Welcome to the Albano Bar Review Center website!

ABRC is on its 4th Review Season.

Please click here to enroll online.

Enrollment for the 2014 Bar Review Season is now open.

Click here to check out the complete list of our Lecturers.

IN PHOTO: NLRC Comm. Ortiguerra, Prof. Barlis, Prof. Cruz, Dean Albano, Justice Sandoval, Dean Riano, and Prof. Reyes.

Monday, March 17, 2014

Congratulations to Albano Bar Review Center's bar topnotchers and passers

Source

Congratulations to our topnotchers!

#5 Tercel Gephart of University of San Carlos
#7 Katrine Suyat of San Beda College-Manila





1. ALCARAZ, JESSIE
2. ALONZON, JASON
3. BUSANGILAN, MARI CIELE
4. CAPILI, VAN JOSEPH
5.CHING, CHERRY CHRISTINE
6. DE VERA, INA BEATRIZ
7. DE VILLA, MACARIO
8. DELENA, MA. BLESILDA
9. DELIS, MA. PHOEBE
10. DOYAOEN, ANNETTE
11. GABUNAS, DIVINE GRACE
12.GARAY, STEPHANIE
13. GASATAYA, JORELYNE
14. GAVIOLA, ALAN BYRNE
15. JUNASAN, DJOANIVIE JOMARE
16. LAPITAN, ERWIN
17. MAAMO, ANTHONY
18. MERCADO-GEPHART, TERCEL MARIA
19. NACUA, BERNADINE
20. NAGA, JOHN HENRY
21. NUEZ, MIGUEL LORENZO
22. OBBUS, FE V.
23. PAMBID, KARLON V.
24. PE, LAURIE
25. RADA, MAYETH O.
26. RAZON, ZENAIDA
27. REMIGIO, FRANCIS JAY
28. RILLERA, CHRISTINE MARIE
29. RODRIGUES, ANNA KATARINA
30. RUZ, JOHN EDMOND
31. SANSON, ROSEBELL
32. SANTOS, RIO ROSE
33. SUYAT, KATRINE PAULA
34. TAJON, MAYVELYN
35, TAN, FRANZ KEVIN
36. TAMAYO, ANNA CLARIFE
37. TEVES, CASSANDRA 
38. VELOSO, PINKY
39. WONG, ARNEL VINCENT
40. ZULUETA, ISABEL
41. COLES, NAT KING


BAGUIO

UNIVERSITY OF THE CORDILLERAS
  1. BERGONIA, SHERLY ANN
  2. TAMBIAC, GRAY
  3. NOLASCO, RAIZULLI
  4. DULAWAN, VIVIAN
  5. GUZMAN, ANGELA
  6. DULNUAN, RUBY ANN
  7. NGO, MARY GRACE
  8. YANES, MERIAN
  9. TAYABAN, VANESSA
  10. CASTRO, PATRICIA MARIE

SAINT LOUIS UNIVERSITY
  1. DASAYON, CLIMARK
  2. GAMMONAC, ABIGAIL

UNIVERSITY OF CAGAYAN VALLEY
  1. URANI, RYAN
GENERAL SANTOS
1. FRINAL, NELYN
2. SALDAVOR, RODEL

NAGA
1. RUBIO, MARK

DAVAO
1.KINTARA, KRISZA JOY
2. LINOG, HANNA KIARRA

Sunday, March 16, 2014

Dean Ed Vincent Albano's Political Law Reviewer 2014 Edition has hit the shelves!



Hardbound, 910 pages on white book paper
Featuring newest decisions of the Supreme Court
Perfect reference material for Political Law Review
Published by ChanRobles Publishing, Inc.

Monday, January 27, 2014

ABRC Special Promo: 50% Off on Review Fee for Honor Law Grads

Albano Bar Review Center wishes to inform everyone that it is giving 50% discount on review fee to all honor graduates. 

Albano Bar Review Center Ozamis 2014 Schedule

NOW OFFERING

2014 BAR REVIEW CLASSES
Starting April 25, 2014 to August 31, 2014

ENROLMENT IS ONGOING!
Review is also open to Law undergraduates who wish to
enhance their knowledge of the Law.
MOCK BAR Examinations will be conducted for
a minimum fee.

FREE HANDOUTS Personally Prepared by Lecturers



Fee: Php16,000.00 Php 4,500.00
(Pre-week only)

Review Director: Dean Ed Vincent S. Albano


Review Site
Executive Hotel Function Hall
Washington St., Ozamis City


 For enrolment, bring 2pcs. 2x2 ID pictures


- - - For inquiries, pls. contact: - - - - -

RODGEE JUMALON
0948 - 4012159; 0905 - 6135360

Please download the images below to view them in their actual sizes:











Wednesday, January 1, 2014

Dean Ed Vincent Albano's Civil Law Reviewer 2013 Edition is out now!


Hardbound, 819 pages on white book paper
Featuring newest decisions of the Supreme Court
Perfect reference material for Civil Law Review


Friday, December 27, 2013

2014 Bar Review Lineup

CIVIL LAW 
 Dean Ed Vincent S. Albano
Assoc. Dean Teresita L. Cruz
Atty. Cresencia C. Cruz


REMEDIAL LAW 
Dean Willard B. Riano
Dean Ed Vincent S. Albano
Dean Jose Grapilon
Dean Reynaldo Agrazamendez


POLITICAL LAW 
Prof. Edwin R. Sandoval
Dean Ed Vincent S. Albano
Prof. Edwin Yan

CRIMINAL LAW 
Justice Edilberto G. Sandoval
Prof. Victoria C. Garcia
Prof. Modesto A. Ticman, Jr.


COMMERCIAL LAW 
Justice Japar B. Dimaampao
Prof. Jason R. Barlis
Prof. Maria Lulu G. Reyes
Prof. Renato S. Rondez
Sol. Ed Vincent A. Albano III


LABOR LAW 
NLRC Comm. Isabel P. Ortiguerra
USEC Josephus B. Jimenez
Labor Arbiter Benedict G. Kato



TAXATION LAW 
Justice Japar B. Dimaampao
Prof. Jason R. Barlis
Prof. Noel M. Ortega



LEGAL ETHICS 
Assoc. Dean Teresita L. Cruz



LAND REGISTRATION & PRIVATE INTERNATIONAL LAW 
Sol. Ed Vincent A. Albano III



SURVEY OF 2014 CASES 
Dean Ed Vincent S. Albano


Thursday, October 17, 2013

2013 Bar Exam Questions in Civil Law

BAR EXAMINATIONS 2013
CIVIL LAW

October 13, 2013 8:00 A.M.-12:00 P.M.

INSTRUCTIONS


1. This Questionnaire contains SIXTEEN (16) pages including these Instructions pages. Check the number of pages and the page numbers at the upper right hand corner of each page of this Questionnaire and make sure it has the correct number of pages and their proper numbers.

