Wednesday, October 22, 2014

Q&A on the Enhanced Defense Cooperation Agreement | Official Gazette of the Republic of the Philippines

See - Q&A on the Enhanced Defense Cooperation Agreement | Official Gazette of the Republic of the Philippines

Click the link above:

Q & A on "EDCA".


VFA; visiting forces agreement - -

See -

Criminal jurisdiction;

Agreement Between the Government of the United States of America

and the Government of the Republic of the Philippines

Regarding the Treatment of United States Armed Forces

Visiting the Philippines

"x x x.

Article V

Criminal Jurisdiction

1. Subject to the provisions of this article:

(a) Philippine authorities shall have jurisdiction over United States

personnel with respect to offenses committed within the Philippines

and punishable under the law of the Philippines.

(b) United States military authorities shall have the right to exercise

within the Philippines all criminal and disciplinary jurisdiction

conferred on them by the military law of the United States over United

States personnel in the Philippines.

2. (a) Philippine authorities exercise exclusive jurisdiction over United

States personnel with respect to offenses, including offenses relating to

the security of the Philippines, punishable under the laws of the

Philippines, but not under the laws of the United States.

(b) United States authorities exercise exclusive jurisdiction over

United States personnel with respect to offenses, including offenses

relating to the security of the United States, punishable under the laws

of the United States, but not under the laws of the Philippines.

(c) For the purposes of this paragraph and paragraph 3 of this article,

an offense relating to security means:

(1) treason;

(2) sabotage, espionage or violation of any law relating to

national defense.

3. In cases where the right to exercise jurisdiction is concurrent, the

following rules shall apply:

(a) Philippine authorities shall have the primary right to exercise

jurisdiction over all offenses committed by United States personnel,

except in cases provided for in paragraphs 1 (b), 2 (b), and 3 (b) of this


(b) United States military authorities shall have the primary right to

exercise jurisdiction over United States personnel subject to the

military law of the United States in relation to:

(1) offenses solely against the property or security of the United States

or offenses solely against the property or person of United States

personnel; and

(2) offenses arising out of any act or omission done in performance of

official duty.

(c) The authorities of either government may request the authorities of

the other government to waive their primary right to exercise

jurisdiction in a particular case.

(d) Recognizing the responsibility of the United States military

authorities to maintain good order and discipline among their forces,

Philippine authorities will, upon request by the United States, waive

their primary right to exercise jurisdiction except in cases of particular

importance to the Philippines. If the Government of the Philippines

determines that the case is of particular importance, it shall

communicate such determination to the United States authorities within

twenty (20) days after the Philippine authorities receive the United

States request.

(e) When the United States military commander determines that an

offense charged by authorities of the Philippines against United States

personnel arises out of an act or omission done in the performance of

official duty, the commander will issue a certificate setting forth such

determination. This certificate will be transmitted to the appropriate

authorities of the Philippines and will constitute sufficient proof of

performance of official duty for the purposes of paragraph 3(b)(2) of

this article. In those cases where the Government of the Philippines

believes the circumstances of the case require a review of the duty

certificate, United States military authorities and Philippine authorities

shall consult immediately. Philippine authorities at the highest levels

may also present any information bearing on its validity. United States

military authorities shall take full account of the Philippine position.

Where appropriate, United States military authorities will take

disciplinary or other action against offenders in official duty cases, and

notify the Government of the Philippines of the actions taken.

(f) If the government having the primary right does not exercise

jurisdiction, it shall notify the authorities of the other government as

soon as possible.

(g) The authorities of the Philippines and the United States shall notify

each other of the disposition of all cases in which both the authorities of

the Philippines and the United States have the right to exercise


4. Within the scope of their legal competence, the authorities of the

Philippines and the United States shall assist each other in the arrest of

United States personnel in the Philippines and in handing them over to

authorities who are to exercise jurisdiction in accordance with the

provisions of this article.

5. United States military authorities shall promptly notify Philippine

authorities of the arrest or detention of United States personnel who are

subject to Philippine primary or exclusive jurisdiction. Philippine

authorities shall promptly notify United States military authorities of

the arrest or detention of any United States personnel.

6. The custody of any United States personnel over whom the

Philippines is to exercise jurisdiction shall immediately reside with

United States military authorities, if they so request, from the

commission of the offense until completion of all judicial proceedings.

United States military authorities shall, upon formal notification by the

Philippine authorities and without delay, make such personnel available

to those authorities in time for any investigative or judicial proceedings

relating to the offense with which the person has been charged. In

extraordinary cases, the Philippine Government shall present its

position to the United States Government regarding custody, which the

United States Government shall take into full account. In the event

Philippine judicial proceedings are not completed within one year, the

United States shall be relieved of any obligations under this paragraph.

The one year period will not include the time necessary to appeal.

Also, the one year period will not include any time during which

scheduled trial procedures are delayed because United States

authorities, after timely notification by Philippine authorities to arrange

for the presence of the accused, fail to do so.

7. Within the scope of their legal authority, United States and

Philippine authorities shall assist each other in the carrying out of all

necessary investigations into offenses and shall cooperate in providing

for the attendance of witnesses and in the collection and production of

evidence, including seizure and, in proper cases, the delivery of objects

connected with an offense.

8. When United States personnel have been tried in accordance with

the provisions of this article and have been acquitted or have been

convicted and are serving, or have served their sentence, or have had

their sentence remitted or suspended, or have been pardoned, they may

not be tried again for the same offense in the Philippines. Nothing in

this paragraph, however, shall prevent United States military authorities

from trying United States personnel for any violation of rules of

discipline arising from the act or omission which constituted an offense

for which they were tried by Philippine authorities.

9. When United States personnel are detained, taken into custody, or

prosecuted by Philippine authorities, they shall be accorded all

procedural safeguards established by the law of the Philippines. At the

minimum, United States personnel shall be entitled:

(a) To a prompt and speedy trial;

(b) To be informed in advance of trial of the specific charge or

charges made against them and to have reasonable time to prepare a


(c) To be confronted with witnesses against them and to cross examine

such witnesses;

(d) To present evidence in their defense and to have compulsory

process for obtaining witnesses;

(e) To have free and assisted legal representation of their own choice

on the same basis as nationals of the Philippines;

(f) To have the services of a competent interpreter;

(g) To communicate promptly with and to be visited regularly by

United States authorities, and to have such authorities present at all

judicial proceedings. These proceedings shall be public unless the

court, in accordance with Philippine law, excludes persons who have no

role in the proceedings.

10. The confinement or detention by Philippine authorities of United

States personnel shall be carried out in facilities agreed on by

appropriate Philippine and United States authorities. United States

personnel serving sentences in the Philippines shall have the right to

visits and material assistance.

11. United States personnel shall be subject to trial only in Philippine

courts of ordinary jurisdiction, and shall not be subject to the

jurisdiction of Philippine military or religious courts.

x x x."

Social Media, Judges, and Lawyers — Lawyerist

See  -  Social Media, Judges, and Lawyers — Lawyerist

"x x x.

Judges have their own code of ethics beyond those applicable to all lawyers, the Model Code of Judicial Conduct (“MCJC”) (and its state-specific variations). So social media issues involving judges go beyond the rules applicable to lawyers and involve another set of rules. The MCJC does not address social media, but some states have started to make rules directly impacting the interaction between judges and lawyers in social media.
  • Florida has specifically barred judges and lawyers from being connected on LinkedIn and Facebook. Florida Supreme Court Judicial Ethics Advisory Comm.,Op. 2012-12 (2012) and Florida Supreme Court Judicial Ethics Advisory Comm.,Op. 2009-20 (2009).
  • Massachusetts and Oklahoma have similar rules.
  • California has said that judges may participate in social networks and connect to lawyers under limited circumstances, but such online connections will need to be disclosed if the attorney appears before the judge and the judge will need to unfriend the lawyer if he has a case pending before the judge.
  • Kentucky, Maryland, Ohio and South Carolina allow judges to be on social media with certain qualifications.
  • New York seems to be most deferential to judges, saying that they may be on social media so long as the judge “otherwise complies with the Rules Governing Judicial Conduct” and exercises “an appropriate degree of discretion” in using the network and stays abreast of how the features of the social network may change and impact the judge’s duties.
  • x x x."

