POLITICAL AND PUBLIC INTERNATIONAL LAW

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POLITICAL AND PUBLIC INTERNATIONAL LAW

1. The Speaker of the House of Representatives filed a motion with the plenary for the
discussion and approval of his proposed revisions to the 1987 Constitution. By a 2/3
vote of the total membership of the House of Representatives, the House of
Representatives approved the proposed revisions and transmitted the same to the
Senate. The Senate, by a majority vote, approved the proposed revisions to the 1987
Constitution. Was there a valid proposal for the revision of the Constitution?

No. Section 1 of Art. XVII of the Constitution provides that any amendment or revision of
the Constitution may be proposed by the Congress upon a vote of ¾ of all its Members.

2. Ang Vlogger sought to register as a Party-List to vie for a seat in the House of
Representatives in the 2025 National and Local Elections. The COMELEC denied its
petition for registration because its nominee, a popular TV show host, was not a vlogger
but a TV personality. Ang Vlogger argued that while its nominee was not a vlogger per
se, the nominee was an advocate of their cause and an avid supporter of vloggers. Was
the COMELEC correct?

No. The nominees of sectoral parties or organizations that represent the "marginalized
and underrepresented," or that represent those who lack "well-defined political
constituencies," either must belong to their respective sectors, or must have a track
record of advocacy for their respective sectors. (Atong Paglaum v. COMELEC, G.R. No.
203766, April 2, 2013).

3. The Congress passed a bill designating the February 14 beginning in 2025 as the date for
the regular election of Senators and Members of the House of Representatives. The
President refused to sign the bill because the Constitution specifically requires that the
regular election of Senators and Members of the House of Representatives be held
every second Monday of May. Is the President correct?

No. Section 8 of Article VI of the Constitution provides that the regular election of
Senators and Members of the House of Representatives shall be held on the second
Monday of May unless otherwise provided by law. Thus, the Congress may enact a law
changing the date of the regular election.

4. President Juan appointed Vice-President Dalwa as Secretary of Education. Vice-

President Dalwa began discharging the duties as head of the Department of Education.
Three Members of the House of Representatives sought to enjoin Vice-President Dalwa
from performing the functions of the Secretary of Education for lack of approval of the
Commission on Appointments. Is the argument meritorious?

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No. Section 3 of Article VII of the Constitution states that the Vice-President may be
appointed as a Member of the Cabinet. Such appointment requires no confirmation.

5. The Philippine Reclamation Authority offered to settle its liabilities with its foreign
contractor that developed reclaimed islands by assigning ownership of a portion of the
reclaimed land to the foreign contractor’s qualified assignee. Is this a valid settlement
offer?

No. Section 3 of Article XII of the Constitution provides that private corporations may not
hold alienable lands of the public domain except by lease. Here, the Compromise
Agreement obliged PRA to transfer the reclaimed land to Central Bay's qualified assignee.
Yet, this scheme grants Central Bay beneficial ownership or equitable title defined as "[a]
title derived through a valid contract or relation, and based on recognized equitable
principles; the right in the party, to whom it belongs, to have the legal title transferred to
him[.]" Indeed, the provision in the Compromise Agreement allowing conveyance to
"Central Bay's [q]ualified [a]ssignee" clearly means that Central Bay will hold the
reclaimed land other than by lease which the constitutional ban seeks to avoid. Further,
the stipulation presupposes that Central Bay, as an assignor, is qualified by law to exercise
ownership of the land and transfer it to another party. (Central Bay Reclamation and
Development Corp. v. Commission on Audit, G.R. No. 252940, April 5, 2022 [JMVL]).

6. The police received a tip that a man wearing camouflage shorts on board a Ceres bus
bound for Cataclan was carrying a firearm in violation of the gun ban for the 2022
elections. The police established a checkpoint to verify the tip. Upon boarding of the
bus, the police officer saw Ronaldo who matched the description given. The police
officer saw the handle of the pistol protruding from Ronaldo’s half-open belt bag. The
police officer asked Ronaldo for his authority to possess the firearm, but he had none.
The police searched Arturo which yielded a caliber .45 pistol and two magazines with
live ammunition. Ronaldo was then convicted for violation of the Omnibus Election
Code. He contends that he should be acquitted because the setting up of the checkpoint
was illegal and violated his right against unreasonable searches and seizures. Decide.