There are TEN (10) Essay Questions numbered I to X (with subquestions), and TEN (10) Multiple Choice Questions (MCQs) numbered I to X (with subquestions), to be answered within four (4) hours.

The essay portion contains questions that are worth 80°/o of the whole examination, while the MCQ portion contains questions worth 20%.

2. Read each question very carefully and write your answers in your Bar Examination Notebook in the same order the questions are posed.

Write your answers only at the front, not the back, page of every sheet in your Examination Notebook. Note well the allocated percentage points for each number, question, or sub-question. In your answers, use the numbering system in the questionnaire.

If the sheets provided in your Examination Notebook are not sufficient for your answers, use the back pages of every sheet of your Examination Notebook, starting at the back page of the first sheet and the back of the succeeding sheets thereafter.


3. Answer the Essay questions legibly, clearly, and concisely. Start each number on a separate page. An answer to a sub-question under the same number may be written continuously on the same page and the immediately succeeding pages until completed.

Your answer should demonstrate your ability to analyze the facts presented by the question, to select the material from the immaterial facts, and to discern the points upon which the question turns. It should
 show your knowledge and understanding of the pertinent principles and theories of law involved and their qualifications and limitations. It should demonstrate your ability to apply the law to the given facts, and to reason logically in a lawyer-like manner to a sound conclusion from the given premises.

A mere "Yes" or "No" answer without any corresponding explanation or discussion will not be given any credit. Thus, always briefly but fully explain your answers althoueh the question does not expressly ask for an explanation. At the same time, remember that a complete explanation does not require that you volunteer information or discuss legal doctrines that are not necessary or pertinent to the solution to the problem. Yon do not need to re-write or repeat the question in your Examination Notebook.

4. MCQs are to be answered by writing in your Examination Notebook the capital letter (A, B, C, D, or E) corresponding to your chosen answer. The MCQ answers should begin in the page following the last page ofyour essay answers.



There is only one correct answer to every MCQ; choose the BEST answer from among the offered choices. Note that some MCQs may need careful analysis both of the questions and the choices offered.

5. Make sure you do not write your name or any extraneous note/s or distinctive markingls on your Examination Notebook•that can serve as an identifying mark/s (such as names that are not in the given questions, prayers, or private notes to the Examiner).

Writing, leaving or making any distinguishing or identifying mark in the Examination Notebook is considered cheating and can disqualify you for the Bar examinations.

You can use the questionnaire for notes you may wish/need to write during the examination.

HAND IN YOUR NOTEBOOK WITH THIS QUESTIONNAIRE




J. ARTURO D. BRION

Chairman

2013 Bar Examinations





ESSAY QUESTIONS

I.

You are a Family Court judge and before you is a Petition for the Declaration of Nullity of Marriage (under Article 36 of the Family Code) filed by Maria against Neil. Maria claims that Neil is psychologically incapacitated to comply with the essential obligations of marriage because Neil is a drunkard, a womanizer, a gambler, and a mama's boy- traits that she never knew or saw when Neil was courting her. Although summoned, Neil did not answer Maria's petition and never appeared in court.

To support her petition, Maria presented three witnesses- herself, Dr. Elsie Chan, and Ambrosia. Dr. Chan testified on the psychological report on Neil that she prepared. Since Neil never acknowledged n9r responded to her invitation for interviews, her report is solely based on her interviews with Maria and the spouses' minor children. Dr. Chan concluded that Neil is suffering from Narcissistic Personality Disorder, an ailment that she found to be already present since Neil's early adulthood and one that is grave and incurable. Maria testified on the specific instances when she found Neil drunk, with another woman, or squandering the family's resources in a casino. Ambrosia, the spouses' current household help, corroborated Maria's testimony.



On the basis of the evidence presented, will you grant the petition? (8%,)



II.

A collision occurred at an intersection involving a bicycle and a taxicab. Both the bicycle rider (a businessman then doing his morning exercise) and the taxi driver claimed that the other was at fault. Based on the police report, the bicycle crossed the intersection first but the taxicab, crossing at a fast clip from the bicycle's left, could not brake in time and hit the bicycle's rear wheel, toppling it and throwing the bicycle rider into the sidewalk 5 meters away.



The bicycle rider suffered a fractured right knee, sustained when he fell on his right side on the concrete side walk. He was hospitalized and was subsequently operated on, rendering him immobile for 3 weeks and requiring physical rehabilitation for another 3 months. In his complaint for damages, the rider prayed for the award of Pl,OOO,OOO actual damages, P200,000 moral damages, P200,000 exemplary damages, Pl 00,000 nominal damages and P50,000 attorney's fees.



Assuming the police report to be correct and as the lawyer for the bicycle rider, what evidence (documentary and testimonial) and legal arguments will you present in court to justify the damages that your client claims? (8°/o)




III.

Sergio is the registered owner of a 500-square meter land. His friend, Marcelo, who has long been interested in the property, succeeded in persuading Sergio to sell it to him. On June 2, 2012, they agreed on the purchase price of P600,000 and that Sergio would give Marcelo up to June 30, 2012 within which to raise the amount. Marcelo, in a light tone usual between them, said that they should seal their agreement through a case of Jack Daniels Black and P5,000 "pulutan" money which he immediately handed to Sergio and which the latter accepted. The friends then sat down and drank the first bottle from the case of bourbon.

On June 15, 2013, Sergio learned of another buyer, Roberto, who was offering P800,000 in ready cash for the land. When Roberto confirmed that he could pay in cash as soon as Sergio could get the documentation ready, Sergio decided to withdraw his offer to Marcelo, hoping to just explain matters to his friend. Marcelo, however, objected when the withdrawal was communicated to him, taking the position that they have a firm and binding agreement that Sergio cannot simply walk away from because he has an option to buy that is duly supported by a duly •accepted valuable consideration.



(A) Does Marcelo have a cause of action against Sergio? (5°/o)

(B) Can Sergio claim that whatever they might have agreed upon cannot be enforced because any agreement relating to the sale of

real property must be supported by evidence in writing and they never reduced their agreement to writing? (3°/o)



IV.

Anselmo is the registered owner of a land and a house that his friend Boboy occupied for a nominal rental and on the condition that Boboy would vacate the property on demand. With Anselmo's knowledge, Boboy introduced renovations consisting of an additional bedroom, a covered veranda, and a concrete block fence, at his own expense.

Subsequently, Anselmo needed the property as his residence and thus asked Boboy to vacate and tum it over to him. Boboy, despite an extension, failed to vacate the property, forcing Anselmo to send him a written demand to vacate.

In his own written reply, Boboy signified that he was ready to leave but Anselmo must first reimburse him the value of the improvements he introduced on the property as he is a builder in good faith. Anselmo refused, insisting that Boboy cannot ask for reimbursement as he is a mere lessee. Boboy responded by removing the improvements and leaving the building in its original state.



(A) Resolve Boboy's claim that as a builder in good faith, he should be reimbursed the value of the improvements he introduced. (4°/o)



(B) Can Boboy be held liable for damages for removmg the improvements over Anselmo's objection? (4°/o)

v.