Supreme Court: Dismissal of Sandigan Justice Ong final | Headlines, News, The Philippine Star |

See - Supreme Court: Dismissal of Sandigan Justice Ong final | Headlines, News, The Philippine Star |

"x x x.

MANILA, Philippines — The Supreme Court on Tuesday affirmed its decision to dismiss Sandiganbayan Associate Justice Gregory Ong in rejecting the magistrate's appeal.
"The Court denied respondent's Oct. 13, 2014 Motion for Reconsideration for lack of merit," SC spokesperson Theodore Te said in a press conference cited by a state news report.
In a September 23 decision, the high court found Ong guilty of "gross misconduct, dishonesty and impropriety" in connection with the anti-graft court magistrate's decision to acquit alleged pork barrel scam mastermind Janet Lim Napoles from anomalies in the government purchase of 500 Kevlar helmets in 2010.
In his motion, Ong argued that dismissing the case against Napoles was not his personal call, but a move by a collegial body.
Besides putting an end to Ong's decades-long government service, the Supreme Court also banned him from returning to any government agency or corporation.
The case against Ong stemmed from disclosures by pork barrel scam lead whistleblower Benhur Luy before the Senate Blue Ribbon Committee last year, accusing Ong of being in personal contact with Napoles.
Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1
Napoles is currently detained for plunder in connection with the alleged malversation of billions in legislative Priority Development Assistance Funds through bogus livelihood organizations. - Camille Diola.
x x x."

Speech of President Aquino at the 2014 FOCAP Presidential Forum | Official Gazette of the Republic of the Philippines

See - Speech of President Aquino at the 2014 FOCAP Presidential Forum | Official Gazette of the Republic of the Philippines

SpeechofHis Excellency Benigno S. Aquino IIIPresident of the PhilippinesAt the annual Presidential Forum of the Foreign Correspondents Association of the Philippines
[Delivered at the Marco Polo Hotel, Ortigas on October 22, 2014]
"I always make it a point to partake in this Annual Presidential Forum, not simply because we all acknowledge it as a healthy practice of democracy, but also as tribute to what the Foreign Correspondents Association of the Philippines has stood for since its inception. You came into existence during a time when our people’s right to the truth was under assault. Our country was under martial law, a time when the media was controlled by the government, and simply running stories inconvenient to the dictatorship was a one-way ticket to prison. Deprived of the truth, we knew all the more that the truth would set us free. This is why, knowing the risks, members of your organization chose to jump into the fray: you stood for freedom of the press against an oppressive dictator, and I have nothing but the utmost respect for everyone who was part of that effort.
Back then, media taking an adversarial role to government was a symbol of bravery, social responsibility. It was a badge of honor, and rightfully so. For the past generation, however, despite our country winning back democracy and regaining freedom of the press, I have noticed that some veteran journalists have maintained their jaundiced eyes towards government. This is an understandable effect of Martial Law: that some members of the media continue to believe that criticism is the be all and end all of principled journalism. I propose, however, that this attitude is no longer compatible with our times.
The situation has changed: We no longer live in a country where the media is muzzled, or where the government tries to impose its will on journalists. In fact, we have been in active pursuit of all those who have allegedly committed extralegal killings, including those involving media, and one can already see the effects of our efforts. We have made high-profile arrests, recently, most prominently that of Retired Major General Jovito Palparan for alleged violations of human rights. Furthermore, there has been a significant reduction of recorded or validated extralegal killings, from a total of 168 during the decade my predecessor was in power, to 42 in the four years of our administration. Indeed, one could consider this as progress, but make no mistake: Our administration will not be content until this number reaches zero. As we continue our efforts to bring to justice all those who have resorted to violence or intimidation to skew or hide the truth, my only request is that the media fulfill its obligation of protecting the truth as well. When reporting on different matters, it is my hope that you could perhaps exert more effort in defining the problem and describing the situation accurately: If there was a crime committed, for instance, then we must be clear about the facts, and the motivations of the culprit so that the problem is indeed solved.
Media is part and parcel of society, and it is incumbent upon you to tell the truth, the whole truth, and nothing but the truth. These days, that also means accurately representing the national condition by striking a healthy balance between the positive and the negative. Negativism has driven some members of our media for far too long, and it might one day convince our people that a disproportionate amount of national events are negative; that all is lost and it is foolish to hope. I encourage you to act on this, because just as it is your role to keep government in check, it is also your duty to keep a watchful eye on your ranks, in view of publishing the truest possible accounting of our national life. By all means, criticize; dialogue has, in many cases, helped accelerate our nation’s development. My only suggestion is for you to make room in your reports for hope. After all, it is also one of the tasks of media to inspire our countrymen with uplifting news.
I am sure that, at one point in the education of many of the people present here, we studied two schools of thought when it comes to art: Art for Art’s sake, and Art for Man’s sake. I am firmly in the latter’s camp. Art must not be inaccessible; it must serve a social purpose. Your field is no different; thus, you must constantly ask yourselves how can your work benefit society.
Perhaps the paradigm shift I am proposing can be best characterized by one of the founders of FOCAP, Teddy Benigno. He was a man who fearlessly covered the Martial Law years, and who was a staunch defender of the freedom of the press. But when freedom was restored in our country, he knew that his approach had to evolve. He joined government precisely to reform state media, so that it would never again be in a position to oppress the independent media. When he eventually left government and returned to media, his reputation was unaffected; if anything, it was enhanced. If I may add: He was able to distinguish between the different roles he has taken during his professional life, from his early work as a reporter, which requires scrupulous objectivity, to his later career as a columnist, where he was free to express his opinion. Indeed, to this day, Teddy Benigno continues to be a fine example to all journalists of how, as democracy evolves, media must evolve with it.
These days, there is no shortage of positive, inspiring news in our country. Just to give a few examples, there is the enormous progress we have made in the Mindanao Peace Process, which promises to free our countrymen from the shackles of conflict, and shepherd them towards better futures, not to mention laying the foundations for a more progressive Mindanao. There is the performance of the Philippine economy, which has continued to surprise the international community, and has our country climbing most of the measures of competitiveness the world over. There are the more than four million families who are benefitting from our conditional cash transfer program, being empowered to regain control of their destinies. It does not even have to be about government efforts. Everywhere you look, there are outstanding Filipinos who are deserving of our attention: whether it is 2009 CNN Hero of the Year, Efren Peñaflorida whose continued efforts deserve more coverage, or 2014 Ramon Magsaysay Awardee Randy Halasan, who has dedicated his professional life to educating indigenous communities, and should be hailed as an example to aspiring teachers.
Through the brilliance and compassion of our people, and through our continued reform efforts, our country is teeming with positive stories. Rest assured, the government will do everything in its power to produce even more of these developments to report. My only appeal to media is that you give these stories their time in the sun and, even as you retain a sharp critical eye, that you still look to inspire and encourage our people along the path to progress. This is perhaps a significant part of the responsibility you bear as members of the press today: To wield the truth not only as a check against public officials like myself, but also as a beacon of hope for the millions who rely on you. Without doubt, if we all fulfill our individual roles in the grand task of nation building, then we can all propel this country of ours to heights never before seen; together, we can give rise to a Philippines we can be proud to bequeath to future generations.
Thank you, good day."

Wednesday, October 15, 2014

Bar Examination Questionnaire for Taxation Law - Oct. 12, 2014.

See - Bar Examination Questionnaire for Taxation Law

October 12, 20142:00 P.M.- 6:00 P.M.
x x x.

