
and impose the appropriate penalties in
In the case at bar, the land adjoins a accordance with the procedure and
busy national highway and the sanctions provided for in the Rules of
construction of the squatter shanties Court. (Carino v. Commission on
impedes the flow of traffic. The
Human Rights, G.R. No. 96681, For these reasons, I would advise
December 2, 1991) the association to work for the veto of the bill
and, if it is not vetoed but becomes a law, to
challenge it in court.
Labor; Right to Self-Organization (1988)
No. 2: Because of the marked increase in the
Labor; Right to Strike (1988)
incidence of labor strikes and of work
stoppages in industrial establishments, No. 1: Hearings before a congressional
Congress intending to help promote industrial committee have established that many firms at the
peace, passed, over the objections of militant Bataan Export Processing Zone had closed down
labor unions, an amendment to the Labor Code, or pulled out because of unstable labor
providing that no person who is or has been a conditions resulting in so many strikes. To
member of the Communist Party may serve as an remedy the situation and inject vitality to the
officer of any labor organization in the export expansion program, some congressional
country. An association of former NPAs (New leaders and business executives propose that
Peoples Army) who had surrendered, availed of strike-free export zones be established.
amnesty, and are presently leading quiet and Do you believe that under the
peaceful lives, comes to you asking what could be
present Constitution, it is legally possible to put
done against the amendment. What would you
up such a strike-free export processing
advise the association to do? Explain.
zone in the country? Why or why not?
SUGGESTED ANSWER:
SUGGESTED ANSWER:
In PAFLU v. Secretary of Labor, 27
No. The fact that many firms at the Bataan
SCRA 40 (1969) the Supreme Court upheld the
EPZA have been forced to close down by
validity of sec. 23 of the Industrial Peace Act
unstable labor condition brought about by strike
requiring labor unions to submit, within 60 days of
does not justify the ban on strike. The
the election of its officers, affidavits of the latter
Constitution guarantees the rights of workers to
that they are not members of the Communist
engage in "peaceful concerted activities,
Party, against the claim that the requirement
including the right to strike in accordance with
unduly curtailed freedom of assembly and
law." (Art. XIII, sec. 3). It is illegal strikes which can
association. The Court pointed out that the filing of
be prohibited but not all strikes. For strike is labor's
the affidavits was merely a condition for the
legitimate weapon. In the absence of a
acquisition by a labor organization of legal
compelling interest of the state (such as health and
personality and the enjoyment of certain rights
safety, e.g., the prohibition of strike in
and privileges which the Constitution does not
hospitals and industries indispensable to the
guarantee. On the other hand, the requirement
national interest) it cannot be prohibited.
constitutes a valid exercise of the State's police
power to protect the public against abuse, fraud
and impostors. Labor; Right to Strike (1993)
But the disqualification of members of
No. 15: Congressman Cheng says he is one of the
the CPP and its military arm, the NPA, from
co-authors of the Subic Bay Metropolitan
being officers of a labor union would (1) nullify
Authority Charter. He declares that the SBMA is the
the amnesty granted by the President with the
answer to rapid economic growth and the
concurrence, it may be assumed, of the
attainment of the President's Philippine 2000"
majority of the members of Congress and (2)
dream. However, Cheng is worried that foreign
permit the condemnation of the former NPA
capital might be slow in coming in due to
members without judicial trial in a way that
unstable working conditions resulting from too
makes it contrary to the prohibition against the
many strikes. To remedy this situation. Cheng
enactment of bill of attainder and ex post facto law.
proposes an amendment to SBMA law
The amnesty granted to the former NPAs
declaring it as a strike-free zone or total ban on
obliterated their offense and relieved them of the
strikes. Is this proposal legally defensible?
punishment imposed by law. (Barrioquinto v,
Explain briefly.
Fernandez, 82 Phil. 642 (1949)). The
amendment would make them guilty of an act, SUGGESTED ANSWER:
that of having been former members of the Art. XIII. sec. 3 of the Constitution guarantees
NPA, for which they have already been forgiven by the right of all workers to engage in peaceful
Presidential amnesty. concerted activities, including the right to strike
in accordance with law. Thus, a law cannot State to alleviate the plight of the
totally prohibit the right to strike but can underprivileged by removing Inequities, it
only regulate the exercise thereof. His simply made a general policy declaration and
proposal to ban strikes totally in the focused on social and economic inequities,
Subic Special Economic and Freeport b) In the 1987 Constitution, social Justice is
Zone is, therefore unconstitutional.
conceptualized as a set of specific
ALTERNATIVE ANSWER: economic, social and cultural rights.
While the Constitution guarantees to workers the c) The 1987 Constitutional provision on
right to engage in peaceful concerted social justice includes all phases of
activities, Including the right to strike, such right can national development. It includes
only be exercised in accordance with law. The economic, political, social and cultural rights.
phrase "in accordance with law" was Inserted
SUGGESTED ANSWER
precisely to Indicate that in some exceptional
cases workers would not have the right to strike 2. In Calalang v. Williams, et. al.. 70 Phil. 726,
if it is prohibited by law. Hence, the proposal to social justice was defined as "neither
ban strikes totally in the Subic Special communism nor despotism, nor atomism, nor
Economic and Freeport Zone is anarchy, but the humanization of laws and the
constitutional. (Social Security System equalization of social and economic forces by
Employees Association vs. Court of Appeals, the State so that justice in its rational and
175 SCRA 686, July 28. 1989; Manila Public objectively secular conception may at least be
School Teachers Association v. Laguio, 200 approximated. Social justice means the
SCRA 323 (1991)). promotion of the welfare of all the people, the
adoption by the government of measures
calculated to insure economic stability of all the
Social Justice under the Present competent elements of society, through the
Constitution (1995) maintenance of a proper economic and social
No. 1- 1. Discuss the concept of social justice equilibrium in the interrelations of the members of
the community,"
under the 1987 Constitution,
On the other hand, Section 6, Article II of the
2. How does it compare with the old
1973 Constitution provided. The State shall
concept of social Justice under the 1973 promote social justice to ensure the dignity,
Constitution? Under the 1935 Constitution? welfare, and security of all the people. Toward
SUGGESTED ANSWER this end. the State shall regulate the acquisition,
1. Section 10, Article II of the 1987 Constitution ownership, use, enjoyment, and disposition of
provides. "The State shall promote social justice in private property, and equitably diffuse property
all phases of national development". As ownership and profits." This provision
stated in Marquez vs. Secretary of Labor, 171 expounded on the concept of social justice by
SCRA 337, social justice means that the State expressly mentioning the regulation of property and
should assist the underprivileged. Without such the equitable diffusion of ownership.
help, they might not be able to secure justice for Note: It is suggested that the examiner
themselves. Since the provision on social should correlate the answers to both questions and
justice in the 1987 Constitution covers all give credit to answers which state that there is
phases of national development, it is not limited to an expansion of the range of social Justice in
the removal of socio-economic inequities but also the 1987 Constitution compared to the 1935 and
includes political and cultural inequities. The the 1973 Constitution.
1987 Constitution elaborated on the concept
of social justice by devoting an entire article,
Article XIII, to it. Women (2000)
Alternative Answers: No IX. b) What are the provisions of the
a) Section 5, Article II of the 1935 Constitution Constitution on women? (2%)
provided, "The promotion of social justice to SUGGESTED ANSWER:
Insure the well-being and economic security of
b) The following are the provisions of
all the people should be the concern of the
the Constitution on women:
State." While this provision embodied the
concept of social justice as an obligation of the
1) "It (the State) shall equally protect (c) The preference given to the poor
the life of the mother and the life man's son is justified. Not only is the seminary
of the unborn from conception." entitled to choose whom it will admit because it
(Section 12, Article II) enjoys institutional autonomy (Art. XIV, Sec. 5(2)
) but the choice made in this case is a wise and
2) The State recognizes the role of
judicious one. The rich man's son had been
women in nation-building, and shall
expelled from another school because of
ensure the fundamental equality
academic delinquency. Despite the economic
before the law of women and men." advantage and opportunity he had, he still failed in
(Section 14, Article II) his school work, warranting a finding that he cannot
3) "The State shall protect working women by really do school work. On the other hand, the
providing safe and healthful working poor man's son may be academically deficient
conditions, taking into account their precisely as a result of poverty so that if relieved of
maternal functions, and such faculties its effects it is probable he will do better in school.
and opportunities that will enhance their The democratization of wealth and power, implicit
welfare and enable them to realize their full in Art. XIII, Sec. 1, and justifies the decision of
potential in the service of the nation." the Rector in this case.
(Section 14, Article XIII)
Education; Academic Freedom (1989)

ARTICLE XIV Education, No. 9: What do you understand by
Science and Technology, Arts academic freedom?
Education; Academic Freedom (1987) SUGGESTED ANSWER:
No. X: "X", a son of a rich family, applied for According to Sidney Hook, academic freedom is
enrolment with the San Carlos Seminary in the freedom of professionally qualified
Mandaluyong, Metro Manila. Because he had persons to inquire, discover, publish and teach the
been previously expelled from another truth as they see it in the field of their
seminary for scholastic deficiency, the Rector of competence without being subject to any
San Carlos Seminary denied the application control or authority except the control or
without giving any grounds for the denial. After "X" authority of the rational methods by which truths or
was refused admission, the Rector admitted another conclusions are sought and established in these
applicant, who is the son of a poor farmer who disciplines.
was also academically deficient.
In Garcia vs. Faculty Admission
xxx Committee, 68 SCRA 277, it was held that the
(b) Prepare a brief argument academic freedom of institutions of higher
citing rules, laws, or Constitutional learning involves a wide sphere of autonomy in
provisions in support of the Rector's denial of deciding their objectives and the best means of
the motion for reconsideration. attaining them without outside interference
except when overriding public welfare calls for
(c) Give your decision on the some restraint. Thus, a school can determine for
appeal of "X" from the Rector's denial itself who may teach, who may be taught, how
of "X's" application, it shall be taught, and who may be
SUGGESTED ANSWER: admitted to study. In Tangonon vs. Pano, 137
SCRA 245, it was held that the academic
(b) The seminary has institutional
freedom of an institution of higher learning
autonomy which gives it the right, all things
includes the right to prescribe academic
being equal, to choose whom it will admit as
standards and to refuse re-enrollment to
student. (Garcia v. Faculty of Admission,
students for academic deficiencies and violation of
Loyola School of Theology, 68 SCRA 277
disciplinary regulations. According to
(1975); Villar v. Technological Institute of the
University of San Carlos vs. Court of Appeals,
Philippines, 135 SCRA 706 (1985); Tangonan v.
G.R. No. 79237, October 18, 1988, academic
Cruz Pano, 137 SCRA 245 (1985) ) This
freedom includes the right to prescribe
autonomy is sufficiently large to permit in this requirements for the conferment of honors.
case the seminary to choose between the rich
man's son and the poor man's son.
Education; Academic Freedom (1993)
No. 18: Ting, a student of Bangkerohan academic freedom of an institution of higher
University, was given a failing grade by learning includes the freedom to determine who
Professor Mahigpit. Ting confronted Professor may teach, what may be taught, how it shall be
Mahigpit at the corridor after class and a heated taught, and who may be admitted to study.
argument ensued. Cooler heads prevented the Because of academic freedom, an institution of
verbal war ending in physical confrontation. higher learning can refuse to re-enroll a student who
Mahigpit left the campus and went shopping In a is academically deficient or who has violated
department store. Ting saw Mahigpit and the rules of discipline. Academic freedom
without any warning mauled the latter. Mahigpit filed grants institutions of higher learning the discretion
an administrative complaint against Ting before to formulate rules for the granting of honors.
the Dean of Students for breach of university Likewise, because of academic freedom, an
rules and regulations. The Dean set the institution of higher learning can close a school.
complaint for hearing. However, Ting filed a petition
before the RTC to prohibit the Dean and the
school from investigating him contending
that the mauling incident happened outside the Education; Alien Enrollees & Donors (1999)
school premises and therefore, outside the No II - C. What is the rule on the number of
school's jurisdiction. The school and the Dean
aliens who may enroll in educational institutions
answered that the school can investigate
in the Philippines. Give the exception to
Ting since his conduct outside school hours
the rule. May such institutions accept
and even outside of school premises affect
donations from foreign students under the
the welfare of the school; and furthermore, the
pretext that such donations are to be
case involves a student and faculty member. If
used to buy equipment and improve
you were the judge, how would you decide the
school facilities? Explain. (2%)
case?
SUGGESTED ANSWER:
SUGGESTED ANSWER:
If I were the Judge, I would dismiss the petition. In
C. Under Section 4(2), Article XIV of
Angeles v Sison, 112 SCRA 26, it was held that
the Constitution, no group of aliens shall
comprise more than one-third of the enrollment
a school can subject to disciplinary action a student
in any school. The exception refers to schools
who assaulted a professor outside the school
established for foreign diplomatic personnel
premises, because the misconduct of the student
and their dependents and, unless
involves his status as, a student or affects the
otherwise provided by law, for other foreign
good name or reputation of the school. The
temporary residents.
misconduct of Ting directly affects his suitability
as a student. Educational institutions may accept
donations from foreign students. No provision in the
Constitution or any law prohibits it.
Education; Academic Freedom; Extent
(1999)
Education; Duties of State in Re
No II - A. What is Academic Freedom?
Discuss the extent of Academic Freedom Education (1999)
enjoyed by institutions of higher learning. (2%) No II - B. Give two duties of the state
mandated by the Constitution
SUGGESTED ANSWER:
regarding education. (2%)
A. According to Reyes v. Court of
SUGGESTED ANSWER:
Appeals, 194 SCRA 402, academic freedom is the
freedom of a faculty member to pursue his studies B. Article XIV of the Constitution imposes the
in his particular specialty and thereafter to make following duties regarding education upon
known or publish the result of his endeavors the State:
without fear that retribution would be visited on him
1. The State shall protect and
in the event that his conclusions are found
promote the right of all citizens
distasteful or objectionable by the powers that
to quality education at all levels
be, whether in the political, economic, or
and shall take appropriate steps
academic establishments.
to make such education
In Garcia v. Faculty Admission accessible to all. (Section 1)
Committee, 68 SCRA 277, it was held that the
2. The State shall establish, maintain Education; Flag Salute (1987)
and support a complete, adequate,
No. XIII: The requirement that school
and integrated system of education
children participate in flag ceremonies has
relevant to the needs of the people been the subject of controversy. On the one
and society. [Section 2(1)] hand it is the view that the requirement
3. The State shall establish and violates religious freedom; on the other is
maintain a system of free public the Supreme Court decision that because of
education in the elementary and relevant provisions of the 1935 Constitution
high school levels. [Section 2(2)] the flag salute may be validly required.
4. The State shall establish and maintain a Which of the above finds support
system of scholarship grants, on 1987 Constitution, Cite at least two
student loan programs, subsidies, and provisions to prove your point.
other incentives which shall be
SUGGESTED ANSWER:
available to deserving students in
both public and private schools, The view that flag salute may validly
especially to the underprivileged. be required finds support in the
[Section 2(3)] following provisions of the 1987 Constitution:
5. The State shall encourage non- (a) Art, XIV, Sec. 3(2), which provides
formal, informal and indigenous that all educational institutions shall inculcate in
learning systems, as well as self- students, among other civil virtues, patriotism
learning, independent and out-of- and nationalism and teach them the rights and
school study program particularly duties of citizenship. Thus considerably
those that respond to community broadening the aims of schools is originally
needs, [Section 2|4|] stated in the 1935 Constitution which the
Supreme Court relied upon for its decision in
6. The State shall provide adult citizens,
Gerona v. Secretary of Education, 106 Phil. 2
the disabled, and out-of-school
(1959), upholding the flag salute in the
youth with training in civics,
Philippines. The 1935 Constitution simply
vocational efficiency and other
mentioned the development of civic conscience and
skills. [Section 2(5)]
the teaching of the duties of citizenship.
7. The State shall take into account
(b) Art II, Sec, 13 mandates the State to
regional and sectoral needs and
"inculcate in the youth patriotism and
conditions and shall encourage local
nationalism," while Sec. 17 requires the State to
planning in the development of
give priority to education, among other
educational policies and programs.
concerns, "to foster patriotism and nationalism."
[Section 5(1|]
8. The State shall enhance the rights of
teachers to professional Education; Right to Choose Profession
advancement. Non-teaching (2000)
academic and non-academic No IV. Undaunted by his three failures in the
personnel shall enjoy the protection of National Medical Admission Test (NMAT), Cruz
the State. [Section 5(4)] applied to take it again but he was refused
9. The State shall assign the highest because of an order of the Department of
budgetary priority to education and Education, Culture and Sports (DECS)
ensure that teaching will attract and disallowing flunkers from taking the test a fourth
retain its rightful share of the best time. Cruz filed suit assailing this rule raising
available talents through adequate the constitutional grounds of accessible quality
remuneration and other means of job education, academic freedom and equal
satisfaction and fulfillment. [Section protection. The government opposes this,
5(5)] upholding the constitutionality of the rule on the
[Note: The question asks for ground of exercise of police power. Decide the case
two constitutional duties of the state discussing the grounds raised. (5%)
regarding education.] SUGGESTED ANSWER:
As held in Department of Education,
Culture and Sports v. San Diego,180 SCRA
533 (1989), the rule is a valid exercise of police public elementary and high schools within the
power to ensure that those admitted to the regular class hours by instructors designated or
medical profession are qualified. The approved by the religious authorities to which
arguments of Cruz are not meritorious. The right the children or wards belong, without additional cost
to quality education and academic freedom to the Government.
are not absolute. Under Section 5(3), Article
XIV of the Constitution, the right to choose
a profession is subject to fair, reasonable Education; Validity of Academic
and equitable admission and academic Requirements (1994)
requirements. The rule does not violate equal No. 12; The Department of Education,
protection. There is a substantial distinction
Culture and Sports Issued a circular
between medical students and other students.
disqualifying anyone who fails for the fourth
Unlike other professions, the medical profession
time in the National Entrance Tests from
directly affects the lives of the people.
admission to a College of Dentistry.
X who was thus disqualified,
questions the constitutionality of the circular.
Education; Right to Quality Education (2003)
1) Did the circular deprive her of
No III - Children who are members of a her constitutional right to education?
religious sect have been expelled from their
2) Did the circular violate the equal
respective public schools for refusing, on
account of their religious beliefs, to take part in the protection clause of the Constitution?
flag ceremony which includes playing by a band SUGGESTED ANSWER:
or singing the national anthem, saluting the 1) No, the circular disqualifying anyone who
Philippine flag and reciting the patriotic fails for the fourth time in the National Entrance
pledge. The students and their parents assail
Tests from admission to the College of
the expulsion on the ground that the school Dentistry did not deprive X of her constitutional right
authorities have acted in violation of their right to education. As held in Department of
to free public education, freedom of speech, and Education, Culture and Sports vs. San Diego,
religious freedom and worship. Decide the case. 180 SCRA 533, this right is not absolute.
Section 5(3). Article XIV of the Constitution
SUGGESTED ANSWER: provides that the right to choose a profession or
The students cannot be expelled from school. course of study is subject to fair, reasonable
As held in Ebralinag v. The Division and equitable admission and academic
Superintendent of Schools of Cebu. 219 SCRA 256 requirements. Requiring that those who will
[1993], to compel students to take part in the enroll in a College of Dentistry should pass the
flag ceremony when it is against their National Entrance Test is valid, because it is
religious beliefs will violate their religious intended to ensure that only those who are
freedom. Their expulsion also violates the duty of qualified to be dentists are admitted for
the State under Article XIV, Section 1 of the enrollment.
Constitution to protect and promote the right of all 2) No, the circular did not violate the equal
citizens to quality education and make such protection clause of the Constitution. ...
education accessible to all.
Education; Teaching of Religion (1999)

ARTICLE XVI General
No II - D. What is the constitutional provision
Provisions
concerning the teaching of religion in
General Provisions; Local Dialect (1987)
the elementary and high schools in the
No. V: State whether or not the following
Philippines? Explain. (2%)
city ordinances are valid and give
SUGGESTED ANSWER: reasons in support of your answers:
D. Under Section 3(3), Article XIV of the (a) An ordinance prescribing the use of
Constitution, at the option expressed in writing the local dialect as medium of instruction
by the parents or guardians, religion shall be
in the primary grades.
SUGGESTED ANSWER:
allowed to be taught to their children or wards in
(a) The ordinance, which prescribes the use of the No. 20: State the various modes of, and
local dialect as medium of instruction in the primary steps in, revising or amending the
grades, is invalid. The Constitution provides Philippine Constitution.
in Art XIV, Sec. 7 for the use of regional
SUGGESTED ANSWER:
dialect as auxiliary medium of instruction. If
the ordinance prescribes the use of local dialect There are three modes of amending the
not as auxiliary, but as exclusive language of Constitution.
instruction, then it is violative of the Constitution for 1. Under Section 1, Article XVIII of
this additional reason. The ordinance would thus
the Constitution. Congress may by three-fourths
allow more dialects to be used than it is desirable
vote of all its Members propose any
and make the quest for national unity more difficult.
amendment to or revision of the Constitution.
2. Under the same provision, a
AFP; limitation on accepting additional constitutional convention may propose any
duties (1996) amendment to or revision of the Constitution.
No. 7: Can the Judge-Advocate General of the According to Section 3, Article XVII of the
Armed Forces of the Philippines be appointed a Constitution. Congress may by a two-thirds vote of
Trustee of the Government Service all its Members call a constitutional
Insurance System? Explain. convention or by a majority vote of all its
SUGGESTED ANSWER: Members submit the question of calling such a
No, the Judge Advocate General of the Armed convention to the electorate.
Forces of the Philippines cannot be appointed 3. Under Section 2. Article XVII of the
as trustee of the Government Service Insurance Constitution, the people may directly propose
System. Under Section 5(4). Article XVI of the amendments to the Constitution through
Constitution, no member of the Armed Forces of initiative upon a petition of at least twelve per
the Philippines in the active service shall at any cent of the total number of registered voters, of
time be appointed or designated in any capacity
which every legislative district must be
to a civilian position in the Government,
represented by at least three per cent of the
including government-owned or controlled
registered voters therein.
corporations.
According to Section 4, Article XVII of the
Constitution, to be valid any amendment to or
revision of the Constitution must be
ARTICLE XVII Amendments or ratified by a majority of the votes cast In a
Revisions plebiscite.
People’s Initiative (2004)
(4-b) An amendment to or a revision of REFERENDUM vs. INITIATIVE (Q1-2005)
the present Constitution may be proposed (a) The present Constitution introduced
by a Constitutional Convention or by the the concepts and processes of Initiative
Congress upon a vote of three-fourths of all its and Referendum. Compare and
members. Is there a third way of proposing differentiate one from the other. (3%)
revisions of or amendments to the SUGGESTED ANSWER:
Constitution? If so, how? (5%) INITIATIVE is the power of the people to
propose amendments to the Constitution or to
SUGGESTED ANSWER: propose and enact legislations through an
There is no third way of proposing revisions to the election called for the purpose. Under the 1987
Constitution; however, the people through Constitution, the people through initiative can
initiative upon petition of at least twelve per cent of propose amendments to the Constitution upon a
the total number of registered, voters, of which petition of at least twelve per centum of the
every legislative district must be represented total number of registered voters, of which
by at least three per cent of the registered every legislative district must be represented by at
voters in it, may directly propose amendments least three per centum of the registered
to the Constitution. This right is not operative voters therein. REFERENDUM is the power of
without an implementing law. (Section 2, the electorate to approve or reject a legislation
Article XVII of the 1987 Constitution.) through an election called for the purpose.
(Sec. 3, R.A. No. 6735 [1989]).
Amendments and Revisions; Modes (1997)

On the other hand, the Local Government Code the other hand, led by the Senate President,
(R.A. No. 7160) defines LOCAL INITIATIVE as are skeptical, and had even warned that no
the legal process whereby the registered voters treaty or international agreement may go into
of a local government unit may directly effect without the concurrence of two-thirds of all
propose, enact, or amend any ordinance (Sec. members of the Senate.
120) and LOCAL REFERENDUM as the A former senator had said, "it
legal process whereby the registered is completely wrong, if not erroneous," and "is
voters of the local government units may an amendment of the Constitution
approve, amend or reject any ordinance by misinterpretation." Some members of the
enacted by the Sanggunian. (Sec. 126) Lower House agree with Secretary
Ordonez, while others lament the
latter's opinion as "questionable,
ARTICLE XVIII Transitory unfortunate, and without any basis at all."
Provisions Do you or do you not agree with
Transitory Provisions; Foreign Military the aforementioned ruling of the
Bases (1996) Department of Justice? Why?
No. 4 - 1) Under the executive agreement SUGGESTED ANSWER:
entered into between the Philippines and the
No. The Constitution provides that if foreign
other members of the ASEAN, the other
military bases, troops or facilities are to be
members will each send a battalion-size unit of their
allowed after the expiration of the present
respective armed forces to conduct a
Philippine-American Military Bases Agreement in
combined military exercise in the Subic Bay
1991, it must be "under a treaty duly
Area. A group of concerned citizens sought to concurred in by the Senate and, when the
enjoin the entry of foreign troops as violative of the Congress so requires, ratified by a majority of
1987 Constitution that prohibited the the votes cast by the people in a national
stationing of foreign troops and the use by referendum." (Art. XVIII, sec. 25) A mere
them, of local facilities. agreement, therefore, not a treaty, without the
As the Judge, decide the case. concurrence of at least 2/3 of all the members
of the Senate will not be valid (Art. VII, sec. 21, Art.
Explain. SUGGESTED ANSWER:
XVIII, sec. 4). With respect to the provision allowing
1) As a judge, I shall dismiss the case. What nuclear weapons within the bases, the Constitution
Section 25, Article XVII of the Constitution appears to ban such weapons from the Philippine
prohibits in the absence of a treaty is the territory. It declares as a state policy that "the
stationing of troops and facilities of foreign Philippines, consistent with the national interest,
countries in the Philippines. It does not include the adopts and pursues a policy of freedom from
temporary presence in the Philippines of foreign nuclear weapons in its territory." (Art, II, sec. 8)
troops for the purpose of a combined military However, the deliberations of the Constitutional
exercise. Besides, the holding of the combined Commission would seem to indicate that this
military exercise is connected with defense, provision of the Constitution is "not something
which is a sovereign function. In accordance absolute nor 100 percent without exception."
with the ruling in Baer vs. Tizon, 57 SCRA 1, the It may therefore be that circumstances may
filing of an action interfering with the defense of justify a provision on nuclear weapons.
the State amounts to a suit against the State
without its consent.
Transitory Provisions; Foreign Military PUBLIC INTERNATIONAL LAW

Bases (1988)
No. 22: The Secretary of Justice had recently Basic Principles in Public Int’l Law (1991)
ruled that the President may negotiate for a
Select any five (5) of the following and
modification or extension of military bases
agreement with the United States regardless of the
explain each, using examples:
"no nukes" provisions in the 1987 (a) Reprisal
Constitution. The President forthwith
(b) Retorsion
announced that she finds the same opinion
"acceptable" and will adopt it. The Senators on
(c) Declaratory Theory of (e) CONTINENTAL SHELF of a coastal state
Recognition Principle comprises the sea-bed and subsoil of
(d) Recognition of Belligerency the submarine areas that extend
beyond its territorial sea throughout
(e) Continental Shelf the natural prolongation of its land
(f) Exequatur territory to the outer edge of the continental
margin, or to a distance of 200 nautical miles
(g) Principle of Double Criminality from the "baselines from which the breadth
(h) Protective Personality of the territorial sea is measured where
the outer edge of the continental shelf
(i) Innocent Passage does not extend up to that distance.
(j) Jus cogens in International
(f) EXEQUATUR is an authorization from the
Law SUGGESTED ANSWER: receiving state admitting the head of a consular post
(a) REPRISAL is a coercive measure short of to the exercise of his functions. For example,
war, directed by a state against another, in if the Philippines appoints a consul general for
retaliation for acts of the latter and as means of New York, he cannot start performing his
obtaining reparation or satisfaction for functions unless the President of the United States
such acts. Reprisal involves retaliatory acts issues an exequatur to him,
which by themselves would be illegal. For (g) The principle of DOUBLE CRIMINALITY is
example, for violation of a treaty by a the rule in extradition which states that for
state, the aggrieved state seizes on the a request to be honored the crime for
high seas the ships of the offending state. which extradition is requested must be a crime
(b) RETORSION is a legal but deliberately in both the requesting state and the state to
unfriendly act directed by a state against which the fugitive has fled. For example,
another in retaliation for an unfriendly though since murder is a crime both in the Philippines
legal act to compel that state to alter its
and in Canada, under the Treaty on
Extradition between the Philippines and
unfriendly conduct. An example of retorsion is
Canada, the Philippines can request Canada
banning exports to the offending state.
to extradite a Filipino who has fled to Canada.
(c) The DECLARATORY THEORY OF
(h) PROTECTIVE PERSONALITY principle is the
RECOGNITION is a theory according to which
principle by which the state exercise
recognition of a state is merely an
jurisdiction over the acts of an alien even if
acknowledgment of the fact of its existence. In
other words, the recognized state already exists and committed outside its territory, if such acts are
can exist even without such recognition. For adverse to the interest of the national state.
example, when other countries recognized (i) INNOCENT PASSAGE means the right of
Bangladesh, Bangladesh already existed as a continuous and expeditious navigation of a
state even without such recognition. foreign ship through the territorial sea of a state for
the purpose of traversing that sea without
(d) RECOGNITION OF BELLIGERENCY is the
entering the internal waters or calling at a
formal acknowledgment by a third party of the
roadstead or port facility outside internal waters, or
existence of a state of war between the central
proceeding to or from internal waters or a call at
government and a portion of that state.
such roadstead or port facility. The passage
Belligerency exists when a sizeable portion of
the territory of a state is under the effective
is innocent so long as it is not prejudicial to the
control of an insurgent community which is peace, good order or security of the coastal
seeking to establish a separate government state.
and the insurgents are in de facto control of a (j) JUS COGENS is a peremptory norm of
portion of the territory and population, have a general international law accepted and
political organization, are able to maintain such recognized by the international community as a
control, and conduct themselves according to the
whole as a norm from which no derogation is
laws of war. For example, Great Britain
permitted and which can be modified only by a
recognized a state of belligerency in the United
subsequent norm of general international law
States during the Civil War,
having the same character, An example is the
prohibition against the use of force.
Constitutive Theory vs. Declaratory a) Can the foreign ambassador invoke
Theory (2004) his diplomatic immunity to resist the
(2-a-4) Distinguish: The constitutive lessor's action? (3%)
theory and the declaratory theory b) The lessor gets hold of evidence that the
concerning recognition of states. ambassador is about to return to his home
SUGGESTED ANSWER: country. Can the lessor ask the court to stop
According to the CONSTITUTIVE the ambassador's departure from the
THEORY, recognition is the last Philippines? (2%)
indispensable element that converts the state SUGGESTED ANSWER:
being recognized into an international person. a) No, the foreign ambassador cannot invoke
his diplomatic immunity to resist the action,
According to the DECLARATORY THEORY,
since he is not using the house in Tagaytay City
recognition is merely an acknowledgment of
for the purposes of his mission but merely
the pre-existing fact that the state being
for vacation. Under Article 3(l)(a) of the
recognized is an international person.(Cruz,
Vienna Convention on Diplomatic
International Law, 2003 ed.)
Relations, a diplomatic agent has no
immunity in case of a real action relating to
Contiguous Zone vs. Exclusive Economic
private immovable property situated in the
Zone (2004) territory of the receiving State unless he
II-A. Distinguish briefly but clearly between: holds it on behalf of the sending State for
2) The contiguous zone and the purposes of the mission.
exclusive economic zone. b) No, the lessor cannot ask the court to stop the
departure of the ambassador from the
SUGGESTED ANSWER:
Philippines. Under Article 29 of the Vienna
(2) CONTIGUOUS ZONE is a zone contiguous Convention, a diplomatic agent shall not be
to the territorial sea and extends up to liable to any form of arrest or detention.
twelve nautical miles from the territorial sea (per Dondee) The grounds cited by YZ is tenable on
and over which the coastal state may the basis that the precept that a State cannot be
exercise control necessary to prevent sued in the courts of a foreign state is a long-
infringement of its customs, fiscal, standing rule of customary international law then
immigration or sanitary laws and regulations closely identified with the personal immunity of a
within its territory or territorial sea. (Article 33 foreign sovereign from suit and, with the emergence
of the Convention on the Law of the Sea.) of democratic states, made to attach not just to the
The EXCLUSIVE ECONOMIC ZONE is person of the head of state, or his representative,
a zone extending up to 200 nautical miles from but also distinctly to the state itself in its sovereign
the baselines of a state over which the coastal capacity. If the acts giving rise to a suit are those of
state has sovereign rights for the purpose a foreign government done by its foreign agent,
of exploring and exploiting, conserving although not necessarily a diplomatic personage,
and managing the natural resources, whether but acting in his official capacity, the complaint could
living or nonliving, of the waters superjacent be barred by the immunity of the foreign sovereign
to the seabed and of the seabed and subsoil, from suit without its consent. Suing a representative
and with regard to other activities for the of a state is believed to be, in effect, suing the state
economic exploitation and exploration of itself. (KHOSROW MINUCHER vs. COURT OF
the zone. (Articles 56 and 57 of the APPEALS, G.R. No. 142396. February 11, 2003)
Convention on the Law of the Sea.)
Diplomatic Immunity (2001)
No XX - Dr. Velen, an official of the World
Diplomatic Immunity (2000) Health Organization (WHO) assigned in the
No XX - A foreign ambassador to Philippines, arrived at the Ninoy Aquino
the Philippines leased a vacation house International Airport with his personal effects
in Tagaytay for his personal use. For contained in twelve crates as unaccompanied
some reason, he failed to pay rentals for baggage. As such, his personal effects were
more than one year. The lessor filed an allowed free entry from duties and taxes, and
action for the recovery of his property in court. were directly stored at Arshaine Corporation's

warehouse at Makati, pending Dr. Under Article 37 of the Vienna Convention on
Velen's relocation to his permanent quarters. Diplomatic Relations, members of the
At the instance of police authorities, the administrative and technical staff of the
Regional Trial Court (RTC) of Makati issued a diplomatic mission, shall, if they are not
warrant for the search and seizure of Dr. nationals of or permanent residents in the
Velen's personal effects in view of an alleged receiving State, enjoy the privileges and
violation of the Tariff and Custom's Code. immunities specified in Article 29.
According to the police, the crates contained Under Article 9 of the Vienna Convention
contraband items. Upon protest of WHO on Diplomatic Relations, the remedy is to
officials, the Secretary of Foreign Affairs declare the high-ranking officials and
formally advised the RTC as to Dr. Velen's rank-and-file employees personae non gratae
immunity. The Solicitor General likewise joined and ask them to leave.
Dr. Velen's plea of immunity and motion to
ALTERNATIVE ANSWER:
quash the search warrant. The RTC denied the
motion. Under the Vienna Convention on Diplomatic
Relations, a diplomatic agent "shall not be liable
Is the denial of the motion to quash
to any form of arrest or detention (Article
proper? (5%)
29) and he enjoys immunity from
SUGGESTED ANSWER: criminal jurisdiction (Article 31).
The denial of the motion is improper. As held in This immunity may cover the "high-ranking
World Health Organization vs. Aquino, 48 officials" in question, who are assumed to be
SCRA 242 (1972). as an official of the World diplomatic officers or agents. With respect to the
Health Organization, Dr. Velen enjoyed "rank-and-file employees" they are covered by the
diplomatic immunity and this included immunity referred to above, provided they are not
exemption from duties and taxes. Since nationals or permanent residents of the Philippines,
diplomatic immunity involves a political pursuant to Article 37(2) of the said Convention.
question, where a plea of diplomatic immunity is
recognized and affirmed by the Executive If the said rank-and-file employees
Department, it is the duty of the court to accept the belong to the service staff of the diplomatic
claim of immunity. mission (such as drivers) they may be covered by
Diplomatic Immunity (2003) the immunity (even if they are not Philippine
nationals or residents) as set out in Article
No XVIII - A group of high-ranking officials and
37(3), if at the time of the arrest they were in
rank-and-file employees stationed in a
"acts performed in the course of their duties." If a
foreign embassy in Manila were arrested
driver was among the said rank-and-file
outside embassy grounds and detained
employees and he was arrested while driving a
at Camp Crame on suspicion that they
diplomatic vehicle or engaged in related acts,
were actively collaborating with "terrorists" out
to overthrow or destabilize the Philippine still he would be covered by immunity.
Government. The Foreign Ambassador Diplomatic Immunity (2004)
sought their immediate release, claiming (8-a) A. MBC, an alien businessman dealing in
that the detained embassy officials and carpets and caviar, filed a suit against
employees enjoyed diplomatic immunity. If policemen and YZ, an attache of XX Embassy, for
invited to express your legal opinion on damages because of malicious prosecution. MBC
the matter, what advice would you give? alleged that YZ concocted false and malicious
charges that he was engaged in drug trafficking,
SUGGESTED ANSWER:
whereupon narcotics policemen conducted a
I shall advice that the high-ranking officials and "buy-bust" operation and without warrant arrested
rank-and-file employees be released him, searched his house, and seized his money
because of their diplomatic immunity. Article and jewelry, then detained and tortured him in
29 of the Vienna Convention on violation of his civil and human rights as well as
Diplomatic Relations provides: causing him, his family and business serious
"The person of a diplomatic agent shall damages amounting to two million pesos. MBC
be inviolable. He shall not be liable added that the trial court acquitted him of the drug
charges.
to any form of arrest or detention."

Assailing the court's jurisdiction: YZ now moves to (a) As counsel of Abad, refute the
dismiss the complaint, on the ground that (1) he is defenses of "sovereign immunity"
an embassy officer entitled to diplomatic and "diplomatic immunity" raised
immunity; and that (2) the suit is really a suit by the State of Italy and
against his home state without its consent. He its Ambassador.
presents diplomatic notes from XX Embassy SUGGESTED ANSWER: As counsel for
certifying that he is an accredited embassy Abad, I will argue that sovereign
officer recognized by the Philippine immunity will not lie as it is an
government. He performs official duties, he established rule that when a State
says, on a mission to conduct surveillance on enters into a contract, it waives its
drug exporters and then inform local police immunity and allows itself to be
officers who make the actual arrest of suspects. Are sued. Moreover, there is a provision
the two grounds cited by YZ to dismiss the suit in the contract that any suit arising
tenable? (5%) therefrom shall be filed with the
proper courts of the City of Manila.
SUGGESTED ANSWER: On the issue of diplomatic immunity, I
A. The claim of diplomatic immunity of YZ is not will assert that the act of the
tenable, because he does not possess an Ambassador unilaterally terminating
acknowledged diplomatic title and is not the agreement is tortuous and done
performing duties of a diplomatic nature. with malice and bad faith and not a
However, the suit against him is a suit against sovereign or diplomatic function.
XX without its consent. YZ was acting as an
agent of XX and was performing his official (b) At any rate, what should be
functions when he conducted surveillance on the court's ruling on the said
drug exporters and informed the local police defenses? SUGGESTED ANSWER:
officers who arrested MBC. He was performing such The court should rule against said
duties with the consent of the Philippine defenses. The maintenance contract
government, therefore, the suit against YZ is a suit and repair of the Embassy and
against XX without its consent. (Minucher v. Court Ambassador's Residence is a
of Appeals, 397 SCRA 244 [1992]). contract in jus imperii, because such
repair of said buildings is
indispensable to the performance of
ALTERNATIVE SUGGESTED ANSWER:
the official functions of the
Diplomatic Immunity; Ambassador Government of Italy. Hence, the
(Q3- 2005) contract is in pursuit of a sovereign
(1) Italy, through its Ambassador, entered into a activity in which case, it cannot be
contract with Abad for the maintenance and deemed to have waived its immunity
repair of specified equipment at its from suit.
Embassy and Ambassador's Residence,
such as air conditioning units, generator On the matter of whether or not the
sets, electrical facilities, water heaters, and Ambassador may be sued, Article 31 of
water motor pumps. It was stipulated that the Vienna Convention on
the agreement shall be effective for a period of Diplomatic Relations provides that a
four years and automatically renewed unless diplomatic agent enjoys immunity
cancelled. Further, it provided that any suit from the criminal, civil and
arising from the contract shall be filed with administrative jurisdiction of the
the proper courts in the City of Manila. receiving state except if the act
performed is outside his official
functions, in accordance with the
Claiming that the Maintenance Contract principle of functional necessity. In
was unilaterally, baselessly and arbitrarily this case, the act of entering into the
terminated, Abad sued the State of Italy and its contract by the Ambassador was part of
Ambassador before a court in the City of his official functions and thus, he is
Manila. Among the defenses, they raised entitled to diplomatic immunity.
were "sovereign immunity" and "diplomatic (Republic of Indonesia v. Vinzons,
immunity." (5%) G.R. No. 154705, June 26, 2003)
Diplomatic Immunity; Ambassadors (1990)

No. 5: D, the Ambassador of the Kingdom of and 31 of the Vienna Convention on Diplomatic
Nepal to the Philippines, leased a house in Relations provides that the papers,
Baguio City as his personal vacation home. On correspondence and the property of diplomat
account of military disturbance in Nepal, D did agents shall be inviolable. Therefore, a writ of
not receive his salary and allowances from his attachment cannot be issued against his
government and so he failed to pay his rentals for furniture and any personal properties.
more than one year. E, the lessor, filed an Moreover, on the assumption that the Kingdom of
action for recovery of his property with the Nepal grants similar protection to Philippine
Regional Trial Court of Baguio City. diplomatic agents. Section 4 of Republic Act No.
75 provides that any writ or process issued by any
(1) Can the action against D prosper?
court in the Philippines for the attachment
(2) Can E ask for the attachment of the of the goods or chattels of the ambassador
furniture and other personal properties of D of a foreign State to the Philippines shall
after getting hold of evidence that D is about to be void.
leave the country? SUGGESTED ANSWER:
(3} Can E ask for the court to stop
(3) No, E cannot ask the court to stop the
D's departure from the Philippines? departure of the Ambassador of the Kingdom of
SUGGESTED ANSWER: Nepal from the Philippines. Article 29 of the
Vienna Convention on Diplomatic Relations
(1) Yes, the action can prosper. Article 31
provides: "The person of a diplomatic agent
of the Vienna Convention on Diplomatic
shall be inviolable. He shall not be liable to any form
Relations provides:
of arrest or detention."
"1. A diplomatic agent shall enjoy
Diplomatic Immunity; Coverage (Q3-2005)
immunity from the criminal jurisdiction of
(2) Adams and Baker are American
the receiving State. He shall also enjoy
citizens residing in the Philippines.
immunity from its civil
Adams befriended Baker and became a
and administrative jurisdiction, except
frequent visitor at his house. One
in the case of:
day, Adams arrived with 30 members
(a) A real action relating to private of the Philippine National Police, armed
immovable property situated in the with a Search Warrant authorizing the
territory of the receiving State, unless he search of Baker's house and its premises
holds it on behalf of the sending State for dangerous drugs being trafficked to
for the purposes of the mission;" the United States of America.
The action against the Ambassador is a
The search purportedly yielded positive
real action involving private immovable
results, and Baker was charged with
property situated within the territory of the
Violation of the Dangerous Drugs Act.
Philippines as the receiving state. The action
Adams was the prosecution's principal
falls within the exception to the grant of
witness. However, for failure to prove his
immunity from the civil and administrative
guilt beyond reasonable doubt, Baker was
jurisdiction of the Philippines.
acquitted.
ALTERNATIVE ANSWER;
Baker then sued Adams for damages for
No, the action will not prosper. Although the
filing trumped-up charges against him.
action is a real action relating to private
Among the defenses raised by Adams is
immovable property within the territory of the
that he has diplomatic immunity,
Philippines, nonetheless, the vacation house
conformably with the Vienna Convention on
may be considered property held by the
Diplomatic Relations. He presented
Ambassador In behalf of his state (the Kingdom of
Diplomatic Notes from the American
Nepal) for the purposes of the mission and,
Embassy stating that he is an agent of the
therefore, such is beyond the civil and
United States Drug Enforcement Agency
administrative jurisdiction of the Philippines,
tasked with "conducting surveillance
including its courts, operations" on suspected drug dealers in the
SUGGESTED ANSWER: Philippines believed to be the source of
(2) No, E cannot ask for the attachment of the prohibited drugs being shipped to the U.S. It
was also stated that after having
personal properties of the Ambassador. Arts. 30 ascertained the target, Adams would then
inform the Philippine narcotic agents 3. Suppose after he was charged, he
to make the actual arrest. (5%) was appointed as his country's ambassador
to the Philippines. Can his newly-gained
a) As counsel of plaintiff Baker, argue why his diplomatic status be a ground for dismissal of
complaint should not be dismissed on his criminal case? Explain.
the ground of defendant Adams'
SUGGESTED ANSWER:
diplomatic immunity from suit.
SUGGESTED ANSWER. 1. Under Article 32 of the Vienna Convention on
As counsel for Baker, I would argue that Diplomatic Relations, a diplomatic agent shall
Adams is not a diplomatic agent enjoy immunity from the criminal jurisdiction of
considering that he is not a head of the receiving State. He shall also enjoy
mission nor is he part of the diplomatic staff immunity from its civil and administrative
that is accorded diplomatic rank. Thus, jurisdiction except in the case of:
the suit should not be dismissed as (a) A real action relating to
Adams has no diplomatic immunity private immovable property situated in the
under the 1961 Vienna Convention on territory of the receiving State, unless he holds
Diplomatic Relations.
it on behalf of the sending State for the
b) As counsel of defendant Adams, purposes of the mission;
argue for the dismissal of the (b) An action relating to succession in
complaint. SUGGESTED ANSWER which the diplomatic agent is invoked as
As counsel for Adams, I would argue executor, administrator, heir or legatee as a
that he worked for the United States private person and not on behalf of the sending
Drug Enforcement Agency and was State;
tasked to conduct surveillance of
(c) An action relating to
suspected drug activities within the
any professional or commercial activity
country with the approval of the
exercised by the diplomatic agent in the
Philippine government. Under the
doctrine of State Immunity from Suit, if receiving State outside his official functions.
the acts giving rise to a suit are those of a On the other hand, under Article 41 of the
foreign government done by its Vienna Convention on Consular Relations, a
foreign agent, although not necessarily a consular officer does not enjoy Immunity from the
diplomatic personage, but acting in his Criminal jurisdiction of the receiving State. Under
official capacity, the complaint could be Article 43 of the Vienna Convention on Consular
barred by the immunity of the foreign Relations, consular officers are not amenable to
sovereign from suit without its consent. the Jurisdiction of the Judicial or administrative
Adams may not be a diplomatic agent authorities of the receiving State in respect of acts
but the Philippine government has given its performed in the exercise of consular functions.
imprimatur, if not consent, to the However, this does not apply in respect of a civil
activities within Philippine territory of action either:
Adams and thus he is entitled to the (a) arising out of a contract concluded
defense of state immunity from suit. by a consular officer in which he did
(Minucher v. CA, G.R. No. 142396,
not contract expressly or impliedly as an
February 11, 2003)
agent of the sending State; or
Diplomatic Immunity; Diplomatic Envoy and (b) by a third party for damage arising
Consular Officers (1995) from an accident in the receiving State caused
No. 3: by a vehicle, vessel, or aircraft.
1. Discuss the differences, if any, in the

privileges or immunities of diplomatic envoys SUGGESTED ANSWER:
and consular officers from the civil or 2. No, he may not claim immunity from the
criminal jurisdiction of the receiving state. jurisdiction of the local court. Under Article 41 of the
2. A consul of a South American country Vienna Convention of Consular Relations,
stationed in Manila was charged with serious consuls do not enjoy immunity from the criminal
physical injuries. May he claim Immunity from Jurisdiction of the receiving State. He is not
jurisdiction of the local court? Explain. liable to arrest or detention pending trial unless the
offense was committed against his father,
mother, child, ascendant, descendant or was held that a consul is not exempt from
spouse. Consuls are not liable to arrest and criminal prosecution in the country where he is
detention pending trial except in the case of a assigned. However, as secretary in the
grave crime and pursuant to a decision by the American Embassy, X enjoys diplomatic
competent judicial authority. The crime of immunity from criminal prosecution As
physical Injuries is not a grave crime unless it secretary, he is a diplomatic agent. Under
be committed against any of the above- Paragraph 1 of Article 31 of the Vienna
mentioned persons. (Schneckenburger v. Convention on Diplomatic Relations, a
Moran 63 Phil. 249). diplomatic agent enjoys immunity from the
criminal jurisdiction of the receiving State.
Exclusive Economic Zone (2000)
SUGGESTED ANSWER:
No XIX. b) What is the concept of
3. Yes, the case should be dismissed. Under
the exclusive economic zone under the
Article 40 of the Vienna Convention
on Diplomatic Relations, if a diplomatic agent UN Convention on the Law of the Sea? (2%)
is in the territory of a third State, which has SUGGESTED ANSWER:
granted him a passport visa if such visa was b) The exclusive economic zone under the
necessary, while proceeding to take up his Convention on the Law of the Sea is an area
post, the third State shall accord him beyond and adjacent to the territorial sea, which
inviolability and such other immunities as may
shall not extend beyond 200 nautical miles from the
be required to ensure his transit.
baselines from which the territorial sea is
measured. The coastal State has in the
Diplomatic Immunity; Diplomatic Envoy and exclusive economic zone:
Consular Officers (1997) (a) Sovereign rights for the purpose of
No 19: X, a Secretary and Consul in the exploring and exploiting, conserving and
American Embassy in Manila, bought from B a managing the natural resources, whether living
diamond ring in the amount of P50,000.00 or non-living, if the waters superjacent to
which he later gave as a birthday present to his the sea-bed and of the seabed and subsoil,
Filipino girlfriend. The purchase price was paid in and with regard to other activities for the
check drawn upon the Citibank. Upon economic exploitation and exploration of the
presentment for payment, the check was zone, such as the production of energy
dishonored for insufficiency of funds. Because of from the water, currents and winds;
X's failure to make good the dishonored check, (b) Jurisdiction as provided in
B filed a complaint against X in the Office of the relevant provisions of the Convention
the City Prosecutor of Manila for violation of with regard to:
Batas Pambansa Big. 22. After preliminary
(i) the establishment and use of
investigation, the information was filed against X
artificial islands, installations
in the City Court of Manila. X filed a motion to
dismiss the case against him on the ground that and structures;
he is a Secretary and Consul in the American (ii) marine scientific
Embassy enjoying diplomatic immunity from research; and
criminal prosecution in the Philippines. (iii) the protection and
preservation of the marine environment;
If you were the Judge, how would you
resolve the motion to dismiss?
(c) Other rights and duties provided
SUGGESTED ANSWER:
form the Convention. [Article 56 of
If I were the Judge, I would grant the motion to the Convention of the Law of the Sea.)
dismiss.
As consul, X is not immune from criminal
Executive Agreements; Binding
prosecution. Under Paragraph 3 of Article 41 of the
Vienna Convention on Consular Relations, a Effect (2003)
consular officer is not immune from the No XX An Executive Agreement was executed
criminal jurisdiction of the receiving state. In between the Philippines and a neighboring
Schneckenburger vs. Moron, 63 Phil. 249, it State. The Senate of the Philippines took it
upon itself to procure a certified true copy of the No. 10: 2) Patrick is charged with illegal
Executive Agreement and, after deliberating on it, recruitment and estafa before the RTC of
declared, by a unanimous vote, that the Manila. He jumped bail and managed to escape to
agreement was both unwise and against the America. Assume that there is an extradition treaty
best interest of the country. Is the Executive between the Philippines and America and it does
Agreement binding (a) from the standpoint of not include illegal recruitment as one of the
Philippine law and (b) from the standpoint of extraditable offenses. Upon surrender of Patrick
international law? Explain by the U.S. Government to the Philippines,
SUGGESTED ANSWER: Patrick protested that he could not be tried for
illegal recruitment. Decide.
(a) As to Philippine law, the
SUGGESTED ANSWER:
Executive Agreement is binding....
2) Under the principle of specialty in extradition,
(b) The Executive Agreement is also binding
Patrick cannot be tried for illegal recruitment,
from the standpoint of international law. As held in
since this is not included in the list of
Bavan v. Zamora. 342 SCRA 449 [2000], in
extraditable offenses in the extradition treaty
international law executive agreements are equally
between the Philippines and the United States,
binding as treaties upon the States who are parties
unless the United States does not object to the trial
to them. Additionally, under Article 2{1)(a) of the
of Patrick for Illegal recruitment.
Vienna Convention on the Law of Treaties,
whatever may be the designation of a written
agreement between States, whether it is indicated Extradition; Effectivity of treaty (1996)
as a Treaty, Convention or Executive Agreement, is
not legally significant. Still it is considered a treaty No. 6; 1) The Extradition Treaty between
and governed by the international law of treaties. France and the Philippines is silent as to
its applicability with respect to crimes
committed prior to its effectivity.
a) Can France demand
Extradition vs. Deportation (1993)
the extradition of A, a French national
No. 10: 1) What is the difference if any between residing in the Philippines, for an offense
extradition and deportation? committed in France prior to the effectivity
SUGGESTED ANSWER: of the treaty? Explain.
b) Can A contest his extradition
1) The following are the differences
on the ground that it violates the ex post
between extradition and deportation:
facto provision of the Philippine
a. EXTRADITION is effected for the Constitution? Explain.
benefit of the state to which the person being
SUGGESTED ANSWER:
extradited will be surrendered because he is a
fugitive criminal in that state, while 1. a) Yes, France can ask for the extradition of A for
DEPORTATION is effected for the protection of the an offense committed in France before the
State expelling an alien because his presence effectivity of the Extradition Treaty between
is not conducive to the public good. France and the Philippines. In Cleugh vs.
Strakosh. 109 F2d 330, it was held that an
b. EXTRADITION is effected on
extradition treaty applies to crimes committed
the basis of an extradition treaty or
before its effectivity unless the extradition treaty
upon the request of another state, while expressly exempts them. As Whiteman points
DEPORTATION is the unilateral act of the out, extradition does not define crimes but
state expelling an alien. merely provides a means by which a State may
c. In EXTRADITION, the alien will obtain the return and punishment of persons
be surrendered to the state asking for charged with or convicted of having committed a
his extradition, while in DEPORTATION crime who fled the jurisdiction of the State
the undesirable alien may be sent to any whose law has been violated. It is therefore
state willing to accept him. immaterial whether at the time of the
commission of the crime for which extradition is
sought no treaty was in existence. If at the time
Extradition; Doctrine of Specialty (1993) extradition is requested there is in force
between the requesting and "the requested
States a treaty covering the offense on which
the request is based, the treaty is the plan of John to assassinate President Harry was
applicable. (Whiteman, Digest of International part of such plan. However, if the
Law, Vol. 6, pp. 753-754.) extradition treaty contains an attentat clause,
Republic A can extradite John, because under
b) No, A cannot contest his extradition on
the attentat clause, the taking of the life or
the ground that it violates the ex post
attempt against the life of a head of state or that of
facto provision of the Constitution. As held
the members of his family does not constitute a
in Wright vs. Court of Appeals, 235
SCRA 341, the prohibition against ex post political offense and is therefore extraditable.
facto laws in Section 22, Article III of the FIRST ALTERNATIVE ANSWER:
Constitution applies to penal laws only and Republic A may or can refuse the request
does not apply to extradition treaties. of extradition of William because he is not
in its territory and thus it is not in the
Extradition; Grounds (2002) position to deliver him to Republic X.
Even if William were in the territorial jurisdiction of
No XVIII. John is a former President of the
Republic A, he may not be extradited
Republic X, bent on regaining power which he
because inciting to sedition, of which he is
lost to President Harry in an election. Fully
charged, constitutes a political offense. It is a
convinced that he was cheated, he set out to
standard provision of extradition treaties, such as
destabilize the government of President Harry by
the one between Republic A and Republic X, that
means of a series of protest actions. His plan
political offenses are not extraditable.
was to weaken the government and, when the
situation became ripe for a take-over, to SECOND ALTERNATIVE ANSWER:
assassinate President Harry. Republic B can deny the request of Republic X
William, on the other hand, is a believer in to extradite William, because his offense
human rights and a former follower of was not a political offense. On the basis of
President Harry. Noting the systematic acts of the predominance or proportionality test his
harassment committed by government agents acts were not directly connected to any
against farmers protesting the seizure of their purely political offense.
lands, laborers complaining of low wages, and
students seeking free tuition, William organized
groups which held peaceful rallies in front of the Extradition; Retroactive Application (Q2-
Presidential Palace to express their grievances. 2005)
On the eve of the assassination (1) The Philippines and Australia entered into a
attempt, John's men were caught by members Treaty of Extradition concurred in by the
of the Presidential Security Group. President
Senate of the Philippines on September 10,
Harry went on air threatening to prosecute
1990. Both governments have notified each
other that the requirements for the entry
plotters and dissidents of his administration. The
into force of the Treaty have been complied
next day, the government charged John with
with. It took effect in 1990.
assassination attempt and William with inciting The Australian government is requesting
to sedition.
the Philippine government to extradite its
John fled to Republic A. William, citizen, Gibson, who has committed in his
who was in Republic B attending a country the indictable offense of Obtaining
lecture on democracy, was advised by his Property by Deception in 1985. The said
friends to stay in Republic B. offense is among those enumerated as
Both Republic A and Republic B extraditable in the Treaty.
have conventional extradition treaties with For his defense, Gibson asserts that the
Republic X. retroactive application of the extradition
If Republic X requests the extradition of treaty amounts to an ex post facto law. Rule on
John and William, can Republic A deny the Gibson's contention. (5%)
request? Why? State your reason fully. (5%)
SUGGESTED ANSWER:
SUGGESTED ANSWER:
Gibson is incorrect. In Wright v. Court of
Republic A can refuse to extradite John, Appeals, G.R. No.113213, August 15,1994, it
because his offense is a political offense. John was was held that the retroactive application of the
plotting to take over the government and Treaty of Extradition does not violate
the prohibition against ex post facto laws, Europe before World War II) were exterminated
because the Treaty is neither a piece of by the Nazis. Along with the Jews, another 9 to
criminal legislation nor a criminal procedural 10 million people (Gypsies and Slavs) were
statute. It merely provided for the massacred. (WORLD ALMANAC 120 (40th ed.,
extradition of persons wanted for offenses 1987)).
already committed at the time the treaty
was ratified.
Human Rights (1999)
Flag State vs. Flag of Convenience (2004) 1999 No X - A. Give three multilateral
II-A. Distinguish briefly but clearly between: conventions on Human Rights adopted under the
direct auspices of the United Nations? (2%)
(3) The flag state and the flag of convenience.
SUGGESTED ANSWER:
SUGGESTED ANSWER:
A. The following are multilateral conventions on
FLAG STATE means a ship has the nationality Human Rights adopted under the
of the flag of the state it flies, but there must be
direct auspices of the United Nations:
a genuine link between the state and the
ship. (Article 91 of the Convention on the Law 1. International Covenant on Civil and
of the Sea.) Political Rights;
FLAG OF CONVENIENCE refers to a state with 2. Convention on the Elimination of All Forms
which a vessel is registered for various reasons of Discrimination against Women;
such as low or non-existent taxation or low 3. Convention on the Rights of the Child;
operating costs although the ship has
no genuine link with that state. (Harris, Cases 4. Convention against Torture and Other
and Materials on International Law, 5th ed., Cruel, Inhuman or Degrading Treatment
1998, p. 425.) or Punishment;
5. International Convention on the Elimination
Genocide (1988) of All Forms of Racial Discrimination;
6. Convention on the Prevention
What is "Genocide," and what is the
and Punishment of the Crime of Genocide; and
foremost example thereof in recent history?
7. International Convention on Economic,
SUGGESTED ANSWER:
Social, and Cultural Rights
"Genocide" refers to any of the following
acts, whether committed in time of war or
peace, with intent to destroy in whole or in Human Rights; Civil and Political
part national, ethnic, racial or religious group: Rights (1992)
(a) Killing members of a group; No. 15: Walang Sugat, a vigilante group
composed of private businessmen and civic
(b) Causing bodily or mental harm to its leaders previously victimized by the Nationalist
members; Patriotic Army (NPA) rebel group, was
(c) Deliberately inflicting on the implicated in the torture and kidnapping of Dr.
group conditions of life calculated Mengele, a known NPA sympathizer.
to bring about its physical a) Under public international law, what
destruction in whole or in part; rules properly apply? What liabilities, if
(d) Imposing measures to prevent any, arise thereunder if Walang Sugat's
births within the group; and involvement is confirmed.
(e) Forcibly transforming children of the b) Does the Commission on Human
group to another group. (J. SALONGA & Rights have the power to investigate and
P. YAP, PUBLIC INTERNATIONAL LAW adjudicate the matter?
399-400 (1966)). SUGGESTED ANSWER:
a) On the assumption that Dr. Mengele is a
The foremost example of genocide is the foreigner, his torture violates the International
Holocaust (1933-1945) where about 6 million Covenant on Civil and Political Rights, to which the
Jews (two thirds of the Jewish population of Philippine has acceded. Article 7 of the
Covenant on Civil and Political Rights provides: b) Can only investigate, no power of
"No one shall be subjected to torture or to cruel, adjudication
inhuman or degrading treatment
or punishment."
Human Rights; Civil and Political
In accordance with Article 2 of the Covenant on Rights (1996)
Civil and Political Rights, it is the obligation
1996 No. 1: 1) Distinguish civil rights
of the Philippines to ensure that Dr. Mengele
from political rights and give an example of
has an effective remedy, that he shall have his
right to such a remedy determined by each right.
competent authority, and to ensure the 2) What are the relations of civil and
enforcement of such remedy when granted. political rights to human rights? Explain.
SUGGESTED ANSWER:
ALTERNATIVE ANSWER:
On the assumption that Dr. Mengele is 1) The term "CIVIL RIGHTS" refers to the rights
a foreigner, his claim will have to be secured by the constitution of any state or
directed against the members of Walang country to all its Inhabitants and not connected with
Sugat on the basis of the Philippine law and the organization or administration of
be addressed to the jurisdiction of Philippine government, [Black, Handbook of American
courts. His claim may be based on the Constitutional Law, 4th ed., 526.) POLITICAL
generally accepted principles of international RIGHTS consist in the power to participate,
law, which form part of Philippine law under directly or indirectly, in the management of the
Section 2, Article II of the Constitution. His government. Thus, civil rights have no relation
claim may be premised on relevant norms of to the establishment, management or support of the
international law of human rights. government. (Anthony vs. Burrow, 129 F 783).
Under international law, Dr. Mengele must first

exhaust the remedies under Philippine law CIVIL RIGHTS defines the relations of
before his individual claim can be taken up by individual amongst themselves
the State of which he is a national unless the while POLITICAL RIGHTS defines the
said State can satisfactorily show it is its own relations of Individuals vis-a-vis the state.
interests that are directly injured. If this CIVIL RIGHTS extend protection to all
condition is fulfilled, the said State's claim will inhabitants of a state, while POLITICAL
be directed against the Philippines as a subject of RIGHTS protect merely its citizens.
international law. Thus it would cease to be an
individual claim of Dr. Mengele. Examples of civil rights are the rights against
involuntary servitude, religious freedom, the
Dr. Mengele's case may concern international guarantee against unreasonable searches and
law norms on State responsibility. But the seizures, liberty of abode, the prohibition
application of these norms require that the against imprisonment for debt, the right to
basis of responsibility is the relevant acts that travel, equal protection, due process, the right to
can be attributed to the Philippines as a State. marry, right to return to this country and right to
education.
Hence, under the principle of attribution it is
necessary to show that the acts of the vigilante Examples of political rights are the right
group Walang Sugat can be legally attributed to of suffrage, the right of assembly, and the right
the Philippines by the State of which to petition for redress of grievances.
Dr. Mengele is a national.
The application of treaty norms of international 2) Human rights are broader in scope than civil and
law on human rights, such as the provision political rights. They also include social,
against torture in the International Covenants in economic, and cultural rights. Human rights are
Civil and Political Rights pertain to States. The acts inherent in persons from the fact of their
of private citizens composing Walang Sugat humanity. Every man possesses them
cannot themselves constitute a violation by the everywhere and at all times simply because he is a
Philippines as a State. human being. On the other hand, some civil and
SUGGESTED ANSWER: political rights are not natural rights. They exist
because they are protected by a
constitution or granted by law. For example, the 1) If Nova and Ameria are members of the
liberty to enter into contracts is not a United Nations, Nova can premise its cause of
human right but is a civil right. action on a violation of Article 2(4) of the United
Nations Charter, which requires members to
refrain from the threat or use of force ...
Int’l Court of Justice; Jurisdiction
2) By virtue of the principle of sovereign
Over States immunity, no sovereign state can be made a
1994 No. 20: The sovereignty over party to a proceeding before the International
certain islands is disputed between State A Court of Justice unless it has given its consent. If
and State B. These two states agreed to Ameria has not accepted the Jurisdiction of the
submit their disputes to the International International Court of Justice. Ameria can invoke
Court of Justice [ICJ]. the defense of lack of jurisdiction. Even if Ameria
1) Does the ICJ have jurisdiction to take has accepted the jurisdiction of the court but
the acceptance is limited and the limitation
cognizance of the case?
applies to the case, it may invoke such
2) Who shall represent the parties before the limitation its consent as a bar to the
Court? assumption of jurisdiction.
SUGGESTED ANSWER: If jurisdiction has been accepted,
Ameria can invoke the principle of
1) The International Court of Justice has
anticipatory self-defense, recognized under
jurisdiction over the case, because the parties
customary international law, because Nova is
have jointly submitted the case to it and have
planning to launch an attack against Ameria by
thus indicated their consent to its jurisdiction.
using the arms it bought from Bresia.
2) Parties to a case may appoint agents
3) If jurisdiction over Ameria is
to appear before the International Court of
established, the case should be decided
Justice in their behalf, and these agents
in favor of Nova, .... if jurisdiction over
need not be their own nationals. However,
Ameria is not established, the case should be
under Article 16 of the Statutes of the
decided in favor of Ameria because of the
International Court of Justice, no member of
principle of sovereign immunity.
the court may appear as agent in any case.
Int’l Court of Justice; Limitations

Int’l Court of Justice; Jurisdiction
On Jurisdiction (1999)
Over States (1994)
No. 19; The State of Nova, controlled by an
No X - B. Under its Statute, give
authoritarian government, had unfriendly two limitations on the jurisdiction of the
relations with its neighboring state, America. International Court of Justice? (2%)
Bresla, another neighboring state, had been SUGGESTED ANSWER:
shipping arms and ammunitions to Nova for use in
B. The following are the limitations on
attacking Ameria.
the jurisdiction of the International Court of
To forestall an attack, Ameria placed Justice under its Statute:
floating mines on the territorial
1. Only states may be parties in cases before
waters surrounding Nova. Ameria supported a
group of rebels organized to overthrow the it. (Article 34)
government of Nova and to replace it 2. The consent of the parties is needed for
with a friendly government. the court to acquire jurisdiction over a
Nova decided to file a case against case. (Article 36)
Ameria in the International Court of Justice
1) On what grounds may Nova's causes of Int’l Court of Justice; Parties; Pleadings and
action against Ameria be based? Oral Argument (1994)
2) On what grounds may Ameria move No. 20: The sovereignty over certain islands is
to dismiss the case with the ICJ? disputed between State A and State B. These
Decide the case. two states agreed to submit their disputes to the
International Court of Justice [ICJ].
SUGGESTED ANSWER:
3) What language shall be used in the 1. Where is the seat of the
pleadings and oral argument? International Court of Justice? 11%)
4) In case State A, the petitioner, falls The seat of the International Court
to appear at the oral argument, can State B, the of Justice is at the Hague or elsewhere,
as it may decide, except during the
respondent, move for the dismissal of
judicial vacations the dates and duration
the petition?
of which it shall fix (I.C.J. Statute, Art. 22).
SUGGESTED ANSWER:
3) Under Article 39 of the Statutes of the
2. How many are its members? (1%)
International Court of Justice, the official The Court is composed of fifteen members
who must be of high moral character
languages of the court are English and French. In
and possess the qualifications required in
the absence of an agreement, each party may
their respective countries for appointment
use the language it prefers. At the request of any
to the highest judicial office or are
party, the court may authorize a party to use a
jurisconsults of recognized competence
language other than English or French.
in international law (I.C.J. Statute, Art. 2).
4) Under Article 53 of the Statutes of the
International Court of Justice, whenever one of 3. What is the term of their office? (1%) They are
the parties does not appear before the court or elected for a term of nine years, staggered
fails to defend its case, the other party may ask at three-year intervals by dividing the
the court to decide in favor of its claim. judges first elected into three equal groups
However, the court must, before doing so, and assigning them by lottery terms of
satisfy itself it has Jurisdiction and that the three, six and nine years respectively.
claim is well founded in fact and law. Immediate re-election is allowed (I.C.J.
Statute, Art. 13).
International Convention; Law of the Sea 4. Who is its incumbent president? (1%) The
(2004) incumbent President is Rosalyn
(2-b) En route to the tuna fishing grounds in the Higgins.
Pacific Ocean, a vessel registered in Country
TW entered the Balintang Channel north of 5. What is his/her nationality? (1 %)
Babuyan Island and with special hooks and nets She is a national of the United Kingdom or
dragged up red corals found near Batanes. By a British subject.
international convention certain corals are (NOTE: Since questions IX(4) and IX(5)
protected species, just before the vessel do not test the examinees' knowledge
reached the high seas, the Coast Guard patrol of the law, it is suggested that
intercepted the vessel and seized its cargo they be disregarded)
including tuna. The master of the vessel and
the owner of the cargo protested, claiming the 6. In 1980, the United States filed with the
rights of transit passage and innocent passage, and International Court of Justice a complaint
sought recovery of the cargo and the against Iran alleging that the latter is
release of the ship. Is the claim meritorious or detaining American diplomats in violation of
not? Reason briefly. (5%) International Law. Explain how the
International Court of Justice can acquire
SUGGESTED ANSWER; jurisdiction over these contending
The claim of innocent passage is not countries. (5%)
meritorious. While the vessel has the right of Under Article 36 of the I.C.J. Statutes,
innocent passage, it should not commit a both parties must agree to
violation of any international convention. The submit themselves to the jurisdiction
vessel did not merely navigate through the of the International Court of Justice.
territorial sea, it also dragged red corals in
violation of the international convention which International Law vs. Municipal
protected the red corals. This is prejudicial to Law; Territorial Principle; International
the good order of the Philippines. (Article 19(2) of Crimes (Q2-2005)
the Convention on the Law of the Sea) (2) Police Officer Henry Magiting of the
Narcotics Section of the Western Police
International Court of Justice (Q9-2006) District applied for a search warrant in the
Regional Trial Court of Manila for violation
of Section 11, Article II (Possession of order to establish probable cause, as
Prohibited Drugs) of Republic Act (R.A.) No. required by Sections 3 and 4 of Rule
9165 (Comprehensive Dangerous Drugs 126. In any event, there is no showing
Act of 2002) for the search and seizure that the requisite quantum of probable
of heroin in the cabin of the Captain of the cause was established by mere
MSS Seastar, a foreign-registered vessel reference to the affidavits and other
which was moored at the South Harbor, documentary evidence presented.
Manila, its port of destination.
Mandates and Trust Territories (2003)
Based on the affidavits of the applicant's
No XVII - What are the so-called Mandates and
witnesses who were crew members of the
Trust Territories? Does the United
vessel, they saw a box containing ten (10)
kilograms of heroin under the bed in the
Nations exercise sovereignty over these
Captain's cabin. The RTC found probable
territories? In the affirmative, how is
cause for the issuance of a search warrant; this jurisdiction exercised?
nevertheless, it denied the application on SUGGESTED ANSWER:
the ground that Philippine courts have no The Mandates were the overseas
criminal jurisdiction over violations of R.A. possessions of the defeated states of Germany and
No. 9165 committed on foreign-registered Turkey which were placed by the League of Nations
vessels found in Philippine waters. under the administration of mandatories
to promote their development and ultimate
Is the ruling of the court correct?
independence. (Harris, Cases and Materials on
Support your answer with reasons. (5%) International Law, 5th ed., p. 131.) When the
United Nations replaced the League of Nations,
ALTERNATIVE ANSWER:
the system of Mandates was replaced by the
The court's ruling is not correct. The
System of Trust Territories. The United Nations
foreign-registered vessel was not in transit.
exercised residuary sovereignty over the Trust
It was moored in South Harbor, Manila,
Territories through the Trustee Powers, who
its port of destination. Hence, any
exercised the powers of sovereignty
crime committed on board said
subject to supervision by and accountability
vessel, like possession of heroin, is
to the United Nations. (Oppenheim-
triable by our courts (U.S. v. Ah Sing,
Lauterpacht, International Law, Vol. I, 7th ed.,
G.R. No. 13005, October 10, 1917),
pp. 213-214.) (Since there are no more Trust
except if the crime involves the
Territories, this is just a matter of historical
internal management of the vessel.
interest.)
ALTERNATIVE ANSWER: ALTERNATIVE ANSWER:
The RTC may assert its jurisdiction over the
Mandates pertains to the mandate
case by invoking the territorial principle,
system established under Article 22 of the
which provides that crimes committed Covenant of the League of Nations for the
within a state's territorial boundaries and
tutelage and guardianship of colonies and
persons within that territory, either
territories formerly held by Germany and Turkey
permanently or temporarily, are subject to
before the First World War, by a victorious
the application of local law. Jurisdiction may
power on behalf of the League of Nations until they
also be asserted on the basis of the
were prepared for independence. Territories
universality principle, which confers upon all
under mandate were not under the sovereignty
states the right to exercise jurisdiction over
of any State; they were administered by a
delicta juris gentium or international crimes,
mandatory power which was responsible to the
such as the international traffic narcotics.
League of Nations for the development and
The possession of 10 kgs. of heroin
welfare of the disadvantaged subject peoples
constitutes commercial quantity and
towards independence. Thus, mandated territories
therefore qualifies as trafficking of
were under the jurisdiction of the mandatory
narcotics.
power, subject to the supervision of the
Consequently, the denial of the search League of Nations.
warrant should have been anchored on the The general legal framework of the
failure of the court to conduct personal mandate system passed into the trusteeship
examination of the witnesses to the crime in system of the United Nations, together with
mandated territories which did not attain it is Philippine courts that will decide the case,
independence status by the end of the Second they will uphold the Constitution over
World War. Trust territories and the Trusteeship international law. If it is an international tribunal that
Council are created by the UN Charter. will decide the case, it will uphold
The trusteeship system under Chapters XII international law over municipal law. As held by the
and XIII of the UN Charter is established under Permanent International Court of Justice in the
the supervision of the UN Trusteeship Council case of the Polish Nationals in Danzig, a State
under the authority of the General Assembly cannot invoke its own Constitution to evade
for the promotion of political and socio- obligations incumbent upon it under
economic development of peoples in trust territories international law.
towards independent status. A new feature of ALTERNATIVE ANSWER
the UN trusteeship system is the creation of a
I would take the proposition assigned to
new category of territories, the strategic trust
Team "C" as being nearer to the legal reality in
territories, which is under the supervision of the
the Philippines, namely, "A
Security Council instead of the Trusteeship
country's Constitution prevails over
Council.
international law but international law
Under the foregoing conditions, the prevails over municipal statutes".
United Nations may not be said to exercise
This is, however, subject to the place of
sovereignty over trust territories, the functions
international law in the Philippine Constitutional
and powers of the Trusteeship Council and the
setting in which treaties or customary norms in
General Assembly being limited to
international law stand in parity with statutes
administration and supervision under the
and in case of irreconcilable conflict, this may
principle of self-determination as set forth in
be resolved by /ex posteriori derogat lex priori
individual trust agreements concluded in
as the Supreme Court obiter dictum in Abbas v.
accordance with the UN Charter. UN
COMELEC holds. Hence, a statute enacted
jurisidiction is exercised through the
later than the conclusion or effectivity of a treaty
Trusteeship Council under the authority of the
may prevail.
General Assembly, except with respect to
strategic areas or territories which are placed In the Philippine legal system, there are no
under the jurisdiction of the Security Council. norms higher than constitutional norms. The fact
that the Constitution makes generally accepted
Municipal Law vs. International Law (2003)
principles of international law or conventional
No XVI- An organization of law students international law as part of Philippine law
sponsored an inter-school debate among three does not make them superior to statutory law, as
teams with the following assignments clarified in Secretary of Justice v. Lantion and Philip
and propositions for each team to defend: Morris decisions.
Team "A" - International law prevails Neutrality of States (1988)
over municipal law. Team "B" - Municipal No. 20: Switzerland and Australia are
law prevails over international law. Team
outstanding examples of neutralized states,
"C" - A country's Constitution prevails over
international law but international law prevails 1. What are the characteristics of
over municipal statutes. a neutralized state?
If you were given a chance to choose 2. Is neutrality synonymous
the correct proposition, which would you with neutralization? If not, distinguish one
take and why? from the other.
I shall take the proposition for Team C. 1. Whether simple or composite, a State is said to
International Law and municipal law are be neutralized where its independence and
supreme in their own respective fields. Neither integrity are guaranteed by an international
has hegemony over the other. (Brownlie, convention on the condition that such State
Principles of Public International Law, 4th ed. p. obligates itself never to take up arms against
157.) Under Article II, Section 2 of the 1987 any other State, except for self-defense, or
Constitution, the generally accepted principles of enter into such international obligations as
international law form part of the law of the would indirectly involve it in war. A State seeks
land. Since they merely have the force of law, if neutralization where it is weak and does not

wish to take an active part in international Outer space in this estimate begins from
politics. The power that guarantee its the lowest altitude an artificial satellite can
neutralization may be motivated either by remain in orbit. Under the Moon Treaty of
balance of power considerations or by the 1979 the moon and the other celestial bodies
desire to make the weak state a buffer between the form part of outer space.
territories of the great powers. (J. In outer space, the space satellites or objects
SALONGA & P. YAP, PUBLIC are under the jurisdiction of States of registry
INTERNATIONAL LAW 76 (1966)). which covers astronauts and cosmonauts. This
2. Firstly, neutrality obtains only during matter is covered by the Registration of Objects in
war, whereas neutralization is a condition that Space Convention of 1974 and the Liability for
applies in peace or in war. Secondly, Damage Caused by Spaced Objects
neutralization is a status created by means of Convention of 1972.
treaty, whereas neutrality is a status created
Principle of Auto-Limitation (Q10-2006)
under international law, by means of a stand on the
1. What is the principle of auto-limitation?
part of a state not to side with any of the
(2.5%)
parties at war. Thirdly, neutrality is brought
ALTERNATIVE ANSWER:
about by a unilateral declaration by the neutral
Under the principle of auto-limitation, any
State, while neutralization cannot be effected by
state may by its consent, express or
unilateral act, but must be recognized by other
implied, submit to a restriction of its
States. (Id.)
sovereign rights. There may thus be a
Outer Space; Jurisdiction (2003) curtailment of what otherwise is a plenary
No XIX - What is outer-space? Who or power (Reagan v. CIR, G.R. L-26379,
which can exercise jurisdiction over December 27, 1969).
astronauts while in outer space? Reciprocity v. Principle of Auto-Limitation
ALTERNATIVE ANSWER: (Q10-2006)
There are several schools of thought regarding the 2. What is the relationship between
determination of outer space, such as the limit reciprocity and the principle of auto-
of air flight, the height of atmospheric space, limitation? (2.5%)
infinity, the lowest altitude of an artificial satellite, ALTERNATIVE ANSWER:
When the Philippines enters into treaties,
and an altitude approximating aerodynamic
necessarily, these international
lift. Another school of thought proceeds by
agreements may contain limitations on
analogy to the law of the sea. It proposes that
Philippine sovereignty. The consideration in
a State should exercise full sovereignty up to
this partial surrender of sovereignty is the
the height to which an aircraft can ascend. Non-
reciprocal commitment of other
militant flight instrumentalities should be allowed
contracting states in granting the same
over a second area, a contiguous zone of 300
privilege and immunities to the Philippines.
miles. Over that should be outer space. The
For example, this kind of reciprocity in
boundary between airspace and outer space
relation to the principle of auto-limitation
has not yet been defined. (Harris, Cases
characterizes the Philippine commitments
and Materials on International Law, 5th ed.. pp.
under WTO-GATT. This is based on the
251-253.) Under Article 8 of the Treaty on
constitutional provision that the Philippines
the Principles Governing the Activities of
"adopts the generally accepted principles of
States in the Exploration and Use of Outer
international law as part of the law of the
Space, Including the Moon and Other Celestial land and adheres to the policy of ...
Bodies, a State on whose registry an object
cooperation and amity with all
launched into outer space retains jurisdiction over
nations" (Tanada v. Angara, G.R. No.
the astronauts while they are in outer space.
118295, May 2, 1997).
ALTERNATIVE ANSWER:
Outer space is the space beyond the airspace
Recognition of States; De Facto vs. De Jure
surrounding the Earth or beyond the national
airspace. In law, the boundary between outer Recognition (1998)
space and airspace has remained No XII. Distinguish between de
undetermined. But in theory, this has been facto recognition and de jure recognition of
estimated to be between 80 to 90 kilometers. states. [5%)
SUGGESTED ANSWER: various parts of Asia. The Japanese
Government has accordingly launched a
The following are the distinctions between
goodwill campaign and has offered the
de facto recognition and de Jure recognition
Philippine Government substantial assistance for
of a government: a program that will promote — through
1. De facto recognition is provisional, de government and non-governmental
Jure recognition is relatively permanent; organizations — womens' rights, child welfare,
2. De facto recognition does not vest title nutrition and family health care.
in the government to its properties abroad; An executive agreement is about to be
de Jure recognition does; signed for that purpose. The agreement
includes a clause whereby the Philippine
3. De facto recognition is limited to certain
Government acknowledges that any liability to
juridical relations; de jure recognition brings
the "comfort women" or their descendants are
about full diplomatic relations.
deemed covered by the reparations
(Cruz. International Law. 1996 ed.. p. 83.)
agreements signed and implemented
ALTERNATIVE ANSWER: immediately after the Second World War.
The distinction between de facto Juliano Iglesias, a descendant of a now
recognition and de jure recognition of a State is deceased comfort woman, seeks your advice on
not clear in international law. It is, however, the validity of the agreement. Advise him.
usually assumed as a point of distinction
SUGGESTED ANSWER:
that while de facto recognition is provisional
and hence may be withdrawn, de jure The agreement is valid. The comfort women and
recognition is final and cannot be withdrawn. their descendants cannot assert individual claims
against Japan. As stated in Davis & Moore vs.
Confronted with the emergence of a
Regan, 453 U.S. 654, the sovereign authority of a
new political entity in the international
State to settle claims of its nationals
community, a State may experience some
against foreign countries has repeatedly
difficulty in responding to the question whether
been recognized. This may be made without the
the new political order qualifies to be regarded
consent of the nationals or even without
as a state under international law, in particular
consultation with them. Since the continued
from the viewpoint of its effectiveness and
amity between a State and other countries
independence on a permanent basis. The
may require a satisfactory compromise of
recognizing State may consider its act in regard to
mutual claims, the necessary power to make
the new political entity as merely a de facto
such compromises has been recognized. The
recognition, implying that it may withdraw it if in the
settlement of such claims may be made by
end it turns out that the conditions of
executive agreement.
statehood are not fulfilled should the new
authority not remain in power. Right to Innocent Passage (1999)
But even then, a de facto recognition in No X - C. State Epsilon, during peace time,
this context produces legal effects in the same has allowed foreign ships innocent passage
way as de jure recognition. Whether recognition through Mantranas Strait, a strait within
is de facto or de jure, steps may be taken Epsilon's territorial sea which has been used by
to withdraw recognition if the conditions foreign ships for international navigation. Such
of statehood in international law are not passage enabled the said ships to traverse the strait
fulfilled. Thus, from this standpoint, the between one part of the high seas to another.
distinction is not legally significant. On June 7, 1997, a warship of State Beta passed
through the above-named strait. Instead of
Note: The question should refer to
passing through continuously and expeditiously,
recognition of government not recognition of
the ship delayed its passage to render
state because there is no such distinction in
assistance to a ship of State Gamma which
recognition of state.
was distressed with no one nearby to assist.
When confronted by Epsilon about the delay,
Reparations Agreement; Validity (1992)
Beta explained that the delay was due to force
No. 14: The Japanese Government confirmed majeure in conformity with the provision of Article
that during the Second World War, Filipinas 18(2) of the 1982 Convention on the Law of the
were among those conscripted as "comfort Sea (UNCLOS). Seven months later, Epsilon
women" (or prostitutes) for Japanese troops in suspended the right of innocent
passage of warships through Mantranas Strait Batanes. By international convention certain
without giving any reason therefor. corals are protected species. Just before the
Subsequently, another warship of Beta passed vessel reached the high seas, the Coast Guard
through the said strait, and was fired upon by patrol intercepted the vessel and seized its
Epsilon's coastal battery. Beta protested the cargo including tuna. The master of the vessel and
aforesaid act of Epsilon drawing attention to the the owner of the cargo protested, claiming the
existing customary international law that the rights of transit passage and innocent
regime of innocent passage (even of transit passage, and sought recovery of the cargo and the
passage) is non-suspendable. Epsilon release of the ship. Is the claim meritorious or not?
countered that Mantranas Strait is not a Reason briefly. (5%)
necessary route, there being another suitable SUGGESTED ANSWER;
alternative route. Resolve the above-mentioned The claim of innocent passage is not
controversy, Explain your answer. (4%) meritorious. While the vessel has the right of
innocent passage, it should not commit a
SUGGESTED ANSWER:
violation of any international convention. The
Assuming that Epsilon and Beta are parties vessel did not merely navigate through the
to the UNCLOS, the controversy maybe territorial sea, it also dragged red corals in
resolved as follows: violation of the international convention which
Under the UNCLOS, warships enjoy a protected the red corals. This is prejudicial to
right of innocent passage. It appearing that the the good order of the Philippines. (Article 19(2) of
portion of Epsilon's territorial sea in question is a the Convention on the Law of the Sea)
strait used for international navigation,
Epsilon has no right under international law to
suspend the right of innocent passage. Article Rights and Obligation under UN
45(2) of the UNCLOS is clear in providing that Charter (1991)
there shall be no suspension of innocent No. 14: State X invades and conquers State Y. The
passage through straits used for international United Nations Security Council declares the
navigation. invasion and conquest illegal and orders an
On the assumption that the straits in international embargo against State X.
question is not used for international navigation, still Subsequently, the same U.N. body adopts a
the suspension of innocent passage by Epsilon resolution calling for an enforcement action
cannot be effective because suspension against State X under Chapter VII of the U.N.
is required under international law to be duly Charter. State Z, a U.N. member, religiously
published before it can take effect. There being complies with the embargo but refuses to take
no publication prior to the suspension of part in the enforcement action, sending a
innocent passage by Beta's warship, Epsilon's medical mission instead of fighting troops to the
act acquires no validity. troubled area.
Moreover, Epsilon's suspension of (a) Did State Z violate its obligations under the
innocent passage may not be valid for U.N. Charter?
the reason that there is no showing that (b) If so, what sanctions may be taken against
it is essential for the protection of its
it?
security. The actuation of Beta's warship
in resorting to delayed passage is for cause (c) If not, why not?
recognized by the UNCLOS as excusable, i.e., ANSWER:
for the purpose of rendering assistance to
persons or ship in distress, as provided in (a) No, State Z did not violate
Article 18(2) of the UNCLOS. Hence, Beta's its obligations under the United Nations
warship complied with the international law Charter. It complied with the resolution
norms on right of innocent passage. calling for enforcement action against State
X, because it sent a medical team.
Right to Transit and Innocent Passage
(2004) (b) No sanctions may be taken
II-B. En route to the tuna fishing grounds in against State Z. because it did not violate its
the Pacific Ocean, a vessel registered in obligation under the United Nations Charter.
Country TW entered the Balintang Channel (c) Compliance with the resolution
north of Babuyan Island and with special hooks and calling for enforcement action against Slate X
nets dragged up red corals found near does not necessarily call for the sending of
fighting troops. Under Art 43 of the United procedures and a customary norm is
Nations Charter, compliance with the call for the product of the formation of general
enforcement action against State X has to be practice accepted as law.
made in accordance with a special agreement
By way of illustrating International Convention as
with the Security Council and such agreement
a source of law, we may refer to the principle
shall govern the numbers and types of forces,
embodied in Article 6 of the Vienna Convention on
their degree of readiness and general locations, and the Law of Treaties which reads: "Every State
the nature of the facilities and assistance to be possesses capacity to conclude treaties". It tells us
supplied by members of the United Nations. what the law is and the process or method by
which it came into being. International
Sources of International Law; Primary
Custom may be concretely illustrated by
& Subsidiary Sources (2003) pacta sunt servanda, a customary or general norm
No XV - State your general understanding of which came about through extensive and
the primary sources and subsidiary sources of consistent practice by a great number of states
international law, giving an illustration of each. recognizing it as obligatory.
SUGGESTED ANSWER: The subsidiary means serves as evidence of
law. A decision of the International Court of
Under Article 38 of the Statute of Justice, for example, may serve as material
the International Court of Justice, the evidence confirming or showing that the
PRIMARY SOURCES of international law prohibition against the use of force is a
are the following: customary norm, as the decision of the Court
1. International conventions, e.g., has demonstrated in the Nicaragua Case. The
Vienna Convention on the Law of Treaties. status of a principle as a norm of international
law may find evidence in the works of highly
2. International customs, e.g., sabotage, the
qualified publicists in international law, such as
prohibition against slavery, and McNair, Kelsen or Oppenheim.
the prohibition against torture.
3. General principles of law recognized Sovereign Immunity of States; Absolute vs.
by civilized nations, e.g., prescription, Restrictive (1998)
res judicata, and due process. No XIII. What is the doctrine of
Sovereign immunity in international Law? [5%]
The SUBSIDIARY SOURCES of international law SUGGESTED ANSWER:
are judicial decisions, subject to the
By the doctrine of sovereign immunity,
provisions of Article 59, e.g., the decision in the
a State, its agents and property are immune
Anglo-Norwegian Fisheries Case and
from the judicial process of another State,
Nicaragua v. United States, and TEACHINGS of
except with its consent. Thus, immunity may
the most highly qualified publicists of various
be waived and a State may permit itself to be
nations, e.g., Human Rights in International
sued in the courts of another State,
Law by Lauterpacht and International Law by
Oppenhe im -Lauterpacht. Sovereign immunity has developed into
two schools of thought, namely, absolute
ALTERNATIVE ANSWER: immunity and restrictive immunity. By
Reflecting general international law, Article absolute immunity, all acts of a State are
38(1) of the Statute of the International Court of covered or protected by immunity. On the
Justice is understood as providing for other hand, restrictive immunity makes
international convention, international custom, and a distinction between governmental or
general principles of law as primary sources sovereign acts (acta jure imperii) and
of international law, while indicating that judicial nongovernmental, propriety or commercial acts
decisions and teachings of the most highly qualified (acta jure gestiones). Only the first category
publicists as "subsidiary means for the of acts is covered by sovereign immunity.
determination of the rules of law." The Philippine adheres to the
The primary sources may be considered as restrictive immunity school of thought.
formal sources in that they are the methods by ALTERNATIVE ANSWER;
which norms of international law are created
and recognized. A conventional or treaty norm
comes into being by established treaty-making
In United States vs. Ruiz, 136 SCRA 487. 490- 21 of the United Nations Conference on the
491. the Supreme Court explained the doctrine Human Environment imposes upon states the
of sovereign immunity in international law; responsibility to ensure that activities within
"The traditional rule of State immunity exempts a their jurisdiction or control do not cause
State from being sued in the courts of another State damage to the environment of other States.
without its consent or waiver, this rule is a
Sovereignty; Definition; Nature (Q10-2006)
necessary consequence of the principles of
3. How is state sovereignty defined in
independence and equality of states. However, the
International Law? (2.5%) ALTERNATIVE
rules of International Law are not petrified, they
ANSWER: State sovereignty signifies
are constantly developing and evolving. And
independence in regard to a portion of the
because the activities of states have
globe, and the right to exercise and enforce
multiplied. It has been necessary to distinguish
jurisdiction therein, to the exclusion of any
them — between sovereign and government
other state the functions of the state [See
acts [jure imperii] and private, commercial and
Island of Las Palmas Case (US v. The
proprietary acts (jure gestionis), The result is
Netherlands) 2 R.IAA. 829]. Sovereignty
that State immunity now extends only to acts means independence from outside
jure imperii." control. The 1933 Montevideo Convention
Sovereignty of States; Natural Use expresses this in positive terms as
including "the capacity to enter into
of Territory (1989)
relations with other states."
No. 19: The Republic of China (Taiwan), in its
bid to develop a hydrogen bomb and defend ALTERNATIVE ANSWER:
itself against threats of invasion coming from the Under the principle of state sovereignty in
People's Republic of China, conducted a series International Law, all states are sovereign
of secret nuclear weapons tests in its own equals and cannot assert jurisdiction over
atmosphere. The tests resulted in one another. A contrary disposition would
radioactive fallouts which contaminated the "unduly vex the peace of nations" (Da
rivers in and around Aparri and other bodies of Haber v. Queen of Portugal, 17 Q. B. 171).
water within the territorial jurisdiction of the
Philippines, Can the Philippines complain 4. Is state sovereignty absolute? (2.5%)
against the Republic of China for violation of its ALTERNATIVE ANSWER: State sovereignty
sovereignty? is not absolute. On the contrary, the rule
says that the state may not be sued
ANSWER:
without its consent, which clearly imports
In the Trial Smelter Arbitration between that it may be sued if it consents.
the United States and Canada, the Moreover, certain restrictions enter into
Arbitral Tribunal held that air pollution from the picture: (1) limitations imposed by
Canada should be enjoined, because the very nature of membership in the family of
sovereignty includes the right against any nations; and (2) limitations imposed by
encroachment which might prejudice the treaty stipulations. The sovereignty of a
natural use of the territory and the free state therefore cannot in fact and in reality
movement of its inhabitants. be considered absolute (Tanada v. Angara,
G.R. No. 118295, May 2,1997).
Since the nuclear tests conducted by
the Republic China resulted in
ALTERNATIVE ANSWER:
radioactive fallouts which contaminated the
Sovereignty is absolute with respect to
rivers and other bodies of water within the
exclusive competence over internal
Philippines, the Republic of China violated matters [See Island of Las Palmas Case
the sovereignty of the Philippines. (US v. The Netherlands) 2 R.IAA. 829],
YES, the Philippines can complain against the subject only to such limitations as may be
Republic of China for violation of its imposed or recognized by the state itself
sovereignty. Article 194 of the Convention on as part of its obligations under
the Law of the Sea requires States to take all international law. In the international plain,
measures necessary to ensure that activities state sovereignty is realized as the co-
under their jurisdiction or control are so existence with other sovereignties under
conducted as not to cause damage by pollution to conditions of independence and equality.
other States and their environment. Principle
State Liabilities (1995) The basis of the Philippine claim is effective
occupation of a territory not subject to the
No. 8: In a raid conducted by rebels in a
sovereignty of another state. The Japanese
Cambodian town, an American businessman who
forces occupied the Spratly Island group during the
has been a long-time resident of the place was
Second World War. However, under the San
caught by the rebels and robbed of his cash
Francisco Peace Treaty of 1951 Japan formally
and other valuable personal belongings. Within
renounced all right and claim to the Spratlys.
minutes, two truckloads of government troops
The San Francisco Treaty or any other
arrived prompting the rebels to withdraw. Before
International agreement however, did not designate
fleeing they shot the American causing him
any beneficiary state following the Japanese
physical injuries. Government troopers
renunciation of right. Subsequently, the Spratlys
immediately launched pursuit operations and
became terra nullius and was occupied by
killed several rebels. No cash or other valuable
the Philippines in the title of sovereignty.
property taken from the American businessman was
Philippine sovereignty was displayed by
recovered.
open and public occupation of a number of
In an action for indemnity filed by the islands by stationing of military forces, by
US Government in behalf of the organizing a local government unit, and by
businessman for injuries and losses in cash awarding petroleum drilling rights, among other
and property, the Cambodian government political and administrative acts. In 1978, it
contended that under International Law it was confirmed its sovereign title by the promulgation
not responsible for the acts of the rebels. of Presidential Decree No. 1596, which declared
1. Is the contention of the the Kalayaan Island Group part of Philippine
territory.
Cambodian government correct? Explain.
2. Suppose the rebellion is successful and a Stateless Persons; Effects; Status; Rights
new government gains control of the entire (1995)
State, replacing the lawful government that was
1. Who are stateless persons
toppled, may the new government be held
under International Law?
responsible for the injuries or losses suffered by the
American businessman? Explain. 2. What are the consequences
ANSWER; of statelessness?
1. Yes, the contention of the Cambodian

