COMMERCIAL LAW

1. Debtor "A" issued a promissory note in the amount of P10M in favor of commercial bank "Y"
secured by mortgage of his properties worth P30M. When "A" failed to pay his indebtedness,
despite demands made by bank "Y", the latter instituted a collection suit to enforce payment of the
P10M account. Subsequently, bank "Y" also filed foreclosure proceedings against "A" for the
security given fo rthe account. If you were the Judge, how would you resolve the two cases?

2. A issued a promissory note payable to B or bearer. A delivered the note to B, B indorsed the note
to C. C placed the note in his drawer, which was stoledn by the janitor X, X indoresed the note to
D by forging C's signature. D indorsed the note to E who in turn delivered the note to F, a holder
in due course, without indorsement. Discuss the individual liabilities to F of A, B and C.

3. GP is a suspected jueteng lord who is rumored to be enjoying police and military protection. The
envy of many drug lords who had not escaped the dragnet of the law, GP was summoned to a
hearing of the Committee on Racketeering and Other Syndicated Crimes of the House of
Representatives, which was conducting a congressional investigation "in aid of legislation" on the
involvement of police and military personne, and possibly even of local government officials, in
the illegal activities of suspected gambling and drug lords. Subpoenaed to attend the investigation
were officers of certain identified banks with a directive to them to bring the records and
documents of bank deposits of individuals mentioned in the subpoenas, among them GP, GP and
the banks opposed the production of the banks records of deposits on the ground that no such
inquiry is allowed under the Law of Secrecy of Bank Deposits. Is the opposition of GP and the
banks valid?

4. CX maintaine a checking account with UBANK, Makati Branch. One of his checks in a stub of
fity was missing. Later, he discovered that Ms. DY forged his signature and succeeded to encash
P15,000 from another branch of the bank. DY was able to encashe the check when ET, a friend,
guaranteed due execution, saying that she was a holder in due course. Can CX recover the money
from the bank?

5. JQ, owner of a condominium unit, insured the same against fire with XYZ Insurance Co., and
made the loss payable to his borther, MLQ. In case of loss by fire of the said condominium unit,
who may recover on the fire insurance policy?

6. A applied for a non-medical life insurance. The insured did not inform the insurer that one week
prior to his application for insurance, he was examined and confined at St. Lukes Hospital where
he was diagnosed for lung cancer. The insured soon thereafter died in a plane crash. Is the insurere
liable considering that the fact concealed had no bearing witht the cause of death of the insured?
Why?

1. After disposing of his last opponent in a boxing match, renowed Filipino boxer Sonny Bachao
arrived at the NAIA met by thousands of fans and hundreds of media photographers. The
following day, a colored photograph of Sonny wearing a black Lacoste polo shirt embroieded by a
2 inch Lacoste logo appeared on the front page of every newspaper.
Lacoste International, who owns Lacoste trademark, decided to cash in on the universal popularity
of the boxing icon. It reprinted the photographs, with the permission of the newspaper publishers,
 and went on a world-wide blitz of print commercials in which Sonny is shown wearing a Lacoste
shirt alongside the phrase "Sonny Bachao loves Lacoste"
When Sonny saw the Lacoste advertisements, he hires you as lawyer and asks you to sue Lacoste
International before a Philippine court.
a. For trademark infringement in the Philippines because Lacoste International used his image
without his permission.
b. For copyright infringement because of the unauthorized use of the published photographs.
c. For injuction in order to stop Lacoste International from featuring him in their commercials.
Will this actions proper?
d. Can Lacoste International validly invoke the defense that is not a Philippine company and
therefore Philippine courts have no jurisdiction?

2. a. As a rule under the Negotiable Instruments Law, a subsequent party may hold a prior party
liable but not vice-versa. Give 2 instances where a prior party may hold a subsequent party liable.
b. How does the shelter principle embodied in the Negotiable Instruments Law operate to give the
rights of a holder in due course to a holder who does not have the status of a holder in due course?

3. Pancho drew a check to Bong and Gerard jointly. Bong indorsed the check and also forged
Gerard's indorsement. The payor bank paid the check and charged Pancho's account for the amount
of the check. Gerard received nothing from the payment.
a. Pancho asked the payor bank to recredit his account. Should the bank comply? Explain.
b. Based on the facts, was Pancho as drawer discharged on the instrument? Why?

4. Discuss the legal consequences when a bank honors a forged check?

5. Jun was about to leave for a business trip. As his usual practice, he signed several blank checks. He
instructed Ruth, his secretary, to fill them as payment for his obligations. Ruth filled one check
with her name as payee, placed P30,000 thereon, endorsed and delivered it to Marie. She accepted
the check in good faith as payment for goods delivered to Ruth. Eventually, Ruth regretted what
she did and apologized to Jun. Immediately, he directed the drawee bank to dishonor the check.
When Marie encased the check, it was dishonored.
a. Is Jun liable to Marie?
b. Supposing the check was stolen while in Ruth's possession and a thief filled the blank check,
endorsed and delivered it to Marie in payment for the goods he purchased from her, is Jun liable to
Marie if the check is dishonored?

6. Under RA 1405 (Bank Secrecy Law), bank deposits are considered absolutely confidential and
may not be examined, inquired or looked into by any person, government official, bureau or office.

7. a. Under what conditions may a stock corporation acquire its own shares?
b. Janice rendered some consultancy work for XYZ Corporation. Her compensation included
shares of stock therein. Can XYZ Corporation issue shares of stock to pay for the services of
Janice as its consultant?

8. a. Under what circumstance may a corporation declare dividends?

b. Distinguish dividend from profit; cash dividend and stock dividend.
c. From what funds are cash and stock dividends sourced?
9. A Korean national joined a corporation which is engaged in the furniture manufacturing business.
He was elected to the Board of Directors. To complement its furniture manufacturing business, the
corporation also engaged in the logging business. With the additional logging activity, can the
Korean national still be a member of the Board of Directors?

10. On a clear weather, MV Sundo, carrying insured cargo, left port of Manila bound for Cebu. While
at sea, the vessel encountered a strong typhoon forcing the captain to steer the vessel to the nearest
island where it stayed for 7 days. The vessel ran out of provisions for its passengers. Consequently,
the vessel proceeded to Leyte to replenish its supplies
a. Assuming that the cargo was damaged because of such deviation, who between the insurance
company and the owner of the cargo bears the loss?
b. Under what circumstances can a vessel property proceed to a port other than its port of
destination.

11. Star Shipping Lines accepted 100 cartons of sardines from Master to be delivered to 555 Company
of Manila. Only 88 cartons were delivered, however, these were in bad condition.
555 Company claimed from Star Shipping Lines the value of the missing goods, as well as the
damaged goods. Star Shipping Lines refused because the former failed to present a bill of lading.
Resolve with reasons the claim of 555 Comapy.

12. Cezar works in a car manufacturing company owned by John. Cezar is quite innovative and loves
to tinker with things. With the materials and parts of the car, he was able to invent a gas-saving
device that will enable cars to consume less gas. Francis, co-worker, also came up with similar
gadget, also using scrap materials and spare parts of the company. Thereafter, Francis filed an
application for registration of his device with Bureau of Patents. 18 months later, Cezar filed his
application for the registration of his device with the Bureau of Patents.
a. Is the gas-saving device patentable?
b. Assuming that it is patentable, who is entitled to the patent? What, if any, is the remedy of the
losing party?
c. Supposing John got wind of the inventions of his employees and also laid claim to the patents,
asserting that Cezar and Francis were using his materials and company time in making the devices,
will his claim prevail over those of his employees?