On March 27, 2012, the Bureau of Internal Revenue (BIR) issued a notice of assessment against Blue Water Industries Inc. (BWI), a domestic corporation, informing the latter of its alleged deficiency corporate income tax for the year 2009. On April 20, 2012, BWI filed a letter protest before the BIR contesting said assessment and demanding that the same be cancelled or set aside.
However, on May 19, 2013, that is, after more than a year from the filing of the letter protest, the BIR informed BWI that the latter’s letter protest was denied on the ground that the assessment had already become final, executory and demandable. The BIR reasoned that its failure to decide the case within 180 days from filing of the letter protest should have prompted BWI to seek recourse before the Court of Tax Appeals (CTA) by filing a petition for review within thirty (30) days after the expiration of the 180-day period as mandated by the provisions of the last paragraph of Section 228 of the National Internal Revenue Code (NIRC). Accordingly, BWI’s failure to file a petition for review before the CTA rendered the assessment final, executory and demandable. Is the contention of the BIR correct? Explain. (5%)
Mr. De Sarapen is a candidate in the upcoming Senatorial elections. Mr. De Almacen, believing in the sincerity and ability of Mr. De Sarapen to introduce much needed reforms in the country, contributed P500,000.00 in cash to the campaign chest of Mr. De Sarapen. In addition, Mr. De Almacen purchased tarpaulins, t-shirts, umbrellas, caps and other campaign materials that he also donated to Mr. De Sarapen for use in his campaign. Is the contribution of cash and campaign materials subject to donor’s tax? (4%)
Dr. Taimtim is an alumnus of the College of Medicine of Universal University (UU), a privately-owned center for learning which grants yearly dividends to its stockholders.
UU has a famous chapel located within the campus where the old folks used to say that anyone who wanted to pass the medical board examinations should offer a dozen roses on all the Sundays of October. This was what Dr. Taimtim did when he was still reviewing for the board examinations. In his case, the folk saying proved to be true because he is now a successful cardiologist. Wanting to give back to the chapel and help defray the costs of its maintenance, Dr. Taimtim donated P50,000.00 to the caretakers of the chapel which was evidenced by an acknowledgment receipt.
In computing his net taxable income, can Dr.Taimtim use his donation to the chapel as an allowable deduction from his gross income under the National Internal Revenue Code (NIRC)? (4%)
Gangwam Corporation (GC) filed its quarterly tax returns for the calendar year 2012 as follows:
First quarter - April 25, 2012
Second quarter - July 23, 2012
Third quarter - October 25, 2012
Fourth quarter - January 27, 2013
On December 22, 2013, GC filed with the Bureau of Internal Revenue (BIR) an administrative claim for refund of its unutilized input Value-Added Tax (VAT) for the calendar year 2012. After several months of inaction by the BIR on its claim for refund, GC decided to elevate its claim directly to the Court of Tax Appeals (CTA) on April 22, 2014.
In due time, the CTA denied the tax refund relative to the input VAT of GC for the first quarter of 2012, reasoning that the claim was filed beyond the two-year period prescribed under Section 112(A) of the National Internal Revenue Code (NIRC).
(A) Is the CTA correct? (3%)
(B) Assuming that GC filed its claim before the CTA on February 22, 2014, would your answer be the same? (3%)
The City of Liwliwa assessed local business taxes against Talin Company. Claiming that there is double taxation, Talin Company filed a Complaint for Refund or Recovery of Illegally and/or Erroneously-collected Local Business Tax; Prohibition with Prayer to Issue Temporary Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC). The RTC denied the application for a Writ of Preliminary Injunction. Since its motion for reconsideration was denied, Talin Company filed a special civil action for certiorari with the Court of Appeals (CA). The government lawyer representing the City of Liwliwa prayed for the dismissal of the petition on the ground that the same should have been filed with the Court of Tax Appeals (CTA). Talin Company, through its lawyer, Atty. Frank, countered that the CTA cannot entertain a petition for certiorari since it is not one of its powers and authorities under existing laws and rules.
Decide. (5%)
Choose the correct answer. Smuggling - (1%)
(A) does not extend to the entry of imported or exported articles by means of any false or fraudulent invoice, statement or practices; the entry of goods at less than the true weight or measure; or the filing of any false or fraudulent entry for the payment of drawback or refund of duties.
(B) is limited to the import of contraband or highly dutiable cargo beyond the reach of customs authorities.
(C) is committed by any person who shall fraudulently import or bring into the Philippines, or assist in so doing, any article, contrary to law, or shall receive, conceal, buy, sell or any manner facilitate the transportation, concealment or sale of such article after importation, knowing the same to have been imported contrary to law.
In accordance with the Local Government Code (LGC), the Sangguniang Panglungsod (SP) of Baguio City enacted Tax Ordinance No. 19, Series of 2014, imposing a P50.00 tax on all the tourists and travellers going to Baguio City. In imposing the local tax, the SP reasoned that the tax collected will be used to maintain the cleanliness of Baguio City and for the beautification of its tourist attractions. (D) is punishable by administrative penalty only.
Claiming the tax to be unjust, Baguio Travellers Association (BTA), an association of travel agencies in Baguio City, filed a petition for declaratory relief before the Regional Trial Court (RTC) because BTA was apprehensive that tourists might cancel their bookings with BTA’s member agencies. BTA also prayed for the issuance of a Temporary Restraining Order (TRO) to enjoin Baguio City from enforcing the local tax on their customers and on all tourists going to Baguio City.
The RTC issued a TRO enjoining Baguio City from imposing the local tax. Aggrieved, Baguio City filed a petition for certiorari before the Supreme Court (SC) seeking to set aside the TRO issued by the RTC on the ground that collection of taxes cannot be enjoined. Will the petition prosper? (5%)
Masarap Kumain, Inc. (MKI) is a Value-Added Tax (VAT)-registered company which has been engaged in the catering business for the past 10 years. It has invested a substantial portion of its capital on flat wares, table linens, plates, chairs, catering equipment, and delivery vans. MKI sold its first delivery van, already 10 years old and idle, to Magpapala Gravel and Sand Corp. (MGSC), a corporation engaged in the business of buying and selling gravel and sand. The selling price of the delivery van was way below its acquisition cost. Is the sale of the delivery van by MKI to MGSC subject to VAT? (4%)
Mr. Gipit borrowed from Mr. Maunawain P100,000.00, payable in five (5) equal monthly installments. Before the first installment became due, Mr. Gipit rendered general cleaning services in the entire office building of Mr. Maunawain, and as compensation therefor, Mr. Maunawain cancelled the indebtedness of Mr. Gipit up to the amount of P75,000.00. Mr. Gipit claims that the cancellation of his indebtedness cannot be considered as gain on his part which must be subject to income tax, because according to him, he did not actually receive payment from Mr. Maunawain for the general cleaning services. Is Mr. Gipit correct? Explain. (4%)
Which of the following is an exclusion from gross income? (1%)
(A) Salaries and wages
(B) Cash dividends
(C) Liquidating dividends after dissolution of a corporation
(D) De minimis benefits
(E) Embezzled money
Triple Star, a domestic corporation, entered into a Management Service Contract with Single Star, a non-resident foreign corporation with no property in the Philippines. Under the contract, Single Star shall provide managerial services for Triple Star’s Hongkong branch. All said services shall be performed in Hongkong.
Is the compensation for the services of Single Star taxable as income from sources within the Philippines? Explain. (4%)
Which of the following should not be claimed as deductions from gross income? (1%)
(A) discounts given to senior citizens on certain goods and services.
(B) advertising expense to maintain some form of goodwill for the taxpayer’s business.
(C) salaries and bonuses paid to employees.
(D) interest payment on loans for the purchase of machinery and equipment used in business.
Hopeful Corporation obtained a loan from Generous Bank and executed a mortgage on its real property to secure the loan. When Hopeful Corporation failed to pay the loan, Generous Bank extrajudicially foreclosed the mortgage on the property and acquired the same as the highest bidder. A month after the foreclosure, Hopeful Corporation exercised its right of redemption and was able to redeem the property. Is Generous Bank liable to pay capital gains tax as a result of the foreclosure sale? Explain. (4%)
Mr. X, a Filipino residing in Alabama, U.S.A., died on January 2, 2013 after undergoing a major heart surgery. He left behind to his wife and two (2) kids several properties, to wit: (4%)
(1) Family home in Makati City;
(2) Condominium unit in Las Piñas City;
(3) Proceeds of health insurance from Take Care, a health maintenance organization in the Philippines; and
(4) Land in Alabama, U.S.A.
The following expenses were paid:
(1) Funeral expenses;
(2) Medical expenses; and
(3) Judicial expenses in the testate proceedings.
(A) What are the items that must be considered as part of the gross estate income of Mr. X?
(B) What are the items that may be considered as deductions from the gross estate?
When is a pre-assessment notice required under the following cases? (1%)
(A) When the finding for any deficiency tax is the result of mathematical error in the computation of the tax as appearing on the face of the return.
(B) When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent.
(C) When the excise tax due on excisable articles has been paid.