3. Is a stateless person entirely without
Government is correct. Unless it clearly right, protection or recourse under the
appears that the government has failed to use Law of Nations? Explain.
promptly and with appropriate force its 4. What measures, if any, has International
constituted authority it cannot be held Law taken to prevent statelessness?
responsible for the acts of rebels, for the rebels are ANSWER:
not its agents and their acts were done without
its volition. In this case, government troopers 1. STATELESS PERSONS are those who
immediately pursued the rebels and killed several are not considered as nationals by any State
of them. under the operation of its laws.
2. The new government may be
held responsible if it succeeds in
2. The consequences of statelessness are the
overthrowing the government. Victorious
rebel movements are responsible for the following:
illegal acts of their forces during the course (a) No State can intervene or complain
of the rebellion. The acts of the rebels are in behalf of a stateless person for
imputable to them when they assumed as an international delinquency
duly constituted authorities of the state. committed by another State in
inflicting injury upon him.
State Sovereignty; Effective Occupation; (b) He cannot be expelled by the
Terra Nullius (2000) State if he is lawfully in its territory
No XIX - a) What is the basis of the except on grounds of national
Philippines' claim to a part of the security or public order.
Spratly Islands? (c) He cannot avail himself of the
SUGGESTED ANSWER: protection and benefits of
citizenship like securing for Under Section 1, Article I of the 1987
himself a passport or visa and Constitution, the INTERNAL WATERS of the
personal documents. Philippines consist of the waters around,
between and connecting the islands of the
Philippine Archipelago, regardless of their
3. No. Under the Convention in Relation to breadth and dimensions, including the waters in
the Status of Stateless Person, the Contracting bays, rivers and lakes. No right of innocent
States agreed to accord to stateless persons passage for foreign vessels exists in the case of
within their territories treatment at least as internal waters. (Harris, Cases and Materials on
favorable as that accorded to their nationals with International Law, 5th ed., 1998, p. 407.)
respect to freedom of religion, access to the
Internal waters are the waters on the
courts, rationing of products in short supply,
landward side of baselines from which the
elementary education, public relief and
breadth of the territorial sea is calculated.
assistance, labor legislation and social security.
(Brownlie, Principles of Public International
They also agreed to accord to them treatment
Law, 4th ed., 1990, p. 120.)
not less favorable than that accorded to aliens
generally in the same circumstances. The
Convention also provides for the issuance of Use of Force; Exceptions (2003)
identity papers and travel documents to
stateless person. No XIV- Not too long ago, "allied forces", led by
American and British armed forces, invaded Iraq
to "liberate the Iraqis and destroy
4. In the Convention on the Conflict of suspected weapons of mass destruction." The
Nationality Laws of 1930, the Contracting Security Council of the United Nations failed to
States agreed to accord nationality to persons reach a consensus on whether to support or
born in their territory who would otherwise be oppose the "war of liberation".
stateless. The Convention on the Reduction of Can the action taken by the allied forces
Statelessness of 1961 provides that if the law of the
find justification in International Law? Explain.
contracting States results in the loss of
nationality as a consequence of marriage or SUGGESTED ANSWER:
termination of marriage, such loss must be The United States and its allied forces
conditional upon possession or acquisition of cannot justify their invasion of Iraq on the basis of
another nationality. self-defense under Article 51 attack by Iraq, and
ALTERNATIVE ANSWER; there was no necessity for anticipatory self- defense
which may be justified under customary
Under the Convention on the Reduction of
international law. Neither can they justify their
Stateless-ness of 1961, a contracting state shall
invasion on the ground that Article 42 of the
grant its nationality to a person born in its
Charter of the United Nations permits the use force
territory who would otherwise be stateless and a
against a State if it is sanctioned by the Security
contracting state may not deprive a person or a
Council. Resolution 1441, which gave Iraq a final
group of persons of their nationality for racial,
opportunity to disarm or face serious
ethnic, religious or political grounds.
consequences, did not authorize the use of
Territorial Sea vs. Internal Waters (2004) armed force.
ALTERNATIVE ANSWER:
II-A. Distinguish briefly but clearly between:
In International Law, the action taken by
(1) The territorial sea and the internal waters of
the allied forces cannot find justification. It
the Philippines. is covered by the prohibition against the
SUGGESTED ANSWER: use of force prescribed by the United Nations
A. (1) TERRITORIAL SEA is an adjacent belt of sea Charter and it does not fall under any of the
with a breadth of twelve nautical miles exceptions to that prohibition.
measured from the baselines of a state and The UN Charter in Article 2(4) prohibits the
over which the state has sovereignty. (Articles 2 and use of force in the relations of states by
3 of the Convention on the Law of the Sea.) Ship of providing that all members of the UN "shall
all states enjoy the right of innocent passage refrain in their international relations from the
through the territorial sea. (Article 14 of the threat or use of force against the territorial
Convention on the Law of the Sea.) integrity or political independence of any state,
or in any other manner inconsistent with of Nova and to replace it with a
the purposes of the United Nations." This friendly government.
mandate does not only outlaw war; it Nova decided to file a case against
encompasses all threats of and acts of force
Ameria in the International Court of Justice
or violence short of war.
1) On what grounds may Nova's causes of
As thus provided, the prohibition
is addressed to all UN members. However, action against Ameria be based?
it is now recognized as a fundamental 2) On what grounds may Ameria move
principle in customary international law and, to dismiss the case with the ICJ?
as such, is binding on all members of 3) Decide the case.
the international community.
ANSWER:
The action taken by the allied forces
cannot be justified under any of the three 1) If Nova and Ameria are members of the
exceptions to the prohibition against the use of force United Nations, Nova can premise its cause of
which the UN Charter allows. These are: action on a violation of Article 2(4) of the United
Nations Charter, which requires members to
(1) inherent right of individual or
refrain from the threat or use of force against
collective self-defense under the territorial integrity or political independence
Article 51; of any state. If either or both Nova or Ameria
(2) enforcement measure involving are not members of the United Nations, Nova
the use of armed forces by may premise its cause of action on a violation
the UN Security Council under of the non-use of force principle in customary
Article 42; and international law which exists parallel to Article
(3) enforcement measure by regional 2(4) of the United Nations Charter.
arrangement under Article 53, as In the Case Concerning Military and
authorized by the UN Security Paramilitary Activities in and Against Nicaragua
Council. The allied forces did not (1986 ICJ Rep. 14), the International Court of
launch military operations and did Justice considered the planting of mines by one
not occupy Iraq on the claim that state within the territorial waters of another as a
their action was in response to an violation of Article 2(4) of the United Nations
armed attack by Iraq, of which there Charter. If the support provided by Ameria to
was none. the rebels of Nova goes beyond the mere giving of
Moreover, the action of the allied forces was monetary or psychological support but
taken in defiance or disregard of the Security consists in the provision of arms and training,
Council Resolution No. 1441 which set up "an the acts of Ameria can be considered as
enhanced inspection regime with the aim of indirect aggression amounting to another
bringing to full and verified completion the violation of Article 2(4).
disarmament process", giving Iraq "a final In addition, even if the provision of
opportunity to comply with its disarmament support is not enough to consider the act a
obligations". This resolution was in the process of violation of the non-use of force principle, this is a
implementation; so was Iraq's compliance with violation of the principle of non-intervention in
such disarmament obligations. customary International law.
Aggression is the use of armed force by
Use of Force; Principle of Non-
a state against the sovereignty,
Intervention (1994) territorial integrity or political independence
No. 19; The State of Nova, controlled by an of another state or in any other manner
authoritarian government, had unfriendly inconsistent with the United Nations Charter.
relations with its neighboring state, Ameria. 2) By virtue of the principle of sovereign
Bresla, another neighboring state, had been immunity, no sovereign state can be made a
shipping arms and ammunitions to Nova for use in party to a proceeding before the International
attacking Arneria. Court of Justice unless it has given its consent.
To forestall an attack, Ameria placed ...
floating mines on the territorial waters
surrounding Nova. Ameria supported a group of
rebels organized to overthrow the government
3) If jurisdiction over Ameria is established, the case (2) It may bring the matter to
should be decided in favor of Nova, because the Security Council which may authorize
Ameria violated the principle against the use of sanctions against Country X, including
force and the principle of non- Intervention. measure invoking the use of force. Under
The defense of anticipatory self- defense cannot Article 4 of the UN Charter, Country Y
be sustained, because there is no showing that may use force against Country X as well
Nova had mobilized to such an extent that if as against the Ali Baba organization by
Ameria were to wait for Nova to strike first it authority of the UN Security Council.
would not be able to retaliate. SECOND ALTERNATIVE ANSWER:
However, if jurisdiction over Ameria is
Under the Security Council Resolution No.
not established, the case should be 1368, the terrorist attack of Ali Baba may be
decided in favor of Ameria because of the defined as a threat to peace, as it did in defining the
principle of sovereign immunity. September 11, 2001 attacks against the United
States. The resolution authorizes military and other
Use of Force; Right of Self-defense (2002)
actions to respond to terrorist attacks. However, the
No XIX. On October 13, 2001, members of Ali use of military force must be proportionate and
Baba, a political extremist organization based in and intended for the purpose of detaining the
under the protection of Country X and persons allegedly responsible for the crimes and
espousing violence worldwide as a means of to destroy military objectives used by the
achieving its objectives, planted high-powered terrorists.
explosives and bombs at the International
The fundamental principles of international
Trade Tower (ITT) in Jewel City in Country Y, a
humanitarian law should also be respected.
member of the United Nations. As a result of
Country Y cannot be granted sweeping
the bombing and the collapse of the 100-story
discretionary powers that include the power to
twin towers, about 2,000 people, including
decide what states are behind the terrorist
women and children, were killed or injured, and
organizations. It is for the Security Council to
billions of dollars in property were lost.
decide whether force may be used against
Immediately after the incident, Ali Baba, specific states and under what conditions the
speaking through its leader Bin Derdandat, force may be used.
admitted and owned responsibility for the
bombing of ITT, saying that it was done to Use of Force; Self-Defense; Waging
pressure Country Y to release captured War (1998)
members of the terrorist group. Ali Baba
No XIV. At the Nuremberg trial of the Nazi war
threatened to repeat its terrorist acts against
criminals at the end of the World War II. the
Country Y if the latter and its allies failed to
defense argued on behalf of the German
accede to Ali Baba's demands. In response,
defendants that although a nation could not
Country Y demanded that Country X surrender and
wage aggressive war without transgressing
deliver Bin Derdandat to the government
International law, it could use war as an
authorities of Country Y for the purpose of trial and
Instrument of self-defense, and that the nation
"in the name of justice." Country X refused to
itself must be the sole judge of whether its
accede to the demand of Country Y.
actions were in self-defense. How would you
What action or actions can Country Y meet the argument if you were a member of the
legally take against Ali Baba and Country X to Tribunal trying the case? [5%]
stop the terrorist activities of Ali Baba and
SUGGESTED ANSWER:
dissuade Country X from harboring and giving
protection to the terrorist organization? Support your No rule of International law gives a state
answer with reasons. (5%) resorting to war allegedly in self-defense the
FIRST ALTERNATIVE ANSWER: right to determine with a legally conclusive
effect the legality of such action.
(1) Country Y may exercise the right of
The Judgment of the Nuremberg
self-defense, as provided under Article 51 of the
International Military Tribunal rejected the
UN Charter "until the Security Council has taken
measure necessary to maintain defense of the Nazi war criminals:
international peace and security". Self-defense "But whether action taken under the
enables Country Y to use force against Country X claim of self-defense was in fact aggressive or
as well as against the Ali Baba organization. defensive must ultimately be subject to
investigation and adjudication if operations by air, sea, or land forces of
international law is ever to be enforced." members of the UN.
ALTERNATIVE ANSWER: 2. Under art. 51 member states also have the
inherent right of collective self defense if an
International law on self-defense cannot
assume the nature of war. War requires "a armed attack occurs against a
declaration of war giving reasons" under the member state, until the Security Council
Hague Convention II of 1907. Precisely, the has taken measures necessary to
Nazi war criminalwere indicted before the maintain international peace and security.
Nuremberg Tribunal for violating
this Convention and were found guilty. War; Combatants/ Prisoners of War
Since the Nazi war criminal argued that vs. Mercenaries (1993)
war as self-defense is understood by them No. 3: Reden, Jolan and Andy. Filipino tourists,
as meaning "that the nation itself must be the were in Bosnia-Herzegovina when hostilities
sole Judge of whether its action were in erupted between the Serbs and the Moslems.
self- defense", it is clear that what they had in Penniless and caught in the crossfire, Reden,
mind in fact is "war as an instrument of Jolan, and Andy, being retired generals, offered
national policy", not self-defense as an their services to the Moslems for a handsome,
objective right under International law. salary, which offer was accepted. When the
Waging was as an instrument Serbian National Guard approached Sarajevo,
of national law is prohibited by the Pact of the Moslem civilian population spontaneously
Paris of 1928 (Kellog - Braid Part) of which took up arms to resist the invading troops. Not
Germany was already a state party before finding time to organize, the Moslems wore
the Second World War. Precisely, the armbands to identify themselves, vowing to
German Reich was indicted before the observe the laws and customs of war. The
Nuremberg Tribunal for violation of the three Filipinos fought side by side with the
Pact of Paris and the Nazi war criminals Moslems. The Serbs prevailed resulting in the
were found guilty of this as a war crime. capture of Reden, Jolan and Andy, and part of the
Hence, the argument is itself an admission civilian fighting force.
of violation of international law. 1) Are Reden, Jolan and Andy considered
combatants thus entitled to treatment
Use of Force; When allowed (1988) as prisoners of war?
1. The Charter of the United Nations prohibits not 2) Are the captured civilians likewise prisoners
only recourse to war but also resort to the use of war?
of force or threat. In the ardent desire to ANSWER:
maintain peace, the Charter obliges members to
settle their international disputes by peaceful means 1) Reden, Jolan and Andy are not combatants
and to refrain in their international relations and are not entitled to treatment as prisoners of
from the threat or use of force. The war, because they are mercenaries. Article
same Charter, however, recognizing perhaps 47 of the Protocol I to the Geneva Conventions
the realities of international relations, allows the of 1949 provides:
use of force in exceptional occasions. "A Mercenary shall not have the right to
be combatant or a prisoner of war."
Please state two occasions when the use Pursuant to Article 47 of Protocol I of
of armed forces is allowed by the U.N. Charter. the Geneva Conventions of 1949, Reden,
SUGGESTED ANSWER: Jolan, and Andy are mercenaries, because they
were recruited to fight in an armed conflict, they in
1. Under art. 42 of the UN Charter, should the
fact took direct part in the hostilities, they were
Security Council consider that pacific
motivated to take part in the hostilities
methods of settling disputes are essentially by the desire for private gain and in fact
inadequate, it may take such action by air, was promised a handsome salary by the
sea, or land forces as may be necessary to Moslems, they were neither nationals of a party to
maintain or restore international peace and the conflict nor residents of territory
security. Such action may include controlled by a party to the conflict, they are not
demonstrations, blockade, and other members of the armed forces of a party to the
conflict, and they were not sent by a state B. Section 40 of the Civil Service Decree has
which is not a party to the conflict on been repealed by Republic Act No. 6654. As
official duty as members of its armed forces. lawyer of Jose Tapulan, I will file a petition for
mandamus to compel his reinstatement. In
2) The captured civilians are prisoners of war.
accordance with the ruling in Mangubat us.
Under Article 4 of the Geneva Convention
Osmena, G.R No. L-12837, April 30, 1959, 105 Phil.
relative to the Treatment of Prisoners of War,
1308, there is no need to exhaust all
inhabitants of a non-occupied territory, who on
the approach of the enemy spontaneously take up administrative remedies by appealing to the
Civil Service Commission, since the act of the
arms to resist the invading forces, without
having had time to form themselves into regular governor is patently Illegal.
armed forces, provided they carry arms openly and
respect the laws and customs of war, are Admin Law; Exhaustion of Administrative
considered prisoners of war if they fall into the
Remedies (2000)
power of the enemy.
No XIII.
Wilson doctrine vs. Estrada doctrine (2004) a) Explain the doctrine of exhaustion
(2-a-5) Distinguish: The Wilson doctrine and
of administrative remedies. (2%)
the Estrada doctrine regarding recognition of
governments. b) Give at least three (3) exceptions to
its application. (3%)
Under the WILSON DOCTRINE,
recognition shall not be extended to any A.) The doctrine of exhaustion of administrative
government established by revolution or remedies means that when an adequate
internal violence until the freely elected remedy is available within the Executive
representatives of the people have Department, a litigant must first exhaust this
organized a constitutional government. remedy before he can resort to the courts. The
purpose of the doctrine is to enable the
Under the ESTRADA DOCTRINE, the Mexican administrative agencies to correct themselves if
government declared that it would, as it saw fit, they have committed an error. (Rosales v.
continue or terminate its diplomatic relations with Court of Appeals, 165 SCRA 344 [19881)
any country in which a political upheaval had
taken place and in so doing it would not
pronounce judgment on the right of the foreign state B.) The following are the exceptions to the
to accept, maintain or replace its application of the doctrine of exhaustion
government. (Cruz, International Law, 2003 ed.) (In of administrative remedies:
view of recent developments, the Wilson doctrine 1. The question involved is purely legal;
and the Estrada doctrine are no longer in the
mainstream of public international law.) 2. The administrative body is in estoppel;
3. The act complained of is patently illegal;
ADMINISTRATIVE LAW
4. There is an urgent need for Judicial
Admin Law; Exhaustion of Administrative
intervention;
Remedies (1991)
No. 9: B, For being notoriously undesirable
5. The claim involved is small;
and a recidivist, Jose Tapulan, an employee in the 6. Grave and irreparable injury will
first level of the career service in the Office of the be suffered;
Provincial Governor of Masbate, was dismissed
7. There is no other plain, speedy and
by the Governor without formal investigation
pursuant to Section 40 of the Civil Service Decree adequate remedy;
(P.D. No. 807} which authorizes summary 8. Strong public interest is involved;
proceedings in such cases. 9. The subject of the controversy is private
As a lawyer of Jose what steps, if any, law;
would you take to protect his rights? 10. The case involves a quo warranto
SUGGESTED ANSWER; proceeding (Sunville Timber Products,
Inc. v. Abad. 206 SCRA 482 {1992);

11. The party was denied due jurisdiction applies where a case is within the
process (Samahang Magbubukid ng concurrent jurisdiction of the court and an
Kapdula, Inc. v. Court of Appeals, 305 administrative agency but the determination of
SCRA 147 [1999]); the case requires the technical expertise of the
12. The decision is that of a Department administrative agency. In such a case, although the
Secretary. (Nazareno v. Court of matter is within the jurisdiction of the court, it must
Appeals, G.R. No. 131641, February yield to the jurisdiction of the
23. 2000); administrative case.
2) No, the failure to exhaust
13. Resort to administrative remedies would be
administrative remedies before filing a case in
futile (University of the Philippines Board
court does not oust the court of jurisdiction to
of Regents v. Rasul 200 SCRA
hear the case. As held in Rosario vs. Court of
685 [1991]);
Appeals, 211 SCRA 384, the failure to exhaust
14. There is unreasonable delay administrative remedies does not affect the
(Republic v, Sandiganbayan, 301 SCRA jurisdiction of the court but results in the lack of a
237 [1999]); cause of action, because a condition
15. "The action involves recovery of precedent that must be satisfied before action
physical possession of public land can be filed was not fulfilled.
(Gabrito u. Court of Appeals, 167 SCRA
771 {1988]); Admin Law; Exhaustion of Administrative
16. The party is poor (Sabello v. Remedies; Exceptions (1991)
Department of Education, Culture and No. 8: On the basis of a verified report and
Sports, 180 SCRA 623 [1989]); and confidential information that various electronic
17. The law provides for immediate equipment, which were illegally imported into the
resort to the court (Rulian v Valdez, 12 Philippines, were found in the bodega of the
SCRA 501 [1964]). Tikasan Corporation located at 1002 Binakayan St.,
Cebu City, the Collector of Customs of Cebu
{Note: The examinee should be
issued, in the morning of 2 January 1988, a Warrant
given full credit if he gives three of the
of Seizure and Detention against the corporation
above- mentioned exceptions.}
for the seizure of the electronic equipment.
The warrant particularly describes the electronic
Admin Law; Exhaustion of Administrative equipment and specifies the provisions of the
Tariff and Customs Code which were violated by
Remedies vs Doctrine of
the importation.
Primary Jurisdiction (1996)
The warrant was served and
No. 11: 1) Distinguish the doctrine of primary
implemented in the afternoon of 2 January 1988 by
jurisdiction from the doctrine of exhaustion
Customs policemen who then seized the
of administrative remedies. described equipment. The inventory of the
2) Does the failure to seized articles was signed by the Secretary of
exhaust administrative remedies before filing the Tikasan Corporation. The following day, a
a case in court oust said court of hearing officer in the Office of the Collector of
jurisdiction to hear the case? Explain. Customs conducted a hearing on the
SUGGESTED ANSWER; confiscation of the equipment.
Two days thereafter, the corporation
1) The doctrine of primary jurisdiction
filed with the Supreme Court a petition for
and the doctrine of exhaustion of administrative
certiorari, prohibition and mandamus to set
remedies both deal with the proper
aside the warrant, enjoin the Collector and his
relationships between the courts and
agents from further proceeding with the
administrative agencies. The doctrine of
forfeiture hearing and to secure the return of the
exhaustion of administrative remedies applies
confiscated equipment, alleging therein that the
where a claim is cognizable in the first instance by
warrant issued is null and void for the reason
an administrative agency alone. Judicial
interference is withheld until the administrative that, pursuant to Section 2 of Article III of the
process has been completed. As stated in 1987 Constitution, only a judge may issue a
Industrial Enterprises, Inc. vs. Court of Appeals, 184 search warrant. In his comment to the petition, the
SCRA 426. The doctrine of primary Collector of Customs, through the Office of
the Solicitor General, contends that he
is authorized under the Tariff and Custom
Admin Law; Judicial Review
Code to order the seizure of the
equipment whose duties and taxes were of Administrative Action (2001)
not paid and that the corporation did not No XIV Give the two (2) requisites for
exhaust administrative remedies. the judicial review of
(a) Should the petition be administrative decision/actions, that is,
when is an administrative action ripe for
granted? Decide.
Judicial review? (5%)
(b) If the Court would sustain the
SUGGESTED ANSWER:
contention of the Collector of Customs on the
matter of exhaustion of administrative The following are the conditions for ripeness for
remedies, what is the administrative remedy judicial review of an administrative action:
available to the corporation? 1. The administrative action has
(c) What are the exceptions to the rule already been fully completed and, therefore,
on exhaustion of administrative remedies? is a final agency action; and
SUGGESTED ANSWER: 2. All administrative remedies have
been exhausted. [Gonzales, Administrative
(a) No. No search warrant from
Law, Rex Bookstore: Manila, p. 136 (1979)].
court needed.
(b) As pointed out in Chia us. Acting
Collector of Customs, 177 SCRA 753, the Admin Law; Judicial Review
administrative remedy available under Section of Administrative Decisions (1988)
2313 of the Tariff and Customs Code is to No. 17: Apex Logging Co. and Batibot Logging Co.
appeal to the Commissioner of Customs, from are adjacent timber concession holders in
whose decision an appeal to the Court of Tax Isabela. Because of boundary conflicts, and
Appeals lies. mutual charges of incursions into their
(c) The following are the exceptions respective concession areas, the Bureau of
to the doctrine of exhaustion of Forestry ordered a survey to establish on the
administrative remedies: ground their common boundary. The Bureau of
Forestry's decision in effect favored Batibot.
1. The case deals with private land;
Apex appealed to the Department of Natural
2. The question involved is purely Resources and Environment and this
legal; department reversed the decision of the Bureau of
Forestry and sustained Apex. It was the turn of
3. The case involves a quo warranto
Batibot to appeal to the Office of the
proceeding; President. The Office of the President through
4. There is denial of due process; an Asst. Executive Secretary sustained the
Department of Natural Resources arid
5. The decision is patently illegal;
Environment. On a motion for reconsideration by
6. The aggrieved party will Batibot, however, an Asst. Executive
suffer irreparable injury; Secretary other than the one who signed the
decision affirming the decision of the
7. There is estoppel;
Department of Natural Resources and
8. Resort to administrative remedies Environment decided for Batibot, Dissatisfied with
would be futile; the Administrative action on the
controversy. Apex filed an action with the
9. The decision is that of
Regional Trial Court against Batibot, the
a department head; Director of Forestry, and the Asst. Executive
10. The law expressly provides for Secretaries insisting that a judicial review of
immediate judicial review; such divergent administrative decisions is
11. Public interest is involved; necessary to determine the correct boundary line
of the licensed areas in question.
12. There was unreasonable delay
Batibot moved to dismiss the action, but the
in the administrative proceedings; and Regional Trial Court denied the same and even
13. The aggrieved party is poor. enjoined enforcement of the decision of
the Office of the President. Batibot's motion for Palace and a long-standing Bureau under the
reconsideration was likewise denied. Department of Interior and Local Governments. The
employees of both offices assailed the action
Batibot then filed a petition for certiorari
of the President for being an
and prohibition to review and annul the
encroachment of legislative powers and thereby
orders of the Regional Trial Court. Do you
void. Was the contention of the employees
believe the petition for certiorari and
correct? Explain.
prohibition is meritorious? Why or why not?
SUGGESTED ANSWER:
SUGGESTED ANSWER:
The contention of the employees is not correct. As
The petition for certiorari and prohibition is
held in Buklod ng Kawaning EHB v. Zamora. 360
meritorious, The order of the trial court must
SCRA 718 [2001], Section 31, Book III of the
accordingly be set aside. As held in a similar
Administrative Code of 1987 has delegated to the
case, Lianga Bay Logging Co. v. Enage, 152
President continuing authority to reorganize
SCRA 80 (1987), decisions of administrative
the administrative structure of the Office of the
officers should not be disturbed by the courts
President to achieve simplicity, economy and
except when the former have acted without or
efficiency. Since this includes the power to
in excess of their jurisdiction or with grave
abolish offices, the President can abolish the
abuse of discretion. The mere suspicion of
Office of the Presidential Spokesman,
Apex that there were anomalies in the
provided it is done in good faith. The President
nonrelease of the first "decision" and its
can also abolish the Bureau in the Department
substitution of a new one by another Assistant
of Interior and Local Governments, provided
Executive Secretary does not justify judicial
it is done in good faith because the President
review. Mere beliefs, suspicions and
has been granted continuing authority to
conjectures cannot overcome the presumption of
reorganize the administrative structure of
regularity of official action.
the National Government to effect economy
and promote efficiency, and the powers include the
Admin Law; Meaning of “Government of the abolition of government offices. (Presidential
Decree No. 1416, as amended by Presidential
Philippines” (1997)
Decree No. 1772; Larin v. The Executive
No. 3: Are government-owned or controlled Secretary. 280 SCRA 713 [1997]).
corporations within the scope and meaning of
the "Government of the Philippines"?
SUGGESTED ANSWER:
Admin Law; Rules and Regulations; Due
Section 2 of the Introductory Provision of the Process (2000)
Administrative Code of 1987 defines the
No III. - The Maritime Industry Authority
government of the Philippines as the corporate
(MARINA) issued new rules and regulations
governmental entity through which the functions of
governing pilotage services and fees, and the
government are exercised throughout the
conduct of pilots in Philippine ports. This it did
Philippines, including, same as the contrary
without notice, hearing nor consultation with
appears from the context, the various arms
harbor pilots or their associations whose rights
through which political authority is made
and activities are to be substantially affected.
effective in the Philippines, whether pertaining to
The harbor pilots then filed suit to have the new
the autonomous regions, the provincial, city,
MARINA rules and regulations declared
municipal or barangay subdivisions or other
unconstitutional for having been issued without due
forms of local government.
process. Decide the case. (5%)
Government owned or controlled
SUGGESTED ANSWER:
corporation are within the scope and meaning of
the Government of the Philippines if they are The issuance of the new rules and regulations
performing governmental or political functions. violated due process. Under Section 9, Chapter II,
Book VII of the Administrative Code of 1987, as far
as practicable, before adopting proposed rules, an
Admin Law; Power of the President to administrative agency should publish or circulate
Reorganize Administrative Structure (2003) notices of the proposed rules and afford
No VI - The President abolished the Office of interested parties the opportunity to submit
their views; and in the fixing of rates, no rule shall
the Presidential Spokesman in Malacanang
be valid unless the proposed rates
shall have been published in a newspaper of intents and purposes. A distinction,
general circulation at least two weeks before the however, may be made with respect
first hearing on them. In accordance with this to those entities possessing a
provision, in Commissioner of Internal separate charter created by statute.
Revenue v CA, 261 SCRA 236 (1996), it was a. DPWH is an agency. It does not
held that when an administrative rule possess a separate charter.
substantially increases the burden of those b. BSP is an instrumentality because it
directly affected, they should be accorded the was incorporated under the new
chance to be heard before its issuance. Central Bank Law (R.A. No. 7653)
ALTERNATIVE ANSWER: c. PPA can be defined as both
an instrumentality and an
Submission of the rule to the University of the agency because it was
Philippines Law Center for publication is incorporated by special law and
mandatory. Unless this requirement is complied it has its own charter, yet it is
with, the rule cannot be enforced. integrated with the DOTC.
d. LTO is an agency. It is an office
Government Agency vs. Government of the DOTC.
Instrumentality (Q7-2005) e. LBP is an instrumentality having a
(3) State with reason(s) which of the charter under a special law and is a
following is a government agency or a government financial institution
government instrumentality: (GFI) independent of any
a. Department of Public Works department of government.
and Highways;
b. Bangko Sentral ng Pilipinas; Quasi-Judicial Body or Agency (Q5-2006)
c. Philippine Ports Authority; 3. What is a quasi-judicial body or
d. Land Transportation Office; agency? (2.5%)
e. Land Bank of the Philippines. (5%) SUGGESTED ANSWER:
A quasi-judicial body or agency is an
SUGGESTED ANSWER: An administrative body with the power to hear,
INSTRUMENTALITY refers to any determine or ascertain facts and decide
agency of the national government not rights, duties and obligations of the parties
integrated within the departmental by the application of rules to the
framework, vested with special ascertained facts. By this power, quasi-
functions or jurisdiction by law, with judicial agencies are enabled to interpret
some if not all corporate powers, and apply implementing rules and
administering special funds, and regulations promulgated by them and laws
enjoying operational autonomy, usually entrusted to their administration.
through a charter. (Iron and Steel
Authority v. Court of Appeals, G.R. No.
102976, October 25, 1995)
AGENCY under the administrative code is

any department, bureau, office,
commission, authority or officer of the
national government, authorized by law or
executive order to make rules, issue
licenses, grant rights or privileges, and
adjudicate cases; research institutions
with respect to licensing functions;
government corporations with respect to
functions regulating private rights,
privileges, occupation or business, and
officials in the exercise of the
disciplinary powers as provided by law.
There is NO PRACTICAL
DISTINCTION between an
instrumentality and agency, for all
Remedial Law Bar Examination Q & A (1997-2006) by: sirdondee@gmail.com Page 1 of 66
ANSWERS TO BAR
IN
REMEDIAL LAW
ARRANGED BY TOPIC
(1997 – 2006)

version 1987-2003
Silliman University
College of Law Batch 2005
UPDATED BY:
Dondee
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QUESTIONS by the UP LAW COMPLEX & Philippine
Law Schools Association 2006
July 22, 2007

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understanding of the issues touched by the Philippine Bar
Examinations and its trend. It is specially intended for law
students from the provinces who, very often, are recipients of
deliberately distorted notes from other unscrupulous law schools
and students. Share to others this work and you will be richly
rewarded by God in heaven. It is also very good karma.
We would like to seek the indulgence of the reader for some Bar
Questions which are improperly classified under a topic and for
some topics which are improperly or ignorantly phrased, for the
authors are just Bar Reviewees who have prepared this work while
reviewing for the Bar Exams under time constraints and within
their limited knowledge of the law. We would like to seek the
reader’s indulgence for a lot of typographical errors in this work.
The Authors
July 26, 2005
Updated by Dondee
July 22, 2007

TABLE OF CONTENTS
GENERAL PRINCIPLES .................................................................................................................... 8
Bar by Prior Judgment vs. Conclusiveness of Judgment (1997)................................................................. 8
Cause of action vs. Action (1997) ....................................................................................................... 8
Civil Actions vs. Special Proceedings (1998) ......................................................................................... 8
Conciliation Proceedings; Katarungang Pambarangay vs. Pre-Trial Conference (1999) ................................... 8
Family Courts Act (2001) .................................................................................................................. 8
Interlocutory Order (2006) ................................................................................................................ 8
Judgment vs. Opinion of the Court (2006) ............................................................................................ 8
Judicial Autonomy & Impartiality (2003) ............................................................................................... 8
Katarungang Pambarangay; Objective (1999) ........................................................................................ 9
Liberal Construction; Rules of Court (1998) .......................................................................................... 9
Remedial Law in Phil. System of Gov’t (2006) ........................................................................................ 9
Remedial Law vs. Substantive Law (2006) ............................................................................................ 9
Remedial Law; Concept (2006)........................................................................................................... 9
Rights of the Accused; Validity; HIV Test (2005) .................................................................................... 9
JURISDICTION .................................................................................................................................. 10
Jurisdiction (1997) ........................................................................................................................ 10
Jurisdiction vs. Venue (2006) .......................................................................................................... 10
Jurisdiction; CTA Division vs. CTA En Banc (2006)............................................................................... 10
Jurisdiction; Incapable of Pecuniary Estimation (2000).......................................................................... 10
Jurisdiction; MTC (2002) ................................................................................................................ 11
Jurisdiction; Office of the Solicitor General (2006)................................................................................ 11
Jurisdiction; Ombudsman Case Decisions (2006)................................................................................. 12
Jurisdiction; Probate (2001) ............................................................................................................ 12
Jurisdiction; RTC (2002)................................................................................................................. 12
Jurisdiction; Subdivision Homeowner (2006) ...................................................................................... 12
Katarungang Pambarangay; Lupon; Extent of Authority; (2001) .............................................................. 13
CIVIL PROCEDURE ......................................................................................................................... 13
Actions; Cause of Action vs. Action (1999) ......................................................................................... 13
Actions; Cause of Action; Joinder & Splitting (1998) ............................................................................ 13
Actions; Cause of Action; Joinder of Action (1999) ............................................................................... 13
Actions; Cause of Action; Joinder of Action (2005) ............................................................................... 13
Actions; Cause of Action; Splitting (1999) .......................................................................................... 14
Actions; Cause of Action; Splitting (2005) .......................................................................................... 14
Actions; Cause of Actions; Motion to Dismiss; bar by prior judgment (2002) .............................................. 14
Actions; Counterclaim (2002) .......................................................................................................... 14
Actions; Counterclaim vs. Crossclaim (1999) ...................................................................................... 15
Actions; Cross-Claims; Third Party Claims (1997) ................................................................................ 15
Actions; Derivative Suit vs. Class Suit (2005) ...................................................................................... 16
Actions; Filing; Civil Actions & Criminal Action (2005) .......................................................................... 16
Actions; Intervention; Requisites (2000)............................................................................................. 16
Actions; Real Actions & Personal Actions (2006) ................................................................................. 16
Actions; Survives Death of the Defendant (2000).................................................................................. 16
Appeals; Period of Appeal; Fresh Period Rule (2003) ............................................................................ 17
Certiorari; Mode of Certiorari (2006) .................................................................................................. 17
Certiorari; Rule 45 vs. Rule 65 (1998)................................................................................................. 17
Certiorari; Rule 45 vs. Rule 65 (2005)................................................................................................. 18
Contempt; Death of a Party; Effect (1998) ........................................................................................... 18
Default (2000) .............................................................................................................................. 18
Default (2001) .............................................................................................................................. 18
Default; Order of Default; Effects (1999) ............................................................................................. 18
Default; Remedies; Party Declared in Default (1998) ............................................................................. 19
Default; Remedies; Party Declared in Default (2006) ............................................................................. 19
Default; Remedies; Substantial Compliance (2000) ............................................................................... 20
Demurrer to Evidence (2001) ........................................................................................................... 20
Demurrer to Evidence; Civil Case vs. Criminal Case (2003)..................................................................... 20
Discovery; Modes of Discovery (2000) ............................................................................................... 20
Discovery; Modes; Subpoena Duces Tecum (1997)............................................................................... 21
Discovery; Production and Inspection of Documents (2002) ................................................................... 21
Dismissal; Motion to Dismiss; Res Judicata (2000) ............................................................................... 21
Evidence; Admissibility; Photocopies (2000)....................................................................................... 22
Forum Shopping; Definition (2006) ................................................................................................... 22
Forum Shopping; Effects; Lack of Certification (2006) ........................................................................... 22
Gen. Principles; Questions of Law vs. Questions of Fact (2004)............................................................... 22
Judgment; Annulment of Judgment; Grounds (1998) ............................................................................ 22
Judgment; Enforcement; 5-year period (1997) ..................................................................................... 22
Judgment; Enforcement; Foreign Judgment (2005) .............................................................................. 22
Judgment; Execution pending Appeal (2002) ...................................................................................... 23
Judgment; Interlocutory Order; Partial Summary Judgments (2004) ......................................................... 23
Judgment; Judgment on the Pleadings (1999) ..................................................................................... 23
Judgment; Judgment on the Pleadings (2005) ..................................................................................... 24
Judgment; Mandamus vs. Quo Warranto (2001) ................................................................................... 24
Judgment; Soundness; Attachment (2002) ......................................................................................... 24
Judgments; Enforcement; Examination of Defendant (2002) ................................................................... 24
Jurisdiction; Habeas Corpus; Custody of Minors (2005) ........................................................................ 25
Jurisdiction; Lack of Jurisdiction; Proper Action of the Court (2004) ........................................................ 25
Parties; Death of a Party; Effect (1998) .............................................................................................. 25
Parties; Third Party Claim (2000) ...................................................................................................... 26
Parties; Third-Party Claim (2005) ...................................................................................................... 26
Petition for Certiorari (2000) ............................................................................................................ 26
Petition for Relief & Action for Annulment (2002) ................................................................................. 27
Petition for Relief; Injunction (2002) .................................................................................................. 27
Pleadings; Amendment of Complaint; By Leave of Court (2003) .............................................................. 27
Pleadings; Amendment of Complaint; By Leave of Court; Prescriptive Period (2000) .................................... 27
Pleadings; Amendment of Complaint; Matter of Right (2005)................................................................... 28
Pleadings; Amendment of Complaint; To Conform w/ Evidence (2004) ...................................................... 28
Pleadings; Answer; Defense; Specific Denial (2004) ............................................................................. 28
Pleadings; Certification Against Forum Shopping (2000) ....................................................................... 29
Pleadings; Counterclaim against the Counsel of the Plaintiff (2004).......................................................... 29
Pleadings; Motions; Bill of Particulars (2003) ...................................................................................... 29
Pleadings; Reply; Effect of Non-Filing of Reply (2000) ........................................................................... 29
Prejudicial Question; Ejectment vs. Specific Performance (2000) ............................................................. 30
Pre-Trial; Requirements (2001) ........................................................................................................ 30
Provisional Remedies (1999) ........................................................................................................... 30
Provisional Remedies; Attachment (1999) .......................................................................................... 30
Provisional Remedies; Attachment vs. Garnishment (1999) .................................................................... 31
Provisional Remedies; Injunction (2001) ............................................................................................ 31
Provisional Remedies; Injunction (2003) ............................................................................................ 31
Provisional Remedies; Injunctions; Ancillary Remedy vs. Main Action (2006) ............................................. 31
Provisional Remedies; Injunctions; Issuance w/out Bond (2006).............................................................. 31
Provisional Remedies; Injunctions; Requisites (2006) ........................................................................... 31
Provisional Remedies; Receivership (2001) ........................................................................................ 32
Provisional Remedies; Replevin (1999) .............................................................................................. 32
Provisional Remedies; Support Pendente Lite (1999) ............................................................................ 32
Provisional Remedies; Support Pendente Lite (2001) ............................................................................ 32
Provisional Remedies; TRO (2001).................................................................................................... 32
Provisional Remedies; TRO (2006).................................................................................................... 33
Provisional Remedies; TRO vs. Status Quo Order (2006) ....................................................................... 33
Provisional Remedies; TRO; CA Justice Dept. (2006) ............................................................................ 33
Provisional Remedies; TRO; Duration (2006)....................................................................................... 33
Reglementary Period; Supplemental Pleadings (2000) ........................................................................... 33
Remedies; Appeal to SC; Appeals to CA (2002) ................................................................................... 33
Remedies; Appeal; RTC to CA (1999) ................................................................................................ 33
Remedies; Appeal; Rule 45 vs. Rule 65 (1999) ..................................................................................... 34
Remedies; Void Decision; Proper Remedy (2004) ................................................................................. 34
Special Civil Action; Ejectment (1997) ............................................................................................... 35
Special Civil Action; Ejectment (1998) ............................................................................................... 35
Special Civil Action; Foreclosure (2003)............................................................................................. 35
Special Civil Action; Petition for Certiorari (2002) ................................................................................. 35
Special Civil Action; Quo Warranto (2001) .......................................................................................... 36
Special Civil Actions; Mandamus (2006)............................................................................................. 36
Summons .................................................................................................................................... 36
Summons (1999) .......................................................................................................................... 37
Summons; Substituted Service (2004) ............................................................................................... 37
Summons; Validity of Service; Effects (2006) ...................................................................................... 37
Venue; Improper Venue; Compulsory Counterclaim (1998) ..................................................................... 38
Venue; Personal Actions (1997) ....................................................................................................... 38
CRIMINAL PROCEDURE ................................................................................................................. 38
Acquittal; Effect (2002) .................................................................................................................. 38
Actions; BP22; Civil Action deemed included (2001) ............................................................................. 39
Actions; BP22; Demurrer to Evidence (2003) ....................................................................................... 39
Actions; Commencement of an Action; Double Jeopardy (2004) .............................................................. 39
Actions; Discretionary Power of Fiscal (1999) ..................................................................................... 39
Actions; Injunction (1999)............................................................................................................... 39
Arrest; Warrantless Arrest; Preliminary Investigation (2004) ................................................................... 40
Arrest; Warrantless Arrests & Searches (1997) .................................................................................... 40
Arrest; Warrantless Arrests & Seizures (2003) ..................................................................................... 40
Arrest; Warrantless Arrests; Objection (2000) ..................................................................................... 41
Bail (2002) .................................................................................................................................. 41
Bail; Appeal (1998)........................................................................................................................ 41
Bail; Application; Venue (2002) ........................................................................................................ 41
Bail; Forms of Bail (1999) ............................................................................................................... 41
Bail; Matter of Right (1999) ............................................................................................................. 41
Bail; Matter of Right vs. Matter of Discretion (1999) .............................................................................. 41
Bail; Matter of Right vs. Matter of Discretion (2006) .............................................................................. 42
Bail; Witness Posting Bail (1999)...................................................................................................... 42
Complaint vs. Information (1999)...................................................................................................... 42
Demurrer to Evidence; Contract of Carriage (2004) ............................................................................... 42
Demurrer to Evidence; w/o Leave of Court (1998) ................................................................................. 42
Dismissal; Failure to Prosecute (2003)............................................................................................... 43
Dismissal; Provisional Dismissal (2003)............................................................................................. 43
Double Jeopardy (2002) ................................................................................................................. 44
Double Jeopardy; Upgrading; Original Charges (2005) .......................................................................... 44
Extradition (2004) ......................................................................................................................... 44
Information (2001) ........................................................................................................................ 45
Information; Amendment (2001) ....................................................................................................... 45
Information; Amendment; Double Jeopardy; Bail (2002) ........................................................................ 45
Information; Amendment; Supervening Events (1997) ........................................................................... 45
Information; Bail (2003).................................................................................................................. 45
Information; Motion to Quash (2000) ................................................................................................. 46
Information; Motion to Quash (2005) ................................................................................................. 46
Information; Motion to Quash; Grounds (1998) .................................................................................... 46
Judgment; Promulgation of Judgment (1997) ...................................................................................... 46
Jurisdiction; Complex Crimes (2003)................................................................................................. 47
Jurisdiction; Finality of a Judgment (2005) ......................................................................................... 47
Parties; Prosecution of Offenses (2000) ............................................................................................. 47
Plea of Guilty; to a Lesser Offense (2002) ........................................................................................... 47
Prejudicial Question (1999) ............................................................................................................. 47
Prejudicial Question (2000) ............................................................................................................. 47
Prejudicial Question; Suspension of Criminal Action (1999) ................................................................... 48
Pre-Trial Agreement (2004) ............................................................................................................. 48
Pre-Trial; Criminal Case vs. Civil Case (1997) ...................................................................................... 48
Provisional Dismissal (2002) ........................................................................................................... 48
Remedies; Void Judgment (2004) ..................................................................................................... 48
Search Warrant; Motion to Quash (2005) ............................................................................................ 49
Trial; Trial in Absentia; Automatic Review of Conviction (1998) ............................................................... 49
Venue (1997) ............................................................................................................................... 49
EVIDENCE ........................................................................................................................................ 50
Admissibility (1998) ...................................................................................................................... 50
Admissibility (2002) ...................................................................................................................... 50
Admissibility (2004) ...................................................................................................................... 50
Admissibility; Admission of Guilt; Requirements (2006) ........................................................................ 51
Admissibility; Document; Not raised in the Pleading (2004) .................................................................... 51
Admissibility; Electronic Evidence (2003) ........................................................................................... 51
Admissibility; Object or Real Evidence (1994) ..................................................................................... 51
Admissibility; Objections (1997)....................................................................................................... 51
Admissibility; Offer to Marry; Circumstantial Evidence (1998) ................................................................. 52
Admissibility; Offer to Pay Expenses (1997)........................................................................................ 52
Admissibility; Private Document (2005) ............................................................................................. 52
Admissibility; Proof of Filiation; Action of Partition (2000)...................................................................... 52
Admissibility; Rules of Evidence (1997) ............................................................................................. 53
Best Evidence Rule (1997) .............................................................................................................. 53
Burden of Proof vs. Burden of Evidence (2004).................................................................................... 54
Character Evidence (2002) .............................................................................................................. 54
Confession; Affidavit of Recantation (1998) ........................................................................................ 54
Facts; Legislative Facts vs. Adjudicative Facts (2004) ........................................................................... 54
Hearsay Evidence (2002) ................................................................................................................ 54
Hearsay Evidence vs. Opinion Evidence (2004).................................................................................... 54
Hearsay; Exception; Dead Man Statute (2001) ..................................................................................... 54
Hearsay; Exception; Dying Declaration (1998) ..................................................................................... 55
Hearsay; Exception; Res Gestae; Opinion of Ordinary Witness (2005)....................................................... 55
Hearsay; Exceptions (1999) ............................................................................................................ 55
Hearsay; Exceptions; Dying Declaration (1999).................................................................................... 55
Hearsay; Inapplicable (2003) ........................................................................................................... 55
Judicial Notice; Evidence (2005) ...................................................................................................... 56
Judicial Notice; Evidence; Foreign Law (1997) ..................................................................................... 56
Memorandum (1996) ..................................................................................................................... 57
Offer of Evidence (1997) ................................................................................................................. 57
Offer of Evidence; res inter alios acta (2003) ....................................................................................... 57
Offer of Evidence; Testimonial & Documentary (1994) ........................................................................... 57
Opinion Rule (1994) ...................................................................................................................... 57
Parol Evidence Rule (2001) ............................................................................................................. 58
Preponderance vs. Substantial Evidence (2003)................................................................................... 58
Privilege Communication (1998)....................................................................................................... 58
Privilege Communication; Marital Privilege (1989) ................................................................................ 58
Remedy; Lost Documents; Secondary Evidence (1992) ......................................................................... 60
Testimony; Independent Relevant Statement (1999).............................................................................. 60
Witness; Competency of the Witness vs. Credibility of the Witness (2004) ................................................. 60
Witness; Examination of a Child Witness; via Live-Link TV (2005) ............................................................ 60
Witness; Examination of Witnesses (1997) ......................................................................................... 60
Witness; Examination of Witnesses (2002) ......................................................................................... 60
Witness; Utilized as State Witness; Procedure (2006) ............................................................................ 60
SPECIAL PROCEEDINGS ................................................................................................................ 61
Cancellation or Correction; Entries Civil Registry (2005) ........................................................................ 61
Escheat Proceedings (2002) ............................................................................................................ 61
Extra-judicial Settlement of Estate (2005) ........................................................................................... 61
Habeas Corpus (1993) ................................................................................................................... 61
Habeas Corpus (1998) ................................................................................................................... 61
Habeas Corpus (2003) ................................................................................................................... 62
Intestate Proceedings (2002) ........................................................................................................... 62
Intestate Proceedings; Debts of the Estate (2002)................................................................................. 62
Judicial Settlement of Estate (2005) .................................................................................................. 62
Probate of Lost Wills (1999) ............................................................................................................ 62
Probate of Will (2003) .................................................................................................................... 63
Probate of Will (2005) .................................................................................................................... 63
Probate of Will (2006) .................................................................................................................... 63
Probate of Will; Mandatory Nature (2002) ........................................................................................... 63
Settlement of Estate (2001) ............................................................................................................. 64
Settlement of Estate; Administrator (1998) ......................................................................................... 64
Venue; Special Proceedings (1997) ................................................................................................... 64
SUMMARY PROCEDURE ................................................................................................................ 65
Prohibited Pleadings (2004) ............................................................................................................ 65
MISCELLANEOUS ............................................................................................................................. 65
Administrative Proceedings (2005) ................................................................................................... 65
Congress; Law Expropriating Property (2006) ..................................................................................... 65
RA 3019; Mandatory Suspension (2001) ............................................................................................. 66

P.D. No. 1508; Sec. 415, Local Government Code of 1991,

GENERAL PRINCIPLES R.A. 7160.) No such prohibition exists in the
Bar by Prior Judgment vs. Conclusiveness of Judgment pre-trial negotiations under the Rules of Court.
(1997)
Distinguish Bar by prior judgment from Family Courts Act (2001)
conclusiveness of judgment a) How should the records of child and family cases
SUGGESTED ANSWER: in the Family Courts or RTC designated by the
Bar by prior-judgment is the doctrine of res judicata, Supreme Court to handle Family Court cases be
which bars a second action when there is identity of treated and dealt with? (3%)
parties, subject matter and cause of action. (Sec. 49[b] of b) Under what conditions may the identity of parties
former Rule 39; Sec, 47 [b] of new Rule 39). in child and family cases be divulged (2%)
SUGGESTED ANSWER:
Conclusiveness of judgment precludes the relitigation a) The records of child and family cases in the Family
of a particular issue in another action between Code to handle Family Court cases shall be dealt with
the same parties on a different cause of action. (Sec. 49 utmost confidentiality. (Sec. 12, Family Courts Act of 1997)
[c] of former Rule 39; sec. 47 [c] of new Rule 39).
b) The identity of parties in child and family
Cause of action vs. Action (1997) cases shall not be divulged unless necessary
Distinguish Cause of action from action and with authority of the judge. (Id.)
SUGGESTED ANSWER:
A CAUSE OF ACTION is an act or omission of one Interlocutory Order (2006)
party in violation of the legal right or rights of
What is an interlocutory order? (2%)
the other (Maao Sugar Central vs. Barrios, 79 Phil. 606; SUGGESTED ANSWER:
Sec. 2 of new Rule 2), causing damage to another. An interlocutory order refers to an order issued
between the commencement and the end of the suit
An ACTION is an ordinary suit in a court of Justice which is not a final decision of the whole controversy
by which one party prosecutes another for and leaves something more to be done on its merits
the enforcement or protection of a right, or (Gallardo et al. v. People, G.R. No. 142030, April 21, 2005;
the prevention or redress of a wrong.(Section 1 of former Investments Inc. v. Court of Appeals, G.R. No.
Rule 2). 60036, January 27, 1987 cited in Denso Phils, v. /AC,
G.R. No. 75000, Feb. 27, 1987).
Civil Actions vs. Special Proceedings (1998)
Distinguish civil actions from special proceedings. Judgment vs. Opinion of the Court (2006)
[3%] What is the difference between a judgment and
SUGGESTED ANSWER: an opinion of the court? (2.5%)
A CIVIL ACTION is one by which a party sues SUGGESTED ANSWER:
another for the enforcement or protection of a right, The judgment or fallo is the final disposition of the Court
or the prevention or redress of a wrong. (See. 3[a], Rule which is reflected in the dispositive portion of the
1, 1997 Rules of Civil Procedure), while a SPECIAL decision. A decision is directly prepared by a judge
and signed by him, containing clearly and distinctly
PROCEEDING is a remedy by which a party seeks
a statement of the facts proved and the law upon which
to establish a status, a right or a particular fact.
the judgment is based (Etoya v. Abraham
(Sec. 3[C]. Rule 1,1997 Rules of Civil Procedure.)
Singson, Adm. Matter No. RTJ-91-758, September 26,
1994).
Conciliation Proceedings; Katarungang Pambarangay
vs. Pre-Trial Conference (1999) An opinion of the court is the informal expression of the
What is the difference, if any, between the views of the court and cannot prevail against its final
conciliation proceedings under the Katarungang order. The opinion of the court is contained in the body
Pambarangay Law and the negotiations for an of the decision that serves as a guide or
amicable settlement during the pre-trial conference enlightenment to determine the ratio decidendi of the
under the Rules of Court? (2%) decision. The opinion forms no part of the judgment even
SUGGESTED ANSWER:
The difference between the conciliation proceedings if combined in one instrument, but may be referred
under the Katarungang Pambarangay Law and the to for the purpose of construing the judgment
(Contreras v. Felix, G.R. No. L-477, June 30,
negotiations for an amicable settlement during the pre-
1947).
trial conference under the Rules of Court is that in the
former, lawyers are prohibited from appearing for the
parties. Parties must appear in person only except Judicial Autonomy & Impartiality (2003)
minors or incompetents who may be assisted by their next
of kin who are not lawyers. (Formerly Sec. 9,
In rendering a decision, should a court take into affairs. This is distinguished from REMEDIAL LAW
consideration the possible effect of its verdict which prescribes the method of enforcing rights or
upon the political stability and economic welfare obtaining redress for their invasion (Bustos v. Lucero,
of the nation? 4% G.R. No. L-2068, October 20, 1948).
SUGGESTED ANSWER:
No, because a court is required to take into Remedial Law; Concept (2006)
consideration only the legal issues and the evidence What is the concept of remedial law? (2%)
admitted in the case. The political stability and SUGGESTED ANSWER:
economic welfare of the nation are extraneous to the case. The concept of Remedial Law lies at the very core of
They can have persuasive influence but they are not the procedural due process, which means a law which
main factors that should be considered in deciding a hears before it condemns, which proceeds upon
case. A decision should be based on the law, rules of inquiry and renders judgment only after trial, and
procedure, justice and equity. However, in exceptional contemplates an opportunity to be heard before
cases the court may consider the political stability judgment is rendered (Albert v. University Publishing,
and economic welfare of the nation when these are G.R. No. L-19118, January 30, 1965).
capable of being taken into judicial notice of and are
Remedial Law is that branch of law which prescribes
relevant to the case.
the method of enforcing the rights or obtaining
Katarungang Pambarangay; Objective (1999) redress for their invasion (Bustos v. Lucero, G.R. No.
L-2068, October 20, 1948; First Lepanto Ceramics, Inc. v.
What is the object of the Katarungang CA, G.R. No. 110571, March 10, 1994).
Pambarangay Law? (2%)
SUGGESTED ANSWER:
Rights of the Accused; Validity; HIV Test (2005)
The object of the Katarungang Pambarangay Law is to
Under Republic Act No. 8353, one may be charged
effect an amicable settlement of disputes among family
with and found guilty of qualified rape if he knew on or
and barangay members at the barangay level without
before the commission of the crime that he is
judicial recourse and consequently help relieve the
afflicted with Human Immuno-Deficiency Virus
courts of docket congestion. (Preamble of P.D. No. 1508, the
(HIV)/Acquired Immune Deficiency Syndrome
former and the first Katarungang Pambarangay Law.)
(AIDS) or any other sexually transmissible disease and
Liberal Construction; Rules of Court (1998) the virus or disease is transmitted to the victim. Under
How shall the Rules of Court be construed? [2%] Section 17(a) of Republic Act No. 8504 the court may
SUGGESTED ANSWER: compel the accused to submit himself to a blood test
The Rules of Court should be liberally construed in where blood samples would be extracted from his
order to promote their objective of securing a just, veins to determine whether he has HIV. (8%)
speedy and inexpensive disposition of every action and
proceeding. (Sec. 6, Rule 1 1997 Rules of Civil Procedure.) a) Are the rights of the accused to be
ADDITIONAL ANSWER: presumed innocent of the crime charged, to
However, strict observance of the rules is an privacy, and against self-incrimination
imperative necessity when they are considered violated by such compulsory testing? Explain.
indispensable to the prevention of needless delays and SUGGESTED ANSWER:
to the orderly and speedy dispatch of Judicial No. The court may compel the accused to submit
himself to a blood test to determine whether he has HIV
business. (Alvero vs. Judge de la Rosa, 76 Phil. 428)
under Sec. 17(a) of R.A. No, 8054. His rights to be
Remedial Law in Phil. System of Gov’t (2006) presumed innocent of the crime charged, to
How are remedial laws implemented in our system of privacy and against self-incrimination are not violated by
government? (2%) such compulsory testing. In an action in which the
SUGGESTED ANSWER: physical condition of a party is in controversy, the
Remedial laws are implemented in our system of court may order the accused to submit to a physical
government through the pillars of the judicial system, examination. (Sec. 1, Rule 28, 1997 Rules of Civil Procedure)
including the prosecutory service, our courts (Look for citation of latest case, in 2004)
of justice and quasi judicial agencies.
b) If the result of such test shows that he is HIV
Remedial Law vs. Substantive Law (2006) positive, and the prosecution offers such result in
Distinguish between substantive law and remedial evidence to prove the qualifying circumstance
law. (2%) under the Information for qualified rape, should the
SUGGESTED ANSWER: court reject such result on the ground that it is the
SUBSTANTIVE LAW is that part of the law which fruit of a poisonous tree? Explain.
SUGGESTED ANSWER:
creates, defines and regulates rights concerning life,
Since the rights of the accused are not violated
liberty, or property, or the powers of agencies or
because the compulsory testing is authorized by the
instrumentalities for the administration of public
Remedial Law Bar Examination Q & A (1997-2006) law, by: sirdondee@gmail.com Page 10 of 66
the result of the testing cannot be considered to be the (e) A petition for the probate of a will involving
fruit of a poisonous tree and can be offered in evidence an estate valued at 200.000.00 falls within
to prove the qualifying circumstance under the the Jurisdiction of the Metropolitan Trial Courts in
information for qualified rape under R.A. No. 8353. Metro Manila (Sec. 19[4] of BP 129, as amended).
The fruit, of the poisonous tree doctrine refers to that ADDITIONAL ANSWER:
rule of evidence that excludes any evidence which (b) An application for a writ of preliminary injunction
may have been derived or acquired from a tainted may be granted by a Municipal Court in an action of
or polluted source. Such evidence is forcible entry and unlawful detainer. (Sec.33 of BP 129;
inadmissible for having emanated from spurious Day vs. RTC of Zamboanga, 191 SCRA610.
origins. The doctrine, however, does not apply to the
Jurisdiction vs. Venue (2006)
results obtained pursuant to Sec. 1, Rule 28, 1997
Rules of Civil Procedure, as it does not contemplate a Distinguish jurisdiction from venue? (2%)
SUGGESTED ANSWER:
search within the moaning of the law. (People v. JURISDICTION treats of the power of the Court to
Montilla, G.R. No. 123872, January 30,1998)
decide a case on the merits, while VENUE refers to the
place where the suit may be filed. In criminal actions,
JURISDICTION however, venue is jurisdictional. Jurisdiction is a
matter of substantive law; venue, of procedural law.
Jurisdiction (1997) Jurisdiction may be not be conferred by consent through
waiver upon a court, but venue may be waived, except
What courts have jurisdiction over the following
in criminal cases (Nocum et al. v. Tan,
cases filed in Metro Manila?
G.R. No. 145022, September 23, 2005; Santos III
a) An action for specific performance or, in the v. Northwest Airlines, G.R. No. 101538, June 23, 1992).
alternative, for damages in the amount of
P180,000.00 Jurisdiction; CTA Division vs. CTA En Banc (2006)
b) An action for a writ of injunction. Mark filed with the Bureau of Internal Revenue
c) An action for replevin of a motorcycle valued at a complaint for refund of taxes paid, but it was
P150,000.00. not acted upon. So, he filed a similar complaint with
d) An action for interpleader to determine who the Court of Tax Appeals raffled to one of its
between the defendants is entitled to receive the Divisions. Mark's complaint was dismissed. Thus, he
amount of P190,000.00 from the plaintiff. filed with the Court of Appeals a petition for
e) A petition for the probate of a will involving an certiorari under Rule 65.
estate valued at P200,000.00. Does the Court of Appeals have jurisdiction
SUGGESTED ANSWER:
(a) An action for specific performance or, in the over Mark's petition? (2.5%)
SUGGESTED ANSWER:
alternative, for damages in the amount of 180,000.00 falls No. The procedure is governed by Sec. 11 of R. A.
within the jurisdiction of Metropolitan Trial Courts in 9282. Decisions of a division of the Court of Tax
Metro Manila. Although an action for specific Appeals must be appealed to the Court of Tax
performance is not capable of pecuniary estimation, Appeals en banc. Further, the CTA now has the same rank
since the alternative demand for damages is capable of as the Court of Appeals and is no longer considered
pecuniary estimation, it is within the jurisdiction of the a quasi-judicial agency. It is likewise provided in
Metropolitan Trial Courts in Metro Manila. (Sec. 33 of BP the said law that the decisions of the CTA en bane
129 as amended by RA No. 7691:
are cognizable by the Supreme Court under Rule 45 of
Cruz us. Tan, 87 Phil. 627].
the 1997 Rules of Civil Procedure.
(b) An action for injunction is not capable of
Jurisdiction; Incapable of Pecuniary Estimation (2000)
pecuniary estimation and hence falls within A brings an action in the MTC of Manila against B
the jurisdiction of the RTCs. for the annulment of an extrajudicial foreclosure sale of
real property with an assessed value of P50,000.00 located
(c) An action for replevin of a motorcycle valued at
in Laguna. The complaint alleged prematurity of the sale
150,000.00 falls within the jurisdiction of the for the reason that the mortgage was not yet due. B
Metropolitan Trial Courts in Metro Manila (Sec. 33 of timely moved to dismiss the case on the ground that
BP 129. as amended by RA No. 7691).
the action should have been brought in the RTC of
(d) An action for interpleader to determine who Laguna. Decide with reason. (3%)
SUGGESTED ANSWER:
between the defendants is entitled to receive the
The motion should be granted. The MTC of Manila has
amount of P190,000.00 falls within the jurisdiction of the
no jurisdiction because the action for the
Metropolitan Trial Courts in Metro Manila.
annulment of the extrajudicial foreclosure is not
(Makati Dev Corp. v. Tanjuatco 27 SCRA 401)
capable of pecuniary estimation and is therefore

under the jurisdiction of the RTCs. (Russell v. Vestil, estimation and, therefore, the action was within the
304 SCRA 738,[1999]). jurisdiction of RTC. (Russel v. Vestil, 304 SCRA 738
[1999]; Copioso v. Copioso, G.R. No. 149243, October
However, the action for annulment is a personal 28,2002; Cabutihan v. Landcenter Construction, 383
action and the venue depends on the residence of SCRA 353 [2002]).
ALTERNATIVE ANSWER:
either A or B. Hence, it should be brought in the
If the action affects title to or possession of real
RTC of the place where either of the parties resides.
property then it is a real action and jurisdiction
Jurisdiction; Incapable of Pecuniary Estimation (2000) is determined by the assessed value of the property.
It is within the jurisdiction therefore of the
A files an action in the Municipal Trial Court against
B, the natural son of A’s father, for the partition of a Metropolitan Trial Court.
parcel of land located in Taytay, Rizal with SUGGESTED ANSWER:
an assessed value of P20,000.00. B moves to dismiss (b) The Court could declare B in default because B
the action on the ground that the case should have did not obtain a writ of preliminary injunction or a
been brought in the RTC because the action is one temporary restraining order from the RTC
that is not capable of pecuniary estimation as it prohibiting the judge from proceeding in the case
involves primarily a determination of hereditary during the pendency of the petition for certiorari.
rights and not merely the bare right to real (Sec. 7 of Rule 65; Diaz v. Diaz, 331 SCRA 302 [2002].
property. Resolve the motion. (2%) ALTERNATIVE ANSWER:
SUGGESTED ANSWER: The Court should not declare B in default inasmuch as
The motion should be granted. The action for the jurisdiction of MTC was put in issue in the
partition depends on a determination of the Petition For Certiorari filed with the RTC. The MTC
hereditary rights of A and B, which is not capable of should defer further proceedings pending the result of
pecuniary estimation. Hence, even though the such petition. (Eternal Gardens Memorial Park
assessed value of the land is P20,000.00, the Corporation v. Court of Appeals, 164 SCRA 421 [1988]).
Municipal Trial Court has no jurisdiction. (Russell v.
Vestil, supra) Jurisdiction; MTC (2002)
P sued A and B in one complaint in the RTC-Manila,
Jurisdiction; Incapable of Pecuniary Estimation (2003) the cause of action against A being on an
A filed with the MTC of Manila an action for specific overdue promissory note for P300,000.00 and
performance against B, a resident of Quezon City, to that against B being on an alleged balance of
compel the latter to execute a deed of conveyance P300,000.00 on the purchase price of goods sold
covering a parcel of land situated in Quezon City on credit. Does the RTC-Manila have jurisdiction
having an assessed value of p19,000.00. B received the over the case? Explain. (3%)
summons and a copy of the Complaint on 02 January SUGGESTED ANSWER:
2003. On 10 January 2003, B filed a Motion to Dismiss No, the RTC-Manila has no jurisdiction over the case.
the Complaint on the ground of lack of jurisdiction A and B could not be joined as defendants in one
contending that the subject matter of the suit was complaint because the right to relief against both
incapable of pecuniary estimation. The court denied the defendants do not arise out of the same transaction
motion. In due time, B filed with the RTC a Petition for or series of transactions and there is no common
Certiorari praying that the said Order be set aside question of law or fact common to both. (Rule 3, sec. 6).
because the MTC had no jurisdiction over the case. 6% Hence, separate complaints will have to be
files and they would fall under the jurisdiction of
On 13 February 2003, A filed with the MTC a motion the [Flores v. Mallare-Philipps,
to declare B in default. The motion was opposed by B Metropolitan Trial Court.
on the ground that his Petition for Certiorari was still 144 SCRA 377 (1986)].
pending. Jurisdiction; Office of the Solicitor General (2006)
(a) Was the denial of the Motion to Dismiss the In 1996, Congress passed Republic Act No. 8189,
Complaint correct? otherwise known as the Voter's Registration Act of
(b) Resolve the Motion to Declare the Defendant in 1996, providing for computerization of elections.
Default. Pursuant thereto, the COMELEC approved the
SUGGESTED ANSWER:
(a) The denial of the Motion to Dismiss the Voter's Registration and Identification System (VRIS)
Complaint was not correct. Although the assessed Project. It issued invitations to pre-qualify and bid for the
value of the parcel of land involved was P19,000.00, within project. After the public bidding, Fotokina was
the jurisdiction of the MTC of Manila, the action filed declared the winning bidder with a bid of P6 billion and
by A for Specific Performance against B to compel the was issued a Notice of Award. But COMELEC Chairman
latter to execute a Deed of Conveyance of said parcel of Gener Go objected to the award on the ground that
land was not capable of pecuniary under the Appropriations Act, the budget for the
COMELEC's modernization is only P1
billion. He announced to the public that the Was the municipal circuit trial court correct in its
VRIS project has been set aside. Two ruling? Why? (5%)
Commissioners sided with Chairman Go, but the SUGGESTED ANSWER:
majority voted to uphold the contract. Yes, the Municipal Circuit Trial Court was correct in
proceeding to hear the case. It has exclusive
Meanwhile, Fotokina filed with the RTC a petition for jurisdiction in all matters of probate, both testate and
mandamus compel the COMELEC to implement the intestate, where the value of the estate does not
contract. The Office of the Solicitor General (OSG), exceed P100,000.00 (now P200,000.00). The value in this
representing Chairman Go, opposed the petition on case of P95,000.00 is within its jurisdiction. In
the ground that mandamus does not lie to enforce determining the jurisdictional amount, excluded are
contractual obligations. During the proceedings, attorney’s fees, litigation expenses and costs; these are
the majority Commissioners filed a manifestation that considered only for determining the filing fees.
Chairman Go was not authorized by the COMELEC En (B.P.Blg. 129, Sec. 33, as amended)
Banc to oppose the petition.
Jurisdiction; RTC (2002)
May the OSG represent Chairman Go before
the RTC notwithstanding that his position is P sued A in the RTC-Manila to recover the following
contrary to that of the majority? (5%) sums: (1) P200,000.00 on an overdue promissory
SUGGESTED ANSWER: note, (2) P80,000.00 on the purchase price of a
Yes, the OSG may represent the COMELEC Chair- computer, (3) P150,000.00 for damages to his car and
man before the RTC notwithstanding that his (4) P100,000.00 for attorney’s fees and
position is contrary to that of a majority of the litigation expenses. Can A move to dismiss the
Commission members in the COMELEC because case on the ground that the court has no
the OSG is an independent office; it's hands are not jurisdiction over the subject matter? Explain. (2%)
shackled to the cause of its client agency. SUGGESTED ANSWER:
The primordial concern of the OSG is to see to it No, because the RTC-Manila has jurisdiction over the
that the best interest of the government is upheld subject matter. P may sue A in one complaint
(COMELEC v. Quyano-Padilla, September 18, 2002). asserting as many causes of action as he may have
and since all the claims are principally for recovery of
Jurisdiction; Ombudsman Case Decisions (2006) money, the aggregate amount claimed shall be the test of
Does the Court of Appeals have jurisdiction jurisdiction. [Rule 2, sec. 5(d)]. The aggregate amount
to review the Decisions in criminal and claimed is P450,000.00, exclusive of the amount of
administrative cases of the Ombudsman? (2.5%) P100,000.00 for attorney’s fees and expenses of
SUGGESTED ANSWER: litigation. Hence, the RTC-Manila has jurisdiction.
The Supreme Court has exclusive appellate
jurisdiction over decisions of the Ombudsman in Jurisdiction; Subdivision Homeowner (2006)
criminal cases (Sec. 14, R.A. 6770). In administrative and What court has jurisdiction over an action for specific
disciplinary cases, appeals from the Ombudsman performance filed by a subdivision homeowner
must be taken to the Court of Appeals under Rule 43 against a subdivision developer? Choose the
(Lanting v. Ombudsman, G.R. No. 141426, May 6, 2005; correct answer. Explain.
Fabian v. Desierto, G.R. No. 129742, September 16, 1998; 1. The Housing and Land Use Regulatory Board
Sec. 14, RA. 6770).
2. The Securities and Exchange Commission
Jurisdiction; Probate (2001) 3. The Regional Trial Court
Josefa filed in the Municipal Circuit Trial Court of 4. The Commercial Court or the Regional Trial
Alicia and Mabini, a petition for the probate of the Court designated by the Supreme Court to hear
will of her husband, Martin, who died in the and decide "commercial cases."
SUGGESTED ANSWER:
Municipality of Alicia, the residence of the spouses. An action for specific performance by a subdivision
The probable value of the estate which consisted homeowner against a subdivision developer is within the
mainly of a house and lot was placed at P95,000.00 jurisdiction of the Housing and Land Use
and in the petition for the allowance of the will, Regulatory Board. Sec. 1 of P.D. 1344 provides that the
attorney’s fees in the amount of P10,000.00, litigation HLURB has jurisdiction over cases involving specific
expenses in the amount of P5,000.00 and costs were performance of contractual and statutory obligations
included. Pedro, the next of kin of Martin, filed an filed by buyers of subdivision lots and condominium
opposition to the probate of the will on the ground that units against the owner, developer, dealer, broker or
the total amount included in the relief of the petition salesman (Manila Bankers Life
is more than P100,000.00, the maximum jurisdictional Insurance Corp. v. Eddy Ng Kok Wei, G.R. No. 139791,
amount for municipal circuit trial courts. The court December 12, 2003; Kakilala v. Faraon, G.R. No. 143233,
overruled the opposition and proceeded to hear the October 18, 2004; Sec. 1, P.D. 1344).
case.

Katarungang Pambarangay; Lupon; Extent of Authority; prejudice to the rights of each necessary party. (Sec. 9 of
(2001) Rule 3)
An amicable settlement was signed before a
Lupon Tagapamayapa on January 3, 2001. On July 6, Actions; Cause of Action; Joinder of Action (1999)
2001, the prevailing party asked the Lupon to a) What is the rule on joinder of causes of action?
execute the amicable settlement because of the (2%)
non-compliance by the other party of the terms of b) A secured two loans from B? one for
the agreement. The Lupon concerned refused P500,000.00 and the other for P1,000,000.00,
to execute the settlement/agreement. payable on different dates. Both have fallen due. Is B
a) Is the Lupon correct in refusing to execute obliged to file only one complaint against A
the settlement/agreement? (3%) for the recovery of both loans? Explain. (2%)
b) What should be the course of action of the SUGGESTED ANSWER:
prevailing party in such a case? (2%) a. The rule on JOINDER OF CAUSES OF
SUGGESTED ANSWER: ACTION is that a party may in one pleading assert,
a) Yes, the Lupon is correct in refusing to execute the in the alternative or otherwise join as many causes of
settlement/agreement because the execution action as he may have against an opposing party,
sought is already beyond the period of six months provided that the rule on joinder of parties
from the date of the settlement within which the is complied with;
Lupon is authorized to execute. (Sec. 417, Local 1.] the joinder shall not include special civil
Government Code of 1991) actions or actions governed by special rules,
but may include causes of action
b) After the six-month period, the prevailing party pertaining to different venues or
should move to execute the settlement/agreement in the jurisdictions provided one cause of
appropriate city or municipal trial court. (Id.) action falls within the jurisdiction of a
RTC and venue lies therein; and
CIVIL PROCEDURE 2.] the aggregate amount claimed shall be the
test of jurisdiction where the claims in all the
causes of action are principally for the
Actions; Cause of Action vs. Action (1999) recovery of money. (Sec. 5, Rule 2 of the 1997
Distinguish action from cause of action. (2%) Rules)
SUGGESTED ANSWER:
An ACTION is one by which a party sues another b. No. Joinder is only permissive since the loans
for the enforcement or protection of a right, or the are separate loans which may be governed by
prevention or redress of a wrong. (Sec. 3(A), Rule ) the different terms and conditions. The two
A CAUSE OF ACTION is the act or omission by
loans give rise to two separate causes of action and
may be the basis of two separate complaints.
which a party violates a right of another. (Sec. 2, Rule 2
of the 1997 Rules) An action must be Actions; Cause of Action; Joinder of Action (2005)
based on a cause Perry is a resident of Manila, while Ricky and Marvin
of action. (Sec. 1, Rule 2 of the 1997 Rules) are residents of Batangas City. They are the co-
owners of a parcel of residential land located in Pasay
Actions; Cause of Action; Joinder & Splitting (1998)
City with an assessed value of P100,000.00. Perry
Give the effects of the following: borrowed P100,000.00 from Ricky which
1. Splitting a single cause of action: and (3%| he promised to pay on or before December 1,
2. Non-joinder of a necessary party. [2%] 2004. However, Perry failed to pay his loan.
SUGGESTED ANSWER:
1. The effect of splitting a single cause of action is Perry also rejected Ricky and Marvin's proposal to
found in the rule as follows: If two or more suits are partition the property. Ricky filed a complaint
instituted on the basis of the same cause of against Perry and Marvin in the RTC of Pasay City
action, the filing of one or a judgment on the merits for the partition of the property. He also
in any one is available as a ground for the dismissal incorporated in his complaint his action against
of the others. (Sec. 4 of Rule 2) Perry for the collection of the latter's P100,000.00
2. The effect of the non-joinder of a necessary loan, plus interests and attorney's fees.
party may be stated as follows: The court may order the
State with reasons whether it was proper for Ricky to
inclusion of an omitted necessary party if
join his causes of action in his complaint for partition
jurisdiction over his person may be obtained. The
against Perry and Marvin in the RTC of Pasay
failure to comply with the order for his inclusion
City. (5%)
without justifiable cause to a waiver of the claim SUGGESTED ANSWER:
against such party. The court may proceed with the
action but the judgment rendered shall be without
It was not proper for Ricky to join his causes of Raphael filed a complaint against X Corporation for
action against Perry in his complaint for partition the payment of P100,000.00 for storage charges and
against Perry and Marvin. The causes of action may be other advances for the goods. X Corporation filed a
between the same parties, Ricky and Perry, with motion to dismiss the complaint on the ground of res
respect to the loan but not with respect to the judicata. X Corporation alleged that Raphael
partition which includes Marvin. The joinder is should have incorporated in his complaint for
between a partition and a sum of money, but interpleader his claim for storage fees and advances
PARTITION is a special civil action under Rule 69, and that for his failure he was barred from
which cannot be joined with other causes of action. interposing his claim. Raphael replied that he
(See. 5[b], Rule 2,) Also, the causes of action pertain to could not have claimed storage fees and other
different venues and jurisdictions. The case for a sum advances in his complaint for interpleader because
of money pertains to the municipal court and cannot be he was not yet certain as to who was liable therefor.
filed in Pasay City because the plaintiff is from Resolve the motion with reasons. (4%)
Manila while Ricky and Marvin are from Batangas SUGGESTED ANSWER:
City. (Sec. 5, Rule 2,) The motion to dismiss should be granted. Raphael
should have incorporated in his complaint for
Actions; Cause of Action; Splitting (1999) interpleader his claim for storage fees and advances, the
a) What is the rule against splitting a cause of action amounts of which were obviously determinable at the time
and its effect on the respective rights of the of the filing of the complaint. They are part of Raphael's
parties for failure to comply with the same? (2%) cause of action which he may not be split. Hence,
when the warehouseman asks the court to ascertain who
b) A purchased a lot from B for Pl,500,000.00. He gave among the defendants are entitled to the goods, he also
a down payment of P500,000, signed a has the right to ask who should pay for the storage
promissory note payable thirty days after date, fees and other related expenses. The filing of the
and as a security for the settlement of the interpleader is available as a ground for dismissal of the
obligation, mortgaged the same lot to B. When second case. (Sec. 4, Rule 2,) It is akin to a compulsory
the note fell due and A failed to pay, B counterclaim which, if not set up, shall be barred. (Sec.
commenced suit to recover from A the balance 2, Rule 9, ; Arreza v. Diaz, G.R.
of P1,000,000.00. After securing a favorable No. 133113, August 30, 2001)
judgment on his claim, B brought another action
against A before the same court to foreclose the Actions; Cause of Actions; Motion to Dismiss; bar
mortgage. A now files a motion to dismiss the by prior judgment (2002)
second action on the ground of bar by prior Rolando filed a petition for declaration of the nullity
judgment. Rule on the motion. (2%) of his marriage to Carmela because of the
SUGGESTED ANSWER: alleged psychological incapacity of the latter.
a. The rule against splitting a cause of action and its
effect are that if two or more suits are instituted on After trial, the court rendered judgment dismissing the
the basis of the same cause of action, the filing of one petition on the ground that Rolando failed to prove
or a judgment upon the merits in any one is available the psychological incapacity of his wife. The judgment
as a ground for the dismissal of the others. (Sec. 4, Rule having become final, Rolando filed another petition, this
2) time on the ground that his marriage to Carmela had been
celebrated without a license. Is the second action barred
b. The motion to dismiss should be granted. When by the judgment in the first? Why? (2%)
B commenced suit to collect on the promissory note,
he waived his right to foreclose the mortgage. B split SUGGESTED ANSWER:
his cause of action. No, the second action is not barred by the judgment in
the first because they are different causes of action. The
Actions; Cause of Action; Splitting (2005) first is for annulment of marriage on the ground of
Raphael, a warehouseman, filed a complaint against V psychological incapacity under Article 36 of the
Corporation, X Corporation and Y Corporation Family Code, while the second is for declaration of
to compel them to interplead. He alleged therein nullity of the marriage in view of the absence of a
that the three corporations claimed title and right basic requirement, which is a marriage license. [ Arts, 9 &
of possession over the goods deposited in his 35(3), Family Code]. They are different causes of action
warehouse and that he was uncertain which of them because the evidence required to prove them are not
was entitled to the goods. After due proceedings, the same. [Pagsisihan v. Court of Appeals, 95 SCRA 540
judgment was rendered by the court declaring (1980) and other cases].
that X Corporation was entitled to the goods. The
decision became final and executory. Actions; Counterclaim (2002)