The checkpoint conducted by the Malay Police was pursuant to the gun ban enforced by
the COMELEC. Checkpoints, which are warranted by the exigencies of public order and
are conducted in a way least intrusive to motorists, are allowed since the COMELEC would
be hard put to implement the ban if its deputized agents are limited to a visual search of
pedestrians…During the conduct of the checkpoint, PSI Tarazona saw in plain view a
firearm protruding from Arturo's belt bag. Under the plain view doctrine, objects falling
in the plain view of an officer who has the right to be in the position to have the view are
subject to seizure and may be presented in evidence. (Sullano y Santia v. People, G.R. No.
232147, June 8, 2020 [JMVL])

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7. The Commission on Audit disallowed expenses of the City of Government of Cebu

separately incurred under its budget for extraordinary and miscellaneous expenses
(EME), on the one hand, and its discretionary expenses, on the other. The City
Government of Cebu argued that the disallowances were made in violation of its fiscal
autonomy. Were the disallowances proper?

Yes. EME appropriations and discretionary funds have the same purpose, i.e., to have an
available source of funds for certain expenses in relation to the discharge of official
functions which are not covered by the regular budget allocation. It is noteworthy that SP
Ordinance No. 2557-2004, which was the basis of the disallowed disbursements, already
had an appropriation for the Office of the City Mayor's discretionary expenses. Thus,
separate amounts appropriated in the local budget ordinance are patent circumventions
of the limitation under Section 325(h) of the LGC. To stress, the provision expressly
prohibits the appropriation of a separate amount for discretionary purposes other than
the two percent (2%) allocated for the local chief executive's discretionary fund. (Abella
v. COA, G.R. No. 238940, April 19, 2022 [JMVL])

8. In 2019, the Kingdom of Arendelle acquired a parcel of land in Pasay City which it
intended to use as housing facilities for its diplomatic mission in the Philippines. was
the recipient of donated land located in Manila. When it had decided to commence with
the planning and construction of the housing facilities, it found out that the land had,
in the meantime, been occupied by informal settlers. It decided to sell the land to Juan
Gomez. Alleging that the Kingdom of Arendelle breached its obligation to clear the land
of informal settlers, Juan Gomez filed a complaint for the rescission of the contract of
sale. Will the action prosper?

No. The immunity of the sovereign is recognized only with regard to public acts or acts
jure imperii of a state, but not with regard to private acts or acts jure gestionis. The right
of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary
for the creation and maintenance of its diplomatic mission, is recognized in the 1961
Vienna Convention on Diplomatic Relations to which the Philippines is a party. “The
decision to transfer the property and the subsequent disposal thereof are likewise clothed
with a governmental character. Petitioner did not sell Lot 5-A for profit or gain. It merely
wanted to dispose of the same because the squatters living thereon made it almost
impossible for petitioner to use it for the purpose of the donation.” (Holy See v. Rosario,
G.R. No. 101949, December 1, 1994)

9. The President of the Philippines appointed his cabinet secretaries upon his assumption
of office. One of them is the Secretary of Finance who also sits as Chairman of the Board
of Directors of Trade and Investment Development Corporation (TIDCORP). As
Chairperson of TIDCORP’s Board of Directors, the Secretary of Finance approved
TIDCORP Board Resolution No. XXX. A Petition was filed assailing this Board Resolution
on the argument that the same lacked the required approval of the President. The

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Secretary of Finance argued that the President’s approval is not necessary because he
was not acting in his capacity as the President’s alter ego, but as Chairman of TIDCORP’s
Board of Directors. Is he correct?