(D) When an article locally purchased or imported by an exempt person, such as, but not limited to vehicles, capital equipment, machineries and spare parts, has been sold, traded or transferred to non-exempt persons.
Mr. Tiaga has been a law-abiding citizen diligently paying his income taxes. On May 5, 2014, he was surprised to receive an assessment notice from the Bureau of Internal Revenue (BIR) informing him of a deficiency tax assessment as a result of a mathematical error in the computation of his income tax, as appearing on the face of his income tax return for the year 2011, which he filed on April 15, 2012. Mr. Tiaga believes that there was no such error in the computation of his income tax for the year 2011. Based on the assessment received by Mr. Tiaga, may he already file a protest thereon? (4%)
In a civil case for Annulment of Contract of Sale, plaintiff Ma. Reklamo presented in evidence the Contract of Sale which she sought to be annulled. No documentary stamp tax on the Contract of Sale was paid because according to plaintiff Ma. Reklamo, there was no need to pay the same since the sale was not registered with the Register of Deeds. Plaintiff Ma. Reklamo is now offering the Contract of Sale as her evidence. Is the Contract of Sale admissible? (4%)
Madam X owns real property in Caloocan City. On July 1, 2014, she received a notice of assessment from the City Assessor, informing her of a deficiency tax on her property. She wants to contest the assessment. (4%)
(A) What are the administrative remedies available to Madam X in order to contest the assessment and their respective prescriptive periods?
(B) May Madam X refuse to pay the deficiency tax assessment during the pendency of her appeal?
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 65-2012 imposing Value-Added Tax (VAT) on association dues and membership fees collected by condominium corporations from its member condominium-unit owners. The RMC’s validity is challenged before the Supreme Court (SC) by the condominium corporations.
The Solicitor General, counsel for BIR, claims that association dues, membership fees, and other assessment/charges collected by a condominium corporation are subject to VAT since they constitute income payments or compensation for the beneficial services it provides to its members and tenants.
On the other hand, the lawyer of the condominium corporations argues that such dues and fees are merely held in trust by the condominium corporations exclusively for their members and used solely for administrative expenses in implementing the condominium corporations’ purposes. Accordingly, the condominium corporations do not actually render services for a fee subject to VAT.
Whose argument is correct? Decide. (5%)
During his lifetime, Mr. Sakitin obtained a loan amounting to P10 million from Bangko Uno for the purchase of a parcel of land located in Makati City, using such property as collateral for the loan. The loan was evidenced by a duly notarized promissory note. Subsequently, Mr. Sakitin died. At the time of his death, the unpaid balance of the loan amounted to P2 million. The heirs of Mr. Sakitin deducted the amount of P2 million from the gross estate, as part of the "Claims against the Estate." Such deduction was disallowed by the Bureau of Internal Revenue (BIR) Examiner, claiming that the mortgaged property was not included in the computation of the gross estate. Do you agree with the BIR? Explain. (4%)
On August 31, 2014, Haelton Corporation (HC), thru its authorized representative Ms. Pares, sold a 16-storey commercial building known as Haeltown Building to Mr. Belly for P100 million. Mr. Belly, in turn, sold the same property on the same day to Bell Gates, Inc. (BGI) for P200 million. These two (2) transactions were evidenced by two (2) separate Deeds of Absolute Sale notarized on the same day by the same notary public.
Investigations by the Bureau of Internal Revenue (BIR) showed that:
(1) the Deed of Absolute Sale between Mr. Belly and BGI was notarized ahead of the sale between HC and Mr. Belly; (2) as early as May 17, 2014, HC received P40 million from BGI, and not from Mr. Belly; (3) the said payment of P40 million was recorded by BGI in its books as of June 30, 2014 as investment in Haeltown Building; and (4) the substantial portion of P40 million was withdrawn by Ms. Pares through the declaration of cash dividends to all its stockholders.
Based on the foregoing, the BIR sent Haeltown Corporation a Notice of Assessment for deficiency income tax arising from an alleged simulated sale of the aforesaid commercial building to escape the higher corporate income tax rate of thirty percent (30%). What is the liability of Haeltown Corporation, if any? (4%)
Choose the correct answer. Double Taxation - (1%)
(A) is one of direct duplicate taxations wherein two (2) taxes must be imposed on the same subject matter, by the same taxing authority, within the same jurisdiction, during the same period, with the same kind or character of tax, even if the purposes of imposing the same are different.
(B) is forbidden by law; and therefore, it is a valid defense against the validity of a tax measure.
(C) means taxing the same property twice when it should be taxed only once; it is tantamount to taxing the same person twice by the same jurisdiction for the same thing.
(D) exists when a corporation is assessed with local business tax as a manufacturer, and at the same time, value-added tax as a person selling goods in the course of trade or business.
Choose the correct answer. Tax Avoidance ‒ (1%)
(A) is a scheme used outside of those lawful means and, when availed of, it usually subjects the taxpayer to further or additional civil or criminal liabilities.
(B) is a tax saving device within the means sanctioned by law.
(C) is employed by a corporation, the organization of which is prompted more on the mitigation of tax liabilities than for legitimate business purpose.
(D) is any form of tax deduction scheme, regardless if the same is legal or not.
A, B, and C, all lawyers, formed a partnership called ABC Law Firm so that they can practice their profession as lawyers. For the year 2012, ABC Law Firm received earnings and paid expenses, among which are as follows: (6%)
(1) Professional/legal fees from various clients
(2) Cash prize received from a religious society in recognition of the exemplary service of ABC Law Firm
(3) Gains derived from sale of excess computers and laptops
(1) Salaries of office staff
(2) Rentals for office space
(3) Representation expenses incurred in meetings with clients
(A) What are the items in the above mentioned earnings which should be included in the computation of ABC Law Firm’s gross income? Explain.
(B) What are the items in the above-mentioned payments which may be considered as deductions from the gross income of ABC Law Firm? Explain.
(C) If ABC Law Firm earns net income in 2012, what, if any, is the tax consequence on the part of ABC Law Firm insofar as the payment of income tax is concerned? What, if any, is the tax consequence on the part of A, B, and C as individual partners, insofar as the payment of income tax is concerned?
Which of the following transactions is subject to Value-Added Tax (VAT)? (1%)
(A) Sale of shares of stock-listed and traded through the local stock exchange
(B) Importation of personal and household effects belonging to residents of the Philippines returning from abroad subject to custom duties under the Tariff and Customs Code
(C) Services rendered by individuals pursuant to an employeremployee relationship
(D) Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the Cooperative Development Authority
Freezy Corporation, a domestic corporation engaged in the manufacture and sale of ice cream, made payments to an officer of Frosty Corporation, a competitor in the ice cream business, in exchange for said officer’s revelation of Frosty Corporation’s trade secrets.
May Freezy Corporation claim the payment to the officer as deduction from its gross income? Explain. (4%)
In January 2013, your friend got his first job as an o ffice clerk. He is single and lives with his family who depends upon him for financial support. His parents have long retired from their work, and his two (2) siblings are still minors and studying in grade school. In February 2014, he consulted you as he wanted to comply with all the rules pertaining to the preparation and filing of his income tax return. He now asks you the following:
(A) Is he entitled to personal exemptions? If so, how much? (1%)
(B) Is he entitled to additional exemptions? If so, how much? (1%)
(C) What is the effect of the taxes withheld from his salaries on his taxable income? (2%)
Choose the correct answer. Tax laws - (1%)
(A) may be enacted for the promotion of private enterprise or business for as long as it gives incidental advantage to the public or the State
(B) are inherently legislative; therefore, may not be delegated
(C) are territorial in nature; hence, they do not recognize the generally-accepted tenets of international law
(D) adhere to uniformity and equality when all taxable articles or kinds of property of the same class are taxable at the same rate
Doña Evelina, a rich widow engaged in the business of currency exchange, was assessed a considerable amount of local business taxes by the City Government of Bagnet by virtue of Tax Ordinance No. 24. Despite her objections thereto, Doña Evelina paid the taxes. Nevertheless, unsatisfied with said Tax Ordinance, Doña Evelina, through her counsel Atty. ELP, filed a written claim for recovery of said local business taxes and contested the assessment. Her claim was denied, and so Atty. ELP elevated her case to the Regional Trial Court (RTC).
The RTC declared Tax Ordinance No. 24 null and void and without legal effect for having been enacted in violation of the public ation requirement of tax ordinances and revenue measures under the Local Government Code (LGC) and on the ground of double taxation. On appeal, the Court of Tax Appeals (CTA) affirmed the decision of the RTC. No motion for reconsideration was filed and the decision became final and executory. (4%)
(A) If you are Atty. ELP, what advice will you give Doña Evelina so that she can recover the subject local business taxes?
(B) If Doña Evelina eventually recovers the local business taxes, must the same be considered as income taxable by the national government?