The plaintiff sued the defendant in the RTC for case. Is the stand of EE Industries sustainable?
damages allegedly caused by the latter’s encroachment on Explain. [2%]
the plaintiff’s lot. In his answer, the defendant denied SUGGESTED ANSWER:
the plaintiff’s claim and alleged that it was the plaintiff a) A COUNTERCLAIM is any claim which
who in fact had encroached on his (defendant’s) a defending party may have against an
land. Accordingly, the defendant counterclaimed opposing party. (Sec. 6, Rule 6)
against the plaintiff for damages resulting from the
alleged encroachment on his lot. The plaintiff filed an ex
b) A counterclaim is distinguished from a CROSS-
parte motion for extension of time to answer the CLAIM in that a cross-claim is any claim by one
defendant’s counterclaim, but the court denied the motion party against a co-party arising out of
on the ground that it should have been set for the transaction or occurrence that is the
hearing. On the defendant’s motion, therefore, the subject matter either of the original action
court declared the plaintiff in default on the counterclaim. or of a counterclaim therein. A
Was the plaintiff validly declared in default? Why? (5%) counterclaim is against an opposing party while
a cross-claim is against a co-party. (Sec. 8, Rule 6)
SUGGESTED ANSWER:
c) No, because if no motion to dismiss has been
No, the plaintiff was not validly declared in default. A
filed, any of the grounds for dismissal provided
motion for extension of time to file an answer may be
in the Rules may be pleaded as an affirmative
filed ex parte and need not be set for hearing.
[Amante vs. Sunga, 64 SCRA 192 (1975)]. defense in the answer which may include a
ALTERNATIVE ANSWER: counterclaim. This is what A did by filing an
The general rule is that a counterclaim must be Answer alleging the lack of legal capacity of EE
answered within ten (10) days from service. (Rule 11, Industries to sue because it is not a duly
sec. 4). However, a counterclaim that raises registered corporation with a counterclaim for
issues damages. The dismissal of the complaint on this
which are deemed automatically joined by the ground is without prejudice to the prosecution of the
allegations of the Complaint need not be answered. counterclaim in the same action because it is a
[Gojo v. Goyala, 35 SCRA 557 (1970)]. compulsory counterclaim. (Sec. 6 of Rule 16.)
In this case, the defendant’s counterclaim is Actions; Cross-Claims; Third Party Claims (1997)
a compulsory counterclaim which arises out or B and C borrowed P400,000.00 from A. The
is connected with the transaction and promissory note was executed by B and C in a Joint and
occurrence constituting the subject matter of the several capacity. B, who received the money from A,
plaintiff’s claim. It raises the same issue of who gave C P200,000.00. C, in turn, loaned
encroached on whose land. Hence, there was P100,000.00 out of the P200,000.00 he received to D.
no need to answer the counterclaim. a) In an action filed by A against B and C with the
RTC of Quezon City, can B file a cross-
Actions; Counterclaim vs. Crossclaim (1999) claim against C for the amount of P200,000.00?
a) What is a counterclaim? (2%) b) Can C file a third party complaint against D for
b) Distinguish a counterclaim from a crossclaim. the amount of P 100,000.00?
(2%) SUGGESTED ANSWER:
c) A, who is engaged in tile installation business, (a) Yes. B can file a cross-claim against C for the
was sued by EE Industries for breach of contract for amount of 200,000.00 given to C. A cross-claim is a claim
installing different marble tiles in its offices as filed by one party against a co-party arising out of the
provided in their contract. Without filing any transaction or occurrence that is the subject matter of
motion to dismiss, A filed its Answer with the original action or a counterclaim therein and may
Counterclaim theorizing that EE Industries has no include a claim that the party against whom it is asserted is
legal capacity to sue because it is not a duly or may be liable to the cross-claimant for all or part of
registered corporation. By way of counterclaim, A a claim asserted against the cross- claimant. (Sec. 8 Rule 6)
asked for moral and actual damages as her
business depleted as a result of the withdrawal
and cancellation by her clients of their contracts due (b) No, C cannot file a third-party complaint against D
to the filing of the case. The case was dismissed because the loan of P100,000 has no connection with
after the trial court found that EE Industries is the opponent's claim. C could have loaned the
not a registered corporation and therefore has no money out of other funds in his possession.
legal capacity to sue. However, it set a date for the ALTERNATIVE ANSWER:
reception of evidence on A's counterclaim. EE Yes, C can file a third-party complaint against D
Industries opposed on the ground that the because the loan of 100,000.00 was taken out of the
counterclaim could no longer be prosecuted in view P200,000 received from B and hence the loan seeks
of the dismissal of the main
contribution in respect to his opponent's claim. (Sec. 11 3. Legal interest
of Rule 6) against both; or
4. So situated as to be adversely affected by a
Actions; Derivative Suit vs. Class Suit (2005) distribution or other disposition or property in
Distinguish a derivative suit from a class suit. the custody of the court or of an officer thereof.
SUGGESTED ANSWER: 5. Intervention will not unduly delay or prejudice
A DERIVATIVE SUIT is a suit in equity that is filed by a the adjudication of the rights or original parties;
minority shareholder in behalf of a corporation to redress
6. Intervenor’s rights may not be fully protected in
wrongs committed against it, for which the directors
refuse to sue, the real party in interest being
a separate proceedings.
(Acenas II v. Court of Appeals, 247 SCRA 773 [1995]; Sec.
the corporation itself (Lint v. Lim-Yu, G.IL No. 138343, 1, Rule 19, 1997 Rules of Civil Procedure.)
February 19, 2001),
while a CLASS SUIT is filed regarding a Actions; Real Actions & Personal Actions (2006)
controversy of common or general interest in What do you mean by a) real actions; and b) personal
behalf of many persons so numerous that it is action? (2%)
impracticable to join all as parties, a number which SUGGESTED ANSWER:
the court finds sufficiently representative(Sec. 12, Rule 3) a. REAL ACTIONS are actions affecting title to or
who possession of real property or an interest therein
may sue or defend for the benefit of all. (Fortune Motors, Inc. v. CA, G. R. No. 76431, October 16,
It is worth noting that a derivative suit is a represen- 1989; Rule 4, Sec. 1).
tative suit, just like a class suit.
b. All other actions are PERSONAL ACTIONS (Rule
Actions; Filing; Civil Actions & Criminal Action (2005) 4, Section I) which include those arising from privity of
While cruising on a highway, a taxicab driven by contract.
Mans hit an electric post. As a result thereof, its
Actions; Survives Death of the Defendant (2000)
passenger, Jovy, suffered serious injuries. Mans
was subsequently charged before the Municipal PJ engaged the services of Atty. ST to represent him
Trial Court with reckless imprudence resulting in in a civil case filed by OP against him which
serious physical injuries. was docketed as Civil Case No. 123. A
retainership agreement was executed between PJ
Thereafter, Jovy filed a civil action against Lourdes, and Atty. ST whereby PJ promised to pay Atty. ST
the owner of the taxicab, for breach of contract, and Mans a retainer sum of P24,000.00 a year and to transfer
for quasi-delict. Lourdes and Mans filed a motion to the ownership of a parcel of land to Atty. ST after
dismiss the civil action on the ground of litis presentation of PJ’s evidence. PJ did not comply
pendentia, that is, the pendency of the civil action with his undertaking. Atty. ST filed a case against
impliedly instituted in the criminal action for reckless PJ which was docketed as Civil Case No. 456.
imprudence resulting in serious physical injuries. During the trial of Civil Case No. 456, PJ died.
Resolve the motion with reasons. (4%) 1. Is the death of PJ a valid ground to dismiss the
SUGGESTED ANSWER: money claim of Atty. ST in Civil Case No. 456?
The motion to dismiss should be denied. The action for Explain. (2%)
breach of contract against the taxicab owner cannot 2. Will your answer be the same with respect to the
be barred by the criminal action against the taxicab real property being claimed by Atty. ST in Civil
driver, although the taxicab owner can be held subsidiarily Case No. 456? Explain (2%)
liable in the criminal case, if the driver is insolvent. On SUGGESTED ANSWER:
1. No. Under Sec. 20, Rule 3, 1997 Rules of Civil
the other hand, the civil action for quasi-delict against
Procedure, when the action is for recovery of
the driver is an independent civil action under Article 33 of
money arising from contract, express or implied, and
the Civil Code and Sec. 3, Rule 111 of the Rules of
the defendant dies before entry of final judgment
Court, which can be filed separately and can
in the court in which the action is pending at the
proceed independently of the criminal action and
time of such death, it shall not be dismissed but
regardless of the result of the latter. (Samson v.
shall instead be allowed to continue until
Daway, G.R. Nos. 160054-55, July 21,
2004) entry of final judgment. A favorable judgment
obtained by the plaintiff shall be enforced in the
Actions; Intervention; Requisites (2000) manner especially provided in the Rules for
What are the requisites for an intervention by a non- prosecuting claims against the estate of a
party in an action pending in court? (5%) deceased person.
SUGGESTED ANSWER: 2. Yes, my answer is the same. An action to recover real
The requisites for intervention are: property in any event survives the death of the
1. Legal interest in the matter in a controversy; or defendant. (Sec. 1, Rule 87, Rules of Court).
2. Legal interest in the success of either of the However, a favorable judgment may be enforced
parties; or
in sirdondee@gmail.com
Remedial Law Bar Examination Q & A (1997-2006) by: Page 17 of 66
accordance with Sec. 7(b) Rule 39 (1997 Rules of allow a FRESH PERIOD of 15 days within which
Civil Procedure) against the executor or to file the notice of appeal in the RTC, counted from
administrator or successor in interest of receipt of the order dismissing a motion for a new
the deceased. trial or motion for reconsideration. [Neypes et. al. vs.
CA, G.R. No. 141524, September 14, 2005]
Appeals; Period of Appeal; Fresh Period Rule (2003)
Defendant X received an adverse Decision of the Certiorari; Mode of Certiorari (2006)
RTC in an ordinary civil case on 02 January 2003. He filed Explain each mode of certiorari:
a Notice of Appeal on 10 January 2003. On the other 1. As a mode of appeal from the Regional Trial
hand, plaintiff A received the same Decision on 06 Court or the Court of Appeals to the Supreme
January 2003 and, on 19 January 2003, filed a Motion Court. (2.5%)
SUGGESTED ANSWER:
for Reconsideration of the Decision. On 13 January
Certiorari as a mode of appeal is governed by Rule 45
2003, defendant X filed a Motion withdrawing
his notice of appeal in order to file a Motion for
of the Rules of Court which allows appeal from judg-
New Trial which he attached. On 20 January 2003,
ment, final order of resolution of the Court
the court denied A’s Motion for Reconsideration
of Appeals, Sandiganbayan, the RTC or other
and X’s Motion to Withdraw Notice of Appeal. Plaintiff A
courts whenever authorized by law to the Supreme
received the Order denying his Motion for
Court by verified petition for review raising only
Reconsideration on 03 February 2003 and filed his Notice
questions of law distinctly set forth.
of Appeal on 05 February 2003. The court denied due
2. As a special civil action from the Regional Trial
course to A’s Notice of Appeal on the ground that he
Court or the Court of Appeals to the Supreme
period to appeal had already lapsed. 6% Court. (2.5%)
SUGGESTED ANSWER:
(a) Is the court’s denial of X’s Motion to Certiorari as a Special Civil Action is governed by
Withdraw Notice of Appeal proper? Rule 65 of the Rules of Court when an aggrieved
(b) Is the court’s denial of due course to A’s appeal party may file a verified petition against a decision,
correct? final order or resolution of a tribunal, body or board that
SUGGESTED ANSWER: has acted without or in excess of its jurisdiction or grave
(a) No, the court’s denial of X’s Motion to abuse of discretion amounting to lack or excess of
Withdraw Notice of Appeal is not proper, jurisdiction, when there is no appeal or any other plain,
because the period of appeal of X has not yet speedy and adequate remedy in the ordinary course
expired. From January 2, 2003 when X received a of law.
copy of the adverse decision up to January 13, 2003
when he filed his withdrawal of appeal and Motion 3. As a mode of review of the decisions of the
for New Trial, only ten (10) days had elapsed and National Labor Relations Commission and the
he had fifteen (15) days to do so. Constitutional Commissions. (2.5%)
SUGGESTED ANSWER:
(b) No, the court’s denial of due course to A’s Certiorari as a mode of review of the decision of the
appeal is not correct because the appeal was taken on time. NLRC is elevated to the Court of Appeals under Rule
From January 6, 2003 when A received a copy of the 65, as held in the case of St. Martin's Funeral Home v.
decision up to January 19, 2003 when he filed a Motion NLRC, G.R. No. 130866, September 16, 1998. Certiorari as
for Reconsideration, only twelve (12) days had elapsed. a mode of review from the Commission on Audit
Consequently, he had three (3) days from receipt on (COA) and COMELEC is elevated to the Supreme
February 3, 2003 of the Order denying his Motion for Court within 30 days from notice of the judgment,
Reconsideration within which to appeal. He filed is notice decision or final order or resolution sought to be
of appeal on February 5, reviewed, as provided for under the Rule 64 of the
2003, or only two (2) days later. 1997 Rules of Civil Procedure. In the case of the Civil
ALTERNATIVE ANSWER: Service Commission (CSC), review of its judgments is
Since A’s Motion for Reconsideration was filed on through petitions for review under Sec. 5 of Rule 43 of
January 19, 2003 and it was denied on January 20, the 1997 Rules of Civil Procedure.
2003, it was clearly not set for hearing with at least
three days’ notice. Therefore, the motion was pro Certiorari; Rule 45 vs. Rule 65 (1998)
forma and did not interrupt the period of appeal Differentiate certiorari as an original action from
which expired on January 21, 2003 or fifteen (15) certiorari as a mode of appeal. |3%]
days after notice of the decision on January 6, 2003. SUGGESTED ANSWER:
Certiorari as an original action and certiorari as a
NOTE: To standardize the appeal periods provided in mode of appeal may be distinguished as follows:
the Rules and to afford litigants fair opportunity to 1. The first is a special civil action under Rule 65 of
appeal their cases, the Court deems it practical to the Rules of Court, while the second is an appeal
Remedial Law Bar Examination Q & A (1997-2006) to by: sirdondee@gmail.com Page 18 of 66
the Supreme Court from the Court of was issued against C, who being B's sole
Appeals, Sandiganbayan and the RTC under Rule heir, acquired the property.
45. Did the failure of counsel X to inform the court of
2. The first can be filed only on the grounds of lack B's death constitute direct contempt? (2%)
or excess of jurisdiction or grave abuse SUGGESTED ANSWER:
of discretion tantamount to lack or excess No. It is not direct contempt under Sec. 1 of Rule
of jurisdiction, while the second is based on 71, but it is indirect contempt within the purview of
the errors of law of the lower court. Sec 3 of Rule 71. The lawyer can also be the subject
3. The first should be filed within sixty (60) days of disciplinary action. (Sec. 16, Rule 3)
from notice of the judgment, order or resolution
sought to be assailed (Sec. 4. Rule 65), while the Default (2000)
second should be filed within fifteen (15) days Defendant was declared in default by the RTC (RTC).
from notice of the judgment or final order or Plaintiff was allowed to present evidence in support
resolution appealed from, or of the denial of the of his complaint. Photocopies of official receipts and
petitioner's motion for new trial or original copies of affidavits were presented in court,
reconsideration filed in due time after notice of identified by plaintiff on the witness stand and
the judgment. (Sec. 2, Rule 45) marked as exhibits. Said documents were offered by
4. The first cannot generally be availed of as a plaintiff and admitted in evidence by the court on the
substitute for a lost appeal under Rules 40, basis of which the RTC rendered judgment in favor of
41, 42, 43 and 45. the plaintiff, pursuant to the relief prayed for. Upon
5. Under the first, the lower court is impleaded as a receipt of the judgment, defendant appeals to the Court
party respondent (Sec. 5 of Rule 65), while under of Appeals claiming that the judgment is not valid
the second, the lower court is not imp leaded. because the RTC based its judgment on mere
(Sec. 4 of Rule of 45) photocopies and affidavits of persons not presented
in court.
Certiorari; Rule 45 vs. Rule 65 (2005) Is the claim of defendant valid? Explain. (3%)
SUGGESTED ANSWER:
May the aggrieved party file a petition for certiorari in
The claim of defendant is not valid because under the
the Supreme Court under Rule 65 of the 1997 Rules
1997 Rules, reception of evidence is not required.
of Civil Procedure, instead of filing a petition for
After a defendant is declared in default, the court
review on certiorari under Rule 45 thereof for
shall proceed to render judgment granting the
the nullification of a decision of the Court of
claimant such relief as his pleading may warrant,
Appeals in the exercise either of its original
unless the court in its discretion requires the claimant to
or appellate jurisdiction? Explain.
SUGGESTED ANSWER:
submit evidence, which may be delegated to the clerk
To NULLIFY A DECISION of the Court of of court. (Sec. 3, Rule 9)
Appeals the aggrieved party should file a PETITION FOR ALTERNATIVE ANSWER:
The claim of defendant is valid, because the court
REVIEW ON CERTIORARI in the Supreme Court
under Rule 45 of the Rules of Court instead of filing a received evidence which it can order in its own
petition for certiorari under Rule 65 except under very discretion, in which case the evidence of the plaintiff must
exceptional circumstances. A long line of decisions of the pass the basic requirements of admissibility.
Supreme Court, too numerous to mention, holds that
Default (2001)
certiorari is not a substitute for a lost appeal. It should
be noted, however, when the Court of Appeals Mario was declared in default but before
imposes the death penalty, or a lesser penalty for
judgment was rendered, he decided to file a motion
offenses committed on such occasion, appeal by
to set aside the order of default.
petition for review or ordinary appeal. In cases when the a) What should Mario state in his motion in order
Court of Appeals imposes reclusion perpetua, life to justify the setting aside of the order of default?
imprisonment or a lesser penalty, appeal is by notice
(3%)
of appeal filed with the Court of Appeals.
b) In what form should such motion be? (2%)
SUGGESTED ANSWER:
a) In order to justify the setting aside of the order of
default, Mario should state in his motion that his
Contempt; Death of a Party; Effect (1998)
failure to answer was due to fraud, accident, mistake
A filed a complaint for the recovery of ownership of land
or excusable negligence and that he has a meritorious
against B who was represented by her counsel X. In the
course of the trial, B died. However, X failed to notify the
defense. [Sec. 3(b) of Rule 9,].
court of B's death. The court proceeded to hear the case b) The motion should be under oath. (Id.)
and rendered judgment against B. After the Judgment
became final, a writ of execution Default; Order of Default; Effects (1999)

1. When may a party be declared in default? defense (Sec. 3[b],
(2%) Rule 9); and if it is denied, he may move to
2. What is the effect of an Order of Default? (2%) reconsider, and if reconsideration is denied,
3. For failure to seasonably file his Answer despite due he may file the special civil action of
notice, A was declared in default in a case certiorari for grave abuse of discretion
instituted against him by B. The following day, tantamount to lack or excess of the lower
A's mistress who is working as a clerk in the sala of 1, Rule 65) court's jurisdiction. (Sec.
the Judge before whom his case is pending, or
informed him of the declaration of default. On (b) he may file a petition for certiorari if he has
the same day, A presented a motion under oath to set been illegally declared in default, e.g. during the
aside the order of default on the ground that his pendency of his motion to dismiss or
failure to answer was due to fraud and he has a before the expiration of the time to answer.
meritorious defense. Thereafter, he went abroad. (Matute vs. Court of Appeals, 26 SCRA 768;
After his return a week later, with the case still Acosta-Ofalia vs. Sundiam, 85 SCRA 412.)
undecided, he received the order declaring him
in default. The motion to set aside default was 2. AFTER JUDGMENT BUT BEFORE ITS FINALITY,
opposed by B on the ground that it was filed before A he may file a motion for new trial on the grounds of
received notice of his having been declared in default, fraud, accident, mistake, excusable negligence, or
citing the rule that the motion to set aside may be a motion for reconsideration on the ground
made at anytime after notice but before judgment. of excessive damages, insufficient evidence or
Resolve the Motion. the decision or final order being contrary to law
(2%) (Sec. 2, Rule 37): and thereafter. If the motion is
SUGGESTED ANSWER: denied, appeal to available under Rules 40 or 41,
1. A party may be declared in default when he fails whichever to applicable.
to answer within the time allowed therefor, and
upon motion of the claiming party with notice to 3. AFTER FINALITY OF THE JUDGMENT, there
the defending party, and proof of such failure. are three ways to assail the judgment, which are:
(Sec. 3, Rule 9) a) a petition for relief under Rule 38 on
the grounds of fraud, accident, mistake
2. The effect of an Order of Default is that the or excusable negligence;
court may proceed to render judgment granting b) annulment of judgment under Rule 47
the claimant such relief as his pleading may for extrinsic fraud or lack of jurisdiction; or
warrant unless the court in its discretion requires c) certiorari if the judgment to void on its face
the claimant to submit evidence (Id.) The party or by the judicial record. (Balangcad vs.
in default cannot take part in the trial but shall be Justices of the Court of Appeals, G.R. No.
entitled to notice of subsequent proceedings. (Sec. 83888. February 12, 1992, 206 8CRA 171).
3[A])
Default; Remedies; Party Declared in Default (2006)
3. Assuming that the motion to set aside complies Jojie filed with the Regional Trial Court of Laguna a
with the other requirements of the rule, it should complaint for damages against Joe. During the pre-
be granted. Although such a motion may be trial, Jojie (sic) and her (sic) counsel failed to appear
made after notice but before judgment (Sec. 3[B] of despite notice to both of them. Upon oral motion of Jojie,
Rule 9), with more reason may it be filed Joe was declared as in default and Jojie was allowed
after discovery even before receipt of the to present her evidence ex parte. Thereafter, the court
order of default. rendered its Decision in favor of Jojie.
Joe hired Jose as his counsel. What are the remedies
Default; Remedies; Party Declared in Default (1998) available to him? Explain. (5%)
What are the available remedies of a party declared In SUGGESTED ANSWER:
default: The remedies available to a party against whom
1. Before the rendition of judgment; [1%] a default decision is rendered are as follows:
2. After judgment but before its finality; and [2%1 1. BEFORE the judgment in default becomes final
3. After finality of judgment? [2%] and executory:
SUGGESTED ANSWER: a. Motion for Reconsideration under Rule 37;
The available remedies of a party declared in default b. Motion for New Trial under Rule 37; and
are as follows: c. Appeal under Rule 41.
1. BEFORE THE RENDITION OF JUDGMENT
(a) he may file a motion under oath to set 2. AFTER the judgment in default becomes final
aside the order of default on the grounds and executory:
of fraud, accident, mistake or excusable a. Petition for Relief under Rule 38;
negligence and that he has a meritorious b. Annulment of Judgment under Rule 47; and
c. Certiorari under Rule 65. Demurrer to Evidence; Civil Case vs. Criminal Case
(See Talsan Enterprises, Inc. v. Baliwag Transit, Inc., (2003)
G.R. No. 126258, July 8, 1999) Compare the effects of a denial of demurrer to
evidence in a civil case with those of a denial
Default; Remedies; Substantial Compliance (2000) of demurrer to evidence in a criminal case. 4%
For failure of K.J. to file an answer within the SUGGESTED ANSWER:
reglementary period, the Court, upon motion of LM, In a civil case, the defendant has the right to file a
declared KJ in default. In due time, KJ filed an demurrer to evidence without leave of court. If his
unverified motion to lift the order of default without demurrer is denied, he has the right to present
an affidavit of merit attached to it. KJ however evidence. If his demurrer is granted and on appeal by the
attached to the motion his answer under oath, stating plaintiff, the appellate court reverses the order and
in said answer his reasons for his failure to file renders judgment for the plaintiff, the defendant loses his
an answer on time, as well as his defenses. Will right to present evidence. (Rule 33).
the motion to lift the order of default prosper?
Explain. (3%) In a criminal case, the accused has to obtain leave of
SUGGESTED ANSWER: court to file a demurrer to evidence. If he
Yes, there is substantial compliance with the rule. obtains leave of court and his demurrer to evidence
Although the motion is unverified, the answer is denied, he has the right to present evidence in his
attached to the motion is verified. The answer defense. If his demurrer to evidence is granted,
contains what the motion to lift the order of default and he is acquitted and the prosecution cannot appeal.
the affidavit of merit should contain, which are the
reasons of movant’s failure to answer as well as his If the accused does not obtain leave of court and his
defenses. (Sec. 3 [b] of Rule 9, 1997 Rules of Civil demurrer to evidence is denied, he waives his right to
Procedure; Cf. Citibank, N.A. v. Court of Appeals, present evidence and the case is decided on the basis
304 SCRA 679, [1999]; Consul v. Consul, 17 SCRA
667, 671 [1966]; Tolentino v. Carlos, 66 Phil, 1450, 143-144 of the evidence for the prosecution.
[1938], Nasser v. Court of Appeals, 191 SCRA 783 [1992]).
The court may also dismiss the action on the ground
Demurrer to Evidence (2001) of insufficiency of the evidence on its own initiative
Carlos filed a complaint against Pedro in the RTC of after giving the prosecution the opportunity to
Ozamis City for the recovery of the ownership of a car. be heard. (Sec. 23 of Rule 119)
Pedro filed his answer within the reglementary period.
After the pre-trial and actual trial, and after Carlos Discovery; Modes of Discovery (2000)
has completed the presentation of his evidence, Describe briefly at least five (5) modes of
Pedro moved for the dismissal of the complaint on discovery under the Rules of Court. (5%)
the ground that under the facts proven and the law SUGGESTED ANSWER:
applicable to the case, Carlos is not entitled to the Five modes of discovery under the Rules of
ownership of the car. The RTC granted the motion Court are:
for dismissal. Carlos appealed the order of dismissal and 1. DEPOSITION. By leave of court after jurisdiction has
been obtained over any defendant or over
the appellate court reversed the order of the trial court.
property which is the subject of the action, or
Thereafter, Pedro filed a motion with the RTC asking the
without such leave after an answer has been
latter to allow him to present his evidence. Carlos
served, the testimony of any person, whether a
objected to the presentation of evidence by Pedro.
party or not, may be taken, at the instance of any
party, by deposition upon oral examination or
Should the RTC grant Pedro’s motion to present his
evidence? Why? (5%) written interrogatories. (Sec. 1, Rule 23, 1997 Rules
SUGGESTED ANSWER: of Civil Procedure.)
No. Pedro’s motion should be denied. He can 2. INTERROGATORIES TO PARTIES. Under the
no longer present evidence. The Rules provide that if same conditions specified in section 1 of Rule 23, any
the motion for dismissal is granted by the trial court party shall file and serve upon any adverse party
but on appeal the order of dismissal is reversed, he written interrogatories regarding material and
shall be deemed to have waived the right to relevant facts to be answered by the party served.
present evidence. (Sec. 1 of Rule 33, Rules of Civil Procedure) (Sec. 1, Rule 25, 1997 Rules of Civil Procedure.)
ALTERNATIVE ANSWER: 3. ADMISSION BY ADVERSE PARTY. At any time
No, because when the appellate court reversed after issues have been joined, a party may file and
the order of the trial court it should have serve upon any other party a written request for the
rendered judgment in favor of Carlos. (Quebral v. Court admission by the latter of the genuineness of any
of Appeals, 252 SCRA 353, 1996) material and relevant document or of the
truth of any material and relevant matter of fact.
(Sec. 1, Rule 26, 1997 Rules of Civil Procedure.)
4. PRODUCTION OR INSPECTION OF DOCUMENTS OR SUGGESTED ANSWER:
THINGS. Upon motion of any party showing good (1) Yes, because upon motion of any party showing
cause therefore, a court may order any party to good cause, the court in which the action is pending
produce and permit the inspection and copying may order any party to produce and permit the
or photographing of any designated documents, inspection of designated documents. (Rule 27).
etc. or order any party to permit entry upon The defendant has the right to inspect and
designated land or property for inspecting, verify the original of the promissory note so that
measuring, surveying, or photographing the he could intelligently prepare his answer.
property or any designated
relevant object or operation thereon. (Sec. 1, (2) The defendant is not required to deny under oath
Rule 27, 1997 Rule 27 Rules of Civil Procedure.) the genuineness and due execution of the promissory
note, because of the non-compliance by the plaintiff
Discovery; Modes; Subpoena Duces Tecum (1997) with the order for production and inspection of the
In an admiralty case filed by A against Y Shipping original thereof. (Rule 8, sec. 8).
Lines (whose principal offices are in Manila) in the ALTERNATIVE ANSWER:
RTC, Davao City, the court issued a subpoena duces (2) The defendant may file a motion to dismiss the
tecum directing Y, the president of the shipping complaint because of the refusal of the plaintiff to
company, to appear and testify at the trial and to obey the order of the court for the production and
bring with him several documents. inspection of the promissory note. [Rule 29 Sec. 3(c)].
(a) On what valid ground can Y refuse to
Dismissal; Motion to Dismiss; Res Judicata (2000)
comply with the subpoena duces tecum?
AB, as mother and in her capacity as legal guardian of her
(b) How can A take the testimony of Y and present
the documents as exhibits other than through the legitimate minor son, CD, brought action for support
subpoena from the RTC? against EF, as father of CD and AB’s lawfully
SUGGESTED ANSWER: wedded husband. EF filed his answer denying his
(a) Y can refuse to comply with the subpoena duces paternity with counterclaim for damages. Subsequently,
tecum on the ground that he resides more than 50 AB filed a manifestation in court that in view of the
(now 100) kilometers from the place where he is to denial made by EF, it would be futile to pursue the case
testify, (Sec. 9 of former Rule 23; Sec. 10 of new Rule 21). against EF. AB agreed to move for the dismissal of the
complaint, subject to the condition that EF will
(b) A can take the testimony of Y and present the withdraw his counter claim for damages. AB and EF filed
documents as exhibits by taking his deposition a joint motion to dismiss. The court dismissed the case
through oral examination or written interrogatories. with prejudice. Later on, minor son CD, represented by
(Rule 24; new Rule 23) He may also file a motion for the AB, filed another complaint for support against EF. EF
production or inspection of documents. (Rule 27). filed a motion to dismiss on the ground of res judicata.
ALTERNATIVE ANSWER:
(a) The witness can also refuse to comply with a) Is res judicata a valid ground for dismissal of the
the subpoena duces tecum on the ground second complaint? Explain your answer (3%)
that the documents are not relevant and there was b) What are the essential requisite of res judicata?
no tender of fees for one day's attendance and the (2%)
kilometrage allowed by the rules. SUGGESTED ANSWER:
(a) No, res judicata is not a defense in an action for
Discovery; Production and Inspection of Documents support even if the first case was dismissed with
(2002) prejudice on a joint motion to dismiss. The plaintiff’s
The plaintiff sued the defendant in the RTC to collect on a mother agreed to the dismissal of the complaint for
promissory note, the terms of which were stated in the support in view of the defendant’s answer denying his
complaint and a photocopy attached to the complaint paternity with a counterclaim for damages. This was in the
as an annex. Before answering, the defendant filed nature of a compromise of the right of support which is
a motion for an order directing the plaintiff to prohibited by law. (Art, 2035, Civil Code; De
produce the original of the note so that the defendant Asis v. Court of Appeals, 303 SCRA 176 [1999]).
could inspect it and verify his signature and the
handwritten entries of the dates and amounts. (b) The Essential Requisites of Res Judicata are:
1. Should the judge grant the defendant’s 1. the judgment or order rendered must be
motion for production and inspection of the final;
original of the promissory note? Why? (2%) 2. the court rendering the same must have
2. Assuming that an order for production and jurisdiction of the subject matter and of the
inspection was issued but the plaintiff failed to parties;
comply with it, how should the defendant plead to 3. it must be a judgment or order on the
the alleged execution of the note? (3%) merits; and
4. there must be between the two cases identity
of parties, identity of subject matter, and SUGGESTED ANSWER:
identity of causes of action. (San Diego v. A QUESTION OF LAW is when the doubt or
Cardona, 70 Phil, 281 [1940]) difference arises as to what the law is on a certain set of
facts, while a QUESTION OF FACT is when the doubt
Evidence; Admissibility; Photocopies (2000) or difference arises as to the truth or falsehood of alleged
If the photocopies of official receipts and facts. (Ramos v. Pepsi-Cola Bottling Co., 19
photocopies of affidavits were attached to the SCRA 289, [19670]).
position paper submitted by plaintiff in an action for
unlawful detainer filed with Municipal Trial Court on Judgment; Annulment of Judgment; Grounds (1998)
which basis the court rendered judgment in favor of What are the grounds for the annulment of
plaintiff? Explain. (2%) a judgment of the RTC (RTC)? [2%]
The claim of defendant is valid, because although The grounds for annulment of judgment of the RTC
summary procedure requires merely the submission of are Extrinsic Fraud and Lack of Jurisdiction. (Sec,
position papers, the evidence submitted with the 2, Rule 47, 1997 Rules of Civil Procedure.)
position paper must be admissible in evidence. (Sec. 9
of the Revised Rule on Summary Procedure). Photocopies of Judgment; Enforcement; 5-year period (1997)
official receipts and affidavits are not admissible A, a resident of Dagupan City, secured a
without proof of loss of the originals. (Sec. 3 of Rule 130) favorable judgment in an ejectment case against X, a
resident of Quezon City, from the MTCof
Forum Shopping; Definition (2006) Manila. The judgment, entered on 15 June 1991,
What is forum shopping? (2.5%) had not as yet been executed.
SUGGESTED ANSWER: a) In July 1996, A decided to enforce the
Forum shopping is the act of a party which consists of filing judgment of the MTCof Manila. What is
multiple suits, simultaneously or successively, for the the procedure to be followed by A in
purpose of obtaining a favorable judgment enforcing the judgment?
(Leyson v. Office of the Ombudsman, G.R. No. 134990, b) With what court should A institute
April 27, 2000; Yulienco v. CA, G.R. No. 131692, June the
10,1999; Chemphil Export & Import Corp. v. CA,
G.R. Nos. 112438-39, December 12, 1995). proceedings?
SUGGESTED ANSWER:
(a) A can enforce the judgment by another
Forum Shopping; Effects; Lack of Certification (2006)
action reviving the Judgment because it can no
Honey filed with the Regional Trial Court, Taal, longer be enforced by motion as the five-year
Batangas a complaint for specific performance against
period within which a judgment may be enforced
Bernie. For lack of certification against forum
shopping, the judge dismissed the complaint. Honey's by motion has already expired. (Sec. 6 of former and
lawyer filed a motion for reconsideration, attaching new Rule 39).
thereto an amended complaint with the (b) A may institute the proceedings in the RTC
certification against forum shopping. If you were the
in accordance with the rules of venue
judge, how will you resolve the motion? (5%)
because the enforcement of the Judgment is a
SUGGESTED ANSWER:
personal action
If I were the judge, the motion should be denied after
hearing because, as expressly provided in the Rules, incapable of pecuniary estimation.
ALTERNATIVE ANSWER:
failure to comply with the requirement of forum
shopping is not curable by mere amendment of the
(b) A may institute the proceeding in a
complaint or other initiatory pleading, but shall be MTCwhich has jurisdiction over the area where the
cause for the dismissal of the case, without prejudice, real property involved is situated. (Sec. 1 of Rule 4).
unless otherwise provided (Sec. 5, Rule 7, 1997 Rules of Civil
Judgment; Enforcement; Foreign Judgment (2005)
Procedure). However, the trial court in the exercise of its
sound discretion, may choose to be liberal and Under Article 1144 of the New Civil Code, an action
consider the amendment as substantial compliance upon a judgment must be brought within 10
years from the time the right of action accrues.
(Great Southern Maritime Services Corp. v. Acuna, G.R.
No. 140189, February 28,2005; Chan v. RTC of Is this provision applicable to an action filed
Zamboanga del Norte, G.R. No. 149253, April 15, 2004; in the Philippines to enforce a foreign judgment?
Uy v. Land Bank, G.R. 136100, July 24, 2000). Explain. (10%)
ALTERNATIVE ANSWER:
Gen. Principles; Questions of Law vs. Questions of Fact Article 1144 of the Civil Code which requires that an
(2004) action upon a judgment (though without distinction) must
Distinguish Questions of law from Questions of fact. be brought within 10 years from the time the right of
action accrues, does not apply to an action filed in the
Philippines to enforce a foreign judgment. While we can
say that where the law does not distinguish, we
should not distinguish, still the law does not
evidently contemplate the inclusion of
foreign judgments. A local judgment may be enforced Judgment; Interlocutory Order; Partial Summary
by motion within five years and by action within the Judgments (2004)
next five years. (Rule 39) That is not the case After defendant has served and filed his answer to
with respect to foreign judgments which plaintiffs complaint for damages before the proper
cannot be enforced by mere motion. RTC, plaintiff served and filed a motion (with
ALTERNATIVE ANSWER: supporting affidavits) for a summary judgment in his favor
Article 1144 of the Civil Code requires that an action upon all of his claims. Defendant served and filed his
upon a judgment (though without distinction) opposition (with supporting affidavits) to the motion.
must be brought within 10 years from the time the After due hearing, the court issued an order (1) stating that
right of action accrues. There seems no cogent the court has found no genuine issue as to any material
reason to exclude foreign judgments from the fact and thus concluded that plaintiff is entitled to
operation of this rule, subject to the requirements of judgment in his favor as a matter of law except as to
Rule 39, Sec. 48 of the Rules of Court which the amount of damages recoverable, and (2) accordingly
establishes certain requisites for proving the foreign ordering that plaintiff shall have judgment summarily
judgment. Pursuant to these provisions, an action for against defendant for such amount as may be found
the enforcement of the foreign judgment may be due plaintiff for damages, to be ascertained by trial
brought at any time within 10 years from the on October 7, 2004, at 8:30 o'clock in the morning. May
time the right of action accrues. defendant properly take an appeal from said order?
Or, may defendant properly challenge said order thru a
Judgment; Execution pending Appeal (2002) special civil action for certiorari? Reason. (5%)
The trial court rendered judgment ordering the
defendant to pay the plaintiff moral and exemplary SUGGESTED ANSWER:
damages. The judgment was served on the plaintiff on No, plaintiff may not properly take an appeal from
October 1, 2001 and on the defendant on October 5, said order because it is an interlocutory order, not a final
2001. On October 8, 2001, the defendant filed a and appealable order (Sec. 4 of Rule 35). It does not dispose
notice of appeal from the judgment, but the following day, of the action or proceeding (Sec. 1 of Rule 39).
October 9, 2001, the plaintiff moved for the execution
of the judgment pending appeal. The trial court granted PARTIAL SUMMARY JUDGMENTS are
the motion upon the posting by the plaintiff of a interlocutory. There is still something to be done,
bond to indemnify the defendant for damages it may which is the trial for the adjudication of damages
suffer as a result of the execution. The court gave as (Province of Pangasinan v. Court of Appeals, 220 SCRA
a special reason for its order the imminent insolvency 726 [1993J; Guevarra v. Court of Appeals, 209 Phil.
of the defendant. 241 [1983]), but the defendant may properly challenge
Is the order of execution pending appeal correct? said order thru a special civil action for certiorari. (Sec.
Why? (5%) 1 [c] and last par. of Rule 41)
SUGGESTED ANSWER:
No, because awards for moral and exemplary Judgment; Judgment on the Pleadings (1999)
damages cannot be the subject of execution pending a) What are the grounds for judgment on
appeal. The execution of any award for moral and the pleadings? (2%)
exemplary damages is dependent on the outcome of the b) A's Answer admits the material allegations of B's
main case. Liabilities for moral and exemplary Complaint. May the court motu proprio render
damages, as well as the exact amounts remain judgment on the pleadings? Explain. (2%)
uncertain and indefinite pending resolution by the c) A brought an action against her husband B for
Court of Appeals or Supreme Court. [RCPI v. Lantin, annulment of their marriage on the ground of
134 SCRA 395 (1985); International School, Inc. v. Court psychological incapacity, B filed his Answer to
of Appeals, 309 SCRA 474 (1999)]. the Complaint admitting all the allegations
ALTERNATIVE ANSWER: therein contained. May A move for judgment on
Yes, because only moral and exemplary damages are the pleadings? Explain. (2%)
awarded in the judgment and they are not dependent SUGGESTED ANSWER:
on other types of damages. a) The grounds for judgment on the pleadings
are where an answer fails to tender an issue,
Moreover, the motion for execution was filed or otherwise admits the material allegations
while the court had jurisdiction over the case of the adverse party's pleading. (Sec. 1, Rule 34).
and was in possession of the original record. b) No, a motion must be filed by the adverse party.
(Sec. 1, Rule 34) The court cannot motu proprio
It is based on good reason which is the imminent render judgment on the pleadings.
insolvency of the defendant. (Rule 39, sec. 2) c) No, because even if B's answer to A's complaint for
annulment of their marriage admits all the
allegations therein contained, the material facts
alleged in the complaint must always be proved. which is tantamount to removal without cause,
(Sec. 1 of Rule 34.) contrary to the fundamental guarantee on non-
ANOTHER ANSWER: removal except for cause. Considering that Pedro
c. No. The court shall order the prosecutor to continued to occupy the disputed position and
investigate whether or not a collusion between the exercise his functions therein, the proper remedy is
parties exists, and if there is no collusion, to intervene for quo warranto, not mandamus. {Garces v. Court of
the State in order to see to it that the evidence Appeals, 259 SCRA 99 (1996)]
submitted is not fabricated. (Sec. 3[E], Rule 9) Evidence must ALTERNATIVE ANSWER:
have to be presented in accordance with the Yes, the court is correct in its ruling. Mandamus lies
requirements set down by the Supreme Court in when the respondent unlawfully excludes another
Republic vs. Court of Appeals and Molina (268 from the use and enjoyment of a right or office
SCRA 198.) to which such other is entitled. (Sec. 2, Rule 65). In
this case, Pablo has not unlawfully excluded Fabian
Judgment; Judgment on the Pleadings (2005) from the Office of Election Registrar. The
In a complaint for recovery of real property, the remedy of Fabian is to file an action of quo
plaintiff averred, among others, that he is the owner warranto in his name against Pablo for usurping the
of the said property by virtue of a deed of sale office. (Sec. 5, Rule 66)
executed by the defendant in his favor. Copy of the
deed of sale was appended to the complaint as Annex Judgment; Soundness; Attachment (2002)
"A" thereof. The plaintiff obtained a writ of preliminary
In his unverified answer, the defendant denied the attachment upon a bond of P1 million. The writ was
allegation concerning the sale of the property in levied on the defendant’s property, but it was
question, as well as the appended deed of sale, for discharged upon the posting by the defendant of a
lack of knowledge or information sufficient to form a counterbond in the same amount of P1 million. After trial,
belief as to the truth thereof. Is it proper for the court to the court rendered judgment finding that the plaintiff
render judgment without trial? Explain. (4%) had no cause of action against the defendant and that he
SUGGESTED ANSWER: had sued out the writ of attachment maliciously.
Defendant cannot deny the sale of the property for Accordingly, the court dismissed the complaint and
lack of knowledge or information sufficient to form a ordered the plaintiff and its surety to pay jointly to the
belief as to the truth thereof. The answer amounts to an defendant P1.5 million as actual damages, P0.5 million
admission. The defendant must aver or state positively as moral damages and P0.5 million as exemplary
how it is that he is ignorant of the facts alleged. damages.
(Phil, Advertising Counselors, Inc. v. Revilla,
Evaluate the soundness of the judgment from
G.R. No. L-31869, August 8, 1973; Sec. 10, Rule 8)
the point of view of procedure. (5%)
Moreover, the genuineness and due execution of the SUGGESTED ANSWER:
deed of sale can only be denied by the The judgment against the surety is not sound if due
defendant under oath and failure to do so is also an notice was not given to him of the applicant for
admission of the deed. (Sec. 8, Rule 8) Hence, a damages. (Rule 57, sec. 20) Moreover, the
judgment on the pleadings can be rendered by the judgment against the surety cannot exceed the
court without need of a trial. amount of its counterbond of P1 million.
Judgment; Mandamus vs. Quo Warranto (2001) Judgments; Enforcement; Examination of
Petitioner Fabian was appointed Election Registrar of the Defendant (2002)
Municipality of Sevilla supposedly to replace the The plaintiff, a Manila resident, sued the defendant, a
respondent Election Registrar Pablo who was resident of Malolos Bulacan, in the RTC-Manila for a
transferred to another municipality without his sum of money. When the sheriff tried to serve
consent and who refused to accept his aforesaid the summons with a copy of the complaint
transfer, much less to vacate his position in Bogo on the defendant at his Bulacan residence, the
town as election registrar, as in fact he continued to sheriff was told that the defendant had gone to
occupy his aforesaid position and exercise his Manila for business and would not be back until the
functions thereto. Petitioner Fabian then filed a evening of that day. So, the sheriff served the
petition for mandamus against Pablo but the trial summons, together with a copy of the complaint, on
court dismissed Fabian’s petition contending that quo the defendant’s 18- year-old daughter, who was a
warranto is the proper remedy. college student. For the defendant’s failure to answer
Is the court correct in its ruling? Why? (5%) the complaint within the reglementary period, the
SUGGESTED ANSWER:
trial court, on motion of the plaintiff, declared the
Yes, the court is correct in its ruling. Mandamus will not
defendant in default. A month later, the trial court
lie. This remedy applies only where petitioner’s right
rendered judgment holding the defendant liable for
is founded clearly in law, not when it is
the entire amount prayed for in the complaint.
doubtful. Pablo was transferred without his consent
A. After the judgment had become final, a writ of Yes. The MeTC did not have jurisdiction over the
execution was issued by the court. As the writ was case because the total amount of the demand
returned unsatisfied, the plaintiff filed a motion for an exclusive of interest, damages of whatever kind,
order requiring the defendant to appear before it and to attorney's fees, litigation expenses, and costs, was
be examined regarding his property and income. How P1M. Its jurisdictional amount at this time should not
should the court resolve the motion? (2%) exceed P400.000.00 (Sec. 33 of B.P. Big. 129, as amended
SUGGESTED ANSWER: by R.A. No. 7691).
Jurisdiction; Habeas Corpus; Custody of Minors (2005) The court's order to forward the case to the RTC is not
While Marietta was in her place of work in Makati proper. It should merely dismiss the complaint. Under
City, her estranged husband Carlo barged into her Sec. 3 of Rule 16, the court may dismiss the action
house in Paranaque City, abducted their six-year old son, or claim, deny the motion or order the
Percival, and brought the child to his hometown in Baguio amendment of the pleading but not to forward the
City. Despite Marietta's pleas, Carlo refused to return their case to another court.
child. Marietta, through counsel, filed a petition for habeas
corpus against Carlo in the Court of Appeals in Manila to Parties; Death of a Party; Effect (1998)
compel him to produce their son, before the court and for A filed a complaint for the recovery of ownership of
her to regain custody. She alleged in the petition that land against B who was represented by her counsel
despite her efforts, she could no longer locate her son. X. In the course of the trial, B died. However, X
failed to notify the court of B's death. The court
proceeded to hear the case and rendered
In his comment, Carlo alleged that the petition was judgment against B. After the Judgment became
erroneously filed in the Court of Appeals as the same final, a writ of execution was issued against C,
should have been filed in the Family Court in Baguio City who being B's sole heir, acquired the property.
which, under Republic Act No. 8369, has exclusive If you were counsel of C, what course of action
jurisdiction, over the petition. Marietta replied that would you take? [3%]
under Rule 102 of the Rules of Court, as amended, the SUGGESTED ANSWER:
petition may be filed in the Court of Appeals and if As counsel of C, I would move to set aside the writ of
granted, the writ of habeas corpus shall be enforceable execution and the judgment for lack of jurisdiction and
anywhere in the Philippines. Whose contention is lack of due process in the same court because the
correct? Explain. (5%) judgment is void. If X had notified the court of B's death,
SUGGESTED ANSWER: the court would have ordered the substitution
Marietta's contention is correct. The Court of of the deceased by C, the sole heir of B. (Sec. 16 of Rule
Appeals has concurrent jurisdiction with the family 3) The court acquired no jurisdiction
courts and the Supreme Court in petitions for habeas over C upon whom the trial and the judgment are
corpus where the custody of minors is at issue, not binding.
notwithstanding the provision in the Family Courts (Ferreira us. Ibarra Vda. de Gonzales, 104 Phil. 143; Vda. de
AH. (R.A. No. 8369) that family courts have exclusive la Cruz vs. Court of Appeals, 88 SCRA 695; Lawas us. Court
jurisdiction in such cases. (Thornton v. Thornton, G.R. of Appeals, 146 SCRA 173.) I could also file an action
No. 154598, August, 2004) to annul the judgment for lack of jurisdiction because
C, as the successor of B, was deprived of due process
Jurisdiction; Lack of Jurisdiction; Proper Action of the and should have been heard before judgment.
Court (2004) (Rule 47)
Plaintiff filed a complaint for a sum of money against ALTERNATIVE ANSWER:
defendant with the MeTC-Makati, the total amount of While there are decisions of the Supreme Court which
the demand, exclusive of interest, damages of whatever hold that if the lawyer failed to notify the court of his
kind, attorney's fees, litigation expenses, and costs, being client's death, the court may proceed even without
P1,000,000. In due time, defendant filed a motion to substitution of heirs and the judgment is valid and
dismiss the complaint on the ground of the MeTC's lack binding on the heirs of the deceased
of jurisdiction over the subject matter. After due (Florendo vs. Coloma, 129 SCRA 30.), as counsel of C, I
hearing, the MeTC (1) ruled that the court indeed will assail the judgment and execution for lack of due
lacked jurisdiction over the subject matter of the process.
complaint; and (2) ordered that the case therefore should
be forwarded to the proper RTC immediately. Was Parties; Death of a Party; Effect (1999)
the court's ruling concerning jurisdiction correct? Was What is the effect of the death of a party upon
the court's order to forward the case proper? Explain a pending action? (2%)
SUGGESTED ANSWER:
briefly. (5%)
1. When the claim in a pending action is
SUGGESTED ANSWER:
purely personal, the death of either of
the parties extinguishes the claim and
the action is dismissed.
attached, stating the grounds of his title thereto, and
2. When the claim is not purely personal and is not serve such affidavit upon the sheriff while the latter
thereby extinguished, the party should has possession of the attached property, and a copy
be substituted by his heirs or his thereof upon the attaching party. (Sec. 14, Rule 57) The
executor or administrator. (Sec. 16, Rule 3) third-party claimant may also intervene or file a
separate action to vindicate his claim to the property
3. If the action is for recovery of money arising involved and secure the necessary reliefs, such as
from contract, express or implied, and the preliminary injunction, which will not be considered as
defendant dies before entry of final judgment in the interference with a court of coordinate jurisdiction.
court in which the action was pending at the time of (Ong v. Tating, 149 SCRA 265, [1987])
such death, it shall not be dismissed but shall instead
be allowed to continue until entry of final judgment. Parties; Third-Party Claim (2005)
A favorable judgment obtained by the plaintiff A obtained a money judgment against B. After
shall be enforced in the manner provided in the the finality of the decision, the court issued a
rules for prosecuting claims writ of execution for the enforcement thereof.
against the estate of a deceased person. (Sec. Conformably with the said writ, the sheriff levied
20, Rule 3) upon certain properties under B's name. C filed a
third-party claim over said properties claiming that
Parties; Death of a Party; Effect (1999) B had already transferred the same to him. A
When A (buyer) failed to pay the remaining balance moved to deny the third-party claim and to hold
of the contract price after it became due and demand- B and C jointly and severally liable to him for
able, B (seller) sued him for collection before the the money judgment alleging that B had
RTC. After both parties submitted their transferred said properties to C to defraud him (A).
respective evidence, A perished in a
plane accident. Consequently, his heirs brought After due hearing, the court denied the third-
an action for the settlement of his estate and party claim and rendered an amended decision
moved for the dismissal of the collection suit. declaring B and C jointly and severally liable to A for
1. Will you grant the motion? Explain. (2%) the money judgment.
2. Will your answer be the same if A died while the Is the ruling of the court correct? Explain. (4%)
case is already on appeal to the Court SUGGESTED ANSWER:
of Appeals? Explain. (2%) NO. C has not been properly impleaded as a party
3. In the same case, what is the effect if B died defendant. He cannot be held liable for the judgment
before the RTC has rendered judgment? (2%) against A without a trial. In fact, since no bond was filed
SUGGESTED ANSWER: by B, the sheriff is liable to C for damages. C can file a
1. No, because the action will not be dismissed but separate action to enforce his third-party claim. It is in that
shall instead be allowed to continue until entry of suit that B can raise the ground of fraud against C.
final judgment. (Id.) However, the execution may proceed where there is a
finding that the claim is fraudulent.
2. No. If A died while the case was already on (Tanongan v. Samson, G.R. No. 140889, May 9, 2002)
appeal in the Court of Appeals, the case will
continue because there is no entry yet of Petition for Certiorari (2000)
final judgment. (Id.) AB mortgaged his property to CD. AB failed to pay his
obligation and CD filed an action for foreclosure of
3. The effect is the same. The action will not mortgage. After trial, the court issued an Order
be dismissed but will be allowed to continue granting CD’s prayer for foreclosure of mortgage and
until entry of final judgment. (Id.) ordering AB to pay CD the full amount of the
mortgage debt including interest and other charges not
Parties; Third Party Claim (2000) later than 120 days from date of receipt of the
JK’s real property is being attached by the sheriff in a Order. AB received the Order on August 10, 1999.
civil action for damages against LM. JK claims that he No other proceeding took place thereafter. On
is not a party to the case; that his property is December 20, 1999, AB tendered the full amount
not involved in said case; and that he is the sole adjudged by the court to CD but the latter refused to
registered owner of said property. Under the accept it on the ground that the amount was tendered
Rules of Court, what must JK do to prevent beyond the 120-day period granted by the court. AB filed
the Sheriff from attaching his property? (5%) a motion in the same court praying that CD be directed
SUGGESTED ANSER: to receive the amount tendered by him on the ground
If the real property has been attached, the remedy is to file that the Order does not comply with the provisions of
a third-party claim. The third-party claimant should Section 2, Rule 68 of the Rules of Court which give AB
make an affidavit of his title to the property 120 days from entry of judgment, and
not from date of receipt of the Order. The judgment, even if the dismissal is not yet final. [Golez
court denied his motion on the ground that the v. Leonidas, 107 SCRA 187 (1981)].
Order had already become final and can no longer be
amended to conform with Section 2, Rule 68. Pleadings; Amendment of Complaint; By Leave of Court
Aggrieved, AB files a petition for certiorari (2003)
against the Court and CD. Will the petition for After an answer has been filed, can the plaintiff
certiorari prosper? Explain. (5%) amend his complaint, with leave of court, by
SUGGESTED ANSWER: changing entirely the nature of the action? 4%
Yes. The court erred in issuing an Order granting SUGGESTED ANSWER:
CD’s prayer for foreclosure of mortgage and ordering AB Yes, the present rules allow amendments substantially
to pay CD the full amount of the mortgage debt including altering the nature of the cause of action. (Sec. 3, Rule
interest and other charges not later than 120 days from 10, 1977 Rules of Civil Procedure; Heirs of Marcelino
Pagobo v. Court of Appeals, 280 SCRA 870 [1997]).
receipt of the Order. The court should have rendered a
judgment which is appealable. Since no appeal was This should only be true, however, when the
taken, the judgment became final on August 25, 1999, substantial change or alteration in the cause of action or
which is the date of entry of judgment. (Sec 2, Rule defense shall serve the higher interests of
36) Hence, AB had up to December 24, 1999 within
substantial justice and prevent delay and equally
which to pay the amount due. (Sec. 2, Rule 68) The
promote the laudable objective of the rules which is to
court gravely abused its discretion amounting to lack or
secure a just, speedy and inexpensive disposition of every
excess of jurisdiction in denying AB’s motion praying that
action and proceeding. (Valenzuela v. Court of Appeals,
CD be directed to receive the amount tendered.
363 SCRA 779 [2001]).
Pleadings; Amendment of Complaint; By Leave

Petition for Relief & Action for Annulment (2002)
of Court; Prescriptive Period (2000)
May an order denying the probate of a will still X, an illegitimate child of Y, celebrated her 18th
be overturned after the period to appeal birthday on May 2, 1996. A month before her
therefrom has lapsed? Why? (3%) birthday, Y died. The legitimate family of Y refused
SUGGESTED ANSWER:
Yes, an order denying the probate of a will may be to recognize X as an illegitimate child of Y. After
overturned after the period to appeal therefrom has countless efforts to convince them, X filed on April 25,
lapsed. A PETITION FOR RELIEF may be filed on the 2000 an action for recognition against Z, wife of Y. After
grounds of fraud, accident, mistake or excusable Z filed her answer on August 14, 2000, X filed a
negligence within a period of sixty (60) days after the motion for leave to file an amended complaint and a
petitioner learns of the judgment or final order and motion to admit the said amended complaint
not more than six (6) months after such judgment or final impleading the three (3) legitimate children of Y. The trial
order was entered [Rule 38, secs. 1 & 3; Soriano v. court admitted the amended complaint on August
Asi, 100 Phil. 785 (1957)]. 22, 2000. What is the effect of the admission of the
amended complaint? Has the action of X prescribed?
An ACTION FOR ANNULMENT may also be filed Explain. (5%)
on the ground of extrinsic fraud within four (4) years SUGGESTED ANSWER:
from its discovery, and if based on lack of No. The action filed on April 25, 2000 is still within the
jurisdiction, before it is barred by laches or estoppel. four-year prescriptive period which started to run on May
(Rule 47, secs. 2 & 3) 2, 1996. The amended complaint impleading the three
legitimate children, though admitted on August 22,
Petition for Relief; Injunction (2002) 2000 beyond the four-year prescriptive period,
A default judgment was rendered by the RTC retroacts to the date of filing of the original
ordering D to pay P a sum of money. The judgment complaint. Amendments impleading new defendants
became final, but D filed a petition for relief and retroact to the date of the filing of the complaint
obtained a writ of preliminary injunction staying the because they do not constitute a new cause of action.
enforcement of the judgment. After hearing, the RTC (Verzosa v. Court of Appeals, 299 SCRA 100 [1998]).
(Note: The four-year period is based on Article 285 of the Civil Code)
dismissed D’s petition, whereupon P immediately ALTERNATIVE ANSWER:
moved for the execution of the judgment in his favor. Under the 1997 Rules of Civil Procedure, if an
Should P’s motion be granted? Why? (3%) additional defendant is impleaded in a later pleading,
SUGGESTED ANSWER:
the action is commenced with regard to him on the
P’s immediate motion for execution of the judgment in his
date of the filing of such later pleading, irrespective
favor should be granted because the dismissal of D’s
of whether the motion for its admission, if
petition for relief also dissolves the writ of preliminary
necessary, is denied by the court. (Sec. 5 of Rule 1).
injunction staying the enforcement of the

Consequently, the action of X has prescribed The motion to dismiss should be granted. Jurisdiction
with respect to the three (3) legitimate children of Y must be conferred by the contents of the original
who are indispensable parties. complaint. Amendments are not proper and should
ANOTHER ALTERNATIVE ANSWER: be denied where the court has no jurisdiction over
Under Article 175 of the Family Code, the the original complaint and the purpose of the
action must be brought within the lifetime of X if the amendment is to confer jurisdiction on the court.
action is based on a record of birth or an (Rosario v. Carandang, G.R. No. L-7076, April 28, 1955)
admission of filiation in a public document While a plaintiff is entitled to amend the complaint
or a private handwritten instrument signed by Y. before a responsive pleading is served (Sec. 2, Rule 10,
In such case, the action of X has not prescribed. 1997 Rules of Civil Procedure; Remington Industrial Sales
Corporation v. Court of Appeals, G.R. No. 133657,
However, if the action is based on the open and May 29, 2002), still, a complaint cannot be
continuous possession of the status of an illegitimate amended to confer jurisdiction on a court where
child, the action should have been brought during the there was none to begin with.
lifetime of Y. In such case, the action of X has
prescribed. Pleadings; Amendment of Complaint; To Conform
w/ Evidence (2004)
Pleadings; Amendment of Complaint; Matter of During trial, plaintiff was able to present,
Right (2005) without objection on the part of defendant in an
On May 12, 2005, the plaintiff filed a complaint in the ejectment case, evidence showing that plaintiff
RTC of Quezon City for the collection of served on defendant a written demand to vacate
P250,000.00. The defendant filed a motion to dismiss the the subject property before the commencement
complaint on the ground that the court had no of the suit, a matter not alleged or otherwise set
jurisdiction over the action since the claimed amount of forth in the pleadings on file. May the
P250,000.00 is within the exclusive jurisdiction of the corresponding pleading still be amended to
Metropolitan Trial Court, of Quezon City. Before the conform to the evidence? Explain. (5%)
court could resolve the motion, the plaintiff, without SUGGESTED ANSWER:
Yes. The corresponding pleading may still be
leave of court, amended his complaint to allege a
amended to conform to the evidence, because the
new cause of action consisting in the inclusion of
an additional amount of P200,000.00, thereby written demand to vacate, made prior to the
increasing his total claim to P450,000.000. The plaintiff commencement of the ejectment suit, was presented by
thereafter filed his opposition to the motion to the plaintiff in evidence without objection on the part of
dismiss, claiming that the RTC had jurisdiction, over the defendant. Even if the demand to vacate was
his action. jurisdictional, still, the amendment proposed was to
conform to the evidence that was already in the
Rule on the motion of the defendant with
record and not to confer jurisdiction on the court,
reasons. (4%)
SUGGESTED ANSWER: which is not allowed. Failure to amend, however,
The motion to dismiss should be denied. Basic is the rule does not affect the result of the trial on these issues. (Sec.
that a motion to dismiss is not a responsive pleading. 5 of Rule 10).
Under the Rules, a pleader may amend his pleading
as a matter of right before the other party has served ALTERNATIVE ANSWER:
his responsive pleading. (Sec. 2, Rule 10, Rules of Court) It depends. In forcible entry, the motion may be
The court, in allowing the amendment, would not be allowed at the discretion of the court, the demand
acting without jurisdiction because allowing an amendment having been presented at the trial without objection
as a matter of right does not require the exercise of on the part of the defendant. In unlawful detainer,
discretion. The court therefore would not be "acting" and however, the demand to vacate is jurisdictional and
thus, could not have acted without jurisdiction. It since the court did not acquire jurisdiction from the very
would have been different had the amendments been beginning, the motion to conform to the evidence
made after a responsive pleading had been served. The cannot be entertained. The amendment cannot be
court then would have been exercising its discretion in allowed because it will in effect confer jurisdiction
allowing or disallowing the amendment. It cannot when there is otherwise no jurisdiction.
do so however, because it would be then acting on
an amendment of a complaint over which it has no
jurisdiction. (Soledad v. Mamangun, G.R. No. L-17983,
Pleadings; Answer; Defense; Specific Denial (2004)
May 30, 1963; Gumabay v. Baralin, G.R. No. L- In his complaint for foreclosure of mortgage to which
30683, May 31, 1977; Prudence Realty v. CA, G.R. No. was duly attached a copy of the mortgage deed, plaintiff
110274, March 21, 1994) PP alleged inter alia as follows: (1) that defendant
ALTERNATIVE ANSWER:
DD duly executed the mortgage deed,
Remedial Law Bar Examination Q & A (1997-2006) copy
by: sirdondee@gmail.com Page 29 of 66
of which is Annex "A" of the complaint and made he being merely plaintiffs counsel. Is the counterclaim
an integral part thereof; and (2) that to of DY compulsory or not? Should AC's motion to
prosecute his complaint, plaintiff contracted a lawyer, dismiss the counterclaim be granted or not? Reason.
CC, for a fee of P50.000. In his answer, defendant (5%)
alleged, inter alia, that he had no knowledge of the SUGGESTED ANSWER:
mortgage deed, and he also denied any liability for Yes. The counterclaim of DY is compulsory because
plaintiffs contracting with a lawyer for a fee. it is one which arises out of or is connected with the
transaction or occurrence constituting the subject
Does defendant's answer as to plaintiff’s matter of the opposing party's claim and does
allegation no. 1 as well as no. 2 sufficiently raise an not require for its adjudication the presence of
issue of fact? Reason briefly. (5%) third parties of whom the court cannot
SUGGESTED ANSWER: acquire jurisdiction.(Sec. 7 of Rule 6).
As to plaintiffs allegation no. 1, defendant does not
sufficiently raise an issue of fact, because he cannot The motion to dismiss of plaintiffs counsel
allege lack of knowledge of the mortgage deed since he should not be granted because bringing in plaintiffs
should have personal knowledge as to whether he signed counsel as a defendant in the counterclaim is
it or not and because he did not deny under oath authorized by the Rules. Where it is required for
the genuineness and due execution of the the grant of complete relief in the
mortgage deed, which is an actionable document. As to determination of the counterclaim, the court
plaintiff’s allegation no. 2, defendant did not shall order the defendant's counsel to be brought
properly deny liability as to plaintiffs contracting with a in since jurisdiction over him can be obtained. (Sec.
lawyer for a fee. He did not even deny for lack of 12 of Rule 6; Aurelio v. Court of Appeals, 196 SCRA 674
knowledge. (Sec. 10 of Rule 8). [1994]). Here, the counterclaim was against both
the plaintiff and his lawyer who allegedly
Pleadings; Certification Against Forum Shopping (2000) maliciously induced the plaintiff to file the suit.
As counsel for A, B, C and D, Atty. XY prepared a ALTERNATIVE ANSWER:
complaint for recovery of possession of a parcel The counterclaim should be dismissed because it is
of land against Z. Before filling the complaint, not a compulsory counterclaim. When a lawyer files a case
XY discovered that his clients were not available to for a client, he should not be sued on a
sign the certification of non-forum shopping. To counterclaim in the very same case he has filed as
avoid further delays in the filing of the counsel. It should be filed in a separate and distinct civil
complaint, XY signed the certification and action. (Chavez v. Sandiganbayan, 193 SCRA 282
immediately filed the complaint in court. Is XY [1991])
justified in signing the certification? Why? (5%)
SUGGESTED ANSWER: Pleadings; Motions; Bill of Particulars (2003)
NO, counsel cannot sign the anti-forum shopping 1. When can a bill of particulars be availed of?
certification because it must be executed by the 2. What is the effect of non-compliance with the
“plaintiff or principal party” himself (Sec. 5, Rule 7; order of a bill of particulars? 4%
Excorpizo v. University of Baguio, 306 SCRA 497, [1999]), SUGGESTED ANSWER:
1. Before responding to a pleading, a party may
since the rule requires personal knowledge by the
move for a bill or particulars of any matter which is
party executing the certification, UNLESS counsel
not averred with sufficient definiteness or
gives a good reason why he is not able to secure his
particularity to enable him properly to prepare his
clients’ signatures and shows that his clients will be
responsive pleading. If the pleading is a reply, the
deprived of substantial justice (Ortiz v. Court of
motion must be filed within ten (10) days from
Appeals, 299 SCRA 708, [1998]) or unless he is
service thereof. (Sec. 1 of Rule 12)
authorized to sign it by his clients through a special
power of attorney. 2. If the order is not complied with, the court may
order the striking out of the pleading or the
Pleadings; Counterclaim against the Counsel of the portions thereof to which the order was directed
Plaintiff (2004) or make such other order as it deems just. (Sec. 4
PX filed a suit for damages against DY. In his answer, DY of Rule 12)
incorporated a counterclaim for damages against PX and
Pleadings; Reply; Effect of Non-Filing of Reply (2000)
AC, counsel for plaintiff in said suit, alleging in said
X files a complaint in the RTC for the recovery of a sum
counterclaim, inter alia, that AC, as such counsel,
of money with damages against Y. Y files his answer
maliciously induced PX to bring the suit against DY
despite AC's knowledge of its utter lack of factual and denying liability under the contract of sale and praying for
legal basis. In due time, AC filed a motion to dismiss the dismissal of the complaint on the ground of lack
the counterclaim as against him on the ground that he is of cause of action because the contract of sale was
not a proper party to the case, superseded by a contract of lease,
executed and signed by X and Y two weeks after the Provisional Remedies; Attachment (1999)
contract of sale was executed. The contract of In a case, the property of an incompetent under
lease was attached to the answer. X does not guardianship was in custodia legis. Can it be attached?
file a reply. What is the effect of the non-filing Explain. (2%)
of a reply? Explain. (3%) SUGGESTED ANSWER:
SUGGESTED ANSWER: Although the property of an incompetent under
A reply is generally optional. If it is not filed, the new guardianship is in custodia legis, it may be attached as in
matters alleged in the answer are deemed fact it is provided that in such case, a copy of the writ of
controverted. (Sec. 10 of Rule 6). However, since the attachment shall be filed with the proper court and
contract of lease attached to the answer is the basis of the notice of the attachment served upon the
defense, by not filing a reply denying under oath the custodian of such property. (Sec. 7, last par., Rule 57)
genuineness and due execution of said contract, the
plaintiff is deemed to have admitted the Provisional Remedies; Attachment (1999)
genuineness and due execution thereof. (Secs. 7 and 8 May damages be claimed by a party prejudiced
Rule 8; Toribio v. Bidin, 132 SCRA 162 [1985]). by a wrongful attachment even if the judgment is
adverse to him? Explain. (2%)
Prejudicial Question; Ejectment vs. Specific SUGGESTED ANSWER:
Performance (2000) Yes, damages may be claimed by a party prejudiced
BB files a complaint for ejectment in the MTCon the by a wrongful attachment even if the judgment is
ground of non-payment of rentals against JJ. adverse to him. This is authorized by the Rules. A
After two days, JJ files in the RTC a complaint claim, for damages may be made on account of
against BB for specific performance to enforce improper, irregular or excessive attachment, which shall
the option to purchase the parcel of land subject of be heard with notice to the adverse party and his surety or
the ejectment case. What is the effect of JJ’s sureties. (Sec. 20, Rule 57; Javellana v. D. O.
action on BB’s complaint? Explain. (5%) Plaza Enterprises Inc., 32 SCRA 281.)
SUGGESTED ANSWER:
There is no effect. The ejectment case involves Provisional Remedies; Attachment (2001)
possession de facto only. The action to enforce the May a writ of preliminary attachment be issued
option to purchase will not suspend the action of ex- parte? Briefly state the reason(s) for your
ejectment for non-payment of rentals. (Willman Auto answer. (3%)
Supply Corp. v. Court of Appeals, 208 SCRA 108 [1992]). SUGGESTED ANSWER:
Yes, an order of attachment may be issued ex-parte
Pre-Trial; Requirements (2001) or upon motion with notice and hearing. (Sec. 2 of Rule
Lilio filed a complaint in the Municipal Trial Court of 57) The reason why the order may be
Lanuza for the recovery of a sum against Juan. issued ex parte is: that requiring notice to the
The latter filed his answer to the complaint serving a adverse party and a hearing would defeat the purpose
copy thereof on Lilio. of the provisional remedy and enable the adverse
After the filing of the answer of Juan, whose duty is it party to abscond or dispose of his property before
to have the case set for pre-trial? Why? (5%) a writ of attachment issues. (Mindanao Savings and
SUGGESTED ANSWER: Loan Association, Inc. v.
After the filing of the answer of Juan, the Court of Appeals, 172 SCRA 480).
PLAINTIFF has the duty to promptly move ex parte
Provisional Remedies; Attachment (2005)
that the case be set for pre-trial. (Sec. 1, Rule18).
Katy filed an action against Tyrone for collection of the
The reason is that it is the plaintiff who knows when
sum of P1 Million in the RTC, with an ex-parte
the last pleading has been filed and it is the plaintiff
application for a writ of preliminary attachment.
who has the duty to prosecute.
ALTERNATIVE ANSWER: Upon posting of an attachment bond, the court
In the event the plaintiff files a reply, his duty granted the application and issued a writ of
to move that the case be set for pre-trial arises after preliminary attachment. Apprehensive that Tyrone
the reply has been served and filed. might withdraw his savings deposit with the bank, the
sheriff immediately served a notice of garnishment on the
Provisional Remedies (1999) bank to implement the writ of preliminary
What are the provisional remedies under the attachment. The following day, the sheriff proceeded to
rules? (2%) Tyrone's house and served him the summons, with copies
SUGGESTED ANSWER: of the complaint containing the application for writ of
The provisional remedies under the rules are preliminary attachment, Katy's affidavit, order of
preliminary attachment, preliminary attachment, writ of preliminary attachment and
injunction, receivership, replevin, and support attachment bond.
pendente lite. (Rules 57 to 61, Rules of Court).
Within fifteen (15) days from service of the
summons, Tyrone filed a motion to dismiss and to
dissolve the writ of preliminary attachment on preliminary injunction may cause grave and
the following grounds: (i) the court did not irreparable injury to the party enjoined.
acquire jurisdiction over his person because the
writ was served ahead of the summons; (ii) the Provisional Remedies; Injunction (2003)
writ was improperly implemented; and (iii) said Can a suit for injunction be aptly filed with the
writ was improvidently issued because the Supreme Court to stop the President of the
obligation in question was already fully paid. Philippines from entering into a peace agreement
Resolve the motion with reasons. (4%) with the National Democratic Front? (4%)
The motion to dismiss and to dissolve the writ No, a suit for injunction cannot aptly be filed with the
of preliminary attachment should be denied. Supreme Court to stop the President of the
(1) The fact that the writ of attachment was served Philippines from entering into a peace agreement with
ahead of the summons did not affect the jurisdiction of the National Democratic Front, which is a
the court over his person. It makes the writ, purely political question. (Madarang v. Santamaria, 37 Phil.
unenforceable. (Sec. 5, Rule. 57) However, all that is 304 [1917]). The President of the Philippines is
needed to be done is to re-serve the writ. (Onate v. immune from suit.
Abrogar, GM. No. 197393, February 23, 1985)
Provisional Remedies; Injunctions; Ancillary Remedy
(2) The writ was improperly implemented. Serving a vs. Main Action (2006)
notice of garnishment, particularly before summons is Distinguish between injunction as an ancillary remedy
served, is not proper. It should be a copy of the writ and injunction as a main action. (2.5%)
of attachment that should be served on the SUGGESTED ANSWER:
defendant, and a notice that the bank deposits Injunction as an ancillary remedy refers to the
are attached pursuant to the writ. (Sec. 7[d], Rule 57) preliminary injunction which requires the existence of a
pending principal case; while injunction as a main
(3) The writ was improvidently issued if indeed it can be action refers to the principal case itself that prays for the
shown that the obligation was already fully paid. The remedy of permanently restraining the adverse party
writ is only ancillary to the main action. (Sec. 13, from doing or not doing the act complained of.
Rule 57) The alleged payment of the account cannot,
serve as a ground for resolving the Provisional Remedies; Injunctions; Issuance w/out
improvident issuance of the writ, because this Bond (2006)
matter delves into the merits of the case, and May a Regional Trial Court issue injunction
requires full-blown trial. Payment, however, serves without bond? (2%)
as a ground for a motion to dismiss. SUGGESTED ANSWER:
Yes, if the injunction that is issued is a final
Provisional Remedies; Attachment vs. injunction. Generally, however, preliminary
Garnishment (1999) injunction cannot issue without bond unless
Distinguish attachment from garnishment. (2%) exempted by the trial court (Sec. 4[b] of Rule 58).
SUGGESTED ANSWER:
Attachment and garnishment are distinguished from Provisional Remedies; Injunctions; Requisites (2006)
each other as follows: ATTACHMENT is a What are the requisites for the issuance of (a) a writ of
provisional remedy that effects a levy on property of a preliminary injunction; and (b) a
party as security for the satisfaction of any judgment that final writ of
may be recovered, while GARNISHMENT is a levy on injunction?
debts due the judgment obligor or defendant and other Requisites for the issuance of a: (Sec. 4, Rule 58 1997
credits, including bank deposits, royalties and other
Rules of Civil Procedure) SUGGESTED
personal property not capable of manual delivery ANSWER:
under a writ of execution or a writ of attachment. a. Writ of Preliminary Injunction
are —
Provisional Remedies; Injunction (2001)

May a writ of preliminary injunction be issued (1) A verified complaint showing;
ex- parte? Why? (3%) (2) The existence of a right in esse;
SUGGESTED ANSWER: (3) Violation or threat of violation of such right;
No, a writ of preliminary injunction may not be (4) Damages or injuries sustained or that will be sus-
issued ex parte. As provided in the Rules, no tained by reason of such violation;
preliminary injunction shall be granted without (5) Notice to all parties of raffle and of hearing;
hearing and prior notice to the party or person sought to (6) Hearing on the application;
be enjoined. (Sec. 5 of Rule 58) The reason is that a (7) Filing of an appropriate bond and service thereof.
SUGGESTED ANSWER:
b. While a final writ of injunction may be rendered by
judgment after trial, showing applicant to be entitled
to the writ (Sec. 9, Rule 58 1997 Rules of Civil Procedure).
waived, reserved or instituted prior to its filing,
Provisional Remedies; Receivership (2001) the accused may be ordered to provide support
Joaquin filed a complaint against Jose for the pendente lite to the child born to the offended party
foreclosure of a mortgage of a furniture factory with a allegedly because of the crime. (Sec. 6 of Rule 61.)
large number of machinery and equipment. During the
pendency of the foreclosure suit, Joaquin learned from Provisional Remedies; Support Pendente Lite (2001)
reliable sources that Jose was quietly and gradually Modesto was accused of seduction by Virginia, a
disposing of some of his machinery and equipment to poor, unemployed young girl, who has a child by
a businessman friend who was also engaged in Modesto. Virginia was in dire need of pecuniary
furniture manufacturing such that from confirmed assistance to keep her child, not to say of herself,
reports Joaquin gathered, the machinery and alive. The criminal case is still pending in court and
equipment left with Jose were no longer sufficient although the civil liability aspect of the crime has not been
to answer for the latter’s mortgage indebtedness. waived or reserved for a separate civil action, the trial
In the meantime judgment was rendered by the for the case was foreseen to take two long years
court in favor of Joaquin but the same is not yet final. because of the heavily clogged court calendar before
the judgment may be rendered.
If you were the lawyer of Virginia, what action should
Knowing what Jose has been doing. If you were you take to help Virginia in the meantime especially
Joaquin’s lawyer, what action would you take to with the problem of feeding the child? (5%)
preserve whatever remaining machinery SUGGESTED ANSWER:
and equipment are left with Jose? Why? (5%) To help Virginia in the meantime, her lawyer should
SUGGESTED ANSWER: apply for Support Pendente Lite as provided in the
To preserve whatever remaining machinery and Rules. In criminal actions where the civil liability
equipment are left with Jose, Joaquin’s lawyer should file a included support for the offspring as a consequence
verified application for the appointment by the court of of the crime and the civil aspect thereof has not been
one or more receivers. The Rules provide that waived or reserved for a separate civil action,
receivership is proper in an action by the the accused may be ordered to provide support
mortgagee for the foreclosure of a mortgage when it pendent elite to the child born to the offended party.
appears that the property is in danger of being wasted or (Sec. 6 of Rule 61)
dissipated or materially injured and that its value is
probably insufficient to discharge the mortgage debt. Provisional Remedies; TRO (2001)
(Sec. 1 of Rule 59). An application for a writ of preliminary injunction
with a prayer for a temporary restraining order is
Provisional Remedies; Replevin (1999) included in a complaint and filed in a multi-sala RTC
What is Replevin? (2%) consisting of Branches 1,2,3 and 4. Being urgent in
SUGGESTED ANSWER: nature, the Executive Judge, who was sitting in
Replevin or delivery of personal property consists in the Branch 1, upon the filing of the aforesaid application
delivery, by order of the court, of personal immediately raffled the case in the presence of the
property by the defendant to the plaintiff, upon the judges of Branches 2,3 and 4. The case was raffled to
filing of a bond. (Calo v. Roldan, 76 Phil. 445 [1946]) Branch 4 and judge thereof immediately issued a
temporary restraining order.
Provisional Remedies; Support Pendente Lite (1999) Is the temporary restraining order valid? Why? (5%)
Before the RTC, A was charged with rape of his 16- SUGGESTED ANSWER:
year old daughter. During the pendency of the case, No. It is only the Executive Judge who can issue
the daughter gave birth to a child allegedly as a immediately a temporary restraining order effective
consequence of the rape. Thereafter, she asked only for seventy-two (72) hours from issuance. No
the accused to support the child, and when he other Judge has the right or power to issue a
refused, the former filed a petition for support temporary restraining order ex parte. The Judge to
pendente lite. The accused, however, insists that he whom the case is assigned will then conduct a
cannot be made to give such support arguing that summary hearing to determine whether the
there is as yet no finding as to his guilt. Would you temporary restraining order shall be extended, but in no
agree with the trial court if it denied the application case beyond 20 days, including the original 72- hour
for support pendente lite? Explain. (2%) period. (Sec. 5 of Rule 58)
No. The provisional remedy of support pendente lite may The temporary restraining order is not valid because
be granted by the RTC in the criminal action for rape. In the question does not state that the matter is of
criminal actions where the civil liability includes extreme urgency and the applicant will suffer
support for the offspring as a consequence of the grave injustice and irreparable injury. (Sec. 5 of Rule 58)
crime and the civil aspect thereof has not been
Provisional Remedies; TRO (2006) Was the motion for Reconsideration filed within the
Define a temporary restraining order (TRO). (2%) reglementary period? Explain. (5%)
A temporary restraining order is an order issued Yes, because the last day of filing a motion for
to restrain the opposite party and to maintain the reconsideration was March 15 if February had 28 days
status quo until a hearing for determining the or March 16 if February had 29 days. Although the
propriety of granting a preliminary injunction (Sec. original motion for reconsideration was defective because
4[c] and [d], Rule 58,1997 Rules of Civil Procedure). it lacked a notice of hearing, the defect was cured on
time by its filing on March 15 of a supplemental
Provisional Remedies; TRO vs. Status Quo Order (2006) pleading, provided that motion was set for hearing and
Differentiate a TRO from a status quo order. (2%) served on the adverse party at least three (3) days
SUGGESTED ANSWER: before the date of hearing.(Sec. 4, Rule 15).
A status quo order (SQO) is more in the nature of a cease ALTERNATIVE ANSWER:
and desist order, since it does not direct the doing or Since the supplemental pleading was not set for
undoing of acts, as in the case of prohibitory or hearing, it did not cure the defect of the original
mandatory injunctive relief. A TRO is only good for motion.
20 days if issued by the RTC; 60 days if issued by the CA;
until further notice if issued by the SC. The SQO is Remedies; Appeal to SC; Appeals to CA (2002)
without any prescriptive period and may be issued a) What are the modes of appeal to the
without a bond. A TRO dies a natural death after the Supreme Court? (2%)
allowable period; the SQO does not. A TRO is b) Comment on a proposal to amend Rule 122,
provisional. SQO lasts until revoked. A TRO is not Section 2(b), in relation to Section 3(c), of the
extendible, but the SQO may be subject to agreement of Revised Rules of Criminal Procedure to provide for
the parties. appeal to the Court of Appeals from the
decisions of the RTC in criminal cases, where the
Provisional Remedies; TRO; CA Justice Dept. (2006) penalty imposed is reclusion perpetua or life
May a justice of a Division of the Court of Appeals imprisonment, subject to the right of the accused
issue a TRO? (2%) to appeal to the Supreme Court. (3%)
Yes, a justice of a division of the Court of Appeals A. The modes of appeal to the Supreme Court are: (a)
may issue a TRO, as authorized under Rule 58 and by APPEAL BY CERTIORARI on pure questions of law
Section 5, Rule IV of the IRCA which additionally under Rule 45 through a petition for review on
requires that the action shall be submitted on the next certiorari; and (b) ORDINARY APPEAL in criminal
working day to the absent members of the division cases through a notice of appeal from convictions
for the ratification, modification or recall (Heirs of the late imposing reclusion perpetua or life imprisonment or
Justice Jose B.L. Reyes v. Court of Appeals, G.R. Nos.
where a lesser penalty is involved but for offenses
135425-26, November 14, 2000).
committed on the same occasion or which arose out of
Provisional Remedies; TRO; Duration (2006) the same occurrence that gave rise to the more
What is the duration of a TRO issued by serious offense. (Rule 122, sec. 3) Convictions imposing the
the Executive Judge of a Regional Trial Court? (2%) death penalty are elevated through automatic review.
SUGGESTED ANSWER:
In cases of extreme urgency, when the applicant will
suffer grave injustice and irreparable injury, B. There is no constitutional objection to
the duration of a TRO issued ex parte by an providing in the Rules of Court for an appeal to the
Executive Judge of a Regional Trial Court is 72 Court of Appeals from the decisions of the RTC in
hours (2nd par. of Sec. 5, Rule 58 1997 Rules of Civil Procedure). criminal cases where the penalty imposed is reclusion
In the exercise of his regular functions over cases perpetua or life imprisonment subject to the right of
assigned to his sala, an Executive Judge may issue a the accused to appeal to the Supreme Court, because
TRO for a duration not exceeding a total of 20 days. it does not deprive the Supreme Court of the right to
exercise ultimate review of the judgments in such
Reglementary Period; Supplemental Pleadings (2000) cases.
The RTC rendered judgment against ST, copy of
which was received by his counsel on February 28, Remedies; Appeal; RTC to CA (1999)
2000. On March 10, 2000, ST, through counsel, filed a a. When is an appeal from the RTC to the Court of
motion for reconsideration of the decision with notice Appeals deemed perfected? (2%}
to the Clerk of Court submitting the motion for the b. XXX received a copy of the RTC decision on June 9,
consideration of the court. On March 15, 2000, 1999; YYY received it on the next day, June 10, 1999.
realizing that the Motion lacked a notice of hearing, XXX filed a Notice of Appeal on June 15, 1999. The
ST’s counsel filed a supplemental pleading. parties entered into a compromise on
June 16, 1999. On June 13, 1999, YYY, who did not there is no appeal nor any plain, speedy and adequate
appeal, filed with the RTC a motion for approval remedy in the ordinary course of law, to be filed
of the Compromise Agreement. XXX changed his within sixty (60) days from notice of the judgment,
mind and opposed the motion on the ground that the order or resolution subject of the petition. (Secs. 1
RTC has no more jurisdiction. Rule on the motion and 4.)
assuming that the records have not yet been ADDITIONAL ANSWER:
forwarded to the CA. (2%) 1) In appeal by certiorari under Rule 45, the petitioner and
SUGGESTED ANSWER: respondent are the original parties to the action and the
a. An appeal from the RTC to the Court of lower court is not impleaded. In certiorari, under Rule
Appeals is deemed perfected as to the appellant upon 65, the lower court is impleaded.
the filing of a notice of appeal in the RTC in due time
or within the reglementary period of appeal. 2) In appeal by certiorari, the filing of a motion
An appeal by record on appeal is deemed perfected for reconsideration is not required, while in the
as to the appellant with respect to the subject special civil action of certiorari, such a motion is
matter thereof upon the approval of the record generally required.
on appeal filed in due time. (Sec. 9, Rule 41)
SUGGESTED ANSWER:
b. The contention of XXX that the RTC has no more b. NO, because as a general rule, certiorari is proper if
jurisdiction over the case is not correct because at the there is no appeal (Sec. 1 of Rule 65.) However, if appeal is
time that the motion to approve the compromise not a speedy and adequate remedy, certiorari may be
had been filed, the period of appeal of YYY had not resorted to. (Echaus v. Court of Appeals, 199 SCRA 381.)
yet expired. Besides, even if that period had already Certiorari is sanctioned, even if appeal is available,
expired, the records of the case had not yet been on the basis of a patent, capricious and whimsical
forwarded to the Court of Appeals. The rules exercise of discretion by a trial judge as when an
provide that in appeals by notice of appeal, the court appeal will not promptly relieve petitioner from the
loses jurisdiction over the case upon the perfection injurious effects of the disputed order
of the appeals filed in due time and the (Vasquez vs. Robilla-Alenio, 271 SCRA 67)
expiration of the time to appeal of the other parties.
(Sec. 9, third par., Rule 41) Remedies; Void Decision; Proper Remedy (2004)
After plaintiff in an ordinary civil action before the
The rules also provide that prior to the transmittal of RTC; ZZ has completed presentation of his evidence,
the record, the court may, among others, defendant without prior leave of court moved for
approve compromises. (Sec. 9, fifth par., Rule 41) dismissal of plaintiffs complaint for insufficiency of
(Note: June 13, the date of the filing of the plaintiff’s evidence. After due hearing of the motion and
motion for approval of the Compromise the opposition thereto, the court issued an order, reading
Agreement, appears to be a clerical error) as follows: The Court hereby grants defendant's
motion to dismiss and accordingly orders the dismissal of
Remedies; Appeal; Rule 45 vs. Rule 65 (1999) plaintiff’s complaint, with the costs taxed against him.
a) Distinguish a petition for certiorari as a mode of It is so ordered." Is the order of dismissal valid? May
appeal from a special civil action for plaintiff properly take an appeal? Reason. (5%)
certiorari. (2%)
b) May a party resort to certiorari when appeal is SUGGESTED ANSWER:
still available? Explain. (2%) The order or decision is void because it does not
SUGGESTED ANSWER: state findings of fact and of law, as required by
a. A PETITION FOR REVIEW ON CERTIORARI as a Sec. 14, Article VIII of the Constitution and Sec. 1,
mode of appeal may be distinguished from a special Rule 36. Being void, appeal is not available.
civil action for certiorari in that the petition for The proper remedy is certiorari under Rule 65.
certiorari as a mode of appeal is governed by Rule 45 and ANOTHER ANSWER:
is filed from a judgment or final order of the RTC, the Either certiorari or ordinary appeal may be
Sandiganbayan or the Court of Appeals, within fifteen resorted to on the ground that the judgment is void.
(15) days from notice of the judgment appealed from or of Appeal, in fact, may be the more expedient remedy.
ALTERNATIVE ANSWER:
the denial of the motion for new trial or reconsideration
Yes. The order of dismissal for insufficiency of
filed in due time on questions of law only (Secs. 1 and 2);
the plaintiffs evidence is valid upon defendant's
SPECIAL CIVIL ACTION FOR CERTIORARI is
motion to dismiss even without prior leave of court.
governed by Rule 65 and is filed to annul or
(Sec. 1 of Rule 33).
modify judgments, orders or resolutions rendered or Yes, plaintiff may properly take an appeal because the
issued without or in excess of jurisdiction or with
dismissal of the complaint is a final and appealable
grave abuse of discretion tantamount to lack or
order. However, if the order of dismissal is reversed
excess of jurisdiction, when
on appeal, the plaintiff is deemed to have waived his summary procedure and since the counterclaim is
right to present evidence. (Id.) only permissive, it cannot be entertained by
the Municipal Court. (Revised Rule on Summary Procedure.)
Special Civil Action; Ejectment (1997)
On 10 January 1990, X leased the warehouse of Special Civil Action; Foreclosure (2003)
A under a lease contract with a period of five years. A borrowed from the Development Bank of the
On 08 June 1996, A filed an unlawful detainer Philippines (DBP) the amount of P1 million secured by
case against X without a prior demand for X to the titled land of his friend B who, however, did not
vacate the premises. assume personal liability for the loan. A defaulted and
(a) Can X contest his ejectment on the ground that DBP filed an action for judicial foreclosure of the real
there was no prior demand for him to vacate estate mortgage impleading A and B as defendants.
the premises? In due course, the court rendered judgment
(b) In case the Municipal Trial Court renders directing A to pay the outstanding account of P1.5
judgment in favor of A, is the judgment immediately million (principal plus interest) to the bank. No appeal
executory? was taken by A on the Decision within the reglementary
SUGGESTED ANSWER: period. A failed to pay the judgment debt within the
(a) Yes. X can contest his ejectment on the ground period specified in the decision. Consequently, the court
that there was no prior demand to vacate ordered the foreclosure sale of the mortgaged land. In
the premises. (Sec. 2 of Rule 70; Casilan vs.Tomassi that foreclosure sale, the land was sold to the DBP for
l0 SCRA 261; Iesaca vs.Cuevas. 125 SCRA 335). P1.2 million. The sale was subsequently confirmed by
the court, and the confirmation of the sale was
(b) Yes, because the judgment of the Municipal Trial
registered with the Registry of Deeds on 05 January
Court against the defendant X is immediately
2002.
executory upon motion unless an appeal has been
perfected, a supersedeas bond has been filed and the On 10 January 2003, the bank filed an ex-parte
periodic deposits of current rentals. If any, as motion with the court for the issuance of a writ
determined by the judgment will be made with the of possession to oust B from the land. It also
appellate court. (Sec. 8 of former Rule 70; Sec. 19 of new Rule 70). filed a deficiency claim for P800,000.00 against A
ALTERNATIVE ANSWER:
and B. the deficiency claim was opposed by A and B.
(a) Yes, X can contest his ejectment on the ground
(a) Resolve the motion for the issuance of a writ of
that since he continued enjoying the thing leased for
possession.
fifteen days after the termination of the lease on
(b) Resolve the deficiency claim of the bank. 6%
January 9, 1995 with the acquiescence of the lessor SUGGESTED ANSWER:
without a notice to the contrary, there was an (a) In judicial foreclosure by banks such as DBP, the
IMPLIED NEW LEASE. (Art. 1670. Civil Code). mortgagor or debtor whose real property has
been sold on foreclosure has the right to redeem
Special Civil Action; Ejectment (1998) the property sold within one year after the
In an action for unlawful detainer in the sale (or registration of the sale). However, the
Municipal Trial Court (MTC), defendant X raised in purchaser at the auction sale has the right to
his Answer the defense that plaintiff A is not the real obtain a writ of possession after the finality of
owner of the house subject of the suit. X filed a the order confirming the sale. (Sec. 3 of Rule 68; Sec.
counterclaim against A for the collection of a debt of 47 of RA 8791. The General Banking Law of 2000). The
P80,000 plus accrued interest of P15,000 and motion for writ of possession, however, cannot be
attorney's fees of P20,000. filed ex parte. There must be a notice of hearing.
1. Is X's defense tenable? [3%]
2. Does the MTC have jurisdiction over (b) The deficiency claim of the bank may be enforced
the counterclaim? [2%] against the mortgage debtor A, but it cannot be
SUGGESTED ANSWER:: enforced against B, the owner of the mortgaged
1. No. X's defense is not tenable if the action is property, who did not assume personal liability
filed by a lessor against a lessee. However, if the right for the loan.
of possession of the plaintiff depends on his
ownership then the defense is tenable. Special Civil Action; Petition for Certiorari (2002)
The defendant was declared in default in the RTC for his
2. The counterclaim is within the jurisdiction of the failure to file an answer to a complaint for a sum of
Municipal Trial Court which does not exceed money. On the basis of the plaintiff’s ex parte
P100,000, because the principal demand is P80,000, presentation of evidence, judgment by default was
exclusive of interest and attorney's fees. (Sec. 33, B.P. rendered against the defendant. The default judgment was
Big. 129, as amended.) However, inasmuch as all actions of served on the defendant on October 1, 2001. On October
forcible entry and unlawful detainer 10, 2001, he files a verified motion to lift the
are subject to
order of default and to set aside the judgment. In his claiming that its main office and operations are
motion, the defendant alleged that, immediately upon in Cebu City and not in Manila.
receipt of the summon, he saw the plaintiff and Is the contention of Cars Co. correct? Why? (5%)
confronted him with his receipt evidencing his SUGGESTED ANSWER:
payment and that the plaintiff assured him that he No. As expressly provided in the Rules, when
would instruct his lawyer to withdraw the complaint. the Solicitor General commences the action
The trial court denied the defendant’s motion because it for quo warranto, it may be brought in a RTC in
was not accompanied by an affidavit of merit. The the City of Manila, as in this case, in the Court of
defendant filed a special civil action for certiorari Appeals or in the Supreme Court. (Sec. 7 of Rule 66)
under Rule 65 challenging the denial order.
A. Is certiorari under Rule 65 the proper Special Civil Actions; Mandamus (2006)
remedy? Why? (2%) In 1996, Congress passed Republic Act No. 8189,
B. Did the trial court abuse its discretion or act otherwise known as the Voter's Registration Act of
without or in excess of its jurisdiction in denying the 1996, providing for computerization of elections.
defendant’s motion to lift the order of default Pursuant thereto, the COMELEC approved the
judgment? Why? (3%) Voter's Registration and Identification System (VRIS)
SUGGESTED ANSWER: Project. It issued invitations to pre-qualify and bid for the
A. The petition for certiorari under Rule 65 project. After the public bidding, Fotokina was
filed by the defendant is the proper remedy because declared the winning bidder with a bid of P6 billion and
appeal is not a plain, speedy and adequate remedy in was issued a Notice of Award. But COMELEC Chairman
the ordinary course of law. In appeal, the defendant Gener Go objected to the award on the ground that
in default can only question the decision in the light under the Appropriations Act, the budget for the
of the evidence of the plaintiff. The defendant cannot COMELEC's modernization is only P1 billion. He
invoke the receipt to prove payment of his obligation announced to the public that the VRIS project has
to the plaintiff. been set aside. Two Commissioners sided with Chairman
ALTERNATIVE ANSWER: Go, but the majority voted to uphold the contract.
A. Under ordinary circumstances, the proper remedy of a
party wrongly declared in default is either to appeal
from the judgment by default or file a petition for relief Meanwhile, Fotokina filed with the RTC a petition for
from judgment. [Jao, Inc. v. Court of Appeals, mandamus compel the COMELEC to implement the
251 SCRA 391 (1995) contract. The Office of the Solicitor General (OSG),
representing Chairman Go, opposed the petition on
SUGGESTED ANSWER:
the ground that mandamus does not lie to enforce
B. Yes, the trial court gravely abused its discretion or acted
contractual obligations. During the proceedings,
without or in excess of jurisdiction in denying the
the majority Commissioners filed a manifestation
defendant’s motion because it was not
that Chairman Go was not authorized by the COMELEC
accompanied by a separate affidavit of merit. In his
En Banc to oppose the petition.
verified motion to lift the order of default and to set aside
the judgment, the defendant alleged that Is a petition for mandamus an appropriate remedy
to enforce contractual obligations? (5%)
immediately upon the receipt of the summons, he saw SUGGESTED ANSWER:
the plaintiff and confronted him with his receipt showing No, the petition for mandamus is not an appropriate
payment and that the plaintiff assured him that he remedy because it is not available to enforce a
would instruct his lawyer to withdraw the complaint. contractual obligation. Mandamus is directed only to
Since the good defense of the defendant was already ministerial acts, directing or commanding a person to do a
incorporated in the verified motion, there was not need for legal duty (COMELEC v. Quijano-Padilla, G.R.
a separate affidavit of merit. [Capuz v. Court of Appeals, No. 151992, September 18, 2002; Sec. 3, Rule 65).
233 SCRA 471 (1994); Mago v. Court of Appeals, 303 SCRA
600 (1999)]. Summons
Seven years after the entry of judgment, the plaintiff
Special Civil Action; Quo Warranto (2001)
filed an action for its revival. Can the defendant
A group of businessmen formed an association in
successfully oppose the revival of the judgment
Cebu City calling itself Cars C. to distribute / sell cars in
by contending that it is null and void because the
said city. It did not incorporate itself under the law nor did
RTC- Manila did not acquire jurisdiction over his
it have any government permit or license to conduct its
person? Why? (3%)
business as such. The Solicitor General filed before a SUGGESTED ANSWER:
RTC in Manila a verified petition for quo warranto The RTC-Manila should deny the motion because it is in
questioning and seeking to stop the operations of Cars violation of the rule that no judgment obligor shall be
Co. The latter filed a motion to dismiss the petition on required to appear before a court, for the purpose of
the ground of improper venue examination concerning his property and
income, outside the province or city in which the ground that the court had no jurisdiction over his
such obligor resides. In this case the judgment person as there was no valid service of summons on
obligor resides in Bulacan. (Rule 39, sec.36). him because the sheriffs return or proof of service
does not show that the sheriff first made a
Summons (1999) genuine attempt to serve the summons on
a) What is the effect of absence of summons on the defendant personally before serving it thru his wife.
judgment rendered in the case? (2%) Is the motion to dismiss meritorious? What is
b) When additional defendant is impleaded in the purpose of summons and by whom may it be
the action, is it necessary that summons be served? Explain. (5%)
served upon him? Explain. (2%) SUGGESTED ANSWER:
c) Is summons required to be served upon The motion to dismiss is not meritorious because the
a defendant who was substituted for the defendant actually received the summons on time
deceased? Explain. (2%) from his wife. Service on the wife was sufficient.
d) A sued XX Corporation (XXC), a corporation (Boticano v. Chu, 148 SCRA 541 [1987]). It is the duty of
organized under Philippine laws, for specific the court to look into the sufficiency of the service.
performance when the latter failed to deliver T- shirts The sheriffs negligence in not stating in his return
to the former as stipulated in their contract of sale. that he first made a genuine effort to serve the
Summons was served on the corporation's summons on the defendant, should not prejudice the
cashier and director. Would you consider service plaintiff. (Mapa v. Court of Appeals, 214 SCRA
of summons on either officer 417/1992). The purpose of the summons is to inform the
sufficient? Explain. (2%) defendant of the complaint filed against him and to
SUGGESTED ANSWER: enable the court to acquire jurisdiction over his
a) The effect of the absence of summons on a person. It maybe served by the sheriff or his deputy or
judgment would make the judgment null and void any person authorized by the court.
because the court would not have ALTERNATIVE ANSWER:
jurisdiction over the person of the defendant, but if Yes. The motion to dismiss is meritorious.
the defendant voluntarily appeared before the court, Substituted service cannot be effected unless the
his appearance is equivalent to the service of sheriffs return shows that he made a genuine attempt to
summons. (Sec. 20, Rule 14) effect personal service on the husband.
b) Yes. Summons must be served on an additional Summons; Validity of Service; Effects (2006)
defendant impleaded in the action so that Tina Guerrero filed with filed the Regional Trial
the court can acquire jurisdiction over him, Court of Binan, Laguna, a complaint for sum of
unless he makes a voluntary appearance. money amounting to P1 Million against Carlos Corro. The
complaint alleges, among others, that Carlos borrowed
c) No. A defendant who was substituted for the from Tina the said amount as evidenced by a promissory
deceased need not be served with summons note signed by Carlos and his wife, jointly and
because it is the court which orders him as the severally. Carlos was served with summons which
legal representative of the deceased to appear and was received by Linda, his secretary. However, Carlos
failed to file an answer to the complaint within the
substitute the deceased. (Sec. 16 of Rule 3.)
15-day reglementary period. Hence, Tina filed with the
d) Summons on a domestic corporation through its court a motion to declare Carlos in default and to allow
cashier and director are not valid under the her to present evidence ex parte. Five days thereafter,
present rules. (Sec. 11, Rule 14) They have been Carlos filed his verified answer to the complaint,
removed from those who can be served with denying under oath the genuineness and due execution
summons for a domestic corporation. Cashier of the promissory note and contending that he has
was substituted by treasurer. (Id.) fully paid his loan with interest at 12% per annum.
Summons; Substituted Service (2004) 1. Was the summons validly served on Carlos?
Summons was issued by the MM RTC and actually (2.5%)
ALTERNATIVE ANSWER:
received on time by defendant from his wife at their
The summons was not validly served on Carlos be-
residence. The sheriff earlier that day had delivered
cause it was served on his secretary and the
the summons to her at said residence because
requirements for substituted service have not been
defendant was not home at the time. The sheriffs
followed, such as a showing that efforts have been
return or proof of service filed with the court in sum states
exerted to serve the same on Carlos and such attempt has
that the summons, with attached copy of the
failed despite due diligence (Manotoc v. CA, G.R.
complaint, was served on defendant at his residence thru
No. 130974, August 16, 2006; AngPing v. CA, G.R. No.
his wife, a person of suitable age and discretion then 126947, July 15, 1999).
residing therein. Defendant moved to dismiss on ALTERNATIVE ANSWER:
Service of Summons on Carlos was validly served 2. The motion to dismiss on the ground of lack of
upon him if the Return will show that it was done jurisdiction over the subject matter should be denied.
through Substituted Service because the defendant can The counterclaim for attorney's fees and expenses of
not be served personally within a reasonable time despite litigation is a compulsory counterclaim because it
diligent efforts made to serve the summons personally. necessarily arose out of and is connected with
Linda, the secretary of defendant Carlos, must likewise the complaint. In an original action before the RTC,
be shown to be a competent person in charge of the counterclaim may be considered
defendant's office where summons was served (Sec. 7, compulsory regardless of the amount. (Sec. 7 of Rule 6)
Rule 14).
Venue; Personal Actions (1997)
2. If you were the judge, will you grant Tina's X, a resident of Angeles City, borrowed P300,000.00 from
motion to declare Carlos in default? (2.5%) A, a resident of Pasay City. In the loan
ALTERNATIVE ANSWER: agreement, the parties stipulated that "the parties agree
If I were the judge, I will not grant Tina's motion to to sue and be sued in the City of Manila."
declare Carlos in default because summons was a) In case of non-payment of the loan, can A
not properly served and anyway, a verified answer to file his complaint to collect the loan from X
the complaint had already been filed. Moreover, in Angeles City?
it is better to decide a case on the merits rather than b) Suppose the parties did not stipulate in the loan
on technicality. agreement as to the venue, where can A file his
ALTERNATIVE ANSWER:
complaint against X?
Yes. If it was shown that summons was validly c) Suppose the parties stipulated in their loan
served, and that the motion to declare Carlos in agreement that "venue for all suits arising from
default was duly furnished on Carlos, and this contract shall be the courts in Quezon City,"
after conducting a hearing on the same motion.
can A file his complaint against X in Pasay City?
SUGGESTED ANSWER:
Venue; Improper Venue; Compulsory Counterclaim (a) Yes, because the stipulation in the loan agreement
(1998) that "the parties agree to sue and be sued in the City of
A, a resident of Lingayen, Pangasinan sued X, a Manila" does not make Manila the "exclusive venue
resident of San Fernando La Union in the RTC thereof." (Sec, 4 of Rule 4, as amended by Circular No. 13- 95: Sec. 4
(RTC) of Quezon City for the collection of a debt of of new Rule 4) Hence, A can file his complaint in
P1 million. Angeles City where he resides, (Sec, 2 of Rule 4).
X did not file a motion to dismiss for improper venue
but filed his answer raising therein improper venue as (b) If the parties did not stipulate on the venue,
an affirmative defense. He also filed a A can file his complaint either in Angeles City where
counterclaim for P80,000 against A for attorney's
he resides or in Pasay City where X resides, (Id).
fees and expenses for litigation. X moved for a
preliminary hearing on said affirmative defense. (c) Yes, because the wording of the stipulation does
For his part, A filed a motion to dismiss not make Quezon City the exclusive venue.
the counterclaim for lack of jurisdiction. (Philbanking v. Tensuan. 230 SCRA 413; Unimasters
1. Rule on the affirmative defense of improper Conglomeration, Inc. v. CA. CR-119657, Feb. 7, 1997)
venue. [3%] ALTERNATIVE ANSWER:
2. Rule on the motion to dismiss the counterclaim on (c) No. If the parties stipulated that the venue "shall be in
the ground of lack of jurisdiction over the the courts in Quezon City", A cannot file his
subject matter. [2%] complaint in Pasay City because the use of the word
SUGGESTED ANSWER: "shall" makes Quezon City the exclusive venue
1. There is improper venue. The case for a sum of thereof. (Hoechst Philippines vs. Torres, 83 SCRA 297).
money, which was filed in Quezon City, is a personal
action. It must be filed in the residence of either the
plaintiff, which is in Pangasinan, or of the defendant,
CRIMINAL PROCEDURE
which is in San Fernando, La Union. (Sec. 2 of Rule 4)
The fact that it was not raised in a motion to dismiss does Acquittal; Effect (2002)
not matter because the rule that if improper venue is Delia sued Victor for personal injuries which she
not raised in a motion to dismiss it is deemed waived allegedly sustained when she was struck by a car
was removed from the 1997 Rules of Civil Procedure. driven by Victor. May the court receive in evidence, over
The new Rules provide that if no motion to dismiss proper and timely objection by Delia, a certified true copy
has been filed, any of the grounds for dismissal may be of a judgment of acquittal in a criminal prosecution
pleaded as an affirmative defense in the answer. (Sec. 6 charging Victor with hit-and-run driving in connection
of Rule 16.) with Delia’s injuries? Why? (3%)
SUGGESTED ANSWER:

If the judgment of acquittal in the criminal case finds he filed his demurrer to evidence without leave
that the act or omission from which the civil liability of court. (Sec. 23 of Rule 119).
may arise does not exist, the court may receive it in
evidence over the objection by Delia. [Rule 111, sec. Actions; Commencement of an Action; Double
2, last paragraph]. Jeopardy (2004)
ALTERNATIVE ANSWER: SPO1 CNC filed with the MTC in Quezon City
If the judgment of acquittal is based on (MeTC-QC) a sworn written statement duly
reasonable doubt, the court may receive it in subscribed by him, charging RGR (an actual resident of
evidence because in such case, the civil action for Cebu City) with the offense of slight physical injuries
damages which may be instituted requires only a allegedly inflicted on SPS (an actual resident of
preponderance of the evidence. (Art. 29, Civil Code). Quezon City). The Judge of the branch to which the
case was raffled thereupon issued an order
Actions; BP22; Civil Action deemed included (2001) declaring that the case shall be governed by the Rule on
Saturnino filed a criminal action against Alex for the Summary Procedure in criminal cases. Soon
latter’s bouncing check. On the date of the thereafter, the Judge ordered the dismissal of the case for
hearing after the arraignment, Saturnino the reason that it was not commenced by
manifested to the court that he is reserving his information, as required by said Rule.
right to file a separate civil action. The court
allowed Saturnino to file a civil action separately and Sometime later, based on the same facts giving rise to
proceeded to hear the criminal case. Alex filed the slight physical injuries case, the City
a motion for reconsideration contending that Prosecutor filed with the same MeTC-QC an
the civil action is deemed included in the criminal information for attempted homicide against the
case. The court reconsidered its order and ruled same RGR. In due time, before arraignment,
that Saturnino could not file a separate action. RGR moved to quash the information on the
Is the court’s order granting the motion for ground of double jeopardy and after due hearing,
reconsideration correct? Why? (5%) the Judge granted his motion. Was the dismissal of
SUGGESTED ANSWER:
the complaint for slight physical injuries proper?
Yes, the court’s order granting the motion
Was the grant of the motion to quash the attempted
for reconsideration is correct. The Rules provide that
homicide information correct? Reason (5%)
the criminal action for violation of B.P. Blg. 22 shall SUGGESTED ANSWER:
be deemed to include the corresponding civil action, Yes, the dismissal of the complaint for slight physical
and that no reservation to file such civil action injuries is proper because in Metropolitan Manila and
separately shall be allowed. [Sec. 1(b), Rule 111, Revised in chartered cities, the case has to be
Rules of Criminal Procedure]
commenced only by information. (Sec. 11, Revised
Rule on Summary Procedure).
Actions; BP22; Demurrer to Evidence (2003)
No, the grant of the motion to quash the attempted
In an action for violation of Batas Pambansa Big. 22, the
homicide information on the ground of
court granted the accused’s demurrer to evidence which
double jeopardy was not correct, because there was
he filed without leave of court. Although he was
no valid prosecution for slight physical injuries.
acquitted of the crime charged, he, however, was required
by the court to pay the private complainant the face value Actions; Discretionary Power of Fiscal (1999)
of the check. The accused filed a Motion of
A filed with the Office of the Fiscal a Complaint for
Reconsideration regarding the order to pay the face value
estafa against B. After the preliminary investigation,
of the check on the following grounds:
the Fiscal dismissed the Complaint for lack of merit.
a) the demurrer to evidence applied only too May the Fiscal be compelled by mandamus to file the
the criminal aspect of the case; and case in court? Explain. (2%)
b) at the very least, he was entitled to adduce SUGGESTED ANSWER:
controverting evidence on the civil liability. No. The public prosecutor may not be compelled
Resolve the Motion for Reconsideration. (6%) by mandamus to file the case in court because
SUGGESTED ANSWER: the determination of probable cause is within
(a) The Motion for Reconsideration should be
the discretion of the prosecutor. The remedy is an
denied. The ground that the demurrer to evidence appeal to the Secretary of Justice. (Sec. 4 Rule 112.)
applied only to the criminal aspect of the case was
not correct because the criminal action for violation of Actions; Injunction (1999)
Batas Pambansa Blg. 22 included the Will injunction lie to restrain the commencement of a
corresponding civil action. (Sec. 1(b) of Rule 111). criminal action? Explain. (2%)
SUGGESTED ANSWER:
(b) The accused was not entitled to adduce As a general rule, injunction will not lie to restrain a
controverting evidence on the civil liability, because criminal prosecution except:
Remedial Law Bar Examination Q & A (1997-2006) a) by: sirdondee@gmail.com Page 40 of 66
To afford adequate protection to the without a warrant of arrest and searched his
constitutional rights of the accused; house without a search warrant.
b) When necessary for the orderly administration of a) Can the gun used by B in shooting A, which was
justice or to avoid oppression or multiplicity seized during the search of the house of B,
of actions; be admitted in evidence?
c) When double jeopardy is clearly apparent; b) Is the arrest of B legal?
d) Where the charges are manifestly false c) Under the circumstances, can B be convicted of
and motivated by the lust for vengeance; homicide?
e) Where there is clearly no prima facie case against SUGGESTED ANSWER:
the accused and a motion to quash on that (a) No. The gun seized during the search of the
ground has been denied. house of B without a search warrant is not admissible in
(See cases cited in Roberts, Jr., vs. Court of Appeals, evidence. (Secs. 2 and 3[2], Art. III of Constitution).
254 SCRA 307 [1996] and Brocka v. Enrile, 192 SCRA Moreover, the search was not an incident to a lawful
183 [1990].) arrest of a person under Sec. 12 of Rule 126.
Arrest; Warrantless Arrest; Preliminary (b) No. A warrantless arrest requires that the crime has
Investigation (2004) in fact just been committed and the police
AX swindled RY in the amount of P10,000 sometime in arresting has personal knowledge of facts
mid-2003. On the strength of the sworn statement given that the (Sec. 5, Rule
by RY personally to SPO1 Juan Ramos sometime 113). person to be arrested has committed
in mid-2004, and without securing a warrant, the it.
police officer arrested AX. Forthwith the police officer Here, the crime has not just been committed
filed with the City Prosecutor of Manila a complaint for since a period of two days had already lapsed, and the
estafa supported by RY"s sworn statement and other (Go vs. Court of Appeals. 206 SCRA 138).
documentary evidence. After due inquest, the prosecutor
police arresting has no such personal knowledge
filed the requisite information with the MM RTC. No because he was not present when the incident
preliminary investigation was conducted either before or
happened.
after the filing of the information and the accused at
(c) Yes. The gun is not indispensable in the
no time asked for such an investigation. However,
conviction of A because the court may rely
before arraignment, the accused moved to quash the
on testimonial or other evidence.
information on the ground that the prosecutor suffered
from a want of authority to file the information because Arrest; Warrantless Arrests & Seizures (2003)
of his failure to conduct a preliminary investigation In a buy-bust operation, the police operatives arrested the
before filing the information, as required by the Rules of
accused and seized from him a sachet of shabu and
Court. Is the warrantless arrest of AX valid? Is he entitled
an unlicensed firearm. The accused was charged in two
to a preliminary investigation before the filing of
Informations, one for violation of the “Dangerous
the information? Explain. (5%)
Drug Act”, as amended, and another for illegal possession
SUGGESTED ANSWER:
of firearms.
No. The warrantless arrest is not valid because
The accused filed an action for recovery of the
the alleged offense has not just been committed.
firearm in another court against the police
The crime was allegedly committed one year
officers with an application for the issuance of a
before the arrest. (Sec. 5 (b) of Rule 113).
writ of replevin. He alleged in his Complaint
Yes, he is entitled to a preliminary that he was a military informer who had been
investigation because he was not lawfully issued a written authority to carry said firearm.
arrested without a warrant (See Sec. 7 of Rule 112). The police officers moved to dismiss the
He can move for a reinvestigation. complaint on the ground that the subject firearm
ALTERNATIVE ANSWER: was in custodia legis. The court denied the
He is not entitled to a preliminary investigation motion and instead issued the writ of replevin.
because the penalty for estafa is the sum of P10,000 does (a) Was the seizure of the firearm valid?
not exceed 4 years and 2 months. Under Sec. 1, second (b) Was the denial of the motion to dismiss proper?
par., Rule 112, a preliminary investigation is not 6%
SUGGESTED ANSWER:
required. (Note: The penalty is not stated in the question.)
(a) Yes, the seizure of the firearm was valid because it was
Arrest; Warrantless Arrests & Searches (1997) seized in the course of a valid arrest in a buy-bust
A was killed by B during a quarrel over a hostess in a operation. (Sec. 12 and 13 of Rule 126) A search warrant
nightclub. Two days after the incident, and upon was not necessary. (People v. Salazar, 266 SCRA 607
[1997]).
complaint of the widow of A, the police arrested B
(b) The denial of the motion to dismiss was not
proper. The court had no authority to issue the writ
of replevin whether the firearm was in custodia legis
Remedial Law Bar Examination Q & A (1997-2006) or by: sirdondee@gmail.com Page 41 of 66
not. The motion to recover the firearm should be he could be convicted of the capital offense. (Obosa
filed in the court where the criminal action vs. Court of Appeals, 266 SCRA 281.)
ALTERNATIVE ANSWER:
is pending.
Under Circular No. 2-92, A is entitled to bail because
Arrest; Warrantless Arrests; Objection (2000) he was convicted of homicide and hence the evidence
FG was arrested without a warrant by policemen of guilt of murder is not strong.
while he was walking in a busy street. After SUGGESTED ANSWER:
preliminary investigation, he was charged with 2. B, who did not appeal, can be benefited by the
rape and the corresponding information was filed decision of the Court of Appeals which is favorable
in the RTC. On arraignment, he pleaded not guilty. and applicable to him. (Sec. 11 [a]. Rule 122, Rules of
Trial on the merits ensued. The court rendered Criminal Procedure.)
The benefit will also apply to C even
judgment convicting him. On appeal, FG
if his appeal is dismissed because of his escape.
claims that the judgment is void because he was
illegally arrested. If you were the Solicitor Bail; Application; Venue (2002)
General, counsel for the People of the If an information was filed in the RTC-
Philippines, how would you refute said claim? (5%)
SUGGESTED ANSWER:
Manila charging D with homicide and he was
Any objection to the illegality of the arrest of the arrested in Quezon City, in what court or courts
accused without a warrant is deemed waived when he may he apply for bail? Explain. (3%)
SUGGESTED ANSWER:
pleaded not guilty at the arraignment without raising the
D may apply for bail in the RTC-Manila where
question. T is too late to complain about a
the information was filed or in the RTC-Quezon
warrantless arrest after trial is commenced and
City where he was arrested, or if no judge,
completed and a judgment of conviction rendered
thereof is available, with any metropolitan trial
against the accused. (People v. Cabiles, 284 SCRA 199,
judge, municipal trial judge or municipal circuit trial
[1999])
judge therein. (Rule 114, sec. 17).
Bail (2002)
Bail; Forms of Bail (1999)
D was charged with murder, a capital offense. After
In what forms may bail be given? (2%)
arraignment, he applied for bail. The trial SUGGESTED ANSWER:
court ordered the prosecution to present its evidence Bail may be given by a corporate surety, or through a
in full on the ground that only on the basis property bond, cash deposit or recognizance.
of such presentation could it determine whether the
evidence of D’s guilt was strong for purposes of Bail; Matter of Right (1999)
bail. Is the ruling correct? Why? (3%) When the accused is entitled as a matter of right to
SUGGESTED ANSWER: bail, may the Court refuse to grant him bail on the
No, the prosecution is only required to present ground that there exists a high degree of probability that
as much evidence as is necessary to determine he will abscond or escape? Explain. (2%)
whether the evidence of D’s guilt is strong for SUGGESTED ANSWER:
purposes of bail.(Rule 114, sec. 8). If bail is a matter of right, it cannot be denied on the
ground that there exists a high degree of probability
Bail; Appeal (1998) that the accused will abscond or escape. What
In an information charging them of Murder, the court can do is to increase the amount of
policemen A, B and C were convicted of Homicide. A the bail. One of the guidelines that the judge may
appealed from the decision but B and C did not. B started use in fixing a reasonable amount of bail is the
serving his sentence but C escaped and is at large. In probability of the accused appearing in trial.
the Court of Appeals, A applied for bail but was denied.
Finally, the Court of Appeals rendered a decision Bail; Matter of Right vs. Matter of Discretion (1999)
acquitting A on the ground that the evidence pointed to When is bail a matter of right and when is it a matter
the NPA as the killers of the victim. of discretion? (2%)
1. Was the Court of Appeal's denial of SUGGESTED ANSWER:
A's application for bail proper? [2%] When Bail is a matter of right:
2. Can B and C be benefited by the decision of the All persons in custody shall (a) before or after
Court of Appeals? [3%] conviction by the metropolitan and municipal trial
SUGGESTED ANSWER: courts, and (b) before conviction by the RTC of an
1, Yes, the Court of Appeals properly denied A's offense not punishable by death, reclusion perpetua or
application for bail. The court had the discretion to life imprisonment, be admitted to bail as a matter of right,
do so. Although A was convicted of homicide only, since with sufficient sureties, or be released on recognizance
he was charged with a capital offense, on appeal as prescribed by law or Rule 114. (Sec. 4, Rule 114, Rules of
Court, as amended by Circular No. 12-94.)

When bail is a matter of discretion: SUGGESTED ANSWER:
Upon conviction by the RTC of an offense not In criminal procedure, a complaint is a sworn written
punishable by death, reclusion perpetua or life statement charging a person with an offense,
imprisonment, on application of the accused. If subscribed by the offended party, any peace officer or
the penalty of imprisonment exceeds six years other peace officer charged with the enforcement of
but not more than 20 years, bail shall be denied the law violated. (Sec. 3, Rule 110, 1985 Rules of Criminal
upon a showing by the prosecution, with Procedure); while an information is an accusation in
notice to the accused, of the following or writing charging a person with an offense subscribed
other similar circumstances: by the prosecutor and filed with the court. (Sec. 4, Id.)
1. That the accused is a recidivist, quasi-re-
cidivist or habitual delinquent, or has Demurrer to Evidence; Contract of Carriage (2004)
committed the crime aggravated by the AX, a Makati-bound paying passenger of PBU, a
circumstance of reiteration; public utility bus, died instantly on board the bus on
2. That the accused is found to have previously account of the fatal head wounds he sustained as a
escaped from legal confinement, result of the strong impact of the collision between
evaded sentence, or has violated the the bus and a dump truck that happened while the
conditions of his bail without valid justification; bus was still travelling on EDSA towards Makati. The
3. That the accused committed the offense while on foregoing facts, among others, were duly established on
probation, parole, or under conditional pardon; evidence-in-chief by the plaintiff TY, sole heir of AX, in
4. That the circumstances of the accused or his case TY’s action against the subject common carrier for
indicate the probability of flight if released breach of contract of carriage. After TY had rested
on bail; or his case, the common carrier filed a demurrer to
5. That there is undue risk that during the pendency evidence, contending that plaintiff’s evidence is
insufficient because it did not show (1) that
of the appeal, the accused may commit
defendant was negligent and (2) that such
another crime. (Sec. 1, Id.)
negligence was the proximate cause of the collision.
Bail; Matter of Right vs. Matter of Discretion (2006) Should the court grant or deny defendant's demurrer to
When is bail a matter of right and when is it a matter evidence? Reason briefly. (5%)
SUGGESTED ANSWER:
of discretion? (5%)
SUGGESTED ANSWER:
No. The court should not grant defendant's demurrer to
Bail is a matter of right (a) before or after conviction evidence because the case is for breach of contract of
by the inferior courts; (b) before conviction by carriage. Proof that the defendant was negligent and
the RTC of an offense not punishable by death, that such negligence was the proximate cause of the
reclusion perpetua or life imprisonment., when the collision is not required. (Articles 1170 and 2201,
evidence of guilt is not strong (Sec. 4, Rule 114, Civil Code; (Mendoza v. Phil. Airlines, Inc., 90 Phil. 836
2000 Rules of Criminal Procedure). [1952]; Batangas Transportation Co. v. Caguimbal, 22
SCRA171 U 968]; Abeto v. PAL, 115 SCRA 489
[1982]; Aboitiz v. Court of Appeals, 129 SCRA 95 [1984]).
Bail is discretionary: Upon conviction by the RTC of
an offense not punishable by death, reclusion Demurrer to Evidence; w/o Leave of Court (1998)
perpetua or life imprisonment (Sec. 5, Rule 114, 2000 Rules Facing a charge of Murder, X filed a petition for bail.
of Criminal Procedure).
The petition was opposed by the prosecution but
Bail; Witness Posting Bail (1999) after hearing the court granted bail to X. On the first
scheduled hearing on the merits, the prosecution
May the Court require a witness to post bail? Explain
manifested that it was not adducing additional
your answer. (2%)
SUGGESTED ANSWER: evidence and that it was resting its case. X filed
Yes. The court may require a witness to post bail if he a demurrer to evidence without leave of court
is a material witness and bail is needed to secure his but it was denied by the court.
appearance. The rules provide that when the court is 1. Did the court have the discretion to deny
satisfied, upon proof or oath, that a material witness the demurrer to evidence under the
will not testify when required, it may, upon motion of circumstances mentioned above? (2%)
either party, order the witness to post bail in 2. If the answer to the preceding question is in the
such sum as may be deemed proper. Upon refusal to affirmative, can X adduce evidence in his defense
post bail, the court shall commit him to prison after the denial of his demurrer to evidence? [1%]
until he complies or is legally discharged after his 3. Without further proceeding and on the sole basis
testimony is taken. (Sec. 6, Rule 119) of the evidence of the prosecution, can the
court legally convict X for Murder? (2%)
Complaint vs. Information (1999) SUGGESTED ANSWER:
1. Yes. The Court had the discretion to deny the
Distinguish a Complaint from Information. (2%)
demurrer to the evidence, because although the
evidence presented by the prosecution at the hearing The trial court denied the demurrer to evidence and
for bail was not strong, without any evidence for the deemed the accused as having waived his right to
defense, it could be sufficient for conviction. present evidence and submitted the case for judgment
on the basis of the prosecution evidence. In due time, the
2. No. Because he filed the demurrer to the court rendered judgment finding the accused guilty of
evidence without leave. (Sec. 15, Rule 119, Rules of Criminal the offense charged beyond reasonable doubt and
Procedure.) However, the accordingly imposing on him the penalty prescribed
trial court should inquire as to why the accused filed the therefor. Is the judgment of the trial court valid and
demurrer without leave and whether his lawyer knew proper? Reason. (5%)
that the effect of filing it without leave is to waive SUGGESTED ANSWER:
the presentation of the (People vs. Fores, 269 SCRA Yes. The judgment of the trial court is valid. The
evidence for the accused. accused did not ask for leave to file the demurrer to
62.) evidence. He is deemed to have waived his right to
present evidence. (Sec. 23 of Rule 119; People v. Flores,
3. Yes. Without any evidence from the accused, the 269 SCRA 62 [1997]; Bernardo v. Court of Appeals, 278
prima facie evidence of the prosecution has been SCRA 782 [1997]. However, the judgment is not proper
converted to proof beyond reasonable doubt. or is erroneous because there was no showing from the
ALTERNATIVE ANSWER: proper office like the Firearms Explosive Unit of the
If the evidence of guilt is not strong and Philippine National Police that the accused has a permit
beyond reasonable doubt then the court to own or possess the firearm, which is fatal to the
cannot legally convict X for murder. conviction of the accused. (Mallari v. Court of
Appeals &People,265 SCRA 456[1996]).
Demurrer to Evidence; w/o Leave of Court (2001)
Carlos, the accused in a theft case, filed a demurrer to Dismissal; Failure to Prosecute (2003)
evidence without leave of court. The court denied the When a criminal case is dismissed on nolle prosequi,
demurrer to evidence and Carlos moved to can it later be refilled? (4%)
present his evidence. The court denied Carlos’ SUGGESTED ANSWER:
As a general rule, when a criminal case is dismissed
motion to present evidence and instead judgment
on nolle prosequi before the accused is placed on trial and
on the basis of the evidence for the prosecution.
before he is called on to plead, this is not equivalent
Was the court correct in preventing Carlos from
to an acquittal and does not bar a subsequent
presenting his evidence and rendering judgment
prosecution for the same offense. (Galvez v. Court of
on the basis of the evidence for the prosecution?
Appeals, 237 SCRA 685 [1994]).
Why? (5%)
SUGGESTED ANSWER:
Yes, because the demurrer to the evidence was filed Dismissal; Provisional Dismissal (2003)
without leave of court. The Rules provide that when the Before the arraignment for the crime of murder, the
demurrer to evidence is filed without leave of court, private complainant executed an Affidavit of
the accused waives the right to present evidence Desistance stating that she was not sure if the accused was
and submits the case for judgment on the basis of the the man who killed her husband. The public
evidence for the prosecution. (Sec. 23 of Rule 119, Revised Rules prosecutor filed a Motion to Quash the Information on
of Criminal Procedure) the ground that with private complainant’s
desistance, he did not have evidence sufficient to
Demurrer to Evidence; w/o Leave of Court (2004) convict the accused. On 02 January 2001, the court
The information for illegal possession of firearm filed without further proceedings granted the motion and
against the accused specifically alleged that he had no provisionally dismissed the case. The accused gave his
license or permit to possess the caliber .45 pistol express consent to the provisional dismissal of the
mentioned therein. In its evidence-in-chief, the case. The offended party was notified of the dismissal but
prosecution established the fact that the subject she refused to give her consent.
firearm was lawfully seized by the police from the
possession of the accused, that is, while the pistol was Subsequently, the private complainant urged
tucked at his waist in plain view, without the accused being the public prosecutor to refile the murder charge
able to present any license or permit to possess the because the accused failed to pay the consideration
firearm. The prosecution on such evidence rested its case which he had promised for the execution of the
and within a period of five days therefrom, the Affidavit of Desistance. The public prosecutor
accused filed a demurrer to evidence, in sum obliged and refiled the murder charge against the
contending that the prosecution evidence has not accused on 01 February 2003, the accused filed
established the guilt of the accused beyond a Motion to Quash the Information on the
reasonable doubt and so prayed that he be acquitted of the ground that the provisional dismissal of the case
offense charged. had already become permanent. (6%)
a) Was the provisional dismissal of the case proper? was aware that the victim had died two days earlier on
b) Resolve the Motion to Quash. account of his stab wounds. Because of his guilty
SUGGESTED ANSWER: plea, Noel was convicted of frustrated homicide and
(a) The provisional dismissal of the case was meted the corresponding penalty. When the
proper because the accused gave his express consent prosecution learned of the victim's death, it filed
thereto and the offended party was notified. It within fifteen (15) days therefrom a motion to amend the
was not necessary for the offended party to give information to upgrade the charge from
her consent thereto. (Sec. 8 of Rule 117). frustrated homicide to consummated homicide. Noel
opposed the motion claiming that the admission of
(b) The motion to quash the information should be the amended information would place him in double
denied because, while the provisional dismissal had jeopardy. Resolve the motion with reasons. (4%)
already become permanent, the prescriptive period SUGGESTED ANSWER:
for filing the murder charge had not prescribed. The amended information to consummated homicide
There was no double jeopardy because the first case from frustrated homicide does not place the accused in
was dismissed before the accused had pleaded to the double jeopardy. As provided in the second
charge. (Sec. 7 of Rule 117). paragraph of Sec. 7, Rule 117,2000 Rules of Criminal Procedure , the
conviction of the accused shall not be a bar to
Double Jeopardy (2002) another prosecution for an offense which necessarily
D was charged with slight physical injuries in the includes the offense charged in the former complaint or
MTC. He pleaded not guilty and went to trial. After the information when: (a) the graver offense
prosecution had presented its evidence, the trial court developed due to supervening facts arising from the same
set the continuation of the hearing on another date. On act or omission constituting the former charge; or (b) the
the date scheduled for hearing, the prosecutor failed facts constituting the graver charge became known or
to appear, whereupon the court, on motion of D, were discovered only after a plea was entered in the
dismissed the case. A few minutes later, the prosecutor former complaint or information. Here, when the plea
arrived and opposed the dismissal of the case. The to frustrated homicide was made, neither the court nor the
court reconsidered its order and directed D to prosecution was aware that the victim had died two days
present his evidence. Before the next date of trial earlier on account of his stab wounds.
came, however, D moved that the last order be set
aside on the ground that the reinstatement of
the case had placed him twice in jeopardy. Acceding Extradition (2004)
to this motion, the court again dismissed the case. RP and State XX have a subsisting Extradition
The prosecutor then filed an information in the RTC, Treaty. Pursuant thereto RP's Secretary of Justice
charging D with direct assault based on the same (SOJ) filed a Petition for Extradition before the MM RTC
facts alleged in the information for slight physical alleging that Juan Kwan is the subject of an arrest
injuries but with the added allegation that D inflicted warrant duly issued by the proper criminal court of
the injuries out of resentment for what the complainant State XX in connection with a criminal case for tax
had done in the performance of his duties as chairman evasion and fraud before his return to RP as a balikbayan.
of the board of election inspectors. D moved to quash Petitioner prays that Juan be extradited and delivered
the second information on the ground that its filing to the proper authorities of State XX for trial, and
had placed him in double jeopardy. How should D’s that to prevent Juan's flight in the interim, a warrant
motion to quash be resolved? (4%) for his immediate arrest be issued. Before the RTC
could act on the petition for extradition, Juan filed
SUGGESTED ANSWER: before it an urgent motion, in sum praying (1) that SoJ's
D’s motion to quash should be granted on the application for an arrest warrant be set for hearing
ground of double jeopardy because the first offense and (2) that Juan be allowed to post bail in the event the
charged is necessarily included in the second offense court would issue an arrest warrant. Should the court
charged. [Draculan v. Donato, 140 SCRA 425 (1985)]. grant or deny Juan's prayers? Reason. (5%)
ALTERNATIVE ANSWER:
D’s motion to quash should be denied because SUGGESTED ANSWER:
the two dismissals of the case against him were Under the Extradition Treaty and Law, the
on his motion (hence with his express consent) and application of the Secretary of Justice for a warrant of
his right to a speedy trial was not violated. arrest need not be set for hearing, and Juan cannot be
allowed to post bail if the court would issue a warrant of
Double Jeopardy; Upgrading; Original Charges (2005) arrest. The provisions in the Rules of Court on arrest
For the multiple stab wounds sustained by the victim, and bail are not basically applicable.
Noel was charged with frustrated homicide in the (Government of the United States of America v.
RTC. Upon arraignment, he entered a plea of guilty Puruganan, 389 SCRA 623 [2002])
to said crime. Neither the court nor the prosecution
Information (2001) B. Yes, the prosecution can re-file the
The prosecution filed an information against Jose for information for murder in substitution of the
slight physical injuries alleging the acts information for homicide because no double jeopardy has
constituting the offense but without anymore as yet attached. [Galvez v. Court of Appeals, 237
alleging that it was committed after Jose’s SCRA 685 (1994)].
unlawful entry in the complainant’s abode.
Was the information correctly prepared by Information; Amendment; Supervening Events (1997)
the prosecution? Why? (5%) A was accused of homicide for the killing of B.
SUGGESTED ANSWER: During the trial, the public prosecutor received a
No. The aggravating circumstance of unlawful copy of the marriage certificate of A and B.
entry in the complainant’s abode has to be specified (a) Can the public prosecutor move for
in the information; otherwise, it cannot be the amendment of the information to charge A with
considered as aggravating. (Sec. 8 of Rule 110, the crime of parricide?
Revised Rules of Criminal Procedure) (b) Suppose instead of moving for the amendment
ALTERNATIVE ANSWER:
of the information, the public prosecutor
The information prepared by the prosecutor is in evidence the marriage certificate
presented
not correct because the accused should have without objection on the part of the defense,
been charged with qualified trespass to dwelling. could Abe convicted of parricide?
SUGGESTED ANSWER:
Information; Amendment (2001) (a) No. The Information cannot be amended to
Amando was charged with frustrated homicide. change the offense charged from homicide to
Before he entered his plea and upon the advice of his parricide. Firstly, the marriage is not a
counsel, he manifested his willingness to supervening fact arising from the act constituting
admit having committed the offense of serious the charge of homicide. (Sec. 7[a] of Rule 117).
physical injuries. The prosecution then filed an Secondly, after plea, amendments may be done only
amended information for serious physical as to matters of form. The amendment is substantial
injuries against Amando. because it will change the nature of the offense. (Sec.
What steps or action should the prosecution take so 14 of Rule 110; Dionaldo us. Dacuycuy. 108 SCRA 736).
that the amended information against Amando which
downgrades the nature of the offense could be validly (b) No. A can be convicted only of homicide not of
made? Why? (5%) parricide which is a graver offense. The accused has
SUGGESTED ANSWER: the constitutional rights of due process and to
In order that the amended information which be informed of the nature and the cause of
downgrades the nature of the offense could be validly the accusation against him. (Secs. 1, 14 (1) and (2} Art. III.
made, the prosecution should file a motion to ask for 1987 Constitution),
leave of court with notice to the offended party.
(Sec.14 of Rule 110, Revised Rules of Criminal Procedure). The new Information; Bail (2003)
rule is for the protection of the interest of the After the requisite proceedings, the Provincial
offended party and to prevent possible abuse by the Prosecutor filed an Information for homicide against X.
prosecution. The latter, however, timely filed a Petition for Review
of the Resolution of the Provincial Prosecutor
Information; Amendment; Double Jeopardy; Bail (2002) with the Secretary of Justice who, in due time, issued a
A. D and E were charged with homicide in one Resolution reversing the resolution of the Provincial
information. Before they could be arraigned, the Prosecutor and directing him to withdraw the
prosecution moved to amend the information to Information.
exclude E therefrom. Can the court grant
the motion to amend? Why? (2%) Before the Provincial Prosecutor could comply
B. On the facts above stated, suppose the with the directive of the Secretary of Justice, the
prosecution, instead of filing a motion to amend, court issued a warrant of arrest against X.
moved to withdraw the information altogether and
its motion was granted. Can the prosecution re-file The Public Prosecutor filed a Motion to Quash the
the information although this time for Warrant of Arrest and to Withdraw the Information,
murder? Explain (3%) attaching to it the Resolution of the Secretary of
SUGGESTED ANSWER: Justice. The court denied the motion. (6%)
A. Yes, provided notice is given to the offended a) Was there a legal basis for the court to deny the
party and the court states its reasons for granting the motion?
same. (Rule 110, sec. 14). b) If you were the counsel for the accused, what
remedies, if any, would you pursue?
SUGGESTED ANSWER:

Remedial Law Bar Examination Q & A (1997-2006) a. RTC has no jurisdiction over the second offense of
Yes, there is a legal basis for the court to deny the
motion to quash the warrant of arrest and to
withdraw the information. The court is not bound by
the Resolution of the Secretary of Justice. (Crespo v.
Mogul, 151 SCRA 462 [1987]).
b. If I were the counsel for the accused, I

would surrender the accused and apply for bail
because the offense is merely homicide, a non-capital
offense. At the pre-trial, I would make a stipulation
of facts with the prosecution which would show
that no offense was committed.
Information; Motion to Quash (2000)

BC is charged with illegal possession of firearms
under an Information signed by a Provincial
Prosecutor. After arraignment but before pre-trial, BC
found out that the Provincial Prosecutor had no authority
to sign and file the information as it was the City
Prosecutor who has such authority. During the pre-
trial, BC moves that the case against him be
dismissed on the ground that the Information is
defective because the officer signing it lacked the
authority to do so. The Provincial Prosecutor
opposes the motion on the ground of estoppel as BC did
not move to quash the Information before
arraignment. If you are counsel for BC, what is your
argument to refute the opposition of the Provincial
Prosecutor? (5%)
SUGGESTED ANSWER:
I would argue that since the Provincial Prosecutor had
no authority to file the information, the court did not
acquire jurisdiction over the person of the accused
and over the subject matter of the offense
(Cudia v. Court of Appeals, 284 SCRA 173
charged.
(Sec. 3,
(Sec. 8, Rule 117, Rules of Court).
[1999]). Hence, this ground is not waived if not raised in

a motion to quash and could be raised at the pre-
trial.
Information; Motion to Quash (2005)
Rodolfo is charged with possession of unlicensed
firearms in an Information filed in the RTC. It
was alleged therein that Rodolfo was in possession of
two unlicensed firearms: a .45 caliber and-a .32
caliber. Under Republic Act No. 8294, possession
of an unlicensed .45 caliber gun is punishable by
prision mayor in its minimum period and a
fine of P30.000.00, while possession of an
unlicensed .32 caliber gun is punishable by prision
correctional in its maximum period and a fine
of not less than P15,000.00.
As counsel of the accused, you intend to file a motion
to quash the Information. What ground or
grounds should you invoke? Explain. (4%)
SUGGESTED ANSWER:
The ground for the motion to quash is that more
than one offense is charged in the information. (Sec.
3[f], Rule 117, 2000 Rules of Criminal Procedure) Likewise, the
by: sirdondee@gmail.com Page 46 of 66 punishment for various offenses;
possession of an unlicensed .32 caliber gun, f) That the criminal action or liability has been
punishable by prision correctional in its maximum extinguished;
period and a fine of not less than P15.000.00. It is the g) That it contains averments which, if
MTC that has exclusive and original jurisdiction true, would constitute a legal
over all offenses punishable by excuse or justification; and
imprisonment not exceeding six years. (Sec. 2, h) That the accused has been previously
R.A. No. 7691, amending B.P. Blg. 129) convicted or in jeopardy of being convicted,
or acquitted of the offense charged.
Information; Motion to Quash; Grounds (1998) Rule 117. Rules of Criminal Procedure.)
1. Give two (2) grounds to quash SUGGESTED ANSWER:
an Information.[2%] 2. No. The certification which is provided in Sec. 4,
2. If the Information is not accompanied by a
Rule 112. Rules of Criminal Procedure, is not an
certification that a preliminary investigation
indispensable part of the information. (People vs.
has Lapura, 255 SCRA 85.)
been conducted. Is the Information void?
[3%] Judgment; Promulgation of Judgment (1997)
SUGGESTED ANSWER:
X, the accused in a homicide case before the
1. Two grounds to quash an Information are: RTC. Dagupan Cay, was personally notified
a) That the facts charged do not of the promulgation of judgment in his case set
constitute an offense; and for 10 December 1996. On said date. X was not
b) That the court trying the case present as he had to attend to the trial of another
has no jurisdiction over the offense criminal case against him in Tarlac, Tarlac. The
charged or the person of the accused. trial court denied the motion of the counsel of
c) That the officer who filed the X to postpone the promulgation.
information had no authority to do so; (a) How shall the court promulgate the judgment in
d) That it does not conform substantially the absence of the accused?
to the prescribed form; (b) Can the trial court also order the arrest of X?
e) That more than one offense is SUGGESTED ANSWER:
charged except in those cases in which (a) In the absence of the accused, the promulgation
existing laws prescribe a single shall be made by recording the Judgment in the
criminal docket and a copy thereof served upon the Parties; Prosecution of Offenses (2000)
accused or counsel. (Sec. 6. third par., Rule 120) Your friend YY, an orphan, 16 years old, seeks your
legal advice. She tells you that ZZ, her
(b) No, the trial court cannot order the arrest of X if the uncle, subjected her to acts of lasciviousness; that
judgment is one of acquittal and, in any event, his failure to when she told her grandparents, they told her to just
appear was with justifiable cause since he had to attend keep quiet and not to file charges against ZZ, their
to another criminal case against him. son. Feeling very much aggrieved, she asks you how
her uncle ZZ can be made to answer for his crime.
Jurisdiction; Complex Crimes (2003) a) What would your advice be? Explain. (3%)
In complex crimes, how is the jurisdiction of a court b) Suppose the crime committed against YY
determined? 4% by her uncle ZZ is rape, witnessed by
SUGGESTED ANSWER: your mutual friend XX. But this time, YY
In a complex crime, jurisdiction over the whole was prevailed upon by her grandparents
complex crime must be lodged with the trial court not to file charges. XX asks you if she can
having jurisdiction to impose the maximum and most initiate the complaint against ZZ.
serious penalty imposable on an offense forming part of the
Would your answer be the same? Explain. (2%).
complex crime. (Cuyos v. Garcia, 160 SCRA 302 SUGGESTED ANSWER:
[1988]). (a) I would advise the minor, an orphan of 16 years
of age, to file the complaint herself independently of
Jurisdiction; Finality of a Judgment (2005) her grandparents, because she is not
Mariano was convicted by the RTC for raping incompetent or incapable to doing so upon
Victoria and meted the penalty of reclusion perpetua. grounds other than her minority. (Sec. 5, Rule 110,
While serving sentence at the National Rules of Criminal Procedure.)
Penitentiary, Mariano and Victoria were married.
Mariano filed a motion in said court for his (b) Since rape is now classified as a Crime
release from the penitentiary on his claim that Against Persons under the Anti-Rape Law of 1997
under Republic Act No. 8353, his marriage to (RA 8353), I would advise XX to initiate the
Victoria extinguished the criminal action against
him for rape, as well as the penalty imposed on complaint against ZZ.
him. However, the court denied the motion on the Plea of Guilty; to a Lesser Offense (2002)
ground that it had lost jurisdiction over the case after D was charged with theft of an article worth
its decision had become final and executory. (7%) p15,000.00. Upon being arraigned, he pleaded not
a) Is the filing of the court correct? Explain. guilty to the offense charged. Thereafter, before trial
SUGGESTED ANSWER:
commenced, he asked the court to allow him to
No. The court can never lose jurisdiction so long as its
change his plea of not guilty to a plea of guilt but only to
decision has not yet been fully implemented and
estafa involving P5,000.00. Can the court allow D to
satisfied. Finality of a judgment cannot operate to
divest a court of its jurisdiction. The court retains an change his plea? Why? (2%)
SUGGESTED ANSWER:
interest in seeing the proper execution and
No, because a plea of guilty to a lesser offense may be
implementation of its judgments, and to that extent, may
issue such orders necessary and appropriate for these
allowed if the lesser offense is necessarily included in
purposes. (Echegaray v. Secretary of Justice, G.R. the offense charged. (Rule 116, sec. 2). Estafa involving
No. 13205, January 19, 1999)
P5,000.00 is not necessarily included in theft of
an article worth P15,000.00
b) What remedy/remedies should the counsel of Prejudicial Question (1999)
Mariano take to secure his proper and most
expeditious release from the National Penitentiary? What is a prejudicial question? (2%)
SUGGESTED ANSWER:
Explain.
SUGGESTED ANSWER:
A prejudicial question is an issue involved in a
To secure the proper and most expeditious release of civil action which is similar or intimately related
Mariano from the National Penitentiary, his counsel to the issue raised in the criminal action, the
should file: (a) a petition for habeas corpus for the resolution of which determines whether or not the
illegal confinement of Mariano (Rule 102), or (b) a criminal action may proceed. (Sec. 5 of Rule 111.)
motion in the court which convicted him, to nullify ANOTHER ANSWER:
the execution of his sentence or the order of his A prejudicial question is one based on a fact distinct
commitment on the ground that a supervening and separate from the crime but so
development had occurred (Melo v. People, G.R. No. intimately connected with it that it determines the
L-3580, March 22, 1950) despite the finality of the guilt or innocence of the accused.
judgment.
Prejudicial Question (2000)
CX is charged with estafa in court for failure to remit to
MM sums of money collected by him (CX) for MM
in payment for goods purchased from MM, by
depositing the amounts in his (CX’s) personal bank alia, the statement that the "Defense admitted all the
account. CX files a motion to suspend proceedings documentary evidence of the Prosecution," thus
pending resolution of a civil case earlier filed in court by leaving the accused little or no room to defend
CX against MM for accounting and damages himself, and violating his right against
involving the amounts subject of the criminal case. self- incrimination. Should the court grant or
As the prosecutor in the criminal case, briefly discuss deny QR's motion? Reason. (5%)
your grounds in support of your opposition to the SUGGESTED ANSWER:
motion to suspend proceedings. (5%). The court should deny QR's motion. If in the pre-
SUGGESTED ANSWER: trial agreement signed by the accused and his counsel,
As the prosecutor, I will argue that the motion the accused admits the documentary evidence of the
to suspend is not in order for the following reasons: prosecution, it does not violate his right against self-
1. The civil case filed by CX against MM incrimination. His lawyer cannot file a motion to
for accounting and damages does not involve withdraw. A pre-trial order is not needed. (Bayas v.
an issue similar to or intimately related to the Sandiganbayan, 391 SCRA 415(2002}). The admission of
issue of estafa raised in the criminal action. such documentary evidence is allowed by the rule.
2. The resolution of the issue in the civil case for (Sec. 2 of Rule 118; People v. Hernandez, 260 SCRA
accounting will not determine whether or 25 [1996]).
not the (Sec. 5, Rule
criminal action for estafa may proceed. Pre-Trial; Criminal Case vs. Civil Case (1997)
111, Rules of Criminal Procedure.) Give three distinctions between a pre-trial in
a criminal case and a pre-trial in a civil case.
Prejudicial Question; Suspension of Criminal Action SUGGESTED ANSWER:
(1999) Three distinctions between a pre-trial in a criminal
A allegedly sold to B a parcel of land which A later also case and a pre-trial in a civil case are as follows: 1.
sold to X. B brought a civil action for The pre-trial in a criminal case is conducted only
nullification of the second sale and asked that the sale "where the accused and counsel agree" (Rule 118,
made by A in his favor be declared valid. A theorized that Sec. 1): while the pre-trial in a civil
case is (Sec. 1 of former Rule 20; Sec, 1 of new Rule
he never sold the property to B and his
mandatory.
purported signatures appearing in the first deed of sale
18).
were forgeries. Thereafter, an Information for estafa was
filed against A based on the same double sale that was the 2. The pre-trial in a criminal case does not consider the
subject of the civil action. A filed a "Motion for possibility of a compromise, which is one
Suspension of Action" in the criminal case, contending
important aspect of the pre-trial in a civil case.
that the resolution of the issue in the civil case would (Sec. 1 of former Rule 20; Sec. 2 of new Rule 18).
necessarily be determinative of his guilt or innocence.
Is the suspension of the criminal action in order? Explain. 3. In a criminal case, a pre-trial agreement is
(2%) required to be reduced to writing and signed by the
SUGGESTED ANSWER: accused and his counsel (See; Rule 118, Sec. 4); while
Yes. The suspension of the criminal action is in order
in a civil case, the agreement may be
because the defense of A in the civil action, that he never
sold the property to B and that his purported signatures in
contained in the pre-trial order. (Sec. 4 of former Rule
20; See 7 of new Rule 78).
the first deed of sale were forgeries, is a prejudicial
question the resolution of which is determinative of Provisional Dismissal (2002)
his guilt or innocence. If the first sale is null and void, In a prosecution for robbery against D, the
there would be no double sale and A would be innocent prosecutor moved for the postponement of the first
of the offense of estafa. scheduled hearing on the ground that he had lost his
(Ras v. Rasul, 100 SCRA 125.) records of the case. The court granted the motion
but, when the new date of trial arrived, the
Pre-Trial Agreement (2004)
prosecutor, alleging that he could not locate his
Mayor TM was charged of malversation through
witnesses, moved for the provisional dismissal of the case.
falsification of official documents. Assisted by Atty.
If D’s counsel does not object, may the court grant
OP as counsel de parte during pre-trial, he signed
the motion of the prosecutor? Why? (3%)
together with Ombudsman Prosecutor TG a "Joint SUGGESTED ANSWER:
Stipulation of Facts and Documents," which was No, because a case cannot be provisionally dismissed
presented to the Sandiganbayan. Before the court except upon the express consent of the accused and
could issue a pre-trial order but after some delay with notice to the offended party. (Rule 117, sec. 8).
caused by Atty. OP, he was substituted by Atty. QR as
defense counsel. Atty. QR forthwith filed a motion to Remedies; Void Judgment (2004)
withdraw the "Joint Stipulation," alleging that it is AX was charged before the YY RTC with theft of
prejudicial to the accused because it contains, inter jewelry valued at P20.000, punishable with
imprisonment of up to 10 years of prision mayor implicated (Mantaring v. Roman, A.M. No. RTJ-93-904,
under the Revised Penal Code. After trial, he was February 28, 1996), so long as the search is conducted in
convicted of the offense charged, notwithstanding the place where the search warrant will be served.
that the material facts duly established during the trial Moreover, describing the shabu in an undetermined
showed that the offense committed was estafa, amount is sufficiently particular. (People v. Tee, G.R.
punishable by imprisonment of up to eight years of Nos. 140546-47, January 20, 2003)
prision mayor under the said Code. No appeal having
been taken therefrom, said judgment of conviction Trial; Trial in Absentia; Automatic Review of Conviction
became final. Is the judgment of conviction valid? Is (1998)
the said judgment reviewable thru a special civil 1. What are the requisites of a trial in absentia? [2%]
action for certiorari? Reason. (5%) 2. If an accused who was sentenced to death escapes,
SUGGESTED ANSWER: is there still a legal necessity for the Supreme Court to
Yes, the judgment of conviction for theft upon an review the decision of conviction? [3%]
information for theft is valid because the court had SUGGESTED ANSWER:
jurisdiction to render judgment. However, the 1. The requisites of trial in absentia are: (a) the
judgment was grossly and blatantly erroneous. The accused has already been arraigned; (b) he has been
variance between the evidence and the judgment of duly notified of the trial; and (c) his failure to appear is
conviction is substantial since the evidence is one for unjustifiable. (Sec. 14 [2], Article III. Constitution;
estafa while the judgment is one for theft. The Parada vs. Veneracion, 269 SCRA 371 [1997].)
elements of the two crimes are not the same. (Lauro
2. Yes, there is still a legal necessity for the Supreme
Santos v. People, 181 SCRA 487). One offense does not
Court (as of 2004 the Court of Appeals has the jurisdiction
necessarily include or is included in the other. (Sec. 5 of
Rule 120). to such review) to review the decision of conviction
sentencing the accused to death, because he is entitled
The judgment of conviction is reviewable by to an automatic review of the death sentence. (Sees.
certiorari even if no appeal had been taken, because the 3[e] and 10, Rule 122, Rules of Criminal Procedure;
judge committed a grave abuse of discretion People vs. Espargas, 260 SCRA 539.)
tantamount to lack or excess of his jurisdiction in
Venue (1997)
convicting the accused of theft and in violating due
process and his right to be informed of the nature
Where is the proper venue for the filing of an
and the cause of the accusation against him, which
information in the following cases?
a) The theft of a car in Pasig City which was
make the judgment void. With the mistake in
brought to Obando, Bulacan, where it
charging the proper offense, the judge should have
was cannibalized.
directed the filing of the proper information and
b) The theft by X, a bill collector of ABC Company,
thereafter dismissed the original information. (Sec. 19 of Rule
with main offices in Makati City, of his
119).
collections from customers in Tagaytay City. In the
Search Warrant; Motion to Quash (2005) contract of employment, X was detailed to the
Police operatives of the Western Police District, Calamba branch office, Laguna, where he was to
Philippine National Police, applied for a search turn in his collections.
warrant in the RTC for the search of the house of c) The malversation of public funds by a Philippine
Juan Santos and the seizure of an undetermined consul detailed in the Philippine Embassy in
amount of shabu. The team arrived at the house of London.
SUGGESTED ANSWER:
Santos but failed to find him there. Instead, the team (a) The proper venue is in Pasig City where the theft of
found Roberto Co. The team conducted a search in the the car was committed, not in Obando where it was
house of Santos in the presence of Roberto Co and cannibalized. Theft is not a continuing offense.
barangay officials and found ten (10) grams of shabu. (People v Mercado, 65 Phil 665).
Roberto Co was charged in court with illegal possession
of ten grams of shabu. Before his arraignment, (b) If the crime charged is theft, the venue is in
Roberto Co filed a motion to quash the warrant on the Calamba where he did not turn in his collections. If the
following grounds (a) it was not the accused named crime of X is estafa, the essential ingredients of the
in the search warrant; and (b) the warrant does not offense took place in Tagaytay City where he received
describe the article to be seized with sufficient his collections, in Calamba where he should have turned
particularity. Resolve the motion with reasons. (4%) in his collections, and in Makati City where the
ABC Company was based. The information may
SUGGESTED ANSWER:
therefore be filed in Tagaytay City or Calamba or
The motion to quash should be denied. The name of
Makati which have concurrent territorial Jurisdiction.
the person in the search warrant is not important. It (Catingub vs. Court of Appeals,
is not even necessary that a particular person be 121 SCRA 106).
Acting on a tip by an informant, police officers
(c) The proper court is the Sandiganbayan which has stopped a car being driven by D and ordered him to
jurisdiction over crimes committed by a consul or open the trunk. The officers found a bag containing
higher official in the diplomatic service. (Sec. 4(c). several kilos of cocaine. They seized the car and the
PD 1606, as amended by RA. No. 7975). The cocaine as evidence and placed D under arrest.
Sandiganbayan is a national court. (Nunez v. Without advising him of his right to remain silent and to
Sandiganbayan, 111 SCRA 433 [1982]. It has only one have the assistance of an attorney, they questioned him
venue at present, which is in Metro Manila, until RA. regarding the cocaine. In reply, D said, “I don’t know
No. 7975, providing for two other branches in Cebu anything about it. It isn’t even my car.” D was charged
and in Cagayan de Oro, is implemented. with illegal possession of cocaine, a prohibited
Alternative Answers: drug. Upon motion of D, the court suppressed
(b) The information may be filed either in Calamba or the use of cocaine as evidence and dismissed the
in Makati City, not in Tagaytay City where no offense charges against him. D commenced proceedings against
had as yet been committed, the police for the recovery of his car. In his direct
examination, D testified that he owned the car but had
(c) Assuming that the Sandiganbayan has registered it in the name of a friend for convenience. On
no jurisdiction, the proper venue is the first cross-examination, the attorney representing the police
RTC in which the charge is filed (Sec. 15(d). Rule 110). asked, “After your arrest, did you not tell the
arresting officers that it wasn’t your car?” If you were
EVIDENCE D’s attorney, would you object to the question? Why?
(5%)
SUGGESTED ANSWER:
Admissibility (1998) Yes, because his admission made when he was
The barangay captain reported to the police that X questioned after he was placed under arrest was in
was illegally keeping in his house in the barangay an violation of his constitutional right to be informed of his
Armalite M16 rifle. On the strength of that right to remain silent and to have competent and
information, the police conducted a search of the independent counsel of his own choice. Hence, it is
house of X and indeed found said rifle. The police inadmissible in evidence. [Constitution, Art. III, sec. 12;
raiders seized the rifle and brought X to the police R.A. 7438 (1992), sec, 2; People v. Mahinay, 302 SCRA 455].
station. During the investigation, he voluntarily ALTERNATIVE ANSWER:
signed a Sworn Statement that he was possessing said rifle Yes, because the question did not lay the predicate to
without license or authority to possess, and a Waiver justify the cross-examination question.
of Right to Counsel. During the trial of X for illegal
possession of firearm, the prosecution submitted Admissibility (2004)
in evidence the rifle. Sworn Statement and Waiver of Right Sgt. GR of WPD arrested two NPA suspects, Max
to Counsel, individually rule on the admissibility in and Brix, both aged 22, in the act of robbing a
evidence of the: grocery in Ermita. As he handcuffed them he noted a
1. Rifle; [2%] pistol tucked in Max's waist and a dagger hidden
2. Sworn Statement; and [2%1 under Brix's shirt, which he promptly confiscated. At the
3. Waiver of Right to Counsel of X. [1%] police investigation room, Max and Brix orally waived
SUGGESTED ANSWER: their right to counsel and to remain silent. Then
1. The rifle is not admissible in evidence because it under oath, they freely answered questions asked by
was seized without a proper search warrant. A the police desk officer. Thereafter they signed their
warrantless search is not justified. There was time to sworn statements before the police captain, a
secure a search warrant. (People us. Encinada G.R. No. lawyer. Max admitted his part in the robbery, his
116720, October 2. 1997 and other cases) possession of a pistol and his ownership of the packet of
shabu found in his pocket. Brix admitted his role in the
2. The sworn statement is not admissible in evidence robbery and his possession of a dagger. But they denied
because it was taken without informing him of his being NPA hit men. In due course, proper charges
custodial rights and without the assistance of counsel were filed by the City Prosecutor against both
which should be independent and competent and arrestees before the MM RTC.
preferably of the choice of the accused. (People us.
Januario, 267 SCRA 608.) May the written statements signed and sworn to
by Max and Brix be admitted by the trial court
3. The waiver of his right to counsel is not admissible as evidence for the prosecution? Reason. (5%)
because it was made without the assistance of counsel SUGGESTED ANSWER:
of his choice. (People us. Gomez, 270 SCRA 433.) No. The sworn written statements of Max and Brix
may not be admitted in evidence, because they were not
Admissibility (2002) assisted by counsel. Even if the police captain
before whom they signed the statements was a deemed to include an electronic document as defined
lawyer, he was not functioning as a lawyer, nor can he in these Rules. (Sec. 1 of Rule 3, Rules of Electronic
be considered as an independent counsel. Waiver of the Evidence effective August 1, 2001).
right to a lawyer must be done in writing and in the
presence of independent counsel. (People v. An electronic document is admissible in evidence if it
Mahinay, 302 SCRA 455 11999]; People v. Espiritu, 302 SCRA complies with the rules on admissibility prescribed by
533 [1999]). the Rules of Court and related laws and is
authenticated in the manner prescribed by
Admissibility; Admission of Guilt; Requirements (2006) these Rules. (Sec. 2 of Rule 3, Id.). The authenticity
What are the requirements in order that an admission of any private electronic document must be
of guilt of an accused during a custodial investigation proved by evidence that it had been digitally
be admitted in evidence? (2.5%) signed and other appropriate security measures
SUGGESTED ANSWER: have been applied. (Sec. 2 of Rule 5, Id.).
1. The admission must be voluntary.
2. The admission must be in writing. (b) An electronic document shall be regarded as the
3. The admission must be made with the equivalent of an original document under the
assistance of competent, independent counsel. Best Evidence Rule if it is a printout or output
4. The admission must be express (People v. readable by sight or other means, shown to
Prinsipe, G.R. No. 135862, May 2, 2002). reflect the data accurately. (Sec. 1 of Rule 4)
5. In case the accused waives his rights to silence
and to counsel, such waiver must be in writing, Admissibility; Object or Real Evidence (1994)
executed with the assistance of At the trial of Ace for violation of the Dangerous
competent, independent counsel. Drugs Act, the prosecution offers in evidence a
photocopy of the marked P100.00 bills used in the
Admissibility; Document; Not raised in the Pleading “buy-bust” operation. Ace objects to the introduction of
(2004) the photocopy on the ground that the Best
In a complaint for a sum of money filed before the MM Evidence Rule prohibits the introduction of
RTC, plaintiff did not mention or even just hint at any secondary evidence in lieu of the original.
demand for payment made on defendant before
a) Is the photocopy real (object) evidence
commencing suit. During the trial, plaintiff duly
or documentary evidence?
offered Exh. "A" in evidence for the stated purpose
b) Is the photocopy admissible in evidence?
of proving the making of extrajudicial demand on SUGGESTED ANSWER:
defendant to pay P500.000, the subject of the suit. Exh. a) The photocopy of the marked bills is real (object)
"A" was a letter of demand for defendant to pay evidence not documentary evidence, because
said sum of money within 10 days from receipt,
the marked bills are real evidence.
addressed to and served on defendant some two
months before suit was begun. Without objection b) Yes, the photocopy is admissible in evidence,
from defendant, the court admitted Exh. "A" in because the best evidence rule does not apply to
evidence. Was the court's admission of Exh. "A" in
object or real evidence.
evidence erroneous or not? Reason. (5%)
SUGGESTED ANSWER: Admissibility; Objections (1997)
The court's admission of Exh. "A" in evidence is not What are the two kinds of objections? Explain each
erroneous. It was admitted in evidence briefly. Given an example of each.
without objection on the part of the defendant. It SUGGESTED ANSWER:
should be treated as if it had been raised in the Two kinds of objections are: (1) the evidence being
pleadings. The complaint may be amended to presented is not relevant to the issue; and (2) the
conform to the evidence, but if it is not so evidence is incompetent or excluded by the law or the
amended, it does not affect the result of the trial rules, (Sec. 3, Rule 138). An example of the first is
on this issue. (Sec. 5 of Rule 10). when the prosecution offers as evidence the alleged
offer of an Insurance company to pay for the
Admissibility; Electronic Evidence (2003) damages suffered by the victim in a homicide case.
a) State the rule on the admissibility of an electronic (See 1997 No. 14).
evidence. Examples of the second are evidence obtained in
b) When is an electronic evidence regarded as being violation of the Constitutional prohibition against
the equivalent of an original document under the unreasonable searches and seizures and
Best Evidence Rule? 4% confessions and admissions in violation of the rights
SUGGESTED ANSWER:
(a) Whenever a rule of evidence refers to the term of a person under custodial Investigation.
ALTERNATIVE ANSWERS:
writing, document, record, instrument, memorandum or
any other form of writing, such term shall be
1) Specific objections: Example: parol evidence and SUGGESTED ANSWER:
best evidence rule (a) The offer by A to pay the
General Objections: Example: continuing hospitalization expenses of B is not admissible in
objections (Sec. 37 of Rule 132). evidence to prove his guilt in both the civil and
criminal cases. (Rule 130, Sec. 27, fourth par.).
2) The two kinds of objections are: (1) objection to a
question propounded in the course of the oral (b) No. It is irrelevant. The obligation of the
examination of the witness and (2) objection to an insurance company is based on the contract of
offer of evidence in writing. Objection to a question insurance and is not admissible in evidence against the
propounded in the course of the oral examination of a accused because it was not offered by the accused but by
witness shall be made as soon as the grounds therefor the insurance company which is not his agent.
shall become reasonably apparent otherwise, it is waived.
An offer of objection in writing shall be made within three Admissibility; Private Document (2005)
(3) days after notice of the offer, unless a different May a private document be offered, and admitted in
period is allowed by the court. In both instances the evidence both as documentary evidence and as object
grounds for objection must be specified. An example of evidence? Explain.
SUGGESTED ANSWER:
the first is when the witness is being cross-examined and Yes, it can be considered as both documentary and
the cross examination is on a matter not relevant. An object evidence. A private document may be offered and
example of the second is that the evidence offered is not admitted in evidence both as documentary evidence
the best evidence. and as object evidence. A document can also be
considered as an object for purposes of the case.
Admissibility; Offer to Marry; Circumstantial Objects as evidence are those addressed to the
Evidence (1998) senses of the court. (Sec. 1, Rule 130, Rules of Court)
A was accused of having raped X. Documentary evidence
Rule on the admissibility of the following pieces consists of writings or any material containing letters,
of evidence: words, numbers, figures, symbols or other modes of
1. an offer of A to marry X; and (3%] written expressions, offered ns proof of their contents.
2. a pair of short pants allegedly left by A at the of Court) (Sec. 2, Rule 130, Rules
crime which the court, over the objection of A,
Hence, a private document may be presented
required him to put on, and when he did, it fit
as object evidence in order to 'establish certain
him well. [2%] physical evidence or characteristics that are visible on the
SUGGESTED ANSWER:
1. A's offer to marry X is admissible in evidence as paper and writings that comprise the document.
an Implied admission of guilt because rape cases are
Admissibility; Proof of Filiation; Action of
not allowed to be compromised. (Sec. 27 of Rule 13O;
People vs. Domingo, 226 SCRA 156.) Partition (2000)
Linda and spouses Arnulfo and Regina Ceres were co-
2. The pair of short pants, which fit the accused owners of a parcel of land. Linda died intestate and
well, is circumstantial evidence of his guilt, although without any issue. Ten (10) persons headed by
standing alone it cannot be the basis of Jocelyn, claiming to be the collateral relatives of the
conviction. The accused cannot object to the court deceased Linda, filed an action for partition with the RTC
requiring him to put the short pants on. It is not part praying for the segregation of Linda’s ½ share, submitting
of his right against self-incrimination because it is a in support of their petition the baptismal certificates of
mere physical act. seven of the petitioners, a family bible belonging to
Linda in which the names of the petitioners have
Admissibility; Offer to Pay Expenses (1997) been entered, a photocopy of the birth certificate of
A, while driving his car, ran over B. A visited B at the Jocelyn, and a certification of the local civil registrar that
hospital and offered to pay for his hospitalization its office had been completely razed by fire. The spouses
expenses. After the filing of the criminal case against Ceres refused to partition on the following grounds: 1) the
A for serious physical injuries through baptismal certificates of the parish priest are
reckless imprudence. A's insurance carrier offered to evidence only of the administration of the sacrament
pay for the injuries and damages suffered by B. The of baptism and they do not prove filiation of the alleged
offer was rejected because B considered the amount collateral relatives of the deceased; 2) entry in the family
offered as inadequate. bible is hearsay; 3) the certification of the registrar on non-
a) Is the offer by A to pay the hospitalization availability of the records of birth does not prove filiation:
expenses of B admissible in evidence? 4) in partition cases where filiation to the deceased is
b) Is the offer by A's insurance carrier to pay for the in dispute, prior and separate judicial declaration of
injuries and damages of B admissible heirship in a settlement of estate proceedings is
necessary; and 5) there is need for publication as real
in evidence?
property is involved. As counsel for Jocelyn and her (c) BEST EVIDENCE RULE: This Rule is
co-petitioners, argue against the objections of the adopted for the prevention of fraud and is declared to
spouses Ceres so as to convince the court to be essential to the pure administration of justice.
allow the partition. Discuss each of the five (5) (Moran, Vol. 5, p. 12.) If a party is in possession of such
arguments briefly but completely. (10%) evidence and withholds it, the presumption naturally
SUGGESTED ANSWER: arises that the better evidence is withheld for
(1) The baptismal certificate can show filiation or fraudulent purposes. (Francisco. Rules of Court, vol. VII. Part
prove pedigree. It is one of the other means allowed under I, pp, 121,122)
the Rules of Court and special laws to show pedigree.
(Trinidad v. Court of Appeals, 289 SCRA 188 (d) An illegally obtained extrajudicial confession
[1998]; Heirs of ILgnacio Conti v. Court of Appeals, 300 nullifies the intrinsic validity of the confession and
SCRA 345 [1998]). renders it unreliable as evidence of the truth. (Moran,
vol. 5, p. 257) it is the fruit of a poisonous tree.
(2) Entries in the family bible may be received as
evidence of pedigree. (Sec. 40, Rule 130, Rules of (e) The reason for the rule against the admission of
Court). an offer of compromise in civil case as an admission
(3) The certification by the civil registrar of the non- of any liability is that parties are encouraged to enter
availability of records is needed to justify the into compromises. Courts should endeavor
to persuade the litigants in a civil case to agree
presentation of secondary evidence, which is the
upon some fair compromise. (Art. 2029, Civil Code).
photocopy of the birth certificate of Jocelyn. (Heirs of
Ignacio Conti v. Court of Appeals, supra.) During pre-trial, courts should direct the parties to
consider the possibility of an amicable settlement.
(4) Declaration of heirship in a settlement proceeding (Sec. 1[a] of former Rule 20: Sec. 2 [a] of new Rule 16).
is not necessary. It can be made in the ordinary action
Best Evidence Rule (1997)
for partition wherein the heirs are exercising the right
When A loaned a sum of money to B. A typed
pertaining to the decedent, their predecessor- a single copy of the promissory note, which they
in- interest, to ask for partition as co-owners (Id.) both signed A made two photo (xeroxed) copies
(5) Even if real property is involved, no publication is of the promissory note, giving one copy to B and
necessary, because what is sought is the mere retaining the other copy. A entrusted the
segregation of Linda’s share in the property. (Sec. 1 of typewritten copy to his counsel for safekeeping.
Rule 69; Id.)
The copy with A's counsel was destroyed
when the law office was burned.
Admissibility; Rules of Evidence (1997) a) In an action to collect on the promissory
Give the reasons underlying the adoption of the note, which is deemed to be the "original" copy
following rules of evidence: for the purpose of the "Best Evidence Rule"?
(a) Dead Man Rule b) Can the photocopies in the hands of the parties
(b) Parol Evidence Rule be considered "duplicate original copies"?
c) As counsel for A, how will you prove the loan
(c) Best Evidence Rule
(d) The rule against the admission of given to A and B?
SUGGESTED ANSWER:
illegally obtained extrajudicial confession (a) The copy that was signed and lost is the
(e) The rule against the admission of an offer of
only "original" copy for purposes of the Best
compromise in civil cases
SUGGESTED ANSWER: Evidence Rule. (Sec. 4 [b] of Rule 130).
The reasons behind the following rules are as follows:
(b) No, They are not duplicate original copies
(a) DEAD MAN RULE: if death has closed the lips
of one party, the policy of the law is to close the lips because there are photocopies which were not signed
of the other. (Goni v. Court ofAppeals, L-77434. (Mahilum v. Court of Appeals, 17 SCRA 482 ), They
September 23, 1986, 144 SCRA 222). This is to prevent constitute secondary evidence. (Sec. 5 of Rule 130).
the temptation to perjury because death has (c) The loan given by A to B may be proved by
already sealed the lips of the party.
secondary evidence through the xeroxed copies of the
(b) PAROL EVIDENCE RULE: It is designed to give promissory note. The rules provide that when the
certainty to a transaction which has been reduced to original document is lost or destroyed, or cannot be
writing, because written evidence is much more certain produced in court, the offerer, upon proof of its
and accurate than that which rests on fleeting memory execution or existence and the cause of its
unavailability without bad faith on his part, may prove
only. (Francisco, Rules of Court Vol. VII, Part I. p. 154)
its contents by a copy, or by a recital of its contents
in some authentic document, or by the
testimony of witnesses in the order stated. (Sec. 5 that it will be repudiated. (Molina vs. People. 259 SCRA
of Rule 130). 138.)
Burden of Proof vs. Burden of Evidence (2004) Facts; Legislative Facts vs. Adjudicative Facts (2004)
Distinguish Burden of proof and burden of evidence. Legislative facts and adjudicative facts.
Burden of proof is the duty of a party to present Legislative facts refer to facts mentioned in a statute
evidence on the facts in issue necessary to establish or in an explanatory note, while adjudicative facts are
his claim or defense by the amount of evidence facts found in a court decision.
required by law. (Sec. 1 of Rule 131), while burden of
evidence is the duty of a party to go forward with the Hearsay Evidence (2002)
evidence to overthrow prima facie evidence Romeo is sued for damages for injuries suffered
established against him. (Bautista v. Sarmiento, 138 SCRA by the plaintiff in a vehicular accident. Julieta, a
587 [1985]). witness in court, testifies that Romeo told her
(Julieta) that he (Romeo) heard Antonio, a witness
Character Evidence (2002) to the accident, give an excited account of the
D was prosecuted for homicide for allegedly beating accident immediately after its occurrence. Is
up V to death with an iron pipe. Julieta’s testimony admissible against Romeo over
A. May the prosecution introduce evidence that proper and timely objection? Why? (5%)
V had a good reputation for peacefulness and SUGGESTED ANSWER:
non- violence? Why? (2%) No, Julieta’s testimony is not admissible
B. May D introduce evidence of specific violent acts against Romeo, because while the excited
by V? Why? (3%) account of Antonio, a witness to the
SUGGESTED ANSWER: accident, was told to Romeo, it was only Romeo
A. The prosecution may introduce evidence of who told Julieta about it, which makes it hearsay.
the good or even bad moral character of the victim if
it tends to establish in any reasonable degree the Hearsay Evidence vs. Opinion Evidence (2004)
probability or improbability of the offense Hearsay evidence and opinion evidence.
charged. [Rule 130, sec. 51 a (3)]. In this case, the SUGGESTED ANSWER:
evidence is not relevant. Hearsay evidence consists of testimony that is not
based on personal knowledge of the person testifying,
B. Yes, D may introduce evidence of (see Sec. 36, Rule 130), while opinion evidence is expert
specific violent acts by V. Evidence that one did or evidence based on the personal knowledge skill,
did not do a certain thing at one time is not experience or training of the person testifying (Sec. 49,
admissible to prove that he did or did not do the Id.) and evidence of an ordinary witness
same or a similar thing at another time; but it may on limited matters (Sec. 50, Id.).
be received to prove a specific intent or
knowledge, identity, plan, system, scheme, habit, Hearsay; Exception; Dead Man Statute (2001)
custom or usage, and the like. (Rule 130, sec. 34). Maximo filed an action against Pedro, the
administrator of the estate of deceased Juan, for the
Confession; Affidavit of Recantation (1998) recovery of a car which is part of the latter’s estate.
1. If the accused on the witness stand repeats During the trial, Maximo presented witness Mariano
his earlier uncounseled extrajudicial who testified that he was present when Maximo and
confession implicating his co-accused in the Juan agreed that the latter would pay a rental of
crime charged, is that testimony admissible in P20,000.00 for the use of Maximo’s car for one
evidence against the latter? [3%] month after which Juan should immediately
2. What is the probative value of a witness' return the car to Maximo. Pedro objected to the
Affidavit of Recantation? [2%] admission of Mariano’s testimony.
SUGGESTED ANSWER: If you were the judge, would you sustain Pedro’s
1. Yes. The accused can testify by repeating his earlier objection? Why? (5%)
uncounseled extrajudicial confession, because he can SUGGESTED ANSWER:
be subjected to cross-examination. No, the testimony is admissible in evidence because
witness Mariano who testified as to what Maximo and
2. On the probative value of an affidavit of Juan, the deceased person agreed upon, is not
recantation, courts look with disfavor upon disqualified to testify on the agreement. Those
recantations because they can easily be secured from disqualified are parties or assignors of parties to a
witnesses, usually through intimidation or for a case, or persons in whose behalf a case is prosecuted,
monetary consideration, Recanted testimony is against the administrator or Juan’s estate, upon a
exceedingly unreliable. There is always the probability
claim or demand against his estate as to any matter of Evidence, expressly provides that a witness
fact occurring before Juan’s death. (Sec. 23 of Rule 130) may testify on his impressions of the emotion,
behavior, condition or appearance of a person.
Hearsay; Exception; Dying Declaration (1998)
Requisites of Dying Declaration. [2%) Hearsay; Exceptions (1999)
SUGGESTED ANSWER: a) Define hearsay evidence? (2%)
The requisites for the admissibility of a dying b) What are the exceptions to the hearsay rule? (2%)
declaration are: (a) the declaration is made by the SUGGESTED ANSWER:
deceased under the consciousness of his impending a. Hearsay evidence may be defined as evidence
death; (b) the deceased was at the time competent as a that consists of testimony not coming from personal
witness; (c) the declaration concerns the cause and knowledge (Sec. 36, Rule 130, Rules of Court). Hearsay
surrounding circumstances of the declarant's death; and testimony is the testimony of a witness as to what he has
(d) the declaration is offered in a (criminal) case wherein heard other persons say about the facts in issue.
the declarant's death is the subject of inquiry.
(People vs.Santos, 270 SCRA 650.) b. The exceptions to the hearsay rule are: dying
ALTERNATIVE ANSWER: declaration, declaration against interest, act or
The declaration of a dying person, made under the declaration about pedigree, family reputation or
consciousness of an impending death, may be tradition regarding pedigree, common reputation, part of
received in any case wherein his death is the subject of the res gestae, entries in the course of business, entries
Inquiry, as evidence of the cause and surrounding in official records, commercial lists and the like,
circumstances of such death. (Sec. 37 of Rule 13O.) learned treatises, and testimony or deposition at
a former proceeding. (37 to 47, Rule 13O, Rules of Court)
Hearsay; Exception; Res Gestae; Opinion of
Ordinary Witness (2005) Hearsay; Exceptions; Dying Declaration (1999)
Dencio barged into the house of Marcela, tied her to a The accused was charged with robbery and homicide. The
chair and robbed her of assorted pieces of jewelry and victim suffered several stab wounds. It appears that
money. Dencio then brought Candida, Marcela's maid, to eleven (11) hours after the crime, while the victim
a bedroom where he raped her. Marcela could hear was being brought to the hospital in a jeep, with his
Candida crying and pleading: "Huwag! Maawa ka sa brother and a policeman as companions, the victim was
akin!" After raping Candida, Dencio fled from the house asked certain questions which he answered,
with the loot. Candida then untied Marcela and rushed pointing to the accused as his assailant. His answers
to the police station about a kilometer away and were put down in writing, but since he was a in a
told Police Officer Roberto Maawa that Dencio had critical condition, his brother and the policeman
barged into the house of Marcela, tied the latter to a signed the statement. Is the statement admissible as a
chair and robbed her of her jewelry and money. Candida dying declaration? Explain. (2%)
also related to the police officer that despite her pleas, SUGGESTED ANSWER:
Dencio had raped her. The policeman noticed that Yes. The statement is admissible as a dying
Candida was hysterical and on the verge of collapse. declaration if the victim subsequently died and his
Dencio was charged with robbery with rape. During answers were made under the consciousness of
the trial, Candida can no longer be located. (8%) impending death (Sec. 37 of Rule 130). The fact that he
did not sign the statement point to the accused as his
a) If the prosecution presents Police Officer Roberto assailant, because he was in critical condition, does
Maawa to testify on what Candida had told him, would not affect its admissibility as a dying declaration. A
such testimony of the policeman be hearsay? Explain.
SUGGESTED ANSWER:
dying declaration need not be in writing (People v.
No. The testimony of the policeman is not hearsay. It is Viovicente, 286 SCRA 1)
part of the res gestae. It is also an independently
relevant statement. The police officer testified of his own
Hearsay; Inapplicable (2003)
personal knowledge, not to the truth of Candida's X was charged with robbery. On the strength of a
statement, i.e., that she told him, despite her pleas, warrant of arrest issued by the court, X was arrested by
Dencio had raped her. (People v. Gaddi,G.R. police operatives. They seized from his person a
No. 74065, February 27,1989) handgun. A charge for illegal possession of firearm
was also filed against him. In a press conference
b) If the police officer will testify that he noticed Candida called by the police, X admitted that he had robbed the
to be hysterical and on the verge of collapse, would such victim of jewelry valued at P500,000.00.
testimony be considered as opinion, hence, inadmissible?
Explain. The robbery and illegal possession of firearm cases
SUGGESTED ANSWER:
were tried jointly. The prosecution presented in
No, it cannot be considered as opinion, because he
evidence a newspaper clipping of the report to the
was testifying on what he actually observed. The last
paragraph of Sec. 50, Rule 130, Revised Rules of reporter who was present during the press conference
stating that X admitted the robbery. It likewise The RTC may not generally take judicial notice of
presented a certification of the PNP Firearms and foreign laws (In re Estate of Johnson, G.R. No. 12767,
Explosive Office attesting that the accused had no November 16, 1918; Fluemer v. Hix, G.R. No. 32636,
license to carry any firearm. The certifying officer, March 17, 1930), which must be proved like any other
however, was not presented as a witness. Both pieces of matter of fact (Sy Joe Lieng v. Sy Quia, G.R. No. 4718,
evidence were objected to by the defense. (6%) March 19, 1910) except in a few instances, the court in
a) Is the newspaper clipping admissible in evidence the exercise of its sound judicial discretion, may take
against X? notice of foreign laws when Philippine courts are
b) Is the certification of the PNP Firearm and evidently familiar with them, such as the Spanish Civil
Explosive Office without the certifying officer Code, which had taken effect in the Philippines, and
testifying on it admissible in evidence against X? other allied legislation. (Pardo v. Republic, G.R. No. L-
SUGGESTED ANSWER: 2248 January 23, 1950; Delgado v. Republic, G.R. No. L-
(a) Yes, the newspaper clipping is admissible in 2546, January .28, 1950)
evidence against X. regardless of the truth or falsity of a
statement, the hearsay rule does not apply and the 4. Rules and Regulations issued by quasi-
statement may be shown where the fact that it is judicial bodies implementing statutes;
made is relevant. Evidence as to the making of such SUGGESTED ANSWER:
statement is not secondary but primary, for the The RTC may take judicial notice of Rules and
statement itself may constitute a fact in issue or be Regulations issued by quasi-judicial
circumstantially relevant as to the existence of such bodies implementing statutes, because they are
fact. (Gotesco Investment Corporation vs. Chatto, 210 capable of unquestionable demonstration
SCRA 18 [1992]) (Chattamal v. Collector of Customs, G.R. No. 16347,
November 3,1920), unless the law itself considers
(b) Yes, the certification is admissible in such rules as an integral part of the statute, in which
evidence against X because a written statement signed by case judicial notice becomes mandatory.
an officer having the custody of an official record or by his
deputy that after diligent search no record or entry of a 5. Rape may be committed even in
specified tenor is found to exist in the records of his public places.
SUGGESTED ANSWER:
office, accompanied by a certificate as above provided, is
The RTC may take judicial notice of the fact that rape may
admissible as evidence that the records of his office
be committed even in public places. The "public setting"
contain no such record or entry.
of the rape is not an indication of consent.
(Sec. 28 of Rule 132).
(People v. Tongson, G.R. No. 91261, February 18, 1991)
The Supreme Court has taken judicial notice of the
Judicial Notice; Evidence (2005)
fact that a man overcome by perversity and beastly
Explain briefly whether the RTC may, motu passion chooses neither the time, place, occasion nor
proprio, take judicial notice of: (5%)
victim. (People v, Barcelona, G.R. No. 82589, October 31,
1. The street name of methamphetamine 1990)
hydro-chloride is shabu.
SUGGESTED ANSWER:
Judicial Notice; Evidence; Foreign Law (1997)
The RTC may motu proprio take judicial notice of the street
name of methamphetamine hydrochloride is shabu, a) Give three instances when a Philippine court can
considering the chemical composition of shabu.
take judicial notice of a foreign law.
(People v. Macasling, GM, No. 90342, May 27, b) How do you prove a written foreign law?
1993) c) Suppose a foreign law was pleaded as part of the
defense of defendant but no evidence was
2. Ordinances approved by municipalities presented to prove the existence of said law,
under its territorial jurisdiction; what is the presumption to be taken by the court
SUGGESTED ANSWER: as to the wordings of said law"?
In the absence of statutory authority, the RTC may SUGGESTED ANSWER:
not take judicial notice of ordinances approved by (a) The three instances when a Philippine court can take
municipalities under their territorial jurisdiction, judicial notice of a foreign law are: (1) when the Philippine
except on appeal from the municipal trial courts, courts are evidently familiar with the foreign law
which took judicial notice of the ordinance in (Moran. Vol. 5, p. 34, 1980 edition); (2) when the
question. (U.S. v. Blanco, G.R, No. 12435, November foreign law refers to the law of nations (Sec. 1 of Rule
9,1917; U.S. v. Hernandez, G.R. No. 9699, August 26, 129) and (3) when it refers to a
1915) published treatise, periodical or pamphlet on the
subject of law if the court takes judicial notice of the
3. Foreign laws; fact that the writer thereof is recognized in his
SUGGESTED ANSWER: profession or calling(Sec. 46. Rule 130).
as
expert on the subject
(b) A written foreign law may be evidenced by an
official publication thereof or by a copy attested by Offer of Evidence; res inter alios acta (2003)
the officer having the legal custody of the record, or by his X and Y were charged with murder. Upon application of
deputy, and accompanied. If the record is not kept in the the prosecution, Y was discharged from the
Philippines, with a certificate that such officer has the Information to be utilized as a state witness. The
custody, if the office in which the record is kept is in prosecutor presented Y as witness but forgot to state the
a foreign country, the certificate may be made by a purpose of his testimony much less offer it in
secretary of the embassy or legation, consul general, evidence. Y testified that he and X conspired to kill the
consul, vice-consul, or consular agent or by any officer victim but it was X who actually shot the victim. The
in the foreign service of the Philippines stationed in the testimony of Y was the only material evidence
foreign country in which the record is kept, and establishing the guilt of X. Y was thoroughly cross-
authenticated by the seal of his office (Sec. 24, Rule 132, examined by the defense counsel. After the
Zalamea v. CA, 228 prosecution rested its case, the defense filed a motion for
SCRA 23). demurrer to evidence based on the following grounds.
(c) The presumption is that the wordings of the (a) The testimony of Y should be excluded
foreign law are the same as the local law. (Northwest because its purpose was not initially stated and it was
Orient Airlines v. Court of Appeals, 241 SCRA 192; Moran, not formally offered in evidence as required
Vol. 6. page 34, 1980 edition; Lim v. Collector of Customs, by Section 34, Rule 132 of the Revised
36 Phil. 472). This is known as the Rules of Evidence; and
PROCESSUAL PRESUMPTION. (b) Y’s testimony is not admissible against X
pursuant to the rule on “res inter alios acta”.
Memorandum (1996)
Rule on the motion for demurrer to evidence on the
X states on direct examination that he once knew the above grounds. (6%)
facts being asked but he cannot recall them now. SUGGESTED ANSWER:
When handed a written record of the facts he testifies The demurrer to the evidence should be denied
that the facts are correctly stated, but that he because:
has never seen the writing before. a) The testimony of Y should not be excluded
Is the writing admissible as past because the defense counsel did not object to his
recollection recorded? Explain, testimony despite the fact that the prosecutor
SUGGESTED ANSWER:
No, because for the written record to be admissible
forgot to state its purpose or offer it in evidence.
as past recollection recorded. It must have been Moreover, the defense counsel thoroughly cross-
written or recorded by X or under his direction at the time
examined Y and thus waived the objection.
when the fact occurred, or immediately b) The res inter alios acta rule does not apply because
thereafter, or at any other time when the fact was
Y testified in open court and was subjected
fresh in his memory and he knew that the same was
to cross examination.
correctly written or recorded. (Sec. 16 of Rule 132) But in this
case X has never seen the writing before. Offer of Evidence; Testimonial & Documentary (1994)
What is the difference between an offer
Offer of Evidence (1997)
of testimonial evidence and an offer of
A trial court cannot take into consideration
documentary evidence?
in deciding a case an evidence that has not SUGGESTED ANSWER:
been "formally offered". When are the following An offer of testimonial evidence is made at the time
pieces of evidence formally offered? the witness is called to testify, while an offer of
(a) Testimonial evidence documentary evidence is made after the presentation
(b) Documentary evidence of a party’s testimonial evidence. (Sec. 35, Rule 132).
(c) Object evidence
SUGGESTED ANSWER: Opinion Rule (1994)
(a) Testimonial evidence is formally offered at At Nolan’s trial for possession and use of the
the time the witness is called to testify. (Rule 132. Sec. prohibited drug, known as “shabu:, his girlfriend Kim,
35, first par.).
testified that on a particular day, he would see Nolan very
prim and proper, alert and sharp, but that three days after,
(b) Documentary evidence is formally offered
he would appear haggard, tired and overly nervous at the
after the presentation of the testimonial evidence.
slightest sound he would hear. Nolan objects to the
(Rule 132, Sec. 35, second par.).
admissibility of Kim’s testimony on the ground that
(c) The same is true with object evidence. It is also Kim merely stated her opinion without having been
offered after the presentation of the first qualified as expert witness.
testimonial evidence. Should you, as judge, exclude the testimony of Kim?
SUGGESTED ANSWER: PREPONDERANCE OF EVIDENCE means that
No. The testimony of Kim should not be the evidence as a whole adduced by one side is
excluded. Even though Kim is not an expert witness, superior to that of the other. This is applicable in civil
Kim may testify on her impressions of the emotion, cases. (Sec. 1 of Rule 133; Municipality of Moncada v.
behavior, condition or appearance of a person. Cajuigan, 21 Phil, 184 [1912]).
(Sec. 50, last par., Rule 130).
SUBSTANTIAL EVIDENCE is that amount
Parol Evidence Rule (2001) of relevant evidence which a reasonable mind
Pedro filed a complaint against Lucio for the recovery of a
might accept as adequate to justify a conclusion.
sum of money based on a promissory note executed
This is applicable in case filed before administrative
by Lucio. In his complaint, Pedro alleged that
or quasi- judicial bodies. (Sec. 5 of Rule 133)
although the promissory note says that it is payable
within 120 days, the truth is that the note is payable Privilege Communication (1998)
immediately after 90 days but that if Pedro is willing, he
C is the child of the spouses H and W. H sued
may, upon request of Lucio give the latter up to 120 days
his wife W for judicial declaration of nullity of
to pay the note. During the hearing, Pedro testified that
marriage under Article 36 of the Family Code. In the
the truth is that the agreement between him and
trial, the following testified over the objection of W:
Lucio is for the latter to pay immediately after ninety
C, H and D, a doctor of medicine who used to treat
day’s time. Also, since the original note was with Lucio
W. Rule on W's objections which are the following:
and the latter would not surrender to Pedro the original
1. H cannot testify against her because of the rule on
note which Lucio kept in a place about one day’s
marital privilege; [1%]
trip from where he received the notice to produce the 2. C cannot testify against her because of the doctrine
note and in spite of such notice to produce the same on parental privilege; and [2%]
within six hours from receipt of such notice, Lucio
3. D cannot testify against her because of the
failed to do so. Pedro presented a copy of the doctrine of privileged communication between
note which was executed at the same time as the patient and physician. [2%]
original and with identical contents. SUGGESTED ANSWER:
1. The rule of marital privilege cannot be invoked in the
a) Over the objection of Lucio, will Pedro be annulment case under Rule 36 of the Family Code because
allowed to testify as to the true agreement or it is a civil case filed by one against the other,
contents of the promissory note? Why? (2%) (Sec. 22 , Rule 130. Rules of Court.)
b) Over the objection of Lucio, can Pedro present a
copy of the promissory note and have it admitted 2. The doctrine of parental privilege cannot likewise
as valid evidence in his favor? Why? (3%) be invoked by W as against the testimony of C, their
SUGGESTED ANSWER: child. C may not be compelled to testify but is free
a) Yes, because Pedro has alleged in his to testify against her. (Sec. 25. Rule 130. Rules of
complaint that the promissory note does not Court; Art. 215, Family Code.)
express the true intent and agreement of the
parties. This is an exception to the parol 3. D, as a doctor who used to treat W, is disqualified
evidence rule. [Sec. 9(b) of Rule 130, Rules of Court] to testify against W over her objection as to any
advice or treatment given by him or any information
b) Yes, the copy in the possession of Pedro is a which he may have acquired in his
duplicate original and with identical contents. [Sec. 4(b) professional capacity. (Sec. 24 [c], Rule 130. Rules of Court.)
of Rule 130]. Moreover, the failure of Lucio to ALTERNATIVE ANSWER:
produce If the doctor's testimony is pursuant to the
the original of the note is excusable because he was not requirement of establishing the psychological
given reasonable notice, as requirement under the Rules incapacity of W, and he is the expert called upon to testify
before secondary evidence may be presented. for the purpose, then it should be allowed.
(Sec. 6 of Rule 130, Rules of Court) (Republic vs. Court of Appeals and Molina, 26S
SCRA 198.)
Note: The promissory note is an actionable document and
the original or a copy thereof should have been attached to Privilege Communication; Marital Privilege (1989)
the complaint. (Sec. 7 of Rule 9, 1997 Rules of Civil Procedure). In Ody sued spouses Cesar and Baby for a sum of
such a case, the genuineness and due execution of the money and damages. At the trial, Ody called Baby as his
note, if not denied under oath, would be deemed admitted. first witness. Baby objected, joined by Cesar, on the
(Sec. 8 of Rule 9, 1997 Rules of Civil Procedure) ground that she may not be compelled to testify against
her husband. Ody insisted and contended that after all,
Preponderance vs. Substantial Evidence (2003) she would just be questioned about a conference
Distinguish preponderance of evidence they had with the barangay captain, a
from substantial evidence. 4%
SUGGESTED ANSWER:
matter which is not confidential in nature. The trial being used as a center for sex tourism and child
court ruled in favor of Ody. Was the ruling proper? Will trafficking. The defense counsel for XYZ objected to
your answer be the same if the matters to be the testimony of ABC at the trial of the child
testified on were known to Baby or acquired by her prostitution case and the introduction of
prior to her marriage to Cesar? Explain. the affidavits she executed against her husband
SUGGESTED ANSWER: as a violation of espousal confidentiality and
No. Under the Rules on Evidence, a wife cannot be marital privilege rule. It turned out that DEF,
examined for or against her husband without his the minor daughter of ABC by her first husband
consent, except in civil cases by one against the other, or who was a Filipino, was molested by XYZ
in a criminal case for a crime committed by one earlier. Thus, ABC had filed for legal separation
against the other. Since the case was filed by Ody from XYZ since last year.
against the spouses Cesar and Baby, Baby cannot be May the court admit the testimony and affidavits of
compelled to testify for or against Cesar without his the wife, ABC, against her husband, XYZ, in the
consent. (Lezama vs. Rodriguez, 23 SCRA 1166). criminal case involving child prostitution? Reason.
(5%)
The answer would be the same if the matters to SUGGESTED ANSWER:
be testified on were known to Baby or acquired by Yes. The court may admit the testimony and
her prior to her marriage to Cesar, because the affidavits of the wife against her husband in the
marital disqualification rule may be invoked with criminal case where it involves child prostitution of
respect to testimony on any fact. It is immaterial the wife's daughter. It is not covered by the marital
whether such matters were known to Baby before privilege rule. One exception thereof is where the
or after her marriage to Cesar. crime is committed by one against the other or the
latter's direct descendants or ascendants. (Sec. 22, Rule
Privilege Communication; Marital Privilege (2000) 130). A crime by the husband against the
Vida and Romeo are legally married. Romeo daughter is a crime against the wife and directly
is charged to court with the crime of serious attacks or vitally (Ordono v. Daquigan, 62
physical injuries committed against Selmo, son of impairs the conjugal relation.
Vida, step- son of Romeo. Vida witnessed the SCRA 270 [1975]).
infliction of the injuries on Selmo by Romeo. The
public prosecutor called Vida to the witness stand Privilege Communication; Marital Privilege (2006)
and offered her testimony as an eyewitness. Leticia was estranged from her husband Paul for
Counsel for Romeo objected on the ground of the more than a year due to his suspicion that she was
marital disqualification rule under the Rules of Court. having an affair with Manuel their neighbor. She was
a) Is the objection valid? (3%) temporarily living with her sister in Pasig City. For
b) Will your answer be the same if Vida’s testimony unknown reasons, the house of Leticia's sister was
is offered in a civil case for recovery of personal burned, killing the latter. Leticia survived. She saw her
property filed by Selmo against Romeo? (2%) husband in the vicinity during the incident. Later he was
SUGGESTED ANSWER: charged with arson in an Information filed with the
(a) No. While neither the husband nor the wife Regional Trial Court, Pasig City. During the trial, the
may testify for or against the other without the prosecutor called Leticia to the witness stand and offered
consent of the affected spouse, one exception is if the her testimony to prove that her husband committed
testimony of the spouse is in a criminal case for a arson. Can Leticia testify over the objection of her
crime committed by one against the other or the husband on the ground of marital privilege? (5%)
latter’s direct descendants or ascendants. (Sec, 22, Rule
130). The case falls under this exception because ALTERNATIVE ANSWER:
Selma is the direct descendant of the spouse Vide. No, Leticia cannot testify over the objection of her
husband, not under marital privilege which is
(b) No. The marital disqualification rule applies this inapplicable and which can be waived, but she would be
time. The exception provided by the rules is in a civil case barred under Sec. 22 of Rule 130, which prohibits her
by one spouse against the other. The case here from testifying and which cannot be waived
involves a case by Selmo for the recovery of personal (Alvarez v. Ramirez, G.R. No. 143439, October 14, 2005).
ALTERNATIVE ANSWER:
property against Vida’s spouse, Romeo. Yes, Leticia may testify over the objection of her
husband. The disqualification of a witness by reason of
Privilege Communication; Marital Privilege (2004)
marriage under Sec. 22, Rule 130 of the Revised
XYZ, an alien, was criminally charged of promoting and
Rules of Court has its exceptions as where the marital
facilitating child prostitution and other sexual abuses
relations are so strained that there is no more
under Rep. Act No. 7610. The principal witness
harmony to be preserved. The acts of Paul eradicate all
against him was his Filipina wife, ABC. Earlier,
major aspects of marital life. On the other hand, the
she had complained that XYZ's hotel was
State has an interest in punishing the guilty and
exonerating the innocent, and must have the right to Witness; Examination of a Child Witness; via Live-Link
offer the testimony of Leticia over the objection of TV (2005)
her husband (Alvarez v. Ramirez, G.R. No. 143439, When may the trial court order that the testimony of
October 14, 2005). a child be taken by live-link television? Explain.
SUGGESTED ANSWER:
Remedy; Lost Documents; Secondary Evidence (1992) The testimony of a child may be taken by live-link
Ajax Power Corporation, a utility company, sued in television if there is a substantial likelihood that the
the RTC to enforce a supposed right of way over a child would suffer trauma from testifying in the
property owned by Simplicio. At the ensuing trial, presence of the accused, his counsel or the
Ajax presented its retired field auditor who testified prosecutor as the case may be. The trauma must of a kind
that he know for a fact that a certain sum of money was which would impair the completeness or
periodically paid to Simplicio for some time as truthfulness of the testimony of the child. (See Sec. 25, Rule
consideration for a right of way pursuant to a written on Examination of a Child Witness).
contract. The original contract was not presented.
Instead, a purported copy, identified by the retired Witness; Examination of Witnesses (1997)
field auditor as such, was formally offered as part of his a) Aside from asking a witness to explain
testimony. Rejected by the trial court, it was finally made and supplement his answer in the cross-
the subject of an offer of proof by Ajax. examination, can the proponent ask in re-
direct examination questions on matters not
Can Ajax validly claim that it had sufficiently met its dealt with during cross- examination?
burden of proving the existence of the b) Aside from asking the witness on matters stated
contract establishing its right of way? Explain, in his re-direct examination, can the opponent in
SUGGESTED ANSWER: his re-cross-examination ask questions
No. Ajax had not sufficiently met the burden of on matters not dealt with during the re-direct?
proving the existence of the written contract because. It c) After plaintiff has formally submitted his
had not laid the basis for the admission of a evidence, he realized that he had forgotten to
purported copy thereof as secondary evidence. Ajax present what he considered an important
should have first proven the execution of the original evidence. Can he recall a witness?
document and its loss or destruction. (Sec. 5 of Rule 130) SUGGESTED ANSWER:
(a) Yes, on redirect examination, questions on matters not
Testimony; Independent Relevant Statement (1999) dealt with during the cross-examination may be
A overheard B call X a thief. In an action for allowed by the court in its discretion. (Sec. 7 of Rule 132).
defamation filed by X against B, is the testimony of A
(b) Yes, the opponent in his re-cross-examination
offered to prove the fact of utterance i.e., that B
called X a thief, admissible in evidence? Explain. may also ask questions on such other matters as may
(2%) be allowed by the court in its discretion. (Sec. 8.
SUGGESTED ANSWER: Rule 132).
Yes. The testimony of A who overheard B call X a thief
is admissible in evidence as an independently relevant (c) Yes, after formally submitting his evidence, the
statement. It is offered in evidence only to prove the plaintiff can recall a witness with leave of court. The court
tenor thereof, not to prove the truth of the facts asserted may grant or withhold leave in its discretion as the
therein. Independently relevant statements include interests of justice may require. (Sec. 9. Rule 132).
statements which are on the very facts in issue or
those which are circumstantial evidence thereof. The Witness; Examination of Witnesses (2002)
hearsay rule does not apply. Is this question on direct examination objectionable:
(See People vs. Gaddi, 170 SCRA 649) “What happened on July 12, 1999”? Why? (2%)
SUGGESTED ANSWER:
Witness; Competency of the Witness vs. Credibility The question is objectionable because it has no basis,
of the Witness (2004) unless before the question is asked the proper basis is
Distinguish Competency of the witness and laid.
credibility of the witness.
SUGGESTED ANSWER: Witness; Utilized as State Witness; Procedure (2006)
Competency of the witness refers to a witness As counsel of an accused charged with homicide, you
who can perceive, and perceiving, can make are convinced that he can be utilized as a state
known his perception to others (Sec. 20 of Rule 130), witness. What procedure will you take? (2.5%)
while credibility of the witness refers to a witness SUGGESTED ANSWER:
whose testimony is believable. As counsel of an accused charged with homicide, the
procedure that can be followed for the accused to be
utilized as a state witness is to ask the Prosecutor to
recommend that the accused be made a state witness.
It is the Prosecutor who must recommend and move stipulation in a pending action for partition and shall
for the acceptance of the accused as a state witness. file a bond with the register of deeds in an amount
The accused may also apply under the equivalent to the value of the personal property
Witness Protection Program. involved as certified to under oath by the parties
concerned. The fact of extra-judicial settlement shall
be published in a newspaper of general
circulation once a week for three consecutive
SPECIAL PROCEEDINGS weeks in the province. (Sec. 1, Rule 74, Rules of Court)
Cancellation or Correction; Entries Civil Registry (2005)
Helen is the daughter of Eliza, a Filipina, and Tony, a Habeas Corpus (1993)
Chinese, who is married to another woman living in China. Roxanne, a widow, filed a petition for habeas corpus
Her birth certificate indicates that Helen is the legitimate with the Court of Appeals against Major Amor who
child of Tony and Eliza and that she is a Chinese is allegedly detaining her 18-year old son Bong
citizen. Helen wants her birth certificate corrected by without authority of the law.
changing her filiation from "legitimate" to "illegitimate"
and her citizenship from "Chinese" to "Filipino" After Major Amor had a filed a return alleging the
because her parents were not married. What petition cause of detention of Bong, the Court of Appeals
should Helen file and what procedural requirements must promulgated a resolution remanding the case to the
be observed? Explain. (5%) RTC for a full-blown trial due to the conflicting facts
SUGGESTED ANSWER: presented by the parties in their pleadings. In
A petition to change the record of birth by changing directing the remand, the court of Appeals relied on
the filiation from "legitimate" to "illegitimate" and Sec.9(1), in relation to Sec. 21 of BP 129 conferring upon
petitioner's citizenship from "Chinese" to "Filipino" said Court the authority to try and decide habeas
because her parents were not married, does not corpus cases concurrently with the RTCs.
involve a simple summary correction, which could Did the Court of Appeals act correctly in remanding
otherwise be done under the authority of R.A. No. the petition to the RTC? Why?
9048. A petition has to be filed in a proceeding under SUGGESTED ANSWER:
Rule 108 of the Rules of Court, which has now been No, because while the CA has original
interpreted to be adversarial in nature. (Republic v. jurisdiction over habeas corpus concurrent with the
Valencia, G.R. No. L-32181, March 5, 1986) Procedural RTCs, it has no authority for remanding to the
requirements include: (a) filing a verified petition; (b) latter original actions filed with the former. On
naming as parties all persons who have or claim any the contrary, the CA is specifically given the power
interest which would be affected; (c) issuance of an to receive evidence and perform any and all acts
order fixing the time and place of hearing; (d) giving necessary to resolve factual issues raised in cases
reasonable notice to the parties named in the petition; falling within its original jurisdiction.
and (e) publication of the order once a week for three ALTERNATIVE ANSWER:
consecutive seeks in a newspaper of general Yes, because there is no prohibition in the law against
circulation. (Rule 108, Rules of Court) a superior court referring a case to a lower
court having concurrent jurisdiction. The
Escheat Proceedings (2002) Supreme Court has referred to the CA or the RTC
Suppose the property of D was declared escheated on cases falling within their concurrent jurisdiction.
July 1, 1990 in escheat proceedings brought by
the Solicitor General. Now, X, who claims to be an Habeas Corpus (1998)
heir of D, filed an action to recover the A was arrested on the strength of a warrant of arrest
escheated property. Is the action viable? Why? (2%) issued by the RTC in connection with an Information
SUGGESTED ANSWER: for Homicide. W, the live-in partner of A filed
No, the action is not viable. The action to recover a petition for habeas corpus against A's jailer and
escheated property must be filed within five years police investigators with the Court of Appeals.
from July 1, 1990 or be forever barred. (Rule 91, sec. 4). 1. Does W have the personality to file the petition
for habeas corpus? [2%]
Extra-judicial Settlement of Estate (2005) 2. Is the petition tenable? [3%]
Nestor died intestate in 2003, leaving no debts. How SUGGESTED ANSWER:
may his estate be settled by his heirs who are of legal 1. Yes. W, the live-in partner of A, has the
age and have legal capacity? Explain. (2%) personality to file the petition for habeas corpus
SUGGESTED ANSWER: because it may be filed by "some person in his
If the decedent left no will and no debts, and the behalf." (Sec. 3. Rule 102. Rules of Court.)
heirs are all of age, the parties may, without securing letters
of administration, divide the estate among themselves
by means of a public instrument or by
2. No. The petition is not tenable because the (1) No, because since the claim of X was disallowed,
warrant of arrest was issued by a court which had there is no amount against which to offset the claim
Jurisdiction to issue it (Sec. 4, Rule 102 Rules of Court) of D’s administrator.
Habeas Corpus (2003) (2) Yes, D’s administrator can prosecute the claim in
Widow A and her two children, both girls, aged 8 and 12 an independent proceeding since the claim of X was
years old, reside in Angeles City, Pampanga. A leaves disallowed. If X had a valid claim and D’s
her two daughters in their house at night because she administrator did not allege any claim against X
works in a brothel as a prostitute. Realizing the by way of offset, his failure to do so would bar his
danger to the morals of these two girls, B, the father of claim forever. (Rule 86, sec. 10).
the deceased husband of A, files a petition for habeas
corpus against A for the custody of the girls in the Intestate Proceedings; Debts of the Estate (2002)
Family Court in Angeles City. In said petition, B A, B and C, the only heirs in D’s intestate
alleges that he is entitled to the custody of the two girls proceedings, submitted a project of partition to the
because their mother is living a disgraceful life. The court partition, two lots were assigned to C, who
issues the writ of habeas corpus. When A learns of the immediately entered into the possession of the lots.
petition and the writ, she brings her two children to Thereafter, C died and proceedings for the settlement of
Cebu City. At the expense of B the sheriff of the his estate were filed in the RTC-Quezon City. D’s
said Family Court goes to Cebu City and serves the writ administrator then filed a motion in the probate court
on A. A files her comment on the petition raising the (RTC-Manila), praying that one of the lots assigned to C in
following defenses: the project of partition be turned over to him to satisfy
debts corresponding to C’s portion. The motion
a) The enforcement of the writ of habeas corpus in was opposed by the administrator of C’s estate. How
Cebu City is illegal; and should the RTC-Manila resolve the motion of D’s
b) B has no personality to institute the petition. 6% administrator? Explain. (3%)
Resolve the petition in the light of the above defenses SUGGESTED ANSWER:
of A. (6%) The motion of D’s administrator should be granted. The
SUGGESTED ANSWER: assignment of the two lots to C was premature because
(a) The writ of habeas corpus issued by the the debts of the estate had not been fully paid. [Rule
Family Court in Angeles City may not be legally 90, sec. 1; Reyes v. Barreto-Datu, 19 SCRA 85
enforced in Cebu City, because the writ is enforceable only (1967)].
within the judicial region to which the Family Court Judicial Settlement of Estate (2005)
belongs, unlike the writ granted by the Supreme State the rule on venue in judicial settlement of estate
Court or Court of Appeals which is enforceable of deceased persons. (2%)
anywhere in the Philippines. (Sec. 20 of SUGGESTED ANSWER:
Rule on Custody of Minors and Writ of Habeas Corpus in If the decedent is an inhabitant of the Philippines at the
Relation to Custody of Minors. (A.M. No. 03-04-04- time of' his death, whether a citizen or an alien, the venue
SC; see also Sec. 4 of Rule 102, Rules of Court.) shall be in the RTC in the province in which he
resides at the time of his death, not in the place where he
(b) B, the father of the deceased husband of A, has used to live. (Jao v. Court of Appeals,
the personality to institute the petition for habeas corpus G.R. No. 128314, May 29, 2002)
of the two minor girls, because the grandparent
has the right of custody as against the mother A who If he is an inhabitant, of a foreign country, the RTC of any
is a prostitute. (Sectioins 2 and 13, Id.) province or city in which he had estate shall be the venue.
The court first taking cognizance of the case shall
Intestate Proceedings (2002) exercise jurisdiction to the exclusion of all other courts.
X filed a claim in the intestate proceedings of D. D’s When the marriage is dissolved by the death of the
administrator denied liability and filed a counterclaim husband or wife, the community property shall be
against X. X’s claim was disallowed. inventoried, administered and liquidated, and the debts
(1) Does the probate court still have jurisdiction thereof paid, in the testate or intestate proceedings of the
to allow the claim of D’s administrator by way deceased spouse. If both spouses have died, the
of offset? Why? (2%) conjugal partnership shall be liquidated in the testate
(2) Suppose D’s administrator did not allege any or intestate proceedings of either. (Sees. 1 and 2, Rule 73,
claim against X by way of offset, can Rules of Court)
D’s administrator prosecute the claim in an
independent proceeding/ why/ (3%) Probate of Lost Wills (1999)
SUGGESTED ANSWER: What are the requisites in order that a lost
or destroyed Will may be allowed? (2%)