Yes. The Secretary of Finance is correct. According to jurisprudence, the doctrine of

qualified political agency could not be extended to the acts of the Board of Directors of
TIDCORP despite some of its members being themselves the appointees of the President
to the Cabinet. Such cabinet members sat on the Board of Directors of TIDCORP ex officio,
or by reason of their office or function, not because of their direct appointment to the
Board by the President. It was the law, not the President, that sat them in the Board. (NPC
v. COA, G.R. No. 218052, January 26, 2021)

10. Mario, as City Mayor of Manila, was charged with violation of Section 3(e) of Republic
Act No. 3019. The Ombudsman, however, dismissed the complaint for lack of probable
cause. Appeal was filed, contesting the Ombudsman’s dismissal of the complaint with
the argument that it committed grave abuse of discretion for its alleged unjust refusal
to file the appropriate Information against Mario. Did the Ombudsman commit grave
abuse of discretion?

No. The Ombudsman’s mandate as “the champion of the people” and “preserver of the
integrity of the public service” have both the constitutional and statutory bases. As an
independent constitutional body, the power of the Ombudsman to investigate is plenary
and unqualified such that it has full discretion to determine whether a criminal case
should be filed or not based on the attendant facts and circumstances of each case.
(Quiogue v. Estacio, Jr., G.R. No. 218530, January 13, 2021)

11. On February 1, 2012, the Commission on Audit (COA) rendered its decision lifting the
Notice of Disallowance against Jaime. In response, Jaime submitted confidential letters
to the COA asking to reconsider the said Decision. However, it took COA more than
three years to act on the letters and reverse its Decision. It also did not provide any
justification for the delay. A motion for reconsideration was subsequently filed, which
took four years for COA to resolve sans any explanation. Did the COA violate the parties’
right to speedy disposition of cases?

Yes. The speedy disposition of cases is paramount in the administration of justice. The
right to a speedy disposition of cases is deemed violated only when vexatious, capricious,
and oppressive delays attended the proceedings; or when unjustified postponements of
trial are asked for and secured; or even without cause or justifiable motive a long period
of time is allowed to elapse without the party having his case tried. Several factors
including the length of the delay, the reasons for such delay, the assertion or failure to
assert such right, and the prejudice caused by the delay must be considered. Here, there
was delay by COA without any justification, causing prejudice to the parties. (DBP v. COA,
G.R. No. 247787, March 2, 2021)

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12. Some disbursements for the payment of separation benefits to former employees of
PSALM, a GOCC, were disallowed in audit because: (a) they were given to contractual
employees whose services are not considered and accredited as government service as
per their service agreements; or (b) they represent the excess in the separation pay
given, which resulted from the rounding off of the length of service that unduly
increased the length of service; or for both grounds. The COA Proper sustained all the
disallowances for being contrary to law. Is the COA correct?

Yes. The Constitution states that no money shall be paid out of any public treasury or
depository except in pursuance of an appropriation law or other specific statutory
authority. Any disbursement of government funds that is contrary to law shall be
disallowed for being an illegal expenditure. Here, the law was clear on the prescribed
amount for separation pay and there is no legal basis to grant the same here. Verily, the
same were correctly disallowed. (Transco v. COA, G.R. No. 246173, June 22, 2021)

13. The Labor Arbiter, as affirmed by the National Labor Relations Commission, found that
Martin was illegally dismissed by his employer, XYZ Corporation, based on the evidence
submitted by the parties. XYZ Corporation appealed the same before the Court of
Appeals, contending that the Labor Arbiter and the National Labor Relations
Commission have no authority to rule on the dispute because they are just
administrative agencies. Thus, their factual findings are not binding upon the Court. Is
XYZ Corporation correct?

No. Well-settled is the rule that the factual findings of administrative agencies, like the
NLRC, are generally respected and even affording finality, when supported by substantial
evidence, because of their specialized knowledge and expertise in matters falling under
their jurisdiction. (See Estrella v. COA, G.R. No. 252079, September 14, 2021)

14. When is there a valid delegation of legislative powers and does it grant plenary
legislative powers to the delegate?

No. The power of subordinate legislation does not mean the absolute transmission of
legislative powers to administrative agencies. A valid delegation of legislative powers
must comply with the completeness test and the sufficient standard test. The law is
complete when it sets the policy to be executed leaving nothing to the delegate except
to implement it. On the other hand, the law lays down a sufficient standard when it
provides adequate guidelines or limitations to determine the boundaries of the delegate’s
authority and prevent the delegation from running riot. (See Sobrejuanite-Flores v.
Pilando, Jr., G.R. No. 251816, November 23, 2021)

15. Are refugees automatically naturalized as Filipinos under the 1951 Refugee Convention
to which the Philippines is bound?