Josefa executed a deed of donation covering a one-hectare rice land in favor of her daughter, Jennifer. The deed specifically provides that:

"For and in consideration of the love and service Jennifer has shown and given to me, I hereby freely, voluntarily and irrevocably donate to her my one-hectare rice land covered by TCT No. 11550, located in San Fernando, Pampanga. This donation shall take effect upon my death. "

The deed also contained Jennifer's signed acceptance, and an attached notarized declaration by Josefa and Jennifer that the land will remain in Josefa's possession and cannot be alienated, encumbered, sold or disposed of while Jose fa is still alive.

Advise .Jennifer on whether the deed is a donation inter vivos or mortis causa and explain the reasons supporting your advice. (8°/o)



VI.

Lito obtained a loan of Pl,OOO,OOO from Ferdie, payable within one year. To secure payment, Lito executed a chattel mortgage on a Toyota Avanza and a real estate mortgage on a 200-square meter piece of property.

(A) Would it be legally significant - from the point of view of validity and enforceability - if the loan and the mortgages were in public or private instruments? (6°/o)

(B) Lito's failure to pay led to the extra-judicial foreclosure of the mortgaged real property. Within a year from foreclosure, Lito tendered a manager's check to Ferdie to redeem the property. Ferdie refused to accept payment on the ground that he wanted payment in cash: the check does not qualify as legal tender and does not include the interest payment.

Is Ferdie's refusal justified? (4°/o)




VII.

In 2005, Andres built a residential house on a lot whose only access to the national highway was a pathway crossing Branda's property. Andres and others have been using this pathway (pathway A) since 1980.

In 2006, Branda fenced off his property, thereby blocking Andres' access to the national highway. Andres demanded that part of the fence be removed to maintain his old access route to the highway (pathway A), but Branda refused, claiming that there was another available pathway (pathway B) for ingress and egress to the highway. Andres countered that pathway B has defects, is circuitous, and is extremely inconvenient to use.

To settle their dispute, Andres and Branda hired Damian, a geodetic and civil engineer, to survey and examine the two pathways and the :~urrounding areas, and to determine the shortest and the least prejudicial way through the servient estates. After the survey, the engineer concluded that pathway B is the longer route and will need improv~ments and repairs, but will not significantly affect the use of Branda's property. On the other hand, pathway A that had long been in place, is the shorter route but would significantly affect the use of Branda's property.



In light of the engineer's findings and the circumstances of the case, resolve the parties' right of way dispute. ( 6 °/o)



VIII.


Ciriaco Realty Corporation ( CRC) sold to the spouses Del a Cruz a 500-square meter land (Lot A) in Paranaque. The land now has a fair market value of Pl,200,000. CRC likewise sold to the spouses Rodriguez, a 700-square meter land (Lot B) which is adjacent to Lot A. Lot B has a present fair market value of Pl ,500,000.

The spouses Dela Cruz constructed a house on Lot B, relying on the representation of the CRC sales agent that it is the property they purchased. Only upon the completion of their house did the spouses DelaCruz discover that they had built on Lot B owned by the spouses Rodriguez, not on Lot A that they purchased. They spent P 1,000,000 for the house.

As their lawyer, advise the spouses Dela obligations under the given circumstances, options open to them to protect their interests.



Cruz on their rights and and the recourses and

(8°/o)


IX.

Rica petitioned for the annulment of her ten-year old marriage to Richard. Richard hired Atty. Cruz to represent him in the proceedings. In payment for Atty. Cruz's acceptance and legal fees, Richard conveyed to Atty. Cruz a parcel of land in Taguig that he recently purchased with his lotto winnings. The transfer documents were duly signed and Atty. Cruz immediately took possession by fencing off the property's entire perimeter.

Desperately needing money to pay for his mounting legal fees and his other needs and despite the transfer to Atty. Cruz, Richard offered the same parcel of land for sale to the spouses Garcia. After inspection of the land, the spouses considered it a good investment and purchased it from Richard. Immediately after the sale, the spouses Garcia commenced the construction of a three-story building over the land, but they were prevented from doing this by Atty. Cruz who claimed he has a better right in light of the prior conveyance in his favor.

Is Atty. Cruz's claim correct?  (8°/o)


X.


Manuel was born on 12 March 1940 in a 1,000-square meter property where he grew up helping his father, Michael, cultivate the land. Michael has lived on the property since the land was opened for settlement at about the time of the Commonwealth government in 193 5, but for some reason never secured any title to the property other than a tax declaration in his name. He has held the property through the years in the c~ncept of an owner and his stay was uncontested by others. He has also conscientiously and continuously paid the realty taxes on the land.

Michael died in 2000 and Manuel - as Michael •s only son and heir - now wants to secure and register title to the land in his own name. He consults you for legal advice as he wants to perfect his title to the land and secure its registration in his name.

(A) What are the laws that you need to consider in advising Manuel on how he can perfect his title and register the land in his name? Explain the relevance of these laws to your projected course of action. (4°/o)



(B) What do you have to prove to secure Manuel's objectives and what documentation are necessary? ( 4°/o)



MULTIPLE CHOICE QUESTIONS



I. Armand died intestate. His full-blood brothers, Bobby and Conrad, and half-blood brothers, Danny, Edward and Floro, all predeceased him. The following are the surviving relatives: •

1. Benny and Bonnie, legitimate children of Bobby;
2. Cesar, legitimate child of Conrad;

3. Dante, illegitimate child of Danny;

4. Ernie, adopted child of Edward; and

5. Felix, grandson of Floro.

The net value of Armand's estate is Pl,200,000.

1.(1) How much do Benny and Bonnie stand to inherit by right of representation? (1 °/o)

(A) P200,000

(B) P300,000

(C) P400,000
(D) P150,000

(E) None of the above.

1.(2) How much is Dante's share in the net estate? (1 °/o)

(A) P150,000.

(B) P200,000.

(C) P300,000.

(D) P400,000.

(E) None of the above.

1.(3) How much is Ernie's share in the net estate ..! (1 °/o)

(A) P 0.

(B) P400,000.

(C) P150,000.

(D) P200,000.

(E) None of the above.

1.( 4) How much is Felix's share in the net estate? (1 o/o)

(A) P400,000.

(B) P150,000.

(C) P300,000.

(D) P 0.

(E) None of the above.



II. A, B, C and D are the solidary debtors of X for P40,000. X released D from the payment of his share of PI 0,000. When the obligation became due and demandable, C turned out to be insolvent.

Should the share of insolvent debtor C be divided only between the two other remaining debtors, A and B? (1 o/o)

(A) Yes. Remission of D's share carries with it total extinguishment of his obligation to the benefit of the solidary debtors.

(B) Yes. The Civil Code recognizes remission as a mode of extinguishing an obligation. This clearly applies to D.
(C) No.  The rule is that gratuitous acts should be

restrictively construed, allowing only the least transmission of rights.

(D) No, as the release of the share of one debtor would then increase the burden of the other debtors without their consent.