A's Will was allowed by the Court. No appeal sound and disposing mind, executed a last will and
was taken from its allowance. Thereafter, Y, who testament in English, a language spoken and written
was interested in the estate of A, discovered that by him proficiently. He disposed of his estate
the Will was not genuine because A's consisting of a parcel of land in Makati City and cash
signature was forged by X. A criminal action deposit at the City Bank in the sum of P 300 Million.
for forgery was instituted against X. May the He bequeathed P 50 Million each to his 3 sons and P
due execution of the Will be validly 150 Million to his wife. He devised a piece of
questioned in such criminal action? (2%) land worth P100 Million to Susan, his favorite
SUGGESTED ANSWER: daughter-in- law. He named his best friend,
a. In order that a lost or destroyed will may be Cancio Vidal, as executor of the will without bond.
allowed, the following must be complied with: Is Cancio Vidal, after learning of Sergio's death,
1. the execution and validity of the obliged to file with the proper court a petition of
same should be established; probate of the latter's last will and testament? (2%)
2. the will must have been in existence at SUGGESTED ANSWER:
the time of the death of the testator, or Cancio Vidal is obliged to file a petition for probate
shown to have been fraudulently or and for accepting or refusing the trust within the
accidentally destroyed in the lifetime of statutory period of 20 days under Sec. 3, Rule
the testator without his knowledge; and 75, Rules of Court.
3. its provisions are clearly and distinctly
proved by at least two credible witnesses. Supposing the original copy of the last will and tes-
(Sec. 6, Rule 76 of the Rules of Court) tament was lost, can Cancio compel Susan to pro-
duce a copy in her possession to be submitted
SUGGESTED ANSWER: to the probate court. (2%)
b. No. The allowance of the will from which no SUGGESTED ANSWER:
appeal was taken is conclusive as to its due execution. Yes, Cancio can compel Susan to produce the copy
(Sec. 1 of Rule 75.) Due execution includes a finding that in her possession. A person having custody of the
the will is genuine and not a forgery. Accordingly, will is bound to deliver the same to the court of
the due execution of the will cannot again be competent jurisdiction or to the executor, as
questioned in a subsequent proceeding, not even in a provided in Sec. 2, Rule 75, Rules of Court.
criminal action for forgery of the will.
Can the probate court appoint the widow
Probate of Will (2003) as executor of the will? (2%)
SUGGESTED ANSWER:
A, a resident of Malolos, Bulacan, died leaving an
estate located in Manila, worth P200,000.00. In what court, Yes, the probate court can appoint the widow as
taking into consideration the nature of jurisdiction executor of the will if the executor does not qualify,
and of venue, should the probate proceeding on the as when he is incompetent, refuses the trust, or fails
estate of A be instituted? (4%) to give bond (Sec. 6, Rule 78, Rules of Court).
SUGGESTED ANSWER:
The probate proceeding on the estate of A should be Can the widow and her children
instituted in the Municipal Trial Court of Malolos, settle extrajudicially among themselves the
Bulacan which has jurisdiction, because the estate is estate of the deceased? (2%)
SUGGESTED ANSWER:
valued at P200,000.00, and is the court of proper No, the widow and her children cannot settle the estate
venue because A was a resident of Malolos at the extrajudicially because of the existence of the Will. No
time of his death. (Sec. 33 of BP 129 as amended by RA will shall pass either real or personal estate unless it is
7691; Sec. 1 of Rule 73).
proved and allowed in the proper court
(Sec. 1, Rule 75, Rules of Court).
Probate of Will (2005)
After Lulu's death, her heirs brought her last will to a
Can the widow and her children initiate a separate
lawyer to obtain their respective shares in the estate. The petition for partition of the estate pending the
lawyer prepared a deed of partition distributing Lulu's probate of the last will and testament by the court?
estate in accordance with the terms of her will. Is the act (2%)
of the lawyer correct? Why? (2%) SUGGESTED ANSWER:
SUGGESTED ANSWER: No, the widow and her children cannot file a separate
No. No will, shall pass either real or personal estate unless petition for partition pending the probate of the will.
it is proved and allowed in the proper court. Partition is a mode of settlement of the estate (Sec. 1,
(Sec. 1, Rule 75, Rules of Court) Rule 75, Rules of Court).
Probate of Will (2006) Probate of Will; Mandatory Nature (2002)

Sergio Punzalan, Filipino, 50 years old, married, and
residing at Ayala Alabang Village, Muntinlupa City, of
What should the court do if, in the course of intestate appointed administrator of said estate. S, the
proceedings, a will is found and it is submitted surviving spouse, opposed the petition and A's
for probate? Explain. (2%) application to be appointed the administrator on the
SUGGESTED ANSWER: ground that he was not the child of her
If a will is found in the course of intestate deceased husband D. The court, however, appointed
proceedings and it is submitted for probate, the A as the administrator of said estate. Subsequently,
intestate proceedings will be suspended until the will is S, claiming to be the sole heir of D, executed an
probated. Upon the probate of the will, the Affidavit of Adjudication, adjudicating unto
intestate proceedings will be terminated. (Rule 82, sec. 1). herself the entire estate of her deceased
husband D. S then sold the entire estate to X.
Settlement of Estate (2001) Was the appointment of A as administrator
The rules on special proceedings ordinarily require that proper? [2%]
the estate of the deceased should be judicially Was the action of S in adjudicating the entire estate
administered thru an administrator or executor. of her late husband to herself legal? [3%]
What are the two exceptions to said SUGGESTED ANSWER:
requirements? (5%) 1. Yes, unless it is shown that the court gravely-
SUGGESTED ANSWER: abused its discretion in appointing the illegitimate
The two exceptions to the requirement are: child as administrator, instead of the spouse. While
(a) Where the decedent left no will and no debts and the the spouse enjoys preference, it appears that the
heirs are all of age, or the minors are represented by their spouse has neglected to apply for letters of
judicial or legal representatives duly authorized for administration within thirty (30) days from the death of
the purpose, the parties may without securing letters the decedent. (Sec. 6, Rule 78, Rules of Court;
of administration, divide the estate among themselves Gaspay, Jr. vs. Court of Appeals. 238 SCRA 163.)
by means of public instrument filed in the office of the ALTERNATIVE ANSWER:
register of deeds, or should they disagree, they may do so S, the surviving spouse, should have been appointed
in an ordinary action of partition. If there is only one heir, administratrix of the estate, in as much as she enjoys
he may adjudicate to himself the entire estate by means of first preference in such appointment under the rules.
an affidavit filed in the office of the register of deeds. The (Sec. 6(a) of Rule 78, Rules of Court.)
parties or the sole heir shall file simultaneously abound
SUGGESTED ANSWER:
with the register of deeds, in an amount equivalent to the
2. No. An affidavit of self-adjudication is allowed
value of the personal property as certified to under
only if the affiant is the sole heir of the. deceased. (Sec.
oath by the parties and conditioned upon the
1, Rule 74, Rules of Court). In this case, A also claims to be
payment of any just claim that may be filed later. The fact
an heir. Moreover, it is not legal because there
of the extrajudicial settlement or administration shall
is already a pending juridical proceeding for
be published in a newspaper of general circulation
the settlement of the estate.
in the province once a week for three consecutive
weeks. (Sec. 1 of Rule 74, Rules of Court) Venue; Special Proceedings (1997)
Give the proper venue for the following special
(b) Whenever the gross value of the estate of a proceedings:
deceased person, whether he died testate or intestate, does a) A petition to declare as escheated a parcel of
not exceed ten thousand pesos, and that fact is made to land owned by a resident of the Philippines who
appear to the RTC having jurisdiction or the estate by the died intestate and without heirs or persons
petition of an interested person and upon hearing, entitled to the property.
which shall be held not less than one (1) month nor more b) A petition for the appointment of an
than three (3) months from the date of the last publication administrator over the land and building left
of a notice which shall be published once a week for three by an American citizen residing in California,
consecutive weeks in a newspaper of general circulation who had been declared an incompetent
in the province, and after such other notice to by an American court.
c) A petition for the adoption of a minor residing in
interested persons as the court may direct, the
court may proceed summarily, without the Pampanga.
SUGGESTED ANSWER:
appointment of an executor (a) The venue of the escheat proceedings of a parcel
or administrator, to settle the estate. (Sec. 2 of Rule of land in this case is the place where the
74, Rules of Court)
deceased last resided. (Sec. 1. Rule 91, Rules of Court).
Settlement of Estate; Administrator (1998) (b) The venue for the appointment of an
A, claiming to be an illegitimate child of the deceased D,
administrator over land and building of an American
instituted an Intestate proceeding to settle the estate
citizen residing in California, declared Incompetent
of the latter. He also prayed that he be
by an American Court, is the RTC of the place where composed of investigators from the Office of the
his property or part thereof is situated. (Sec. 1. Rule 92). Special Prosecutor and from the Office of the
Deputy Ombudsman for the Military to conduct a
(c) The venue of a petition for the adoption joint investigation of the criminal case and the
of a minor residing in Pampanga is the RTC of the administrative case. The team of investigators
place in which the petitioner resides. (Sec. 1. Rule 99) recommended to the Ombudsman that AG be
preventively suspended for a period not exceeding six
months on its finding that the evidence of guilt is
strong. The Ombudsman issued the said order as
SUMMARY PROCEDURE recommended by the investigators.
Prohibited Pleadings (2004) AG moved to reconsider the order on the following

Charged with the offense of slight physical grounds: (a) the Office of the Special Prosecutor had
injuries under an information duly filed with the exclusive authority to conduct a preliminary
MeTC in Manila which in the meantime had investigation of the criminal case; (b) the order for his
duly issued an order declaring that the case shall be preventive suspension was premature because he had
governed by the Revised Rule on Summary yet to file his answer to the administrative complaint
Procedure, the accused filed with said court a and submit countervailing evidence; and (c) he was a
motion to quash on the sole ground that the career executive service officer and under Presidential
officer who filed the information had no authority to Decree No. 807 (Civil Service Law), his
do so. The MeTC denied the motion on the ground preventive suspension shall be for a maximum
that it is a prohibited motion under the said Rule. period of three months. Resolve with reasons
The accused thereupon filed with the RTC in Manila the motion of respondent AG. (5%)
a petition for certiorari in sum assailing and SUGGESTED ANSWER:
seeking the nullification of the MeTC's denial of his The motion should be denied for the
motion to quash. The RTC in due time issued following reasons:
an order denying due course to the certiorari 1. The Office of the Special Prosecutor does
petition on the ground that it is not allowed by not have exclusive authority to conduct a
the said Rule. The accused forthwith filed with preliminary investigation of the criminal
said RTC a motion for reconsideration of its case but it participated in the investigation
said order. The RTC in time denied said motion together with the Deputy Ombudsman for the
for reconsideration on the ground that the same is Military who can handle cases of civilians and
also a prohibited motion under the said Rule. is not limited to the military.
Were the RTC's orders denying due course to 2. The order of preventive suspension need not wait
the petition as well as denying the motion for the answer to the administrative complaint
for reconsideration correct? Reason. (5%) and the submission of countervailing evidence.
SUGGESTED ANSWER: (Garcia v. Mojica, G.R. No. 13903, September 10, 1999)
The RTC's orders denying due course to the petition
for certiorari as well as denying the motion for In Vasquez case, G.R. No. 110801, April 6, 1995, the
reconsideration are both not correct. The petition for court ruled that preventive suspension pursuant to
certiorari is a prohibited pleading under Section 19(g) Sec. 24 of R.A. No. 6770 (Ombudsman Act of 1989),
of the Revised Rule on Summary Procedure and the shall continue until termination of the case but shall
motion for reconsideration, while it is not prohibited not exceed six (6) months, except in relation to
motion (Lucas v. Fabros, AM No. MTJ-99-1226, January R.A. No, 3019 and P.D. No. 807. As a career
31, 2000, citing Joven v. Court of Appeals, 212 SCRA 700, executive officer, his preventive suspension
707-708 (1992), should be denied because the petition under the Civil Service Law may only be for a
for certiorari is a prohibited pleading. maximum period of three months. The period of the
suspension under the Anti-Graft Law shall be the
same pursuant to the equal protection clause.
MISCELLANEOUS (Garcia v. Mojica, G.R. No.
Administrative Proceedings (2005) 13903, September 10, 1999; Layno v. Sandiganbayan,
Regional Director AG of the Department of Public G.R. No. L-65848, May 21, 1985)
Works and Highways was charged with violation of
Section 3(e) of Republic Act No. 3019 in the Office of the Congress; Law Expropriating Property (2006)
Ombudsman. An administrative charge for gross May Congress enact a law providing that a 5, 000
misconduct arising from the transaction subject matter of square meter lot, a part of the UST compound in
said criminal case was filed against him in the same Sampaloc Manila, be expropriated for the
office. The Ombudsman assigned a team construction of a park in honor of former City Mayor
Arsenic Lacson? As compensation to UST, the City
of sirdondee@gmail.com
Remedial Law Bar Examination Q & A (1997-2006) by: Page 66 of 66
Manila shall deliver its 5-hectare lot in Sta. Rosa, decree or executive order can mandate that the
Laguna originally intended as a residential subdivision determination of just compensation by the executive
for the Manila City Hall employees. Explain. (5%) or legislative departments can prevail over the court's
SUGGESTED ANSWER: findings (Export Processing Zone Authority v. Dulay,
Yes, Congress may enact a law expropriating property G.R. No. L-59603, April 29,1987; Sees. 5 to 8 Rule 67,1997
provided that it is for public use and with just Rules of Civil Procedure). In addition, compensation
compensation. In this case, the construction of a park must be paid in money (Esteban v. Onorio, A.M. No.
is for public use (See Sena v. Manila Railroad Co., G.R. 00-4-166-RTC, June 29, 2001).
No. 15915, September 7, 1921; Reyes v. NHA, GR No.
147511, March 24, 2003). The planned compensation,
however, is not legally tenable as the determination of .
just compensation is a judicial function. No statute,
RA 3019; Mandatory Suspension (2001)

Governor Pedro Mario of Tarlac was charged with indirect bribery before the Sandiganbayan for accepting a car in
exchange of the award of a series of contracts for medical supplies. The Sandiganbayan, after going over
the information, found the same to be valid and ordered the suspension of Mario. The latter contested the
suspension claiming that under the law (Sec. 13 of R.A. 3019) his suspension is not automatic upon the filing of the
information and his suspension under Sec. 13, R.A. 3019 is in conflict with Sec. 5 of the Decentralization Act of
1967 (R.A. 5185). The Sandilganbayan overruled Mario’s contention stating that Mario’s suspension under the
circumstances is mandatory.
Is the court’s ruling correct? Why?
SUGGESTED ANSWER:
Yes. Mario’s suspension is mandatory, although not automatic, (Sec. 13 of R.A. No. 3019 in relation to Sec. 5 of the Decentralization
Act of 1967 (R.A. No. 5185). It is mandatory after the determination of the validity of the information in a
pre- suspension hearing. [Segovia v. Sandiganbayan, 288 SCRA 328 (1988)]. The purpose of suspension is to
prevent the accused public officer from frustrating or hampering his prosecution by intimidating or
influencing witnesses or tampering with evidence or from committing further acts of malfeasance while in office.

Answers to the BAR: Taxation 1994-2006 (Arranged by Topics) sirdondee@gmail.com 1 of
73
ANSWERS TO BAR
IN
TAXATION LAW
* ARRANGED BY TOPIC *
(1994 – 2006)