Bar Examination Questionnaire for Civil Law - Oct. 12, 2014.

See - Bar Examination Questionnaire for Civil Law

October 12, 20148:00 A.M.- 12:00 N.N.
x x x.
Ariz and Paz were officemates at Perlas ng Silangan Bank (PSB). They fell in love with each other and had a civil and church wedding. Meanwhile, Paz rapidly climbed the corporate ladder of PSB and eventually became its Vice President, while Ariz remained one of its bank supervisors, although he was short of 12 units to finish his Masters of Business Administration (MBA) degree.
Ariz became envious of the success of his wife. He started to drink alcohol until he became a drunkard. He preferred to join his "barkadas"; became a wifebeater; would hurt his children without any reason; and failed to contribute to the needs of the family. Despite rehabilitation and consultation with a psychiatrist, his ways did not change.
After 19 years of marriage, Paz, a devout Catholic, decided to have their marriage annulled by the church. Through the testimony of Paz and a psychiatrist, it was found that Ariz was a spoiled brat in his youth and was sometimes involved in brawls. In his teens, he was once referred to a psychiatrist for t reatment due to his violent tendencies. In due time, the National Appellate Matrimonial Tribunal (NAMT) annulled the union of Ariz and Paz due to the failure of Ariz to perform and fulfill his duties as a husband and as a father to their children. The NAMT concluded that it is for the best interest of Paz, Ariz and their children to have the marriage annulled.
In view of the NAMT decision, Paz decided to file a Petition for Declaration of Nullity of Marriage of their civil wedding before the Regional Trial Court (RTC) of Makati City using the NAMT decision and the same evidence adduced in the church annulment proceedings as basis.
If you are the judge, will you grant the petition? Explain. (5%)
Crispin died testate and was survived by Alex and Josine, his children from his first wife; Rene and Ruby, his children from his second wife; and Allan, Bea, and Cheska, his children from his third wife.
One important provision in his will reads as follows:
"Ang lupa at bahay sa Lungsod ng Maynila ay ililipat at ilalagay sa pangalan nila Alex at Rene hindi bilang pamana ko sa kanila kundi upang pamahalaan at pangalagaan lamang nila at nang ang sinuman sa aking mga anak, sampu ng aking mga apo at kaapuapuhan ko sa habang panahon, ay may tutuluyan kung magnanais na mag-aral sa Maynila o sa kalapit na mga lungsod."
Is the provision valid? (4%)
The Roman Catholic Church accepted a donation of a real property located in Lipa City. A deed of donation was executed, signed by the donor, Don Mariano, and the donee, the Church, as represented by Fr. Damian. Before the deed could be notarized, Don Mariano died. Is the donation valid? (4%)
Nante, a registered owner of a parcel of land in Quezon City, sold the property to Monica under a deed of sale which reads as follows:
"That for and in consideration of the sum of P500,000.00, value to be paid and delivered to me, and receipt of which shall be acknowledged by me to the full satisfaction of Monica, referred to as Vendee, I hereby sell, transfer, cede, convey, and assign, as by these presents, I do have sold, transferred, ceded, conveyed and assigned a parcel of land covered by TCT No. 2468 in favor of the Vendee."
After delivery of the initial payment of P100,000.00, Monica immediately took possession of the property. Five (5) months after, Monica failed to pay the remaining balance of the purchase price. Nante filed an action for the recovery of possession of the property. Nante alleged that the agreement was one to sell,which was not consummated as the full contract price was not paid. Is the contention of Nante tenable? Why? (4%)
What is the effect of preterition ? (1%)
(A) It annuls the devise and legacy
(B) It annuls the institution of heir
(C) It reduces the devise and legacy
(D) It partially annuls the institution of heir
Miko and Dinah started to live together as husband and wife without the benefit of marriage in 1984. Ten (10) years after, they separated. In 1996, they decided to live together again, and in 1998, they got married.
On February 17, 2001, Dinah filed a complaint for declaration of nullity of her marriage with Miko on the ground of psychological incapacity under Article 36 of the Family Code. The court rendered the following decision:
"1. Declaring the marriage null and void;
2. Dissolving the regime of absolute community of property; and
3. Declaring that a decree of absolute nullity of marriage shall only be issued after liquidation, partition and distribution of the parties’ properties under Article 147 of the Family Code."
Dinah filed a motion for partial reconsideration questioning the portion of the decision on the issuance of a decree of nullity of marriage only after the liquidation, partition and distribution of properties under Article 147 of the Code.
If you are the judge, how will you decide petitioner’s motion for partial reconsideration? Why? (4%)
Due to the continuous heavy rainfall, the major streets in Manila became flooded. This compelled Cris to check-in at Square One Hotel. As soon as Crisgot off from his Toyota Altis, the Hotel’s parking attendant got the key of his car and gave him a valet parking customer’s claim stub. The attendant parked his car at the basement of the hotel. Early in the morning, Cris was informed by the hotel manager that his car was carnapped. (4%)
(A) What contract, if any, was perfected between Cris and the Hotel when Cris surrendered the key of his car to the Hotel’s parking attendant?
(B) What is the liability, if any, of the Hotel for the loss of Cris’ car?
Tess leased her 1,500 sq. m. lot in Antipolo City to Ruth for a period of three (3) years, from January 2010 to February 2013.
On March 19, 2011, Tess sent a letter to Ruth, part of which reads as follows:
"I am offering you to buy the property you are presently leasing at P5,000.00 per sq. m. or for a total of P7,500,000.00. You can pay the contract price by installment for two (2) years without interest.
I will give you a period of one (1) year from receipt of this letter to decide whether you will buy the property."
After the expiration of the lease contract, Tess sold the property to her niece for a total consideration of P4 million.
Ruth filed a complaint for the annulment of the sale, reconveyance and damages against Tess and her niece. Ruth alleged that the sale of the leased property violated her right to buy under the principle of right of first refusal.
Is the allegation of Ruth tenable? (4%)
Spouses Macario and Bonifacia Dakila entered into a contract to sell with Honorio Cruz over a parcel of industrial land in Valenzuela, Bulacan for a price of Three Million Five Hundred Thousand Pesos (P3,500,000.00). The spouses would give a downpayment of Five Hundred Thousand Pesos (P500,000.00) upon the signing of the contract, while the balance would be paid for the next three (3) consecutive months in the amount of One Million Pesos (P1,000,000.00) per month. The spouses paid the first two (2) installments but not the last installment. After one (1) year, the spouses offered to pay the unpaid balance which Honorio refused to accept.
The spouses filed a complaint for specific performance against Honorio invoking the application of the Maceda Law. If you are the judge, how will you decide the case? (4%)
Dorotea leased portions of her 2,000 sq. m. lot to Monet, Kathy, Celia, and Ruth for five (5) years. Two (2) years before the expiration of the lease contract, Dorotea sold the property to PM Realty and Development Corporation. The following month, Dorotea and PM Realty stopped accepting rental payments from all the lessees because they wanted to terminate the lease contracts.
Due to the refusal of Dorotea to accept rental payments, the lessees , Ruth, et al., filed a complaint for consignation of the rentals before the Regional Trial Court (RTC) of Manila without notifying Dorotea.
Is the consignation valid? (4%)
An easement that can be acquired by prescription: (1%)
(A) Right of way
(B) Watering of an animal
(C) Lateral and subjacent support
(D) Light and view
J.C. Construction (J.C.) bought steel bars from Matibay Steel Industries (MSI) which is owned by Buddy Batungbacal. J.C. failed to pay the purchased materials worth P500,000.00 on due date. J.C. persuaded its client Amoroso with whom it had receivables to pay its obligation to MSI. Amoroso agreed and paid MSI the amount of P50,000.00. After two (2) other payments, Amoroso stopped making further payments.
Buddy filed a complaint for collection of the balance of the obligation and damages against J.C. J.C. denied any liability claiming that its obligation was extinguished by reason of novation which took place when MSI accepted partial payments from Amoroso on its behalf.
Was the obligation of J.C. Construction to MSI extinguished by novation? Why? (4%)
Esteban and Martha had four (4) children: Rolando, Jun, Mark, and Hector. Rolando had a daughter, Edith, while Mark had a son, Philip. After the death of Esteban and Martha, their three (3) parcels of land were adjudicated to Jun. After the death of Jun, the properties passed to his surviving spouse Anita, and son Cesar. When Anita died, her share went to her son Cesar. Ten (10) years after, Cesar died intestate without any issue. Peachy, Anita’s sister, adjudicated to herself the properties as the only surviving heir of Anita and Cesar. Edith and Philip would like to recover the properties claiming that they should have been reserved by Peachy in their behalf and must now revert back to them.
Is the contention of Edith and Philip valid? (4%)
A pedestrian, who was four (4) months pregnant, was hit by a bus driver while crossing the street. Although the pedestrian survived, the fetus inside her womb was aborted. Can the pedestrian recover damages on account of the death of the fetus? (1%)
(A) Yes, because of Article 2206 of the Civil Code which allows the surviving heirs to demand damages for mental anguish by reason of the death of the deceased.
(B) Yes, for as long as the pedestrian can prove that she was not at fault and the bus driver was the one negligent.
(C) No, because a fetus is not a natural person.
(D) No, if the fetus did not comply with the requirements under Article 41 of the Civil Code.
Mr. Bong owns several properties in Pasig City. He decided to build a condominium named Flores de Manila in one of his lots. To fund the project, he obtained a loan from the National Bank (NB) secured by a real estate mortgage over the adjoining property which he also owned.