CIVIL LAW

1. In December 2000, Michael and Anna, after obtaining a valid marriage license, went to the Office
of the Mayor of Bulacan to get married. The Mayor was not there, but the Mayors secretary asked
Michael and Anna and their witnesses to fill up and sign the required marriage contract forms. The
secretary then told them to wait, and went out to look for the Mayor who was attending a wedding
ceremony in the neighboring municipality. When the secretary caught up with the Mayor at the
wedding reception, she showed him the marriage contract forms and told him that the couple and
their witnesses were waiting in his office. The Mayor forthwith signed all the copies of the
marriage contract, gave them to the secretary who returned to the Mayors office. She then gave
copies of the marriage contract to the parties, and told Michael and Anna that they were already
married. Thereafter, the couple lived together as husband and wife, and had three sons.
a. Is the marriage of Michael and Anna valid, voidable or void? Explain.
b. What is the status of the three children of Michael and Anna? Explain.
 c. What property regime governs the properties acquired by the couple? Explain.

2. On December 1, 2000, Dr. Fuentes executed a holographic will, wherein he gave nothing to his
recognized illegitimate son, Jay. Dr. Fuentes left for the US, passed the New York medical
licensure examinations, resided therein and became a naturalized American citizen. He died in New
York in 2007. The laws of New York do not recognized holographic wills or compulsory heirs.
a. Can the holographic will of Dr. Fuentes be admitted to probate in the Philippines? Explain.
b. Assuming tha the will is probated in the Philippines, can Jay validly insist that he be given his
legitime? Explain.

3. Before migrating to Canada in 1992, the spouses Teodoro and Anita entrusted all their legal papers
and documents to their nephew, Atty. Tan. Taking advantage of the situation, Atty. Tan forged a
deed of sale, making it appear that he had bought the couples property in Quezon City. In 2000, he
succeeded in obtaining a TCT over the property in his name. Subsequently, Atty. Tan sold the
same property to Luis, who built an auto repair shop on the property. In 2004, Luis registered the
deed of conveyance, and title over the property was transferred in his name. In 2006, the spouses
Teodoro and Anita came to the Philippines for a visit and discovered what had happened to their
property. They immediately hire you as lawyer. What action or actions will you institute in order to
vindicate their rights? Explain.

4. Emmanuel and Margarita, American citizen and employees of the US State Department, got
married in the African state of Kenya where sterility is a ground for annulment of marriage.
Thereafter, the spouses were assigned to the US Embassy in Manila. On the first year of the
spouses tour of duty in the Philippines, Margarita filed an annulment case against Emmanuel
before a Philippine court on the ground of her husbands sterility at the time of the celebration of
the marriage.
a. Will the suit prosper? Explain.
b. Assume Emmanuel and Margarita are both Filipinos. After their wedding in Kenya, they come
back and take up residence in the Philippines. Can their marriage be annulled on the ground of
Emanuels sterility?

5. Marciano is the owner of a parcel of land through which a river runs out into the sea. The land had
been brought under the Torrens System, and is cultivated by Ulpiano and his family as
farmworkers therein. Over the years, the river has brought silt and sediment from its sources up in
the mountains and forests so that gradually the land owned b Marciano increased in area by three
hectares. Ulpiano and his family planted peanuts, monggo beans and vegetables. Ulpiano also
regularly paid taxes on the land, as shown by tax declarations, for over thirty years. When
Marciano learned of the increase in the size of the land, he ordered Ulpiano to demolish the huts,
and demanded that he be paid his share in the proceeds of the harvest. Marciano claims that under
the Civil Code, the alluvium belongs to him as a registered riparian owner to whose land the
accretion attaches and that his right is enforceable against the whole world.
a. Is Marciano correct? Explain.
b. What rights, if any, does Ulpiano have against Marciano? Explain.

6. Gianna was born to Andy and Aimee, who at the time of Giannas birth were not married to each
other. While Andy was single at that time, Aimee was still in the process of securing a judicial
declaration of nullity on her marriage to her ex-husband. Giannas birth certificate, which was
 signed by both Andy and Aimee, registered the status of Gianna as legitimate her surname
carrying that of Andys and that her parents were married to each other.
a. Can a judicial action for correction of entries in Giannas birth certificate be successfully
maintained to:
i. Change her status from legitimate to illegitimate
ii. Change her surname from that of Andys to Aimees maiden surname?
b. Instead of judicial action, can administrative proceedings be brought for the purpose of making
the above corrections?

7. Despite several relationships with different women, Andrew remained unmarried. His first
relationship with Brenda produced a daughter, Amy, now 30 years old. His second, with Carla,
produced two sons: Jon and Ryan. His third, with Donna, bore him two daughters: Vina and Wilma.
His fourth, with Elena, bore him no children although Elena has a daughter Jane, from a previous
relationship. His last, with Fe, produced no biological children but they informally adopted without
court proceedings, Sandy, now 13 years old, whom they consider as their own. Sandy was
orphaned as a baby and was entrusted to them by the midwife who attended to Sandys birth. All
the children, including Amy, now live with Andrew in his house.
a. Is there any legal obstacle to the legal adoption of Amy by Andrew? To the legal adoption of
Sandy by Andrew and Elena?
b. In his old age, can Andrew be legally entitled to claim support from Amy, Jon, Ryan, Vina,
Wilma and Sandy assuming that all of them have the means to support him?
c. Can Amy, Jon, Ryan, Vina, Wilma and Sandy legally claim support from each other?
d. Can Jon and Jane legally marry?

8. Anthony bought a piece of untitled agricultural land from Bert. Bert, in turn, acquired the property
by forging Carlo's signature in a deed of sale over the property. Carlo had been in possession of the
property for 8 years, declared it for tax purposes, and religiously paid all taxes due on the property.
Anthony is not aware of the defect in Bert's title, but has been in actual physical possession of the
property from the time he bought it from Bert, who had never been in possession. Anthony has
since then been in possession of the property for one year.
a. Can Anthony acquire ownership of the property by acquisitive prescription? How many more
years does he have to possess it to acquire ownership?
b. If Carlo is able to legally recover his property, can he require Anthony to account for all the
fruits he has harvested from the property while in possession?
c. If there are standing crops on the property when Carlo recovers possession, can Carlo
appropriate them?

9. Arthur executed a will which contained only: (i) a provision disinheriting his daughter Bernice for
running off with a married man, and (ii) a provision disposing of his share in the family house and
lot in favor of his other children Connie and Dora. He did not make any provisions in favor of his
wife Erica, because as the will stated, she would anyway get 1/2 of the house and lot as her
conjugal share. The will was very brief and straightforward and both the above provisions were
contained in page 1, which Arthur and his instrumental witness, signed at the bottom. Page 2
contained the attestation clause and the signatures, at the bottom thereof, of the 3 instrumental
witnesses which included Lambert, the driver of Arthur; Yoly, the family cook and Atty. Zorba, the
lawyer who prepared the will. There was a 3rd page, but this only contained the notarial
acknowlegement. The attestation clause stated the will was signed on the same occasion by Arthur
and his instrumental witnesses who all signed in the presence of each other, and the notary public
 who notarized the will. There are no marginal signatures or pagination appearing on any of the 3
pages. Upon his death, it was discovered that apart from the house and lot, he had a P1 million
account deposited with ABC bank.
a. Was Erica preterited?
b. What other defects of the will, if any, can cause denial of probate?
c. Was the disinheritance valid?
d. How should the house and lot, and the cash be distributed?