III. Amador obtained a loan of P300,000 from Basilio payable on March 25, 2012. As security for the payment of his loan, Amador constituted a mortgage on his residential house and lot in Basilio's favor. Cacho, a good friend of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity.

III.(l) If Amador fails to pay Basilio his loan on March 25, 2012, can Basilio compel Cacho to pay? (1 °/o)

(A) No, Basilio cannot compel Cacho to pay bec~use as guarantor, Cacho can invoke the principle of excussion, i.e., all the assets of Basilio must first be exhausted.

(B) No, Basilio cannot compel Cacho to pay because Basilio has not exhausted the available remedies against Amador.

(C) Yes, Basilio can compel Cacho to pay because the nature of Cacho's undertaking indicates that he has bound himself solidarily with Amador.

(D) Yes, Basilio can compel Cacho who bound himself to unconditionally pay in case Amador fails to pay; thus the benefit of excussion will not apply.



III.(2)  If Amador sells his residential house and lot to Diego, can

Basilio foreclose the real estate mortgage? (1 °/o)

(A) Yes, Basilio can foreclose the real estate mortgage because real estate mortgage creates a real right that attaches to the property.

(B) Yes, Basilio can foreclose the real estate mortgage. It is binding upon Diego as the mortgage is embodied in a public instrument.

(C) No, Basilio cannot foreclose the real estate mortgage. The sale

confers ownership on the buyer, Diego, who must therefore consent.

(D) No, Basilio cannot foreclose the real estate mortgage. To deprive the new owner of ownership and possession is unjust and inequitable.



IV. Cruz lent Jose his car until Jose finished his Bar exams. Soon after Cruz delivered the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred costs of P8,000. Seeing the car's peeling and faded paint, Jose also had the car repainted for PlO,OOO. Answer the two questions below based on these common facts.

IV.(l) After the bar exams, Cruz asked for the return of his car. Jose said he would return it as soon as Cruz has reimbursed him for the car maintenance and repainting costs of P 18,000.

Is Jose's refusal justified? (1 °/o)

(A) No, Jose's refusal is not justified. In this kind of contract, Jose is obliged to pay for all the expenses incurred for the preservation of the thing loaned.

(B) Yes, Jose's refusal is justified. He is obliged to pay for all the ordinary and extraordinary expenses, but subject to reimbursement from Cruz.

(C) Yes, Jose's refusal is justified. The principle ofunjust enrichment warrants the reimbursement of Jose's expenses.

(D) No, Jose's refusal is not justified. The expenses he incurred are useful for the preservation of the thing loaned. It is Jose's obligation to shoulder these useful expenses.



IV.(2) During the bar exam month, Jose lent the car to his girlfriend, Jolie, who parked the car at the Mall of Asia's open parking lot, with the ignition key inside the car. Car thieves broke into and took the car.

Is Jose liable to Cruz for the loss of the car due to Jolie's negligence? (1 °/o)

(A) No, Jose is not liable to Cruz as the loss was not due to his fault or negligence.

(B) No, Jose is not liable to Cruz.  In the absence of any

1 1


prohibition, Jose could lend the car to Jolie. Since the loss was due to force majeure, neither Jose nor Jolie is liable.

(C) Yes, Jose is liable to Cruz. Since Jose lent the car to Jolie without Cruz's consent, Jose must bear the consequent loss of the car.

(D) Yes, Jose is liable to Cruz. The contract between them is personal in nature. Jose can neither lend nor lease the car to a third person.



V. In 2005, L, M, N, 0 and P formed a partnership. L, M and N were capitalist partners who contributed P500,000 each, while 0, a limited partner, contributed P1 ,000,000. P joined as an industrial partner,

contributing only his services. The Articles of Partnership, registered with the Securities and Exchange Commission, designated L and 0 as managing partners; L was liable only to the extent of his capital contribution; and P was not liable for losses.

In 2006, the partnership earned a net profit of P800,000. In the same year, P engaged in a different business with the consent of all the partners. However, in 2007, the partnership incurred a net loss of PSOO,OOO. In 2008, the partners dissolved the partnership. The proceeds of the sale of partnership assets were insufficient to settle its obligation. After liquidation, the partnership had an unpaid liability ofP300,000.

V.(l) Assuming that the just and equitable share of the industrial partner, P, in the profit in 2006 amounted to P1 00,000, how much is the share of 0, a limited partner, in the P800,000 net profit? (1 °/o)

(A) P160,000.

(B) P175,000.

(C) P280,000.

(D) P200,000.

(E) None of the above.

V.(2) In 2007, how much is the share of 0, a limited partner, in the net loss of P500,000? (1 °/o)

(A) P 0.

(B) P1 00,000.

(C) P125,000.

(D) P200,000.

(E) None of the above.

V.(3) Can the partnership creditors hold L, 0 and Pliable after all the assets of the partnership are exhausted? (1 °/o)


(A) Yes. The stipulation exempting P from losses is valid only among the partners. L is liable because the agreement limiting his liability to his capital contribution is not valid insofar as the creditors are concerned. Having taken part in the

management of the partnership, 0  is liable as capitalist partner.

(B) No. P is not liable because there is a valid stipulation exempting him from losses. Since the other partners allowed him to engage in an outside business activity, the stipulation

absolving P from liability is valid. For 0, it is basic that a limited partner is liable only up to the extent of his capital contribution.

(C) Yes. The stipulations exempting P and L from losses are not binding upon the creditors. 0 is likewise liable because the partnership was not formed in accordance with the requirements of a limited partnership.

(D) No. The Civil Code allows the partners to stipulate that a partner shall not be liable for losses. The registration of the Articles of Partnership embodying such stipulations serves as constructive notice to the partnership creditors.

(E) None of the above is completely accurate.



VI. Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to Homer for delivery within a month, although the period for delivery was not guaranteed. Despite Gary's efforts ~o deliver on time, transportation problems and government red tape hindered his efforts and he could only deliver after 30 days. Homer refused to accept the late delivery and to pay on the ground that the agreed term had not been complied with.

As lending investor, Gary granted a Pl,OOO,OOO loan to Isaac to be paid within two years from execution of the contract. As security for the loan, Isaac promised to deliver to Gary his Toyota Innova within seven (7) days, but Isaac failed to do so. Gary was thus compelled to demand payment for the loan before the end of the agreed two-year term.

VI.(l) Was Homer justified in refusing to accept the tobacco leaves? (1 °/o)

(A) Yes. Homer was justified in refusing to accept the tobacco leaves. The delivery was to be made within a month. Gary's promise of delivery on a "best effort" basis made the delivery uncertain. The term, therefore, was ambiguous.

(B) No. Homer was not justified in refusing to accept the tobacco leaves. He consented to the terms and conditions of the sale and must abide by it. Obligations arising from contract have the force of law between the contracting parties.

(C) Yes. Homer was justified in his refusal to accept the delivery. The contract contemplates an obligation with a term. Since the delivery was made after 30 days, contrary to •the terms agreed upon, Gary could not insist that Homer accept the tobacco leaves.