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No. Naturalization is not a right, but one of privilege of the most discriminating, as well as
delicate and exacting nature, affecting public interest of the highest order, and which may
be enjoyed only under the precise conditions prescribed by law. The Philippines’
international commitment to the 1951 Refugee Convention does not amount to a blanket
waiver of all the legal requirements for naturalization. (Mohamed v. Republic, G.R. No.
220674, December 2, 2021)

16. When is a statute or act considered void for vagueness?

A statute or act may be said to be vague when it lacks comprehensible standards that
men of common intelligence must necessarily guess at its meaning and differ in its
application. But the doctrine does not apply as against legislations that are merely
couched in imprecise language but which nonetheless specify a standard though
defectively phrased; or to those that are apparently ambiguous yet fairly applicable to
certain types of activities. The first may be ‘saved’ by proper construction, while no
challenge may be mounted as against the second whenever directed against such
activities. (De Alban v. COMELEC, G.R. No. 243968, March 22, 2022)

17. Kesha, a Filipino Citizen, owns a parcel of land in Bulacan. She sold the same to a Chinese
Citizen, Ping, who later on sold it to Ricardo, a Filipino Citizen. May Ricardo register the
land under his name?

Yes. No private lands shall be transferred or conveyed except to Filipino individuals,

corporations, or associations qualified to acquire or hold lands of the public domain [Sec.
7, Art. XII]. Any sale or transfer in violation of the prohibition is null and void [Ong Ching
Po v. CA, G.R. No. 113472-73 (1994)]. When a disqualified foreigner later sells it to a
qualified owner (e.g. Filipino citizen), the defect is cured. Here, although the subject land
was invalidly sold to Ping, the defect was cured when it was sold to Roberto, a Filipino.

18. Jeff his Certificate of Candidacy for senator in the 2025 elections. Upon finding out that
Jeff is a mere taxi driver, the COMELEC motu proprio filed a petition to declare Jeff a
nuisance candidate on the ground that he has no bona fide intent to run for public
office, considering that he is not be able to afford the cost of a nationwide campaign.
The COMELEC First Division thus declared Jeff a nuisance candidate. Is the COMELEC
correct?

No. In De Alban v. COMELEC, the Court has held that a candidate’s modest financial
capacity or lack of membership in a political party cannot be considered as lack of a bona
fide intent to run for public office. Thus, the COMELEC is not correct in declaring Jeff a
nuisance candidate on the mere basis that he, being a taxi driver, does not have a bona
fide intent to run for public office for not having the financial capacity to afford the cost
of a nationwide campaign. [G.R. No. 243968, March 22, 2022, per JMVL].

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19. May “comfort women” who were sexually abused by Japanese Imperial troops during
the occupation of the Philippines in World War II, bring a class suit for compensation
and damages against the Japanese government before the International Court of
Justice?

No, the “comfort women” may not bring a class suit against the Japanese Government
before the International Court of Justice. Under International Law, only States may be
parties in cases before the International Court of Justice.

20. Joe, a flight attendant, was dismissed by Philippine Airlines for being overweight. He
challenges the dismissal on the ground of violation of his right to equal protection,
claiming that in other airlines, his weight is not considered “overweight”. Is Joe correct?

A: No. In Yrasuegui v. Philippine Air Lines, the Court has held that the equal protection
clause may be invoked only against governmental interference or action and not against
the acts of private individuals or entities. Here, Philippine Air Lines is a private entity.
Hence, Joe cannot invoke his right to equal protection against it.