10. Raymond, single, named his sister Ruffa in his will as a devisee of a parcel of land which he own.
The will imposed upon Ruffa the obligation of preserving the land and transferring it, upon her
death, to her illegitimate daughter Scarlet who was then only one year old. Raymond later died,
leaving behind hiw widowed mother, Ruffa and Scarlet.
a. Is the condition imposed upon Ruffa to preserve the property and to transmit it upon her death to
Scarlet, valid?
b. If Scarlet predeceases Ruffa, who inherits the property?
c. If Ruffa predeceases Raymond, can Scarlet inherit the property directly from Raymond?

11. Dux leased his house to Iris for a period of 2 years, at the rate of P25,000 monthly, payable
annually in advance. The contract stipulated that it may be renewed for another 2-year period upon
mutual agrement of the parties. The contract also granted Iris the right of first regusal to purchase
the property at any time during the lease, if Dux decides to sell the property at the same price that
the property is offered for sale to a third party. Twenty-three months after the execution of the lease
contract, Dux sold the house to his mother for P2 million. Iris claimed that the sale was a breach of
her right of first refusal. Dux said there was no breach because the property was sold to his mother
who is not a third party. Iris filed an action to rescind the sale and to compel Dux to sell the
property to her at the same price. Alternatively, she asked the court to extend the lease for another
2 years on the same terms.
a. Can Iris seek rescission of the sale of the property to Dux's mother?
b. Will the alternative prayer for extension of the lease prosper?

12. AB Corp entered into a contract with XY Corp whereby the former agreed to construct the research
and laboratory facilities of the latter. Under the terms of the contract, AB agreed to complete the
facility in 18 months, at the total contract price of P10 million. XY paid 50% of the total contract
price, the balance to be paid upon completion of the work The work started immediately, but AB
later experience work slippage because of labor unrest in his company. AB employees claimed that
they are not being paid on time; hence the work slowdown. As of the 17 month, work was only 45%
completed. AB asked for extension of time, claiming that its labor problems is a case of fortuitous
event, but this was denied by XY. When it came certain that the construction could not be finished
on time, XY sent a written notice cancelling the contract and requiring AB to immediately vacate
the premises.
a. Can the labor unrest be considered a fortuitous event.
b. Can XY unilaterally and immediately cancel the contract.

13. Juliet offered to sell her house and lot, together with all the furniture and appliances therein, to
Delma. Before agreeing to purchase the property, Delma went to the Register of Deeds to verify
Juliet's title. She discovered that while the property was registered in Juliet's name under the Land
Registration Act, as amended by the Property Registration Decree, it was mortgaged to Elaine to
secure a debt of P80,000. Wanting to buy the property, Delma told Juliet to redeem the property
 from Elaine, and gave her an advance payment to be used for purposes of releasing the mortgage
on the property. When the mortgage was released, Juliet executed a Deed of Absolute Sale over the
property which was duly registered with the Registry of Deeds, and a new TCT was issued in
Delma's name. Delma immediately took possession over the house and lot and the movables
therein. Thereafter, Delma went to the Assessor's Office to get a new tax declaration uder her name.
She was surprised to find out that the property was already declared for tax purposes in the name of
XYZ Bank which had forclosed the mortgage on the property before it was sold to her. XYZ Bank
was also the purchaser in the foreclosure sale of the property. At the time, the property was still
unregistered but XYZ Bank registered the Sheriff's Deed of Conveyance in the day book of teh
Register of Deeds under Act 3344 and obtained a tax declaration in its name.
a. Was Delma a purchaser in good faith?
b. Who as between Delma and XYZ Bank has a better right to the house and lot?
c. Who owns the movables inside the house?

CRIMINAL LAW

1. Antero Makabayan was convicted of the crime of Rebellion. While serving sentence, he escaped
from jail. Captured, he was charged with, and convicted of, Evasion of Service of Sentence.
Thereafter, the President of the Philippines issued an amnesty proclamation for the offence of
Rebellion. Antero applied for and was granted the benefit of the amnesty proclamation.
Antero then filed a petition for habeas corpus, praying for his immediate release from confinement.
He claims that the amnesty extends to the offense of evasion of Service of Sentence. As judge, will
you grant the petition? Discuss

2. To secure a release of his brother Willy, a detention prisoner, and his cousin Vincent, who is
serving sentence for homicide, Chito asked the RTC Branch Clerk of Court to issue an Order
which would allow the two prisoners to be brought out of jail. At first, the Clerk refused, but when
Chito gave her P50,000, she consented.
She then prepared an Order requiring the appearance in court of Willy and Vincent, ostensibly as
witnesses in a pending case. She forged the judges signature, and delivered the Order to the jail
warden who, in turn, allowed Willy and Vincent to go out of jail in the company of an armed
escort, Edwin. Chito also gave Edwin P50,000 to leave the two inmates unguarded for three
minutes and provide them with an opportunity to escape. Thus, Willy and Vincent were able to
escape.
What crime or crimes, if any, had been committed by Chito, Willy, Vincent, the Branch Clear of
Court, Edwin and the jail warden? Explain

3. a. In a conviction for homicide, the trial court appreciated two mitigating circumstance and one
aggravating circumstance. Homicide under Article 249 of the Revised Penal Code is punishable
by reclusion temporal, an imprisonment term of twelve (12) years and one (1) day to twenty 20
years. Applying the Indeterminate Sentence Law, determine the appropriate penalty to be
imposed.
b. Will your answer be the same if it is conviction for illegal possession of drugs under RA 9165
(Dangerous Drugs Act of 2002), the prescribed penalty of which is also imprisonement for a
term of twelve (12) years and one day to twenty 20 years? Why or why not?
4. Angelo devised a Ponzi Scheme in which 500 persons were deceived into investing their money
upon a promise of a capital return of 25%, computed monthly, and guaranteed by post-dated
checks. During the first two months following the investment, the investors received their profits,
but thereafter, Angelo vanished.
Angelo was charged with 500 counts of estafa and 2000 counts of violation of BP 22. In his motion
to quash, Angelo contends that he committed a continued crime, or delito continuado, hence, he
committed only one count of estafa and one count of violation of BP 22.
a. What is delito continuado
b. Is Angelos contention tenable?