During construction, he built three (3) pumps on the mortgaged property to supply water to the condominium. After one (1) year, the project was completed and the condominium was turned over to the buyers. However, Mr. Bong failed to pay his loan obligation to NB. Thus, NB foreclosed the mortgaged property where the pumps were installed. During the sale on public auction of the mortgaged property, Mr. Simon won in the bidding. When Mr. Simon attempted to take possession of the property, the condominium owners, who in the meantime constituted themselves into Flores de Manila Inc. (FMI), claimed that they have earlier filed a case for the declaration of the existence of an easement before the Regional Trial Court (RTC) of Pasig City and prayed that the easement be annotated in the title of the property foreclosed by NB. FMI further claimed that when Mr. Bong installed the pumps in his adjoining property, a voluntary easement was constituted in favor of FMI.
Will the action prosper? (4%)
A congregation for religious women, by way of commodatum, is using the real property owned and registered in the name of Spouses Manuel as a retreat house.
Maria, a helper of the congregation discovered a chest in the backyard. When she opened the chest, it contained several pieces of jewelry and money. (4%)
(A) Can the chest containing the pieces of jewelry and money be considered as hidden treasure?
(B) Who has the right to claim ownership of it?
On March 30, 2000, Mariano died intestate and was survived by his wife, Leonora, and children, Danilo and Carlito. One of the properties he left was a piece of land in Alabang where he built his residential house.
After his burial, Leonora and Mariano’s children extrajudicially settled his estate. Thereafter, Leonora and Danilo advised Carlito of their intention to partition the property. Carlito opposed invoking Article 159 of the Family Code. Carlito alleged that since his minor child Lucas still resides in the premises, the family home continues until that minor beneficiary becomes of age.
Is the contention of Carlito tenable? (4%)
Spouses Magtanggol managed and operated a gasoline station on a 1,000 sq.m. lot which they leased from Francisco Bigla-awa. The contract was for a period of three (3) years. When the contract expired, Francisco asked the spouses to peacefully vacate the premises. The spouses ignored the demand and continued with the operation of the gasoline station.
One month after, Francisco, with the aid of a group of armed men, caused the closure of the gasoline station by constructing fences around it.
Was the act of Francisco and his men lawful? Why? (4%)
Who enjoys the Right of Retention? (1%)
(A) Depositary until full payment of what may be due him in deposit.
(B) Lessee if he advances the expenses for the repair of the leased premises.
(C) Bailee if bailor owes him something.
(D) Builder in bad faith for the recovery of necessary and useful expenses.
Mabuhay Elementary School organized a field trip for its Grade VI students in Fort Santiago, Manila Zoo, and Star City. To be able to join, the parents of the students had to sign a piece of paper that reads as follows:
"I allow my child (name of student), Grade – Section, to join the school’s field trip on February 14, 2014.
I will not file any claim against the school, administrator or teacher in case something happens to my child during the trip."
Joey, a 7-year-old student of Mabuhay Elementary School was bitten by a snake while the group was touring Manila Zoo. The parents of Joey sued the school for damages. The school, as a defense, presented the waiver signed by Joey’s parents.
Was there a valid waiver of right to sue the school? Why? (4%)
A delayed accession is: (1%)
(A) formation of an island
(B) avulsion
(C) alluvium
(D) change in the course of the riverbed
On March 27, 1980, Cornelio filed an application for land registration involving a parcel of agricultural land that he had bought from Isaac identified as Lot No. 2716 with an area of one (1) hectare. During the trial, Cornelio claimed that he and his predecessors-in-interest had been in open, continuous, uninterrupted, public and adverse possession and occupation of the land for more than thirty (30) years. He likewise introduced in evidence a certification dated February 12, 1981 citing a presidential declaration to the effect that on June 14, 1980, agricultural lands of the public domain, including the subject matter of the application, were declared alienable and disposable agricultural land. (4%)
(A) If you are the judge, will you grant the application for land registration of Cornelio?
(B) Can Cornelio acquire said agricultural land through acquisitive prescription, whether ordinary or extraordinary?
After undergoing sex reassignment in a foreign country, Jose, who is now using the name of "Josie," married his partner Ador. Is the marriage valid? (1%)
(A) Yes, the marriage is valid for as long as it is valid in the place where it is celebrated following Article 17 of the Civil Code.
(B) Yes, the marriage is valid if all the essential and formal elements of marriage under the Family Code are present.
(C) No, the marriage is not valid because one essential element of marriage is absent.
(D) No, the marriage is not valid but is voidable because "Josie" concealed her real identity.
Ted, married to Annie, went to Canada to work. Five (5) years later, Ted became a naturalized Canadian citizen. He returned to the Philippines to convince Annie to settle in Canada. Unfortunately, Ted discovered that Annie and his friend Louie were having an affair. Deeply hurt, Ted returned to Canada and filed a petition for divorce which was granted. In December 2013, Ted decided to marry his childhood friend Corazon in the Philippines. In preparation for the wedding, Ted went to the Local Civil Registry of Quezon City where his marriage contract with Annie was registered. He asked the Civil Register to annotate the decree of divorce on his marriage contract with Annie. However, he was advised by the National Statistics Office (NSO) to file a petition for judicial recognition of the decree of divorce in the Philippines.
Is it necessary for Ted to file a petition for judicial recognition of the decree of divorce he obtained in Canada before he can contract a second marriage in the Philippines? (4%)
Mario executed his last will and testament where he acknowledges the child being conceived by his live-in partner Josie as his own child; and that his house and lot in Baguio City be given to his unborn conceived child. Are the acknowledgment and the donation mortis causa valid? Why? (4%)
Isaac leased the apartment of Dorotea for two (2) years. Six (6) months after, Isaac subleased a portion of the apartment due to financial difficulty. Is the sublease contract valid? (1%)
(A) Yes, it is valid for as long as all the elements of a valid sublease contract are present.
(B) Yes, it is valid if there is no express prohibition for subleasing in the lease contract.
(C) No, it is void if there is no written consent on the part of the lessor.
(D) No, it is void because of breach of the lease contract.
Fe, Esperanza, and Caridad inherited from their parents a 500 sq. m. lot which they leased to Maria for three (3) years. One year after, Fe, claiming to have the authority to represent her siblings Esperanza and Caridad, offered to sell the leased property to Maria which the latter accepted. The sale was not reduced into writing, but Maria started to make partial payments to Fe, which the latter received and acknowledged. After giving the full payment, Maria demanded for the execution of a deed of absolute sale which Esperanza and Caridad refused to do. Worst, Maria learned that the siblings sold the same property to Manuel. This compelled Maria to file a complaint for the annulment of the sale with specific performance and damages.
If you are the judge, how will you decide the case? (4%)
Spouses Esteban and Maria decided to raise their two (2) nieces, Faith and Hope, both minors, as their own children after the parents of the minors died in a vehicular accident.
Ten (10) years after, Esteban died. Maria later on married her boss Daniel, a British national who had been living in the Philippines for two (2) years.
With the permission of Daniel, Maria filed a petition for the adoption of Faith and Hope. She did not include Daniel as her co-petitioner because for Maria, it was her former husband Esteban who raised the kids.
If you are the judge, how will you resolve the petition? (4%)
Timothy executed a Memorandum of Agreement (MOA) with Kristopher setting up a business venture covering three (3) fastfood stores known as "Hungry Toppings" that will be established at Mall Uno, Mall Dos, and Mall Tres.
The pertinent provisions of the MOA provides:
1. Timothy shall be considered a partner with thirty percent (30%) share in all of the stores to be set up by Kristopher;
2. The proceeds of the business, after deducting expenses, shall be used to pay the principal amount of P500,000.00 and the interest therein which is to be computed based on the bank rate, representing the bank loan secured by Timothy;
3. The net profits, if any, after deducting the expenses and payments of the principal and interest shall be divided as follows: seventy percent (70%) for Kristopher and thirty percent (30%) for Timothy;
4. Kristopher shall have a free hand in running the business without any interference from Timothy, his agents, representatives, or assigns , and should such interference happen, Kristopher has the right to buy back the share of Timothy less the amounts already paid on the principal and to dissolve the MOA; and
5. Kristopher shall submit his monthly sales report in connection with the business to Timothy.
What is the contractual relationship between Timothy and Kristopher? (4%)
Joe Miguel, a well-known treasure hunter in Mindanao, executed a Special Power of Attorney (SPA) appointing his nephew, John Paul, as his attorney-infact. John Paul was given the power to deal with treasure-hunting activities on Joe Miguel’s land and to file charges against those who may enter it without the latter’s authority. Joe Miguel agreed to give John Paul forty percent (40%) of the treasure that may be found on the land.
Thereafter, John Paul filed a case for damages and injunction against Lilo for illegally entering Joe Miguel’s land. Subsequently, he hired the legal services of Atty. Audrey agreeing to give the latter thirty percent (30%) of Joe Miguel’s share in whatever treasure that may be found in the land.
Dissatified however with the strategies implemented by John Paul, Joe Miguel unilaterally revoked the SPA granted to John Paul.
Is the revocation proper? (4%)