21. Tony worked for the Quezon City Hall. He complained before the Mayor that the use of
the basement as chapel to hold catholic masses must be stopped because it is in
violation of the non-establishment clause. Is Tony correct?

No. Under the concept of Benevolent Neutrality, the State is allowed to accommodate a
certain religion. It is not an act that promotes or favors a specific religion, rather, it is an
act that merely allows individuals or groups to exercise their religion without hindrance.
Here, there was no regulation or rule that required employees to attend the masses held
in the basement. No government funds were being used to conduct the masses. [Letter
of Tony Valenciano, A.M. No. 10-4-19-SC, March 07, 2017.]

22. Differentiate Content-Based and Content-Neutral Regulation.

A: Content-neutral regulation is one that is merely concerned with the incidents of

speech, or one that merely controls the time, place, or manner, and under well-defined
standards. Only a substantial governmental interest is required for its validity. Because
regulations of this type are not designed to suppress any particular message, they are not
subject to the strictest form of judicial scrutiny but an intermediate approach-somewhere
between the mere rationality that is required of any other law and the compelling interest
standard applied to content-based restrictions.

On the other hand, content-based regulation is restriction that is based on the subject
matter of the utterance or speech. It bears a heavy presumption of invalidity and is
measured against the clear and present danger rule. The latter will pass constitutional

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muster only if justified by a compelling reason, and the restrictions imposed are neither
overbroad nor vague.

23. Judge Reyes was given a court-issued laptop. When he had it repaired by the Court’s
tech office, it was revealed through the private messages of that laptop that he was
committing acts of briberies with lawyers involved in the cases he was handling. Thus,
a case for his dismissal as a judge was initiated. He argues that the messages obtained
from his laptop cannot be used for being in violation of the Exclusionary Rule. Is Judge
Reyes correct?

No. Judge Reyes had no expectation of privacy for electronic communications stored in
the subject laptop. For judges and court employees, laptops and computers are provided
to facilitate the courts’ function of adjudicating cases, and are not meant for private
purposes. In this case, the SMS/iMessage correspondence were stored in the subject
laptop and not in his private computer. Neither did it appear that the laptop was forcibly
taken from him. “These circumstances convince this Court that Judge Reyes cannot
successfully claim that the State unduly intruded into a personal matter”. [Office of the
Court Administrator v. Judge Reyes, A.M. No. RTJ-20-2579 October 10, 2023]

24. Alexis Guo is a Chinese national with outstanding warrants in China. Alexis Guo was
arrested in the Philippines for qualified theft. Upon learning of this fact, the Chinese
Embassy in the Philippines demanded the extradition of Alexis Guo. Despite a lack of an
extradition treaty with the Philippines, the Chinese government claims that the
Philippines' obligation to extradite is based on Customary International Law. Is the
Philippines required to grant the Chinese Government's request for extradition?

No, the obligation to extradite is not part of customary international law, and a state is
only obligated to extradite according to a treaty. In this case, the Philippines and China do
not have an extradition treaty. [Government of Hongkong Special Administrative Region
v. Muñoz, G.R. No. 207342 (2016)]

25. What are the sources of obligations in International Law?

a. international conventions, whether general or particular, establishing rules

expressly recognized by the contesting states;
b. international custom, as evidence of a general practice accepted as law;
c. the general principles of law recognized by civilized nations; and
d. subject to the provisions of Article 59, judicial decisions and the teachings of the
most highly qualified publicists of the various nations, as subsidiary means for the
determination of rules of law. [Article 38(1), ICJ Statute]

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26. Mr. A filed a case for Quo Warranto against the Vice-President of the Philippines, Mr. B
to remove the latter from office. Mr. B argues that the case should be dismissed as he
can only be removed from the office of the vice president through impeachment. Mr. A
however argues that the existence of impeachment does not preclude the filing of Quo
Warranto against the Vice-President. Between Mr. A and Mr. B, which one is correct?

Mr. A. In Republic vs. Sereno, the Court held that Quo Warranto and Impeachment are
distinct in terms of jurisdiction, grounds, applicable rules, and limitation. The existence of
the other will not prevent the commencement of the other remedy. Hence, the rule
against forum shopping will not apply because of the difference in cause of action.