5. Manolo revealed to his friend Domeng his desire to kill Cece. He likewise confided to Domeng his
desire to borrow his revolver. Domeng lent it. Manolo shot Cece in Manil with Domengs revolver.
As his gun was used in the killing, Domeng asked Mayor tan to help him escape. The Mayor gave
Domeng P5000 and told him to proceed to Mindanao to hide. Domeng went to Mindanao. The
Mayor was later charged as an accessory to Ceces murder.
a. Can he (Mayor) be held liable for the charged? Explain
b. Can he be held liable for any other offence? Explain

6. Hubert and Eunice were married in the Philippines. Hubert took graduate studies in New York and
met his former girlfriend Eula. They renewed their friendship and finally decided to get married.
The first wife, Eunice, heard about the marriage and secured a copy of the marriage contract in
New York. Eunice filed a case of bigamy against Hubert in the Philippines.
a. Will the case prosper? Explain
b. If Eunice gave her consent to the second marriage, what will your answer be? Explain.

7. Upon opening a letter containing 17 money orders, the mail carrier forged the signatures of the
payees on the money orders and encashed them. What crim or crimes did the mail carrier commit?
Explain briefly

8. Raissa and Martin are married to each other but had been separated for the last five years. Raissa
decided to wed Juan, her suitor, who had no inkling that she was married. Raissa and Juan
accomplished an application for marriage license which they subscribed and swore to before the
Local Civil Registrar. Raissa declared, in the application, that she is single. The marriage license
was issued. In due time, the couple were married by the Mayor. Raissa and Juan had their first
sexual intercourse later in the evening. What crime or crimes, if any, did Raissa commit? Explain.

9. Roger, the leader of a crim syndicate in Malate, demanded the payment by Antonio, the owner of a
motel in that area, of P10000 a month as protection money. With the monthly payments, Roger
assured, the syndicate would provide protection to Antonio, his business and his employees.
Should Antonio refuse, Roger warned, the motel owner would either be killed or his establishment
destroyed. Antonio refused to pay the protection money. Days later, at around 3:00 in the morning,
Mauro, a member of the criminal syndicate, arrived at Antonios home and hurled a grenade into
an open window of the bedroom where Antonio, his wife and their three year old daughter were
sleeping. All three of them were killed instantly when the grenade exploded.
State, with reasons, the crime or crimes that had been committed as well as the aggravating
circumstance, if any, attendant thereto.
10. Eddie brought his son Randy to a local faithhealer known as Mother Himala. He was diagnosed
by the faithhealer as being possessed by an evil spirit. Eddie thereupon authorized the conduct of a
treatment calculated to drive the spirit from the boys body. Unfortunately, the procedure
conducted resulted in the boys death.
The faithhealer and three others who were part of the healing ritual were charged with murder and
convicted by the lower court. If you were the appellate court justice, would you sustain the
conviction upon appeal?

11. During a concert of gary V., and in order to prevent the crowd from rushing to the stage, Rafael
pointed his gun at the onrush of people. When the crown still pushed forward, Rafael fired his gun
into the air to scare them off. However, the bullet hit one of the metal roof supports, ricocheted and
then hit one of the stage crew members, causing injuries which resulted in the latters confinement
in the hospital for twelve days. What crime or crimes did Rafael commit?

12. Under what situations may a private person enter any dwelling, residence, or other establishments
without being liable for trespass to dwelling?

13 There are at least 7 instances or situations in criminal cases wherein the accused, either as an adult
or as a minor, can apply for and/or be granted a suspended sentence. Give 5

14. a. While SS Nagoya Maru was negotiating the sea route from Hong Kong to Manila, and whiel
still 300 miles apart from Aparri, Cagayan, its engine malfunctioned. The captain ordered the
ship to stop for emergency repairs lasting for almost 15 hours. Due to exhaustion, the officers
and crew fell asleep. While the ship was anchored, a motorboat manned by renegade Ybanags
from Claveria, Cagayan, passed by and took advantage of the situation. They cut the ships
engineds and took away several heavy crated of electrical equipment and loaded them in their
motorboat. Then they left hurriedly towards Aparri. At daybreak, the crew found that a robbery
took place. They radioed the Aparri Port Authorities resulting in the apprehension of the culprits.
What crime was committed?
b. Supposed that while the robbery was taking place, the culprits stabbed a member of the crew
while sleeping. What crime was committed?

15. Commissioner Marian Torres of the BIR wrote solicitation letters addressed to the Fil-Chinese
Chamber of Commerce and Industry and to certain CEOs of various multinational corporations
requesting donations for gifts for her office Christmas party. She used the Bureaus official
stationery. The response was prompt and overwhelming so much so that Commissioner Torres
office was overcrowded with rice cookers, radio sets, freezers, electric stoves and toasters. Her
staff also received several envelopes containing cash money for the employees Christmas
luncheon. Has Commissioner Torres committed any impropriety or irregularity? What laws or
decrees did she violate?

16. Jaime, Andy and Jimmy, laborers in the noodles in the noodles factory of Luke Tan, agreed to kill
him due to his arrogance and miserliness. One afternoon, they seized him and loaded him in a
taxi driven by Mario. They told Mario they will only teach Luke a lesson in Christian humility.
Mario drove them to a fishpond in Navotas where Luke was entrusted to Emil and Louie, the
fishpond caretakers, asking them to hide Luke in their shack because he was running from the
NBI. The trio then left in Marios car for Manila where they called up Lukes family and
threatened them to kill Luke unless they give a ransom within 24 hours. Unknown to them,
 because of a leak, the kidnapping was announced over the radio and TV. Emil and Louie heard
the broadcast and panicked, especially when the announcer stated that there is a shoot to kill
order for the kidnappers. Emil and Louie took Luke to the seashore of Dagat-dagatan where they
smashed his head with a shovel and buried him in the sand. However, they were seen by a
barangay kagawad who arrested them and brought them to the police station. Upon interrogation
they confessed and pointed to Jaime, Andy, Jimmy and Mario as those responsible for the
kidnapping. Later the 4 were arrested and charged. What crime or crimes did the 6 suspects
commit?

17. Dang was a beauty queen in a university. Job, a rich classmate, was so enamored with her that he
persistently wooed and pursued her. Dang, being in love with another man, rejected him. This
angered Job. Sometime in September 2003, while Dang and her sister Lyn were on their way home,
Job and his minor friend Nonoy grabbed them and pushed them inside a white van. They brought
them in an abandoned warehouse where they forced them to dance naked. Thereafter, they brought
them to a hill in a nearby barangay where they took turns raping them. After satisfying their lust,
Job ordered Nonoy to push Dang down a ravine, resulting in her death. Lyn ran away but Job and
Nonoy chased here and pushed her inside the van. Then the duo drove away. Lyn was never seen
again.
a. What crime or crimes were committed by Job and Nonoy
b. What penalties should be imposed on them?
c. Will Nonoys minority exculpate him?
d. Is the non-recovery of Lyns body material to the criminal liability of Job and Nonoy?

18. Harold was convicted of a crime defined and penalized by a special penal law where the imposable
penalty is from 6 months, as minimum to 3 years, as maximum.
State with reasons whether the court may correctly impose the following penalties
a. a straight penalty of 10 months
b. 6 months, as minimum to 11 months, as maximum
c. a straight penalty of 2 years

19. The accused found guilty for 10 counts of rape for having carnal knowledge with the same woman.
In addition to the penalty of imprisonment, he was ordered to pay indemnity in the amount of
P50000 for each count. On appeal, the accused questions the award of civil indemnity for each
count, considering that the victim is the same woman.
How would you rule on the contention of the accused?