ROMUALDO L. SEÑERIS II
Silliman University - College of Law

by the UP LAW COMPLEX
&
June 3, 2007
73
FOREWARD
This work is NOT intended FOR SALE or COMMERCE. This work is a freeware. It may
be freely copied and distributed, nevertheless, PERMISSION TO COPY from the editors
is ADVISABLE to protect the interest of the ORIGINAL SOURCES/REFERENCES
of this material…. It is primarily intended for all those who desire to have a
deeper understanding of the issues commonly touched by the Philippine Bar
Examinations and its trend on specifically on Taxation Laws. It is specifically intended
for law students from the provinces who, very often, are recipients of deliberately
distorted notes from other unscrupulous law schools and students.
I would like to seek the indulgence of the reader for some Bar Questions which
are improperly classified under a topic and for some topics which are improperly
or ignorantly phrased, for the arranger is just a Bar Reviewee who has prepared this
work while reviewing for the 2nd time for the Bar Exams 2007 under time
constraints and within his limited knowledge of the law. I would like to seek the reader’s
indulgence also for a number of typographical errors in this work.
The Arranger
73
Detailed Table of Contents
GENERAL PRINCIPLES .................................................................................................................. 8
Basic Features: Present Income Tax System (1996) ....................................................................................... 8
Basic Stages or Aspects of Taxation (2006) .............................................................................................. 8
Collection of Taxes: Authority; Ordinary Courts (2001) ............................................................................... 8
Collection of Taxes: Prescription (2001) ..................................................................................................... 8
Direct Tax vs. Indirect Tax (1994) ........................................................................................................... 8
Double Taxation (1997) ......................................................................................................................... 9
Double Taxation: What Constitutes DT? (1996) ......................................................................................... 9
Double Taxation; Indirect Duplicate Taxation (1997) ................................................................................... 9
Double Taxation; License Fee vs. Local Tax (2004) .................................................................................... 9
Double Taxation; Methods of Avoiding DT (1997).......................................................................................... 9
Imprescriptibility of Tax Laws (1997) ......................................................................................................... 9
Power of Taxation: Equal Protection of the Law (2000) .................................................................................10
Power of Taxation: Inherent in a Sovereign State (2003) .............................................................................10
Power of Taxation: Legality; Local Gov’t Taxation (2003) ...............................................................................10
Power of Taxation: Legislative in Nature (1994) ...........................................................................................10
Power of Taxation: Limitations of the Congress (2001) ..................................................................................10
Power of Taxation: Limitations: Passing of Revenue Bills (1997) ......................................................................11
Power of Taxation: Limitations; Power to Destroy (2000)................................................................................11
Power of Taxation: Revocation of Exempting Statutes (1997) ......................................................................11
Power of Taxation; Inherent in a Sovereign State (2005) .............................................................................11
Power of Taxation; Legislative in Nature (1996) ...........................................................................................12
Purpose of Taxation; Interpretation (2004) ..............................................................................................12
Purpose of Taxation; Legislative in Nature (2004) ........................................................................................12
Rule on Set-Off or Compensation of Taxes (1996) ........................................................................................12
Rule on Set-Off or Compensation on Taxes (2005) .......................................................................................13
Tax Avoidance vs. Tax Evasion (1996) ...................................................................................................13
Tax Avoidance vs. Tax Evasion (2000) ...................................................................................................13
Tax Exemptions: Nature & Coverage; Proper Party (2004) ..............................................................................13
Tax Laws; BIR Ruling; Non-Retroactivity of Rulings (2004) .............................................................................14
Tax Pyramiding; Definition & Legality (2006) ..............................................................................................14
Taxpayer Suit; When Allowed (1996) ........................................................................................................14
Uniformity in the Collection of Taxes (1998) ............................................................................................14
INCOME TAXATION ....................................................................................................................... 14
Basic: Allowable Deductions vs. Personal Exemptions (2001) .........................................................................14
Basic: Meaning of Taxable Income (2000) ..................................................................................................15
Basic: Principle of Mobilia Sequuntur Personam (1994) .................................................................................15
Basic: Proper Allowance of Depreciation (1998) ..........................................................................................15
Basic: Sources of Income: Taxable Income (1998) .......................................................................................15
Basic: Tax Benefit Rule (2003) ...............................................................................................................15
Basic; Basis of Income Tax (1996) ...........................................................................................................16
Basic; Gross Income: Define (1995) .......................................................................................................16
Basic; Income vs. Capital (1995) .............................................................................................................16
Basic; Schedular Treatment vs. Global Treatment (1994) ...............................................................................16
Compensation; Income Tax: Due to Profitable Business Deal (1995)..................................................................16
Corporate: Income: Donor’s tax; Tax Liability (1996) .....................................................................................17
Corporate; Income Tax; Reasonableness of the Bonus (2006) .........................................................................17
Corporate; Income: Coverage; "Off-Line" Airline (1994) .................................................................................17
Corporate; Income: Coverage; "Off-Line" Airline (2005) .................................................................................17
Dividends: Disguised dividends (1994) .....................................................................................................18
Dividends; Income Tax; Deductible Gross Income (1999) ...............................................................................18
73
Effect; Condonation of Loan in Taxation (1995) ...........................................................................................18
Fringe Benefit Tax: Covered Employees (2001) ...........................................................................................18
Fringe Benefit Tax: Employer required to Pay (2003).....................................................................................19
Interest: Deficiency Interest: define (1995 Bar) .........................................................................................19
Interest: Delinquency Interest: define (1995)...............................................................................................19
ITR: Personal Income; Exempted to File ITR (1997) ......................................................................................19
ITR; Domestic Corporate Taxation (1997) ................................................................................................19
ITR; Domestic Corporate Taxation (2001) ................................................................................................20
ITR; Personal Income: Two Employment (2001) ........................................................................................20
ITR; Personal Income; GSIS Pension (2000) ............................................................................................20
ITR; Personal Income; Married Individual (2004) ..........................................................................................20
ITR; Taxpayer; Liabilities; Falsified Tax Return (2005) ...................................................................................20
Partnership: Income Tax (1995) ............................................................................................................21
Personal; Income Tax: Non-Resident Alien (2000) ........................................................................................21
Personal; Income Tax: Non-Resident Citizen (1999) ......................................................................................21
Personal; Income Tax: Tax-Free Exchange (1997) ........................................................................................22
Personal; Income Tax; Contract of Lease (1995) ..........................................................................................22
Personal; Income Tax; Married Individual (1997) ..........................................................................................22
Personal; Income Tax; Retiring Alien Employee (2005) ..................................................................................23
Personal; Income Taxation: Non-Resident Citizen (1997)................................................................................23
Taxable Income: Illegal Income (1995 Bar) ..............................................................................................23
Taxable or Non-Taxable; Income and Gains (2005) .......................................................................................23
Withholding Tax: Non-Resident Alien (2001)...............................................................................................24
Withholding Tax: Retirement Benefit (2000) .............................................................................................24
Withholding Tax: Retirement Benefit (2000) .............................................................................................24
Withholding Tax: Royalty (2002) .............................................................................................................24
Withholding Tax; Coverage (2004) ...........................................................................................................25
Withholding Tax; Domestic Corporation; Cash Dividends (2001) ......................................................................25
Withholding Tax; Income subject thereto (2001) .......................................................................................25
Withholding Tax; Non-Resident Alien (1994)...............................................................................................25
Withholding Tax; Non-Resident Corporation (1994) ......................................................................................26
Withholding Tax; Reader's Digest Award (1998) ..........................................................................................26
Withholding Tax; Time Deposit Interest; GSIS Pension (1994) .........................................................................26
DEDUCTIONS, EXEMPTIONS, EXCLUSIONS & INCLUSIONS ..................................................... 26
Deduction: Facilitation Fees or "kickback" (1998) .....................................................................................26
Deductions: Ordinary Business Expenses (2004) ........................................................................................26
Deductions: Amount for Bribe (2001) .......................................................................................................27
Deductions: Capital Losses; Prohibitions (2003)..........................................................................................27
Deductions: Deductible Items from Gross Income (1999) ............................................................................27
Deductions: Income Tax: Donation: Real Property (2002) ..............................................................................27
Deductions: Non-Deductible Items; Gross Income (1999) ...........................................................................28
Deductions: Requisites; Deducibility of a Loss (1998) ...................................................................................28
Deductions; Income Tax: Allowable Deductions (2001) ..................................................................................28
Deductions; Vanishing Deduction; Purpose (2006) .......................................................................................28
Exclusion & Inclusion; Gross Receipts (2006) .............................................................................................28
Exclusion vs. Deduction from Gross Income (2001) ......................................................................................28
Exclusions & Inclusions: Benefits on Account of Injury (1995) .....................................................................29
Exclusions & Inclusions: Executive Benefits (1995) ......................................................................................29
Exclusions & Inclusions; Assets; Resident Alien (2005) .................................................................................29
Exclusions & Inclusions; Benefits on Account of Death (1996).........................................................................30
Exclusions & Inclusions; Benefits on Account of Injury (2005) .....................................................................30
Exclusions & Inclusions; Compensation for personal injuries or sickness (2003) ..................................................30
Exclusions & Inclusions; Facilities or Privileges; Military Camp (1995) ..........................................................30
Exclusions & Inclusions; Gifts over and above the Retirement Pay (1995) ...........................................................31
Exclusions & Inclusions; ITR; 13th month pay and de minimis benefits (2005)......................................................31
Exclusions & Inclusions; ITR; Dividends received by a domestic corporation (2005) ..............................................31
Exclusions & Inclusions; ITR; Income realized from sale (2005) .......................................................................31
Exclusions & Inclusions; ITR; Interest on deposits (2005) ...........................................................................31
Exclusions & Inclusions; ITR; Proceeds of life insurance (2005) ...................................................................32
Exclusions & Inclusions; Life Insurance Policy (2003) ...................................................................................32
73
Exemptions: Charitable Institutions (2000).................................................................................................32
Exemptions: Charitable Institutions; Churches (1996) ...................................................................................32
Exemptions: Educational institution (2004) ................................................................................................32
Exemptions: Gifts & Donations (1994)....................................................................................................32
Exemptions: Head of the Family: (1998) ...................................................................................................33
Exemptions: Non-Profit Educational Institutions (2000) .................................................................................33
Exemptions: Non-Profit Entity; Ancillary Activity & Incidental Operations (1994) ...................................................33
Exemptions: Non-Stock/ Non-Profit Association (2002) .................................................................................34
Exemptions: Prize of Peace Poster Contest (2000) ....................................................................................34
Exemptions: Prizes & Awards; Athletes (1996) ............................................................................................34
Exemptions: Retirement Benefits: Work Separation (1999) .............................................................................34
Exemptions: Separation Pay (1994) .......................................................................................................35
Exemptions: Stock Dividends (2003) ........................................................................................................36
Exemptions: Strictly Construed (1996) ...................................................................................................36
Exemptions: Terminal Leave Pay (1996) ....................................................................................................36
Exemptions; Charitable Institutions (2006).................................................................................................36
Exemptions; Educational institution (2004) ................................................................................................36
Exemptions; Exemptions are Unilateral in Nature (2004) ................................................................................37
Exemptions; Gov’t Bonus, Gifts, & Allowances (1994) ...................................................................................37
Exemptions; Personal & Additional Exemption (2006) ...................................................................................37
Exemptions; Roman Catholic Church; Limitations (2005) ...........................................................................38
CAPITAL GAIN TAX ....................................................................................................................... 38
Capital Asset vs. Ordinary Asset (2003) ..................................................................................................38
Capital Gain Tax; Nature (2001) ..............................................................................................................38
Ordinary Sale of a Capital Asset (1994) .....................................................................................................38
Sales of Share of Stocks: Capital Gains Tax Return (1999)..............................................................................39
Tax Basis: Capital Gains: Merger of Corporations (1994)................................................................................39
Tax Basis: Capital Gains: Tax-Free Exchange of Property (1994) ......................................................................39
CORPORATION & PARTNERSHIP ................................................................................................ 39
Bad Debts; Factors; Elements thereof (2004) ...........................................................................................39
Condominium Corp.; Sale of Common Areas (1994) ..................................................................................40
Corporation; Sale; Creditable Withholding Tax (1994) ...................................................................................40
Dividends: Withholding Tax (1999) ..........................................................................................................40
Effect: Dissolution; Corporate Existence (2004)...........................................................................................41
Minimum Corporate Income Tax (2001) .....................................................................................................41
Minimum Corporate Income Tax; Exemption (2001) ......................................................................................41
ESTATE & DONOR’S TAXES ........................................................................................................ 41
Donor’s Tax: Election Contributions (1998) ................................................................................................41
Donor’s Tax; Basis for Determining Gain (1995) ..........................................................................................41
Donor’s Tax; Dacion en Pago; Effect: Taxation (1997) ................................................................................42
Donor’s Tax; Donation to a Sibling (2001) ..................................................................................................42
Donor’s Tax; Donation to Non-Stock, Non-Profit Private Educational Institutions (2000) ....................................42
Donor’s Tax; Donation to Political Candidate (2003) ..................................................................................43
Donor’s Tax; Donee or Beneficiary; Stranger (2000) .....................................................................................43
Donor’s Tax; Sale of shares of Stock & Sale of Real Property (1999) .............................................................43
Estate Tax: Comprehensive Agrarian Reform Law (1994) ............................................................................43
Estate Tax: Donation Mortis Causa (2001) .................................................................................................43
Estate Tax: Donation Mortis Causa vs. Inter Vivos (1994) ...............................................................................44
Estate Tax: Gross Estate: Allowable Deduction (2001)...................................................................................44
Estate Tax: Gross Estate: Deductions (2000) ..............................................................................................44
Estate Tax: Inclusion: Resident Alien (1994) ...............................................................................................44
Estate Tax: Payment vs. Probate Proceedings (2004) ....................................................................................45
Estate Tax: Situs of Taxation: Non-Resident Decedent (2000) ......................................................................45
Estate Tax: Vanishing Deductions (1994) ..................................................................................................45
Estate Tax; Payment vs. Probate Proceedings (2005) ....................................................................................45
BUSINESS TAXES .................................................................................................................................. 45
73
VAT: Basis of VAT (1996)......................................................................................................................45
VAT: Characteristics of VAT (1996)..........................................................................................................45
VAT: Exempted Transactions (1996) ........................................................................................................45
VAT: Liable for Payment (1996) ..............................................................................................................46
VAT: Transactions "Deemed Sales” (1997).................................................................................................46
VAT; Covered Transactions (1998) ........................................................................................................46
VAT; Exemption: Constitutionality (2004) ..................................................................................................46
VAT; Non-VAT taxpayer; Claim for Refund (2006) .....................................................................................47
REMEDIES IN INTERNAL REVENUE TAXES................................................................................ 47
BIR: Assessment: Unregistered Partnership (1997) ......................................................................................47
BIR: Collection of Tax Deficiency (1999)....................................................................................................47
BIR: Compromise; Conditions (2000) .......................................................................................................48
BIR: Compromise; Extent of Authority (1996) .............................................................................................48
BIR: Compromise; Withholding Agent (1998) ..............................................................................................48
BIR: Corporation: Distraint & Levy (2002) ..................................................................................................48
BIR: Court of Tax Appeals: Collection of Taxes; Grounds for Compromise (1996)..................................................49
BIR: Criminal Prosecution: Tax Evasion (1998) ........................................................................................49
BIR: Extinction; Criminal Liability of the Taxpayer (2002) ............................................................................49
BIR: Fraudulent Return; Prima Facie Evidence (1998) ................................................................................50
BIR: Fraudulent Return; Prima Facie Evidence (2002) ................................................................................50
BIR: Garnishment: Bank Account of a Taxpayer (1998) ..................................................................................50
BIR: Pre-Assessment Notice not Necessary (2002) .......................................................................................51
BIR: Prescriptive Period: Civil Action (2002) ...............................................................................................51
BIR: Prescriptive Period; Assessment & Collection (1999) ..............................................................................51
BIR: Prescriptive Period; Criminal Action (2002) ..........................................................................................51
BIR: Secrecy of Bank Deposits Law (1998).................................................................................................52
BIR: Summary Remedy: Estate Tax Deficiencies (1998) .................................................................................52
BIR: Unpaid Taxes vs. Claims for Unpaid Wages (1995) .................................................................................53
BIR; Assessment; Criminal Complaint (2005) ...........................................................................................53
BIR; Authority; Refund or Credit of Taxes (2005) .........................................................................................53
BIR; Compromise (2004) ......................................................................................................................53
BIR; Compromise (2005) ......................................................................................................................54
BIR; Deficiency Tax Assessment vs. Tax Refund / Tax Credit (2005) ..............................................................54
BIR; Distraint; Prescription of the Action (2002) .......................................................................................54
BIR; False vs. Fraudulent Return (1996) ....................................................................................................55
BIR; Jurisdiction; Review Rulings of the Commissioner (2006) ........................................................................55
BIR; Prescriptive Period; Assessment; Fraudulent Return (2002)......................................................................55
BIR; Prescriptive Period; Criminal Action (2006) ..........................................................................................55
BIR; Taxpayer: Civil Action & Criminal Action (2002) ....................................................................................55
Custom: Violation of Tax & Custom Duties (2002) ........................................................................................56
Customs; Basis; Automatic Review (2002) ..............................................................................................56
Delinquent Tax Return (1998).................................................................................................................57
Jurisdiction: Customs vs. CTA (2000) ...................................................................................................57
LGU: Collection of Taxes, Fees & Charges (1997) ........................................................................................57
Tax Amnesty vs. Tax Exemption (2001).....................................................................................................57
Taxpayer: Administrative & Judicial Remedies (2000) ...................................................................................57
Taxpayer: Assessment: Protest: Claims for refund (2000) ..............................................................................58
Taxpayer: Assessment; Injunction (2004) ...............................................................................................58
Taxpayer: BIR Audit or Investigation (1999) .............................................................................................58
Taxpayer: City Board of Assessment Decision; Where to appeal (1999) ..............................................................59
Taxpayer: Claim for Refund; Procedure (2002) .........................................................................................59
Taxpayer: Deficiency Income Tax (1995) ...................................................................................................59
Taxpayer: Exhaustion of Administrative Remedies (1997) ...........................................................................60
Taxpayer: Failure to Withheld & Remit Tax (2000) .....................................................................................60
Taxpayer: NIRC vs. TCC Remedies (1996)..................................................................................................60
Taxpayer: Overwitholding Claim for Refund (1999) .......................................................................................61
Taxpayer: Prescriptive Period: Suspended (2000) ........................................................................................61
Taxpayer: Prescriptive Period; Claim for Refund (1997) .................................................................................61
Taxpayer: Prescriptive Period; Claims for Refund (1994) ................................................................................61
Taxpayer: Prescriptive Period; Claims for Refund (2004) ................................................................................62
73
Taxpayer: Protest against Assessment (1998).............................................................................................62
Taxpayer: Protest; Claim of Refund (1996) .................................................................................................63
Taxpayer; Appeal to the Court of Tax Appeals (2005) .................................................................................63
Taxpayer; Claim for Tax Credits (2006) .....................................................................................................63
Taxpayer; Compromise after Criminal Action (1998) .....................................................................................63
Taxpayer; Protest against Assessment; Donor’s Tax (1995) ............................................................................64
Taxpayer; Withholding Agent; Claim of Tax Refund (2005)..............................................................................64
LOCAL & REAL PROPERTY TAXES ............................................................................................. 64
Local Taxation: Actual Use of Property (2002).............................................................................................64
Local Taxation: Coverage (2002) .............................................................................................................64
Local Taxation: Exemption; Real Property Taxes (2002) .................................................................................65
Local Taxation: Imposition of Ad Valorem Tax (2000) ....................................................................................65
Local Taxation: Legality/ Constitutionality; Tax Ordinance (2003) .................................................................65
Local Taxation: Legality; Imposition of Real Property Tax Rate (2002) ................................................................65
Local Taxation: Power to Impose (2003) ....................................................................................................65
Local Taxation: Remission/Condonation of Taxes (2004) ...............................................................................66
Local Taxation: Rule of Uniformity and Equality (2003) ..............................................................................66
Local Taxation; Situs of Professional Taxes (2005).......................................................................................66
Local Taxation; Special Levy on Idle Lands (2005) .......................................................................................66
Real Property Tax: Underground Gasoline Tanks (2003) .............................................................................67
Real Property Tax; Requirements; Auction Sales of Property for Tax Delinquency (2006) ........................................67
Real Property Taxation: Capital Asset vs. Ordinary Asset (1995) ......................................................................67
Real Property Taxation: Capital Gains vs. Ordinary Gains (1998) ......................................................................67
Real Property Taxation: Coverage of Ordinary Income (1998) ..........................................................................67
Real Property Taxation: Exchange of Lot; Capital Gain Tax (1997) ....................................................................68
Real Property Taxation: Exemption/Deductions; Donor’s Tax (1998) .............................................................68
Real Property Taxation: Exemption: Acquiring New Principal Residence (2000) ....................................................68
Real Property Taxation: Fundamental Principles (1997) .................................................................................69
Real Property Taxation: Principles & Limitations: LGU (2000) ..........................................................................69
Real Property Taxation: Property Sold is an Ordinary Asset (1998) ...................................................................69
Real Property Taxation: Underground Gasoline Tanks (2001) ..........................................................................69
Real Property Taxation; Exempted Properties (2006) ....................................................................................69
TARIFF AND CUSTOMS DUTIES .................................................................................................. 70
Customs: “Flexible Tariff Clause” (2001) ...................................................................................................70
Customs: Administrative vs. Judicial Remedies (1997) .................................................................................70
Customs: Importation (1995) .................................................................................................................70
Customs: Jurisdiction; Seizure & Forfeiture Proceedings (1996)......................................................................70
Customs: Kinds of Custom Duties (1995) ..................................................................................................70
Customs: Kinds of Custom Duties (1997) ..................................................................................................71
Customs: Remedies of an Importer (1996) .................................................................................................71
Customs: Returning Residents: Tourist/Travelers (2003)................................................................................71
Customs: Seizure & Forfeiture: Effects (1994).............................................................................................71
Customs: Steps involving Protest Cases (1994) .......................................................................................72
Customs; Basis of Dutiable Value; Imported Article (2005) ..........................................................................72
Customs; Countervailing Duty vs. Dumping Duty (2005) ................................................................................72
Customs; Taxability; Personal Effects (2005)..............................................................................................72
OTHER RELATED MATTERS ........................................................................................................ 73
BIR: Bank Deposits Secrecy Violation (2000) ...........................................................................................73
BIR: Secrecy of Bank Deposit Law (2003) ...............................................................................................73
sirdondee@gmail.com 8 of
Answers to the BAR: Taxation 1994-2006 (Arranged by Topics)
GENERAL PRINCIPLES
Basic Features: Present Income Tax System (1996)
73
What are the basic features of the present income Collection of Taxes: Authority; Ordinary Courts (2001)
tax system"? May the courts enjoin the collection of revenue
SUGGESTED ANSWER:
Our present income tax system can be said to have taxes? Explain your answer. (2%)
SUGGESTED ANSWER:
the following basic features: As a general rule, the courts have no authority to enjoin the
(a) It has adopted a COMPREHENSIVE TAX collection of revenue taxes. (Sec. 218, NIRC).
SITUS by using the nationality, residence, However, the Court of Tax Appeals is empowered to
and source rules. This makes citizens and resident enjoin the collection of taxes through administrative
aliens taxable on their income derived from all remedies when collection could jeopardize the interest of the
sources while non-resident aliens are taxed only government or taxpayer. (Section 11, RA 1125).
on their income derived from within the
Philippines. Domestic corporations are also Collection of Taxes: Prescription (2001)
taxed on universal income while foreign May the collection of taxes be barred by
corporations are taxed only on income from within. prescription? Explain your answer. (3%)
SUGGESTED ANSWER:
(b) The individual income tax system is mainly Yes. The collection of taxes may be barred by
PROGRESSIVE IN NATURE in that it provides prescription. The prescriptive periods for collection of
a graduated rates of income tax. Corporations taxes are governed by the tax law imposing the tax.
in general are taxed at a flat rate of thirty five However, if the tax law does not provide for prescription,
percent (35%) of net income. the right of the government to collect taxes becomes
imprescriptible.
(c) It has retained MORE SCHEDULAR THAN
GLOBAL FEATURES with respect to individual
Direct Tax vs. Indirect Tax (1994)
taxpayers but has maintained a more global
Distinguish a direct from an indirect tax.
treatment on corporations. SUGGESTED ANSWER:
Note: The following might also be cited by the bar candidates as A DIRECT TAX is one in which the taxpayer who pays the
features of the income tax system: tax is directly liable therefor, that is, the burden of
a. Individual compensation income earners are taxed
paying the tax falls directly on the person paying the tax.
on modified Gross Income (Gross compensation
income less personal exemptions). Self-employed An INDIRECT TAX is one paid by a person who is not
and professionals are taxed on net income with directly liable therefor, and who may therefore shift or
deductions limited to seven items or in lieu thereof the pass on the tax to another person or entity, which
forty percent (40%) maximum deduction plus the ultimately assumes the tax burden. (Maceda v. Macaraig,
personal exemptions. Corporations are generally 197 SCRA 771)
taxed on net income except for non-resident foreign
corporations which are taxed on gross income. Direct Tax vs. Indirect Tax (2000)
Among the taxes imposed by the Bureau of Internal
b. The income tax is generally imposed via the self- Revenue are income tax, estate and donor's tax,
assessment system or pay-as-you-file concept of value- added tax, excise tax, other percentage
imposing the tax although certain incomes. Including taxes, and documentary stamp tax. Classify these
income of non-residents, are taxed on the pay-as- taxes into direct and indirect taxes, and differentiate
you-earn concept or the so called withholding tax. direct from Indirect taxes. (5%)
SUGGESTED ANSWER:
c. The corporate income tax is a one-layer tax in Income tax, estate and donor's tax are considered as direct
that distribution of profits to stockholders (except taxes. On the other hand, value-added tax, excise tax,
to non- residents) are not subject to income tax. other percentage taxes, and documentary stamp tax
are indirect taxes.
Basic Stages or Aspects of Taxation (2006)
Enumerate the 3 stages or aspects of taxation. DIRECT TAXES are demanded from the very
Explain each. (5%) person who, as intended, should pay the tax which
SUGGESTED ANSWER: he cannot shift to another; while an INDIRECT TAX is
The aspects of taxation are: demanded in the first instance from one person with the
(1) LEVYING — the act of the legislature in choosing expectation that he can shift the burden to someone else,
the persons, properties, rights or privileges to be not as a tax but as a part of the purchase price.
subjected to taxation.
(2) ASSESSMENT and COLLECTION — This is Direct Tax vs. Indirect Tax (2001)
the act of executing the law through the Distinguish direct taxes from indirect taxes, and give
administrative agencies of government. an example for each one. (2%)
(3) PAYMENT — the act of the taxpayer in settling his SUGGESTED ANSWER:
tax obligations. DIRECT TAXES are taxes wherein both the incidence
(or liability for the payment of the tax) as well as the
impact or burden of the tax falls on the same person. An
Answers to the BAR: Taxation 1994-2006 (Arranged by Topics) sirdondee@gmail.com 9 of 73
example of this tax is income tax where the person subject There is no double taxation. DOUBLE
to tax cannot shift the burden of the tax to another TAXATION means taxing for the same tax period the
person. same thing or activity twice, when it should be taxed but
once, by the same taxing authority for the same purpose and
INDIRECT TAXES, on the other hand, are with the same kind or character of tax. The REAL
taxes wherein the incidence of or the liability for the ESTATE TAX is a tax on property; the REAL ESTATE
payment of the tax falls on one person but the burden DEALER'S TAX is a tax on the privilege to engage in
thereof can be shifted or passed on to another person. business; while the INCOME TAX is a tax on the
Example of this tax is the value-added tax. privilege to earn an income. These taxes are imposed by
different taxing authorities and are essentially of different
ALTERNATIVE ANSWER: kind and character (Villanueva vs. City of Iloilo, 26 SCRA
A direct tax is a tax which is demanded from the person 578).
who also shoulders the burden of the tax. Example:
corporate and individual income tax. Double Taxation; Indirect Duplicate Taxation (1997)
When an item of income is taxed in the Philippines and
An indirect tax is a tax which is demanded from the same income is taxed in another country, is there
one person in the expectation and intention that he a case of double taxation?
shall indemnify himself at the expense of another, SUGGESTED ANSWER:
and the burden finally resting on the ultimate Yes, but it is only a case of indirect duplicate
purchaser or consumer. Example: value added tax. taxation which is not legally prohibited because the
taxes are imposed by different taxing authorities.
Direct Tax vs. Indirect Tax (2006)
Distinguish "direct taxes" from "indirect taxes." Give Double Taxation; License Fee vs. Local Tax (2004)
examples. (5%) A municipality, BB, has an ordinance which requires that
SUGGESTED ANSWER: all stores, restaurants, and other establishments selling
DIRECT TAXES are demanded from the very liquor should pay a fixed annual fee of P20.000.
person who should pay the tax and which he can Subsequently, the municipal board proposed an ordinance
not shift to another. An INDIRECT TAX is imposing a sales tax equivalent to 5% of the amount paid
demanded from one person with the expectation that he for the purchase or consumption of liquor in stores,
can shift the burden to someone else, not as a tax but as restaurants and other establishments. The municipal
part of the purchase price. Examples of direct taxes mayor, CC, refused to sign the ordinance on the ground
are the income tax, the estate tax and the donor's tax. that it would constitute double taxation. Is the refusal of
Examples of indirect taxes are the value-added tax, the the mayor justified? Reason briefly. (5%)
percentage tax and the excise tax on exciseable articles. SUGGESTED ANSWER:
No. The refusal of the mayor is not justified. The
Double Taxation (1997) impositions are of different nature and character. The
Is double taxation a valid defense against the legality of a fixed annual fee is in the nature of a license fee imposed
tax measure? through the exercise of police power while the 5% tax on
SUGGESTED ANSWER: purchase or consumption is a local tax imposed through the
No, double taxation standing alone and not being exercise of taxing powers. Both a license fee and a tax may
forbidden by our fundamental law is not a valid defense be imposed on the same business or occupation, or for
against the legality of a tax measure (Pepsi Cola v. selling the same article and this is not in violation of the rule
Tanawan, 69 SCRA 460). However, if double taxation against double taxation {Campania General de
amounts to a direct duplicate taxation, Tabacos de Filipinos v. City of Manila, 8 SCRA 367
1. in that the same subject is taxed twice when it should [1963]).
be taxed but once,
2. in a fashion that both taxes are imposed for the same Double Taxation; Methods of Avoiding DT (1997)
purpose What are the usual methods of avoiding the occurrence of
3. by the same taxing authority, within the double taxation?
same jurisdiction or taxing district, SUGGESTED ANSWER:
4. for the same taxable period and The usual methods of avoiding the occurrence of double
5. for the same kind or character of a tax taxation are:
1. Allowing reciprocal exemption either by law or
then it becomes legally objectionable for by treaty;
2. Allowance of tax credit for foreign taxes paid;
being oppressive and inequitable.
3. Allowance of deduction for foreign taxes paid; and
Double Taxation: What Constitutes DT? (1996) 4. Reduction of the Philippine tax rate.
Note: Any three of the methods shall be given full credit.
X, a lessor of a property, pays real estate tax on the
premises, a real estate dealer's tax based on rental receipts Imprescriptibility of Tax Laws (1997)
and income tax on the rentals. X claims that this is double
Taxes were generally imprescriptible; statutes,
taxation? Decide.
SUGGESTED ANSWER:
however, may provide otherwise. State the rules that
have been adopted on this score by -
(a) The National Internal Revenue Code; There are substantial differences between big
(b) The Tariff and Customs Code; and investors being enticed to the "secured area" and the
(c) The Local Government Code Answer: business operators outside that are in accord with the
SUGGESTED ANSWERS: equal protection clause that does not require territorial
The rules that have been adopted on prescription are uniformity of laws. The classification applies equally to all
as follows: the resident individuals and businesses within the "secured
(a) National Internal Revenue Code - The statute of area". The residents, being in like circumstances to
limitation for assessment of tax if a return is filed is contributing directly to the achievement of the end
within three (3) years from the last day prescribed by purpose of the law, are not categorized further. Instead,
law for the filing of the return or if filed after the last they are similarly treated, both in privileges granted and
day, within three years from date of actual filing. obligations required. (Tiu, et al, v. Court of 4npeals, et al, G.R.
If no return is filed or the return filed is false No. 127410, January 20, 1999)
or fraudulent, the period to assess is within
TEN YEARS from discovery of the omission, Power of Taxation: Inherent in a Sovereign State (2003)
fraud or falsity. Why is the power to tax considered inherent in
a sovereign State? (4%)
The period to collect the tax is within THREE SUGGESTED ANSWER:
YEARS from date of assessment. In the It is considered inherent in a sovereign State because it is a
case, however, of omission to file or if the return necessary attribute of sovereignty. Without this power no
filed is false or fraudulent, the period to collect sovereign State can exist or endure. The power to tax proceeds upon
is within TEN YEARS from discovery without the theory that the existence of a government is a necessity and this
need of an assessment. power is an essential and inherent attribute of sovereignty, belonging
as a matter of right to every independent state or government.
(b) Tariff and Customs Code - It does not express any No sovereign state can continue to exist without the
general statute of limitation; it provided, however, means to pay its expenses; and that for those means, it
that "when articles have entered and passed free of has the right to compel all citizens and property
duty or final adjustment of duties made, with within its limits to contribute, hence, the emergence of
subsequent delivery, such entry and passage free of the power to tax. (51 Am. Jur.,Taxation 40).
duty or settlement of duties will, after the expiration of
ONE (1) YEAR, from the date of the final Power of Taxation: Legality; Local Gov’t Taxation (2003)
payment of duties, in the absence of fraud or protest, May Congress, under the 1987 Constitution, abolish
be final and conclusive upon all parties, unless the the power to tax of local governments? (4%)
liquidation of Import entry was merely tentative" (Sec SUGGESTED ANSWER:
1603, TCC). No. Congress cannot abolish what is expressly granted by
the fundamental law. The only authority conferred to
(c) Local Government Code - Local taxes, fees, or Congress is to provide the guidelines and limitations
charges shall be assessed within FIVE (5) YEARS on the local government's exercise of the power to tax
from the date they became due. In case of fraud or (Sec. 5, Art. X, 1987 Constitution).
intent to evade the payment of taxes, fees or charges
the same maybe assessed within TEN YEARS from Power of Taxation: Legislative in Nature (1994)
discovery of the fraud or intent to evade payment. The Secretary of Finance, upon recommendation of
They shall also be collected either by administrative the Commissioner of Internal Revenue, issued a
or judicial action within FIVE (5) YEARS from date Revenue Regulation using gross income as the tax
of assessment (Sec. 194, LGC). base for corporations doing business in the
Philippines. Is the Revenue Regulation valid?
Power of Taxation: Equal Protection of the Law (2000) SUGGESTED ANSWER:
An Executive Order was issued pursuant to law, granting tax The regulation establishing gross income as the tax
and duty incentives only to businesses and residents base for corporations doing business in the
within the "secured area" of the Subic Economic Special Philippines (domestic as well as resident foreign) is not
Zone, and denying said incentives to those who live valid. This is no longer implementation of the law
within the Zone but outside such "secured area". Is the but actually it constitutes legislation because among the
constitutional right to equal protection of the law violated by powers that are exclusively within the legislative
the Executive Order? Explain. (3%) authority to tax is the power to determine -the amount
SUGGESTED ANSWER: of the tax. (See 1 Cooley 176-184). Certainly, if the tax
No. Equal protection of the law clause is subject to is limited to gross income without deductions of these
reasonable classification. Classification, to be valid, corporations, this is changing the amount of the tax as
must (1) rest on substantial distinctions, (2) be germane said amount ultimately depends on the taxable base.
to the purpose of the law, (3) not be limited to
existing conditions only, (4) apply equally to all Power of Taxation: Limitations of the Congress (2001)
members of the same class. Congress, after much public hearing and consultations
with various sectors of society, came to the conclusion
that it will be good for the country to have only one
system of taxation by centralizing the imposition and broadest scope of all the powers of government
collection of all taxes in the national government. because in the absence of limitations, it is considered
Accordingly, it is thinking of passing a law that as unlimited, plenary, comprehensive and supreme. The
would abolish the taxing power of all local government two limitations on the power of taxation are the inherent
units. In your opinion, would such a law be valid under and constitutional limitations which are intended to
the present Constitution? Explain your answer. (5%) prevent abuse on the exercise of the otherwise
SUGGESTED ANSWER: plenary and unlimited power. It is the Court's role to see
No. The law centralizing the imposition and collection of all to it that the exercise of the power does not
taxes in the national government would contravene the transgress these limitations.
Constitution which mandates that: . . . "Each local
government unit shall have the power to create their own Power of Taxation: Revocation of Exempting Statutes
sources of revenue and to levy taxes, fees, and charges (1997)
subject to such guidelines and limitations as Congress may "X" Corporation was the recipient in 1990 of two tax
provide consistent with the basic policy of local exemptions both from Congress, one law exempting the
autonomy." It is clear that Congress can only give the company's bond issues from taxes and the other
guidelines and limitations on the exercise by the local exempting the company from taxes in the operation of its
governments of the power to tax but what was granted by public utilities. The two laws extending the tax
the fundamental law cannot be withdrawn by Congress. exemptions were revoked by Congress before their expiry
dates. Were the revocations constitutional?
Power of Taxation: Limitations: Passing of Revenue Bills SUGGESTED ANSWER:
(1997) Yes. The exempting statutes are both granted unilaterally
The House of Representatives introduced HB 7000 which by Congress in the exercise of taxing powers. Since
envisioned to levy a tax on various transactions. After the taxation is the rule and tax exemption, the exception, any
bill was approved by the House, the bill was sent to the tax exemption unilaterally granted can be withdrawn at the
Senate as so required by the Constitution. In the pleasure of the taxing authority without violating the
upper house, instead of a deliberation on the House Constitution (Mactan Cebu International Airport
Bill, the Senate introduced SB 8000 which was its own Authority v, Marcos, G.R No. 120082, September 11,
version of the same tax. The Senate deliberated on 1996).
this Senate Bill and approved the same. The House
Bill and the Senate Bill were then consolidated in the Neither of these were issued by the taxing authority in a
Bicameral Committee. Eventually, the consolidated bill contract lawfully entered by it so that their
was approved and sent to the President who signed the revocation would not constitute an impairment of the
same. The private sectors affected by the new law obligations of contracts.
questioned the validity of the enactment on the ground ALTERNATIVE ANSWER:
that the constitutional provision requiring that all No. The withdrawal of the tax exemption amounts
revenue bills should originate from the House of to a deprivation of property without due process of law,
Representatives had been violated. Resolve the issue. hence unconstitutional.
SUGGESTED ANSWER:
There is no violation of the constitutional requirement Power of Taxation; Inherent in a Sovereign State (2005)
that all revenue bills should originate from the House of Describe the power of taxation. May a legislative
Representatives. What is prohibited is for the Senate to body enact laws to raise revenues in the absence
enact revenue measures on its own without a bill of a constitutional provision granting said body the
originating from the House. But once the revenue bill was power to tax? Explain.
passed by the House and sent to the Senate, the latter can SUGGESTED ANSWER:
pass its own version on the same subject matter Yes, the legislative body may enact laws even in the
consonant with the latter's power to propose or concur absence of a constitutional provision because the power
with amendments. This follows from the co-equality of to tax is inherent in the government and not merely a
the two chambers of Congress (Tolentino v. Secretary constitutional grant. The power of taxation is an essential
of Finance, GR No. 115455, Oct. 30, 1995). and inherent attribute of sovereignty belonging as a matter
of right to every independent government without being
Power of Taxation: Limitations; Power to Destroy (2000) expressly granted by the people. (Pepsi-Cola Bottling
Company of the Philippines, Inc. v. Municipality
Justice Holmes once said: The power to tax is not the power to of Tanauan, Leyte, G.R. No. L-31156, February 27,1976)
destroy while this Court (the Supreme Court) sits." Describe the
power to tax and its limitations. (5%) Taxation is the inherent power of a State to collect
SUGGESTED ANSWER:
The power to tax is an inherent power of the sovereign
enforced proportional contribution to support
which is exercised through the legislature, to impose the expenses of government. Taxation is the power
burdens upon subjects and objects within its Jurisdiction for vested in the legislature to impose burdens or charges
the purpose of raising revenues to carry out the upon persons and property in order to raise
legitimate objects of government. The underlying basis for revenue for public purposes.
its exercise is governmental necessity for without it no
The power to tax is so unlimited in force and so searching
government can exist nor endure. Accordingly, it has the
in extent that courts scarcely venture to declare it is
subject to any restrictions whatever, except such as rest in
the discretion of the authority which exercises it. (Tio v. 73 may now be untenable" may lead the
examinee to choose a proposition which is untenable
Videogram Regulatory Board, G.R. No. L-75697, June 18, on the basis of the new law despite the cut-off
1987) So potent is the power to tax that it was once opined date adopted by the Bar Examination Committee. R.A.
that "the power to tax involves the power to destroy." No. 9282 was passed on March 30, 2004.
(C.J. Marshall in McCulloch v. Maryland, 4 Wheat, 316 4 L.
Ed. 579, 607) Purpose of Taxation; Legislative in Nature (2004)
Taxes are assessed for the purpose of generating revenue
Power of Taxation; Legislative in Nature (1996) to be used for public needs. Taxation itself is the power
What is the nature of the power of taxation? by which the State raises revenue to defray the expenses
SUGGESTED ANSWER: of government. A jurist said that a tax is what we pay for
The POWER TO TAX is an attribute of sovereignty and civilization.In our jurisdiction, which of the following
is inherent in the State. It is a power emanating statements may be erroneous:
from necessity because it imposes a necessary 1) Taxes are pecuniary in nature.
burden to preserve the State's sovereignty (Phil 2) Taxes are enforced charges and contributions.
Guarantee Co. vs. Commissioner, L-22074, April 30, 3) Taxes are imposed on persons and property
1965). It is inherently legislative in nature and within the territorial jurisdiction of a State.
character in that the power of taxation can only be 4) Taxes are levied by the executive branch of the
exercised through the enactment of law. government.
ALTERNATIVE ANSWER: 5) Taxes are assessed according to a reasonable rule of
The nature of the power of taxation refers to its own apportionment.
limitations such as the requirement that it should be for a Justify your answer or choice briefly. (5%)
public purpose, that it be legislative, that it is territorial SUGGESTED ANSWER:
and that it should be subject to international comity. A. 4. Taxes are levied by the executive branch of government. This
statement is erroneous because levy refers to the act of
Purpose of Taxation; Interpretation (2004) imposition by the legislature which is done through the
Which of the following propositions may now be enactment of a tax law. Levy is an exercise of the power to
untenable: tax which is exclusively legislative in nature and character.
1) The court should construe a law granting tax Clearly, taxes are not levied by the executive branch
exemption strictly against the taxpayer. of government. (JVPC v. Albay, 186 SCRA 198 [1990]).
2) The court should construe a law granting a municipal
corporation the power to tax most strictly. Rule on Set-Off or Compensation of Taxes (1996)
3) The Court of Tax Appeals has jurisdiction over X is the owner of a residential lot situated at Quirino
decisions of the Customs Commissioner in cases Avenue, Pasay City. The lot has an area of 300 square
involving liability for customs duties. meters. On June 1, 1994, 100 square meters of said lot
4) The Court of Appeals has jurisdiction to review owned by X was expropriated by the government to be
decisions of the Court of Tax Appeals. used in the widening of Quirino Avenue, for P300.000.00
5) The Supreme Court has jurisdiction to review representing the estimated assessed value of said portion.
decisions of the Court of Appeals. From 1991 to 1995, X, who is a businessman, has not
Justify your answer or choice briefly. (5%) been paying his income taxes. X is now being assessed for
SUGGESTED ANSWER: the unpaid income taxes in the total amount of
2. The court should construe a law granting a municipal corporation P150,000.00. X claims his income tax liability has already
the power to tax most strictly. been compensated by the amount of P300.000.00 which
This proposition is now untenable. The basic rationale for the government owes him for the expropriation of his
the grant of tax power to local government units is to property. Decide.
safeguard their viability and self-sufficiency by directly SUGGESTED ANSWER:
granting them general and broad tax powers (Manila The income tax liability of X can not be compensated
Electric Company v. Province of Laguna et. al., 306 SCRA 750 with the amount owed by the Government as
[1999]). Considering that inasmuch as the power to tax may compensation for his property expropriated, taxes are of
be exercised by local legislative bodies, no longer by valid distinct kind, essence and nature than ordinary
congressional delegation but by direct authority obligations. Taxes and debts cannot be the subject of
conferred by the Constitution, in interpreting statutory compensation because the Government and X are not
provisions on municipal fiscal powers, doubts will, mutually creditors and debtors of each other and a claim for
therefore, have to be resolved in favor of municipal taxes is not a debt, demand, contract, or Judgment as is
corporations (City Government of San Pablo, Laguna v. allowable to be set off. (Francia vs. IAC. G.R 76749, June
Reyes, 305 SCRA 353 [1999]). This means that the court 28. 1988)
must adopt a liberal construction of a law granting a
municipal corporation the power to tax. Rule on Set-Off or Compensation of Taxes (2001)
Note: If the examinee chose proposition no. 4 as his May a taxpayer who has pending claims for VAT
answer, it should be given full credit considering that the
input credit or refund, set-off said claims against his
present CTA Act (R.A. No. 9282) has made the
CTA a coequal judicial body of the Court of Appeals.
other tax liabilities? Explain your answer. (5%)
SUGGESTED ANSWER:
The question "Which of the following propositions
No. Set-off is available only if both obligations are referring to Republic of the Philippines v.
liquidated and demandable. Liquidated debts are those Mambulao Lumber Co., G.R. No. L-17725, February
where the exact amounts have already been determined. 28, 1962; and Francia v. Intermediate Appellate Court,
In the instant case, the claim of the taxpayer for VAT G.R. No. L-67649, June 28,1998.
refund is still pending and the amount has still to be
determined. A fortiori, the liquidated obligation of the There is, however, legal basis to state that an assessment for
taxpayer to the government can not, therefore, be set-off a local tax may be the subject of set-off or
against the unliquidated claim which the taxpayer compensation against a final judgment for a sum of
conceived to exist in his favor. (Philex Mining Corp. v. money obtained by the taxpayer against the local
government by operation of law where the local
CIR, GR No. 125704, August 29, 1998).
ALTERNATIVE ANSWER: government and the taxpayer are in their own right
No. Taxes and claims for refund cannot be the subject of reciprocally debtors and creditors of each other, and that the
set-off for the simple reason that the government and the debts are both due and demandable. This is consistent
taxpayer are not creditors and debtors of each other. Domingo v. Garlitos, G.R. No. L-18994,
There is a material distinction between a tax and a claim June 29,1963,
for refund. Claims for refunds just like debts are due from with the ruling in
the government in its corporate capacity, while taxes are relying upon Arts. 1278 and 1279 of the Civil
due to the government in its sovereign capacity. ( Philex Code, where these provisions were applied in relation to
Mining Corp. v. CIR, GR No. 125704, August 29, the national tax, and should therefore be applicable
1998). to a local tax.
Rule on Set-Off or Compensation of Taxes (2005) Tax Avoidance vs. Tax Evasion (1996)
May taxes be the subject of set-off or compensation? Distinguish tax evasion from tax avoidance.
SUGGESTED ANSWER:
Explain.
SUGGESTED ANSWER. Tax evasion is a scheme used outside of those
No, taxes cannot be the subject of set-off lawful means to escape tax liability and, when availed
or compensation for the following reasons: of, it usually subjects the taxpayer to further or
1) The lifeblood theory requires that there should be no additional civil or criminal liabilities. Tax avoidance, on
unnecessary impediments to the collection of taxes to the other hand, is a tax saving device within the
make available to the government the wherewithal to meet means sanctioned by law, hence legal.
its legitimate objectives; and
Tax Avoidance vs. Tax Evasion (2000)
2) The payment of taxes is not a contractual obligation but Mr. Pascual's income from leasing his property reaches
arises out of a duty to pay, and in respect of the positive acts the maximum rate of tax under the law. He donated one-
of government, regarding the making and enforcing of half of his said property to a non-stock, non-profit
taxes, the personal consent of the individual taxpayer is not educational institution whose income and assets are
required. (Republic v. Mambulao Lumber Co., G.R. actually, directly and exclusively used for educational
No. L-17725, February 28, 1962; Caltex v. Commission on purposes, and therefore qualified for tax exemption under
Audit, G.R. No. 92585, May 8, 1992; and Philex v. Article XIV, Section 4 (3) of the Constitution and Section 30
Commissioner of Internal Revenue, G.R. No. (h) of the Tax Code. Having thus transferred a portion of his
125704, August 28, 1998) said asset, Mr. Pascual succeeded in paying a lesser tax on
the rental income derived from his property. Is there tax
However, there is a possibility that set-off may arise, if the avoidance or tax evasion? Explain. (2%)
claims against the government have been recognized and an SUGGESTED ANSWER:
amount has already been appropriated for that There is tax avoidance. Mr. Pascual has exploited a fully
purpose. Where both claims have already become overdue permissive alternative method to reduce his income tax by
and demandable as well as fully liquidated. Compensation transferring part of his rental income to a tax
takes place by operation of law under Art. 1200 in relation to exempt entity through a donation of one-half of the
Articles 1279 and 1290 of the New Civil Code. income producing property. The donation is likewise
(Domingo v. Garlitos, G.R. No. L-18994, June 29, 1963) exempt from the donor's tax. The donation is the legal
means employed to transfer the incidence of income
Rule on Set-Off or Compensation on Taxes (2005) tax on the rental income.
Can an assessment for a local tax be the subject of set-off
or compensation against a final judgment for a sum Tax Exemptions: Nature & Coverage; Proper Party (2004)
of money obtained by the taxpayer against the As an incentive for investors, a law was passed giving
local government that made the assessment? Explain. newly established companies in certain economic zone
SUGGESTED ANSWER: exemption from all taxes, duties, fees, imposts and other
No, taxes cannot be the subject of set-off even when charges for a period of three years. ABC Corp. was
there is a final judgment for a sum of money against the organized and was granted such incentive. In the course
local government making the assessment. The of business, ABC Corp. purchased mechanical equipment
government and the taxpayer are not the "mutual from XYZ Inc. Normally, the sale is subject to a sales tax.
creditors and debtors" of each other who can avail of the
remedy of compensation which Art. 1278 (Civil Code) is XYZ Inc. claims, however, that since it sold the
equipment to ABC Corp. which is tax exempt,
XYZ
should not be liable to pay the sales tax. Is this 73 sale, thus, shifting the tax burden to the ultimate
claim tenable? (5%) consumer.
SUGGESTED ANSWER: (NOTABENE: This concept pertains to the VAT law which is
A. No. Exemption from taxes is personal in nature and excluded from the bar coverage, Guidelines for 2006 Bar
covers only taxes for which the taxpayer-grantee is directly Examinations, June 15, 2006)
liable. The sales tax is a tax on the seller who is not
exempt from taxes. Since XYZ Inc. is directly liable for Taxpayer Suit; When Allowed (1996)
the sales tax and no tax exemption privilege is ever given to When may a taxpayer's suit be allowed?
him, therefore, its claim that the sale is tax exempt is not SUGGESTED ANSWER:
tenable. A tax exemption is construed in strictissimi juris and A taxpayer's suit may only be allowed when an act
it can not be permitted to exist upon vague complained of, which may include a legislative enactment,
implications (Asiatic Petroleum Co., Ltd. V. Llanes, 49 Phil directly involves the illegal disbursement of public
466 [1926]). funds derived from taxation (Pascual vs. Secretary of
Public Works, 110 Phil. 331).
Assume arguendo that XYZ had to and did pay the sales
tax. ABC Corp. later found out, however, that XYZ Uniformity in the Collection of Taxes (1998)
merely shifted or passed on to ABC the amount of Explain the requirement of uniformity as a limitation
the sales tax by increasing the purchase price. ABC Corp. in the imposition and/or collection of taxes. (5%|
now claims for a refund from the Bureau of Internal SUGGESTED ANSWER:
Revenue in an amount corresponding to the tax Uniformity in the imposition and/or collection of taxes
passed on to it since it is tax exempt. Is the means that all taxable articles, or kinds of property of the
claim of ABC Corp. meritorious? (5%) same class shall be taxed at the same rate. The
SUGGESTED ANSWER; requirement of uniformity is complied with when the tax
B. No. The claim of ABC Corp. is not meritorious. operates with the same force and effect in every place
Although the tax was shifted to ABC Corp. by the seller, where the subject of it is found (Churchill & Tail v.
what is paid by it is not a tax but part of the cost it has Conception, 34 Phil. 969). It does
assumed. Hence, since ABC Corp. is not a taxpayer, it has not mean that lands, chattels, securities, income,
no capacity to file a claim for refund. The taxpayer who occupations, franchises, privileges, necessities and luxuries
can file a claim for refund is the person statutorily liable shall be assessed at the same rate. Different articles maybe
for the payment of the tax. taxed at different amounts provided that the rate is
uniform on the same class everywhere with all people at all
Tax Laws; BIR Ruling; Non-Retroactivity of Rulings (2004) times. Accordingly, singling out one particular class for
Due to an uncertainty whether or not a new tax law taxation purposes does not infringe the requirement of
is applicable to printing companies, DEF Printers uniformity.
submitted a legal query to the Bureau of Internal FIRST ALTERNATIVE ANSWER:
Revenue on that issue. The BIR issued a ruling that The criteria is met when the tax laws operate equally and
printing companies are not covered by the new law. uniformly on all persons under similar circumstances. All
Relying on this ruling, DEF Printers did not pay said tax. persons are treated in the same manner, the
conditions not being different, both in privileges
Subsequently, however, the BIR reversed the ruling conferred and liabilities imposed. Uniformity in
and issued a new one stating that the tax covers taxation also refers to geographical uniformity.
printing companies. Could the BIR now assess DEF Favoritism and preference is not allowed.
Printers for back taxes corresponding to the years SECOND ALTERNATIVE ANSWER:
before the new ruling? Reason briefly. (5%) A tax is deemed to have satisfied the uniformity rule when
SUGGESTED ANSWER: it operates with the same force (Phil. Trust & Co. v.
No. Reversal of a ruling shall not be given a retroactive and effect in every place
application if said reversal will be prejudicial to the where the subject maybe found.
taxpayer. Therefore, the BIR can not assess DEF printers Yatco, 69 Phil. 420).
for back taxes because it would be violative of the
principle of non-retroactivity of rulings and doing so
would result in grave injustice to the taxpayer who relied on
the first ruling in good faith (Section 246, NIRC; CIR v. INCOME TAXATION
Burroughs, Inc., 142 SCRA 324[1986]).
Basic: Allowable Deductions vs. Personal Exemptions
Tax Pyramiding; Definition & Legality (2006) (2001)
Distinguish Allowable Deductions from Personal
What is tax pyramiding? What is its basis in law? (5%)
SUGGESTED ANSWER: Exemptions. Give an example of an allowable deduction
Tax Pyramiding is the imposition of a tax upon another and another example for personal exemption. (5%)
tax. It has no basis in fact or in law (People v. SUGGESTED ANSWER:
Sandiganbayan, G.R. No. 152532, August 16, 2005). There is The distinction between allowable deductions
also tax pyramiding when sales taxes are incorrectly and personal exemptions are as follows:
a. As to amount — Allowable deductions generally
applied to goods several times from production to final
refer to actual expenses incurred in the pursuit of
trade, business or practice of profession
while
personal exemptions are arbitrary amounts allowed The facts given in the problem are sufficient to
by law. compute the annual depreciation either under the declining-
b. As to nature — Allowable deductions balance method or sum-of-years-digit method. Any answer
arrived at by using any of the recognized methods should be
constitute business expenses while personal
given full credit. It is suggested that no question requiring
exemptions pertain to personal expenses.
computation should be given in future bar examinations.
c. As to purpose — Deductions are allowed to
enable the taxpayer to recoup his cost of doing Basic: Sources of Income: Taxable Income (1998)
business while personal exemptions are allowed to
From what sources of income are the following
cover personal, family and living expenses.
persons/corporations taxable by the Philippine
d. As to claimants — Allowable deductions can government?
be claimed by all taxpayers, corporate or 2) Citizen of the Philippines residing therein; [1%]
otherwise, while personal exemptions can be 3) Non-resident citizen; [1%1
claimed only by individual taxpayers. 4) An individual citizen of the Philippines who is
working and deriving income from abroad as an
Basic: Meaning of Taxable Income (2000)
overseas contract worker; [1%]
What is meant by taxable income? (2%) 5) An alien individual, whether a resident or not of the
SUGGESTED ANSWER:
TAXABLE INCOME means the pertinent items of gross Philippines; [1%]
income specified in the Tax Code, less the deductions 6) A domestic corporation; [1%]
SUGGESTED ANSWER: (Section 23, NIRC of 1997)
and/or personal and additional exemptions, if any,
authorized for such types of income by the Tax Code or
1) A citizen of the Philippines residing therein
other special laws. (Sec. 31, NIRC of 1997)
is taxable on all income derived from sources
within and without the Philippines.
Basic: Principle of Mobilia Sequuntur Personam (1994) 2) A nonresident citizen is taxable only on income
derived from sources within the Philippines.
What is the principle of mobilia sequuntur personam
3) An individual citizen of the Philippines who is
in income taxation?
SUGGESTED ANSWER: working and deriving income from abroad as an
Principle of Mobilia Sequuntur Personam in income taxation overseas contract worker is taxable only on income
refers to the principle that taxation follows the property or from sources within the Philippines.
person who shall be subject to the tax. 4) An alien individual, whether a resident or not of the
Philippines, is taxable only on income derived from
Basic: Proper Allowance of Depreciation (1998) sources within the Philippines.
2. What is the proper allowance for depreciation of any 5) A domestic corporation is taxable on all income
property used in trade or business? [3%) derived from sources within and without the
3. What is the annual depreciation of a depreciable fixed Philippines.
asset with a cost of P100,000 and an estimated useful
life of 20 years and salvage value of P 10,000 after its Basic: Tax Benefit Rule (2003)
useful life? (a) What is meant by the "tax benefit rule"?
1. The proper allowance of depreciation of any (a) TAX BENEFIT RULE states that the taxpayer is
property used in trade or business refers to the reason- obliged to declare as taxable income subsequent recovery
able allowance for the exhaustion, wear and tear (includ- of bad debts in the year they were collected to the extent
ing reasonable allowance for obsolescence) of said of the tax benefit enjoyed by the taxpayer when the bad
property. The reasonable allowance shall include, but debts were written-off and claimed as a deduction
not limited to, an allowance computed under any of from income. It also applies to taxes previously deducted
the following methods: from gross income but which were subsequently
(a) straight-line method; refunded or credited. The taxpayer is also required to
(b) declining-balance method; report as taxable income the subsequent tax refund or tax
(c) sum-of-years-digit method; and credit granted to the extent of the tax benefit the
(d) any other method which may be prescribed by taxpayer enjoyed when such taxes were previously
the Secretary of Finance upon claimed as deduction from income.
recommendation of the Commissioner of
(b) Give an illustration of the application of the tax
Internal Revenue (Sec. 34(F). NIRC).
benefit rule.
2. The annual depreciation of the depreciable fixed asset SUGGESTED ANSWER:
may be computed on the straight-line method which (b) X Company has a business connected receivable
will allow the taxpayer to deduct an annual depre- amounting to P100,000.00 from Y who was declared
bankrupt by a competent court. Despite earnest efforts to
ciation of Php4,500, arrived at by dividing the
collect the same, Y was not able to pay, prompting X
depreciable value (Php l00.000-Phpl0.000) of
Company to write-off the entire liability. During the year of
Php90,000 by the estimated useful life (20 years). write-off, the entire amount was claimed as a deduction for
NOTE: The bar candidate may give a different figure depending income tax purposes reducing the taxable net income of X
on the method he used in computing the annual depreciation. Company to only P1,000,000.00. Three years later, Y
voluntarily paid his obligation previously written-off to X 73 and from incidental or outside operations or
Company. In the year of recovery, the entire amount sources (Sec. 43, Rev. Reg. No. 2).
constitutes part of gross income of X Company because it
was able to get full tax benefit three years earlier. Basic; Income vs. Capital (1995)
How does "Income" differ from "capital"? Explain.
Basic; Basis of Income Tax (1996) SUGGESTED ANSWER:
X is employed as a driver of a corporate lawyer and Income differs from capital in that INCOME is any
receives a monthly salary of P5,000.00 with free board and wealth which flows into the taxpayer other than a return of
lodging with an equivalent value of P1,500.00. capital while capital constitutes the investment which is the
1. What will be the basis of X's income tax? Why source of income. Therefore, capital is fund while
2. Will your answer in question (a) be the same if X's income is the flow. Capital is wealth, while income is the
employer is an obstetrician? Why? service of wealth. Capital is the tree while income is the
SUGGESTED ANSWERS: fruit (Vicente Madrigal et al v. James Rqfferty, 38 Phil. 414).
1) The basis of X’s income tax would depend on
whether his employer is an employee or a practicing Basic; Schedular Treatment vs. Global Treatment (1994)
corporate lawyer. Distinguish "schedular treatment" from "global treatment"
• If his employer is an employee, the basis of X's as used in income taxation.
income tax is P6,500.00 equivalent to the total of the SUGGESTED ANSWER:
basic salary and the value of the board and lodging. Under a SCHEDULER SYSTEM, the various
This is so because the employer/corporate lawyer has types/items of income (compensation; business/professional
no place of business where the free board income) are classified accordingly and are accorded
and lodging may be given. different tax treatments, in accordance with schedules
characterized by graduated tax rates. Since these types of
• On the other hand, if the corporate lawyer is a
income are treated separately, the allowable deductions
"practicing lawyer (self-employed), X should be taxed
shall likewise vary for each type of income.
only on P5,000.00 provided that the free board
and lodging is given in the business premises of Under the GLOBAL SYSTEM, all income received by the
the lawyer and for his convenience and that the taxpayer are grouped together, without any distinction as
free lodging was given to X as a condition
to the type or nature of the income, and after deducting
for employment.
therefrom expenses and other allowable deductions,
2) If the employer is an obstetrician who is self-em- are subjected to tax at a fixed rate.
ployed, the basis of X's income will only be P5,000.00 if it is
proven that the free board and lodging is given within the Compensation; Income Tax: Due to Profitable
business premises of said employer for his Business Deal (1995)
convenience and that the free lodging is required to be Mr. Osorio, a bank executive, while playing golf with Mr.
accepted by X as condition for employment. Otherwise, X Perez, a manufacturing firm executive, mentioned to the
would be taxed on P6,500.00. latter that his (Osorio) bank had just opened a
business relationship with a big foreign importer of
Basic; Gross Income: Define (1995) goods which Perez' company manufactures. Perez
What is "gross Income" for purposes of the Income tax? requested Osorio to introduce him to this foreign
SUGGESTED ANSWER: importer and put in a good word for him (Perez), which
GROSS INCOME means all income from whatever Osorio did. As a result, Perez was able to make a
source derived, including (but not limited to) profitable business deal with the foreign Importer.
compensation for services, including fees, commissions,
and similar items; gross income from business; gains In gratitude, Perez, in behalf of his manufacturing
derived from dealings in property; interest; rents; royalties; firm, sent Osorio an expensive car as a gift. Osorio called
dividends; annuities; prizes and winnings; pensions; and Perez and told him that there was really no
partner's distributive share of the gross income of general obligation on the part of Perez or his company to
professional partnership (Sec. 28, NIRC). give such an expensive gift. But Perez insisted that
ALTERNATIVE ANSWER: Osorio keep the car. The company of Perez
a) Gross income means all wealth which flows into the deducted the cost of the car as a business expense.
taxpayer other than as a mere return of capital. It includes
the forms of income specifically described as gains The Commissioner of Internal Revenue included the fair
and profits including gains derived from the sale or market value of the car as Income of Osorio
other disposition of capital. who protested that the car was a gift and therefore
excluded from income. Who is correct, the
b) Gross income means income (in the broad sense) less Commissioner or Osorio? Explain.
income which is, by statutory provision or otherwise, SUGGESTED ANSWER:
exempt from the tax imposed by law (Sec. 36, Rev. Reg. No. The Commissioner is correct. The car having been given
2). Gross income from business means total sales, less to Mr. Osorio in consideration of having introduced Mr.
cost of goods sold, plus any income from investments Perez to a foreign Importer which resulted to a profitable
business deal is considered to be a compensation for
services rendered. The transfer is not a gift because it is Corporate; Income Tax; Reasonableness of the
not made out of a detached or disinterested generosity but Bonus (2006)
for a benefit accruing to Mr. Perez. The fact that the Gold and Silver Corporation gave extra 14th month
company of Mr. Perez takes a business deduction for the bonus to all its officials and employees in the total amount
payment indicates that it was considered as a pay rather of P75 Million. When it filed its corporate income tax
than a gift. Hence, the fair market value of the car is return the following year, the corporation declared a net
includable in the gross income pursuant to Section 28(a)(l) operating loss. When the income tax return of the
of the Tax Code (See 1974 Federal Tax Handbook, p. 145). A corporation was reviewed by the BIR the following year, it
payment though voluntary, if it is in return for services disallowed as item of deduction the P75 Million bonus the
rendered, or proceeds from the constraining force of any corporation gave its officials and employees on the
moral or legal duty or a benefit to the payer is anticipated, is ground of unreasonableness. The corporation claimed that
a taxable income to the payee even if characterized as a 'gift' the bonus is an ordinary and necessary expense that
by the payor (Commissioner vs. Duberstein, 363 U.S. should be allowed. If you were the BIR Commissioner,
278). how will you resolve the issue? (5%)
Mr. Osorio is correct. The car was not payment for I will disallow the expense. A bonus is ordinary and
services rendered. There was no prior agreement or necessary where said expenditure is (1) appropriate and
negotiations between Mr. Osorio and Mr. Perez that the helpful in the development of the taxpayers business
former will be compensated for his services. Mr. Perez, in (Martens, Law of Federal Income Taxation, Volume IV, p. 315)
behalf of his company, gave the car to Mr. Osorio out of and (2) is normal in relation to the business of the
gratitude. The transfer having been made gratuitously taxpayer and the surrounding circumstances (p. 316, Ibid).
should be treated as a gift subject to donor's tax and
should be excluded from the gross income of the To determine the reasonableness of the bonus it must be
recipient, Mr. Osorio. The Commissioner should cancel commensurate with services performed by the officials
the assessment of deficiency income tax to Mr. Osorio and employees. Other factors to consider are whether the
and instead assess deficiency donor's tax on Mr Perez' payment was made in good faith; the character of the
company. (Sec. 28(b)(3), NIRC; Pirovano vs. taxpayer's business; the volume and amount of its net
Commissioner) earnings; its locality; the type and extent of the services
rendered; the salary policy of the corporation; the size of the
Corporate: Income: Donor’s tax; Tax Liability (1996) particular business; the employees' qualification and
X, a multinational corporation doing business in the contributions to the business venture; and general
Philippines donated 100 shares of stock of economic conditions (Atlas Mining v. CIR, G.R. No. L-
said corporation to Mr. Y, its resident manager 26911, January 27, 1981). However, since the business
in the Philippines. suffers from a net operating loss, I will rule that the bonus is
1) What is the tax liability, if any, of X corporation? an unreasonable expense.
2) Assuming the shares of stocks were given to Mr. Y in
consideration of his services to the corporation,
what are the tax implications? Explain. Corporate; Income: Coverage; "Off-Line" Airline (1994)
SUGGESTED ANSWERS: Caledonia Aircargo is an off-line international carrier
1) Foreign corporations effecting a donation are subject to without any flight operations in the Philippines. It has,
donor's tax only if the property donated is located in however, a liaison office in the Philippines which is duly
the Philippines. Accordingly, donation of a foreign licensed with the Securities and Exchange Commission,
corporation of its own shares of stocks in favor of established for the purpose of providing passenger and
resident employee is not subject to donor's tax (BIR flight information, reservation and ticketing services.
Ruling No. 018-87, January 26, 1987). However, if 85% of Are the revenues of Caledonia Aircargo from tickets
the business of the foreign corporation is located in the reserved by its Philippine office subject to tax?
Philippines or the shares donated have acquired business SUGGESTED ANSWER:
situs in the Philippines, the donation may be taxed in the The revenues in the Philippines of Caledonia Aircargo as an
Philippines subject to the rule of reciprocity. "off-line" airline from ticket reservation services are
taxable income from "whatever source" under Sec. 28(a) of
2) If the shares of stocks were given to Mr. Y in the Tax Code. This case is analogous to Commissioner v.
consideration of his services to the corporation, the same BOAC, G.R No. No. 65773-74, April 30, 1987 where the
shall constitute taxable compensation income to Supreme Court ruled that the income received in the
the recipient because it is a compensation for Philippines from the sale of tickets by an "off-line" airline is
services rendered under an employer-employee taxable as income from whatever source.
relationship, hence, subject to income tax.
Corporate; Income: Coverage; "Off-Line" Airline (2005)
The par value or stated value of the shares issued also An international airline with no landing rights in the
constitutes deductible expense to the corporation Philippines sold tickets in the Philippines for air
provided it is subjected to withholding tax on wages. transportation. Is income derived from such sales of
tickets considered taxable income of the said international
air carrier from Philippine sources under the Tax 1) Non-voting;
Code? Explain. (5%) 2) Preferred and cumulative dividends at the rate of
ALTERNATIVE ANSWER: 10% per annum, whether or not in any period the
Yes. The income derived from the sales of tickets in the amount is covered by earnings or projects;
Philippines is considered taxable income of 3) In the event of dissolution of the issuer, holders of
the international air carrier from Philippine sources. preferred stock shall be paid in full or ratably as the
assets of the issuer may permit before any
The source of income is the property, activity or service distribution shall be made to common stockholders;
that produced the income. The sale of tickets in the and
Philippines is the activity that produces the income. The 4) The issuer has the option to redeem the
absence of landing rights in the Philippines cannot preferred stock.
alter the fact that revenues were derived from ticket
sales within the Philippines. (Commissioner of Internal A Co. declared dividends on the preferred stock and
Revenue v. Japan Air Lines, G.R. No. 60714, claimed the dividends as interests deductible from its
October 4, 1991 reiterating British Overseas Airways gross Income for income tax purposes. The BIR
Corp., Air India and American Airlines, Inc.) disallowed the deduction. A Co. maintains that the
ALTERNATIVE ANSWER:
No, under Sec. 3 of R.R. No. 15-2002, an off-line airline preferred shares with their features are really debt and
having a branch office or a sales agent in the Philippines therefore the dividends are realty interests. Decide. (10%)
SUGGESTED ANSWER:
which sells passage documents for compensation or
The dividends are not deductible from gross income.
commission to cover off-line flights of its principal or
Preferred shares shall be considered capital regardless
head office, or for other airlines covering flights
of the conditions under which such shares are issued
originating from Philippine ports or off-line flights, is not
and, therefore, dividends paid thereon are not
considered engaged in business as an international air
considered 'interest' which are allowed to be deducted
carrier in the Philippines and is, therefore, not subject to
from the gross income of the corporation. (Revenue
Gross Philippine Billings Tax nor to the 3% common
Memorandum Circular No. 17-71, July 12, 1971).
carrier's tax.
Effect; Condonation of Loan in Taxation (1995)
Based on the foregoing, the international airline company
Mr. Francisco borrowed P10,000.00 from his friend Mr.
is not considered as engaged in business in the Philippines
Gutierrez payable in one year without interest. When the
and is therefore a non-resident foreign corporation. A
loan became due Mr. Francisco told Mr. Gutierrez that he
non-resident foreign corporation is subject to the
(Mr. Francisco) was unable to pay because of business
gross income tax on its income derived from sources
reverses. Mr. Gutierrez took pity on Mr. Francisco and
within the Philippines. The income from sale of
condoned the loan. Mr. Francisco was solvent at the time he
tickets shall not form part of taxable income because
borrowed the P 10,000.00 and at the time the loan was
the term "taxable income" as defined under Sec. 31 of
condoned. Did Mr. Francisco derive any income from the
the NIRC refers only to income of those taxpayers who
cancellation or condonation of his indebtedness? Explain.
pay by way of the net income tax. Taxable income means SUGGESTED ANSWER:
the pertinent items of gross income specified in the No, Mr. Francisco did not derive any income from the
NIRC, less the deductions and/or personal and cancellation or condonation of his indebtedness. Since it is
additional exemptions, if any, authorized for such obvious that the creditor merely desired to benefit the
types of income by the NIRC or other special laws. debtor in view of the absence of consideration for the
cancellation, the amount of the debt is considered as a gift
Dividends: Disguised dividends (1994) from the creditor to the debtor and need not be included in
Disguised dividends in income taxation? Give an example. the latter's gross income.
SUGGESTED ANSWER:
Disguised dividends are those income payments made by a
Fringe Benefit Tax: Covered Employees (2001)
domestic corporation, which is a subsidiary of a non-
resident foreign corporation, to the latter ostensibly for
X was hired by Y to watch over V’s fishponds with
services rendered by the latter to the former, but which a salary of Php 10,000.00. To enable him to perform
payments are disproportionately larger than the actual
his duties well, he was also provided a small hut,
value of the services rendered. In such case, the amount over which he could use as his residence in the middle of the
and above the true value of the service rendered shall be
fishponds. Is the fair market value of the use of the small
treated as a dividend, and shall be subjected to the hut by X a "fringe benefit" that is subject to the 32% tax
corresponding tax of 35% on Philippine sourced gross
imposed by Section 33 of the National Internal
income, or such other preferential rate as may be provided Revenue Code? Explain your answer. (5%)
SUGGESTED ANSWER:
under a corresponding Tax Treaty. No. X is neither a managerial nor a supervisory employee.
Example: Royalty payments under a Only managerial or supervisory employees are entitled to a
corresponding licensing agreement. fringe benefit subject to the fringe benefits tax. Even
assuming that he is a managerial or supervisory employee,
Dividends; Income Tax; Deductible Gross Income (1999)
the small hut is provided for the convenience of the
A Co., a Philippine corporation, issued preferred shares of
stock with the following features:
employer, hence does not constitute a taxable fringe pay on this latter date will render the tax
benefit. (Section 33, NERC). delinquent and will require the payment of
delinquency interest.
Fringe Benefit Tax: Employer required to Pay (2003)
A "fringe benefit" is defined as being any good, service or ITR: Personal Income; Exempted to File ITR (1997)
other benefit furnished or granted in cash or in kind by an A bachelor was employed by Corporation A on the first
employer to an individual employee. Would it be the working day of January 1996 on a part-time basis with a
employer or the employee who is legally required to pay salary of P3,500.00 a month. He then received the 13th
an income tax on it? Explain. (4%) month pay. In September 1996, he accepted another part-
SUGGESTED ANSWER: time Job from Corporation B from which he received a
It is the employer who is legally required to pay an income total compensation of P14,500.00 for the year 1996. The
tax on the fringe benefit. The fringe benefit tax is imposed correct total taxes were withheld from both earnings.
as a FINAL WITHHOLDING TAX placing the With the withholding taxes already paid, would he still be
legal obligation to remit the tax on the employer, such required to file an income tax return for his 1996 income?
that, if the tax is not paid the legal recourse of the BIR is SUGGESTED ANSWER:
to go after the employer. Any amount or value received Yes, because what is exempt from filing are those
by the employee as a fringe benefit is considered tax paid individuals who have total compensation income not
hence, net of the income tax due thereon. The exceeding P60.000 with the taxes correctly withheld only by
person who is legally required to pay (same as one employer. In this case, even if his aggregate
statutory incidence as distinguished from economic incidence) is compensation income from both his employers does not
that person who, in case of non-payment, can be legally exceed P60.000 and that total withholding taxes were
demanded to pay the tax. correctly withheld by his employers, the fact that he
derives compensation income concurrently from two
Interest: Deficiency Interest: define (1995 Bar) employers at anytime during the taxable year, does not
What is a "deficiency interest" for purposes of the income exempt him from filing his income tax return (RA 7497, as
tax? Illustrate. implemented by RR No. 4-93).
SUGGESTED ANSWER:
DEFICIENCY INTEREST for purposes of the ITR; Domestic Corporate Taxation (1997)
income tax is the interest due on any amount of tax During the year, a domestic corporation derived the
due or installment thereof which is not paid on or before following items of revenue: (a) gross receipts from a
the date prescribed for its payment computed at the trading business; (b) interests from money placements in the
rate of 20% per annum or the Manila Reference banks; (c) dividends from its stock investments in
Rate, whichever is higher, from the date prescribed for domestic corporations; (d) gains from stock transactions
its payment until it is fully paid. through the Philippine Stock Exchange; (e) proceeds
under an insurance policy on the loss of goods. In
If for example after the audit of the books of XYZ Corp. for preparing the corporate income tax return, what should be
taxable year 1993 there was found to be due a the tax treatment on each of the above items?
deficiency income tax of P125,000.00 inclusive of the 25% SUGGESTED ANSWER:
surcharge imposed under Section 248 of the Tax Code, The gross receipts from trading business is includible
the interest will be computed on the P125.000.00 from as an item of income in the corporate income tax return
April 15, 1994 up to its date of payment. and subject to corporate income tax rate based on
net income.
Interest: Delinquency Interest: define (1995)
What is a "delinquency interest" for purposes of the The other items of revenue will not be included in
income tax? Illustrate. the corporate income tax return.
SUGGESTED ANSWER: The interest from money market placements
Delinquency interest is the interest of 20% or the Manila is subject to a final withholding tax of 20%;
Reference Rate, whichever is higher, required to be paid in The dividends from domestic corporation are
case of failure to pay: exempt from income tax; and
(a) the amount of the tax due on any return required to gains from stock transactions with the Philippine
be filed; or Stock Exchange are subject to transaction tax which
(b) the amount of the tax due for which return is is in lieu of the income tax.
required; or The proceeds under an insurance policy on the
(c) the deficiency tax or any surcharge or interest loss of goods is not an item of income but merely a
thereon, on the due date appearing in the notice and return of capital hence not taxable.
demand of the Commissioner of Internal Revenue.
ALTERNATIVE ANSWER:
If in the above illustration the assessment notice was The gross receipts from trading business is includible as
released on December 31, 1994 and the amount of an item of income in the corporate income tax return.
deficiency tax, inclusive of surcharge and deficiency Likewise, the gain or loss realized as a consequence of the
interest were computed up to January 30, 1995 which is receipt of proceeds under an insurance policy on the loss of
the due date for payment per assessment notice, failure to goods will be included in the corporate income tax
return either as a taxable gain or a deductible loss. The the tax withheld is equal to the tax due. (Section 5
gain or loss is arrived at by deducting from the proceeds of l(A](2)(b), NIRC).
insurance (amount realized) the basis of the good lost (Sec.
34(a), NIRC). The net income of the corporation shall There is no mention in the problem of the amount
be subject to corporate income tax rate of 35%. of personal and additional personal exemption to
quantify how much is that compensation income that
The other items of revenue will not be included in the did not exceed the personal and additional personal
corporate income tax return. The interest from money exemptions. There is no, mention, either, of whether
market placements is subject to a final withholding tax of or not the employers withheld taxes and that the
20%; dividends from domestic corporations are exempt amount withheld is equal to the tax due. Whether or not
from income tax; and gains from stock transactions with the she will be required to file an income tax return last
Philippine Stock Exchange are subject to transaction tax April 15 on the 2000 income will depend on her
which is in lieu of the income tax. compliance with the requirements of the law.
ITR; Domestic Corporate Taxation (2001) ITR; Personal Income; GSIS Pension (2000)
a) How often does a domestic corporation file income Mr. Javier is a non-resident senior citizen. He
tax return for income earned during a single taxable receives a monthly pension from the GSIS which he
year? Explain the process. (3%) deposits with the PNB-Makati Branch. Is he exempt
SUGGESTED ANSWER: from income tax and therefore not required to file
a) A domestic corporation is required to file income tax an income tax return? (5%)
returns four (4) times for income earned during a single SUGGESTED ANSWER:
taxable year. Quarterly returns are required to be filed for the Mr. Javier is exempt from income tax on his monthly
first three quarters where the corporation shall declare its GSIS pension (Sec. 32(B)(6)(f), NIRC of 1997) but not on
quarterly summary of gross income and deductions on a the interest income that might accrue on the pensions
cumulative basis. (Section 75, NIRC). Then, a final deposited with PNB which are subject to final
adjustment return is required to be filed covering the total withholding tax. Consequently, since Mr. Javier's sole
taxable income for the entire year, calendar or fiscal. taxable income would have been subjected to a final
(Section 76, NIRC). withholding tax, he is not required anymore to file an
income tax return. (Sec. 51 (A) (2) (c). Ibid].
b) What is the reason for such procedure? (2%)
SUGGESTED ANSWER: ITR; Personal Income; Married Individual (2004)
b) The reason for this procedure is to ensure the RAM got married to LISA last January 2003.
timeliness of collection to meet the budgetary needs of the On November 30, 2003, LISA gave birth to
government. Likewise, it is designed to ease the burden on twins. Unfortunately, however, LISA died in the
the taxpayer by providing it with an installment payment course of her delivery. Due to complications, one of the
scheme, rather than requiring the payment of the tax on a twins also died on December 15, 2003.
lump-sum basis after the end of the year.
ALTERNATIVE ANSWER: In preparing his Income Tax Return (ITR) for the year
b) The reason for the quarterly filing of tax returns is to 2003, what should RAM indicate in the ITR as his civil
allow partial collection of the tax before the end of status: (a) single; (b) married; (c) Head of the family; (d)
the taxable year and also to improve the liquidity widower; (e) none of the above? Why? Reason. (5%)
of government SUGGESTED ANSWER:
RAM should indicate "(b) married" as his civil status in
ITR; Personal Income: Two Employment (2001) preparing his Income Tax Return for the year 2003. The
In the year 2000, X worked part time as a waitress death of his wife during the year will not change his status
in a restaurant in Mega Mall from 8:00 a.m. to 4:00 p.m. because should the spouse die during the taxable year, the
and then as a cashier in a 24-hour convenience store taxpayer may still claim the same exemptions (that of being
in her neighborhood. The total income of X for the married) as if the spouse died at the close of such year
year from the two employers does not exceed her total (Section 35/Cj, NIRC).
personal and additional exemptions for the year 2000.
Was she required to file an income tax return last ITR; Taxpayer; Liabilities; Falsified Tax Return (2005)
April? Explain your answer. (5%) Danilo, who is engaged in the trading business, entrusted
SUGGESTED ANSWER:
to his accountant the preparation of his income tax return
Yes. An individual deriving compensation concurrently and the payment of the tax due. The accountant
from two or more employers at any time during the filed a falsified tax return by underdeclaring the
taxable year shall file an income tax return (Sec. sales and overstating the expense deductions by Danilo.
51(A)(2)(b), NIRC.) Is Danilo liable for the deficiency tax and the
ALTERNATIVE ANSWER:
It depends. An individual with pure compensation income is penalties thereon? What is the liability, if any, of the
not required to file an income tax returns when she accountant? Discuss. (5%)
SUGGESTED ANSWER:
meets the following conditions; (1) the total gross Danilo is liable for the deficiency tax as well as for the
compensation income does not exceed Php60,000.00 and (2)
deficiency interest. He should not be held liable for the
the income tax has been correctly withheld, meaning
fraud penalty because the accountant acted beyond 2) No. Revenue Regulation No. 2-93
the limits of his authority. There is no showing in the implementing RA No. 7496 have indeed significantly
problem that Danilo signed the falsified return or reduced the items of deduction by limiting it to
that it was prepared under his direction. direct costs and expenses or the 40% of gross receipts
{On the other hand the accountant may be held criminally maximum deduction in cases where the direct costs
liable for violation of the Tax Code when he falsified the tax are difficult to determine. The allowance of limited
return by underdeclaring the sale and overstating the deductions however, is still in consonance with the net
expense deductions. If Danny's accountant is a Certified income taxation scheme rather than the gross income
Public Accountant, his certificate as a CPA shall method. While it is true that not all the expenses of
automatically be revoked or cancelled upon conviction. earning the income might be allowed, this can well
be justified by the fact that deductions are not
Partnership: Income Tax (1995) matters of right but are matters of legislative grace.
Five years ago Marquez, Peneyra, Jayme, Posadas and
Manguiat, all lawyers, formed a partnership which they Personal; Income Tax: Non-Resident Alien (2000)
named Marquez and Peneyra Law Offices. The Commis- Mr. Cortez is a non-resident alien based in Hong
sioner of Internal Revenue thereafter issued Revenue Regu- Kong. During the calendar year 1999, he came to the
lation No. 2-93 implementing RA. 7496 known as the Philippines several times and stayed in the country for an
Simplified Net Income Taxation Scheme (SNITS). aggregated period of more than 180 days. How will
Revenue Regulation No. 2-93 provides in part: Mr. Cortez be taxed on his income derived from
Sec. 6. General Professional Partnership. — sources within the Philippines and from abroad? (5%)
The general professional partnership and the SUGGESTED ANSWER:
partners are covered by R.A. 7496. Thus, in Mr. Cortez being a non-resident alien individual who has
determining profit of the partnership, only the stayed for an aggregated period of more than 180
direct costs mentioned in said law are to be days during the calendar year 1999, shall for that taxable
deducted from partnership income. Also, the year be deemed to be a non-resident alien doing
expenses paid or Incurred by partners in their business in the Philippines.
individual capacities in the practice of their
profession which are not reimbursed or paid by Considering the above, Mr. Cortez shall be subject to an
the partnership but are not considered as direct income tax in the same manner as an individual
costs are not deductible from his gross income. citizen and a resident alien individual, on taxable income
received from all sources within the Philippines. [Sec.
1) Marquez and Peneyra Law Offices filed a taxpayer's 25 (A) (1), NIRC of 1997] Thus, he is allowed to avail of
suit alleging that Revenue Regulation No. 2-93 the itemized deductions including the personal
violates the principle of uniformity in taxation and additional exemptions but subject to the rule on
because general professional partnerships are now reciprocity on the personal exemptions. (Sec. 34 (A) to (J)
subject to payment of income tax and that there is a and (M) in relation to Sec. 25 (A) (1), Ibid, Sec. 35 (D), Ibid.]
difference in the tax treatment between individuals NOTE: It is suggested that full credit should be given if
engaged in the practice of their respective profes- the examinee's answer only cover the first two paragraphs.
sions and partners in general professional
Personal; Income Tax: Non-Resident Citizen (1999)
partnerships. Is this contention correct? Explain.
SUGGESTED ANSWER: A Co., a Philippine corporation, has an executive (P) who is
1) The contention is not correct. General professional a Filipino citizen. A Co. has a subsidiary in Hong Kong (HK
partnerships remain to be a non-taxable entity. What is Co.) and will assign P for an indefinite period to work
taxable are the partners comprising the same and they are full time for HK Co. P will bring his family to reside in HK
obligated to report as income their share in the income of and will lease out his residence in the Philippines. The salary
the general professional partnership during the taxable of P will be shouldered 50% by A Co. while the other 50%
year whether distributed or not. The SNITS treat plus housing, cost of living and educational allowances
professionals as one class of taxpayer so that they shall be of P's dependents will be shouldered by HK Co. A Co.
treated alike irrespective of whether they practice their will credit the 50% of P's salary to P's Philippine bank
profession alone or in association with other professionals account. P will sign the contract of employment in the
under a general professional partnership. What are taxed Philippines. P will also be receiving rental income for the
differently are individuals and corporations. All individuals lease of his Philippine residence. Are these salaries,
similarly situated are taxed alike under the regulations, allowances and rentals subject to the Philippine
therefore, the principle of uniformity in taxation is not income tax? (5%)
violated. On the contrary, all the requirements of a valid SUGGESTED ANSWER:
classification have been complied with (Ton vs. Del The salaries and allowances received by P are not subject to
Rosario et al G.R No. 109289, Octobers, 1994). Philippine income tax. P qualifies as a nonresident
citizen because he leaves the Philippines for employment
2) Is Revenue Regulation No. 2-93 now considered as requiring him to be physically present abroad most of the
having adopted a gross income method instead of time during the taxable year. (Section 22(E), NIRC). A non-
retaining the net income taxation scheme? Explain. resident citizen is taxable only on income derived from
SUGGESTED ANSWER: Philippine sources. (Section 23, NIRC). The salaries and
allowances received from being employed abroad are will erect a building on the land which will
incomes from without because these are become the property of Mr. Domingo at the end of the
compensation for services rendered outside of the lease without compensation or reimbursement whatsoever
Philippines. (Section 42, NIRC). for the value of the building.
However, P is taxable on rental income for the lease of his Mr. Enriquez erects the building. Upon completion
Philippine residence because this is an income the building had a fair market value of P1 Million. At the
derived from within, the leased property being end of the lease the building is worth only P900.000.00
located in the Philippines. (Section 42, NIRC). due to depreciation.
Personal; Income Tax: Tax-Free Exchange (1997) Will Mr. Domingo have income when the lease
Three brothers inherited in 1992 a parcel of land valued expires and becomes the owner of the building with a fair
for real estate tax purposes at P3.0 million which they held market value of P900.000.00? How much income must
in co-ownership. In 1995, they transferred the property to he report on the building? Explain.
a newly organized corporation as their equity which SUGGESTED ANSWER:
was placed at the zonal value of P6.0 million. In exchange When a building is erected by a lessee in the leased
for the property, the three brothers thus each received premises in pursuance of an agreement with the
shares of stock of the corporation with a total par value lessor that the building becomes the property of the
of P2.0 million or, altogether, a total of P6.0 million. No lessor at the end of the lease, the lessor has the
business was done by the Corporation, and the property option to report income as follows:
remained idle. In the early part of 1997, one of the 1) The lessor may report as income the market value of
brothers, who was in dire need of funds, sold his the building at the time when such building is
shares to the two brothers for P2.0 million. Is the completed; or
transaction subject to any internal revenue tax (other 2) The lessor may spread over the life of the lease the
than the documentary stamp tax)? estimated depreciated value of such building at the
SUGGESTED ANSWER: termination of the lease and report as income
Yes. The exchange in 1995 is a tax-free exchange so that for each year of the lease an aliquot part
the subsequent sale of one of the brothers of his shares to thereof (Sec. 49, RR No. 2).
the other two (2) brothers in 1997 will be subject to
income tax. This is so because the tax-free exchange Under the first option, the lessor will have no income
merely deferred the recognition of income on the when the lease expires and becomes the owner of the
exchange transaction. The gain subject to income tax building. The second option will give rise to an income
in the sale is measured by the difference between the during the year of lease expiration of P90.000.00 or 1/10 of
selling price of the shares (P2 Million) and the basis of the depreciated value of the building.
the real property in the hands of the transferor at
the time of exchange which is the fair market value of The availment of the first option will require
his share in the real property at the time of inheritance Mr. Domingo to report an income of P1.000,000.00
(Section 34(b)(2), NIRC). The net gain from the sale during the year when the building was completed. A
of shares of stock is subject to the schedular capital total of P900.000.00 income will be reported under
gains tax of 10% for the first P100.000 and 20% for the second option but will be spread over the life
the excess thereof (Section 2l(d), NIRC). of the lease or P90.000.00 per year.
ALTERNATIVE ANSWER:
The exchange effected in 1995 did not qualify as a tax-free ALTERNATIVE ANSWER:
exchange because there is no showing that the three Mr. Domingo will realize an income when the lease
brothers gained control of the corporation by acquiring at expires and becomes the owner of the building with a fair
least 51% of the voting rights. Since the entire gain on the market value of P900.000.00 because the condition for
exchange was previously subjected to income tax, then, the lease is the transfer of the building at the expiration
the sale will also be taxable if a gain results therefrom. In the of the lease. The income to be realized by Mr. Domingo
instant case, the sale will not be subject to any internal at the time of the expiration will consist of the value
revenue tax other than the documentary stamp tax, of the building which is P900.000.00 and any rental
because the seller did not realize any gain from the sale. The income that has accrued as of said date.
gain is measured by the difference between the amount
realized (selling price) and the basis of the property. Personal; Income Tax; Married Individual (1997)
Incidentally, the basis to him is his share in the value of the Mar and Joy got married in 1990. A week before their
property received at the time of exchange, which is P2 marriage. Joy received, by way of donation, a
Million, an amount, just equal to the amount realized from condominium unit worth P750.000.00 from her parents.
the sale. After marriage, some renovations were made at a cost of
P150.000.00. The spouses were both employed in 1991 by
Personal; Income Tax; Contract of Lease (1995) the same company. On 30 December 1992, their first
Mr. Domingo owns a vacant parcel of land. He leases the child was born, and a second child was born on 07
land to Mr. Enriquez for ten years at a rental of November 1993. In 1994, they sold the condominium unit
P12,000.00 per year. The condition is that Mr. Enriquez and bought a new unit. Under the foregoing facts, what
were the events in the life of the spouses that had income accordance with the schedular graduated rates of
tax incidences? 1%, 2% and 3%. based on the adjusted gross
SUGGESTED ANSWER: income derived by non-resident citizens from all sources
The events in the life of spouses. Mar and Joy, which have without the Philippines during each taxable year.
income tax incidences are the following:
1) Their marriage in 1990 qualifies them to Taxable Income: Illegal Income (1995 Bar)
claim personal exemption for married individuals; Mr. Lajojo is a big-time swindler. In one year he was able to
2) Their employment in 1991 by the same earn P1 Million from his swindling activities. When the
company will make them liable to the income tax Commissioner of Internal Revenue discovered his income
imposed on gross compensation income; from swindling, the Commissioner assessed him a
3) Birth of their first child in December 1992 deficiency income tax for such income. The lawyer of Mr.
would give rise to an additional exemption of Lajojo protested the assessment on the following grounds:
P5,000 for taxable year 1992; 1) The income tax applies only to legal income, not to
4) Birth of their second child in November 1993 would illegal income;
likewise entitle them to claim additional exemption 2) Mr. Lajojo's receipts from his swindling did not
of P5,000 raising their additional personal constitute income because he was under obligation
exemptions to P 10,000 for taxable year 1993; and to return the amount he had swindled, hence, his
5) Sale of their condominium unit in 1994 shall make receipt from swindling was similar to a loan, which is
the spouses liable to the 5% capital gains tax on the not income, because for every peso borrowed he has a
gain presumed to have been realized from the sale. corresponding liability to pay one peso; and
3) If he has to pay the deficiency income tax assess-
Personal; Income Tax; Retiring Alien Employee (2005) ment, there will be hardly anything left to return to
An alien employee of the Asian Development the victims of the swindling.
Bank (ADB) who is retiring soon has offered to sell his How will you rule on each of the three grounds for
car to you which he imported tax-free for his personal the protest? Explain.
use. The privilege of exemption from tax is granted SUGGESTED ANSWERS:
to qualified personal use under the ADB Charter which 1) The contention that the income tax applies to legal
is recognized by the tax authorities. If you decide to income and not to illegal income is not correct. Section
purchase the car, is the sale subject to tax? Explain. (5%) 28(a) of the Tax Code includes within the purview of
SUGGESTED ANSWER: gross income all Income from whatever source derived.
The sales transaction is subject to value added tax (VAT) Hence, the illegality of the income will not preclude the
under Sec. 107(B) of the NIRC, although this provision is imposition of the income tax thereon.
expressly excluded from the coverage of the 2005
bar exam. 2) The contention that the receipts from his
swindling did not constitute income because of his
The proceeds from the sale are subject to income tax. The obligation to return the amount swindled is likewise not
car is considered a capital asset of the retiring alien correct. When a taxpayer acquires earnings, lawfully
employee because he is not engaged in the business or unlawfully, without the consensual recognition,
of buying and selling cars. He therefore derived express or implied, of an obligation to repay and without
income, which should be reported in his income tax restriction as to their disposition, he has received taxable
return. (Sees. 32 and 39, NIRC) income, even though it may still be claimed that he is not
entitled to retain the money, and even though he may
Personal; Income Taxation: Non-Resident Citizen (1997) still be adjudged to restore its equivalent (James vs.
Juan, a Filipino citizen, has immigrated to the United U.S.,366 U.S. 213, 1961). To treat the embezzled funds
States where he is now a permanent resident. He not as taxable income would perpetuate injustice by
owns certain income-earning property in the relieving embezzlers of the duty of paying income taxes
Philippines from which he continues to derive on the money they enrich themselves with through
substantial income. He also receives income from his embezzlement, while honest people pay their taxes on
employment in the United States on which the US every conceivable type of income. (James vs. U.S.)
income tax is paid. On which of the above income
is the taxable, if at all, in the Philippines, and how, in 3) The deficiency income tax assessment is a direct tax
general terms, would such income or incomes be taxed? imposed on the owner which is an excise on the privilege to
SUGGESTED ANSWER: earn an income. It will not necessarily be paid out of the
Juan, shall be taxed on both his income from the same income that were subjected to the tax. Mr.
Philippines and on his Income from the United States be- Lajojo's liability to pay the tax is based on his having
cause his being a citizen makes him taxable on all Income realized a taxable income from his swindling activities and
wherever derived. For the income he derives from his
will not affect his obligation to make restitution. Payment of
property in the Philippines, Juan shall be taxed on his net
the tax is a civil obligation imposed by law while
income under the Simplified Net Income Taxation
restitution is a civil liability arising from a crime.
Scheme (SNITS) whereby he shall be considered as a
self-employed individual. His Income as employee in the Taxable or Non-Taxable; Income and Gains (2005)
United States, on the other hand, shall be taxed in
Explain briefly whether the following items are taxable or of its territorial jurisdiction to file a return; for
non-taxable: (5%) this reason, the income tax on income derived from
a) Income from JUETENG; within must be collected through the withholding tax
SUGGESTED ANSWER: system and thus relieve the recipient of the income
Taxable. Gross income includes "all income derived from the duty to file income tax returns. (Section 51, NIRC).
whatever source" (Sec. 32[A], NIRC), which was
interpreted as all income not expressly excluded or Withholding Tax: Retirement Benefit (2000)
exempted from the class of taxable income, irrespective of To start a business of his own, Mr. Mario de
the voluntary or involuntary action of the taxpayer in Guzman opted for an early retirement from a private
producing the income. Thus, the income may proceed company after ten (10) years of service. Pursuant to the
from a legal or illegal source such as from jueteng. company's qualified and approved private retirement
Unlawful gains, gambling winnings, etc. are subject to benefit plan, he was paid his retirement benefit which
income tax. The tax code stands as an indifferent neutral was subjected to withholding tax. Is the employer
party on the matter of where the income comes from. correct in withholding the tax? Explain. (2%)
(Commissioner of Internal Revenue v. Manning, G.R. No. SUGGESTED ANSWER:
L-28398, August 6, 1975) (a) It depends. An employee retiring under a
company's qualified and private retirement plan can only
b) Gain arising from EXPROPRIATION OF be exempt from income tax on his retirement
PROPERTY; benefits if the following requisites are met:
SUGGESTED ANSWER:
(1) that the retiring employee must have been in service
Taxable. Sale exchange or other disposition of property to
of the same employer for at least ten (10) years;
the government of real property is taxable. It includes
(2) that he is not less than 50 years of age at the time of
taking by the government through condemnation
retirement; and
proceedings. (Gonzales v. Court of Tax Appeals, G.R. No.
(3) the benefit is availed of only once.
L-14532, May 26, 1965)
In the instant case, there is no mention whether the
c) TAXES paid and subsequently refunded;
SUGGESTED ANSWER:
employee has likewise complied with requisites
Taxable only if the taxes were paid and claimed as number (2) and (3).
deduction and which are subsequently refunded or
credited. It shall be included as part of gross income in the Withholding Tax: Retirement Benefit (2000)
year of the receipt to the extent of the income tax benefit of Under what conditions are retirement benefits received by
said deduction. (Sec. 34[C][1], NIRC) Not taxable if the taxes officials and employees of private firms excluded
refunded were not originally claimed as deductions. from gross income and exempt from taxation? (3%)
SUGGESTED ANSWER:
d) Recovery of BAD DEBTS previously charged off; The conditions to be met in order that retirement benefits
SUGGESTED ANSWER: received by officials and employees of private firms
Taxable under the TAX BENEFIT RULE. Recovery of are excluded from gross income and exempt from
bad debts previously allowed as deduction in the taxation are as follows:
preceding years shall be included as part of the gross 2. Under Republic Act No. 4917 (those received under
income in the year of recovery to the extent of the income a reasonable private benefit plan):
tax benefit of said deduction. (Sec. 34[E][1], NIRC) This is a. the retiring official or employee must have been
sometimes referred as the RECAPTURE RULES. in service of the same employer for at least ten
(10) years;
e) Gain on the sale of a car used for personal purposes. b. that he is not less than fifty (50) years of age at
SUGGESTED ANSWER: the time of retirement; and
Taxable. Since the car is used for personal purposes, it is c. that the benefit is availed of only once.
considered as a capital asset hence the gain is considered
income. (Sec. 32[A][3] and Sec. 39[A][1], NIRC) 3. Under Republic Act No. 7641 (those received
from employers without any retirement plan):
Withholding Tax: Non-Resident Alien (2001) a. Those received under existing
Is a non-resident alien who is not engaged in trade collective bargaining agreement and other
or business or in the exercise of profession in the agreements are exempt; and
Philippines but who derived rental income from the b. In the absence of retirement plan or agreement
Philippines required to file an income tax return on April providing for retirement benefits the
of the year following his receipt of said income? If benefits are excluded from gross income
not, why not? Explain your answer. (5%) and exempt from income tax if:
SUGGESTED ANSWER: i. retiring employee must have served at
No. The income tax on all income derived from least five(5) years; and
Philippine sources by a non-resident alien who is not ii. that he is not less than sixty (60) years of
engaged in trade or business in the Philippines is withheld by age but not more than sixty five (65).
the lessee as a Final Withholding Tax. (Section 57(A),
NIRC). The government can not require persons outside Withholding Tax: Royalty (2002)
The MKB-Phils. is a BOI-registered domestic corporation a resident citizen or alien from a domestic
licensed by the MKB of the United Kingdom to corporation, is to ensure the collection of income tax on
distribute, support and use in the Philippines its computer said income. If we subject the dividend to the progressive
software systems, including basic and related materials for tax rate, which can only be done through the filing
banks. The MKB-Phils. provides consultancy of income tax returns, there is no assurance that the
and technical services incidental thereto by taxpayer will declare the income, especially when
entering into licensing agreements with banks. Under there are other items of gross income earned during the
such agreements, the MKB-Phils. will not acquire any year. It would be extremely difficult for the BIR to
proprietary rights in the licensed systems. The MKB- monitor compliance considering the huge number of
Phils. pays royalty to the MKB-UK, net of 15% stockholders. By shifting the responsibility to remit the
withholding tax prescribed by the RP-UK Tax Treaty. tax to the corporation, it is very easy to check
compliance because there are fewer withholding
Is the income of the MKB-Phils. under the licensing agents compared to the number of income recipients.
agreement with banks considered royalty subject to
20% final withholding tax? Why? If not, what kind of tax Likewise, the imposition of a final withholding tax will
will its income be subject to? Explain. (5%) make the tax available to the government at an earlier
SUGGESTED ANSWER: time. Finally, the final withholding tax will be a sure
Yes. The income of MKB-Phils. under the licensing revenue to the government unlike when the dividend is
agreement with banks shall be considered as royalty treated as a returnable income where the recipient thereof
subject to the 20% final withholding tax. The term royalty is who is in a tax loss position is given the chance to offset
broad enough to include technical advice, assistance or such loss against dividend income thereby depriving the
services rendered in connection with technical government of the tax on said dividend income. [Note: It is
management or administration of any scientific, industrial or recommended that any of the foregoing answers can be given full
commercial undertaking, venture, project or scheme. credit because the question involves a policy issue which can only be
(Sec. 42(4)(f), NIRC). Accordingly, the consultancy and found in the deliberations of Congress.]
technical services rendered by MKB-Phils, which are ALTERNATIVE ANSWER:
incidental to the distribution, support and use of the The reason why cash dividends received by a
computer systems of MKB-UK are taxable as royalty. resident citizen or alien from a domestic corporation are
subjected to the final withholding tax of 10% and
Withholding Tax; Coverage (2004) not at the progressive rate tax schedule is to lessen the
Citing Section 10, Article VIII of the 1987 Constitution impact of a second layer of tax on the same income.
which provides that salaries of judges shall be fixed by law
and that during their continuance in office their salary Withholding Tax; Income subject thereto (2001)
shall not be decreased, a judge of MM Regional Trial What is meant by income subject to "final tax"? Give at
Court questioned the deduction of withholding taxes from least two examples of income of resident individuals that
his salary since it results into a net deduction of his pay. Is is subject to the final tax. (3%)
SUGGESTED ANSWER:
the contention of the judge correct? Reason briefly. (5%)
SUGGESTED ANSWER: Income subject to final tax refers to an income wherein
No. The contention is incorrect. The salaries of judges are the tax due is fully collected through the withholding tax
not tax-exempt and their taxability is not contrary to the system. Under this procedure, the payor of the income
provisions of Section 10, Article VIII of the Constitution withholds the tax and remits it to the government as a
on the non-diminution of the salaries of members of the final settlement of the income tax due on said income.
judiciary during their continuance in office. The clear The recipient is no longer required to include the item of
intent of the Constitutional Commission that framed the income subjected to "final tax" as part of his gross income in
Constitution is to subject their salaries to tax as in the case his income tax returns. Examples of income subject to final
of all taxpayers. Hence, the deduction of withholding tax are dividend income, interest from bank deposits,
taxes, being a manner of collecting the income tax royalties, etc.
on their salary, is not a diminution contemplated
by the fundamental law. (Nitafan et. al. v. CIR, 152 Withholding Tax; Non-Resident Alien (1994)
SCRA 284 [1987]). Four Catholic parishes hired the services of Frank
Binatra, a foreign non-resident entertainer, to perform
Withholding Tax; Domestic Corporation; Cash Dividends for four (4) nights at the Folk Arts Theater.
(2001) Binatra was paid P200.000.00 a night. The parishes
What do you think is the reason why cash dividends, earned P1,000,000.00 which they used for the support of
when received by a resident citizen or alien from a the orphans in the city. Who are liable to pay taxes?
SUGGESTED ANSWER:
domestic corporation, are taxed only at the final tax
of 10% and not at the progressive tax rate schedule The following are liable to pay income taxes:
(a) The four catholic parishes because the income
under Section 24(A) of the Tax Code? Explain your
received by them, not being income earned "as such" in
answer. (5%)
SUGGESTED ANSWER: the performance of their religious functions and
The reason for imposing final withholding tax rather than duties, is taxable income under the last paragraph of
the progressive tax schedule on cash dividends received by Sec. 26, in relation to Sec. 26(e) of the Tax Code. In
promoting and operating the Binatra Show, they 73 year but not more than ten (10) years (1st par.,
engaged in an activity conducted for profit. (Ibid.) Sec. 255, NIRC).
(b) The income of Frank Binatra, a non-resident alien COMMENT: It is suggested that any of the following answers
under our law is taxable at the rate of 30%, final to the question, "What are the liabilities for failure to withhold
withholding tax based on the gross income from the such a tax?" be given full credit:
1) The payor shall be liable for the payment of the tax which
show. Mr. Binatra is not engaged in any trade or
was not withheld.
business in the Philippines. 2) The payer/withholding agent shall be liable to both civil
and criminal penalties imposed by the Tax Code.
Withholding Tax; Non-Resident Corporation (1994)
Bates Advertising Company is a non-resident corporation Withholding Tax; Time Deposit Interest; GSIS Pension
duly organized and existing under the laws of Singapore. It (1994)
is not doing business and has no office in the Maribel Santos, a retired public school teacher, relies
Philippines. Pilipinas Garment Incorporated, a domestic on her pension from the GSIS and the Interest Income
corporation, retained the services of Bates to do all the from a time deposit of P500.000.00 with ABC Bank.
advertising of its products abroad. For said services, Bates' Is Miss Santos liable to pay any tax on her Income?
fees are paid through outward remittances. Are the fees SUGGESTED ANSWER:
received by Bates subject to any withholding tax? Maribel Santos is exempt from tax on the pension
SUGGESTED ANSWER: from the GSIS (Sec. 28(b((7)(F), Tax Code). However, as
The fees paid to Bates Advertising Co., a non-resident regards her time deposit, the interest she receives
foreign corporation are not subject to withholding tax thereon is subject to 20% final withholding tax. (Sec.
since they are not subject to Philippine tax. They are 21(a)(c), Tax Code).
exempt because they do not constitute income from
Philippine sources, the same being compensation for DEDUCTIONS, EXEMPTIONS,
labor or personal services performed outside the
Philippines (Sec. 36{c) (3) and Sec. 25(b)(l), Tax Code). EXCLUSIONS & INCLUSIONS
Deduction: Facilitation Fees or "kickback" (1998)
Withholding Tax; Reader's Digest Award (1998) MC Garcia, a contractor who won the bid for
Is the prize of one million pesos awarded by the Reader's the construction of a public highway, claims as
Digest subject to withholding of final tax? Who expenses, facilitation fees which according to him
is responsible for withholding the tax? What are is standard operating procedure in transactions with the
the liabilities for failure to withhold such tax? [5%] government. Are these expenses allowable as
SUGGESTED ANSWER: deduction from gross income? [5%]
1) It depends. If the prize is considered as winnings SUGGESTED ANSWER:
derived from sources within the Philippines, it is No. The alleged facilitation fees which he claims as
subject to withholding of final tax (Sec. 24[B] in standard operating procedure in transactions with the
relation to Sec. 57[A], NIRC). If derived from government comes in the form of bribes or "kickback"
sources without the Philippines, it is not subject to which are not allowed as deductions from gross income
withholding of final tax because the Philippine tax (Section 34(A)(l)(c), NIRC).
law and regulations could not reach out to foreign
jurisdictions. Deductions: Ordinary Business Expenses (2004)
OXY is the president and chief executive officer of ADD
2) The tax shall be withheld by the Reader's Digest or Computers, Inc. When OXY was asked to join
local agent who has control over the payment of the the government service as director of a bureau under
prize. the Department of Trade and Industry, he took a
leave of absence from ADD. Believing that its
3) Any person required to withhold or who willfully business outlook, goodwill and opportunities improved
fails to withhold, shall, in addition to the other with OXY in the government, ADD proposed to
penalties provided under the Code, be liable upon obtain a policy of insurance on his life. On ethical
conviction to a penalty equal to the total amount of grounds, OXY objected to the insurance purchase but
tax not withheld (Sec. 251, NIRC). In case of failure to ADD purchased the policy anyway. Its annual premium
withhold the tax or in the case of under amounted to P100,000. Is said premium deductible
withholding, the deficiency tax shall be collected by ADD Computers, Inc.? Reason. (5%)
from the payor/withholding agent (1st par.. Sec. SUGGESTED ANSWER:
2.57[A], R.R. No. 2-98). No. The premium is not deductible because it is not an
ordinary business expense. The term "ordinary" is used in
Any person required under the Tax Code or by rules and the income tax law in its common significance and it has the
regulations to withhold taxes at the time or times required by connotation of being normal, usual or customary
law or rules and regulations shall, in addition to other (Deputy v. Du Pont, 308 US 488 [1940]). Paying premiums
penalties provided by law, upon conviction be punished for the insurance of a person not connected to the
by a fine of not less than Ten thousand pesos (Php company is not normal, usual or customary.
10.0OO) and suffer imprisonment of not less than one (1)
Another reason for its non-deductibility is the fact that it ordinary gains which are subject to a higher rate
can be considered as an illegal compensation made to of income tax. (Chirelstein, Federal Income Taxation,
a government employee. This is so because if the 1977 Ed.)
insured, his estate or heirs were made as the beneficiary
(because of the requirement of insurable interest), the payment of Deductions: Deductible Items from Gross Income (1999)
premium will constitute bribes which are not allowed as Explain if the following items are deductible from
deduction from gross income (Section 34[A][l][c], NIRC). gross income for income tax purposes. Disregard
who is the person claiming the expense. (5%)
On the other hand, if the company was made 1) Interest on loans used to acquire capital equipment
the beneficiary, whether directly or indirectly, the or machinery.
premium is not allowed as a deduction from gross 2) Depreciation of goodwill.
income (Section 36[A}14], NIRC). SUGGESTED ANSWER:
1) Interest on loans used to acquire capital equip-
Deductions: Amount for Bribe (2001) ment or machinery is a deductible item from gross
In order to facilitate the processing of its application for a income. The law gives the taxpayer the option to claim as
license from a government office, Corporation A found it a deduction or treat as capital expenditure interest
necessary to pay the amount of Php 100,000 as a bribe to incurred to acquire property used in trade, business
the approving official. Is the Php 100,000 deductible from or exercise of a profession. (Section 34(B) (3), NIRC).
the gross income of Corporation A? On the other hand, is 2) Depreciation for goodwill is not allowed as de-
the Php 100,000 taxable income of the approving official?
duction from gross income. While intangibles maybe
Explain your answers. (5%)
SUGGESTED ANSWER: allowed to be depreciated or amortized, it is only allowed to
Since the amount of Phpl00.000 constitutes a bribe, it is not those intangibles whose use in the business or trade is
allowed as a deduction from gross income of definitely limited in duration. (Basilan Estates, Inc. v,
Corporation A, (Section 34(A)(l)(c), NIRC). However, to CIR, 21 SCRA 17). Such is not the case with goodwill.
the recipient government official, the same constitutes a
ALTERNATIVE ANSWER:
taxable income. All income from legal or illegal sources
are taxable absent any clear provision of law exempting Depreciation of goodwill is allowed as a deduction from
the same. This is the reason why gross income had been gross income if the goodwill is acquired through
defined to include income from whatever source derived. capital outlay and is known from experience to be of
(Section 32(A), NIRC). Illegally acquired income constitutes value to the business for only a limited period. (Section
realized income under the claim of right doctrine (Rutkin v. 107, Revenue Regulations No. 2). In such case, the goodwill
US, 343 US 130). is allowed to be amortized over its useful life to allow the
deduction of the current portion of the expense from
Deductions: Capital Losses; Prohibitions (2003) gross income, thereby paving the way for a proper
What is the rationale for the rule prohibiting the matching of costs against revenues which is an
deduction of capital losses from ordinary gains? Explain. essential feature of the income tax system.
SUGGESTED ANSWER:
It is to insure that only costs or expenses incurred in Deductions: Income Tax: Donation: Real Property (2002)
earning the income shall be deductible for income tax On December 06, 2001, LVN Corporation donated a
purposes consonant with the requirement of the law that piece of vacant lot situated in Mandaluyong City to
only necessary expenses are allowed as deductions from an accredited and duly registered non-stock, non-
gross income. The term "NECESSARY EXPENSES" profit educational institution to be used by the latter in
presupposes that in order to be allowed as deduction, the building a sports complex for students.
expense must be business connected, which is not the A. May the donor claim in full as deduction from its
case insofar as capital losses are concerned. This is also gross income for the taxable year 2001 the amount of
the reason why all non-business connected expenses like the donated lot equivalent to its fair market
personal, living and family expenses, are not allowed as value/zonal value at the time of the donation?
deduction from gross income (Section 36(A)(1) of the 1997 Explain your answer. (2%)
Tax Code). SUGGESTED ANSWER:
A. No. Donations and/or contributions made to
The prohibition of deduction of capital losses from qualified donee institutions consisting of property
ordinary gains is designed to forestall the shifting of other than money shall be based on the acquisition
deductions from an area subject to lower taxes to an area cost of the property. The donor is not entitled to
subject to higher taxes, thereby unnecessarily resulting in claim as full deduction the fair market value/zonal
leakage of tax revenues. Capital gains are generally taxed at a value of the lot donated. (Sec. 34(H), NIRC).
lower rate to prevent, among others, the bunching of
income in one taxable year which is a liberality in the law B. In order that donations to non-stock, non-profit
begotten from motives of public policy (Rule on Holding educational institution may be exempt from the
Period). It stands to reason therefore, that if the transaction donor's gift tax, what conditions must be met by the
results in loss, the same should be allowed only from and to donee? (3%)
SUGGESTED ANSWER:
the extent of capital gains and not to be deducted from
B. In order that donations to non-stock, non-profit that they are not allowed to deduct any item
educational institution may be exempt from the from their gross income for purposes of computing their
donor's gift tax, it is required that not more than 30% net taxable income. With the passage of the
of the said gifts shall be used by the donee-institution Comprehensive Tax Reform Act of 1997, is this
for administration purposes. (Sec. 101(A)(3), NIRC). complaint still valid? Explain your answer. (5%)
SUGGESTED ANSWER:
Deductions: Non-Deductible Items; Gross Income (1999) No more. Gross compensation income earners are now
Explain if the following items are deductible from allowed at least an item of deduction in the form of
gross income for income tax purposes. Disregard premium payments on health and/or hospitalization
who is the person claiming the deduction. (5%) insurance in an amount not exceeding P2,400 per annum
1. Reserves for bad debts. [Section 34(M)]. This deduction is allowed if the aggregate
2. Worthless securities family income do not exceed P250.000 and by the spouse, in
SUGGESTED ANSWER: case of married individual, who claims additional
1. RESERVE FOR BAD DEBTS are not allowed as personal exemption for dependents.
deduction from gross income. Bad debts must be
charged off during the taxable year to be allowed as Deductions; Vanishing Deduction; Purpose (2006)
deduction from gross income. The mere setting up of Vanishing deduction is availed of by taxpayers to:
reserves will not give rise to any deduction. (Section a. Correct his accounting records to reflect the actual
34(E). NTRC). deductions made
b. Reduce his gross income
2. WORTHLESS SECURITIES, which are ordinary c. Reduce his output value-added tax liability
assets, are not allowed as deduction from gross d. Reduce his gross estate
income because the loss is not realized. However, if Choose the correct answer. Explain. (5%)
these worthless securities are capital assets, the owner is SUGGESTED ANSWER:
considered to have incurred a capital loss as of the last (D) reduce his gross estate. Vanishing deduction or prop-
day of the taxable year and, therefore, deductible to the erty previously taxed is one of the items of
extent of capital gains. (Section 34(D)(4), NIRC). This deduction allowed in computing the net estate of a
deduction, however, is not allowed to a bank or trust decedent (Section 86[A][2] and 86[B][2], NIRC).
company. (Section 34(E)(2), NIRC).
Exclusion & Inclusion; Gross Receipts (2006)
Deductions: Requisites; Deducibility of a Loss (1998) Congress enacts a law imposing a 5% tax on gross receipts
Give the requisites for deducibility of a loss. (5%1 of common carriers. The law does not define the term
SUGGESTED ANSWER: "gross receipts." Express Transport, Inc., a bus company
The requisites for deducibility of a loss are plying the Manila-Baguio route, has time deposits with
1) loss belongs to the taxpayer; ABC Bank. In 2005, Express Transport earned P1 Million
2) actually sustained and charged off during the interest, after deducting the 20% final withholding tax
taxable year; from its time deposits with the bank. The BIR wants to
3) evidenced by a closed and completed transaction; collect a 5% gross receipts tax on the interest income of
4) not compensated by Insurance or other forms of Express Transport without deducting the 20% final
indemnity; withholding tax. Is the BIR correct? Explain. (5%)
5) not claimed as a deduction for estate tax purposes ALTERNATIVE ANSWER:
in case of individual taxpayers; and Yes. The term "Gross Receipts" is broad enough to
6) if it is a casualty loss it is evidenced by a declaration of include income constructively received by the taxpayer.
loss filed within 45 days with the BIR. The amount withheld is paid to the government on its
behalf, in satisfaction of withholding taxes. The fact that it
COMMENT: did not actually receive the amount does not alter the fact
The question is vague. There are different kinds of losses that it is remitted in satisfaction of its tax obligations.
recognized as deductible under the Tax Code. These are losses, Since the income withheld is an income owned by
in general (Sec. 34[D](1); net operating loss carryover (Sec.
34[D](3); capital losses (Sec. 34[D](4); Losses from wash sales of
Express Transport, the same forms part of its gross
stocks or securities (Sec. 34[D](5) in relation to Sec. receipts (CIR v. Solidbank Corp., G.R. No. 148191,
38); wagering losses (Sec. 34[D](6); and abandonment losses November 25, 2003).
ALTERNATIVE ANSWER:
(Sec. 34(D](7). Losses are also deductible from the gross estate
(Sec. 86[A](l)(e), NIRC). No. The term "gross receipts," as applied to the business
of a common carrier consists of revenues from carriage of
Considering the time allotted for a five (5) point question is only goods, cargoes, and passengers. It does not comprehend
nine (9) minutes, the candidates would not be able to write down or include interest income which is properly described as
a complete answer. It is suggested that any answer which states "Other Income."
the requisites for the deducibility of any of the above losses be (NOTA BENE: This question pertains to a percentage tax on
given full credit. Gross Receipts which is excluded from the Bar coverage)
Deductions; Income Tax: Allowable Deductions (2001) Exclusion vs. Deduction from Gross Income (2001)
Taxpayers whose only income consists of salaries and
wages from their employers have long been complaining
Distinguish "Exclusion from Gross Income" 73 which are exclusions from gross income
from "Deductions From Gross Income". Give an pursuant to Section 28(b)(5) of the Tax Code.
example of each. (2%)
SUGGESTED ANSWER: Exclusions & Inclusions: Executive Benefits (1995)
EXCLUSIONS from gross income refer to a flow of Mr. Adrian is an executive of a big business corporation.
wealth to the taxpayer which are not treated as part of Aside from his salary, his employer provides him with the
gross income, for purposes of computing the taxpayer’s following benefits: free use of a residential house in an
taxable income, due to the following reasons: (1) It is exclusive subdivision, free use of a limousine and
exempted by the fundamental law; (2) It is exempted by membership in a country club where he can entertain
statute; and (3) It does not come within the definition of customers of the corporation. Which of these benefits, if
income. (Section 61, RR No. 2). DEDUCTIONS from any, must Mr. Adrian report as income? Explain.
gross income, on the other hand, are the amounts, which SUGGESTED ANSWER:
the law allows to be deducted from gross income in order to Mr. Adrian must report the imputed rental value of the
arrive at net income. house and limousine as income. If the rental value exceeds
the personal needs of Mr. Adrian because he is expected to
Exclusions pertain to the computation of gross provide accommodation in said house for company
income, while deductions pertain to the guests or the car is used partly for business purpose, then
computation of net income. Exclusions are something Mr. Adrian is entitled only to a ratable rental value of the
received or earned by the taxpayer which do not form house and limousine as exclusion from gross income and
part of gross income while deductions are something only a reasonable amount should be reported as income.
spent or paid in earning gross income. This is because the free housing and use of the limousine are
given partly for the convenience and benefit of the
Example of an exclusion from gross income is proceeds employer (Collector vs. Henderson).
of life insurance received by the beneficiary upon the ALTERNATIVE ANSWER:
death of the insured which is not an income or 13th Remuneration for services although not given in the form of
month pay of an employee not exceeding P30.000 which cash constitutes compensation income. Accordingly, the
is an income not recognized for tax purposes. Example of value for the use of the residential house is part of his
a deduction is business rental. compensation income which he must report for income
tax purposes. However, if the residential house given to
Exclusions & Inclusions: Benefits on Account of Mr. Adrian for his free use as an executive is also used for
Injury (1995) the benefit of the corporation/employer, such as for
Mr. Infante was hit by a wayward bus while on his way to entertaining customers of the corporation, only 50% of
work. He survived but had to pay P400.000.00 for his the rental value or depreciation (if the house is owned by the
hospitalization. He was unable to work for six months corporation) shall form part of compensation income
which meant that he did not receive his usual salary of P (RAMO 1-87).
10,000.00 a month or a total of P60.000.00. He sued the bus
company and was able to obtain a final judgment The free use of a limousine and the membership in
awarding him P400.000.00 as reimbursement for his a country club is not part of Mr. Adrian's
hospitalization, P60.000 for the salaries he failed to receive compensation income because they were given for
while hospitalized, P200,000.00 as moral damages for his the benefit of the employer and are considered to be
pain and suffering, and P 100,000.00 as exemplary necessary incidents for the proper performance of his
damages. He was able to collect in full from the judgment. duties as an executive of the corporation.
How much income did he realize when he collected on
the judgment? Explain. The membership fee in the country club needs to be
SUGGESTED ANSWER: reported as income. It appears that the membership of
None. The P200.000 moral and exemplary damages are Mr. Adrian to the country club is primarily for the benefit
compensation for injuries sustained by Mr. Infante. The and convenience of the employer. This is to enable Mr.
P400.000.00 reimbursement for hospitalization expenses Adrian to entertain company guests (Collector vs.
and the P60.000.00 for salaries he failed to receive are Henderson).
'amounts of any damages received whether by suit or
agreement on account of such injuries.' Section 28(b)(5) of Exclusions & Inclusions; Assets; Resident Alien (2005)
the Tax Code specifically exclude these amounts from the Ralph Donald, an American citizen, was a top executive
gross income of the individual injured. (Section 28(b), of a U.S. company in the Philippines until he retired in
NIRC and Sec. 63 Rev. Reg. No. 2) 1999. He came to like the Philippines so much that
ALTERNATIVE ANSWER: following his retirement, he decided to spend the rest of his
The income realized from the judgment is only the life in the country. He applied for and was granted a
recovery for lost salaries. This constitutes taxable income permanent resident status the following year. In the spring
because were it not for the injury, he could have received it of 2004, while vacationing in Orlando, Florida, USA, he
from his employer as compensation income. All the suffered a heart attack and died. At the time of his death, he
other amounts received are either compensation for left the following properties: (a) bank deposits with
injuries or damages received on account of such injuries' Citibank Makati and Citibank Orlando, Florida; (b) a
resthouse in Orlando, Florida; (c) a condominium unit in
Makati; (d) shares of stock in the Philippine subsidiary of was reached under the terms of which JR was
the U.S. Company where he worked; (e) shares of stock in paid the following amounts: P500,000.00 for his
San Miguel Corp. and PLOT; (f) shares of stock in Disney hospitalization; P250,000.00 as moral damages; and
World in Florida; (g) U.S. treasury bonds; and (g) proceeds P300,000.00 for loss of income during the period of his
from a life insurance policy issued by a U.S. corporation. treatment and recuperation. In addition, JR received from
Which of the foregoing assets shall be included in his employer the amount of P200,000.00 representing the
the taxable gross estate in the Philippines? Explain. (5%) cash equivalent of his earned vacation and sick leaves.
SUGGESTED ANSWER: Which, if any, of the amounts he received are subject to
All of the properties enumerated except (g), the proceeds income tax? Explain. (5%)
from life insurance, are included in the taxable gross estate SUGGESTED ANSWER:
in the Philippines. Ralph Donald is considered a resident All amounts received from the airline company
alien for tax purposes since he is an American Citizen and are excluded from gross income. Under Sec. 32(B)(4) of
was a permanent resident of the Philippines at the time of the NIRC, amounts of damages received, whether by suit
his death. The value of the gross estate of a resident alien or agreement, on account of personal injuries or sickness
decedent shall be determined by including the value at the are excluded from gross income. Since the amounts
time of his death of all property, real or personal, tangible received from the airline company were received as
or intangible, wherever situated. (Sec. 85, NIRC) damages by agreement on account of personal
The other item, (g) proceeds from a life insurance policy, injuries, all shall be excluded from JR's gross income.
may also be included on the assumption that it was Ralph
Donald who took out the insurance upon his own life, The amount of P200,000.00, less the equivalent of
payable upon his death to his estate. (Sec. 85[E], NIRC) not more than 10 days of vacation leave, received by JR
from his employer, is subject to income tax under Sec.
Exclusions & Inclusions; Benefits on Account of 2.78.1 (a) (7) of R.R. No. 2-98.
Death (1996)
X, an employee of ABC Corporation died. ABC Exclusions & Inclusions; Compensation for
Corporation gave X’s widow an amount equivalent to X’s personal injuries or sickness (2003)
salary for one year. Is the amount considered taxable X, while driving home from his office, was seriously
income to the widow? Why? injured when his automobile was bumped from behind by
SUGGESTED ANSWER: a bus driven by a reckless driver. As a result, he had to pay
No. The amount received by the widow from P200,000.00 to his doctor and P100, 000.00 to
the decedent's employer may either be a gift or a the hospital where he was confined for treatment. He
separation benefit on account of death. Both are filed a suit against the bus driver and the bus company
exclusions from gross income pursuant to provisions and was awarded and paid actual damages of P300,
of Section 28(b) of the Tax Code. 000.00 (for his doctor and hospitalization bills), P100,000.00
ALTERNATIVE ANSWER:
by way of moral damages, and P50,000.00 for what he
No. Since the amount was given to the widow and not to had to pay his attorney for bringing his case to court.
the estate, it becomes obvious that the amount is more of Which, if any, of the foregoing awards are taxable income
a gift. In one U.S. tax case (Estate of Hellstrom vs. to X and which are not? Explain. (8%)
Commissioner, 24 T.C. 916), it was held that payments to SUGGESTED ANSWER:
the widow of the president of a corporation of the Nothing is taxable. Under the Tax Code, any amount
amount the president would have received in salary if he received as compensation for personal injuries or sickness,
lived out the year constituted a gift and not an income. plus the amounts for any damages received whether
by suit or agreement, on account of such injuries or
The controlling facts which would lead to the conclusion sickness shall be excluded from gross income. Since
that the amount received by the widow is not an income the entire amount of P450, 000.00 received are award of
are as follows: damages on account of the injuries sustained; all shall
7) the gift was made to the widow rather than the be excluded from his gross income. Obviously, these
estate: damages are considered by law as mere return of
8) there was no obligation for the corporation to make capital. (Section 32(B)(4), 1997 Tax Code)
further payments to the deceased;
9) the widow had never worked for the corporation; Exclusions & Inclusions; Facilities or Privileges;
10) the corporation received no economic benefit; and Military Camp (1995)
11) the deceased had been fully compensated for Capt. Canuto is a member of the Armed Forces of
his services (Estate of Sydney Carter the Philippines. Aside from his pay as captain,
vs. Commissioner, 453 F. 2d 61 (2dCir. 1971). the government gives him free uniforms, free living
quarters in whatever military camp he is assigned, and
Exclusions & Inclusions; Benefits on Account of free meals inside the camp. Are these benefits income
Injury (2005) to Capt. Canuto? Explain.
JR was a passenger of an airline that crashed. He survived SUGGESTED ANSWER:
the accident but sustained serious physical injuries which No, the free uniforms, free living quarters and the free
required hospitalization for 3 months. Following meals inside the camp are not income to Capt. Canute
negotiations with the airline and its insurer, an agreement because these are facilities or privileges furnished by the
employer for the employer's convenience which Exclusions & Inclusions; ITR; 13th month pay
are necessary incidents to proper performance of the and de minimis benefits (2005)
military personnel's duties. State with reasons the tax treatment of the following
in the preparation of annual income tax returns: 13th
Exclusions & Inclusions; Gifts over and above month pay and de minimis benefits;
the Retirement Pay (1995) SUGGESTED ANSWER:
Mr. Quiroz worked as chief accountant of a hospital for The 13th month pay not exceeding P30,000.00 shall not
forty-five years. When he retired at 65 he received be reported in the income tax return because it is excluded
retirement pay equivalent to two months' salary for every from gross income (Sec. 32[B][7], [e], NIRC) The amount
year of service as provided in the hospital BIR approved of the 13th month pay in excess of P30,000.00 shall
retirement plan. The Board of Directors of the hospital be reported in the annual income tax return.
felt that the hospital should give Quiroz more than what was
provided for in the hospital's retirement plan in view of his De minimis benefits which do not exceed the
loyalty and invaluable services for forty-five years; hence, it ceilings are excluded from gross income, and not to be
resolved to pay him a gratuity of P1 Million over and above considered for determining the P30,000.00 ceiling
his retirement pay. hence not reportable in the annual income tax
return. (Sec. 2.78.1[A][3], R.R. 2-98 as amended by Sec.
The Commissioner of Internal Revenue taxed the P1 Mil- 2.33 [C] and further amended by R.R. No. 8-2000)
lion as part of the gross compensation income of Quiroz
who protested that it was excluded from income because Exclusions & Inclusions; ITR; Dividends received by
(a) it was a retirement pay, and (b) it was a gift. a domestic corporation (2005)
1) Is Mr. Quiroz correct in claiming that the additional State with reasons the tax treatment of the following in
P1 Million was retirement pay and therefore the preparation of annual income tax returns: Dividends
excluded from income? Explain. received by a domestic corporation from (i) another
2) Is Mr. Quiroz correct in claiming that the additional domestic corporation; and (ii) a foreign corporation;
P1 Million was gift and therefore excluded from SUGGESTED ANSWER:
income? Explain. (i) Dividends received by a domestic corporation from a
SUGGESTED ANSWERS: domestic corporation shall not be subject to tax (Sec.
1) No. The additional P1 million is not a retirement pay 27[D][4], NIRC), hence, excluded from the income
but a part of the gross compensation income of Mr. tax return.
Quiroz. This is not a retirement benefit received in
accordance with a reasonable private benefit plan (ii) Dividends received by a domestic corporation from a
maintained by the employer as it was not paid out of the foreign corporation form part of the gross income and are
retirement plan. Accordingly, the amount received in accordingly subject to net income tax, hence included in
excess of the retirement benefits that he is entitled to the annual ITR (Sec. 42[A][2][b], NIRC), hence, must be
receive under the BIR-approved retirement plan would included in the income tax return.
not qualify as an exclusion from gross income.
Exclusions & Inclusions; ITR; Income realized from
2) No. The amount received was in consideration of his sale (2005)
loyalty and invaluable services to the company which is State with reasons the tax treatment of the following
clearly a compensation income received on account of in the preparation of annual income tax returns:
employment. Under the employer's 'motivation test,' Income realized from sale of: (i) capital assets; and
emphasis should be placed on the value of Mr. Quiroz (ii) ordinary assets.
services to the company as the compelling reason for SUGGESTED ANSWER:
giving him the gratuity, hence it should constitute a (i) Income realized from sale of capital assets is subject to
taxable income. The payment would only qualify as a gift if the final withholding tax at source and therefore excluded
there is nothing but 'good will, esteem and kindness' from the Income Tax Return (Sec. 24[C] and [D], NIRC);
which motivated the employer to give the gratuity.
(Stonton vs. U.S., 186 F. Supp. 393). Such is not the case in (ii) Income realized from sale of ordinary assets is part of
the herein problem. Gross Income, included in the Income Tax Return. (Sec.
ALTERNATIVE ANSWER: 32[A][3], NIRC)
Yes. The 1 million is not compensation income subject to
income tax but a gift from his employer. There was no Exclusions & Inclusions; ITR; Interest on deposits (2005)
evidence presented to show that he was not fully compen- State with reasons the tax treatment of the following
sated for his 45 years of service. If his services contributed in in the preparation of annual income tax returns: Interest
a large measure to the success of the hospital, it did not give on deposits with: (i) BPI Family Bank; and (ii) a
rise to a recoverable debt. The P1 million is purely a gratuity local offshore banking unit of a foreign bank;
from the company. It is a taxable gift to the transferor. SUGGESTED ANSWER:
Under the Tax Code, gifts are excluded from gross Both items are excluded from the income tax return: (i)
income therefore exempt from income tax. (Sec. Interest income from any currency bank deposit is
28{b)(3), NIRC; Pirovano vs. Commissioner) considered passive income from sources within the
Philippines and subject to final tax. Since it is subject to
final tax it is not to be included in the annual ITR. (Sec. 73 exclusively used for religious, charitable or
24[B][1], NIRC) (u) Same as No. (j). educational purposes shall be exempt from taxation.
a) To what kind of tax does this exemption apply? (2%)
Exclusions & Inclusions; ITR; Proceeds of life insurance SUGGESTED ANSWER:
(2005) This exemption applies only to property taxes. What is
State with reasons the tax treatment of the following exempted is not the institution itself but the lands,
in the preparation of annual income tax returns: Proceeds buildings and improvements actually, directly and
of life insurance received by a child as exclusively used for religious, charitable and educational
irrevocable beneficiary; purposes. (Commissioner of Internal Revenue v. Court of
SUGGESTED ANSWER: Appeals, et al, G.R. No. 124043, October 14, 1998).
Not to be reported in the annual income tax returns
because the proceeds of the life insurance are b) Is proof of actual use necessary for tax exemption
excluded from gross income. Proceeds of Life purposes under the Constitution? (3%)
insurance policies paid to the heirs or beneficiaries SUGGESTED ANSWER:
upon the death of the insured is an exclusion from gross Yes, because tax exemptions are strictly construed against
income. (Sec.32[B][l],NIRC) the taxpayer. There must be evidence to show that the
taxpayer has complied with the requirements for
Exclusions & Inclusions; Life Insurance Policy (2003) exemption. Furthermore, real property taxation is based
On 30 June 2000, X took out a life insurance policy on his on use and not on ownership, hence the same rule must also
own life in the amount of P2,000,000.00. He be applied for real property tax exemptions.
designated his wife, Y, as irrevocable beneficiary to
P1,000,000.00 and his son, Z, to the balance of Exemptions: Charitable Institutions; Churches (1996)
P1,000,000.00 but, in the latter designation, reserving his The Constitution exempts from taxation charitable in-
right to substitute him for another. On 01 September stitutions, churches, parsonages or convents
2003, X died and his wife and son went to the insurer to appurtenant thereto, mosques arid non-profit
collect the proceeds of X's life insurance policy. (8%) cemeteries and lands, buildings and improvements
(a) Are the proceeds of the insurance subject actually, directly and exclusively used for religious,
to income tax on the part of Y and Z for charitable and educational purposes. Mercy Hospital is
their respective shares? Explain. a 100-bed hospital organized for charity patients. Can
(b) Are the proceeds of the insurance to form part of said hospital claim exemption from taxation under
the gross estate of X? Explain. the above-quoted constitutional provision? Explain.
(a) No. The law explicitly provides that proceeds of life Yes. Mercy Hospital can claim exemption from
insurance policies paid to the heirs or beneficiaries upon taxation under the provision of the Constitution, but
the death of the insured are excluded from gross income only with respect to real property taxes provided that
and is exempt from taxation. The proceeds of such real properties are used actually, directly and
life insurance received upon the death of the exclusively for charitable purposes.
insured constitute a compensation for the loss of life,
hence a return of capital, which is beyond the scope Exemptions: Educational institution (2004)
of income taxation. (Section 32(B)(1) 1997 Tax Code) Suppose that XYZ Colleges is a proprietary
educational institution owned by the Archbishop's family,
(b) Only the proceeds of P1,000,000.00 given to the son, Z, rather than the Archdiocese, which of those above cited
shall form part of the Gross Estate of X. Under the income and donation would be exempt from taxation?
Tax Code, proceeds of life insurance shall form part of Explain briefly. (5%)
the gross estate of the decedent to the extent of the SUGGESTED ANSWER:
amount receivable by the beneficiary designated in the If XYZ Colleges is a proprietary educational institution, all
policy of the insurance except when it is expressly of its income from school related and non-school related
stipulated that the designation of the beneficiary is activities will be subject to the income tax based on
irrevocable. As stated in the problem, only the designation its aggregate net income derived from both activities
of Y is irrevocable while the insured/decedent reserved (Section 27(B), NMC). Accordingly, all of the income
the right to substitute Z as beneficiary for another person. enumerated in the problem will be taxable.
Accordingly, the proceeds received by Y shall be excluded
The donation of lot and building will likewise be subject
while the proceeds received by Z shall be included in the
to the donor's tax because a donation to an
gross estate of X. (Sect/on 85(E), 1997 Tax Code)
educational institution is exempt only if the school is
Exemptions: Charitable Institutions (2000) incorporated as a non-stock entity paying no dividends.
Article VI, Section 28 (3) of the 1987 Philippine
Since the donee is a proprietary educational institution,
Constitution provides that charitable institutions,
churches and personages or covenants appurtenant the donation is taxable (Section 101(AX3), NJRC).
thereto, mosques, non-profit cemeteries and all lands,
Exemptions: Gifts & Donations (1994)
buildings and improvements actually, directly and
In 1991, Imelda gave her parents a Christmas gift of P
100,000.00 and a donation of P50,000.00 to her parish
church. She also donated a parcel of land for Under Article XTV, Section 4 (3) of the 1987
the construction of a building to the PUP Philippine Constitution, all revenues and assets of
Alumni Association, a non-stock, non-profit non- stock, nonprofit educational institutions, used
organization. Portions of the building shall be leased to actually, directly and exclusively for educational
generate income for the association. purposes, are exempt from taxes and duties. Are income
1) Is the Christmas gift of P 100,000.00 to derived from dormitories, canteens and bookstores as
Imelda's parents subject to tax? well as interest income on bank deposits and
2) How about the donation to the parish church? yields from deposit substitutes automatically exempt
3) How about the donation to the P.U.P, Alumni Asso- from taxation? Explain. (5%)
ciation? SUGGESTED ANSWER:
SUGGESTED ANSWER: No. The interest income on bank deposits and yields from
1) The Christmas gift of P100,000.00 given by Imelda to deposit substitutes are not automatically exempt from
her parents is taxable up to P50,000.00 because under taxation. There must be a showing that the incomes are
the law (Sec. 92 (a) of the Tax Code), net gifts not included in the school's annual information return and
exceeding P50,000.00 are exempt. duly audited financial statements together with:
1. Certifications from depository banks as to
2) The donation of P50,000.00 to the parish church the amount of interest income earned from
even assuming that it is exclusively for religious passive investments not subject to the 20% final
purposes is not tax-exempt because the withholding tax;
exemption granted under Article VI, Sec. 2. Certification of actual, direct and exclusive utilization
28(3) of the Constitution applies only to real of said income for educational purposes;
estate taxes (Lladoc v. Commissioner, 14SCRA292). 3. Board resolution on proposed project to be funded
out of the money deposited in banks or placed
3) The donation to the P.U.P. Alumni Association does in money market placements (Finance Department
not also qualify for exemption both under the Order No. 149-95 issued November 24, 1995), which
Constitution and the aforecited law because it is not an must be used actually, directly and exclusively for
educational or research organization, corporation, educational purposes.
institution, foundation or trust.
ALTERNATIVE ANSWER: The income derived from dormitories, canteens
Donation to the P.U.P. Alumni Association is exempt and bookstores are not also automatically exempt
from donor's tax if it is proven that the association from taxation. There is still the requirement for
is a nonstock, non-profit charitable association, paying evidence to show actual, direct and exclusive use for
no dividends, governed by trustees who receive educational purposes. It is to be noted that the 1987
no compensation, and devoting all its income to Philippine Constitution does not distinguish with
the accomplishment and promotion of the respect to the source or origin of the income. The
purposes enumerated in its articles of incorporation. Not distinction is with respect to the use which should
more than 30% of the gift should be used for be actual, direct and exclusive for educational purposes.
administration purposes by the donee.
Consequently, the provisions of Sec. 30 of the NIRC of
Exemptions: Head of the Family: (1998) 1997, that a non-stock and nonprofit educational
Arnold, who is single, cohabits with Vilma, who is legally institution is exempt from taxation only "in respect
married to Zachary. Arnold and Vilma have six to income received by them as such" could not
minor children who live and depend upon Arnold for affect the constitutional tax exemption. Where the
their chief support. The children are not married and Constitution does not distinguish with respect to source
not gainfully employed. or origin, the Tax Code should not make distinctions.
1) For income tax purposes, may Arnold be considered
as "head of a family?" [3%] Exemptions: Non-Profit Entity; Ancillary Activity
2) Is Arnold entitled to deduct from his gross income, & Incidental Operations (1994)
an additional exemption for each of his illegitimate The University of Bigaa, a non-stock, non-profit entity,
child? [2%] operates a canteen for its students and a bookstore inside the
SUGGESTED ANSWER:
campus. It also operates two dormitories for its
1) Yes. An unmarried man who has illegitimate minor
students, one of which is in the campus. Is the University
children who live with him and depend upon him
liable to pay income taxes for the operation of the: 1)
for their chief support is considered as "head of the
canteen? 2) bookstore? 3) two dormitories?
family" (RR No. 2-98 implementing Section 35, NIRC). SUGGESTED ANSWER:
2) No. Arnold is only entitled to deduct additional 1) For the operation of the canteen inside the campus, the
personal exemption for four (4) out of the six (6) income thereon being incidental to the operations of the
illegitimate children. The maximum number of University as a school, is exempt (Art. XIV (4) (3),
dependents for purposes of the additional personal Constitution; DECS Regulations No. 137-87, Dec. 16, 1987).
exemption is four. (Sec. 35, NIRC).
2) For the same reasons, the University of Bigaa is not
Exemptions: Non-Profit Educational Institutions (2000)
liable to pay income taxes for the operation of the
bookstore, since this is an ancillary activity the conduct of are income from its activities conducted for
which is carried out within the school premises. profit which are subject to tax. The income tax
attaches irrespective of the disposition of these incomes.
3) The University of Bigaa shall not be liable to (Sec. 30, NIRC; CIR v. YMCA, GR No. 124043, 1998).
pay income taxes for the operation of the dormitory
located in the campus, for same reasons as the foregoing. Exemptions: Prize of Peace Poster Contest (2000)
However, the latter shall be liable for income taxes on Jose Miranda, a young artist and designer, received a prize
income from operations of the dormitory located of P100,000.00 for winning in the on-the-spot peace
outside the school premises. poster contest sponsored by a local Lions Club. Shall the
reward be included in the gross income of the
Exemptions: Non-Stock/ Non-Profit Association (2002) recipient for tax purposes? Explain. (3%)
XYZ Foundation is a non-stock, non-profit association SUGGESTED ANSWER:
duly organized for religious, charitable and social welfare No. It is not includable in the gross income of the
purposes. Last January 3, 2000 it sold a portion of its lot recipient because the same is subject to a final tax of 20%,
used for religious purposes and utilized the entire the amount thereof being in excess of P10.000 (Sec.
proceeds for the construction of a building to house its 24(B){1), NIRC of 1997). The prize constitutes a taxable
free Day and Night Care Center for children of single income because it was made primarily in recognition of
parents. In order to subsidize the expenses of the Day and artistic achievement which he won due to an action on his
Night Care Center and to support its religious, charitable part to enter the contest. [Sec. 32 (B) (7) (c), NIRC of 1997]
and social welfare projects, the Foundation leased the 300- Since it is an on-the-spot contest, it is evident that
square meter area of the second and third floors of the he must have joined the contest in order to earn the prize
building for use as a boarding house. The Foundation also or award.
operates a canteen and a gift shop within the premises, all
the income from which is used actually, directly, and Exemptions: Prizes & Awards; Athletes (1996)
exclusively for the purposes for which the Foundation Onyoc, an amateur boxer, won in a boxing competition
was organized. sponsored by the Gold Cup Boxing Council, a sports
association duly accredited by the Philippine Boxing
A. Considering the constitutional provision granting tax Association. Onyoc received the amount of P500,000 as
exemption to non-stock corporations such as those his prize which was donated by Ayala Land Corporation.
formed exclusively for religious, charitable or social The BIR tried to collect income tax on the amount
welfare purposes, explain the meaning of the last received by Onyoc and donor's tax from Ayala Land
paragraph of said Sec. 30 of the 1997 Tax Code Corporation, which taxes, Onyoc and Ayala Land
which states that “Income of whatever kind and character of Corporation refuse to pay. Decide.
the foregoing organizations from any of their properties, real or SUGGESTED ANSWER:
personal, or from any of their activities conducted for profit The prize will not constitute a taxable income to Onyoc,
regardless of the disposition made of such income shall be hence the BIR is not correct in imposing the income tax.
subject to tax imposed under this Code." (5%) R.A. No. 7549 explicitly provides that 'All prizes and
SUGGESTED ANSWER: awards granted to athletes in local and international sports
A. The exemption contemplated in the Constitution tournaments and competitions held in the Philippines or
covers real estate tax on real properties actually, directly abroad and sanctioned by their respective national sports
and exclusively used for religious, charitable or social associations shall be exempt from income tax".
welfare purposes. It does not cover exemption from the
imposition of the income tax which is within the context of Neither is the BIR correct in collecting the donor's
Section 30 of the Tax Code. As a rule, non-stock non- profit tax from Ayala Land Corporation. The law is clear
corporations organized for religious, charitable or social when it categorically stated "That the donor's of said
welfare purposes are exempt from income tax on their prizes and awards shall be exempt from the payment of
income received by them as such. However, if these the donor's tax."
religious, charitable or social welfare corporations derive
income from their properties or any of their activities Exemptions: Retirement Benefits: Work Separation (1999)
conducted for profit, the income tax shall be imposed on A Co., a Philippine corporation, has two divisions —
said items of income irrespective of their disposition. manufacturing and construction. Due to the economic
(Sec. 30, NIRC; CIR v, YMCA, GR No. 124043, 1998 ). situation, it had to close its construction division and lay-
off the employees in that division. A Co. has a retirement
B. Is the income derived by XYZ Foundation from the plan approved by the BIR, which requires a minimum of
sale of a portion of its lot, rentals from its boarding 50 years of age and 10 years of service in the same
house and the operation of its canteen and gift shop employer at the time of retirement. There are 2 groups of
subject to tax? Explain. (5%) employees to be laid off:
SUGGESTED ANSWER: 1) Employees who are at least 50 years of age and has
B. Yes. The income derived from the sale of lot and at 10 years of service at the time of termination of
rentals from its boarding house are considered as income employment.
from properties which are subject to tax. Likewise, the 2) Employees who do no meet either the age or length
income from the operation of the canteen and gift shop of service A Co. plans to give the following:
a. For category (A) employees - the benefits
under the BIR approved plan plus an ex gratia 73
payment of one month of every year of
SUGGESTED ANSWER:
service.
b. For category (B) employees - one month for 1) The separation pay given to Reyes is subject to
every year of service. income tax as compensation income because it arises from
For both categories, the cash equivalent of a service rendered pursuant to an employer-employee rela-
unused vacation and sick leave credits. tionship. It is not considered an exclusion from
gross income because the rule in taxation is tax
A Co. seeks your advice as to whether or not it will construed in strictissimi juris or the rule on strict
subject any of these payments to WT. Explain your Interpretation of tax exemptions.
advice. (5%)
SUGGESTED ANSWER: 2) The separation pay received by Cruz is not subject to
For category A employees, all the benefits received on income tax because his separation from the company was
account of their separation are not subject to income tax, involuntary (Sec. 28 b (7), Tax Code).
hence no withholding tax shall be imposed. The benefits
received under the BIR-approved plan upon meeting the 3) The separation pay received by Bautista is likewise not
service requirement and age requirement are explicitly subject to tax. His separation is due to disability, hence
excluded from gross income. The ex gratia payment also involuntary. Under the law, separation pay received
qualifies as an exclusion from gross income being in the through involuntary causes are exempt from taxation.
nature of benefit received on account of separation due to
causes beyond the employees' control. (Section 32(B), Exemptions: Separation Pay (1995)
NIRC). The cash equivalent of unused vacation and sick Mr. Jacobo worked for a manufacturing firm. Due to
leave credits qualifies as part of separation benefits business reverses the firm offered voluntary
excluded from gross income (CIR v. Court of Appeals, GR redundancy program in order to reduce overhead
No. 96O16, October 17, 1991). expenses. Under the program an employee who
offered to resign would be given separation pay
For category B employees, all the benefits received equivalent to his three month's basic salary for every year
by them will also be exempt from income tax, hence of service. Mr. Jacobo accepted the offer and received
not subject to withholding tax. These are benefits P400.000.00 as separation pay under the program.
received on account of separation due to causes
beyond the employees' control, which are specifically After all the employees who accepted the offer were paid,
excluded from gross income. (Section 32(B), NIRC). the firm found its overhead still excessive. Hence it
ALTERNATIVE ANSWER; adopted another redundancy program.
All of the payments are not subject to income tax and Various unprofitable departments were closed. As a
should not also be subject to withholding tax. The result, Mr. Kintanar was separated from the service. He
employees were laid off, hence separated for a cause also received P400.000.00 as separation pay.
beyond their control. Consequently, the amounts to be 1) Did Mr. Jacobo derive income when he received his
paid by reason of such involuntary separation are separation pay? Explain.
excluded from gross income, irrespective of whether the 2) Did Mr. Kintanar derive income when he received his
employee at the time of separation has rendered less than separation pay? Explain.
ten years of service and/or is below fifty years of age. SUGGESTED ANSWER:
(Section 32(B), NIRC). 1) Yes, Mr. Jacobo derived a taxable income when he
received his separation pay because his separation from
Exemptions: Separation Pay (1994) employment was voluntary on his part in view of his offer to
Pedro Reyes, an official of Corporation X, asked for resign. What is excluded from gross income is any
an "earlier retirement" because he was emigrating amount received by an official or employee as a
to Australia. He was paid P2.000.000.00 as separation pay consequence of separation of such official or employee
in recognition of his valuable services to the corporation. from the service of the employer for any cause beyond the
control of the said official or employee (Sec 28, NIRC).
Juan Cruz, another official of the same company, ALTERNATIVE ANSWER:
was separated for occupying a redundant position. He No, Mr. Jacobo did not derive any taxable income because
was given P1,000.000.00 as separation pay. the separation pay was due to a retrenchment policy
adopted by the company so that any employee terminated
Jose Bautista was separated due to his failing eyesight. He by virtue thereof is considered to have been separated due
was given P500.000.00 as separation pay. to causes beyond the employee's control. The
All the three (3) were not qualified to retire under voluntary redundancy program requiring employees to
the BIR-approved pension plan of the corporation. make an offer to resign is only considered as a tool to
1) Is the separation pay given to Reyes subject to income expedite the lay-off of excess manpower whose services
tax? are no longer needed by the employer, but is not the
2) How about the separation pay received by Cruz? main reason or cause for the termination
3) How about the separation pay received by Bautista? SUGGESTED ANSWER:
2) No, Mr. Kintanar did not derive any income when he
received his separation pay because his separation
from
employment is due to causes beyond his control. The A, an employee of the Court of Appeals, retired
separation was involuntary as it was a consequence of the upon reaching the compulsory age of 65 years. Upon
closure of various unprofitable departments pursuant compulsory retirement, A received the money value of his
to the redundancy program. accumulated leave credits in the amount of P500.000.00.
Is said amount subject to tax? Explain.
Exemptions: Separation Pay (2005) SUGGESTED ANSWER:
Company A decides to close its operations due to No. The commutation of leave credits, more commonly
continuing losses and to terminate the services of its known as terminal leave pay, i.e., the cash equivalent of
employees. Under the Labor Code, employees who are accumulated vacation and sick leave credits given to an
separated from service for such cause are entitled to a officer or employee who retires, or separated from the
minimum of one-half month pay for every year of service. service through no fault of his own, is exempt from
Company A paid the equivalent of one month pay for income tax. (BIR Ruling 238-91 dated November 8, 1991;
every year of service and the cash equivalent of unused Commissioner v. CA and Efren Castaneda, GR No. 96016,
vacation and sick leaves as separation benefits. October 17, 1991).
Are such benefits taxable and subject to withholding tax
Exemptions; Charitable Institutions (2006)
under the Tax Code? Decide with reasons. (5%)
SUGGESTED ANSWER: The Constitution provides "charitable institutions,
All of the benefits are not taxable, hence they are churches, personages or convents appurtenant thereto,
not subject to withholding tax under the Tax Code. mosques, and non-profit cemeteries and all lands,
Benefits received as a consequence of separation for buildings, and improvements actually directly
any cause beyond the control of the employees such and exclusively used for religious, charitable or
as closure of business are excluded from gross income. educational purposes shall be exempt from taxation."
(Sec. 32[B][6][b], NIRC in relation to Sec. 2[b][2], R.R. 2-98) This provision exempts charitable institutions and
religious institutions from what kind of taxes?
Exemptions: Stock Dividends (2003) Choose the best answer. Explain. (5%)
On 03 January 1998, X, a Filipino citizen residing in the a. from all kinds of taxes, i.e., income, VAT, customs
Philippines, purchased one hundred (100) shares in the duties, local taxes and real property tax
capital stock of Y Corporation, a domestic company. On 03 b. from local tax only
January 2000, Y Corporation declared, out of the profits c. from value-added tax
of the company earned after 01 January 1998, a d. from real property tax only
hundred percent (100%) stock dividends on all e. from capital gains tax only
stockholders of record as of 31 December 1999 as a result of SUGGESTED ANSWER:
which X holding in Y Corporation became two The provision exemptions charitable institutions and
hundred (200) shares. Are the stock dividends received by X religious institutions from (d) REAL PROPERTY
TAXES only. The exemption is only for taxes assessed as
subject to income tax? Explain. (8%)
SUGGESTED ANSWER: property taxes, as distinguished from excise taxes (CIR v.
No. Stock dividends are not realized income. Accordingly, CA, CTA & YMCA, G.R. No. 124043, October 14,
1998; Lladoc v. Commissioner of Internal Revenue, L-
the different provisions of the Tax Code imposing a tax
19201, June 16,1965).
on dividend income only includes within its purview cash
and property dividends making stock dividends Exemptions; Educational institution (2004)
exempt from income tax. However, if the distribution
XYZ Colleges is a non-stock, non-profit
of stock dividends is the equivalent of cash or
educational institution run by the Archdiocese of BP City.
property, as when the distribution results in a change of
It collected and received the following:
ownership interest of the shareholders, the stock
(a) Tuition fees
dividends will be subject to income tax. (Section 24(B)(2);
(b) Dormitory fees
Section 25(A)&(B); Section 28(B)(5)(b), 1997 Tax Code)
(c) Rentals from canteen concessionaires
(d) Interest from money-market placements of the
Exemptions: Strictly Construed (1996) tuition fees
Why are tax exemptions strictly construed against the (e) Donation of a lot and building by school alumni
taxpayer? Which of these above cited income and donation would
SUGGESTED ANSWER:
not be exempt from taxation? Explain briefly. (5%)
Tax exemptions are strictly construed against the taxpayer SUGGESTED ANSWER:
because such provisions are highly disfavored and A. All of the income derived by the non-stock, nonprofit
may almost be said to be odious to the law (Manila educational institution will be exempt from
Electric Company vs. Vera, 67 SCRA 351 ). The taxation provided they are used actually, directly and
exception contained in the tax statutes must be exclusively for educational purposes. The Constitution
strictly construed against the one claiming the provides that all revenues and assets of non-
exemption because the law does not look with favor stock, non-profit educational institution which are
on tax exemptions they being contrary to the life-blood actually, directly and exclusively used for educational
theory which is the underlying basis for taxes. purposes are exempt from taxation (Section 4 par.
3, Article XIV, 1987 Constitution).
Exemptions: Terminal Leave Pay (1996)
The donation is, likewise, exempt from the donor's tax if legislature and no service or duty or other
actually, directly and exclusively used for educational remunerative conditions have been imposed on the
purposes, provided not more than 30% of the donation is taxpayers receiving the exemption, it may be revoked at
used by the donee for administration purposes. The will by the legislature (Christ Church v. Philadelphia, 24
donee, being a non-stock, non-profit educational How. 300 [1860]). What constitutes an impairment of the
institution, is a qualified entity to receive an exempt obligation of contracts is the revocation of an exemption
donation subject to conditions prescribed by law (Section 4 which is founded on a valuable consideration because it
par. 4, Art. XIV, 1987 Constitution, in relation to Section takes the form and essence of a contract (Casanovas v.
101(AX3), NJRC). Hord, 8 Phil. 125 [1907]; Manila Railroad Company v.
Insular Collector of Customs, 12 Phil. 146 [1915])
Accordingly, none of the cited income and donation
collected and received by the non-stock, non- Exemptions; Gov’t Bonus, Gifts, & Allowances (1994)
profit educational institution would not be exempt In December 1993, the Sangguniang Bayan authorized a
from taxation. Christmas bonus of P3,000.00, a cash gift of P5,000.00
ALTERNATIVE ANSWER: and transportation and representation allowance of
The following receipts by the non-stock, nonprofit P6,000.00 for each of the municipal employees.
educational institution are not exempt from taxation, viz: 1) Is the Christmas bonus subject to any tax?
(c) Rentals from Canteen Concessionaires. 2) How about the cash gift?
Rental income is considered as unrelated to the 3) How about the transportation and representation
school operations; hence, taxable (DOF Order No. 137-87, allowances?
Dec. 16, 1987) SUGGESTED ANSWER:
1) The CHRISTMAS BONUS given by
(d) Interest from money-market placements of the the Sangguniang Bayan to the municipal
tuition fees. The interest on the placement is taxable employees is taxable as additional compensation
(DOF Order No. 137-87). If however, the said interest is (Sec. 21 (a). Tax Code).
used actually, directly and exclusively for educational
purposes as proven by substantial evidence, the same will be 2) The cash gift per employee of P5.000.00 being
exempt from taxation (CIR v. CA, 298 SCRA 83 11998]}. substantial may be considered taxable also. They
partake the nature of additional compensation
The other items of income which were all derived from income as it is highly doubtful if municipal
school-related activities will be exempt from taxation in governments are authorized to make gifts in
the hands of the recipient if used actually, directly and substantial sums such as this. They are not further-
exclusively for educational purposes (Section 4 par. 3, more gifts of "small value" which employers might
Article XTV, 1987 Constitution). give to their employees on special occasions like
Christmas - items which could be exempt under BIR
The donation to a non-stock, non-profit Revenue Audit Memo No. 1-87.
educational institution will be exempt from the
donor's tax if used actually, directly and exclusively for 3) The transportation and representation allowances
educational purposes and provided, that, not more than are actually reimbursements for expenses incurred
30% of the donation is used for administration by the employee for the employer. Said allowances
purposes (Section 4, par. 4, Art. XJV, 1987 spent by the employee for the employer are
Constitution, in relation to Section 101(AM3), NJRC). designed to enhance the quality of the service that
the employer is supposed to perform for its clientele
Exemptions; Exemptions are Unilateral in Nature (2004) like the people of the municipality.
A law was passed granting tax exemption to certain
industries and investments for a period of five years. But Exemptions; Personal & Additional Exemption (2006)
three years later, the law was repealed. With the repeal, the Charlie, a widower, has two sons by his previous
exemptions were considered revoked by the BIR, marriage. Charlie lives with Jane who is legally
which assessed the investing companies for unpaid married to Mario. They have a child named Jill. The
taxes effective on the date of the repeal of the law. children are all minors and not gainfully employed.
1. How much personal exemption can Charlie claim?
NPC and KTR companies questioned the assessments on Explain. (2.5%)
the ground that, having made their investments in SUGGESTED ANSWER:
full reliance with the period of exemption granted by the Charlie can claim the personal exemption of a Head of a
law, its repeal violated their constitutional right Family or P25,000.00 provided that, at least one of his
against the impairment of the obligations and minor and not gainfully employed children is unmarried
contracts. Is the contention of the companies and living with and dependent upon him for chief support
tenable or not? Reason briefly. (5%) (Tax Reform Act, RA 8424, Chapter VII, Section 35[A]; BIR
SUGGESTED ANSWER: Revenue Regulation 02-98).
The contention is not tenable. The exemption granted is in
the nature of a unilateral tax exemption. Since the 2. How much additional exemption can
exemption given is spontaneous on the part of the Charlie claim? Explain. (2.5%)
SUGGESTED ANSWER: 73 inventory of the taxpayer if on hand at
His children from his previous marriage who are le- the close of the taxable year;
gitimate children and his illegitimate child with Jane will all
entitle him to additional personal exemption of P8,000.00 (2) property held by the taxpayer primarily for sale to
for each dependent, if apart from being minor and customers in the ordinary course of trade or
not gainfully employed, they are unmarried, living business;
with and dependent upon Charlie for their chief
support (Tax Reform Act, RA8424, Chapter VH, (3) property used in the trade or business of
Section 35(A); BIR Revenue Regulation 02-98). a character which is subject to the allowance
for depreciation provided in Section 34 (F) of the
Exemptions; Roman Catholic Church; Limitations (2005) Tax Code; or
The Roman Catholic Church owns a 2-hectare lot, in a
town in Tarlac province. The southern side and middle (4) real property used in trade or business of the
part are occupied by the Church and a convent, the taxpayer.
eastern side by a school run by the Church itself, the
southeastern side by some commercial establishments, The statutory definition of "capital assets"
while the rest of the property, in particular the practically excludes from its scope, it will be noted, all
northwestern side, is idle or unoccupied. property held by the taxpayer if used in connection
May the Church claim tax exemption on the entire land? with his trade or business.
Decide with reasons.
SUGGESTED ANSWER: Capital Gain Tax; Nature (2001)
No. The Church cannot claim tax exemption on the entire
A, a doctor by profession, sold in the year 2000 a parcel of
land. Only the southern side and middle part that are
land which he bought as a form of investment in 1990 for
occupied by the Church and a convent and the eastern Php 1 million. The land was sold to B, his colleague, at a
side occupied by a school run by the Church itself are time when the real estate prices had gone down and so the
exempt, because such parts of the 2-hectare lot are land was sold only for Php 800,000 which was then
actually, directly and exclusively used for religious and the fair market value of the land. He used the
educational purposes. (Sec. 28[3], Art. VI, 1987 proceeds to finance his trip to the United States. He
Constitution; Sec. 234, Local Government Code) claims that he should not be made to pay the 6% final
tax because he did not have any actual gain on the
The southeastern side occupied by some commercial
sale. Is his contention correct? Why? (5%)
establishment is not tax exempt. If real property is used SUGGESTED ANSWER:
for one or more commercial purposes, it is not exclusively No. The 6% capital gains tax on sale of a real
used for the exempted purpose but is subject to taxation. property held as capital asset is imposed on the income
'Solely' is synonymous with 'exclusively.' (Lung Center of the presumed to have been realized from the sale which
Philippines v. Quezon City, G.R. No. 144104, June 29, 2004) is the fair market value or selling price thereof,
The property must be exclusively (solely) used for whichever is higher. (Section 24(D), NIRC). Actual gain
religious or educational purposes. is not required for the imposition of the tax but it is
the gain by fiction of law which is taxable.
Of course, it is apparent that the northwestern side, which
is idle or unoccupied is not "actually, directly Ordinary Sale of a Capital Asset (1994)
and exclusively" used for religious or educational Noel Langit and his brother, Jovy, bought a parcel of land
purposes, hence not exempt from taxation. which they registered in their names as pro-indiviso
owners (Parcel A). Subsequently, they formed a
CAPITAL GAIN TAX partnership, duly registered with Securities and Exchange
Capital Asset vs. Ordinary Asset (2003) Commission, which bought another parcel of land (Parcel
Distinguish a "capital asset" from an "ordinary asset". B). Both parcels of land were sold, realizing a net profit of
SUGGESTED ANSWER: P1,000,000.00 for parcel A and P500.000.00 for parcel B.
(a) The term "capital asset" regards all properties not
specifically excluded in the statutory definition of capital The BIR claims that the sale of parcel A should be taxed
assets, the profits or loss on the sale or the exchange of as a sale by an unregistered partnership. Is the BIR
which are treated as capital gains or capital losses. correct?
Conversely, all those properties specifically excluded are SUGGESTED ANSWER:
considered as ordinary assets and the profits or losses The BIR is not correct, since there is no showing that the
realized must have to be treated as ordinary gains or acquisition of the property by Noel and Jovy Langit as pro
ordinary losses. Accordingly, "Capital Assets" includes indiviso owners, and prior to the formation of the
property held by the taxpayer whether or not connected partnership, was used, intended for use, or bears any
with his trade or business, but the term does not include any relation whatsoever to the pursuit or conduct of the
of the following, which are consequently considered partnership business. The sale of parcel A shall therefore
"ordinary assets": not be treated as a sale by an unregistered partnership, but
(1) stock in trade of the taxpayer or other property of a an ordinary sale of a capital asset, and hence will be
kind which would properly be included in the subject to the 5% capital gains tax and documentary
stamp tax on transfers of real property, said taxes to 73 the seller from the sale. For this reason, any
be borne equally by the co-owners. of the foregoing suggested answers should be
ALTERNATIVE ANSWER: given full credit).
The BIR is correct in treating the gain from the sale
of parcel of land by Noel and Jovy Langit at a Tax Basis: Capital Gains: Merger of Corporations (1994)
profit of P1,000,000.00. In the case of Pascual and In a qualified merger under Section 34 (c) (2) of the Tax
Dragon v. Commissioner, G.R. No. 78133, October Code, what is the tax basis for computing the capital gains
18, 1988, the Supreme Court ruled that the sharing of on: (a) the sale of the assets received by the
returns does not in itself establish a partnership, surviving corporation from the absorbed corporation;
whether or not the persons sharing therein have a and (b) the sale of the shares of stock received by
joint or common right or interest in the property. The the stockholders from the surviving corporation?
decision in said case cannot be applied here because SUGGESTED ANSWER:
clearly the parties organized a partnership duly In a qualified merger under Section 34 (c) (2) of the Tax
registered with the Securities and Exchange Code, the tax basis for computing the capital gains on:
Commission. They pooled their resources together (a) the sale of the assets received by the surviving
with the purpose of dividing the profit between them. corporation from the absorbed corporation shall be
the original/historical cost of the assets when still in
Sales of Share of Stocks: Capital Gains Tax Return (1999) the hands of the absorbed corporation.
HK Co. is a Hong Kong corporation not doing business in (b) the sale of the shares of stock received by the
the Philippines. It holds 40% of the shares of A Co., a stockholders from the surviving corporation shall be
Philippine company, while the 60% is owned by P Co., a the acquisition/historical cost of assets transferred to
Filipino-owned Philippine corporation. HK Co. also owns the surviving corporation.
100% of the shares of B Co., an Indonesian company
which has a duly licensed Philippine branch. Due to Tax Basis: Capital Gains: Tax-Free Exchange of Property
worldwide restructuring of the HK Co. group, HK Co. (1994)
decided to sell all its shares in A and B Cos. The In a qualified tax-free exchange of property for
negotiations for the buy-out and the signing of the shares under Section 34 (c) (2) of the Tax Code, what is
Agreement of Sale were all done in the Philippines. The the tax basis for computing the capital gains on: (a) the
Agreement provides that the purchase price will be paid to sale of the assets received by the Corporation; and (b) the
HK Co's bank account in the U. S. and that little to A and B sale of the shares received by the stockholders in
Cos. Shares will pass from HK Co. to P Co. in HK exchange of the assets?
where the stock certificates will be delivered. P Co. seeks SUGGESTED ANSWER:
your advice as to whether or not it will subject the In a qualified tax free exchange of property for
payments of purchase price to Withholding Tax. Explain shares under Section 34 (c) (2) of the Tax Code, the tax
your advice. (10%) basis for computing the gain on the:
SUGGESTED ANSWER: (a) sale of the assets received by the corporation shall be
P Co. should not subject the payments of the purchase the original/historical cost (purchase price plus
price to withholding tax. While the seller is a non-resident expenses of acquisition) of the property/ assets given
foreign corporation which is not normally required to file in exchange of the shares of stock.
returns in the Philippines, therefore, ordinarily all its (b) sale of the shares of stock received by the
income earned from Philippine sources is taxed via the stockholders in exchange of the assets shall be the
withholding tax system, this is not the procedure availing original/historical cost of the property given in
with respect to sales of shares of stock. The capital gains tax exchange of the shares of stock.
on the sale of shares of stock of a domestic ALTERNATIVE ANSWER:
corporation is always required to be paid through a capital The basis in computing capital gains tax in a qualified tax-
gains tax return filed. The sale of the shares of stock of free exchange under Sec. 34 (c) (2) is:
the Indonesian Corporation is not subject to income tax (a) With respect to the asset received by the corporation
under our jurisdiction because the income derived there the same as it would be in the hands of the transferor
from is considered as a foreign-sourced income. increased by the amount of the gain recognized
ALTERNATIVE ANSWER: to the transferor on the transfer.
Yes, but only on the shares of stocks of A Co. and only (b) With respect to the shares received by the
on the portion of the purchase price, which stockholders in exchange of the assets - the same as the
constitutes capital gains. Under the Tax Code of basis of the property, stock or securities
1997, the capital gains tax imposed under Section exchanged, decreased by the money received and the
28(B)(5)(c) is collectible via the withholding of tax at fair market value of the other property received, and
source pursuant to Section 57 of the same Code. increased by the amount treated as dividend of the
(Note: The bar candidate might have relied on the shareholder and the amount of any gain that was
provision of the Tax Code of 1997 which provides recognized on the exchange.
that the capital gains tax is imposed as withholding
taxes (Section 57, NIRC). This procedure is CORPORATION & PARTNERSHIP
impractical and, therefore, not followed in practice
because the buyer/ withholding agent will not be in a
position to determine how much income is realized by Bad Debts; Factors; Elements thereof (2004)
PQR Corp. claimed as a deduction in its tax returns the
amount of P1,000,000 as bad debts. The corporation was 73
assessed by the Commissioner of Internal Revenue for
deficiency taxes on the ground that the debts cannot be There being no monetary consideration, neither is the
considered as "worthless," hence they do not qualify as conveyance subject to the creditable withholding tax im-
bad debts. The company asks for your advice on "What posed under Revenue Regulations 1-90, as amended.
factors will held in determining whether or not the debts are
bad debts?" Answer and explain briefly. (5%) The second conveyance was actually no conveyance at all
SUGGESTED ANSWER: because when the units were sold to the various
In order that debts be considered as bad debts because buyers, the common areas were already part and parcel of
they have become worthless, the taxpayer should establish the sale of said units pursuant to the
that during the year for which the deduction is sought, a Condominium Act. However, the Deed of
situation developed as a result of which it became evident in Conveyance is subject to documentary stamp tax.
the exercise of sound, objective business judgment that there
remained no practical, but only vaguely theoretical, prospect N.B. Documentary stamps tax and Condominium Law
that the debt would ever be paid (Collector of are excluded from the coverage of the Bar Examinations.
Internal Revenue v. Goodrich International Rubber Co., 21
SCRA 1336 [1967]). "Worthless" is not determined by an Corporation; Sale; Creditable Withholding Tax (1994)
inflexible formula or slide rule calculation, but upon the Noel Langit and his brother, Jovy, bought a parcel of land
exercise of sound business judgment. The factors to be which they registered in their names as pro-indiviso
considered include, but are not limited to, the following: owners (Parcel A). Subsequently, they formed a
1. The debtor has no property nor visible income; partnership, duly registered with Securities and Exchange
2. The debtor has been adjudged bankrupt Commission, which bought another parcel of land (Parcel
or insolvent; B). Both parcels of land were sold, realizing a net profit of
3. Collateral shares have become worthless; and P1,000,000.00 for parcel A and P500.000.00 for parcel B.
4. There are numerous debtors with small amounts of
debts and further action on the accounts would The BIR also claims that the sale of parcel B should
entail expenses exceeding the amounts sought to be be taxed as a sale by a corporation. Is the BIR correct?
collected. SUGGESTED ANSWER:
ALTERNATIVE ANSWER: The BIR is correct, since a "corporation" as defined under
The following are the factors to be considered Section 20 (a) of the Tax Code includes partnerships, no
in determining whether or not the debts are bad debts: matter how created or organized, except general profes-
1. The debt must be valid and subsisting; sional partnerships. The business partnership, in the in-
2. The debt is connected with the taxpayer's trade stant case, shall therefore be taxed in the same manner as a
or business, and is not between related parties; corporation on the sale of parcel B. The sale shall thus be
3. There is an actual ascertainment that the debt subject to the creditable withholding tax under
is worthless; and Revenue Regulations 1-90, as amended by 12-94, on the
4. The debt is charged-off within the taxable year. sale of parcel B, and the partnership shall report the gain
(PRC v. CA, 256 SCRA 667 [1996]; Revenue realized from the sale when it files its income tax return.
Regs. No. 5-99). Dividends: Withholding Tax (1999)
HK Co., is a Hong Kong company, which has a duly
Condominium Corp.; Sale of Common Areas (1994) licensed Philippine branch, engaged in trading activities in
X-land Condominium Corporation was organized by the the Philippines. HK Co. also invested directly in 40% of the
owners of units in X-land Building in accordance with the shares of stock of A Co., a Philippine corporation.
Master Deed with Declaration of Restrictions. The X-land These shares are booked in the Head Office of HK Co. and
Building Corporation, the developer of the are not reflected as assets of the Philippine branch. In 1998,
building, conveyed the common areas in favor of the A Co. declared dividends to its stockholders. Before
X-land Condominium Corporation. Is the conveyance remitting the dividends to HK Co., A Co. seeks your
subject to any tax? advice as to whether it will subject the remittance to WT.
SUGGESTED ANSWER: No need to discuss WT rates, if applicable. Focus your
The conveyance is not subject to any tax. The same discussion on what is the issue. (10%)
is without consideration, and not in connection with a SUGGESTED ANSWER:
sale made to X-land Condominium Corporation, I will advise A Co. to withhold and remit the withholding tax
and the purpose of the conveyance to the latter on the dividends. While the general rule is that a
is for the management of the common areas for foreign corporation is the same juridical entity as its
the common benefit of the unit owners. branch office in the Philippines, when, however, the
corporation transacts business in the Philippines directly
The same is not subject to income tax since no and independently of its branch, the taxpayer would be
income was realized as a result of the conveyance, the foreign corporation itself and subject to the dividend tax
which was made pursuant to the Condominium Act similarly imposed on non-resident foreign corporation. The
(R.A. No. 4626, and the purpose of which was merely to dividends attributable to the Home Office would not qualify
vest title to the common areas in favor of the as dividends earned by a resident foreign
Land Condominium Corporation. corporation, which is exempt from tax. (Marubeni
Corporation v. Commissioner, GR No. 76573,
September 14, 1989).
Answers to the BAR: Taxation 1994-2006 (Arranged by Topics) dominant income), but it is exempt from the imposition
of MCIT because the latter is not intended to substitute
Effect: Dissolution; Corporate Existence (2004)
For failure to comply with certain corporate requirements,
the stockholders of ABC Corp. were notified by the
Securities and Exchange Commission that the corporation
would be subject to involuntary dissolution. The
stockholders did not do anything to comply with the
requirements, and the corporation was dissolved. Can the
stockholders be held personally liable for the unpaid taxes of
the dissolved corporation? Explain briefly. (5%)
SUGGESTED ANSWER:
No. As a general rule, stockholders cannot be held
personally liable for the unpaid taxes of a dissolved
corporation. The rule prevailing under our jurisdiction is that
a corporation is vested by law with a personality that is
separate and distinct from those of the persons
(Sunio v. NLRC, 127 SCRA 390{1984]}.
composing it
NOTE: additional point should be given to the
examinee if he answers in the following that:
However, stockholders may be held liable for the
unpaid taxes of
a dissolved(Tan Tiong Bio v. CFR, 4 SCRA
corporation if it
appears that the corporate assets have passed
into their hands
986 [1962]). Likewise, when stockholders have
unpaid subscriptions to the capital of the
corporation they can be made liable for
unpaid taxes of the corporation to the
extent of their unpaid subscriptions.
Minimum Corporate Income Tax (2001)