(D) No. Homer was not justified in refusing to accept the tobacco leaves. There was no term in the contract but a mixed condition. The fulfillment of the condition did not depend purely on Gary's will but on other factors, e.g., the shipping company and the government. Homer should comply with his obligation.

VI~(2) Can Gary compel Isaac to pay his loan even before the end of the two-year period? (1 °/o)

(A) Yes, Gary can compel Isaac to immediately pay the loan. Non-compliance with the promised guaranty or security renders the obligation immediately demandable. Isaac lost his right to make use of the period.

(B) Yes, Gary can compel Isaac to immediately pay the loan. The delivery of the Toyota Innova is a condition for the loan. Isaac's failure to deliver the car violated the condition upon which the loan was granted. It is but fair for Gary to demand immediate payment.

(C) No, Gary cannot compel Isaac to immediately pay the loan. The delivery of the car as security for the loan is an accessory contract; the principal contract is still the P 1,000,000 loan. Thus, Isaac can still make use of the period.

(D) No, Gary cannot compel Isaac to immediately pay the loan. Equity dictates that Gary should have granted a reasonable extension of time for Isaac to deliver his Toyota Innova. It would be unfair and burdensome for Isaac to pay the

P 1,000,000 simply because the promised security was not delivered.



VII.

Lito was a commercial pilot who flew for Pacific-Micronesian Air. In 1998, he was the co-pilot of the airline's Flight MA916 that mysteriously disappeared two hours after take-off from Agana, Guam, presumably over the Pacific Ocean. No trace of the plane and its 105 passengers and crew was ever found despite diligent search; Lito himself was never heard of again. Lito left behind his wife, Lita, and their two children.

In 2008, Lita met and and married Jaime. They now have a child of their own.

While on a tour with her former high school classmates in a remote province of China in 2010, Lita was surprised to see Lito or somebody who

14


looked exactly like him, but she was sure it was Lito because of the extreme surprise that registered in his face when he also saw her. Shocked, she immediately fled to her hotel and post haste returned to the country the next day. Lita now comes to you for legal advice. She asks you the following questions:

VII(l)  If Lito is alive, what is the status of his marriage to Lita?

(1 °/o)

(A) The marriage subsists because the marital bond has not been terminated by death.

(B) The marriage was terminated when Lita married Jaime.

(C) The marriage subsists because Lita's marriage to Jaime is void.

(D) The marriage is terminated because Lito is presumed dead after his plane has been missing for more than 4 years.

(E) The marriage can be formally declared terminated if Lito would not resurface.

VII(2) If Lito is alive, what is the status of Lita's marriage to Jaime? (1 °/o)

(A) The marriage is valid because Lita's marrtage to Lito was terminated upon Lito's disappearance for more than seven years.

(B) The marriage is valid. After an absence of more than 10 years, Lito is already presumed dead for all purposes.

(C) The marriage is void. Lito's mere absence, however lengthy, is insufficient to authorize Lita to contract a subsequent marriage.

(D) The marriage is void. If Lito is indeed alive, his marriage to Lita was never dissolved and they can resume their marital relations at any time.



VIII.

Which of the following actions or defenses are meritorious: (1 °/o)

(A) An action for recovery of downpayment paid under a rescinded oral sale of real property.

(B) A defense in an action for ejectment that the lessor verbally promised to extend or renew the lease.

(C) An action for payment of sum of money filed against one who orally promised to answer another's debt in case the latter defaults.

(D) A defense in an action for damages that the debtor has sufficient, but unliquidated assets to satisfy the credit acquired when it becomes due.

(E) None of the above.








IX.

Betty entrusted to her agent, Aida, several pieces of jewelry to be sold on commission with the express obligation to turn over to Betty the proceeds of the sale, or to return the jewelries if not sold in a month's time. Instead of selling the jewelries, Aida pawned them with the Tambunting Pawnshop, and used the money for herself. Aida failed to redeem the pawned jewelries and after a month, Betty discovered what Aida had done. Betty brought criminal charges which resulted in Aida's conviction for estafa.

Betty thereafter filed an action against Tambunting Pawnshop for the recovery of the jewelries. Tambunting raised the defense of ownership, additionally arguing that it is duly licensed to engage in the pawnshop and lending business, and that it accepted the mortgage of the jewelry in good faith and in the regular course of its business.

If you were the judge, how will you decide the case? (1 °/o)

(A) I will rule in favor of Betty. My ruling is based on the Civil Code provision that one who has lost any movable or has been unlawfully deprived thereof may recover it from the person in possession of the same. Tam bunting's claim of good faith is inconsequential.

(B) I will rule in favor of Betty. Tambunting's claim of good faith pales into insignificance in light of the unlawful deprivation of the jewelries. However, equity dictates that Tambunting must be reimbursed for the pawn value of the jewelries.

(C) I will rule in favor ofTambunting. Its good ~aith takes precedence over the right of Betty to recover the jewelries.

(D) I will rule in favor ofTambunting. Good faith is always presumed. Tambunting's lawful acquisition in the ordinary course ofbusiness coupled with good faith gives it legal right over the jewelries.



X.

Arlene owns a row of apartment houses in Kamuning, Quezon City. She agreed to lease Apartment No. 1 to Janet for a period of 18 months at the rate of P10,000 per month. The lease was not covered by any contract. Janet promptly gave Arlene two (2) months deposit and 18 checks covering the rental payment for 18 months. This show of good faith prompted Arlene to promise Janet that should Arlene decide to sell the property, she would give Janet the right of first refusal.

X.(l) Not long after Janet moved in, she received news that her application for a Master of Laws scholarship at King's College in London had been approved. Since her acceptance of the scholarship entailed a transfer of residence, Janet asked Arlene to return the advance rental payments she made. Arlene refused, prompting Janet to file an action to recover the payments. Arlene filed a motion to dismiss, claiming that the lease on which the action is based, is unenforceable.

If you were the judge, would you grant Arlene's motion? (1 o/o)

(A) Yes, I will grant the motion because the lease contract between Arlene and Janet was not in writing, hence, Janet may not enforce any right arising from the same contract.

(B) No, I will not grant the motion because to allow Arlene to retain the advance payments would amount to unjust enrichment.

(C) Yes, I will grant the motion because the action for recovery is premature; Janet should first secure a judicial rescission of the contract of lease.

(D) No. I will not grant the motion because the cause of action does not seek to enforce any right under the contract of lease.



X.(2)Assume that Janet decided not to accept the scholarship and continued leasing Apartment No. 1. Midway through the lease period, Arlene decided to sell Apartment No. 1 to Jun in breach of her promise to Janet to grant her the right of first refusal. Thus, Janet filed an action seeking the recognition of her right of first refusal, the payment of damages for the violation of this right, and the rescission of the sale between Arlene and Jun.