20. During a PNP buy-bust operation, Cao Shih was arrested for selling 20 grams of shabu to a poseur-
buyer. Cao Shih, through an intermediary, paid Patrick, the Evidence Custodian of the PNP
Forensic Chemistry Section, the amount of P50000 in consideration for the destruction by Patrick
of the drug. Patrick manage to destroy the drug.
State with reasons whether Patrick committed the following crimes:
a. Direct Bribery
b. Indirect bribery
c. Section 3(e) of RA 3019 (Anti-Graft and Corrupt Practices Act)
d. Obstruction of Justice under PD 1829

21. Obie Juan is suspected to have in his possession an unspecified amount of shabu. An entrapement
operation was conducted by police officers, resulting in his arrest following the discovery of 100
 grams of the said dangerous drug in his possession. He was subjected to a drug test and was found
positive for the use of marijuana, another dangerous drug. He was subsequently charged with two
crimes; Violation of Section 11, Article II of RA 9165 for possession of shabu and violation of
Section 15, Article II of RA 9165 for the use of marijuana.
a. Are the charges proper?
b. So as not to be sentenced to death, Obie Juan offers to plead guilty to a lesser offense. Can he do
so? Why?

REMEDIAL LAW

1. Saturnino filed a criminal action against Alex for the latter's bouncing check. On the date of the
hearing after the arraignment, Saturnino manifested to the court that he is reserving his right to file a
separate civil action. The court allowed Saturnino to file a civil action separately and proceeded to
hear the criminal case.Alex file a motion for reconsideration contending that the civil action is
deemed included in the criminal case. The court reconsidered its order and ruled that Saturnino
could not file a separate civil action. Is the court's order granting the motion for reconsideration
correct? Why?

2. Joaquin filed a complaint against Jose for the foreclosure of a mortgage of a furniture factory with a
large number of machinery and equipment. During the pendency of the foreclosure suit, Joaquin
learned from reliable sources that Jose was quietly and gradually disposing of some of his
machinery and equipment to a businessman friend who was also engaged in furniture
manufacturing such that from confirmed reports Joaquin gathered, the machinery and equipment
left with Jose were no longer sufficient to answer for the latter's mortgage indebtedness. In the
meantime, judgment was rendered by the court in favor of Joaquin but the same is not yet final.
Knowing what Jose has been doing, if you were Joaquin's lawyer, what action would you take to
preserve whatever remaining machinery and equipment are left with Jose? Why?

3. A filed with MTC of Manila an action for specific performance against B, a resident of Quezon
City, to compel the latter to execute a deed of conveyance covering a parcel of land situated in
Quezon City having an assessed value of P19,000. B received the summons and a copy of the
complaint on January 2, 2003. On January 10, 2003, B filed a Motion to Dismiss the Complaint on
the ground of lack of jurisdiction contending that the subject matter of the suit was incapable of
pecuniary estimation. The court denied the motion. In due time, B filed with the RTC a Petition for
Certiorari praying that the said order be set aside because the MTC had no jurisdiction over the case.
On February 13, 2003, A filed with the MTC a motion do declare B in default. The motion was
opposed by B, on the ground that his Petition for Certiorari was still pending.
a. Was the denial of the Motion to Dismiss the Complaint correct?
b. Resolve the Motion to Declare the Defendant in Default.

4. Can a suit for injunction be aptly filed with the Supreme Court to stop the President of the
Philippines from entering into a peace agreement with the National Democratic Front?

5. X was charged with robbery. On the strength of a warrant of arrest issued by the court, X was
arrested by police operatives. They seized from his person a handgun. A charge for illegal
possession of firearm was also filed against him, in a press conference called by the police, X
admitted that he had robbed the victim of jewelry valued at P500,000. The robbery and illegal
 possession of firearm cases were tried jointly. The prosecution presented in evidence a newspaper
clipping of the report to the reporter who was present during the press conference stating that X
admitted the robbery. It likewise presented a certification of the PN Firearms and Explosives Office
attesting that the accused had no license to carry any firearm. The certifying officer, however, was
not presented as a witness. Both pieces of evidence were objected to the defense.
a. Is the newspaper clipping admissible in evidence against X?
b. Is the certification of the PNP Firearms and Explosive Office without the certifying officer
testifying on it admissible in evidence against X?

6. AX was charged before the YY RTC with theft of jewelry valued at P20,000, punishable by
imprisonment of up to 10 years of prision mayor under the Revised Penal Code. After trial, he was
convicted of the offense charged, notwithstanding that the material facts duly established during the
trial showed that the offense committed was estafa, punishable by imprisonment of up to eight years
of prision mayor under the said Code. No appeal having been taken therefrom, said judgment of
conviction became final. Is the judgment of conviction valid? Is the said judgment reviewable thru a
special civil action for certiorari?

7. At the scene of a crime, police recovered a man's short with blood stains and strands of hair. Shortly
afterwards, a warrant was issued and police arrested the suspect, AA. During his detention, a
medical technician extracted blood sample from his finger and cut a strand from his hair, despite
AA's objections. During AA's trial for rape with murder, the prosecution sought to introduce DNA
evidence against AA, based on forensic laboratory matching of the materials found at the crime
scene and AA's hair and blood samples. AA's counsel objected, claiming that DNA evidence is
inadmissible because the materials taken from AA were in violation of his constitutional right
against self-incrimination as well as his right of privacy and personal property. Should the DNA
evidence be admitted or not?

8. Perry is a resident of Manila, while Ricky and Marvin was residents of Batangas City. They are the
co-owners of a parcel of residential land located in Pasay City with an assessed value of P100,000.
Perry borrowed P100,00 from Ricky which he promised to pay on or before December 1, 2004.
However, Perry failed to pay his loan. Perry also rejected Ricky and Marvin's proposal to partition
the property. Ricky filed a complaint against Perry and Marvin in the RTC of Pasay for the partition
of the property. He also incorporated in his complaint his action against Perry for the collection of
the latter's P100,000 loan, plus interests and attorney's fees. State with reasons whether it was
proper for Ricky to join his causes of action in his complaint for partition against Perry and Marvin
in the RTC of Pasay.

9. Explain briefly whether the RTC may motu propio, take judicial notice of the following:
a. The street name of methamphetamine hydrochloride is shabu;
b. Ordinances approved by municipalities under its territorial jurisdiction;
c. Foreign laws;
d. Rules and Regulations issued by quasi-judicial bodies implementing statutes;
e. Rape may be committed even in public places.

10. Leticia was estranged from her husband Paul for more than a year due to his suspicion that she was
having an affair with Manuel, their neighbor. She was temporarily living with her sister in Pasig
City. For unknown reasons, the house of Leticia's sister was burned, killing the latter. Leticia
 survived. She saw her husband in the vicinity during the incident. Later, he was charged with arson
in an Information filed with the RTC Pasig. During the trial, the prosecutor called Leticia to the
witness stand and offered her testimony to prove that her husband committed arson. Can Leticia
testify over the objection of her husband on the ground of marital privilege?