What is the rationale of the law in imposing what is
known as the Minimum Corporate Income tax
on Domestic Corporations? (3%)
SUGGESTED ANSWER:
The imposition of the Minimum Corporate Income Tax
(MCIT) is designed to forestall the prevailing practice of
corporations of over claiming deductions in order to
reduce their income tax payments. The filing of income
tax returns showing a tax loss every year goes against the
business motive which impelled the stockholders to
form the corporation. This is the reason why domestic
corporations (and resident foreign corporations) after
the recovery period of four years from the time they
commence business operations, they become liable to the
MCIT whenever this tax imposed at 2% of gross income
exceeds the normal corporate income tax imposed on
net income. (Sponsorship Speech, Chairman of Senate
Ways and Means Committee).
Minimum Corporate Income Tax; Exemption (2001)

Is a corporation which is exempted from the minimum
corporate income tax automatically exempted from the
regular corporate income tax? Explain your answer. (2%)
SUGGESTED ANSWER:
No. The minimum corporate income tax is a proxy for the
normal corporate income tax, not the regular corporate
income tax paid by a corporation. For instance, a
proprietary educational institution may be subject to a
regular corporate income tax of 10% (depending on its
sirdondee@gmail.com 41 of 73 gift tax shall be P7.5million in 1994 and P7.5million in
special tax rates. So is with PEZA enterprises,
CDA enterprises etc.
[Note: If what is meant by regular income tax is
the 32% tax rate imposed on taxable
income of corporations, the answer would be in the
affirmative, because domestic corporations and
resident foreign corporations are either liable for
the 2% of gross income (MCIT) or 32% of net
income (the normal corporate income tax) whichever
is higher.]
ALTERNATIVE ANSWER:
No. A corporation which is exempted from the minimum
corporate income tax is not automatically exempted from
the regular corporate income tax. The reason for this
is that MCIT is imposed only beginning on the fourth
taxable year immediately following the year in which such
corporation commenced its business operations. Thus,
a corporation may be exempt from MCIT because it is
only on its third year of operations
following its commencement of business operations.
ESTATE & DONOR’S TAXES

Donor’s Tax: Election Contributions (1998)
Are contributions to a candidate in an election subject to
donor's tax? On the part of the contributor, is it
allowable as a deduction from gross income? [5%J
SUGGESTED ANSWER:
1) No, provided the recipient candidate had complied
with the requirement for filing of returns of contri-
butions with the Commission on Elections
as required under the Omnibus Election Code.
2) The contributor is not allowed to deduct the
contributions because the said expense is not
directly attributable to, the development,
management, operation and/or conduct of a trade,
business or profession {Sec. 34[AJ(l)(a), NIRC).
Furthermore, if the candidate is an incumbent
government official or employee, it may even be
considered as a bribe or a kickback (Sec. 34[AJ(l)(c),
NIRC).
COMMENT: It is suggested that full credit
should be given for any answer to the first question
because the answer requires an interpretation of
the Election Code. Pursuant to the provisions of
Section 99(C) of the NIRC, the taxability
of this type of contributions/donations is
governed by the Election Code.
Donor’s Tax; Basis for Determining Gain (1995)