27. Mr. A filed a certificate of candidacy for the 2019 National Elections. However, the
COMELEC Law Department motu proprio filed a petition to declare Mr. A as a nuisance
candidate which the COMELEC First Division and En Banc granted. Thus, Mr. A filed a
petition for certiorari before the Supreme Court. During the pendency of the case, the
COMELEC proclaimed the winning senatorial candidates in the 2019 elections. Should
Mr. A's petition be dismissed? Why or why not?

Yes, Mr. A's petition should be dismissed for being moot and academic. The conclusion of
the 2019 elections rendered the petition moot and academic. A case becomes "moot"
when it ceases to present a justiciable controversy by virtue of supervening events so that
a declaration thereon would be of no practical use or value. In such circumstances, the
courts generally decline jurisdiction and no longer consider questions in which no actual
interests are involved. Here, Mr. A's prayer to include his name in the ballots can no longer
be enforced. Indeed, such relief will serve no useful purpose because the COMELEC
already proclaimed the winning senatorial candidates in the 2019 elections. [De Alban v.
Commission on Elections, G.R. No. 243968, (2022)]

Alternative answer:

No, based on the case of De Alban v. Commission on Elections, G.R. No. 243968, (2022),
courts will decide cases, otherwise moot and academic if: first, there is a grave violation
of the Constitution; second, the exceptional character of the situation and the paramount
public interest is involved; third, when the constitutional issue raised requires formulation
of controlling principles to guide the bench, the bar, and the public; and fourth, the case
is capable of repetition yet evading review. The present case falls within the fourth
exception. Notably, elections are held at regular intervals and the issues of nuisance
candidates will inescapably reach the Court. The declared nuisance candidates will
inevitably echo similar sentiments against the authority of the COMELEC and that its
findings anchored on the general allegation of lack of capacity to wage a nationwide
campaign, without any evidence or explanation, are insufficient to demonstrate the
absence of bona fide intention to run for public office.

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28. Mr. A, an attache for the Drug Enforcement Agency of Russia was charged with the theft
when he was cause with allegedly stolen items during a routine checkpoint in Quezon
City. Mr. A filed a motion to quash and submitted the DFA certification that he was in
fact an attache and was granted diplomatic immunity. Mr. A argues that the DFA
certification is conclusive on the Regional Trial Court which must dismiss the case
against him as a ministerial duty. Is Mr. A correct?

No. While the authority to certify which individuals are entitled to diplomatic immunity is
exclusively granted to the DFA, this determination is not conclusive. Even with a DFA
certification, the court is not precluded from making an inquiry into the intrinsic
correctness of such certification. [China National Machinery & Equipment Corporation
(Group) v. Santamaria, G.R. No. 185572 (2012)].

29. What is the difference between an obligation erga omnes and a jus cogens norm? Are
jus cogens norms automatically erga omnes obligations?

An obligations erga omnes means an obligation of a State towards the international

community as a whole, which is the "concern of all States" and for whose protection all
States have a "legal interest" [Barcelona Traction Case (ICJ, 1970)]. On the other hand, a
jus cogens norm is one that is accepted and recognized by the international community
of States as a whole as a norm from which no derogation is permitted and which can be
modified only by a subsequent norm of general international law having the same
character" [Art. 53, Vienna Convention on the Law of Treaties (hereinafter "VCLT")]. An
obligation erga omnes is a rule on standing which allows a state to hold another liable
regardless of whether it is affected by the violation of an international obligation. On the
other hand, a jus cogens norm is a rule disallowing derogation from a certain obligation.
Thus, jus cogens norms are not automatically erga omnes obligations

30. Differentiate the doctrine of incorporation from the doctrine of transformation.

The Incorporation Clause has allowed us to apply the rules of international law even if
such rules had not previously been subject to statutory enactments because these
generally accepted principles of international law are automatically part of our own laws.
[See Kuroda v. Jalandoni, 42 O.G. 4282; Kim Chan v. Valdez Tan Keh, 75 Phil 113.