1. The search warrant authorized the seizure of undetermined quantity of shabu. During the service
of the search warrant, the raiding team also recovered a kilo of dried marijuana leaves wrapped in
newsprint. The accused moved to suppress the marijuana leaves as evidence for the violation of
Section 11 of the Comprehensive Dangerous Drugs Act of 2002 since they were not covered by the
search warrant. The State justified the seizure of the marijuana leaves under the plain view
doctrine. There was no indication of whether the marijuana leaves were discovered and seized
before or after the seizure of the shabu. If you are the judge, how would you rule on the motion to
suppress?

2. The heirs of H agree among themselves that they will honor the division of Hs estate as indicated
in her Last Will and Testament. To avoid the expense of going to court in a Petition for Probate of
the Will, can they instead execute an Extrajudicial Settlement Agreement among themselves?
Explain.

3. May a private document be offered and admitted in evidence both as documentary evidence and as
object evidence?

4. Raphael, a warehouseman, filed a complaint against V Corp, X Corp and Y Corp to compel them
to interplead. He alleged therein that the three corporations claimed title and right of possession
over the goods deposited in his warehouse and that he was uncertain which of them was entitled to
the goods. After due proceedings, judgement was rendered by the court declaring that X Corp was
entitled to the goods. The decision became final and executory.
Raphael filed a complaint against X Corp for the payment of P100,000 for storage charges and
other advances for the goods. X Corp filed a motion to dismiss the complaint on the ground of res
judicata. X Corp alleged that Raphael should have incorporated in his complaint for interpleader
his claim for storage fees and advances and that for his failure he was barred from interposing his
claim. Raphael replied that he could not have claimed storage fees and other advances in his
complaint for interpleader because he was not yet certain as to who was liable therefore.
Resolve the motion with reasons.

5. Amorsolo, a Filipino citizen permanently residing in New York City, filed with the RTC of Lpa
City a Complaint for Rescission of Contract of Sale of Land against Brigido, a resident of
Barangay San Miguel, Sto. Tomas, Batangas. The subject property, located in Barangay Talisay,
Lipa City, hasan assessed value of 19,700.Appended to the complaint is Amorsolos verification
and certification of non-forum shoping executed in New York City, duly notarized by Mr. Joseph
Brown, a notary public in New York. Brigido filed a motion to dismiss the complaint on the
following grounds:
a. The court cannot acquire jurisdiction over the person of Amorsolo because he is not a resident of
the Philippines;
b. The RTC does not have jurisdiction over the subject matter of the action involving real property
with an assessed value of 19,700; exclusive and original jurisdiction is with the Municipal Trial
Court where the defendant resides;
 c. The verification and certification of non-forum shopping are fatally defective because there is no
accompanying certification issued by the Philippine Consulate in New York, authenticating that Mr.
Brown is duly authorized to notarized the document. Rule on the foregoing ground with reasons.

6. FG was arrested without a warrant by police while he was walking in a busy street. After
preliminary investigation, he was charged with rape and the corresponding information was filed in
the Regional Trial Court. On arraignment, he pleaded not guilty. Trial on the merits ensued. The
court rendered judgment convicting him. On appeal, FG claims that the judgement is void because
he was illegally arrested. If you were the Solicitor General, counsel for the People of the
Philippines, how would your refute said claim?

7. Lani filed an action for partition and accounting in the Regional Trial Court of Manila against her
sister Mary Rose, who is a resident of Singapore and is not found in the Philippines. Upon motion,
the court ordered the publication of the summons for three weeks in a local tabloid, Bulgar. Linda,
an OFW vacationing in the Philippines, saw the summons in Bulgar and brought a copy of the
tabloid when she returned to Singapore, Linda showed the tabloid and the page containing the
summons to Mary Rose, who said Yes I know, my kumara scanned and e-mailed that page of
Bulgar to me. Did the court acquire jurisdiction over Mary Rose?

8. Husband H files a petition for declaration of nullity of marriage before the RTC of Pasig City.
Wife W files a petition for habeas corpus before the RTC of Pasay City, praying for custody over
their minor child. H files a motion to dismiss the wifes petition on the ground of the pendency of
the other case. Rule on this.

9. L was charged with illegal possession of shabu before the RTC. Although bail was allowable
under his indictment, he could not afford to post bail, and so he remained in detention at the City
Jail. For various reasons ranging from the promotion of the Presiding Judge, to the absence of the
trial prosecutor, and to the lack of notice to the City Jail Warden, the arraignment of L was
postponed nineteen times over a period of two years. Twice during that period, Ls counsel filed
motions to dismiss, invoking the right of the accused to a speedy trial. Both motions were denied
by the RTC. Can L file a petition for mandamus?

10. Bembol was charged with rape. Bembols father, Ramil approached Artemon, the victims father,
during the preliminary investigation and offered 1 Million to Artemon to settle the case. Artemon
refused the offer.
a. During trial, the prosecution presented Artemon to testify on Ramils offer and thereby
establish an implied admission of guilt. Is Ramils offer to settle is admissible in evidence?
b. During the pre-trial, Bembol personally offered to settle the case for 1 Million to the private
prosecutor, who immediately put the offer on record in the presence of the trial judge. Is Bembols
offer a judicial admission of his guilt?

1. Carlos filed a complaint against Pedro in the Regional Trial Court of Ozamis City for the recovery
of the ownership of a car. Pedro filed his answer within the reglementary period. After the pre-
trial and actual trial, and after Carlos has completed the presentation of his evidence, Pedro moved
for the dismissal of the complaint on the ground that under the facts proven and the law applicable
to the case, Carlos is not entitled to the ownership of the car. The Regional Trial Court granted the
motion for dismissal. Carlos appealed the order of dismissal and the appellate court reversed the
order of the trial court. Thereafter, Pedro filed a motion with the Regional Trial Court asking the
 latter to allow him to present his evidence. Carlos objected to the presentation of evidence by
Pedro. Should the Regional Trial Court grant Pedros motion to present his evidence?

2. Acting on a tip by an informant, police officers stopped a car being driven by D and ordered him
to open the trunk. The officers found a bag containing several kilos of cocaine. They seized the
car and the cocaine as evidence and placed D under arrest. Without advising him of his right to
remain silent and to have the assistance of an attorney, they question him regarding the cocaine. In
reply, D said he does not know anything about it. D was charged with illegal possession of
cocaine, a prohibited drug. Upon motion of D, the court suppressed the use of cocaine as evidence
and dismissed the charges against him. D commenced proceedings against the police for the
recovery of his car. In his direct examination, D testified that he owned the car but had registered
it in the name of a friend for convenience. On cross-examination, the attorney representing the
police asked After your arrest, did you not tell the arresting officers that it wasnt your car? If
you were Ds attorney, would you object to the question? Why?

3. a. May an order denying the probate of a will still be overturned after the period to appeal
therefrom has lapsed? Why?
b. What should the court do if, in the course of intestate proceedings, a will is found and it is
submitted for probate?

4. After an answer has been filed, can the plaintiff amend his complaint, with leave of court, by
changing entirely the nature of the action?

5. Summons was issued by the MM RTC and actually received on time by defendant from his wife
at their residence. The sheriff earlier that day had delivered the summons to her at said residence
because defendant was not home at the time. The sheriffs return or proof of service filed with the
court in sum states that the summons, with attached copy of the complaint, was served on
defendant at his residence thru his wife, a person suitable of age and discretion then residing
therein. Defendant moved to dismiss on the ground that the court had no jurisdiction over his
person as there was no valid service of summons on him because the sheriffs return or proof of
service does not show that the sheriff first made a genuine attempt to serve the summons on
defendant personally before serving it thru his wife. Is the motion to dismiss meritorious? What is
the purpose of summons and by whom may it be served?