(1) Kenneth Yusoph owns a commercial lot which he
bought many years ago for P1 Million. It is now
worth P20 Million although the zonal value is
only P15 Million. He donates one-half pro-
indiviso interest in the land to his son Dino on 31
December 1994, and the other one-half pro-indiviso
interest to
the same son on 2 January 1995.
How much is the value of the gifts in 1994 and 1995 for
purposes of computing the gift tax? Explain.
SUGGESTED ANSWER:
1) The value of the gifts for purposes of computing the
1995. In valuing a real property for gift tax purposes the An insolvent company had an outstanding
property should be appraised at the higher of two values as obligation of P l00,000.00 from a creditor. Since it could
of the time of donation which are (a) the fair market not pay the debt, the creditor agreed to accept
value as determined by the Commissioner (which is the payment through dacion en pago a property which
zonal value fixed pursuant to Section 16(e) of the Tax had a market value of P30.000.00. In the dacion en pago
Code), or (b) the fair market value as shown in the document, the balance of the debt was condoned.
schedule of values fixed by the Provincial and City A. What is the tax effect on the discharge of the unpaid
Assessors. The fact that the property is worth P20 million as balance of the obligation on the debtor corporation?
of the time of donation is immaterial unless it can be shown B. Insofar as the creditor is concerned, how is he
that this value is one of the two values mentioned as effected tax-wise as a consequence of the transaction?
provided under Section 81 of the Tax Code. SUGGESTED ANSWERS:
(a) The condonation of the unpaid balance of
(2) The Revenue District Officer questions the splitting the obligation has the effect of a donation made on the
of the donations into 1994 and 1995. He says that part of the creditor. It is obvious that the creditor
since there were only two (2) days separating the two merely desires to benefit the debtor and
donations they should be treated as one, having been without any consideration therefore cancels the debt,
made within one year. Is he correct? Explain. the amount of the debt cancelled is a gift from the
SUGGESTED ANSWER: creditor to the debtor and need not be included in the
2) The Revenue District Officer is not correct because the latter's gross income (Sec. 50, RR No. 2);
computation of the gift tax is cumulative but only
insofar as gifts made within the same calendar year. (b) For the difference of P70,000 the creditor shall
Therefore, there is no legal justification for treating two be subject to donor's tax at the applicable rates provided
gifts effected in two separate calendar years as one gift. for under the National Internal Revenue Code.
(3) Dino subsequently sold the land to a buyer for P 20 ALTERNATIVE ANSWER:
Million. How much did Dino gain on the sale? (a) If the discharge was prompted by the insolvency of the
Explain. debtor company, then it is a clear case of a write-off of a
SUGGESTED ANSWER: bad debts which has no tax consequence to the debtor.
3) Dino gained an income of 19 million from the sale.
Dino acquires a carry-over basis which is the basis of the (b) The write-off of the bad debt will entitle the creditor
property in the hands of the donor or P1 million. The gain to claim the same as a deduction from its gross income.
from the sale or other disposition of property shall be the
excess of the amount realized therefrom over the basis or Donor’s Tax; Donation to a Sibling (2001)
adjusted basis for determining gain (Sec. 34(a), Your bachelor client, a Filipino residing in Quezon City,
NIRC). Since the property was acquired by gift, the wants to give his sister a gift of Php 200,000.00. He seeks
basis for determining gain shall be the same as if it would your advice, for purposes of reducing if not
be in the hands of the donor or the last preceding owner eliminating the donor's tax on the gift, on whether it is
by whom the property was not acquired by gift. Hence, better for him to give all of the Php 200,000.00 on
the gain is computed by deducting the basis of P1 million Christmas 2001 or to give Php 100,000.00 on
from the amount realized which is P20 million. Christmas2001 and the other Php 100,000.00 on January
1, 2002. Please explain your advice. (5%)
(4) Suppose, instead of receiving the lot by way of SUGGESTED ANSWER:
donation, Dino received it by inheritance. What I would advice him to split the donation. Giving the
would be his gain on the sale of the lot for P20 Php200,000 as a one-time donation would mean that it
Million? Explain. will be subject to a higher tax bracket under the graduated
SUGGESTED ANSWER: tax structure thereby necessitating the payment of donor's
4) If the commercial lot was received by inheritance the tax. On the other hand, splitting the donation into two
gain from the sale for P20 million is P5 million equal amounts of Php 100,000 given on two different
because the basis is the fair market value as of the years will totally relieve the donor from the donor’s tax
date of acquisition. The stepped-up basis of P15 million because the first Phpl00.000 donation in the graduated
which is the value for estate tax purposes is the brackets is exempt. (Section 99, NIRC). While the donor’s
basis for determining the gain (Sec. 34(b)(2), NIRC). tax is computed on the cumulative donations, the
ALTERNATIVE ANSWER: aggregation of all donations made by a donor is allowed only
If Dino held on to the property as a capital asset in that it over one calendar year.
is neither for sale in the ordinary course of business nor
used in Dino's business, then upon sale thereof there Donor’s Tax; Donation to Non-Stock, Non-Profit
is presumed to be realized an income of P20 million Private Educational Institutions (2000)
which is the gross selling price of the property. (Sec. What conditions must occur in order that all grants,
21(e), NIRC). The same would be subject to the 5% donations and contributions to non-stock, non-profit
capital gains tax. private educational institutions may be exempt from the
donor's tax under Section 101 (a) of the Tax Code? (3%)
Donor’s Tax; Dacion en Pago; Effect: Taxation (1997) SUGGESTED ANSWER:
The following are the conditions:
1. Not more than thirty percent (30%) of said stake in its business. Explain if the above
gifts shall be used by such donee for transactions are subject to donor's tax. (5%)
administration purposes; SUGGESTED ANSWER:
2. The educational institution is incorporated as a non- The first transaction where a lot was sold by A to his
stock entity, brother-in-law for a price below its fair market value will not
3. paying no dividends, be subject to donor's tax if the lot qualifies as a capital asset.
4. governed by trustees who receive no compensation, The transfer for less than adequate and full consideration, which
and gives rise to a deemed gift, does not apply to a sale of property subject to
5. devoting all its income, whether students' fees or capital gains tax. (Section 100, NIRC). However, if the lot
gifts, donations, subsidies or other forms of sold is an ordinary asset, the excess of the fair market
philanthropy, to the accomplishment and promotion value over the consideration received shall be considered
of the purposes enumerated in its Articles of as a gift subject to the donor's tax.
Incorporation. (Sec. 101 (A) (3), NIRC of 1997]
The sale of shares of stock below the fair market
Donor’s Tax; Donation to Political Candidate (2003) value thereof is subject to the donor's tax pursuant
X is a friend of Y, the chairman of Political Party Z, who to the provisions of Section 100 of the Tax Code. The
wants to run for President in the 2004 elections. Knowing excess of the fair market value over the selling price
that Y needs funds for posters and streamers, X is is a deemed gift.
ALTERNATIVE ANSWER:
thinking of donating to Y P150,000.00 for his campaign.
The sale of shares of stock below the fair market value
He asks you whether his intended donation to Y will be
will not give rise to the imposition of the donor's tax. In
subject to the donor's tax. What would your answer
determining the gain from the transfer, the selling price of
be? Will your answer be the same if he were to
donate to Political Party Z instead of to Y directly? (8%) the shares of stocks shall be the fair market value of the
SUGGESTED ANSWER: shares of stocks transferred. (Section 6, RR No. 2-82). In
The donation to Y, once he becomes a candidate for an which case, the reason for the imposition of the donor's tax
elective post, is not subject to donor's tax provided that he on sales for inadequate consideration does not exist.
complies with the requirement of filing returns of
contributions with the Commission on Elections as Estate Tax: Comprehensive Agrarian Reform Law (1994)
required under the Omnibus Election Code. Jose Ortiz owns 100 hectares of agricultural land planted to
coconut trees. He died on May 30, 1994. Prior to his death,
The answer would be the same if X had donated the the government, by operation of law, acquired under the
amount to Political Party Z instead of to Y directly Comprehensive Agrarian Reform Law all his agricultural
because the law places in equal footing any contribution lands except five (5) hectares. Upon the death of Ortiz, his
to any candidate, political party or coalition of parties for widow asked you how she will consider the 100 hectares of
campaign purposes. (Section 99(C) of the 1997 Tax Code). agricultural land in the preparation of the estate tax return.
What advice will you give her?
Donor’s Tax; Donee or Beneficiary; Stranger (2000) SUGGESTED ANSWER:
When the donee or beneficiary is a stranger, the tax The 100 hectares of land that Jose Ortiz owned but which
payable by the donor shall be 30% of the net gifts. prior to his death on May 30, 1994 were acquired by the
For purposes of this tax, who is a stranger? (2%) government under CARP are no longer part of his taxable
SUGGESTED ANSWER: gross estate, with the exception of the remaining five (5)
A STRANGER is a person who is not a: hectares which under Sec. 78{a) of the Tax Code
A. Brother, sister (whether by whole or half-blood), still forms part of "decedent's interest".
spouse, ancestor and lineal descendant; or
B. Relative by consanguinity in the collateral line within Estate Tax: Donation Mortis Causa (2001)
the fourth degree of relationship." [Sec. 98 (B), NIRC A, aged 90 years and suffering from incurable cancer, on
of 1997] August 1, 2001 wrote a will and, on the same day, made
several inter-vivos gifts to his children. Ten days later, he
Donor’s Tax; Sale of shares of Stock & Sale of Real died. In your opinion, are the inter-vivos gifts considered
Property (1999) transfers in contemplation of death for purposes
A, an individual, sold to B, his brother-in-law, his lot with of determining properties to be included in his gross
a market value of P1,000,000 for P600.000. A's cost in the estate? Explain your answer. (5%)
SUGGESTED ANSWER:
lot is P100.000. B is financially capable of buying the lot.
Yes. When the donor makes his will within a short time of,
A also owns X Co., which has a fast growing business. A or simultaneously with, the making of gifts, the gifts are
sold some of his shares of stock in X Co. to his key considered as having been made in contemplation of death.
executives in X Co. These executives are not related to A. (Roces v. Posadas, 58 Phil. 108). Obviously, the intention
The selling price is P3,000,000, which is the book value of of the donor in making the inter-vivos gifts is to avoid the
the shares sold but with a market value of P5,000,000. A's imposition of the estate tax and since the donees are
cost in the shares sold is P1,000,000. The purpose of A in likewise his forced heirs who are called upon to inherit,
it will create a presumption juris tantum that said
selling the shares is to enable his key executives to acquire a
propriety interest in the business and have a personal donations were made mortis causa, hence, the properties
donated shall be included as part of A's gross estate.
The gross estate shall be determined by including
Estate Tax: Donation Mortis Causa vs. Inter Vivos (1994) the value at the time of his death all of the
Are donations inter vivos and donations mortis causa properties mentioned, to the extent of the interest
subject to estate taxes? he had at the time of his death because he is a Filipino
SUGGESTED ANSWER: citizen. [Sec. 85 (A), NIRC of 1997]
Donations inter vivos are subject to donor's gift tax (Sec. 91
(a). Tax Code) while donations mortis causa are subject to With respect to the life insurance proceeds, the amount
estate tax (Sec. 77, Tax Code). However, donations inter includible in the gross estate for Philippine tax purposes
vivos, actually constituting taxable lifetime like transfers in would be to the extent of the amount receivable by
contemplation of death or revocable transfers (Sec. 78 (b) the estate of the deceased, his executor, or
and (c), Tax Code) may be taxed for estate tax administrator, under policies taken out by decedent
purposes, the theory being that the transferor's control upon his own life, irrespective of whether or not the
thereon extends up to the time of his death. insured retained the power of revocation, or to the
ALTERNATIVE ANSWER: extent of the amount receivable by any beneficiary
Donations inter vivos are not subject to estate taxes designated in the policy of insurance, except when it
because the transfer of the property take effect during the is expressly stipulated that the designation of the
lifetime of the donor. The transfer is therefore subject to beneficiary is irrevocable. [Sec. 85 (E) NIRC of 1997]
the donor's tax.
The DEDUCTIONS that may be claimed by the estate
On the other hand, donations mortis causa are subject to are:
estate taxes since the transfer of the properties takes effect 1) The actual funeral expenses or in an amount equal to
after the death of the decedent. Such donated properties, five percent (5%) of the gross estate, whichever
real or personal, tangible or intangible, shall form part of is lower, but in no case to exceed two
the gross estate. hundred thousand pesos (P200.000.00). [Sec. 86
(A) (1) (a). NIRC of 1997]
Estate Tax: Gross Estate: Allowable Deduction (2001)
On the first anniversary of the death of Y, his heirs hosted a 2) The judicial expenses in the testate or
sumptuous dinner for his doctors, nurses, and others intestate proceedings.(Sec. 86(A)(1)
who attended to Y during his last illness. The cost of the
dinner amounted to Php 50,000.00. Compared to his 3) The value of the decedent's family home located in
gross estate, the Php 50,000.00 did not exceed five Valle Verde, Pasig City in an amount not exceeding
percent of the estate. Is the said cost of the dinner to one million pesos (P1,000,000.00), and upon
commemorate his one year death anniversary deductible presentation of a certification of the barangay captain
from his gross estate? Explain your answer. (5%) of the locality that the same have been the decedent's
SUGGESTED ANSWER:
family home. [Sec. 86 (A) (4), Ibid]
No. This expense will not fall under any of the allowable
deductions from gross estate. Whether viewed in the 4) The standard deduction of P1,000,000. (Sec. 86(A)(5)
context of either funeral expenses or medical expenses,
the same will not qualify as a deduction. Funeral expenses 5) Medical expenses incurred within one year
may include medical expenses of the last illness but not from death in an amount not exceeding
expenses incurred after burial nor expenses incurred to P500,000.(Sec. 86(A)(6)
commemorate the death anniversary. (De Guzman V. De
Guzman, 83 SCRA 256). Medical expenses, on the other The ESTATE TAX RETURN shall be filed within six
hand, are allowed only if incurred by the decedent within (6) months from the decedent's death (Sec. 90 (B), NIRC
one year prior to his death. (Section 86(A)(6), NIRC). of 1997], provided that the Commissioner of Internal
Revenue shall have authority to grant in meritorious cases,
Estate Tax: Gross Estate: Deductions (2000) a reasonable extension not exceeding thirty (30) days for
Mr. Felix de la Cruz, a bachelor resident citizen, suffered filing the return (Sec. 90 (c), Ibid]
from a heart attack while on a business trip to the USA. He
died intestate on June 15, 2000 in New York City, Except in cases where the Commissioner of Internal
leaving behind real properties situated in New York; his Revenue otherwise permits, the estate tax return shall be
family home in Valle Verde, Pasig City; an office filed with an authorized agent bank, or Revenue District
condominium in Makati City; shares of stocks in San Officer, Collection Officer, or duly authorized
Miguel Corporation; cash in bank; and personal Treasurer of Pasig City, the City in which the
belongings. The decedent is heavily insured with Insular decedent Mr. de la Cruz was domiciled at the time of
Life. He had no known debts at the time of his death. his death. [Sec. 90 (D). NIRC of 1997]
As the sole heir and appointed Administrator, how would
you determine the gross estate of the decedent? What Estate Tax: Inclusion: Resident Alien (1994)
deductions may be claimed by the estate and when and Cliff Robertson, an American citizen, was a permanent
where shall the return be filed and estate tax paid? (3%) resident of the Philippines. He died in Miami, Florida. He
SUGGESTED ANSWER: left 10,000 shares of Meralco, a condominium unit at the
Twin Towers Building at Pasig, Metro Manila and a house SUGGESTED ANSWER:
and lot in Los Angeles, California. Vanishing deductions or property previously taxed in
What assets shall be included in the Estate Tax Return to estate taxation refers to the diminishing deducibility/
be filed with the BIR? exemption, at the rate of 20% over a period of five
SUGGESTED ANSWER: (5) years until it is lost after the fifth year, of any
All of Mr. Robertson's assets consisting of 10,000 shares property (situated in the Philippines) forming part of
in the Meralco, a condominium unit in Pasig, and the gross estate, acquired by the decedent from a
his house and lot in Los Angeles, California are taxable. prior decedent who died within a period of five (5)
The properties of a resident alien decedent like Mr. years from the decedent's death.
Robertson are taxable wherever situated (Sees. 77, 78
and 98, Tax Code). Estate Tax; Payment vs. Probate Proceedings (2005)
Is the approval of the court, sitting as probate or
Estate Tax: Payment vs. Probate Proceedings (2004) estate settlement court, required in the
VCC is the administrator of the estate of his father NGC, in enforcement and collection of estate tax? Explain.
the estate proceedings pending before the MM SUGGESTED ANSWER:
Regional Trial Court. Last year, he received from the No, the approval of the court, sitting in probate, or as a
Commissioner of Internal Revenue a deficiency tax settlement tribunal over the deceased is not a mandatory
assessment for the estate in the amount of P1,000,000. requirement in the collection of estate taxes. There is
But he ignored the notice. Last month, the BIR effected a nothing in the Tax Code, and in the pertinent remedial
levy on the real properties of the estate to pay the laws that implies the necessity of the probate or estate
delinquent tax. VCC filed a motion with the probate court to settlement court's approval of the state's claim for estate
stop the enforcement and collection of the tax on the taxes, before the same can be enforced and collected.
ground that the BIR should have secured first the (Marcos v. Court of Appeals, G.R. No. 120880, June 5, 1997)
approval of the probate court, which had jurisdiction over
the estate, before levying on its real properties. Is VCC's BUSINESS TAXES
contention correct? (5%)
SUGGGESTED ANSWER: VAT: Basis of VAT (1996)
No. VCC's contention is not correct. The approval of the What is the basis of the Value-Added Tax on taxable
probate court is not necessary. Payment of estate taxes is a sales of real property?
condition precedent for the distribution of the properties SUGGESTED ANSWER:
of the decedent and the collection of estate taxes is The basis of the Value-Added Tax on taxable sale of real
executive in nature for which the court is devoid of any property is "GROSS SELLING PRICE" which is
jurisdiction. Hence, the approval of the court, sitting either selling price stated in the sale document or the
in probate, or as a settlement tribunal is not a "Zonal Value", whichever is higher. In the absence
mandatory requirement in the collection of estate taxes of zonal values, the gross selling price shall refer to
(Marcos H v. Court of Appeals, 273 SCRA 47 [1997]). the market value as shown in the latest tax
declaration or the consideration, whichever is higher.
Estate Tax: Situs of Taxation: Non-Resident Decedent
(2000) VAT: Characteristics of VAT (1996)
Discuss the rule on situs of taxation with respect to What are the characteristics of the Value-Added Tax?
the imposition of the estate tax on property left behind SUGGESTED ANSWER:
by a non-resident decedent. (2%) The value-added tax is an indirect tax and the amount of
SUGGESTED ANSWER: tax may be shifted or passed on to the buyer, transferee or
The value of the gross estate of a non-resident decedent who lessee of the goods, properties or services.
is a Filipino citizen at the time of his death shall be ALTERNATIVE ANSWER:
determined by including the value at the time of his death of The value-added tax has the following characteristics:
all property, real or personal, tangible or intangible, 1) It is an indirect tax where tax shifting is always
wherever situated to the extent of the interest therein of the presumed:
decedent at the time of his death [Sec. 85 (A), NIRC of 2) It is consumption-based;
1997). These properties shall have a situs of taxation in the 3) It is imposed on the value-added in each stage
Philippines hence subject to Philippine estate taxes. of distribution;
4) It is a credit-invoice method value-added tax; and
On the other hand, in the case of a non-resident decedent 5) It is not a cascading tax.
who at the time of his death was not a citizen of the
Philippines, only that part of the entire gross estate which is VAT: Exempted Transactions (1996)
situated in the Philippines to the extent of the interest therein of the Give at least three (3) real estate transactions which
decedent at the time of his death shall be included in his are not subject to the Value-Added Tax.
taxable estate. Provided, that, with respect to intangible SUGGESTED ANSWER:
personal property, we apply the rule of reciprocity. (Ibid) Real estate transactions which are exempt from the value-
added tax are:
Estate Tax: Vanishing Deductions (1994) (a) Sale of real property not primarily held for sale
Vanishing deductions in estate-taxation? or lease in the ordinary course of trade or business;
(b) Sale of real property utilized for socialized housing State whether the following transactions are a)
under RA. No. 7279; VAT Exempt, b) subject to VAT at 10%; or c) subject to
(c) Sale of real property utilized under the low-cost VAT at 0%:
housing under BP Big. 220. 1) Sale of fresh vegetables by Aling Ining at
the Pamilihang Bayan ng Trece Martirez. [1%]
Note: The other real estate transactions which are exempt 2) Services rendered by Jake's Construction Company,
from the value-added tax which may be cited by the bar a contractor to the World Health Organization
candidates are as follows: in the renovation of its offices in Manila. [1%]
(a) Transfer of real property to a trustee if the property 3) Sale of tractors and other agricultural implements by
is to be held merely in trust for the trustor. Bungkal Incorporated to local farmers. [1%]
(b) Transfer of real property to a corporation 4) Sale of RTW by Cely's Boutique, a Filipino dress
in exchange for its shares of stock under designer, in her dress shop and other outlets. [1%]
Section 34(c)(2) and (6)(2) of the Tax Code. 5) Fees for lodging paid by students to Bahay-Bahayan
(c) Advance payment by the lessee in a lease contract, Dormitory, a private entity operating a student
when the same is actually a loan to the lessor from dormitory (monthly fee PI,500). [1%]
the lessee. SUGGESTED ANSWER:
(d) Security deposits for lease arrangements to 1) VAT exempt. Sale of agricultural products, such as
insure the faithful performance of certain fresh vegetables, in their original state, of a
obligations of the lessee to the lessor. kind generally used as, or producing foods for
(e) Lease of residential units, boarding houses, dormito- human consumption is exempt from VAT. (Section
ries, rooms and bed spaces offered for rent by their 109(c), NIRC).
owners at a monthly rental not exceeding P3,950.00
2) VAT at 0%. Since Jake's Construction Company has
per unit.
rendered services to the World Health Organization,
VAT: Liable for Payment (1996) which is an entity exempted from taxation under
Who are liable for the payment of Value-Added Tax? international agreements to which the Philippines is a
SUGGESTED ANSWER: signatory, the supply of services is subject to zero
The persons liable for the value-added tax are: percent (0%) rate. (Sec. 108[B1(3), NIRC).
a. Sellers of goods and properties in the course of trade
or business; 3) VAT at 10%. Tractors and other agricultural
b. Sellers of services in the course of trade or business, implements fall under the definition of goods which
including lessors of goods and properties; include all tangible objects which are capable of
c. Importers of taxable goods, whether in the course of pecuniary estimation (Sec. 106[A1(1), NIRC, the
business or not sales of which are subject to VAT at 10%.
VAT: Transactions "Deemed Sales” (1997) 4) This is subject to VAT at 10%. This transaction also
Under the Value Added tax (VAT), the tax is imposed on falls under the definition of goods which include all
sales, barter, or exchange of goods and services. The VAT is tangible objects which are capable of pecuniary
also imposed on certain transactions "deemed-sales". estimation (Sec. 106[A1(1), NIRC, the sales
What are these so-called transactions "deemed sales'? of which are subject to VAT at 10%.
SUGGESTED ANSWER:
The following transactions shall be deemed sale: 5) VAT Exempt. The monthly fee paid by each student
a) Transfer, use, or consumption not in the course of falls under the lease of residential units with a
business of goods originally intended for sale or for monthly rental per unit not exceeding Php
use in the course of business; 8,000, which Is exempt from VAT regardless
of the amount of aggregate rentals received by
b) Distribution or transfer to: the lessor during the year. (Sec. 109(x), NIRC). The
(1) Shareholders or investors as share in the term unit shall mean per person in the case of
profits of VAT-registered persons; or dormitories, boarding houses and bed spaces
(2) Creditors in payment of debt; (Sec. 4.103-1, RRNo. 7-95).
c) Consignment of goods if actual sale is not COMMENT: The problems do not call for a yes or no answer.
made within 60 days following the date such Accordingly, a bar candidate who answered only VAT exempt.
goods were consigned; and VAT at 10% or VAT at 0%. as called for in the problem without
further reasons, should be given full credit.
d) Retirement from or cessation of business, with
respect to inventories of taxable goods existing as VAT; Exemption: Constitutionality (2004)
A law was passed exempting doctors and lawyers from the
of such retirement or cessation.
operation of the value added tax. Other professionals
VAT; Covered Transactions (1998) complained and filed a suit questioning the law for being
discriminatory and violative of the equal protection clause of
the Constitution since complainants were not given the
same exemption. Is the suit meritorious or not? Reason unapplied/unused Input VAT (Tax Reform Act,
briefly. (5%) Section 112[A] [1997]).
B. Yes, the suit is meritorious. The VAT is designed for No. The exemption of Lily's Fashion, Inc. is only for taxes
economic efficiency; hence, should be neutral to those for which it is directly liable. Hence, it can not claim
who belong to the same class. Professionals are a class of exemption for a tax shifted to it, which is not at all
taxpayers by themselves who, in compliance with the rule of considered a tax to the buyer but a part of the purchase
equality of taxation, must be treated alike for tax price. Lily's fashion is not the taxpayer in so far as
purposes. Exempting lawyers and doctors from a burden to the passed-on tax is concerned and therefore, it can not
which other professionals are subjected will make the law claim for a refund of a tax merely shifted to it (Phil.
discriminatory and violative of the equal protection Acetylene Co., Inc. v. CIR, L-19707,Aug. 17, 1987).
clause of the Constitution. While singling out a class for (NOTA BENE: This concept pertains to the VAT
taxation purposes will not infringe upon this law which is excluded from the Bar coverage, Guidelines
constitutional limitation (Shell v. Vano, 94 Phil. 389 for 2006 Bar Examinations, June 15, 2006)
[1954]), singling out a taxpayer from a class will no doubt
transgress the constitutional limitation (Ormoc Sugar Co. REMEDIES IN INTERNAL
Inc., v. Treasurer of Ormoc City, 22 SCRA 603 [1968]).
Treating doctors and lawyers as a different class of
REVENUE TAXES
professionals will not comply with the requirements of a BIR: Assessment: Unregistered Partnership (1997)
reasonable, hence valid classification, because the Mr. Santos died intestate in 1989 leaving his spouse and five
classification is not based upon substantial distinction children as the only heirs. The estate consisted of a
which makes real differences. The classification does not family home and a four-door apartment which was being
comply with the requirement that it should be germane to rented to tenants. Within the year, an extrajudicial settle-
the purpose of the law either. (Pepsi-Cola Bottling Co., ment of the estate was executed from the heirs, each
Inc. v. City of Butuan, 24 SCRA 789 [1968]). of them receiving his/her due share. The surviving
ANOTHER ANSWER: spouse assumed administration of the property. Each
No. The suit is not meritorious. The equal protection year, the net income from the rental property was
clause of the Constitution merely requires that all persons distributed to all, proportionately, on which they paid
subjected to legislation shall be treated alike, under like respectively, the corresponding income tax.
circumstances and conditions, both in the privileges
conferred and in the liabilities imposed. The equality in In 1994, the income tax returns of the heirs were
taxation rule is not violated if classifications or distinctions examined and deficiency income tax assessments were is-
are made as long as the same are based on reasonable and sued against each of them for the years 1989 to 1993,
substantial differences. {Pepsi-Cola Bottling Co., Inc. inclusive, as having entered into an unregistered
v. City of Butuan, 24 SCRA 789 [1968]). partnership. Were the assessments justified?
SUGGESTED ANSWER:
In the instant case, the professions of doctors and lawyers Yes, the assessments were justified because for income tax
are not principally aimed at earning money but for the purposes, the co-ownership of inherited property is
service of the people. The exemption granted to doctors and automatically converted into an unregistered partnership
lawyers from the operation of the VAT is justified, as it is from the moment the said properties are used as a
not discriminatory against the other professionals common fund with intent to produce profits for the heirs in
because they have reasonable and substantial differences proportion to their shares in the inheritance.
in the conduct of their professions. From the moment of such partition, the heirs are entitled
already to their respective definite shares of the estate and
VAT; Non-VAT taxpayer; Claim for Refund (2006)
the income thereof, for each of them to manage and
Lily's Fashion, Inc. is a garment manufacturer located and dispose of as exclusively his own without the intervention of
registered as a Subic Bay Freeport Enterprise the other heirs, and, accordingly, he becomes liable
under Republic Act No. 7227 and a non-VAT taxpayer. individually for all taxes in connection therewith. If after
As such, it is exempt from payment of all local and such partition, he allows his shares to be held in common
national internal revenue taxes. During its operations, it with his co-heir under a single management to be used
purchased various supplies and materials necessary in
with the intent of making profit thereby in proportion to his
the conduct of its manufacturing business. The
share, there can be no doubt that, even if no document or
suppliers of these goods shifted to Lily's Fashion,
instrument were executed for the purpose, for tax
Inc. the 10% VAT on the purchased items
purposes, at least, an unregistered partnership is formed
amounting to P 500,000.00. Lily's Fashion, Inc. filed
(Lorenzo Ona, et al v. CIR, 45 SCRA 74).
with the BIR a claim for refund for the input tax shifted ALTERNATIVE ANSWER:
to it by the suppliers. If you were the Commissioner No, the assessments are not justified. The mere sharing of
of Internal Revenue, will you allow the refund? (5%) income does not of itself establish a partnership
ALTERNATIVE ANSWER:
absent any clear intention of the co-owners who are only
No, I will not allow the refund. Only VAT-Registered
awaiting liquidation of the estate.
taxpayers are entitled to a refund of their
BIR: Collection of Tax Deficiency (1999)
A died, survived by his wife and three children. The estate final assessments issued against large taxpayers
tax was properly paid and the estate settled and divided wherein the Commissioner cannot compromise for
and distributed among the four heirs. Later, the BIR less than fifty percent (50%). Any compromise involving
found out that the estate failed to report the income large taxpayers lower than fifty percent (50%) shall be
received by the estate during administration. The BIR subject to the approval of the Secretary of Finance.
issued a deficiency income tax assessment plus interest,
surcharges and penalties. Since the 3 children are residing All criminal violations except those involving fraud,
abroad, the BIR sought to collect the full tax deficiency can be compromised by the Commissioner but only prior
only against the widow. Is the BIR correct? (10%) to the filing of the information with the Court.
SUGGESTED ANSWER: The Commissioner may also abate or cancel a tax
Yes, the BIR is correct. In a case where the estate has liability when
been distributed to the heirs, the collection remedies 1. the tax or any portion thereof appears to have been
available to the BIR in collecting tax liabilities of an estate unjustly or excessively assessed; or
may either (1) sue all the heirs and collect from each of 2. the administrative and collection costs involved
them the amount of tax proportionate to the inheritance do not Justify collection of the amount due.
received or (2) by virtue of the lien created under Section (Sec. 204, NIRC)
219, sue only one heir and subject the property he
received from the estate to the payment of the estate tax. BIR: Compromise; Withholding Agent (1998)
The BIR, therefore, is correct in pursuing the second May the Commissioner of the Internal Revenue compro-
remedy although this will give rise to the right of the heir mise the payment of withholding tax (tax deducted and
who pays to seek reimbursement from the other heirs. withheld at source) where the financial position of
(CIR v. Pineda, 21 SCRA 105). In no case, however, can the the taxpayer demonstrates a clear inability to pay the
BIR enforce the tax liability in excess of the share of the assessed tax? [5%1
widow in the inheritance. SUGGESTED ANSWER:
No. A taxpayer who is constituted as withholding agent
BIR: Compromise; Conditions (2000) who has deducted and withheld at source the tax on the
Under what conditions may the Commissioner of Internal income payment made by him holds the taxes as trust
Revenue be authorized to: funds for the government (Sec. 58[D]) and is obligated to
A. Compromise the payment of any internal revenue remit them to the BIR. The subsequent inability of the
tax? (2%) withholding agent to pay/remit the tax withheld is not a
SUGGESTED ANSWER: ground for compromise because the withholding tax is
The Commissioner of Internal Revenue may not a tax upon the withholding agent but it is only a
be authorized to compromise the payment of any procedure for the collection of a tax.
internal revenue tax where:
1) A reasonable doubt as to the validity of the BIR: Corporation: Distraint & Levy (2002)
claim against the taxpayer exists; or On March 15, 2000, the BIR issued a deficiency income
2) the financial position of the taxpayer demonstrates a tax assessment for the taxable year 1997 against the Valera
clear inability to pay the assessed tax. Group of Companies (Valera) in the amount of P10
million. Counsel for Valera protested the assessment and
B. Abate or cancel a tax liability? (3%) requested a reinvestigation of the case. During
SUGGESTED ANSWER: the investigation, it was shown that Valera had
The Commissioner of Internal Revenue may abate or been transferring its properties to other persons.
cancel a tax liability when: As no additional evidence to dispute the assessment
1) The tax or any portion thereof appears to be unjustly had been presented, the BIR issued on June 16,
or excessively assessed; or 2000 warrants of distraint and levy on the properties
2) The administration and collection costs involved and ordered the filing of an action in the Regional Trial
do not justify the collection of the amount due. Court for the collection of the tax. Counsel for Valera
[Sec. 204 (B), NIRC of 1997] filed an injunctive suit in the Regional Trial Court to
compel the BIR to hold the collection of the tax in
BIR: Compromise; Extent of Authority (1996)
abeyance until the decision on the protest was rendered.
Explain the extent of the authority of the Commissioner A. Can the BIR file the civil action for collection,
of Internal Revenue to compromise and abate taxes? pending decision on the administrative protest?
SUGGESTED ANSWER:
The authority of the Commissioner to compromise Explain. (3%)
SUGGESTED ANSWER:
encompasses both civil and criminal liabilities of the tax-
A. Yes, because there is no prohibition for this
payer. The civil compromise is allowed only in cases procedure considering that the filing of a civil action for
12) where the tax assessment is of doubtful validity, or collection during the pendency of an
13) when the financial position of the taxpayer
administrative protest constitutes the final decision of the
demonstrates a clear inability to pay the tax. Commissioner on the protest (CIR v. Union Shipping
The compromise of the tax liability is possible at any stage
Corp., 85 SCRA 548 [1990]).
of litigation and the amount of compromise is left to the
discretion of the Commissioner except with respect to
B. As counsel for Valera, what action would you take 73 criminal prosecution (CIR v. Fortune Tobacco
in order to protect the interest of your client? Corp., GR No. 119322, June 4, 1996).
Explain your answer. (2%)
SUGGESTED ANSWER: BIR: Extinction; Criminal Liability of the Taxpayer (2002)
B. I will wait for the filing of the civil action for Mr. Chan, a manufacturer of garments, was investigated
collection and consider the same as an appealable for failure to file tax returns and to pay taxes for the
decision. I will not file an injunctive suit because it is not an taxable year 1997. Despite the subpoena duces tecum issued to
available remedy. I would then appeal the case to the Court him, he refused to present and submit his books of
of Tax Appeals and move for the dismissal of the collection accounts and allied records. Investigators, therefore,
case with the RTC. Once the appeal to the CTA is filed on raided his factory and seized several bundles of
time, the CTA has exclusive jurisdiction over the case. manufactured garments, supplies and unpaid imported
Hence, the collection case in the RTC should be dismissed textile materials. After his apprehension and based on the
(Tabes v. Flojo, 115 SCRA 278 [1982]). testimony of a former employee, deficiency income and
business taxes were assessed against Mr. Chan on April
BIR: Court of Tax Appeals: Collection of Taxes; Grounds 15, 2000. It was then that he paid the taxes. Criminal
for Compromise (1996) action was nonetheless instituted against him in the
1. May the Court of Tax Appeals issue an injunction to Regional Trial Court for violation of the Tax Code. Mr.
enjoin the collection of taxes by the Bureau of Chan moved to dismiss the criminal case on the ground that
Internal Revenue? Explain. he had already paid the taxes assessed against him. He also
SUGGESTED ANSWER: demanded the return of the garments and materials
Yes. When a decision of the Commissioner on a tax seized from his factory. How will you resolve Mr. Chan's
protest is appealed to the CTA pursuant to Sec. 11 of RA. No. motion? (5%)
1125 (law creating the CTA) in relation to Sec. 229 of the SUGGESTED ANSWER:
NIRC, such appeal does not suspend the payment, levy, The motion to dismiss should be denied. The satisfaction
distraint and/or sale of any of the taxpayer's property for the of the civil liability is not one of the grounds for
satisfaction of his tax liability. However, when in the opinion the extinction of criminal action ( People v.
of the CTA the collection of the tax may Ildefonso Tierra, 12 SCRA 666 [1964]). Likewise, the
jeopardize the interest of the Government and/or the payment of the tax due after apprehension shall not
taxpayer, the Court at any stage of the proceedings may constitute a valid defense in any prosecution for violation
suspend or restrain the collection of the tax and require of any provision of the Tax Code (Sec. 253[a],
the taxpayer either to deposit the amount claimed or to NIRC). However, the garments and materials seized
file a surety bond for not more than double the amount with from the factory should be ordered returned because
the Court. the payment of the tax had released them from any
lien that the Government has over them.
2. May the tax liability of a taxpayer be compromised
during the pendency of an appeal? Explain. Customs; Jurisdiction; Assessment; Unpaid
SUGGESTED ANSWER: Customs Duties/Taxes (2006)
Yes. During the pendency of the appeal, the taxpayer may The Collector of Customs issued an assessment for un-
still enter into a compromise settlement of his tax liability paid customs duties and taxes on the importation of your
for as long as any of the grounds for a compromise i.e.; client in the amount of P980,000.00. Where will you file your
doubtful validity of assessment and financial incapacity of taxpayer, is case to protect your client's right? Choose the correct
present. A compromise of a tax liability is possible at courts/ agencies, observing their proper hierarchy. (5%)
any stage of litigation, even during appeal, although legal 1. Court of Tax Appeals
propriety demands that prior leave of court should be 2. Collector of Customs
obtained (Pasudeco vs. CIR L-39387, June 29, 1982). 3. Commissioner of Customs
4. Regional Trial Court
BIR: Criminal Prosecution: Tax Evasion (1998)
5. Metropolitan Trial Court
Is assessment necessary before a taxpayer may be 6. Court of Appeals
prosecuted for willfully attempting in any manner to evade 7. Supreme Court
or defeat any tax imposed by the Internal Revenue Code? SUGGESTED ANSWER:
[5%) 1. Protest with the Collector of Customs (Sec. 2308, TCC)
SUGGESTED ANSWER: 2. Appeal to the Commissioner of Customs (Sec.
No. Assessment is not necessary before a taxpayer maybe 2313, TCC).
prosecuted if there is a prima facie showing of a willful 3. Appeal to the CTA (RA 9282)
attempt to evade taxes as in the taxpayer's failure to 4. Petition for Review on Certiorari Supreme Court (Rule
declare a specific item of taxable income in his income tax 45 of the 1997 Rules of Civil Procedure (RA 9282).
returns (Ungab v. Cusi 97 SCRA 877). On the contrary, if
the taxes alleged to have been evaded is computed Taxpayer; Prescriptive Period; Assessment; Deficiency
based on reports approved by the BIR there is a Income Tax (2006)
presumption of regularity of the previous payment of The Commissioner of Internal Revenue issued an assess-
taxes, so that unless and until the BIR has made a final ment for deficiency income tax for taxable year 2000 last
determination of what is supposed to be the correct taxes, July 31, 2006 in the amount of P 10 Million inclusive of
the taxpayer should not be placed in the crucible of
surcharge and interests. If the delinquent taxpayer is your Royal Mining is a VAT-registered domestic
client, what steps will you take? What is your mining entity. One of its products is silver being sold to
defense? (10%) the Bangko Sentral ng Pilipinas. It filed a claim with the
ALTERNATIVE ANSWER: BIR for tax refund on the ground that under Section 106
As Counsel, I shall move to cancel the of the Tax Code, sales of precious metals to the Bangko
Assessment because of prescription. The three (3) Sentral ng Pilipinas are considered export sales subject to
year period of assessment for the Income Tax Returns zero-rated VAT. Is Royal Mining's claim meritorious?
of 2000 starts on April 15, 2001 and ends on Explain. (5%)
April 16, 2004. The assessment of July 31, 2006 is SUGGESTED ANSWER:
beyond the three (3) year prescriptive period and can No, Royal Mining's claim is not meritorious because it is
no longer have any legal, binding effect (Tax Reform the sale to the Bangko Sentral ng Pilipinas of gold and not
Act, Title VIII, Chapter I, Section 203 [1997]). silver which is considered export sales at Zero-rated VAT
ALTERNATIVE ANSWER: (Tax Reform Act, Title IV, Section 106[2][a][4]).
Since my client has lost his right to protest, I will advise him (NOTA BENE: EVAT is excluded from the Bar coverage, Guidelines
to wait for a collection action by the Commissioner. Then, I for 2006 Bar Examinations, June 15, 2006)
will file a petition for review with the CTA to question
the collection. Since the assessment was issued beyond BIR: Fraudulent Return; Prima Facie Evidence (1998)
the prescriptive period to assess, the action to collect an What constitutes prima facie evidence of a false
invalid assessment is not warranted (Phil. Jour- nalists, Inc. v. or fraudulent return? [2%]
CIR, G.R. No. 162852, December 16, 2004). SUGGESTED ANSWER:
There is prima facie evidence of a false or fraudulent
Taxpayer; Assessment; Deficiency Tax (2006) return when the taxpayer has willfully and knowingly filed it
On June 1, 2003, Global Bank received a final notice of with the intent to evade a part or all of the tax legally due
assessment from the BIR for deficiency documentary from him (Ungab v. Cusi,, 97 SCRA 877). There must
stamp tax in the amount of P5 Million. On June 30, 2003, appear a design to mislead or deceive on the part of the
Global Bank filed a request for reconsideration with taxpayer, or at least culpable negligence. A mistake not
the Commissioner of Internal Revenue. The culpable in respect of its value would not constitute a false
Commissioner denied the request for reconsideration return. (Words and Phrases, Vol. 16, page 173).
only on May 30, 2006, at the same time serving on
Global Bank a warrant of distraint to collect the BIR: Fraudulent Return; Prima Facie Evidence (2002)
deficiency tax. If you were its counsel, what will be What constitutes prima facie evidence of a false
your advice to the bank? Explain. (5%) or fraudulent return to justify the imposition of a
ALTERNATIVE ANSWER: 50% surcharge on the deficiency tax due from a
The denial for the request for reconsideration is the final taxpayer? Explain. (5%)
decision of the CIR.. I would advise Global Bank to SUGGESTED ANSWER:
appeal the denial to the Court of Tax Appeals (CTA) There is a prima facie evidence of false or fraudulent
within 30 days from receipt. I will further advise the bank to return when the taxpayer SUBSTANTIALLY UNDER-
file a motion for injunction with the Court of Tax DECLARED his taxable sales, receipts or income, or
Appeals to enjoin the Commissioner from enforcing the SUBSTANTIALLY OVERSTATED his deductions, the
assessment pending resolution of the appeal. While an taxpayer's failure to report sales, receipts or income in an
appeal to the CTA will not suspend the payment, levy, amount exceeding 30% of that declared per return, and a
distraint, and/or sale of any property of the taxpayer for the claim of deduction in an amount exceeding 30% of actual
satisfaction of its tax liability, the CTA is authorized to give deduction shall render the taxpayer liable for substantial
injunctive relief if the enforcement would jeopardize the underdeclaration and overdeclaration, respectively, and
interest of the taxpayer, as in this case, where the will justify the imposition of the 50% surcharge on the
assessment has not become final (Lascona Land Co. v, deficiency tax due from the taxpayer. (Sec. 248, NIRC).
CIR, CTA Case No. 5777, January 4, 2000; See also Revised
CTA Rules, approved by the Supreme Court on December BIR: Garnishment: Bank Account of a Taxpayer (1998)
15, 2005). Is the BIR authorized to issue a warrant of garnishment
ALTERNATIVE ANSWER:
against the bank account of a taxpayer despite the
I will advice the Bank to promptly pay the deficiency pendency of his protest against the assessment with the
documentary stamp tax and the interest charges to avoid BIR or appeal with the Court of Tax Appeals? [5%]
any further increase in the tax liability. The Bank should SUGGESTED ANSWER:
have appealed to the Court of Tax Appeals when the BIR The BIR is authorized to issue a warrant of garnishment
failed to decide on its Request for Reconsideration within against the bank account of a taxpayer despite the
thirty (30) days after the inaction of the BIR for one pendency of protest (Yabes v. Flojo, 15 SCRA 278).
hundred eighty (180) days or on December 31, 2003. The Nowhere in the Tax Code is the Commissioner required to
Tax Assessment has already become final, executory and rule first on the protest before he can institute
unappealable at that point (BPI v. CIR, G.R. No. 139736, collection proceedings on the tax assessed. The legislative
October 17, 2005). policy is to give the Commissioner much latitude in the
speedy and prompt collection of taxes because it is in
Taxpayer; VAT-registered; Claim for Tax Refund (2006)
taxation that the Government depends to obtain the
means to carry on its operations (Republic u. Tim Tian refused to pay the modified assessment.
Teng Sons, Inc., 16 SCRA 584). Consequently, the BIR brought an action for collection in
ALTERNATIVE ANSWER: the Regional Trial Court on September 15, 2000.
No, because the assessment has not yet become Adamson moved to dismiss the action on the ground that
final, executory and demandable. The basic consideration the government's right to collect the tax by judicial action
in the collection of taxes is whether the assessment is has prescribed. Decide the case. (5%)
final and unappealable or the decision of the SUGGESTED ANSWER:
Commissioner is final, executory and demandable, the The right of the Government to collect by judicial action
BIR has legal basis to collect the tax liability by either has not prescribed. The filing of the request for
administrative or judicial action. reconsideration suspended the running of the prescriptive
period and commenced to run again when a decision on
BIR: Pre-Assessment Notice not Necessary (2002) the protest was made on August 5, 1999. It must be noted
In the investigation of the withholding tax returns of AZ that in all cases covered by an assessment, the period to
Medina Security Agency (AZ Medina) for the taxable collect shall be five (5) years from the date of
years 1997 and 1998, a discrepancy between the taxes the assessment but this period is suspended by the filing
withheld from its employees and the amounts actually of a request for reconsideration which was acted upon by
remitted to the government was found. Accordingly, the Commissioner of Internal Revenue (CIR v. Wyeth
before the period of prescription commenced to run, the Suaco Laboratories, Inc., 202 SCRA 125 [1991]).
BIR issued an assessment and a demand letter calling for the
immediate payment of the deficiency withholding taxes in BIR: Prescriptive Period; Assessment & Collection (1999)
the total amount of P250,000.00. Counsel for AZ Medina A Co., a Philippine Corporation, filed its 1995
protested the assessment for being null and void on the Income Tax Return (ITR) on April 15, 1996 showing
ground that no pre-assessment notice had been issued. a net loss. On November 10, 1996, it amended its 1995
However, the protest was denied. Counsel then filed a ITR to show more losses. After a tax investigation, the
petition for prohibition with the Court of Tax Appeals BIR disallowed certain deductions claimed by A Co.,
to restrain the collection of the tax. putting A Co. in a net income position. As a result, on
A. Is the contention of the counsel tenable? Explain August 5, 1999, the BIR issued a deficiency income
(2%) assessment against A Co. A Co. protested the assessment
SUGGESTED ANSWER: on the ground that it has prescribed: Decide. (5%)
A. No, the contention of the counsel is untenable. SUGGESTED ANSWER:
Section 228 of the Tax Code expressly provides that no The right of the BIR to assess the tax has not prescribed.
pre-assessment notice is required when a discrepancy has The rule is that internal revenue taxes shall be assessed within three
been determined between the tax withheld and the years after the last day prescribed by law for the filing of the return.
amount actually remitted by the withholding agent. Since the (Section 203, NIRC), However, if the return originally filed
amount assessed relates to deficiency withholding taxes, is amended substantially, the counting of the three-
the BIR is correct in issuing the assessment and year period starts from the date the amended return was
demand letter calling for the immediate payment of the filed. (CIR v. Phoenix Assurance Co., Ltd., 14 SCRA 52).
deficiency withholding taxes. (Sec. 228, NIRC). There is a substantial amendment in this case because a
new return was filed declaring more losses, which can
B. Will the special civil action for prohibition brought only be done either (1) in reducing gross income or (2) in
before the CTA under Sec. 11 of R.A, No. increasing the items of deductions, claimed.
1125 prosper? Discuss your answer. (3%)
BIR: Prescriptive Period; Criminal Action (2002)
SUGGESTED ANSWER: TY Corporation filed its final adjusted income tax return
B. The special civil action for prohibition will not for 1993 on April 12, 1994 showing a net loss from
prosper, because the CTA has no jurisdiction to entertain operations. After investigation, the BIR issued a pre-
the same. The power to issue writ of injunction provided for assessment notice on March 30, 1996. A final notice and
under Section 11 of RA 1125 is only ancillary to its demand letter dated April 15, 1997 was issued, personally
appellate jurisdiction. The CTA is not vested with original delivered to and received by the company's chief
jurisdiction to issue writs of prohibition or injunction accountant. For willful refusal and failure of TY
independently of and apart from an appealed case. The Corporation to pay the tax, warrants of distraint and levy
remedy is to appeal the decision of the BIR. (Collector v. on its properties were issued and served upon it. On
Yuseco, 3 SCRA 313 [1961]). January 10, 2002, a criminal charge for violation of
the Tax Code was instituted in the Regional Trial Court
BIR: Prescriptive Period: Civil Action (2002) with the approval of the Commissioner.
On August 5, 1997, Adamson Co., Inc. (Adamson) filed a
request for reconsideration of the deficiency withholding The company moved to dismiss the criminal complaint on
tax assessment on July 10, 1997, covering the taxable year the ground that an act for violation of any provision
1994. After administrative hearings, the original of the Tax Code prescribes after five (5) years and,
assessment of P150,000.00 was reduced to P75.000.00 and in this case, the period commenced to run on March
a modified assessment was thereafter issued on August 05, 30, 1996 when the pre-assessment was issued. How will
1999. Despite repeated demands, Adamson failed and you resolve the motion? Explain your answer. (5%)
P2.0 Million as the selling price. Discuss the tax
SUGGESTED ANSWER: implications and consequences of the action. (5%)
The motion to dismiss should not be granted. It is only ALTERNATIVE ANSWER:
when the assessment has become final and unappealable that The action of the parties constitutes tax evasion and
the 5-year period to file a criminal action commences to run exposes Josel to:
(Tupaz v. Ulop, 316 SCRA 118 [1999]). The pre- (1) DEFICIENCY FINAL INCOME TAX on the sale of
assessment notice issued on March 30, 1996 is not a final real property in the Philippines classified as a
assessment which is enforceable by the BIR. It is the capital asset. Under Sec. 24(D) of the NIRC, the final
issuance of the final notice and demand letter dated April 15, tax of six percent (6%) shall be based on the gross
1997 and the failure of the taxpayer to protest within 30 selling price of P2.5 Million or zonal value of P2.0
days from receipt thereof that made the assessment final Million, whichever is higher, i.e., P2.5 Million;
and unappealable. The earliest date that the (2) FRAUD PENALTY amounting to 50% surcharge
assessment has become final is May 16, 1997 and since the on the amount evaded (Sec. 248[B] NIRC); and
criminal charge was instituted on January 10, 2002, the (3) DEFICIENCY INTEREST of 20% per annum on
same was timely filed. the deficiency. (Sec. 249[A][B], NIRC)
ALTERNATIVE ANSWER:
BIR: Secrecy of Bank Deposits Law (1998) There is tax evasion because of the concurrence of
Can the Commissioner of Internal Revenue inquire the following factors:
into the bank deposits of a taxpayer? If so, does this 1) The payment of less than that known by the taxpayer to
power of the Commissioner conflict with R.A. 1405 be legally due, or the non-payment of tax when it is shown
(Secrecy of Bank Deposits Law) [5%] that a tax is due. It is evident that the parties that the tax
SUGGESTED ANSWER: due should be computed based on the valuation of P2.5
The Commissioner of Internal Revenue is authorized million and not P2.0 million;
to inquire into the bank deposits of: 2) An accompanying state of mind which is described
1) a decedent to determine his gross estate; as being "evil" on "bad faith," "willful," or "deliberate and
not accidental." Despite the above knowledge, the parties
2) any taxpayer who has filed an application for deliberately misrepresented the true basis of the sale; and
compromise of his tax liability by means of financial 3) A course of action or failure of action which is
incapacity to pay his tax liability (Sec. 6(F). NIRC). unlawful. This is shown by the preparation of the two
deeds of sale which showed different values.
3) Where the taxpayer has signed a waiver authorizing (Commissioner of Internal Revenue v. The
the Commissioner or his duly authorized Estate ofBenigno P, Tbda, Jr., G.R. No. 147188,
representatives to Inquire into the bank deposits. September 14, 2004)
(Note: This answer was not part of the answers enumerated
The tax evasion committed should result to the
in the UP Law Answers to the Bar in this but was
imposition of a 50% fraud surcharge on the amount
later added in the recent UP Law Answers to the Bar as a evaded (Sec. 248[B], NIRC) payment of the Deficiency
result of AMLA Law of 2001) Tax, and interest of 20% per annum on the deficiency.
The limited power of the Commissioner does not conflict (Sec. 249[A][B], NIRC) The parties may likewise be
with R.A. No. 1405 because the provisions of the Tax subject to criminal prosecution for willfully failing to pay the
Code granting this power is an exception to the Secrecy of tax, as well as for filing a false and fraudulent return.
Bank Deposits Law as embodied in a later legislation. (Sees. 254, 255 and 257, NIRC)
Furthermore, in case a taxpayer applies for an application to BIR: Summary Remedy: Estate Tax Deficiencies (1998)
compromise the payment of his tax liabilities on his Is the BIR authorized to collect estate tax deficiencies by
claim that his financial position demonstrates a clear the summary remedy of levy upon and sale of
inability to pay the tax assessed, his application shall not be real properties of the decedent without first securing
considered unless and until he waives in writing his the authority of the court sitting in probate over the
privilege under R.A. No. 1405, and such waiver shall supposed will of the decedent?
SUGGESTED ANSWER:
constitute the authority of the Commissioner to inquire
Yes. The BIR is authorized to collect estate tax deficiency
into the bank deposits of the taxpayer.
through the summary remedy of levying upon and sale of
BIR; Consequence; Taxpayer guilty of Tax Evasion (2005) real properties of a decedent, without the cognition
and authority of the court sitting in probate over the
Josel agreed to sell his condominium unit to Jess for P2.5
supposed will of the deceased, because the collection of
Million. At the time of the sale, the property had a zonal
estate tax is executive in character. As such the estate tax
value of P2.0 Million. Upon the advice of a tax consultant,
is exempted from the application of the statute of non-
the parties agreed to execute two deeds of sale, one
claims, and this is justified by the necessity of
indicating the zonal value of P2.0 Million as the selling
government funding, immortalized in the maxim that
price and the other showing the true selling price of P2.5
taxes are the lifeblood of the government ( Marcos v.
Million. The tax consultant filed the capital gains tax
CIR, G.R. No. 120880, June 5, 1997).
return using the deed of sale showing the zonal value of ALTERNATIVE ANSWER:
Yes, if the tax assessment has already become final, assessment so long as there is a prima facie
executory and enforceable. The approval of the court showing of violation of the provisions of the Tax Code.
sitting in probate over the supposed will of the deceased is After all, a criminal charge is instituted not to demand
not a mandatory requirement for the collection of the payment, but to penalize the tax payer for violation of the
estate tax. The probate court is determining issues which are Tax Code. (Commissioner of Internal Revenue v. Pascor
not against the property of the decedent, or a claim Realty and Development Corporation, G.R. No. 128315,
against the estate as such, but is against the interest or June 29, 1999) Furthermore, there is nothing in
property right which the heir, legatee, devisee, etc. has in the the problem that shows that the BIR in filing the case is
property formerly held by the decedent. (Marcos v. also interested in collecting the tax deficiency.
CIR, G.R, No. 120880, June 5, 1997).
However, it is in error when it ruled that the joint affidavit
BIR: Unpaid Taxes vs. Claims for Unpaid Wages (1995) of the BIR examiners may be considered as an assessment
For failure of Oceanic Company, Inc. (OCEANIC), to of the tax liability of the corporation. The joint
pay deficiency taxes of P20 Million, the Commissioner of affidavit showing the computation of the tax liabilities of
Internal Revenue issued warrants of distraint on the erring taxpayer is not a tax assessment because it was
OCEANIC's personal properties and levied on its real not sent to the taxpayer, and does not demand
properties. Meanwhile, the Department of Labor through payment of the tax within a certain period of time. An
the Labor Arbiter rendered a decision ordering assessment is deemed made only when the BIR
OCEANIC to pay unpaid wages and other benefits to its releases, mails or sends such notice to the taxpayer.
employees. Four barges belonging to OCEANIC were (Commissioner of Internal Revenue v. Pascor Realty and
levied upon by the sheriff and later sold at public auction. Development Corporation, G.R. No. 128315, June 29, 1999)
Notes and Comments: A plea is made for liberality
The Commissioner of Internal Revenue filed a in correcting the examinees answers because the examination is
very long.
motion with the Labor Arbiter to annul the sale and
enjoin the sheriff from disposing the proceeds BIR; Authority; Refund or Credit of Taxes (2005)
thereof. The employees of OCEANIC opposed the State the conditions required by the Tax Code before the
motion contending that Art. 110 of the Labor Code gives Commissioner of Internal Revenue could authorize the
first preference to claims for unpaid wages. refund or credit of taxes erroneously or illegally received.
Resolve the motion. Explain. SUGGESTED ANSWER:
SUGGESTED ANSWER:
Under Sec. 204(C), NIRC, the following conditions must
The motion filed by the Commissioner should be granted
be met:
because the claim of the government for unpaid taxes are
1. There must be a written claim for refund filed by the
generally preferred over the claims of laborers for unpaid
taxpayer with the Commissioner.
wages. The provision of Article 110 of the Labor Code,
2. The claim for refund must be a categorical demand
which gives laborers' claims for preference applies only in
for reimbursement.
case of bankruptcy or liquidation of the employer's
3. The claim for refund must be filed within two
business. In the instant case, Oceanic is not under
(2) years from date of payment of the tax or
bankruptcy or liquidation at the time the warrants of
distraint and levy were issued hence, the opposition of the penalty regardless of any supervening cause.
employees is unwarranted. (CIR vs. NLRC et al G.R. No. BIR; Compromise (2004)
74965, November 9, 1994).
After the tax assessment had become final
BIR; Assessment; Criminal Complaint (2005) and unappealable, the Commissioner of Internal
Revenue initiated the filing of a civil action to collect the
In 1995, the BIR filed before the Department of Justice
tax due from NX. After several years, a decision was
(DOJ) a criminal complaint against a corporation and its
officers for alleged evasion of taxes. The complaint was rendered by the court ordering NX to pay the tax due
supported by a sworn statement of the BIR examiners plus penalties and surcharges. The judgment
showing the computation of the tax liabilities of the erring became final and executory, but attempts to
taxpayer. The corporation filed a motion to dismiss the execute the judgment award were futile.
criminal complaint on the ground that there has been, as yet,
Subsequently, NX offered the Commissioner
no assessment of its tax liability; hence, the criminal
a compromise settlement of 50% of the judgment
complaint was premature. The DOJ denied the motion on
award, representing that this amount is all he could really
the ground that an assessment of the tax deficiency of the
afford. Does the Commissioner have the power to
corporation is not a precondition to the filing of a
accept the compromise offer? Is it legal and ethical?
criminal complaint and that in any event, the joint
Explain briefly. (5%)
affidavit of the BIR examiners may be considered as an
SUGGESTED ANSWER:
assessment of the tax liability of the corporation. Is the Yes. The Commissioner has the power to accept the offer
ruling of the DOJ correct? Explain. (5%) of compromise if the financial position of the
SUGGESTED ANSWER:
The DOJ is correct in ruling that an assessment of the tax taxpayer clearly demonstrates a clear inability to
pay the tax (Section 204, NIRC).
deficiency of the corporation is not a precondition to the
filing of a criminal complaint. There is no need for an
As represented by NX in his offer, only 50% of the
judgment award is all he could really afford. This is an 73
offer for compromise based on financial incapacity which
the Commissioner shall not accept unless accompanied by a BIR; Deficiency Tax Assessment vs. Tax Refund /
waiver of the secrecy of bank deposits (Section 6[F}, Tax Credit (2005)
NIRC). The waiver will enable the Commissioner to Is a deficiency tax assessment a bar to a claim for
ascertain the financial position of the taxpayer, although tax refund or tax credit? Explain.
the inquiry need not be limited only to the bank deposits of SUGGESTED ANSWER:
the taxpayer but also as to his financial position as Yes, the deficiency tax assessment is a bar to a tax refund or
reflected in his financial statements or other records upon credit. The Taxpayer cannot be entitled to a refund and at
which his property holdings can be ascertained. the same time liable for a tax deficiency assessment for the
same year. The deficiency assessment creates a doubt as to
If indeed, the financial position of NX as determined by the truth and accuracy of the Tax Return. Said Return
the Commissioner demonstrates a clear inability to pay the cannot therefore be the basis of the refund
tax, the acceptance of the offer is legal and ethical because (Commissioner of Internal Revenue v. Alltel [2002], citing
Commissioner of Internal Revenue v. Court of
the ground upon which the compromise was anchored is Appeals, City Trust Banking Corporation and Court of
within the context of the law and the rate of compromise Tax Appeals, G.R. No. 106611, July 21, 1994)
is well within and far exceeds the minimum prescribed by
law which is only 10% of the basic tax assessed. BIR; Distraint; Prescription of the Action (2002)
Mr. Sebastian is a Filipino seaman employed by a
BIR; Compromise (2005) Norwegian company which is engaged exclusively in
State and discuss briefly whether the following cases may international shipping. He and his wife, who manages
be compromised or may not be compromised: their business, filed a joint income tax return for 1997 on
a) Delinquent accounts; March 15, 1998. After an audit of the return, the BIR
b) Cases under administrative protest, after issuance issued on April 20, 2001 a deficiency income tax
of the final assessment notice to the taxpayer, which assessment for the sum of P250.000.00, inclusive of
are still pending; interest and penalty. For failure of Mr. and Mrs. Sebastian to
c) Criminal tax fraud cases; pay the tax within the period stated in the notice of
d) Criminal violations already filed in court; assessment, the BIR issued on August 19, 2001 warrants of
e) Cases where final reports of reinvestigation or distraint and levy to enforce collection of the tax.
reconsideration have been issued resulting in the A. What is the rule of income taxation with respect to
reduction of the original assessment agreed to by the Mr. Sebastian's income in 1997 as a seaman on
taxpayer when he signed the required agreement board the Norwegian vessel engaged in
form. (5%) international shipping? Explain your answer. (2%)
The following cases may still be compromised (R.R. 30-02 A. The income of Mr. Sebastian as a seaman is considered as
[2002]) because of the taxpayer's financial incapacity income of a non-resident citizen derived from without the
to pay the tax due or the assessment's doubtful validity: Philippines. The total gross income, in US dollars (or if in
a) DELINQUENT ACCOUNTS may be other foreign currency, its dollar equivalent) from
compromised because there is no showing that there is a without shall be declared by him for income tax purposes
duly-approved schedule of installment payments; and using a separate income tax return which will not include his
b) Cases under administrative protest, after issuance of income from business derived within (to be covered by
the final assessment notice to the taxpayer, which are still another return). He is entitled to deduct from his dollar
pending. gross income a personal exemption of $4,500 and foreign
national income taxes paid to arrive at his adjusted income
The following cases MAY NO LONGER during the year. His adjusted income will be subject to the
BE COMPROMISED (R.R. 30-02 [2002]) graduated tax rates of 1% to 3%. (Sec. 21 (b), Tax Code of
because the taxpayer has not paid his taxes for reasons 1986[PD 1158], as amended by PD 1994).
other than his financial incapacity or the doubtful
validity of the assessment: [Note: The bar candidates are not expected to be familiar with tax
a) CRIMINAL TAX FRAUD cases as may be history. Considering that this is already the fourth year of
determined by the Commissioner or his authorized agents implementation of the Tax Code of 1997, bar candidates were
may not be compromised; taught and prepared to answer questions based on the present
b) CRIMINAL VIOLATIONS ALREADY law. It is therefore requested that the examiner be more lenient in
FILED IN COURT so that the taxpayer will not profit checking the answers to this question. Perhaps, an answer
from his fraud which would encourage tax evasion; and based on the present law be given full credit.]
c) Cases where final reports of reinvestigation B. If you are the lawyer of Mr. and Mrs. Sebastian,
or reconsideration have been issued resulting in what possible defense or defenses will you raise in
the reduction of the original assessment agreed to by behalf of your clients against the action of the BIR in
the taxpayer when he signed the required agreement enforcing collection of the tax by the summary
form. The taxpayer is estopped from applying remedies of warrants of distraints and levy?
for a compromise.
Explain your answer. (3%)
SUGGESTED ANSWER:
B. I will raise the defense of prescription. The right of the properties left by his father with intent to evade
BIR to assess prescribes after three years counted payment of the correct tax. As a result, a deficiency estate
from the last day prescribed by law for the filing of the tax assessment for P1,250,000.00, inclusive of
income tax returns when the said return is filed on time. 50% surcharge for fraud, interest and penalty, was
(Section 203, NIRC). The last day for filing the 1997 issued against him on January 10, 2001. Mr. Castro
income tax return is April 15, 1998. Since the assessment protested the assessment on the ground of prescription.
was issued only on April 20, 2001, the BIR's right to A. Decide Mr. Castro's protest. (2%)
assess has already prescribed. SUGGESTED ANSWER:
A. The protest should be resolved against Mr. Castro.
BIR; False vs. Fraudulent Return (1996) What was filed is a fraudulent return making the
Distinguish a false return from a fraudulent return. prescriptive period for assessment ten (10) years from
SUGGESTED ANSWER: discovery of the fraud (Section 222, NIRC). Accordingly,
The distinction between a false return and a the assessment was issued within that prescriptive period to
fraudulent return is that the first merely implies a make an assessment based on a fraudulent return.
deviation from the truth or fact whether intentional or
not, whereas the second is intentional and deceitful B. What legal requirement/s must Mr. Santos comply
with the sole aim of evading the correct tax due with so that he can claim his reward? Explain. (3%)
(Aznar us. Commissioner, L-20569, August 23, 1974). SUGGESTED ANSWER:
ALTERNATIVE ANSWER: The legal requirements that must be complied by Mr.
A false return contains deviations from the truth which Santos to entitle him to reward are as follows:
may be due to mistakes, carelessness or ignorance of the 1) He should voluntarily file a confidential information
person preparing the return. A fraudulent return contains an under oath with the Law Division of the Bureau
intentional wrongdoing with the sole object of avoiding the of Internal Revenue alleging therein the
tax and it may consist in the intentional specific violations constituting fraud;
underdeclaration of income, intentional overdeclaration of 2) The information must not yet be in the possession of
deductions or the recurrence of both. A false return is not the Bureau of Internal Revenue, or refer to a
necessarily tainted with fraud because the fraud case already pending or previously investigated by
contemplated by law is actual and not constructive. Any the Bureau of Internal Revenue;
deviation from the truth on the other hand, whether 3) Mr. Santos should not be a government employee or
intentional or not, constitutes falsity. ( Aznar vs. a relative of a government employee within the sixth
Commissioner, L-20569, August 23, 1974) degree of consanguinity; and
4) The information must result to collections of
BIR; Jurisdiction; Review Rulings of the revenues and/or fines and penalties. (Sec.
Commissioner (2006) 282, NIRC)
Mr. Abraham Eugenio, a pawnshop operator, after having
been required by the Revenue District Officer to pay BIR; Prescriptive Period; Criminal Action (2006)
value added tax pursuant to a Revenue Memorandum Gerry was being prosecuted by the BIR for failure to pay his
Order (RMO) of the Commissioner of Internal Revenue, income tax liability for Calendar Year 1999 despite
filed with the Regional Trial Court an action questioning several demands by the BIR in 2002. The Information was
the validity of the RMO. If you were the judge, will you filed with the RTC only last June 2006. Gerry filed a
dismiss the case? (5%) motion to quash the Information on the ground of
SUGGESTED ANSWER: prescription, the Information having been filed beyond
Yes. The RMO is in reality a ruling of the Commissioner in the 5-year reglementary period. If you were the judge, will
implementing the provisions of the Tax Code on the you dismiss the Information? Why? (5%)
taxability of pawnshops. Jurisdiction to review rulings of the SUGGESTED ANSWER:
Commissioner is lodged with the Court of Tax No. The trial court can exercise jurisdiction. Prescription of
Appeals and not with the Regional Trial Court (CIR v. a criminal action begins to run from the day of the
Josefina Leal, G.R. No. 113459, November 18, 2002; violation of the law. The crime was committed when
Tax Reform Act, RA 8424, Title I, Sec. 4 [1997]). Gerry willfully refused to pay despite repeated demands in
(NOTA BENE: This concept pertains to the VAT 2002. Since the information was filed in June 2006, the
law which is excluded from the bar coverage, Guidelines criminal case was instituted within the five-year period
for 2006 Bar Examinations, June 15, 2006) required by law (Tupaz v. Ulep, G.R. No. 127777, October
1, 1999; Section 281, NIRC).
BIR; Prescriptive Period; Assessment; Fraudulent Return
(2002) BIR; Taxpayer: Civil Action & Criminal Action (2002)
Mr. Castro inherited from his father, who died on June 10, Minolta Philippines, Inc. (Minolta) is an EPZA-registered
1994, several pieces of real property in Metro Manila. The enterprise enjoying preferential tax treatment under a
estate tax return was filed and the estate tax due in the special law. After investigation of its withholding tax
amount of P250.000.00 was paid on December 06, 1994. returns for the taxable year 1997, the BIR issued a
The Tax Fraud Division of the BIR investigated the case on deficiency withholding tax assessment in the amount of
the basis of confidential information given by Mr. P150.000.00. On May 15, 1999, because of financial
Santos on January 06, 1998 that the return filed by Mr. difficulty, the deficiency tax remained unpaid, as a result
Castro was fraudulent and that he failed to declare all of which the assessment became final and executory. The
BIR also found that, in violation of the provisions of the with the Collector of Customs. The Bureau of
National Internal Revenue Code, Minolta did not file Customs moved to dismiss the case for lack of
its final corporate income tax return for the taxable jurisdiction of the Court of Tax Appeals.
year 1998, because it allegedly incurred net loss
from its operations. On May 17, 2002, the BIR filed A. Does the Court of Tax Appeals have jurisdiction over
with the Regional Trial Court an action for the petition for review and writ of prohibition?
collection of the deficiency withholding tax for 1997. Explain (3%)
A. Will the BIR's action for collection prosper? As SUGGESTED ANSWER:
counsel of Minolta, what action will you take? A. No, because there is no decision as yet by
Explain your answer. (5%) the Commissioner of Customs which can be appealed to
SUGGESTED ANSWER: the CTA. Neither the remedy of prohibition
A. Yes, BIR's action for collection will prosper because would lie because the CTA has not acquired any
the assessment is already final and executory, it can appellate jurisdiction over the seizure case. The writ of
already be enforced through judicial action. prohibition being merely ancillary to the appellate
jurisdiction, the CTA has no jurisdiction over it until
As counsel of Minolta, I will introduce evidence that the it has acquired jurisdiction on the petition for review.
income payment was reported by the payee and the Since there is no appealable decision, the CTA has no
income tax was paid thereon in 1997 so that my jurisdiction over the petition for review and
client may only be allowed to pay the civil penalties writ of prohibition. ( Commissioner of Customs v.
for non- withholding pursuant to RMO No. 38-83. Alikpala, 36 SCRA 208 [1970]).
[Note: It is not clear whether this is a case of
non- withholding/ underwithholding or non-remittance B. Will an appeal to the CTA for tax refund be possible?
of tax withheld. As such, the tax counsel may be Explain (2%)
open to other remedies against the assessment.] SUGGESTED ANSWER:
B. No, because the Commissioner of Customs has not
B. May criminal violations of the Tax Code be yet rendered a decision on the claim for refund. The
compromised? If Minolta makes a voluntary offer to jurisdiction of the Commissioner and the CTA are not
compromise the criminal violations for non- concurrent in so far as claims for refund are concerned.
filing and non-payment of taxes for the year 1998, The only exception is when the Collector has not acted on
may the Commissioner accept the offer? Explain the protested payment for a long time, the continued
(5%) inaction of the Collector or Commissioner should not be
SUGGESTED ANSWER: allowed to prejudice the taxpayer. (Nestle Phils., Inc. v.
B. All criminal violations of the Tax Code may be Court of Appeals, GR No. 134114, July 6, 2001).
compromised except those already filed in court or those
involving fraud (Section 204, NIRC). Accordingly, if Customs; Basis; Automatic Review (2002)
Minolta makes a voluntary offer to compromise the Whenever the decision of the Collector of Customs
criminal violations for non-filing and non-payment of is adverse to the government, it is automatically elevated
taxes for the year 1998, the Commissioner may accept the to the Commissioner for review and, if it is affirmed by
offer which is allowed by law. However, if it can be him, it is automatically elevated to the Secretary of
established that a tax has not been paid as a consequence of Finance for review. What is the basis of the
non-filing of the return, the civil liability for taxes may be automatic review procedure in the Bureau of
dealt with independently of the criminal violations. The Customs? Explain your answer. (5%)
compromise settlement of the criminal violations will not SUGGESTED ANSWER:
relieve the taxpayer from its civil liability. But the civil Automatic review is intended to protect the interest of the
liability for taxes may also be compromised if the financial Government in the collection of taxes and customs duties in
position of the taxpayer demonstrates a clear inability to pay seizure and protest cases. Without such automatic
the tax. review, neither the Commissioner of Customs nor the
Secretary of Finance would know about the decision laid
Custom: Violation of Tax & Custom Duties (2002) down by the Collector favoring the taxpayer. The power to
The Collector of Customs of the Port of Cebu issued decide seizure and protest cases may be abused if no
warrants of seizure and detention against the importation of checks are instituted. Automatic review is necessary
machineries and equipment by LLD Import and because nobody is expected to appeal the decision of the
Export Co. (LLD) for alleged nonpayment of tax and Collector which is favorable to the taxpayer and adverse to
customs duties in violation of customs laws. LLD was the Government. This is the reason why whenever the
notified of the seizure, but, before it could be heard, the decision of the Collector is adverse to the Government,
Collector of Customs issued a notice of sale of the the said decision is automatically elevated to the
articles. In order to restrain the Collector from carrying Commissioner for review; and if such decision is affirmed by
out the order to sell, LLD filed with the Court of Tax the Commissioner, the same shall be automatically
Appeals a petition for review with application for the elevated to and be finally reviewed by the Secretary of
issuance of a writ of prohibition. It also filed with the Finance (Yaokasin v. Commissioner of Customs, 180
CTA an appeal for refund of overpaid taxes on its other SCRA 591 [1989]).
importations of raw materials which has been pending
Delinquent Tax Return (1998) functions It has been Instituted to perform. ( Jao,
When is a revenue tax considered delinquent? [3%) et al, Court of Appeals, et al, and companion
SUGGESTED ANSWER: case, 249 SCRA 35, 43)
A revenue tax is considered delinquent when it is unpaid
after the lapse of the last day prescribed by law for LGU: Collection of Taxes, Fees & Charges (1997)
its payment. Likewise, it could also be considered Give the remedies available to local government units to
as delinquent where an assessment for deficiency tax enforce the collection of taxes, fees, and charges?
has become final and the taxpayer has not paid it within SUGGESTED ANSWER:
the period given in the notice of assessment. The remedies available to the local government units
to enforce collection of taxes, fees, and charges are:
Jurisdiction: Customs vs. CTA (2000) 1) ADMINISTRATIVE REMEDIES of distraint
a) On the basis of a warrant of seizure and detention of personal property of whatever kind whether
issued by the Collector of Customs for the purpose of tangible or intangible, and levy of real property
enforcing the Tariff and Customs Laws, assorted and interest therein; and
brands of cigarettes said to have been illegally imported 2) JUDICIAL REMEDY by institution of an
into the Philippines were seized from a store where ordinary civil action for collection with the
they were openly offered for sale. Dissatisfied with the regular courts of proper jurisdiction.
decision rendered after hearing by the Collector of
Customs on the confiscation of the articles, the Tax Amnesty vs. Tax Exemption (2001)
importer filed a petition for review with the Court of Tax Distinguish a tax amnesty from a tax exemption. (3%)
Appeals. The Collector moved to dismiss the petition SUGGESTED ANSWER:
for lack of Jurisdiction. Rule on the motion. Tax amnesty is an immunity from all criminal, civil and
(2%) administrative liabilities arising from nonpayment of taxes. It
SUGGESTED ANSWER: is a general pardon given to all taxpayers. It applies only to
Motion granted. The Court of Tax Appeals has past tax periods, hence of retroactive application.
jurisdiction only over decisions of the Commissioner of (People v. Costonedo, G.R. No. L-46881, 1988).
Customs in cases involving seizures, detention or release of
property affected. (Sec. 7, R.A. No. 1125). There is no Tax exemption is an immunity from the civil liability only.
decision yet of the Commissioner which is subject to It is an immunity or privilege, a freedom from a charge or
review by the Court of Tax Appeals. burden to which others are subjected. (Florer v.
ALTERNATIVE ANSWER: Sheridan, 137 Ind. 28, 36 ME 365). It is generally
Motion granted. The Court of Tax Appeals has no prospective in application.
jurisdiction because there is no decision rendered by the
Commissioner of Customs on the seizure and forfeiture Taxpayer: Administrative & Judicial Remedies (2000)
case. The taxpayer should have appealed the decision Describe separately the procedures on the legal remedies
rendered by the Collector within fifteen (15) days from under the Tax Code available to an aggrieved taxpayer
receipt of the decision to the Commissioner of Customs. both at the administrative and judicial levels. (5%)
The Commissioner’s adverse decision would then be the SUGGESTED ANSWER:
subject of an appeal to the Court of Tax Appeals. The legal remedies of an aggrieved taxpayer under the Tax
Code, both at the administrative and judicial levels,
may be classified into those for assessment,
b) Under the same facts, could the importer file an action in collection and refund.
the Regional Trial Court for replevin on the ground that
the articles are being wrongfully detained by the The procedures for the ADMINISTRATIVE
Collector of Customs since the importation was not REMEDIES for ASSESSMENT are as follows:
illegal and therefore exempt from seizure? Explain. a. After receipt of the Pre-Assessment Notice, he must
(3%) within fifteen (15) days from receipt explain why no
SUGGESTED ANSWER: additional taxes should be assessed against him.
No. The legislators intended to divest the Regional Trial
Courts of the jurisdiction to replevin a property which is a b. If the Commissioner of Internal Revenue issues an
subject of seizure and forfeiture proceedings for violation assessment notice, the taxpayer must administratively
of the Tariff and Customs Code otherwise, actions protest or dispute the assessment by filing a motion for
for forfeiture of property for violation of the reconsideration or reinvestigation within thirty
Customs laws could easily be undermined by the (30) days from receipt of the notice of
simple device of replevin. (De la Fuente v. De Veyra, assessment. (4th par.. Sec. 228, NIRC of 1997)
et. al, 120 SCRA 455)
c. Within sixty (60) days from filing of the protest, the
There should be no unnecessary hindrance on the taxpayer shall submit all relevant supporting
government's drive to prevent smuggling and other frauds
documents.
upon the Customs. Furthermore, the Regional Trial Court
do not have Jurisdiction in order to render effective and The JUDICIAL REMEDIES of an aggrieved taxpayer
efficient the collection of Import and export duties due relative to an ASSESSMENT NOTICE are as follows:
the State, which enables the government to carry out the
a. Where the Commissioner of Internal Revenue the refund of the surcharge, interest and
has not acted on the taxpayer's protest within a compromise penalty. The CTA took cognizance of the
period of one hundred eighty (180) days from case and ordered the Commissioner to make a refund.
submission of all relevant documents, then the The Commissioner filed a Petition for Review with the
taxpayer has a period of thirty (30) days from the Court of Appeals assailing the jurisdiction of the CTA and
lapse of said 180 days within which to interpose a the Order to make refund to the Estate on the ground
petition for review with the Court of Tax Appeals. that no claim for refund was filed with the BIR.
A. Is the stand of the Commissioner correct?
b. Should the Commissioner deny the taxpayer's protest, Reason. (2%)
then he has a period of thirty (30) days from receipt SUGGESTED ANSWER:
of said denial within which to interpose a petition for Yes. There was no claim for refund or credit that has been
review with the Court of Tax Appeals. duly filed with the Commissioner of Internal Revenue
which is required before a suit or proceeding can be filed
In both cases the taxpayer must apply with the Court of in any court (Sec. 229. NIRC of 1997). The denial of the
Tax Appeals for the Issuance of an Injunctive writ claim by the Commissioner is the one which will vest the
to enjoin the Bureau of Internal Revenue from collecting Court of Tax Appeals jurisdiction over the refund
the disputed tax during the pendency of the proceedings. case should the taxpayer decide to appeal on time.
NOTE: A 2004 Amendment - The decision of the B. Why is the filing of an administrative claim with the
division of CTA is in turn appeallable within fifteen (15) BIR necessary? (3%)
days to the CTA en banc. The decision of the CTA SUGGESTED ANSWER:
en banc is directly appeallable to the Supreme Court The filing of an administrative claim for refund with the
on question of law on certiorari. BIR is necessary in order:
1) To afford the Commissioner an opportunity to
The employment by the Bureau of Internal Revenue consider the claim and to have a chance to correct
of any of the Administrative Remedies for the the errors of subordinate officers ( Gonzales v.
collection of the tax like distraint, levy, etc. may be CTA, et al, 14 SCRA 79); and
administratively appealed by the taxpayer to the 2) To notify the Government that such taxes have
Commissioner whose decision is appealable to the Court been questioned and the notice should be borne in
of Tax Appeals under other matter arising under the mind in estimating the revenue available for
provisions of the National Internal Revenue Code. expenditures. (Bermejo v. Collector, G.R. No. L-
3028. July 29, 1950)
The judicial appeals starts with the Court of Tax Appeals,
Taxpayer: Assessment; Injunction (2004)
and continues in the same manner as shown above.
RR disputed a deficiency tax assessment and upon receipt
Should the Bureau of Internal Revenue decide to utilize its of an adverse decision by the Commissioner of
Judicial tax remedies for collecting the taxes by means of Internal Revenue, filed an appeal with the Court of Tax
an ordinary suit filed with the regular courts for the Appeals. While the appeal is pending, the BIR served a
collection of a sum of money, the taxpayer could oppose warrant of levy on the real properties of RR to enforce
the same going up the ladder of judicial processes the collection of the disputed tax. Granting arguendo
from the Municipal Trial Court (as the case may be) that the BIR can legally levy on the properties, what
to the Regional Trial Court, to the Court of Appeals, could RR do to stop the process? Explain briefly. (5%)
SUGGESTED ANSWER:
thence to the Supreme Court.
RR should file a motion for injunction with the Court of
The remedies of an aggrieved taxpayer on a claim Tax Appeals to stop the administrative collection process.
An appeal to the CTA shall not suspend the enforcement
for refund is to appeal the adverse decision of
of the tax liability, unless a motion to that effect shall have
the Commissioner to the CTA in the same manner
been presented in court and granted by it on the basis that
outlined above.
such collection will jeopardize the interest of the taxpayer
Taxpayer: Assessment: Protest: Claims for refund (2000) or the Government (Pirovano v. CIR, 14 SCRA
On June 16, 1997, the Bureau of Internal Revenue (BIR)
832 [1965]).
issued against the Estate of Jose de la Cruz a notice of The CTA is empowered to suspend the collection of
deficiency estate tax assessment, inclusive of surcharge, internal revenue taxes and customs duties in cases pending
interest and compromise penalty. The Executor of the appeal only when: (1) in the opinion of the court the
Estate of Jose de la Cruz (Executor) filed a timely protest collection by the BIR will jeopardize the interest of the
against the assessment and requested for waiver of the Government and/or the taxpayer; and (2) the taxpayer is
surcharge, interest and penalty. The protest was denied by
willing to deposit the amount being collected or to file a
the Commissioner of Internal Revenue (Commissioner)
surety bond for not more than double the amount of the tax
with finality on September 13, 1997. Consequently, the
to be fixed by the court (Section 11, JR.A. No. 1125).
Executor was made to pay the deficiency assessment on
October 10, 1997. The following day, the Executor filed a Taxpayer: BIR Audit or Investigation (1999)
Petition with the Court of Tax Appeals (CTA) praying for
A Co., a Philippine corporation, is a big manufacturer of 3. The claim filed must state a categorical
consumer goods and has several suppliers of raw materi- demand for reimbursement (Bermejo v. Collector, 87
als. The BIR suspects that some of the suppliers are not Phil. 96 [1950]).
properly reporting their income on their sales to A
Co. The CIR therefore: 4. The suit or proceeding for recovery must be
1) Issued an access letter to A Co. to furnish the BIR commenced in court within two years from date of
information on sales and payments to its suppliers. payment of the tax or penalty regardless of any
2) Issued an access letter to a bank (CX Bank) to supervening event that will arise after payment (Sec.
furnish the BIR on deposits of some suppliers of A 229, NIRC).
Co. on the alleged ground that the suppliers are
committing tax evasion. [Note: If the answer given is only number 1, it is suggested that the
same shall be given full credit considering that this is the only
A Co., X Bank and the suppliers have not been issued by requirement for the Commissioner to acquire jurisdiction over the
the BIR letter of authority to examine. A Co. and X Bank claim.]
believe that the BIR is on a "fishing expedition" and come
B. Can the Commissioner grant a refund or tax
to you for counsel. What is your advice? (10%)
SUGGESTED ANSWER:
credit even without a written claim for it? (2%)
SUGGESTED ANSWER:
I will advise A Co. and B Co. that the BIR is justified only
B. Yes. When the taxpayer files a return which on its face
in getting information from the former but not from the
shows an overpayment of the tax and the option to
latter. The BIR is authorized to obtain information from
refund/ claim a tax credit was chosen by the taxpayer, the
other persons other than those whose internal revenue tax
Commissioner shall grant the refund or tax credit without
liability is subject to audit or investigation. However, this
the need for a written claim. This is so, because a return filed
power shall not be construed as granting the
showing an overpayment shall be considered as a
Commissioner the authority to inquire into bank deposits.
written claim for credit or refund. (Sees. 76 and 204,
(Section 5. NIRC).
NIRC). Moreover, the law provides that the
Taxpayer: City Board of Assessment Decision; Where to Commissioner may, even without a written claim therefor,
refund or credit any tax where on the face of the return
appeal (1999)
upon which payment was made, such payment appears
A Co., a Philippine corporation, is the owner of machin-
clearly to have been erroneously paid. (Sec. 229, NIRC).
ery, equipment and fixtures located at its plant
in Muntinlupa City. The City Assessor characterized all Taxpayer: Deficiency Income Tax (1995)
these properties as real properties subject to the real Businessman Stephen Yang filed an income tax return for
property tax. A Co. appealed the matter to the 1993 showing business net income of P350,000.00 on
Muntinlupa Board of Assessment Appeals. The Board which he paid an income tax of P61,000.00. After filing
ruled in favor of the City. In accordance with RA 1125 the return he realized that he forgot to include an item of
(An Act creating the Court of Tax Appeals). A Co. business income in 1993 for P50.000.00. Being an honest
brought a petition for review before the CTA to appeal taxpayer, he included this income in his return for 1994
the decision of the City Board of Assessment Appeals. Is and paid the corresponding income tax thereon. In the
the Petition for Review proper? Explain. (5%) examination of his 1993 return the BIR examiner found
SUGGESTED ANSWER:
No. The CTA’s devoid of jurisdiction to entertain appeals that Stephen Yang failed to report this item of P50.000.00
from the decision of the City Board of Assessment and assessed him a deficiency income tax on this item,
Appeals. Said decision is instead appealable to the Central plus a 50% fraud surcharge.
Board of Assessment Appeals, which under the Local 1) Is the examiner correct? Explain.
Government Code, has appellate jurisdiction over deci- 2) If you were the lawyer of Stephen Yang, what would
sions of Local Board of Assessment Appeals. (Caltex you have advised your client before he included
Phils, foe. v. Central Board of Assessment Appeals, L- in his 1994 return the amount of P50.000.00 as
50466, May 31, 1982). 1993 income to avoid the fraud surcharge? Explain.
3) Considering that Stephen Yang had already been
Taxpayer: Claim for Refund; Procedure (2002) assessed a deficiency income tax for 1993 for
A. What must a taxpayer do in order to claim a refund of, his failure to report the P50.000.00 income, what
or tax credit for, taxes and penalties which he alleges to would you advise him to do to avoid the penalties
have been erroneously, illegally or excessively assessed for tax delinquency? Explain.
or collected? (3%) 4) What would you advise Stephen Yang to do with
SUGGESTED ANSWER: regard to the income tax he paid for the P50.000.00 in
The taxpayer must comply with the following procedures his 1994 return? In case your remedy fails, what is
in claiming a refund of, or tax credit for, taxes and your other recourse? Explain.
penalties which he alleges to have been erroneously, SUGGESTED ANSWERS:
illegally or excessively assessed or collected: 1) The examiner is correct in assessing a deficiency
2. He should file a written claim for refund with income tax for taxable year 1993 but not in imposing the
the Commissioner within two years after the date 50% fraud surcharge. The amount of all items of gross
of payment of the tax or penalty (Sec. 204, NIRC); income must be included in gross income during the year in
which received or realized (Sec. 38, NIRC). The 50%
fraud surcharge attaches only if a false or fraudulent Commissioner on cases involving claim for tax
return is willfully made by Mr. Yang (Sec.248, NIRC). The refunds are within the exclusive and primary jurisdiction
fact that Mr. Yang included the income in his 1994 return of the Court of Tax Appeals (Section 7.RA1125).
belies any claim of willfulness but is rather indicative of an
honest mistake which was sought to be rectified by a Taxpayer: Failure to Withheld & Remit Tax (2000)
subsequent act, that is the filing of the 1994 return. A domestic corporation failed to withhold and remit the
tax on income received from Philippine sources by a non-
2) Mr. Yang should have amended his 1993 Income tax resident foreign corporation. In addition to the
return to allow for the inclusion of the P50.000 civil penalties provided for under the Tax Code, a
income during the taxable period it was realized. compromise penalty was imposed for violation of the
withholding tax provisions. May the Commissioner of
3) Mr. Yang should file a protest questioning the 50% Internal Revenue legally enforce the collection of
surcharge and ask for the abatement thereof. compromise penalty? (5%)
Mr. Yang should pay the deficiency income tax on or No. There is no showing that the compromise penalty was
before the day prescribed for its payment per notice of imposed by the Commissioner of Internal Revenue with
demand. After payment and within two years thereafter, the agreement and conformity of the taxpayer. (Wonder
he should file a claim for refund of taxes erroneously paid to Mechanical Engineering Corporation u. Court of Tax
recover the excessive surcharge imposed. Appeals, et. al., 64 SCRA 555).
Taxpayer: NIRC vs. TCC Remedies (1996)
4) Mr. Yang should file a written claim for refund with Compare the taxpayer's remedies under the National
the Commissioner of Internal Revenue of the taxes paid Internal Revenue Code and the Tariff and Customs Code.
on the P50.000 income included in 1994 within two years SUGGESTED ANSWER:
from payment pursuant to Section 204(3) of the Tax The taxpayer's remedies under the NATIONAL
Code. Should this remedy fail in the administrative level, a INTERNAL REVENUE CODE may be categorized
judicial claim for refund can be instituted before the into remedies before payment and remedies after
expiration of the two year period. payment. The remedy BEFORE PAYMENT consists of
(a) Administrative Remedy which is the filing
Taxpayer: Exhaustion of Administrative Remedies (1997) of protest within 30 days from receipt of
(a) A taxpayer received, on 15 January 1996 an as- assessment, and
sessment for an internal revenue tax deficiency. On (b) Judicial Remedy which is the appeal of the adverse
10 February 1996, the taxpayer forthwith filed a decision of the Commissioner on the protest with the
petition for review with the Court of Tax Court of Tax Appeals, and finally with the Supreme
Appeals. Could the Tax Court entertain the petition? Court.
(b) Under the above factual setting, the taxpayer, instead of The remedy AFTER PAYMENT is availed of
questioning the assessment he received on 15 (c) by paying the assessed tax within 30 days from
January 1996 paid, on 01 March 1996 the "deficiency receipt of assessment and
tax" assessed. The taxpayer requested a refund from the (d) the filing of a claim for refund or tax credit of these
Commissioner by submitting a written claim on taxes on grounds that they are erroneously paid
1 March 1997. It was denied. The taxpayer, on 15 within two years from date of payment.
March 1997, filed a petition for review with the (e) If there is a denial of the claim, appeal to the CTA shall
Court of Appeals. Could the petition still be be made within 30 days from denial but within two
entertained? years from date of payment.
SUGGESTED ANSWER:  If the Commissioner fails to act on the claim for
(a) No. Before taxpayer can avail of Judicial remedy he refund or tax credit and the two-year period
must first exhaust administrative remedies by filing a is about to expire, the taxpayer should consider
protest within 30 days from receipt of the assessment. It is the continuous inaction of the Commissioner
the Commissioner's decision on the protest that give the Tax as a denial and elevate the case to the CTA
Court jurisdiction over the case provided that the appeal before the expiration of the two-year period. 
is filed within 30 days from receipt of the
Commissioner's decision. An assessment by the BIR is Under the Tariff and Customs Code, taxpayer's
not the Commissioner's decision from which a petition remedies arise only after payment of duties.
for review may be filed with the Court of Tax Appeals. 4) The administrative remedies consist of filing a claim
Rather, it is the action taken by the Commissioner in for refund which may take the form of abatement or
response to the taxpayer's protest on the assessment that drawback.
would constitute the appealable decision (Section 7, RA 5) The taxpayer can also file a protest within 15
1125). days from payment if he disagrees with the
ruling or decision of the Collector of Customs
(b) No, the petition for review can not be entertained by regarding the legality or correctness of the
the Court of Appeals, since decisions of the assessment of customs duties.
6) If the decision of the Collector is adverse to the December 15, 1995 up to December 8, 1998.
taxpayer, he can notify the Collector within 15 (Sec. 223 in relation to Sec. 203, both of the NIRC of 1997)
days from receipt of said decision of his desire to
have his case reviewed by the Commissioner. Taxpayer: Prescriptive Period; Claim for Refund (1997)
 The decision of the Collector on the A corporation files its income tax return on a calendar
taxpayer's protest, if adverse to the year basis. For the first quarter of 1993, it paid on 30 May
Government, is automatically elevated to the 1993 its quarterly income tax in the amount of P3.0
Commissioner for review; and if such million. On 20 August 1993, it paid the second quarterly
decision is affirmed by the Commissioner, income tax of P0.5 million. The third quarter resulted in a
the same shall be automatically elevated to net loss, and no tax was paid. For the fourth and final
and finally reviewed by the Secretary of Finance.  return for 1993, the company reported a net loss for the
 year, and the taxpayer indicated in the income tax return that
 Resort to judicial relief can be had by it opted to claim a refund of the quarterly income tax
the taxpayer by appealing the decision of payments. On 10 January 1994, the corporation filed with
the Commissioner or of the Secretary of the Bureau of Internal Revenue a written claim for the
Finance (for cases subject to automatic review) refund of P3.5 million.
within 30 days from the promulgation of
the adverse decision to the CTA.  BIR failed to act on the claim for refund; hence, on
02 March 1996, the corporation filed a petition for
Taxpayer: Overwitholding Claim for Refund (1999) review with the Court of Tax Appeals on its claim for
A Co. is the wholly owned subsidiary of B Co., a non- refund of the overpayment of its 1993 quarterly income
resident German company. A Co. has a trademark tax. BIR, in its answer to the petition, alleged that the
licensing agreement with B Co. On Feb. 10, 1995, A Co. claim for refund was filed beyond the reglementary
remitted to B Co. royalties of P 10,000,000, which A Co. period. Did the claim for refund prescribe?
subjected to a withholding tax of 25% or P2,500,000. SUGGESTED ANSWER:
Upon advice of counsel, A Co. realized that the proper The claim for refund has prescribed. The counting of the
withholding tax rate is 10%. On March 20, 1996, A Co. two-year prescriptive period for filing a claim for
filed a claim for refund of P2.500.000 with the BIR. The refund is counted not from the date when the quarterly
BIR denied the claim on Nov. 15, 1996. On Nov. 28, income taxes were paid but on the date when the final
1996, A Co. filed a petition for review with the CTA. The adjustment return or annual income tax return was filed
BIR attacked the capacity of A Co., as agent, to bring the (CIR v. TMX Sales Inc., G.R. No. 83736, January 15, 1992;
refund case. Decide the issue. (5%) CIR v. Phi/Am Life Insurance Co., Inc., G.R. No. 105208,
SUGGESTED ANSWER: May 29, 1995). It is obvious that the annual income tax
A Co., the withholding agent of the non-resident foreign return was filed before January 10, 1994 because the
corporation is entitled to claim the refund of excess written claim for refund was filed with the BIR on January
withholding tax paid on the income of said corporation in 10, 1994. Since the two-year prescriptive period is not
the Philippines. Being a withholding agent, it is the one only a limitation of action in the administrative stage but also
held liable for any violation of the withholding tax law a limitation of action for bringing the case to the
should such a violation occur. In the same vein, it should be judicial stage, the petition for review filed with the CTA on
allowed to claim a refund in case of overwitholding. March 02, 1996 is beyond the reglementary period.
(CIR v. Wander Phils. Inc., GR No. 68378, April 15, 1988,
160 SCRA 573; CIR v. Procter & Gamble PMC, 2O4 SCRA Taxpayer: Prescriptive Period; Claims for Refund (1994)
377). XCEL Corporation filed its quarterly income tax return
for the first quarter of 1985 and paid an income tax of
Taxpayer: Prescriptive Period: Suspended (2000) P500.000.00 on May 15, 1985. In the subsequent quarters,
Mr. Reyes, a Filipino citizen engaged in the real estate XCEL suffered losses so that on April 15, 1986 it declared a
business, filed his 1994 income tax return on March 20, net loss of P1,000,000.00 in its annual income tax return.
1995. On December 15, 1995, he left the Philippines as an After failing to get a refund, XCEL filed on March 1, 1988 a
immigrant to join his family in Canada. After the case with the Court of Tax Appeals to recover the
investigation of said return/the BIR issued a notice of P500.000.00 in taxes paid on May 15, 1985.
deficiency income tax assessment on April 15, 1998. Mr. Is the action to recover the taxes filed timely?
Reyes returned to the Philippines as a balikbayan on SUGGESTED ANSWER:
December 8, 1998. Finding his name to be in the list of The action for refund was filed in the Court of Tax
delinquent taxpayers, he filed a protest against the Appeals on time. In the case of Commissioner v. TMX
assessment on the ground that he did not receive the Sales, Inc., 205 SCRA 184, which is similar to this case, the
notice of assessment and that the assessment had Supreme Court ruled that in the case of overpaid quarterly
prescribed. Will the protest prosper? Explain. (5%) corporate income tax, the two-year period for filing claims for
SUGGESTED ANSWER: refund in the BIR as well as in the institution of an
No. Prescription has not set in because the period of action for refund in the CTA, the two-year prescriptive
limitations for the Bureau of Internal Revenue to issue an period for tax refunds (Sec. 230, Tax Code) is counted
assessment was SUSPENDED during the time that Mr. from the filing of the final, adjustment return under Sec. 67 of
Reyes was out of the Philippines or from the period the Tax Code, and not from the filing of the
quarterly return and payment of the quarterly tax. The subject of appeal to the Court of Tax Appeals
CTA action on March 1, 1988 was clearly within the (Yobes u. Flojo, 15 SCRA 278). The CTA may, however,
reglementary two-year period from the filing of the final remand the case to the BIR and require the Commissioner
adjustment return of the corporation on April 15, 1986. to specifically rule on the protest. The decision of
the Commissioner, if adverse to my client, would
Taxpayer: Prescriptive Period; Claims for Refund (2004) then constitute an appealable decision.
On March 12, 2001, REN paid his taxes. Ten
months later, he realized that he had overpaid Taxpayer: Protest against Assessment (1999)
and so he immediately filed a claim for A Co., a Philippine corporation, received an income tax
refund with the Commissioner of Internal Revenue. deficiency assessment from the BIR on May 5, 1995. On
May 31, 1995, A Co. filed its protest with the BIR. On
On February 27, 2003, he received the decision of July 30, 1995, A Co. submitted to the BIR all relevant
the Commissioner denying REN's claim for supporting documents. The CIR did not formally rule on the
refund. On March 24, 2003, REN filed an appeal protest but on January 25, 1996, A Co. was served a
with the Court of Tax Appeals. Was his appeal filed on summons and a copy of the complaint for collection of
time or not? Reason. (5%) the tax deficiency filed by the BIR with the Regional Trial
SUGGESTED ANSWER: Court (RTC). On February 20, 1996, A Co. brought a
The appeal was not filed on time. The two-year period of Petition for Review before the CTA. The BIR contended
limitation for filing a claim for refund is not only a that the Petition is premature since there was no formal
limitation for pursuing the claim at the administrative level denial of the protest of A Co. and should therefore be
but also a limitation for appealing the case to the Court of dismissed.
Tax Appeals. The law provides that "no suit or proceeding 1. Has the CTA jurisdiction over the case?
shall be filed after the expiration of two years from SUGGESTED ANSWER;
the date of the payment of the tax or penalty regardless Yes, the CTA has jurisdiction over the case because this
of any supervening cause that may arise after payment qualifies as an appeal from the Commissioner's decision
(Section 229, JVZRCJ. Since the appeal was only made on disputed assessment. When the Commissioner decided to
on March 24, 2003, more than two years had already collect the tax assessed without first deciding on the
elapsed from the time the taxes were paid on taxpayer's protest, the effect of the Commissioner’s action of
March 12, 2003. Accordingly, REN had lost his judicial filing a judicial action for collection is a decision of
remedy because of prescription. denial of the protest, in which event the taxpayer may file an
appeal with the CTA. (Republic v. Lim Tian Teng &
Taxpayer: Protest against Assessment (1998) Sons, Inc., 16 SCRA 584; Dayrit v. Cruz, L-39910,
CFB Corporation, a domestic corporation engaged in Sept. 26, 1988).
food processing and other allied activities, received a letter
from the BIR assessing it for delinquency income 2. Has the RTC jurisdiction over the collection case
taxes. CFB filed a letter of protest. One month after, a filed by the BIR? Explain.
warrant of distraint and levy was served on CFB SUGGESTED ANSWER;
Corporation. If you were the lawyer engaged by CFB The RTC has no jurisdiction over the collection case filed by
Corporation to contest the assessment made by the BIR, the BIR. The filing of an appeal with the CTA has the effect
what steps will you take to protect your client? (5%) of divesting the RTC of jurisdiction over the
SUGGESTED ANSWER: collection case. At the moment the taxpayer appeals the
I shall immediately file a motion for reconsideration of the case to the Court of Tax Appeals in view of the
issuance of the warrant of distraint and levy and seek from Commissioner's filing of the collection case with the RTC
the BIR Commissioner a denial of the protest "in clear which was considered as a decision of denial, it gives a
and unequivocal language." This is so because the issuance justifiable basis for the taxpayer to move for dismissal in the
of a warrant of distraint and levy is not considered as RTC of the Government's action to collect the tax
a denial by the BIR of the protest filed by CFB Corporation liability under dispute. (Yabes v. Flojo, 15 SCRA 278; San
(CIR v. Union Shipping Corp., 185 SCRA 547). Juan v. Vasquez, 3 SCRA 92). There is no final, executory and
demandable assessment which can be enforced by the BIR,
Within thirty (30) days from receipt of such denial once a timely appeal is filed.
"in clear and unequivocal language," I shall then file a
petition for review with the Court of Tax Appeals. Taxpayer: Protest against Assessment (1999)
ALTERNATIVE ANSWER: A Co., a Philippine corporation, received an income tax
Within thirty (30) days from receipt of the warrant deficiency assessment from the BIR on November 25,
of distraint and levy, I shall file a petition for review with 1996. On December 10, 1996, A Co. filed its protest with
the Court of Tax Appeals with an application for issuance the BIR On May 20, 1997, the BIR issued a warrant
of a writ of preliminary injunction to enjoin the of distraint to enforce the assessment. This warrant was
Bureau of Internal Revenue from enforcing the warrant. served on A Co. on May 25, 1997. In a letter dated June 4,
1997 and received by A Co. 5 days later, the CIR formally
This is the action I shall take because I shall consider the denied A Co.'s protest stating that it constitutes his final
issuance of the warrant as a final decision of the decision on the matter. On July 6, 1997, A Co. filed a
Commissioner of Internal Revenue which could be the Petition for Review with the CTA. The BIR moved to
dismiss the Petition on the ground that the CTA has no
jurisdiction over the case. Decide. (10%)
73
SUGGESTED ANSWER:
The CTA has jurisdiction over the case. The appealable Taxpayer; Claim for Tax Credits (2006)
decision is the one which categorically stated that the Congress enacts a law granting grade school and high
Commissioner's action on the disputed assessment is final school students a 10% discount on all school-prescribed
and, therefore, the reckoning of the 30-day period to textbooks purchased from any bookstore. The law allows
appeal was on June 9, 1999. The filing of the petition for bookstores to claim in full the discount as a tax credit.
review with the CTA was timely made. The Supreme 1. If in a taxable year a bookstore has no tax due on
Court has ruled that the CIR must categorically state that his which to apply the tax credits, can the bookstore
action on a disputed assessment is final; otherwise, the claim from the BIR a tax refund in lieu of tax credit?
period to appeal will not commence to run. That final Explain. (2.5%)
action cannot be implied from the mere issuance of a SUGGESTED ANSWER:
warrant "of distraint and levy. (CIR v. Union Shipping No, the bookstore cannot claim from the BIR a tax
Corporation, 185 SCRA 547). refund in lieu of tax credit. There is nothing in the
law that grants a refund when the bookstore has no tax
Taxpayer: Protest; Claim of Refund (1996) liability against which the tax credit can be used (CIR v.
Is protest at the time of payment of taxes and Central Luzon Drug, G.R. No 159647, April 15, 2005). A
duties a requirement to preserve the taxpayers' right tax credit is in the nature of a tax exemption and in case
to claim a refund? Explain. of doubt, the doubt should be resolved in strictissimi
SUGGESTED ANSWER: juris against the claimant.
For TAXES imposed under the NIRC, protest at the
time of payment is not required to preserve the taxpayers' 2. Can the BIR require the bookstores to deduct the
right to claim refund. This is clear under Section 230 of the amount of the discount from their gross income? Explain.
NIRC which provides that a suit or proceeding maybe (2.5%)
maintained for the recovery of national internal revenue SUGGESTED ANSWER:
tax or penalty alleged to have been erroneously assessed No. Tax credit which reduces the tax liability is different
or collected, whether such tax or penalty has been paid from a tax deduction which merely reduces the tax base.
under protest or not. Since the law allowed the bookstores to claim in full the
discount as a tax credit, the BIR is not allowed to expand
For DUTIES imposed under the Tariff and Customs or contract the legislative mandate (CIR v. Bicolandia
Code, a protest at the time of payment is required to Drug Corp., G.R. No. 148083, July 21, 2006; CIR v. Central
preserve the taxpayers' claim for refund. The procedure Luzon Drug Corp., G.R. No. 159647, April 15, 2005).
under the TCC is to the effect that when a ruling or
decision of the Collector of Customs is made whereby 3. If a bookstore closes its business due to losses with-
liability for duties is determined, the party adversely out being able to recoup the discount, can it claim
affected may protest such ruling or decision by presenting to reimbursement of the discount from the government on
the Collector, at the time when payment is made, or the ground that without such reimbursement, the law
within 15 days thereafter, a written protest setting forth constitutes taking of private property for public
his objections to the ruling or decision in question (Sec. use without just compensation? Explain. (5%)
SUGGESTED ANSWER:
2308. TCC). A bookstore, closing its business due to losses, cannot
claim reimbursement of the discount from the
Taxpayer; Appeal to the Court of Tax Appeals (2005)
government. If the business continues to operate at a loss
A taxpayer received a tax deficiency assessment of and no other taxes are due, thus compelling it to close
P1.2 Million from the BIR demanding payment within 10 shop, the credit can never be applied and will be lost
days, otherwise, it would collect through summary altogether (CIR v. Central Luzon Drug, G.R. No. 159647,
remedies. The taxpayer requested for a April 15, 2005). The grant of the discount to the taxpayer is a
reconsideration stating the grounds therefor. Instead mere privilege and can be revoked anytime.
of resolving the request for reconsideration, the BIR
sent a Final Notice before Seizure to the taxpayer. Taxpayer; Compromise after Criminal Action (1998)
May this action of the Commissioner of Internal Revenue An information was filed in court for willful non-payment
be deemed a denial of the request for reconsideration of of income tax the assessment of which has become final.
the taxpayer to entitle him to appeal to the Court of Tax The accused, through counsel, presented a motion that he
Appeals? Decide with reasons. (5%)
SUGGESTED ANSWER:
be allowed to compromise his tax liability subject of the
Yes, the final notice before seizure was in effect a denial information. The prosecutor indicated his conformity
of the taxpayer's request for reconsideration, not only was to the motion. Is this procedure correct? [5%]
SUGGESTED ANSWER:
the notice the only response received, its nature, content No. Criminal violations, if already filed in court, may not be
and tenor supports the theory that it was the BIR's final compromised (Sec. 204[B], NIRC). Furthermore, the
act regarding the request for reconsideration. (CIR v. payment of the tax due after apprehension shall not
Isabela Cultural Corporation, G.R. No. 135210, July 11,
2001) constitute a valid defense in any prosecution for violation of
any provisions of the Tax Code (Sec. 247(a), NIRC).
Finally, there is no showing that the prosecutor in the
problem is a legal officer of the Bureau of Internal
Revenue to whom the conduct of criminal actions LOCAL & REAL PROPERTY
are lodged by the Tax Code.
ALTERNATIVE ANSWER: TAXES
No. If the compromise referred to is the civil aspect, the
procedure followed is not correct. Compromise for the Local Taxation: Actual Use of Property (2002)
payment of any internal revenue tax shall be made only by The real property of Mr. and Mrs Angeles, situated in a
the Commissioner of Internal Revenue or in a proper case commercial area in front of the public market, was
the Evaluation Board of the BIR (Sec. 204, NIRC). declared in their Tax Declaration as residential because it
Applying the law to the case at bar, compromise had been used by them as their family residence from the
settlement can only be effected by leave of Court. time of its construction in 1990. However, since January
1997, when the spouses left for the United States to stay
Taxpayer; Protest against Assessment; Donor’s Tax there permanently with their children, the property has
(1995) been rented to a single proprietor engaged in the sale of
Mr. Rodrigo, an 80-year old retired businessman, fell in appliances and agri-products. The Provincial Assessor
love with 20-year old Tetchie Sonora, a night club reclassified the property as commercial for tax purposes
hospitality girl. Although she refused to marry him she starting January 1998. Mr. and Mrs. Angeles appealed to
agreed to be his "live-in" partner. In gratitude, Mr. the Local Board of Assessment Appeals, contending that the
Rodrigo transferred to her a condominium unit, where Tax Declaration previously classifying their property as
they both live, under a deed of sale for P10 Million. Mr. residential is binding. How should the appeal be
Rodrigo paid the capital gains tax of 5% of P10 Million. decided? (5%)
SUGGESTED ANSWER:
The Commissioner of Internal Revenue found that The appeal should be decided against Mr. and Mrs.
the property was transferred to Tetchie Sonora by Angeles. The law focuses on the actual use of the
Mr. Rodrigo because of the companionship she was property for classification, valuation and assessment
providing him. Accordingly, the Commissioner purposes regardless of ownership. Section 217 of
made a determination that Sonora had the Local Government Code provides that "real
compensation income of P10 Million in the year property shall be classified, valued, and assessed on
the condominium unit was transferred to her and the basis of its actual use regardless of where
issued a deficiency income tax assessment. located, whoever owns it, and whoever uses it".
Tetchie Sonora protests the assessment and claims Local Taxation: Coverage (2002)
that the transfer of the condominium unit was a gift Aside from the basic real estate tax, give three (3)
and therefore excluded from income. How will you rule other taxes which may be imposed by provincial
on the protest of Tetchie Sonora? Explain. and city governments as well as by municipalities in
SUGGESTED ANSWER: the Metro Manila area. (3%)
I will grant the protest and cancel the assessment. SUGGESTED ANSWER:
The transfer of the property by Mr. Rodrigo to Ms. The following real property taxes aside from the basic real
Sonora was gratuitous. The deed of sale indicating a P10 property tax may be imposed by provincial and city
million consideration was simulated because Mr. Rodrigo governments as well as by municipalities in the
did not receive anything from the sale. The problem Metro Manila area:
categorically states that the transfer was made in 1. Additional levy on real property for the
gratitude to Ms. Sonora's companionship. The transfer Special Education Fund (Sec. 235, LGC);
being gratuitous is subject to donor's tax. Mr. Rodrigo 2. Additional Ad-valorem tax on Idle lands (Sec.
should be assessed deficiency donor's tax and a 50% 23§, LGC); and
surcharge imposed for fraudulently simulating a contract 3. Special levy (Sec. 240).
of sale to evade donor's tax. (Sec. 91(b), NIRC).
[Note: The question is susceptible to dual interpretation
Taxpayer; Withholding Agent; Claim of Tax Refund (2005) because it is asking for three other taxes and not
Does a withholding agent have the right to file three other real property taxes. Accordingly, an
an application for tax refund? Explain. alternative answer should be considered and given full
SUGGESTED ANSWER: credit] A. The following taxes, aside from basic real
Yes. A taxpayer is "any person subject to tax." Since, the estate tax, may be imposed by:
withholding tax agent who is "required to deduct and 1. Provincial Government
withheld any tax" is made "personally liable for such tax" a. Printer's or publisher's tax
should the amount of the tax withheld be finally found to b. Franchise Tax
be less than that required to be withheld by law, then he is c. Professional tax
a taxpayer. Thus, he has sufficient legal interest to file an 2. City Government - may levy taxes which the province
application for refund, of the amount he believes was or municipality are authorized to levy (Sec. 151, LGC)
illegally collected from him. (Commissioner of Internal a. Printer's or publisher's tax
Revenue v. Procter & Gamble, G.R. No. 66838, December b. Franchise tax
2, 1991) c. Professional tax
3. Municipalities in the Metro Manila Area - may levy Local Taxation: Legality/ Constitutionality; Tax
taxes at rates which shall not exceed by 50% Ordinance (2003)
the maximum rates prescribed in the Local X, a taxpayer who believes that an ordinance passed by
Government Code. the City Council of Pasay is unconstitutional for being
a. Annual fixed tax on manufacturers, assemblers, discriminatory against him, want to know from you, his
repackers, processors, brewers, distillers, rectifiers and tax lawyer, whether or not he can file an appeal. In
compounders of liquors, distilled spirits, and wines or the affirmative, he asks you where such appeal should
manufacture of any article of commerce of whatever be made: the Secretary of Finance, or the Secretary of
kind or nature; Justice, or the Court of Tax Appeals, or the regular courts.
b. Annual fixed tax on wholesalers, distributors, or What would your advice be to your client, X? (8%)
dealers in any article of commerce of whatever SUGGESTED ANSWER:
kind or nature; The appeal should be made with the Secretary of Justice.
c. Percentage tax on retailers Any question on the constitutionality or legality of a tax
ordinance may be raised on appeal with the Secretary of
[Note: Other taxes may comprise the enumeration because many Justice within 30 days from the effectivity thereof. (Sec.
other taxes are authorized to be imposed by LGUs.] 187, LGC; Hagonoy Market Vendor Association
v. Municipality of Hagonoy, 376 SCRA 376 [2002]).
Local Taxation: Exemption; Real Property Taxes (2002)
Under the Local Government Code, what properties Local Taxation: Legality; Imposition of Real Property Tax
are exempt from real property taxes? (5%) Rate (2002)
SUGGESTED ANSWER: An Ordinance was passed by the Provincial Board of
The following properties are exempt from real a Province in the North, increasing the rate of basic
property taxes: (Sec. 234, LGC). real property tax from 0.006% to 1 % of the assessed
1. Real property owned by the Republic of the value of the real property effective January 1, 2000.
Philippines or any of its political subdivisions except Residents of the municipalities of the said province
when the beneficial use thereof has been granted, protested the Ordinance on the ground that no
for consideration or otherwise, to a taxable person; public hearing was conducted and, therefore, any
increase in the rate of real property tax is void. Is there
2. All lands, buildings and improvements actually, merit in the protest? Explain your answer. (2%)
directly, and exclusively used for religious, charitable SUGGESTED ANSWER:
or educational purposes by charitable institutions, The protest is devoid of merit. No public hearing is
churches, parsonages or convents appurtenant required before the enactment of a local tax
thereto, mosques, nonprofit or religious cemeteries; ordinance levying the basic real property tax (Art.
324, LGC Regulations).
3. All machineries and equipment that are actually, ALTERNATIVE ANSWER:
directly and exclusively used by local water districts Yes, there is merit in the protest provided that sufficient
and government-owned or controlled proof could be introduced for the non-observance of
corporations engaged in the supply and public hearing. By implication, the Supreme Court
distribution of water and/or generation and recognized that public hearings are required to be
conducted prior to the enactment of an ordinance
transmission of electric power;
imposing real property taxes. Although it was concluded
4. All real property owned by duly registered by the highest tribunal that presumption of validity of a
cooperatives as provided for under R.A. No. 6938; tax ordinance can not be overcome by bare assertions of
procedural defects on its enactment, it would seem that if
and
the taxpayer had presented evidence to support the
5. Machinery and equipment used for pollution control allegation that no public hearing was conducted, the Court
should have ruled that the tax ordinance is invalid. (Belen
and environmental protection.
Figuerres v. Court of Appeals, GRNo. 119172, March
Local Taxation: Imposition of Ad Valorem Tax (2000) 25, 1999).
May local governments impose an annual realty tax
in addition to the basic real property tax on idle or Local Taxation: Power to Impose (2003)
vacant lots located in residential subdivisions In order to raise revenue for the repair and maintenance
within their respective territorial jurisdictions? (3%) of the newly constructed City Hall of Makati, the
SUGGESTED ANSWER: City Mayor ordered the collection of P1.00, called
Not all local government units may do so. Only provinces, "elevator tax", every time a person rides any of the
cities, and municipalities within the Metro Manila area (Sec. high-tech elevators in the city hall during the hours of
232, Local Government Code) may impose an ad 8:00 a.m. to 10:00 a.m. and 4:00 p.m. to 6:00 p.m. Is the
valorem tax not exceeding five percent (5%) of the "elevator tax" a valid imposition? Explain. (8%)
assessed value (Sec. 236, Ibid.) of idle or vacant SUGGESTED ANSWER:
No. The imposition of a tax, fee or charge or the
residential lots in a subdivision, duly approved by
proper authorities regardless of area. (Sec.237, Ibid.) generation of revenue under the Local Government Code, shall
be exercised by the SANGUNIAN of the local
government unit concerned through an appropriate
ordinance (Section 132 of the Local Government Code). The city two professions. He has his main office in
mayor alone could not order the collection of the tax; as Makati City and maintains a branch office in Pasig
such, the "elevator tax" is an invalid imposition. City. Mr. Fermin pays his professional tax as a CPA in
Makati City and his professional tax as a lawyer in
Local Taxation: Remission/Condonation of Taxes (2004) Pasig City. (5%)
RC is a law-abiding citizen who pays his real estate taxes a) May Makati City, where he has his main office, require
promptly. Due to a series of typhoons and adverse him to pay his professional tax as a lawyer? Explain.
economic conditions, an ordinance is passed by MM City SUGGESTED ANSWER:
granting a 50% discount for payment of unpaid real estate No. Makati City where Mr. Fermin has his main office
taxes for the preceding year and the condonation of all may not require him to pay his professional tax as a
penalties on fines resulting from the late payment. lawyer. Mr. Fermin has the option of paying his
Arguing that the ordinance rewards delinquent taxpayers professional tax as a lawyer in Pasig City where he
and discriminates against prompt ones, RC demands that he practices law or in Makati City where he maintains his
be refunded an amount equivalent to one-half of the principal office. (Sec. 139[b], Local Government Code)
real taxes he paid. The municipal attorney rendered an
opinion that RC cannot be reimbursed because the b) May Quezon City, where he has his residence and
ordinance did not provide for such reimbursement. RC where he also practices his two professions, go after him
files suit to declare the ordinance void on the ground that it for the payment of his professional tax as a CPA
is a class legislation. Will his suit prosper? Explain your and a lawyer? Explain.
answer briefly. (5%) SUGGESTED ANSWER:
SUGGESTED ANSWER: No, the situs of the professional tax is the city where the
The suit will not prosper. The remission or condonation of professional practices his profession or where
taxes due and payable to the exclusion of taxes already he maintains his principal office in case he practices
collected does not constitute unfair discrimination. Each his profession in several places. The local government
set of taxes is a class by itself and the law would be open to of Quezon City has no right to collect the
attack as class legislation only if all taxpayers belonging to professional tax from Mr. Fermin as the place of
one class were not treated alike (Juan Luna Subdivision, residence of the taxpayer is not the proper situs in the
Inc., v. Sarmiento, 91 Phil. 371 [1952]). collection of the professional tax.
Local Taxation: Rule of Uniformity and Equality (2003) Local Taxation; Special Levy on Idle Lands (2005)
The City of Makati, in order to solve the traffic problem A city outside of Metro Manila plans to enact
in its business districts, decided to impose a tax, to be paid an ordinance that will impose a special levy on idle
by the driver, on all private cars entering the city during lands located in residential subdivisions within its
peak hours from 8:00 a.m. to 9:00 a.m. from Mondays to territorial jurisdiction in addition to the basic real
Fridays, but exempts those cars carrying more than property tax. If the lot owners of a subdivision
two occupants, excluding the driver. Is the ordinance located in the said city seek your legal advice on the
valid? Explain. (8%) matter, what would your advice be? Discuss. (5%)
The ordinance is in violation of the Rule of Uniformity I would advise the lot owners that a city, even if it is
and Equality, which requires that all subjects or objects of outside Metro Manila, may levy an annual tax on idle lands
taxation, similarly situated must be treated alike in equal at the rate not exceeding five percent (5%) of the assessed
footing and must not classify the subjects in an arbitrary value of the property which shall be in addition to the
manner. In the case at bar, the ordinance exempts cars basic real property tax. (Sec. 236, Local Government Code) I
carrying more than two occupants from coverage of the would likewise advise them that the levy may apply to
said ordinance. Furthermore, the ordinance only imposes the residential lots, regardless of land area, in subdivisions
tax on private cars and exempts public vehicles from the duly approved by proper authorities, the ownership of
imposition of the tax, although both contribute to the traffic which has been transferred to individual owners who shall
problem. There exists no substantial standard used in the be liable for the additional tax. (Last par., Sec. 237)
classification by the City of Makati.
The term "Idle Lands" means, land not devoted directly
Another issue is the fact that the tax is imposed on to any crop or to any definite purpose for at least one
the driver of the vehicle and not on the registered owner year prior to the notice of expropriation, except for
of the same. The tax does not only violate the reasons other than force majeure or any fortuitous event,
requirement of uniformity, but the same is also unjust but used to be devoted or is suitable to such crop or is
because it places the burden on someone who has contiguous to land devoted directly to any crop and
no control over the route of the vehicle. The does not include land devoted permanently or
ordinance is, therefore, invalid for violating the rule of regularly to other essential and more productive
uniformity and equality as well as for being unjust. purpose. (Philippine Legal Encyclopedia, by Sibal, 1986 Ed.)
Local Taxation; Situs of Professional Taxes (2005) Finally, I would advise them to construct or place
Mr. Fermin, a resident of Quezon City, is a Certified improvements on their idle lands by making valuable
Public Accountant-Lawyer engaged in the practice of his additions to the property or ameliorations in the land's
conditions so the lands would not be considered as idle.
(Sec. 199[m]) In this manner their properties would not be
73
subject to the ad valorem tax on idle lands.
2. Assuming Joachin is a registered owner, will
Real Property Tax: Underground Gasoline Tanks (2003) your answer be the same? (2.5%)
Under Article 415 of the Civil Code, in order for SUGGESTED ANSWER:
machinery and equipment to be considered real property, Yes. The law requires that a notice of the auction sale
the pieces must be placed by the owner of the land and, in must be properly sent to Joachin and not merely through
addition, must tend to directly meet the needs of the publication (Tan v. Bantegui, G.R. No, 154027, October
industry or works carried on by the owner. Oil companies 24,2005; Estate of Mercedes Jacob v. CA, G.R. No. 120435,
Dec. 22, 1997).
install underground tanks in the gasoline stations located on
land leased by the oil companies from the owners of the Real Property Taxation: Capital Asset vs. Ordinary Asset
land where the gasoline stations [are] located. Are those
(1995)
underground tanks, which were not placed there by the
In 1990, Mr. Naval bought a lot for P1,000,000.00 In a
owner of the land but which were instead placed there by
subdivision with the intention of building his residence on it.
the lessee of the land, considered real property for
In 1994, he abandoned his plan to build his residence on it
purposes of real property taxation under the local
because the surrounding area became a depressed area
Government Code? Explain. (8%)
and land values in the subdivision went down;
SUGGESTED ANSWER:
Yes. The properties are considered as necessary fixtures of instead, he sold it for P800.000.00. At the time of the sale,
the zonal value was P500.000.00.
the gasoline station, without which the gasoline
station would be useless. Machinery and equipment 1) Is the land a capital asset or an ordinary asset? Explain.
installed by the 2) Is there any income tax due on the sale? Explain.
SUGGESTED ANSWERS:
lessee of leased land is not real property for purposes of
1) The land is a capital asset because it is neither for sale
execution of a final judgment only. They are considered as
real property for real property tax purposes as "other in the ordinary course of business nor a property used in
improvements to affixed or attached real property under the the trade or business of the taxpayer. (Sec. 33. NIRC).
Assessment Law and the Real Property Tax Code. 2) Yes, Mr. Naval is liable to the 5% capital gains
(Caltex v. Central Board of Assessment Appeals, 114 SCRA
296 [1982]). tax imposed under Section 21(e) of the Tax Code
based on the gross selling price of P800.000.00 which is
Real Property Tax; Requirements; Auction Sales of an amount higher than the zonal value.
Property for Tax Delinquency (2006)
Quezon City published on January 30, 2006 a list of Real Property Taxation: Capital Gains vs. Ordinary Gains
delinquent real property taxpayers in 2 newspapers of (1998)
general circulation and posted this in the main lobby of What is the difference between capital gains and ordinary
the City Hall. The notice requires all owners of real gains? [3%]
SUGGESTED ANSWER:
properties in the list to pay the real property tax due
CAPITAL GAINS are gains realized from the sale
within 30 days from the date of publication, otherwise the
or exchange of capital assets, while ORDINARY
properties listed shall be sold at public auction.
GAINS refer to gains realized from the sale or
Joachin is one of those named in the list. He purchased a disposition of ordinary assets.
real property in 1996 but failed to register the document of
Real Property Taxation: Coverage of Ordinary Income
sale with the register of Deeds and secure a new real
property tax declaration in his name. He alleged that the (1998)
auction sale of his property is void for lack of due process What does the term "ordinary income" include? [2%]
SUGGESTED ANSWER:
considering that the City Treasurer did not send him The term ordinary income includes any gain from the sale or
personal notice. For his part, the City Treasurer maintains exchange of property which is not a capital asset. These are
that the publication and posting of notice are sufficient the gains derived from the sale or exchange of
compliance with the requirements of the law. property such as stock in trade of the taxpayer or other
1. If you were the judge, how will you resolve property of a kind which would properly be included in
this issue? (2.5%) the inventory of the taxpayer if on hand at the close of the
SUGGESTED ANSWER:
taxable year, or property held by the taxpayer primarily for
I will resolve the issue in favor of Joachin. In auction sales of
sale to customers in the course of his trade or business, or
property for tax delinquency, notice to delinquent
property used in trade or business of a character which is
landowners and to the public in general is an essential and
subject to the allowance for depreciation, or real property
indispensable requirement of law, the non-fulfillment of
used in trade or business of the taxpayer. (Sec. 22 [Z]
which vitiates the same (Tiongco v. Phil. Veterans Bank,
in relation to Sec. 39[A](1), both of the NIRC).
G.R. No. 82782, Aug. 5, 1992). The failure to give notice to
ALTERNATIVE ANSWER:
the right person i.e., the real owner, will render an auction The term ordinary income includes income from
sale void (Tan v. Bantegui, G.R. No, 154027, October 24, performance of services, whether professional or per-
2005; City Treasurer of Q.C. v. CA, G.R. No. 120974, Dec.
22, 1997).
sonal, gains accruing from business, and profit arising
from the sale or exchange of ordinary assets.
Real Property Taxation: Exchange of Lot; Capital hence the value of the land may be deductible
Gain Tax (1997) in full from the gross income of Ace Tobacco
A corporation, engaged in real estate' development, Corporation if in accordance to a National Priority Plan
executed deeds of sale on various subdivided lots. One determined by the National Economic Development
buyer, after going around the subdivision, bought a corner Authority. (Sec. 34{H](2)(a), NIRC). If the utilization is not
lot with a good view of the surrounding terrain. He paid in accordance to a National Priority Plan determined by
P1.2 million, and the title to the property was issued. A the National Economic Development Authority, then Ace
year later, the value of the lot appreciated to a market Tobacco Corporation may deduct the value of the land
value of P1.6 million, and the buyer decided to build his donated only to the extent of five (5%) percent of its
house thereon. Upon inspection, however, he discovered taxable income derived from trade or business as
that a huge tower antennae had been erected on the lot computed without the benefit of the donation. (Sec.
frontage totally blocking his view. When he complained, 34[H](2)(a) in relation to Sec. 34[H](1), NIRC).
the realty company exchanged his lot with another corner lot
with an equal area but affording a better view. Is the buyer The Municipality of Pateros is not subject to any donor's
liable for capital gains tax on the exchange of the lots? tax on the value of land it subsequently donated, it being
exempt from taxes as a political subdivision of
SUGGESTED ANSWER: the National Government.
Yes, the buyer is subject to capital gains tax on the
exchange of lots on the basis of prevailing fair The occupants/beneficiaries are subject to real
market value of the property transferred at the time property taxes because they now own the land.
of the exchange or the fair market value of the property
received, whichever is higher (Section 21(e), NIRC). ALTERNATIVE ANSWER on Taxability of Municipality and
Real property transactions subject to capital gains tax are Awardees:
not limited to sales but also exchanges of property unless The awarding by the Municipal Government of lots to
exempted by a specific provision of law. specific awardees or donees is likewise exempt from the
ALTERNATIVE ANSWER: donor's tax because it is only an implementation of the
No. The exchange is not subject to capital gains tax purpose for which the property was given by Ace
because it is merely done to comply with the intentions of Tobacco Corporation. The purpose of the first donation is
the parties to the previous contract regarding the sale and to devote the land as a relocation site for the less
acquisition of a property with a good view. This is a fortunate constituents. If later on the Municipality gives
simple substitution of the object of sale and since out Certificates of Award over specific lots occupied by
the previous transaction was already subjected to tax, no the qualified occupants/beneficiaries, this is intended to
new tax should be imposed on the exchange (BIR perpetuate the purpose of the previous donor, the Mu-
Ruling No. 21(e) 053-89 008-95). nicipality acting merely as a conduit and not the true
donor. This is simply a donation by the Municipality in
Real Property Taxation: Exemption/Deductions; form but not in substance.
Donor’s Tax (1998)
Ace Tobacco Corporation bought a parcel of land situated at The receipt by the occupant beneficiaries of their
Pateros and donated it to the Municipal Government of respective lots through the Certificate of Award has
Pateros for the sole purpose of devoting the said land as a no tax implications. They are, however, liable for real
relocation site for the less fortunate constituents of said property taxes.
municipality. In accordance therewith, the Municipal Gov-
ernment of Pateros issued to the occupants/beneficiaries Real Property Taxation: Exemption: Acquiring New
Certificates of Award giving to them the respective areas Principal Residence (2000)
where their houses are erected. Through Ordinance No. 2, Last July 12, 2000, Mr. & Mrs. Peter Camacho sold their
Series of 1998, the said municipal government ordained principal residence situated in Tandang Sora, Quezon City
that the lots awarded to the awardees/donees be finally for Ten Million Pesos (P10,000,000.00) with the intention
transferred and donated to them. Determine the tax of using the proceeds to acquire or construct a new
consequence of the foregoing dispositions with respect to principal residence in Aurora Hills, Baguio City.
Ace Tobacco Corporation, the Municipal Government of What conditions must be met in order that the
Pateros, and the occupants/beneficiaries. [5%] capital gains presumed to have been realized from
SUGGESTED ANSWER: such sale may not be subject to capital gains tax? (5%)
The donation by Ace Tobacco Corporation is SUGGESTED ANSWER:
exempt from the donor's tax because it qualifies as a The conditions are:
gift to or for the use of any political subdivision of 1. The proceeds are fully utilized in acquiring
the National Government (Section 101(2), NIRC). or constructing a new principal residence
The conveyance is likewise exempt from documentary within eighteen (18) calendar months from
stamp tax because it is a transfer without consideration. the sale or disposition of the principal residence
or eighteen (18) months from July 12, 2000.
Since the donation is to be used as a relocation site for the
less fortunate constituents of the municipality. It may be
considered as an undertaking for human settlements,
2. The historical cost or adjusted basis of the real Real Property Taxation: Property Sold is an
property sold or disposed shall be carried over to the Ordinary Asset (1998)
new principal residence built or acquired. An individual taxpayer who owns a ten (10) door apart-
ment with a monthly rental of P10,000 each residential
3. The Commissioner of Internal Revenue must have unit, sold this property to another individual taxpayer. Is the
been informed by Mr. & Mrs. Peter Camacho within seller liable to pay the capital gains tax? [5%]
thirty (30) days from the date of sale or disposition SUGGESTED ANSWER:
on July 12, 2000 through a prescribed return of their No. The seller is not liable to pay the capital gains tax
intention to avail of the tax exemption. because the property sold is an ordinary asset, i.e. real
property used in trade or business. It is apparent that the
4. That the said exemption can only be availed of once taxpayer is engaged in the real estate business, regularly
every ten (10) years. renting out the ten (10) door apartment.
5. If there is no full utilization of the proceeds of sale or Real Property Taxation: Underground Gasoline
disposition, the portion of the gain presumed to have Tanks (2001)
been realized from the sale or disposition shall Under Article 415 of the Civil Code, in order
be subject to capital gains tax [Sec. 24 (D) (2), for machinery and equipment to be considered real
NIRC of 1997] property, they must be placed by the owner of the
land and, in addition, must tend to directly meet the
Real Property Taxation: Fundamental Principles (1997) needs of the industry or works carried on by the owner.
State the fundamental principles underlying real property Oil companies, such as Caltex and Shell, install
taxation in the Philippines. underground tanks in the gasoline stations located on
SUGGESTED ANSWER: land leased by the oil companies from others. Are
The following are the fundamental principles those underground tanks which were not placed there
governing real property taxation: by the owner of the land but which were instead placed
1) Real property shall be appraised at its current there by the lessee of the land, considered real property
and fair market value; for purposes of real property taxation under the Local
2) Real property shall be classified for Government Code? Explain your answer. (5%)
assessment purposes on the basis of its actual use: SUGGESTED ANSWER:
3) Real property shall be assessed on the basis of Yes. The underground tanks although installed by the
a uniform classification within each local lessee, Shell and Caltex, are considered as real property for
government unit; purposes of the imposition of real property taxes. It
4) The appraisal, assessment, levy, and collection is only for purposes of executing a final judgment that
of real property tax shall not be let to any these machinery and equipment, installed by the
private person; and lessee on a leased land, would not be considered as real
5) The appraisal and assessment of real property shall property. But in the imposition of the real
be equitable. property tax, the underground tanks are taxable as
necessary fixtures of the gasoline station without which
Real Property Taxation: Principles & Limitations: LGU the gasoline station would not be operational. ( Caltex
(2000) Phils., Inc v. CBAA, 114 SCRA. 296).
Give at least two (2) fundamental principles governing real
property taxation, which are limitations on the taxing Real Property Taxation; Exempted Properties (2006)
power of local governments insofar as the levying of the What properties are exempt from the real property
realty tax is concerned. (2%) tax? (5%)
Two (2) fundamental principles governing real The following properties are exempt from the
property taxation are: real property tax (Section 234, Local Government Code):
1) The appraisal must be at the current and fair market (1) Real property owned by the REPUBLIC OF
value; and THE PHILIPPINES or any of its political
2) Classification for assessment must be on the basis subdivisions except when the beneficial use
of actual use. (Sec. 198, Local Government Code) thereof has been granted for consideration or
ALTERNATIVE ANSWER: otherwise to a taxable person;
The examinee should be given credit if he chooses the (2) CHARITABLE INSTITUTIONS, churches,
above two (2) or any two (2) of those enumerated below: parsonages or convents appurtenant thereto,
1) Assessment must be on the basis of uniform mosques, non-profit or religious cemeteries, and all
classification; lands, buildings, and improvements actually, directly
2) Appraisal, assessment, levy and collection shall not be and exclusively used for religious, charitable or
let to private persons; and educational purposes;
3) Appraisal and assessment must be equitable. (Sec. 198, (3) All machineries and equipment that are actually,
Local Government Code) directly and exclusively used by LOCAL WATER
UTILITIES and government-owned or controlled
corporations engaged in the supply and distribution
of water and/or generation and transmission payment of the customs duties or with legal
of electric power; permit to withdraw (Viduya vs. Berdiago, 73 SCRA
(4) All real property owned by duly REGISTERED 553).
COOPERATIVES as provided for under R.A. 6938;
and Customs: Jurisdiction; Seizure & Forfeiture
(5) Machinery and equipment used for POLLUTION Proceedings (1996)
CONTROL and On January 1, 1996, armed with warrants of seizure and
ENVIRONMENTAL PROTECTION. detention issued by the Bureau of Customs, members of the
customs enforcement and security services
coordinated with the Quezon City police to search the
TARIFF AND CUSTOMS DUTIES premises owned by a certain Mr. Ho along Kalayaan
Avenue, Quezon City, which allegedly contained untaxed
Customs: “Flexible Tariff Clause” (2001) vehicles and parts. While inside the premises, the member of
What do you understand by the term "flexible tariff the customs enforcement and security services noted
clause" as used in the Tariff and Customs Code? (5%) articles which were not included in the list contained in
SUGGESTED ANSWER: the warrant. Hence, on January 15, 1996, an amended
The term "flexible tariff clause "refers to the authority warrant and seizure was issued.
given to the President to adjust tariff rates under Section 401
On January 25, 1996, the customs personnel started
of the Tariff and Customs Code, which is the
hauling the articles pursuant to the amended warrant. This
enabling law that made effective the delegation of the
prompted Mr. Ho to file a case for injunction
taxing power to the President under the Constitution.
and damages with a prayer for a restraining order before
[Note: It is suggested that if the examinee cites the entire
the Regional Trial Court of Quezon City against the
provision of Sec. 401 of the Tariff &, Customs Code, he
Bureau of Customs on January 27, 1996. On the same date,
should also be given full credit.]
the Trial Court issued a temporary restraining order.
Customs: Administrative vs. Judicial Remedies (1997)
A motion to dismiss was filed by the Bureau of Customs
The Tariff and Customs Code allows the Bureau of
Customs to resort to the administrative remedy of seizure,
on the ground that the Regional Trial Court has no juris-
such as by enforcing the tax lien on the imported article, and
diction over the subject matter of the complaint claiming
to the judicial remedy of filing an action in court. that it was the Bureau of Customs that has exclusive
When does the Bureau of Customs normally avail itself; jurisdiction over it. Decide.
SUGGESTED ANSWER:
(a) of the administrative, instead of the judicial remedy, The motion to dismiss should be granted. Seizure and
or forfeiture proceedings are within the exclusive jurisdiction of
(b) of the latter, instead of the former, remedy? the Collector of Customs to the exclusion of regular
SUGGESTED ANSWER:
Courts. Regional Trial Courts are devoid of competence
(a) The Bureau of Customs normally avails itself of the
to pass upon the validity or regularity of seizure and
ADMINISTRATIVE REMEDY of seizure, such as
forfeiture proceedings conducted by the Bureau of
by enforcing the tax lien on the imported articles, instead
Customs and to enjoin or otherwise interfere with these
of the judicial remedy when the goods to which the tax
proceedings (Republic vs. CFI of Manila [Branch
lien attaches, regardless of ownership, is still in the
custody or control of the Government. In the case,
XXII], G.R. No. 43747, September 2, 1992; Jao vs.
however, of importations which are prohibited or CA, G.R. No. 104604, October 6, 1995).
undeclared, the remedy of seizure and forfeiture may still Customs: Kinds of Custom Duties (1995)
be exercised by the Bureau of Customs even if the goods
Under the Tariff and Customs Code, what are
are no longer in its custody.
a) dumping duties
(b) On the other hand, when the goods are properly b) countervailing duties
released and thus beyond the reach of tax lien, the govern- c) marking duties
ment can seek payment of the tax liability through judicial d) discriminatory duties?
action since the tax liability of the importer constitutes a SUGGESTED ANSWER:
personal debt to the government, therefore, enforceable 6) Dumping duties are special duties imposed by the
by action. In this case judicial remedy is normally availed of Secretary of Finance upon recommendation of the
instead of the administrative remedy. Tariff Commission when it is found that the price of
the imported articles is deliberately or continually
Customs: Importation (1995)
fixed at less than the fair market value or cost of
When does importation begin and when does it end?
SUGGESTED ANSWER:
production, and the importation would cause or
IMPORTATION begins from the time the carrying vessel likely cause an injury to local industries engaged in
or aircraft enters Philippine territorial jurisdiction with the the manufacture or production of the same or
intention to unload therein and ends at the time the goods similar articles or prevent their establishment.
are released or withdrawn from the customhouse upon
7) Countervailing duties are special duties imposed SUGGESTED ANSWER:
by the Secretary of Finance upon prior investigation During the pendency of seizure proceedings the importer
and report of the Tariff Commission to offset an may secure the release of the imported property for
excise or inland revenue tax upon articles of the legitimate use by posting a bond in an amount to be fixed
same class manufactured at home or subsidies to by the Collector, conditioned for the payment of the
foreign producers or manufacturers by their appraised value of the article and/or any fine,
respective governments. expenses and costs which may be adjudged in the case;
provided, that articles the importation of which is prohibited by
8) Marking duties are special duties equivalent to 5% law shall not be released under bond.
ad valorem imposed on articles not properly
marked. These are collected by the Commissioner of The importer may also offer to pay to the collector a fine
Customs except when the improperly marked imposed by him upon the property to secure its release or
articles are exported or destroyed under customs in case of forfeiture, the importer shall offer to pay for the
supervision and prior to final liquidation of the domestic market value of the seized article, which
corresponding entry. These duties are designed offer subject to the approval of the Commissioner
to prevent possible deception of the customers. may be accepted by the Collector in settlement of the
seizure case, except when there is fraud. Upon payment
9) Discriminatory duties are special duties of the fine or domestic market value, the property
collected in an amount not exceeding 100% ad shall be forthwith released and all liabilities which may
valorem, imposed by the President of the or might attach to the property by virtue of the offense
Philippines against goods of a foreign country which was the occasion of the seizure and all liability
which discriminates against Philippine which might have been incurred under any bond given
commerce or against goods coming from the by the importer in respect to such property shall
Philippines and shipped to a foreign country. thereupon be deemed to be discharged.
Customs: Kinds of Custom Duties (1997) Customs: Returning Residents: Tourist/Travelers (2003)
Explain briefly each of the special customs duties X and his wife, Y, Filipinos living in the Philippines, went
authorized under the Tariff and Customs Code. on a three-month pleasure trip around the world
SUGGESTED ANSWER: during the months of June, July and August 2002. In the
The following are the Special Duties imposed under the course of their trip, they accumulated some personal
Tariff and Customs Code: effects which were necessary, appropriate and
(a) Dumping Duty - This is a duty levied on imported normally used in leisure trips, as well as souvenirs
goods where it appears that a specific kind or class of in non-commercial quantities. Are they "returning
foreign article is being imported into or sold or residents" for purposes of Section 105 of the Tariff
is likely to be sold in the Philippines at a price less and Customs Code? Explain. (8%)
than its fair value; SUGGESTED ANSWER:
No. The term "returning residents" refers to nationals
(b) Countervailing Duty - This is a duty equal to the who have stayed in a foreign country for a period of
ascertained or estimated amount of the subsidy or at least six (6) months. (Section 105(f) of the Tariff and Customs
bounty or subvention granted by the foreign country Code). Due to their limited duration of stay abroad X and Y
on the production, manufacture, or exportation into are not considered as "returning residents" but they are
the Philippines of any article likely to injure an merely considered as travelers or tourists who enjoy the
industry in the Philippines or retard or considerable benefit of conditionally free importation.
retard the establishment of such industry; [Note: Credit must likewise be given if the candidate answered
in the affirmative, considering that travelers or tourists are given
(c) Marking Duty - This is a duty on an ad valorem the same tax treatment as that of returning residents,
treating their personal effects, not in commercial
basis imposed for improperly marked articles. The
quantities, as conditionally free importation.]
law requires that foreign importations must be
marked in any official language of the Philippines the Customs: Seizure & Forfeiture: Effects (1994)
name of the country of origin of the article; In smuggling a shipment of garlic, the smugglers used an
eight-wheeler truck which they hired for the purpose
(d) Discriminatory or Retaliatory Duty - This is a duty
of taking out the shipment from the customs zone.
imposed on imported goods whenever it is found as Danny, the truck owner, did not have a certificate of
a fact that the country of origin discriminates against public convenience to operate his trucking business.
the commerce of the Philippines in such a manner as Danny did not know that the shipment of garlic
to place the commerce of the Philippines at was illegally imported.
a disadvantage compared with the commerce of Can the Collector of Customs of the port seize and forfeit
any foreign country. the truck as an instrument in the smuggling?
SUGGESTED ANSWER:
Customs: Remedies of an Importer (1996) Yes, the Collector of Customs of the port can seize and
Discuss briefly the remedies of an importer during forfeit the truck as an instrument in the smuggling activity,
the pendency of seizure proceedings. since the same was used unlawfully in the importation of
smuggled articles. The mere carrying of such articles similar goods (Sec. 201[C]); Deductive value
on board the truck (in commercial quantities) shall (Sec. II.E.1, CA.O. No. 4-2004); Computed value
subject the truck to forfeiture, since it was not being (Sec., II.F.l, C.A.O. No. 1-20040) and Fallback value.
used as a duly authorized common carrier, which was (Sec. 201[F])
chartered or leased as such. (Sec. 2530 [a], TCC) ALTERNATIVE ANSWER:
The basis of dutiable value of an imported article subject
Moreover, although forfeiture of the vehicle will not be to an ad valorem tax under the Tariff and Customs Code
effected if it is established that the owner thereof had no is its transaction value, which shall be the price
knowledge of or participation in the unlawful act, there actually paid or payable for the goods when sold for
arises a prima facie presumption or knowledge or export to the Philippines, adjusted by adding certain
participation if the owner is not in the business for which cost elements to the extent that they are incurred by the
the conveyance is generally used. Thus, not having a buyer but are not included in the price actually paid
certificate of public convenience to operate a trucking or payable for the imported goods. (Sec. 201[A],
business, he is legally deemed not to have been engaged in Tariff and Customs Code, as amended by R.A. 9135)
the trucking business. (Sec. 2531, Tariff and Customs Code)
If such value could not be determined, then the following
Customs: Steps involving Protest Cases (1994) values are to be utilized in their sequence: Transaction
The Collector of Customs instituted seizure proceedings value of identical goods (Sec. 201[B]); Transaction value
against a shipment of motor vehicles for having been of similar goods (Sec. 201[C]); Deductive value (Sec.
misdeclared as second-hand vehicles. State the procedure for II.E.1, CA.O. No. 4-2004); Computed value (Sec. II.F.l,
the review of the decision up to the Supreme Court of the C.A.O. No. 1-20040) and Fallback value. (Sec. 201[F])
Collector of Customs adverse to the importer.
SUGGESTED ANSWER: Customs; Countervailing Duty vs. Dumping Duty (2005)
The procedure in seizure cases may be summarized Distinguish countervailing duty from dumping duty. (5%)
as follows: SUGGESTED ANSWER:
(a) The collector issues a warrant for the detention The distinctions between countervailing duty
or forfeiture of the imported articles; (Sec. 2301, and dumping duty are the following:
Tariff and Customs Code) (1) Basis: The countervailing duty is imposed whenever
(b) The Collector gives the importer a written notice of there is granted upon the imported article by the country
the seizure and fixes a hearing date to give the of origin a specific subsidy upon its production,
importer an opportunity to be heard; (Sec. 2303, manufacture or exportation and this results or
TCC) threatens injury to local industry while the basis for the
(c) A formal hearing is conducted; (Sec. 2312, TCC) imposition of dumping duty is the importation and sale
(d) The Collector renders a declaration of forfeiture; of imported items at below their normal value
(Sec. 2312, TCC) causing or likely to cause injury to local industry.
(e) The Importer aggrieved by the action of the (2) Amount: The countervailing duty imposed
Collector in any case of seizure may appeal to is equivalent to the value of the specific subsidy
the Commissioner for his review within fifteen (15) while the dumping duty is equivalent to the margin
days from written notice of the Collector's decision; of dumping which is equal to the difference between the
(Sec. 2313, TCC) export price to the Philippines and the normal value of
(f) The importer aggrieved by the action or ruling of the the imported article.
Commissioner in any case of seizure may appeal
to the Court of Tax Appeals; (Sec. 2402, TCC) Customs; Taxability; Personal Effects (2005)
(g) The importer adversely affected by the decision of Jacob, after serving a 5-year tour of duty as military
the Court of Tax Appeals (Division) may appeal to attache in Jakarta, returned to the Philippines
the Court of Tax Appeals (en banc) within fifteen bringing with him his personal effects including a
(15) days which may be extended for another fifteen personal computer and a car. Would Jacob be liable
(15) days or such period as the Court of Tax Appeals for taxes on these items? Discuss fully. (5%)
SUGGESTED ANSWER:
may decide.
No, Jacob is not liable for taxes on his personal computer
Customs; Basis of Dutiable Value; Imported Article (2005) and the car because he is tax-exempt by law. He has met
State and explain the basis of dutiable value of the following requirements for exemption under P.D. No.
an imported article subject to an ad valorem tax 922 (1976):
under the Tariff and Customs Code. a) He was a military attache assigned to Jakarta;
ALTERNATIVE ANSWER: b) He has served abroad for not less than two (2) years;
The basis of dutiable value of an imported article subject to c) He is returning to the Philippines after serving his
an ad valorem tax under the Tariff and Customs Code is its tour of duty; and
TRANSACTION VALUE. (Sec. 201[A], Tariff and d) He has not availed of the tax exemption for the past
Customs Code, as amended by R.A. No. 9135) If such value four (4) years.
could not be determined, then the following values are to be
utilized in their sequence: Transaction value of He is entitled to tax exemption on his personal and
identical goods (Sec. 201[B]); Transaction value of household effects including a car; provided,
sirdondee@gmail.com 73 of 73
Answers to the BAR: Taxation 1994-2006 (Arranged by Topics) c) Where the taxpayer has signed a waiver
a) The car must have been ordered or purchased prior authorizing the Commissioner or his duly
to the receipt by the Philippine mission or consulate authorized representatives to Inquire into the bank
in Jakarta of Jacob's recall order; deposits.
b) the car is registered in Jacob's name;
c) the exemption shall apply to the value of the car; BIR: Secrecy of Bank Deposit Law (2003)
d) the exemption shall apply to the aggregate value X dies in year 2000 leaving a bank deposit of
of his personal and household effects (including P2,000,000.00 under joint account with his associates in a
the personal computer) not exceeding thirty per law office. Learning of X's death from the newspapers,
centum (30%) of the total amount received by Jacob the Commissioner of Internal Revenue wrote to every
as salary and allowances during his assignment in bank in the country asking them to disclose to him the
Jakarta, but not to exceed four (4) years; amount of deposits that might be outstanding in his name or
e) Jacob must not have availed of the exemption more jointly with others at the date of his death. May the
oftener than one every four years. (Last par., Sec. 105, bank holding the deposit refuse to comply on the ground of
Tariff and Customs Code) the Secrecy of Bank Deposit Law? Explain. (8%)
SUGGESTED ANSWER:
No. The Commissioner of Internal Revenue has the
OTHER RELATED MATTERS authority to inquire into bank deposit accounts of a
BIR: Bank Deposits Secrecy Violation (2000) decedent to determine his gross estate
A taxpayer is suspected not to have declared his notwithstanding the provisions of the Bank Secrecy Law.
correct gross income in his return filed for 1997. Hence, the banks holding the deposits in question
The examiner requested the Commissioner to may not refuse to disclose the amount of deposits on
authorize him to inquire into the bank deposits of the ground of secrecy of bank deposits. (Section 6(F)
the taxpayer so that he could proceed with the net of the 1997 Tax Code). The fact that the deposit is
worth method of investigation to establish fraud. May a joint account will not preclude the Commissioner
the examiner be allowed to look into the taxpayer's bank from inquiring thereon because the law mandates that
deposits? In what cases may the Commissioner or his if a bank has knowledge of the death of a person, who
duly authorized representative be allowed to inquire maintained a bank deposit account alone, or jointly
or look into the bank deposits of a taxpayer? (5%) with another, it shall not allow any withdrawal from
SUGGESTED ANSWER:
the said deposit account, unless the Commissioner has
No. as this would be violative of Republic Act No. 1405, certified that the taxes imposed thereon have been
the Bank Deposits Secrecy Law.
paid. (Section 97 of the 1997 Tax Code). Hence, to be
The Commissioner of Internal Revenue or his able to give the required certification, the inclusion of the
duly authorized representative may be allowed to deposit is imperative, which may be made possible only
inquire or look into the bank deposits of a taxpayer in through the inquiry made by the Commissioner.
the following cases:
a) For the purpose of determining the gross estate of a
decedent;
b) Where the taxpayer has filed an application for
compromise of his tax liability by reason of financial
incapacity to pay such tax liability. (Sec. 6 (F), NIRC
of 1997]

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CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)

First Edition - Edited and Arranged by:

Latest Edition – Edited and Arranged by:

From the ANSWERS TO BAR EXAMINATION QUESTIONS

copied and distributed, nevertheless, PERMISSION TO COPY from the editors is

ADVISABLE to protect the interest of the ORIGINAL SOURCES/REFERENCES of this

rewarded by God in heaven. It is also very good karma.

typographical errors in this work.

cannot have the force of official precedents. It is as if the

Torts; Prescriptive Period (2004) Inter-Country Adoption; Formalities (2005)

c) What properties may be held answerable for SUGGESTED ANSWER:

Intestate Succession (1992) W, the widow is limited to the legitime of P20.000.00

Intestate Succession (1998) Intestate Succession (1999)

Such detriment or prejudice cannot be shown by Armando.

Donations; Conditions; Revocation (1991)

B. The donation is onerous, And being onerous, what

Donations; Effect; illegal & immoral conditions (1997)

Donations con causa onerosa is governed by law on

Easements; Classification (1998) Easements; Right of Way (2000)

SUGGESTED ANSWER: Notice of Lis Pendens (1995)

January 22, 1996) TRUST

SUGGESTED ANSWER: Transfer of Ownership; Non-Payment of the Price (1991)

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From the ANSWERS TO BAR EXAMINATION QUESTIONS IN

Version 1994-2006 Updated by Dondee

Version 1994-2006 Updated by Dondee

JUSTIFYING & EXEMPTING CIRCUMSTANCES 19

PERSONS CRIMINALLY LIABLE FOR FELONIES 25

EXTINCTION OF CRIMINAL LIABILITY 38

CRIMES AGAINST NATIONAL SECURITY AND THE LAW OF NATIONS 42

CRIMES AGAINST THE FUNDAMENTAL LAW OF THE STATE 43

CRIMES AGAINST PUBLIC ORDER 43

CRIMES AGAINST PUBLIC INTEREST 47

CRIMES COMMITTED BY PUBLIC OFFICERS 49

CRIMES AGAINST PERSONS 53

CRIMES AGAINST PERSONAL LIBERTY AND SECURITY 60

CRIMES AGAINST PROPERTY 64

CRIMES AGAINST CHASTITY 74

CRIMES AGAINST THE CIVIL STATUS OF PERSONS 75

CRIMES AGAINST HONOR 76

SPECIAL PENAL LAWS 79

Version 1994-2006 Updated by Dondee

Version 1994-2006 Updated by Dondee

Version 1994-2006 Updated by Dondee

Version 1994-2006 Updated by Dondee