Bar Examination Questionnaire for Labor Law - Oct. 5, 2014.

See - Bar Examination Questionnaire for Labor Law

October 5, 20142:00P.M.- 6:00 P.M.
x x x.
Linda was employed by Sectarian University (SU) to cook for the members of a religious order who teach and live inside the campus. While performing her assigned task, Linda accidentally burned herself. Because of the extent of her injuries, she went on medical leave. Meanwhile, SU engaged a replacement cook. Linda filed a complaint for illegal dismissal, but her employer SU contended that Linda was not a regular employee but a domestic househelp. Decide. (4%)
Lucy was one of approximately 500 call center agents at Hambergis, Inc. She was hired as a contractual employee four years ago. Her contracts would be for a duration of five (5) months at a time, usually after a onemonth interval. Her re-hiring was contingent on her performance for the immediately preceding contract. Six (6) months after the expiration of her last contract, Lucy went to Hambergis personnel department to inquire why she was not yet being recalled to work. She was told that her performance during her last contract was "below average." Lucy seeks your legal advice about her chances of getting her job back. What will your advice be? (4%)
Lolong Law Firm (LLF), which employs around 50 lawyers and 100 regular staff, suffered losses for the first time in its history. The management informed its employees that it could no longer afford to provide them free lunch. Consequently, it announced that a nominal fee would henceforth be charged. Was LLF justified in withdrawing this benefit which it had unilaterally been providing to its employees? (1%)
(A) Yes, because it is suffering losses for the first time.
(B) Yes, because this is a management prerogative which is not due to any legal or contractual obligation.
(C) No, because this amounts to a diminution of benefits which is prohibited by the Labor Code.
(D) No, because it is a fringe benefit that has already ripened into a demandable right.
Linis Manpower, Inc. (LMI) had provided janitorial services to the Philippine Overseas Employment Administration (POEA) since March 2009. Its service contract was renewed every three months. However, in the bidding held in June 2012, LMI was disqualified and excluded. In 2013, six janitors of LMI formerly assigned at POEA filed a complaint for underpayment of wages. Both LMI and POEA were impleaded as respondents. Should POEA, a government agency subject to budgetary appropriations from Congress, be held liable solidarily with LMI for the payment of salary differentials due to the complainant? Cite the legal basis of your answer. (4%)
Liwayway Glass had 600 rank-and-file employees. Three rival unions – A, B, and C ‒ participated in the certification elections ordered by the Med-Arbiter. 500 employees voted. The unions obtained the following votes: A-200; B-150; C-50; 90 employees voted "no union"; and 10 were segregated votes. Out of the segregated votes, four (4) were cast by probationary employees and six (6) were cast by dismissed employees whose respective cases are still on appeal. (10%)
(A) Should the votes of the probationary and dismissed employees be counted in the total votes cast for the purpose of determining the winning labor union?
(B) Was there a valid election?
(C) Should Union A be declared the winner?
(D) Suppose the election is declared invalid, which of the contending unions should represent the rank-and-file employees?
(E) Suppose that in the election, the unions obtained the following votes: A-250; B-150; C-50; 40 voted "no union"; and 10 were segregated votes. Should Union A be certified as the bargaining representative?
Lina has been working as a steward with a Miami, U.S.A.-based Loyal Cruise Lines for the past 15 years. She was recruited by a local manning agency, Macapagal Shipping, and was made to sign a 10-month employment contract everytime she left for Miami. Macapagal Shipping paid for Lina’s round-trip travel expenses from Manila to Miami. Because of a food poisoning incident which happened during her last cruise assignment, Lina was not re-hired. Lina claims she has been illegally terminated and seeks separation pay. If you were the Labor Arbiter handlingthe case, how would you decide? (4%)
Non-lawyers can appear before the Labor Arbiter if: (1%)
(A) they represent themselves
(B) they are properly authorized to represent their legitimate labor organization or member thereof
(C) they are duly-accredited members of the legal aid office recognized by the DOJ or IBP
(D) they appear in cases involving an amount of less than Php5,000
As a result of a bargaining deadlock between Lazo Corporation and Lazo Employees Union, the latter staged a strike. During the strike, several employees committed illegal acts. Eventually, its members informed the company of their intention to return to work. (6%)
(A) Can Lazo Corporation refuse to admit the strikers?
(B) Assuming the company admits the strikers, can it later on dismiss those employees who committed illegal acts?
(C) If due to prolonged strike, Lazo Corporation hired replacements, can it refuse to admit the replaced strikers?
Luisa Court is a popular chain of motels. It employs over 30 chambermaids who, among others, help clean and maintain the rooms. These chambermaids are part of the union rank-and-file employees which has an existing collective bargaining agreement (CBA) with the company. While the CBA was in force, Luisa Court decided to abolish the position of chambermaids and outsource the cleaning of the rooms to Malinis Janitorial Services, a bona fide independent contractor which has invested in substantial equipment and sufficient manpower. The chambermaids filed a case of illegal dismissal against Luisa Court. In response, the company argued that the decision to outsource resulted from the new management’s directive to streamline operations and save on costs. If you were the Labor Arbiter assigned to the case, how would you decide? (4%)
Luisa was hired as a secretary by the Asian Development Bank (ADB) in Manila. Luisa’s first boss was a Japanese national whom she got along with. But after two years, the latter was replaced by an arrogant Indian national who did not believe her work output was in accordance with international standards. One day, Luisa submitted a draft report filled with typographical errors to her boss. The latter scolded her, but Luisa verbally fought back. The Indian boss decided to terminate her services right then and there. Luisa filed a case for illegal dismissal with the Labor Arbiter claiming arbitrariness and denial of due process. If you were the Labor Arbiter, how would you decide the case? (4%)
Lionel, an American citizen whose parents migrated to the U.S. from the Philippines, was hired by JP Morgan in New York as a call center specialist. Hearing about the phenomenal growth of the call center industry in his parents’ native land, Lionel sought and was granted a transfer as a call center manager for JP Morgan’s operations in Taguig City. Lionel’semployment contract did not specify a period for his stay in the Philippines. After three years of working in the Philippines, Lionel was advised that he was being recalled to New York and being promoted to the position of director of international call center operations. However, because of certain "family reasons," Lionel advised the company of his preference to stay in the Philippines. He was dismissed by the company. Lionel now seeks yo ur legal advice on: (6%)
(A) whether he has a cause of action
(B) whether he can file a case in the Philippines
(C) what are his chances of winning
Which of the following groups does not enjoy the right to selforganization? (1%)
(A) those who work in a non-profit charitable institution
(B) those who are paid on a piece-rate basis
(C) those who work in a corporation with less than 10 employees
(D) those who work as legal secretaries
Don Luis, a widower, lived alone in a house with a large garden. One day, he noticed that the plants in his garden needed trimming. He remembered that Lando, a 17-year old out-of-school youth, had contacted him in church the other day looking for work. He contacted Lando who immediately attended to Don Luis’s garden a nd finished the job in three days. (4%)
(A) Is there an employer-employee relationship between Don Luis and Lando?
(B) Does Don Luis need to register Lando with the Social Security System (SSS)?
Luisito has been working with Lima Land for 20 years. Wanting to work in the public sector, Luisito applied with and was offered a job at Livecor. Before accepting the offer, he wanted to consult you whether the payments that he and Lima Land had made to the Social Security System (SSS) can be transferred or credited to the Government Service Insurance System (GSIS). What would you advice? (4%)