TAXATION LAW

1. Melissa inherited from her father a 300-square meter lot. At the time of her father's death on March
14, 1995; the property was valued at P720.000. On February 28, 1996, to defray the cost of the
medical expenses of her sick son, she sold the lot for P600,000, on cash basis. The prevailing
market value of the property at the time of the sale was P3,000 per square meter.
a. Is Melissa liable to pay capital gains tax on the transaction? If so how much and why? If not,
why not?
b. Is Melissa liable to pay VAT on the sale of the property? If so, how much and why? If not, why
not?
2. Kenya International Airlines (KIA) is a foreign corporation, organized under the laws of Kenya. It
is not licensed to do business in the Philippines. Its commercial airplanes do not operate within
Philippine territory or service passengers embarking from Philippine airports. The firm is
represented in the Philippines by its general agent, Philippine Airlines (PAL), a Philippine
corporation.
KIA sells airplane tickets through PAL and these tickets are serviced by KIA airplanes outside the
Philippines. The total sales of airline tickets transacted by PAL for KIA in 1997 amounted to
P2,968,156. The Commissioner of Internal Revenue assessed KIA deficiency income taxes at the
rate of 35% on its taxable income, finding that KIA's airline ticket sales constituted income derived
from sources within the Philippines.
KIA filed a protest on the ground that the P2,968,156 should be considered as income derived
exclusively from sources outside the Philippines since KIA only serviced passengers outside
Philippine territory.
Is the position of KIA tenable?

3. The City of Manila enacted Ordinance No. 55-66 which imposes a municipal occupation tax on
persons practicing various professions in the city. Among those subjected to the occupation tax
were lawyers, Atty. Mariano Batas, who has a law office in Manila, pays the ordinance imposed
occupation tax under protest. He goes to court to assail the validity of the ordinance for being
discriminatory. Decide with reasons.

4. ABCD Corporation is a domestic corporation with individual and corporate shareholders who are
residents of United States. For the 2nd quarter of 1983, these US based individual and corporate
stockholders received cash dividends from the corporation. The corresponding withholding tax on
dividend income is 30% for individuals and 35% for corporate non-resident stockholders was
deducted at source and remitted to the BIR.
On May 15, 1984, ABCD filed with the Commissioner of Internal Revenue a formal claim for
refund, alleging that under the RP-US Tax Treaty, the deduction withheld at source as tax on
dividends earned was fixed at 25% of said income. Thus, ABCD asserted that it overpaid the
withholding tax due on the cash dividends given to its non-resident stockholders in the US the
Commissioner denied the claim.
On January 17, 1985, ABCD filed a petition with the Court of Tax Appeals reiterating its demand
for refund.
a. Does ABCD Corporation have the legal personality to file the refund on behalf of its non-
resident stockholders? Why or why not?
b. Is the contention of ABCD Corporation correct? Why or why not?

1. Raffy and Wena, husband and wife, are both employed by XXX Corporation. After office hours,
they jointly manage a coffee shop at the ground floor of their house. The coffee shop is registered
in the name of both spouses. Which of the following is the correct way to prepare their income tax
return? Choose only the correct letter.
a. Raffy will declare as his income the salaries of both spouses, while Wena will declare the
income from the coffee shop.
b. Wena will declare the combined compensation income of the spouses, and Raffy will declare the
income from the coffee shop.
c. All the income will be declared by Raffy alone, because only one consolidated return is required
to be filed by the spouses.
 d. Raffy will declare his own compensation income and Wena will declare hers. The income from
the coffee shop shall be equally divided between them. Each spouse shall be taxed separately on
their corresponding taxable income to be covered by one consolidated return for the spouses.
e. Raffy will declare his own compensation income and Wena will declare hers. The income from
the coffee shop shall be equally divided between them. Raffy will file one income tax return to
cover all the income of both spouses, and the tax is computed on the aggregate taxable income
of the spouses.

2. In 1999, Xavier purchased from his friend, Yuri, a painting for P500,000. The fair market value of
the painting at the time of the purchase was P1 million. Yuri paid all the corresponding taxes on the
transaction. In 2001, Xavier died. In his last will and testament, Xavier bequeathed the painting,
already worth P1.5 million, to his only son, Zandro. The will also granted Zandro the power to
appoint his wife, Wilma, as successor to the painting in the event of Zandros death. Zandro died in
2007, and Wilma succeeded to the property.
a. Should the painting be included in the gross estate of Xavier in 2001 and thus, be subject to
estate tax?
b. Should the painting be included in the gross estate of Zandro in 2007 and thus, be subject to
estate tax?

3. A final assessment notice was issued by the BIR on June 13, 2000 and received by the taxpayer on
June 18, 2000. The taxpayer protested the assessment on July 13, 2000. The protest was initially
given due course, but was eventually denied by the Commissioner of Internal Revenue in a
decision dated June 15, 2005. The taxpayer then filed a petition for review with the CTA, but the
CTA dismissed the same.
a. Is the CTA correct in dismissing the petition for review? Explain brief
b. Assume that CTAs decision dismissing the petition for review has become final. May the
Commissioner legally enforce collection of the delinquent tax? Explain brief

4. Jose Cernan, Filipino, married to Maria Cernan, died in a vehicular accident in NLEX on July 10,
2007. The spouses owned, among others, a 100-hectare agricultural land in Sta. Rosa, Laguna with
current fair market value of P20 million, which was the subject matter of a Joint Venture
Agreement about to be implemented with Star Land Corporation, a well-known real estate
development company. He bought the said real property for P2 million fifty years ago. On January
5, 2008, the administrator of the estate and Star jointly announced their big plans to start
conversion and development of the agricultural lands in Sta. Rosa, Laguna, into first-class
residential and commercial centers. As a result, the prices of real properties in the locality have
doubled.
The Administrator of the estate of Jose filed the estate tax return on January 9, 2008, by including
in the gross estate the real property at P2 million. After 9 months, the BIR issued deficiency estate
tax assessment, by valuing the real property at P40 million.
a. Is the BIR correct in valuing the real property at P40 million? Explain briefly.
b. If you disagree, what is the correct value to use for estate tax purposes? Explain briefly.

5. DEF Corporation is a wholly owned subsidiary of DEF Inc., California, USA. Starting December
15, 2004. DEF Corporation paid annual royalties to DEF Inc., for the use of the latters software,
for which the former, as withholding agent of the government, withheld and remitted to the BIR the
15% final tax based on the gross royalty payments. The withholding tax return was filed and the
tax remitted to the BIR on January 10 of the following year. On April 10, 2007, DEF Corporation
 filed a written claim for tax credit with the BIR, arising from erroneously paid income taxes
covering the years 2004 and 2005. The following day, DEF Corporation filed a petition for review
with the Court of Tax Appeals involving the tax credit claim for 2004 and 2005.
a. As a BIR lawyer handling the case, would you raise the defense of prescription in your answer
to the claim for tax credit?
b. Can the BIR lawyer raise the defense that DEF Corporation is not the proper party to file such
claim for tax credit?