Is Janet's action meritorious? (1 °/o)

(A) Yes, under the Civil Code, a promise to buy and sell a determinate thing is reciprocally demandable.

(B) No, the promise to buy and sell a determinate thing was not supported by a consideration.

(C) Yes, Janet's right of first refusal was clearly violated when the property was not offered for sale to her before it was sold to Jun.

(D) No, a right of first refusal involves an interest over real property that must be embodied in a written contract to be enforceable.
(E) None of the above.


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2013 Bar Exam Questions in Taxation Law


2013 BAR EXAMINATIONS
TAXATION
October 13, 2013 2:00P.M.- 6:00P.M.

INSTRUCTIONS

1. This Questionnaire contains THIRTEEN (13) pages including these Instructions pages. Check the number of pages and the page numbers at the upper right hand corner of each page of this Questionnaire and make sure it has the correct number of pages and their proper numbers.



There are TWELVE (12) Essay Questions numbered I to XII, and TWENTY (20) Multiple Choice Questions (MCQs) numbered I to XX, to be answered within four (4) hours.

The essay portion contains questions that are worth 80°/o of the whole examination, while the MCQ portion contains questions worth 20°/o.




2. Read each question very carefully and write your answers in your Bar Examination Notebook in the same order the questions are posed.

Write your answers only at the front, not the back, page of every sheet in your Notebook. Note well the allocated percentage points for each number, question, or sub-question. In your answers, ~se the numbering system in the questionnaire.

If the sheets provided in your Examination Notebook are not sufficient for your answers, use the back pages of every sheet of your Examination Notebook, starting at the back page of the first sheet and the back of the succeeding sheets thereafter.



3. Answer the Essay questions legibly, clearly, and concisely. Start each number on a separate page. An answer to a sub-question under the same number may be written continuously on the same page and the immediately succeeding pages until completed.

Your answer should demonstrate your ability to analyze the facts presented by the question, to select the material from the immaterial facts, and to discern the points upon which the question turns. It should show your knowledge and understanding of the pertinent principles and
2


theories of law involved and their qualifications and limitations. It should demonstrate your ability to apply the law to the given facts, and to reason logically in a lawyer-like manner to a sound conclusion from the given premises.

A mere "Yes" or "No" answer without any corresponding explanation or discussion will not be given any credit. Thus, always hrie{lv but fully explain your answers althou&h the guestion does not expressly ask for an explanation. At the same time, remember that a complete explanation does not require that you volunteer information or discuss legal doctrines that are not necessary or pertinent to the solution to the problem. You do not need to re-write or repeat the question in your Notebook.





4. MCQs are to be answered by writing in your Notebook the capital letter (A, B, C, D, or E) corresponding to your chosen answer. The MCQ answers should begin in the page following the last page of your essay answers.



There is only one correct answer to every MCQ; choose the BEST answer from amon2 the offered choices. Note that .some MCQs may need careful analysis both of the questions and the choices offered.



5. Make sure you do not write your name or any extraneous notels or distinctive markingls on your Notebook that can serve as identifying mark/s (such as names that are not in the given questions, prayers, or private notes to the Examiner).



Writing, leaving or making any distinguishing or identifying mark in the exam Notebook is considered cheating and can disqualify you for the Bar examinations.

You can use the questionnaire for notes you may wish/need to write during the examination.



HAND IN YOUR NOTEBOOK WITH THIS QUESTIONNAIRE


QfWBi~
Chairman

2013 Bar Examinations
3


ESSAY QUESTIONS



I.

In its final adjustment return for the 2010 taxable year, ABC Corp. had excess tax credits arising from its over-withholding of income payments. It opted to carry over the excess tax credits to the following year. Subsequently, ABC Corp. changed its mind and applied for a refund of the excess tax credits.



Will the claim for refund prosper?  (6o/o)



II.

A group of philanthropists organized a non-stock, non-profit hospital for charitable purposes to provide medical services to the poor. The hospital also accepted paying patients although none of its income accrued to any private individual; all income were plowed back for the hospital's use and not more than 30o/o of its funds were used for administrative purposes.

Is the hospital subject to tax on its income?  If it is, at what rate?

(6°/o)



III.

ABC Corporation is registered as a holding company and has an office in the City ofMakati. It has no actual business operations. It invested in another company and its earnings are limited to dividends from this investment, interests on its bank deposits, and foreign exchange gains from its foreign currency account. The City of Makati assessed ABC Corporation as a contractor or one that sells services for a fee.

Is the City ofMakati correct?  (6°/o)



IV.

Atty. Gambino is a partner in a general professional partnership. The partnership computes its gross revenues, claims deductions allowed under the Tax Code, and distributes the net income to the partners, including Atty. Gambino, in accordance with its articles of partnership.

In filing his own income tax return, Atty. Gambino claimed deductions that the partnership did not claim, such as purchase of law books,
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entertainment expenses, car msurance and car depreciation. The BIR disallowed the deductions.

Was the BIR correct?  (6°/o)



V.

Mr. Agustin, 75 years old and suffering from an incurable disease, decided to sell for valuable and sufficient consideration a house and lot to his son. He died one year later.

In the settlement of Mr. Agustin's estate, the BIR argued that the house and lot were transferred in contemplation of death and should therefore form part of the gross estate for estate tax purposes.

Is the BIR correct? (7o/o)



VI.

On October 15, 2005, ABC Corp. imported 1,000 kilos of steel ingots and paid customs duties and VAT to the Bureau of Customs on the importation. On February 17, 2009, the Bureau of Customs, citing provisions of the Tariff and Customs Code on post-audit, investigated and assessed ABC Corp. for deficiency customs duties and VAT.

Is the Bureau of Customs correct?  (7°/o)



VII.

XYZ Law Offices, a law partnership in the Philippines and a VAT-registered taxpayer, received a query by e-mail from Gainsburg Corporation, a corporation organized under the laws of Delaware, but the e-mail came from California where Gainsburg has an office. Gainsburg has no office in the Philippines and does no business in the Philippines.

XYZ Law Offices rendered its opinion on the query and billed Gainsburg US$1,000 for the opinion. Gainsburg remitted its payment through Citibank which converted the remitted US$1 ,000 to pesos and deposited the converted amount in the XYZ Law Offices account.

What are the tax implications of the payment to XYZ Law Offices in terms of VAT and income taxes? (7o/o)
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VIII.


Mr. Amado leased a piece of land owned by the Municipality of Pinagsabitan and built a warehouse on the property for his business operations. The Municipal Assessor assessed Mr. Amado for real property taxes on the land and the warehouse. Mr. Amado objected to the assessment, contending that he should not be asked to pay realty taxes on the land since it is municipal property.



Was the assessment proper?  (5o/o)



IX.

In the settlement of the estate of Mr. Barbera who died intestate, his wife renounced her inheritance and her share of the conjugal property in favor of their children. The BIR determined that there was a taxable gift and thus assessed Mrs. Barbera as a donor.

Was the BIR correct? (7°/o)



X.