Our Lady of Peace Catholic School Teachers and Employees Labor Union (OLPCS-TELU) is a legitimate labor organization composed of vice principals, department heads, coordinators, teachers, and non-teaching personnel of Our Lady of Peace Catholic School (OLPCS).
OLPCS-TELU subsequently filed a petition for certification election among the teaching and non-teaching personnel of OLPCS before the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE). The Med-Arbiter subsequently granted the petition and ordered the conduct of a joint certification election for the teaching and non-teaching personnel of OLPCS.
May OLPCS-TELU be considered a legitimate labor organization? (5%)
Samahang East Gate Enterprises (SEGE) is a labor organization composed of the rank-and-file employees of East Gate Enterprises (EGE), the leading manufacturer of all types of gloves and aprons.
EGE was later requested by SEGE to bargain collectively for better terms and conditions of employment of all the rank -and-file employees of EGE. Consequently, EGE filed a petition for certification election before the Bureau of Labor Relations (BLR).
During the proceedings, EGE insisted that it should participate in the certification process. EGE reasoned that since it was the one who filed the petition and considering that the employees concerned were its own rankand-file employees, it should be allowed to take an active part in the certification process.
Is the contention of EGE proper? Explain. (5%)
Philhealth is a government-owned and controlled corporation employing thousands of Filipinos. Because of the desire of the employees of Philhealth to obtain better terms and conditions of employment from the government, they formed the Philhealth Employees Association (PEA) and demanded Philhealth to enter into negotiations with PEA regarding terms and conditions of employment which are not fixed by law. (4%)
(A) Are the employees of Philhealth allowed to self-organize and form PEA and thereafter demand Philhealth to enter into negotiations with PEA for better terms and conditions of employment?
(B) In case of unresolved grievances, can PEA resort to strikes, walkouts, and other temporary work stoppages to pressure the government to accede to their demands?
The procedural requirements of a valid strike include: (1%)
(A) a claim of either unfair labor practice or deadlock in collective bargaining
(B) notice of strike filed at least 15 days before a ULP-grounded strike or at least 30 days prior to the deadlock in a bargaining grounded strike
(C) majority of the union membership must have voted to stage the strike with notice thereon furnished to the National Conciliation and Mediation Board (NCMB) at least 24 hours before the strike vote is taken
(D) strike vote results must be furnished to the NCMB at least seven (7) days before the intended strike
Lincoln was in the business of trading broadcast equipment used by television and radio networks. He employed Lionel as his agent. Subsequently, Lincoln set up Liberty Communications to formally engage in the same business. He requested Lionel to be one of the incorporators and assigned to him 100 Liberty shares. Lionel was also given the title Assistant Vice-President for Sales and Head of Technical Coordination. After several months, there were allegations that Lionel was engaged in "under the table dealings" and received "confidential commissions" from Liberty’s clients and suppliers. He was, therefore, charged with serious misconduct and willful breach of trust, and was given 48 hours to present his explanation on the charges. Lionel was unable to comply with the 48 -hour deadline and was subsequently barred from entering company premises. Lionel then filed a complaint with the Labor Arbiter claiming constructive dismissal. Among others, the company sought the dismissal of the complaint alleging that the case involved an intra-corporate controversy which was within the jurisdiction of the Regional Trial Court (RTC).
If you were the Labor Arbiter assigned to the case, how would you rule on the company’s motion to dismiss? (5%)
Lito was anticipating the bonus he would receive for 2013. Aside from the 13th month pay, the company has been awarding him and his other co-employees a two to three months bonus for the last 10 years. However, because of poor over-all sales performance for the year, the company unilaterally decided to pay only a one month bonus in 2013. Is Lito’s employer legally allowed to reduce the bonus? (4%)
An accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend operations and requested its employees to stop reporting for work. After six (6) months, JKL resumed operations but hired a new set of employees. The old set of employees filed a case for illegal dismissal. If you were the Labor Arbiter, how would you decide the case? (4%)
Despite a reinstatement order, an employer may choose not to reinstate an employee if: (1%)
(A) there is a strained employer-employee relationship
(B) the position of the employee no longer exists
(C) the employer’s business has been closed
(D) the employee does not wish to be reinstated.
Luningning Foods engaged the services of Lamitan Manpower, Inc., a bona fide independent contractor, to provide "tasters" that will check on food quality. Subsequently, these "tasters" joined the union of rank -and-file employees of Luningning and demanded that they be made regular employees of the latter as they are performing functions necessary and desirable to operate the company’s business. Luningning rejected the demand for regularization. On behalf of the "tasters", the union then filed a notice of strike with the Department of Labor and Employment (DOLE). In response, Luningning sought a restraining order from the Regional Trial Court (RTC) arguing that the DOLE does not have jurisdiction over t he case since it does not have an employer-employee relationship with the employees of an independent contractor. If you were the RTC judge, would you issue a restraining order against the union? (4%)
Lanz was a strict and unpopular Vice-President for Sales of Lobinsons Land. One day, Lanz shouted invectives against Lee, a poor performing sales associate, calling him, among others, a "brown monkey." Hurt, Lee decided to file a criminal complaint for grave defamation against Lanz. The prosecutor found probable cause and filed an information in court. Lobinsons decided to terminate Lanz for committing a potential crime and other illegal acts prejudicial to business. Can Lanz be legally terminated by the company on these grounds? (4%)
Lizzy Lu is a sales associate for Luna Properties. The latter is looking to retrench Lizzy and five other sales associates due to financial losses. Aside from a basic monthly salary, Lizzy and her colleagues receive commissions on the sales they make as well as cost of living and representation allowances. In computing Lizzy’s separation pay, Luna Properties should consider her: (1%)
(A) monthly salary only
(B) monthly salary plus sales commissions
(C) monthly salary plus sales commissions, plus cost of living allowance
(D) monthly salary plus sales commissions, plus cost of living allowance and representation allowance
Liwanag Corporation is engaged in the power generation business. A stalemate was reached during the collective bargaining negotiations between its management and the union. After following all the requisites provided by law, the union decided to stage a strike. The management sought the assistance of the Secretary of Labor and Employment, who assumed jurisdiction over the strike and issued a return-to-work order. The union defied the latter and continued the strike. Without providing any notice, Liwanag Corporation declared everyone who participated in the strike as having lost their employment. (4%)
(A) Was Liwanag Corporation’s action valid?
(B) If, before the DOLE Secretary assumed jurisdiction, the striking union members communicated in writing their desire to return to work, which offer Liwanag Corporation refused to accept, what remedy, if any, does the union have?
The jurisdiction of the National Labor Relations Commission does not include: (1%)
(A) exclusive appellate jurisdiction over all cases decided by the Labor Arbiter
(B) exclusive appellate jurisdiction over all cases decided by Regional Directors or hearing officers involving the recovery of wages and other monetary claims and benefits arising from employer-employee relations where the aggregate money claim of each does not exceed five thousand pesos (Php5,000)
(C) original jurisdiction to act as a compulsory arbitration body over labor disputes certified to it by the Regional Directors
(D) power to issue a labor injunction