6. While driving his car to Baguio last month, Pedro together with his wife Assunta, and only son,
Jaime, met an accident that caused the instantaneous death of Jaime. The following day, Assunta
also died in the hospital. The spouses and their son had the following assets and liabilities at the
time of death:

Assunta Jaime
Conjugal Exclusive
Cash P10,000,000 P1,200,000
Cars P200,000,000 P500,000
Land P5,000,000 P2,000,000
Residential House P4,000,000
Mortgage Payable P2,500,000
Funeral Expenses P300,000
a. Is the estate of Jaime Asuncion liable for estate tax? Explain briefly.
b. Is vanishing deduction applicable to the estate of Assunta? Explain briefly

7. The City of Manila enacted an ordinance, imposing a 5% of tax on gross receipts on rentals of
space in privately owned public markets. BAT Corporation questioned the validity of the ordinance,
stating that the tax is an income tax, which cannot be imposed by the city government. Do you
agree with the position of BAT Corporation? Explain.

8. William Antonio imported into the Philippines a luxury car worth $100,000. This car was, however,
declared only for $20,000 and corresponding customs duties and taxes were paid thereon.
Subsequently, the Collector of Customs discovered the underdeclaration and he initiated forfeiture
proceedings of the imported car.
a. May the Collector of Customs declare the imported car forfeited in favor of the government?
b. Are forfeiture proceedings of goods illegally imported criminal in nature?

9. John McDonald, US citizen residing in Makati City, bought shares of stock of a domestic
corporation whose shared are listed and traded in the Philippines Stock Exchange at the price of P2
million. Yesterday, he sold the shares of stock through his favorite Makati stockbroker at a gain of
P200,000.
a. Is John subject to Philippine income tax on the sale of his shares through his stockbroker? Is he
liable for any other tax?
b. If John directly sold the shares to his best friend, who is another US citizen residing in Makat, at
a gain of P200,000, is he liable for Philippine income tax? If so, what is the tax base and rate?

10. Spouses Jose and Clara San Pedro, both Filipino citizens, are the owners of a residential house and
lot in Quezon City. After the recent wedding of their son, Mario, to Maria, the spouses donated
 said real property to them. At the time of donation, the real property has a fair market value of P2
million.
a. Are Mario and Maria subject to income tax for the value of the property donated to them?
Explain.
b. Are Jose and Clara subject to donors tax? If so, how much is the taxable gift of each spouse and
what rate shall be applied to the gift?

11. What is the nature of the taxing power of the provinces, municipalities and cities? How will the
local government units be able to exercise their taxing powers?

12. What kind of taxes, fees and charges are considered as National Internal Revenue Taxes under
National Internal Revenue Code?

13. Z is a Filipino immigrant living in the United States for more than 10 years. He is retired and he
came back to the Philippines as a balikbayan. Every time he comes to the Philippines, he stays here
for about a month. He regularly receives a pension from his former employer in the US, amounting
to $1000 a month. While in the Philippines, with his pension pay from his former employer, he
purchased three condominium units in Makati which he is renting out for P15,000 a month each.
a. Does the $1,000 pension become taxable because he is now residing in the Philippines?
b. Is his purchase of the three condominium units subject to any tax? Reason briefly.
c. Will Z be liable to pay income tax on the P45,000 monthly income?

14. Weber Realty Company which owns a three-hectare land in Antipolo entered into Joint Venture
Agreement with Prime Development Company for the development of said parcel of land. Weber
Realty as owner of the land contributed the land to the Joint Venture and Prime Development
agreed to develop the same into a residential subdivision and construct residential houses thereon.
They agreed that they would divide the lots between them.
a. Does the JVA entered into by and between Weber and Prime create a separate taxable entity?
b. Are the allocation and distribution of the saleable lots to Weber and Prime subject to income tax
and to expanded withholding tax?
c. Is the sale by Weber or Prime of their respective shares in the saleable lots to third parties
subject to income tax and to expanded withholding tax.

15. The Congregation of the Mary Immaculate donated a land and a dormitory building located along
Espana St. in favor of the Sisters of the Holy Cross, a group of nuns operating a free clinic and high
school teaching basic spiritual values. Is the donation subject to donors tax? Reason briefly.

16. ABC Corporation won a tax refund case for P50 million. Upon execution of the judgment and
when trying to get the Tax Credit Certificate representing the refund, the BIR refused to issue the
TCC on the basis of the fact that the corporation is under audit by the BIR and it has a potential tax
liability. Is there a valid justification for the BIR to withhold the issuance of the TCC? Explain
your answer briefly.

17. What properties are exempt from the real property tax?

18. 1. Vanishing deduction is availed of by taxpayers to:

a. correct his accounting records to reflect the actual deductions made
b. reduce his gross income
 c. reduce his output value-added tax liability
d. reduce his gross estate

2. The Constitution provides charitable institutions, churches, parsonages or convents appurtenant

thereto, mosques, and non-profit cemeteries and all lands, buildings and improvements actually,
directly and exclusively used for religious, charitable or educational purposes shall be exempt from
taxation This provision exempts charitable institutions and religious institutions from what kind of
taxes?
a. from all kinds of taxes, i.e., income, VAT, customs, duties, local taxes, and real property tax
b. from income tax only
c. from value-added tax only
d. from real property tax only
e. from capital gains tax only

19. Congress enacts a law imposing a 5% tax on the gross receipts of common carriers. The law does
not deine the term gross profits. Express Transport Inc., a bus company plying the Manila-
Baguio route, has time deposits with ABC Bank. In 2005, Express Transport earned P1 million
interest, after deducting the 20% final withholding tax from its time deposits with the bank. The
BIR wants to collect a 5% gross receipt tax on the interest income of Express Transport without
deducting the 20% final withholding tax. Is the BIR correct?

20. The Commissioner of Internal Revenue issued an assessment for deficiency income tax for taxable
year 2000 last July 31, 2006 in the amount of P10 million inclusive of surcharge and interest. If the
delinquent taxpayer is your client, what steps will you take? What is your defense?

21. The Collector of Customs issued an assessment for unpaid customs duties and taxes on the
importation of your client in the amount of P980,000. Where will you file your case to protect your
clients right? Choose the correct courts/agencies, observing their proper hierarchy?

22. Gerry was being prosecuted by the BIR for failure to pay his income tax liability for Calendar Year
1999 despite several demands by the BIR in 2002. The information was filed with the RTC only
last June 2006. Gerry filed a motion to quash the Information on the ground of prescription, the
Information having been filed beyond the 5-year reglementary period. If you were the judge, will
you dismiss the Information? Why?

23. Lilys Fashion Inc., is a garment manufacturer located and registered as a Subic Bay Freeport
Enterprise under RA 7227 and a non-VAT taxpayer. As such, it is exempt from payment of all
local and national internal revenue taxes. During its operations, it purchased various supplies and
materials necessary in the conduct of its manufacturing business. The suppliers of these goods
shifted to Lilys Fashion Inc. the 10% VAT on the purchased items amounting to P500,000. Lilys
Fashion Inc. filed with the BIR a claim for refund for the input tax shifted to it by the suppliers. If
you were the Commissioner of Internal Revenue, will you allow the refund?