In 2010, pursuant to a Letter of Authority (LA) issued by the Regional Director, Mr. Abcede was assessed deficiency income taxes by the BIR for the year 2009. He paid the deficiency. In 2011, Mr. Abcede received another LA for the same year 2009, this time from the National Investigation Division, on the ground that Mr. Abcede's 2009 return was fraudulent.

Mr. Abcede contested the LA on the ground that he can only be investigated once in a taxable year. Decide. (7o/o)



XI.

In 2000, Mr. Belen bought a residential house and lot for PI ,000,000. He used the property as his and his family's principal residence. It is now year 2013 and he is thinking of selling the property to buy a new one. He seeks your advice on how much income tax he would pay if he sells the property. The total zonal value of the property is P5,000,000 and the fair market value per the tax declaration is P2,500,000. He intends to sell it for P6,000,000.



What material considerations will you take into account in computing the income tax? Please explain the legal relevance of each of these considerations. (7°/o)
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XII.

You are the retained tax counsel of ABC Corp. Your client informed you that they have been directly approached with a proposal by a BIR insider (i.e., a middle rank BIR official) on the tax matter they have referred to you for handling. The BIR insider's proposal is to settle the matter by significantly reducing the assessment, but he will get 50% of the savings arising from the reduced assessment.

What tax, criminal and ethical considerations will you take into account in giving your advice? Explain the relevance of each of these considerations.

(9%)



MULTIPLE CHOICE QUESTIONS



I. ABC Corp. was dissolved and liquidating dividends were declared and paid to the stockholders.

What tax consequence follows?  (1 °/o)

(A) ABC Corp. should deduct a final tax of 10% from the dividends. 

(B) The stockholders should declare their gain from their investment and pay income tax at the ordinary rates. 

(C) The dividends are exempt from tax. 

(D) ABC Corp. should withhold a 10% creditable tax. 



II. MGC Corp. secured an income tax holiday for 5 years as a pioneer industry. On the fourth year of the tax holiday, MGC Corp. declared and paid cash dividends to its stockholders, all of whom are individuals. 

Are the dividends taxable?  (1 °/o)

(A) The dividends are taxable; the tax exemption of MGC Corp. does not extend to its stockholders. 

(B) The dividends are tax exempt because of MGC Corp.'s income tax holiday. 

(C) The dividends are taxable if they exceed 50% of MGC Corp.'s retained earnings. 

(D) The dividends are exempt if paid before the end of MGC Corp.'s fiscal year. 
7


III. Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his gross sales to the BIR and the municipal license tax based on the same gross sales to the City of Makati. He comes to you for advice because he thinks he is being subjected to double taxation.

What advice will you give him? (1 °/o)

(A) Yes, there is double taxation and it is oppressive. 

(B) The City ofMakati does not have this power. 

(C) Yes, there is double taxation and this is illegal m the Philippines. 

(D) Double taxation is allowed where one tax is imposed by the national government and the other by the local government. 



IV. Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette companies out of business, and was questioned in court by a cigarette company that would go out of business because it would not be able to pay the increased tax.



The cigarette company is _____• (1 °/o)

(A) wrong because taxes are the lifeblood of the government 

(B) wrong because the law recognizes that the power to tax is the power to destroy 

(C) correct because no government can deprive a person of his livelihood 

(D) correct because Congress, in this case, exceeded its power to tax 





V. Mr. Alvarez is in the retail business. He received a deficiency tax assessment from the BIR containing only the computation of the deficiency tax and the penalties, without any explanation of the factual and legal bases for the assessment. 

Is the assessment valid? (1 °/o)

(A) The assessment is valid; all that Mr. Alvarez has to know is the amount of the tax. 

(B) The assessment is invalid; the law requires a statement of the facts and the law upon which the assessment is based. 

(C) The assessment is valid but Mr. Alvarez can still contest it. 

(D) The assessment is invalid because Mr. Alvarez has no way to determine if the computation is erroneous. • 
8




VI. In 2010, Mr. Platon sent his sister Helen $1 ,000 via a telegraphic transfer through the Bank of PI. The bank's remittance clerk made a mistake and credited Helen with $1,000,000 which she promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Helen refused. The BIR entered the picture and investigated Helen.

Would the BIR be correct if it determines that Helen earned taxable income under these facts'? (1 °/o)

(A) No, she had no income because she had no right to the mistakenly credited funds. 

(B) Yes, income is income regardless ofthe source. 

(C) No, it was not her fault that the funds in excess of $1,000 were credited to her. 

(D) No, the funds in excess of$1,000 were in effect donated to her. 



VII. The municipality of San Isidro passed an ordinance imposing a tax on installation managers. At that time, there was only one installation manager in the municipality; thus, only he would be liable for the tax.

Is the law constitutional?  (1 °/o)

(A) It is unconstitutional because it clearly discriminates against this person. 

(B) It is unconstitutional for lack of legal basis. 

(C) It is constitutional as it applies to all persons in that class. 

(D) It is constitutional because the power to tax is the power to destroy. 



VIII. XYZ Corporation manufactures glass panels and is almost at the point of insolvency. It has no more cash and all it has are unsold glass panels. It received an assessment from the BIR for deficiency income taxes. It wants to pay but due to lack of cash, it seeks permission to pay in kind with glass panels.



Should the BIR grant the requested permission?•  (1 °/o)

(A) It should grant permission to make payment convenient to taxpayers. 

(B) It should not grant permission because a tax is generally a pecuniary burden. 

(C) It should grant permission; otherwise, XYZ Corporation would not be able to pay. 

(D) It should not grant permission because the government does not have the storage facilities for glass panels. 
9





IX. Prior to the VAT law, sales of cars were subject to a sales tax but the tax applied only to the original or the first sale; the second and subsequent sales were not subject to tax.

Deltoid Motors, Inc. (Deltoid) hit on the idea of setting up a wholly-owned subsidiary, Gonmad Motors, Inc. (Gonmad), and of selling its assembled cars to Gonmad at a low price so it would pay a lower tax on the first sale. Gonmad would then sell the cars to the public at a higher price without paying any sales tax on this subsequent sale.

Characterize the arrangement.  (1 °/o)

A. The plan is a legitimate exercise of tax planning and merely takes advantage of a loophole in the law. 

B. The plan is legal because the government collects taxes anyway. 

C. The plan is improper; the veil of corporate fiction can be pierced so that the second sale will be considered the taxable sale. 

D. The government must respect Gonmad's separate juridical personality and Deltoid's taxable sale to it. 





X. PRT Corp. purchased a residential house and lot with a swimming pool in an upscale subdivision and required the c.ompany president to stay there without paying rent; it reasoned out that the company president must maintain a certain image and be able to entertain guests at the house to promote the company's business. The company president declared that because they are childless, he and his wife could very well live in a smaller house. 



Was there a taxable fringe benefit? (1 °/o)

(A) There was no taxable fringe benefit since it was for the convenience of the employer and was necessary for its business. 

(B) There was a taxable fringe benefit since the stay at the house was for free. 

(C) There was a taxable fringe benefit because the house was very luxurious. 

(D) There was no taxable fringe benefit because the company president was only required to stay there and did not demand free housing. 
10


XI. Taxpayer A was required by the BIR to sign and submit a waiver of the statute of limitations on the assessment period, to give the BIR more time to complete its investigation. The BIR accepted the waiver but failed to indicate the date of its acceptance.

What is the legal status of the waiver?  (1 °/o)

(A) The waiver is valid because the date of acceptance is immaterial and unimportant. 

(B) The waiver is invalid; the taxpayer cannot be required to waive the statute of limitations. 

(C) The waiver is invalid; the date of acceptance is crucial in counting the start of the period of suspension of the prescriptive period. 

(D) The waiver is valid, having been accepted by the BIR. 



XII. Taxpayer Andy received on January 3, 2010 a preliminary assessment notice (PAN) from the BIR, stating that he had fifteen (15) days from its receipt to comment or to file a protest. Eight (8) days later (or on January 11, 201 0 ), before he could comment or file a protest, Andy received the final assessment notice (FAN).

Decide on the validity of the FAN.  (1 °/o)

(A) The FAN is invalid; Andy was not given the chance to respond to the PAN, in violation of his due process rights. 

(B) The FAN is invalid for being premature. 

(C) The FAN is valid since it was issued before the right to assess prescribed. 

(D) The FAN is valid. There is no legal requirement that the FAN should await the protest to the PAN because protest to the PAN is not mandatory. 



XIII. MSI Corp. imports orange and lemon concentrates as raw materials for the fruit drinks it sells locally. The Bureau of Customs (BOC) imposed a 1o/o duty rate on the concentrates. Subsequently, the BOC changed its position and held that the concentrates should be taxed at 7o/o duty rate. MSI disagreed with the ruling and questioned it in the CTA which upheld MSI's position. The Commissioner of Customs appealed to the CTA en bane without filing a motion for reconsideration.

Resolve the appeal.  (1 °/o)

(A) The appeal should be dismissed because a motion for reconsideration is mandatory. 
1 1


(B) The appeal should be dismissed for having been filed out of time. 

(C) The appeal should be given due course since a motion for reconsideration is a useless exercise. 

(D) The appeal should be upheld to be fair to the government which needs taxes. 



XIV. The spouses Jun and Elvira Sandoval purchased a piece of land for P5,000,000 and included their two (2) minor children as co-purchasers in the Deed of Absolute Sale. The Commissioner of Internal Revenue ( CIR) ruled that there was an implied donation and assessed donors' taxes against the spouses.



Rule on the CIR's action. (I 0/o)

(A) The CIR is wrong; a donation must be express. 

(B) The CIR is wrong; financial capacity is not a requirement for a valid sale. 

(C) The CIR is correct; the amount involved is huge and ultimately ends up with the children. 

(D) The CIR is correct; there was animus donandi since the children had no financial capacity to be co-purchasers. 



XV. Pheleco is a power generation and distribution company operating mainly from the City of Taguig. It owns electric poles which it also rents out to other companies that use poles such as telephone and cable companies. Taguig passed an ordinance imposing a fee equivalent to 1% of the annual rental for these poles. Pheleco questioned 'the legality of the ordinance on the ground that it imposes an income tax which local government units (LG Us) are prohibited from imposing.

Rule on the validity of the ordinance. (1 o/o)

(A) The ordinance is void; the fee is based on rental income and is therefore a tax on income. 

(B) The ordinance is valid as a legitimate exercise of police power to regulate electric poles. 

(C) The ordinance is void; 1% of annual rental is excessive and oppressive. 

(D) The ordinance is valid; an LGU may impose a tax on income. 



XVI. Aleta sued Boboy for breach of promise to marry. Boboy lost the case and duly paid the court's award that included, among others, PlOO,OOO as moral damages for the mental anguish Aleta suffered.
12





Did Aleta earn a taxable income? (1 o/o)

(A) She had a taxable income of PIOO,OOO since income is income from whatever source. 

(B) She had no taxable income because it was a donation. 
(C) She had taxable income since she made a profit. 

(D) She had no taxable income since moral damages are compensatory. 



XVII. Mr. Mayuga donated his residential house and lot to his son and duly paid the donor's tax. In the Deed of Donation) Mr. Mayuga expressly reserved for himself the usufruct over the property for as long as he lived.

Describe  the  donated  property  from  the  taxation  perspective.

(1 °/o)

(A) The property will form part of Mr. Iv1ayuga's gross estate when he dies. 

(B) The property will not fom1 part of Mr. Mayuga's gross estate when he dies because he paid the donor's tax. 

(C) The property will form part of Mr. Mayuga's gross estate because he died soon after the donation. 

(D) The property will not fmm part of Mr. Mayuga's gross estate because it is no longer his. 



XVIII. Mr. Z made an importation which he declared at the Bureau of Customs (BOC) as "Used Truck Replacement Parts". Upon investigation, the container vans contained 15 units of Porsche and Ferrari cars.

Characterize Mr. Z's action.  (1 °/o)

(A) Mr. Z committed smuggling. 

(B) Mr. Z did not commit smuggling becaus~ he submitted his shipment to BOC examination. 

(C) Mr. Z only made a misdeclaration, but did not commit smuggling. 

(D) Mr. Z did not commit smuggling because the shipment has not left the customs area. 



XIX. Mr. A was preparing his income tax return and had some doubt on whether a commission he earned should be declared for the current year or for the succeeding year. He sought the opinion of his lawyer who advised him to report the commission in the succeeding year. He heeded his
13


lawyer's advice and reported the commission in the succeeding year. The lawyer's advice turned out to be wrong; in Mr. A's petition against the BIR assessment, the court ruled against Mr. A.

Is Mr. A guilty of fraud?  (1 °/o)

(A) Mr. A is not guilty of fraud as he simply followed the advice of his laVvyer. 

(B) Mr. A is guilty of fraud; he deliberately did not report the commission in the current year when he should have done so. 

(C) Mr. A's lawyer should pay the tax for giving the wrong advice. 
(D) Mr.  A is guilty for failing to consult his accountant. 



XX. The BIR, through the Commissioner, instituted a system requiring taxpayers to submit to the BIR a summary list of their sales and purchases during the year, indicating the name of the seller or the buyer and the amount. Based on these lists, the BIR discovered that in 2004 ABC Corp. purchased from XYZ Corp. goods worth PS,OOO,OOO. XYZ Corp. did not declare these for income tax purposes as its reported gross sales for 2004 was only Pl,OOO,OOO.



Which of the following defenses may XYZ Corp. interpose in an assessment against it by the BIR? (1 °/o)

(A) The BIR has no authority to obtain third party information to assess taxpayers. 

(B) The third party information is inadmissible as hearsay evidence. 

(C) The system of requiring taxpayers to submit third party information is illegal for violating the right to privacy. 

(D) None of the above. 

NOTHING FOLLOWS

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