On the other hand, the doctrine of transformation requires that an international law
principle be transformed into domestic law through a constitutional mechanism, such as
local legislation. The incorporation method applies when, by mere constitutional
declaration, international law is deemed to have the force of domestic law
[Pharmaceutical and Health Care Association v. Duque, supra.]

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1. What is the incontestability clause?

After a policy of life insurance made payable on the death of the accused shall have been
in force during the lifetime of the insured for a period of two years from the date of its
issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio
or is rescindable by any reason of the fraudulent concealment or misrepresentation of
the insured or his or her agent (Florendo v. Philam Plans, G.R. No. 186983, February 22,
2012)

2. What is the Trust Fund Doctrine?

The Trust Fund Doctrine provides that the capital stock, property, and other assets of the
corporation are regarded as equity in trust for the payment of the corporate creditors.
The subscribed capital stock of the corporation is a trust fund for the payment of debts of
the corporation, which the creditors have a right to look for the satisfaction of their
credits. A corporation may not dissipate this and the creditors may sue stockholders
directly for the unpaid subscription (Phil. Trust Co. V. Rivera, 44 Phil. 649)

3. What is a covered transaction under the Anti-Money Laundering Act?

A covered transaction is a transaction in cash or other equivalent monetary instrument

involving a total amount in excess of PHP 500,000.00 within one banking day; for casinos
that are now covered under Section 3(a)(8), a single casino transaction involving an
amount in excess of PHP 5 Million or its equivalent in any other currency (R.A. No. 9160,
as amended by R.A. No. 10927)

4. Lloyd commutes to and from his work in Makati daily by riding the bus. One Friday
morning, Lloyd took his usual bus going to the office. As he stepped onto the pavement
while alighting the bus, the bus suddenly accelerated, causing Lloyd to lose his balance
and fall. As a result, Lloyd badly fractured his arm. He thus sued the bus company for
damages. The bus company countered that the contract of carriage had already ended
because Lloyd has already alighted the bus when he fell. Is the bus company correct?

No. Once created, the relationship between a common carrier and a passenger will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted
from the carrier’s conveyance or has had a reasonable opportunity to leave the carrier’s
premises. (La Mallora v. CA, 17 SCRA 739)

5. What is the doctrine of secondary meaning?

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The doctrine of secondary meaning provides that a generic or descriptive mark may later
acquire the characteristic of distinctiveness and can later be registered if it acquires a
meaning which is different from its ordinary connotation. For this to happen, there must
be exclusive and continuous use for a period of at least five (5) years (Section 123.2,
Intellectual Property Law)

6. What are considered personal information under the Data Privact Act?

Personal information is any information from which the identity of an individual is

apparent, or can be reasonably and directly ascertained by the one holding the
information, or when put together with other information would directly and certainly
identify an individual (Section 3(g) of the DPA).

7. Name at least two instances when a stockholder may not exercise their preemptive
right to subscribe to issues or dispositions of shares of the corporation?

(1) When denied by the articles of incorporation; (2) for shares issued in compliance with
laws requiring stock offerings or minimum stock ownership by the public; (3) shares
issued in good faith with the approval of the stockholders representing two-thirds (2/3)
of the outstanding capital stock, in exchange for property needed for corporate purposes
or in payment of a previously contracted debt.

8. When does the grandfather rule apply in determining the nationality of a corporation?

The "control test" is still the prevailing mode of determining whether or not a corporation
is a Filipino corporation, within the ambit of Sec. 2, Art. II of the 1987 Constitution, entitled
to undertake the exploration, development and utilization of the natural resources of the
Philippines. When in the mind of the Court there is doubt, based on the attendant facts
and circumstances of the case, in the 60-40 Filipino-equity ownership in the corporation,
then it may apply the "grandfather rule." (Narra Nickel Mining & Development Corp. v.
Redmont Consolidated Mines Corp., G.R. No. 195580, April 21, 2014)

See also The Grandfather Rule, standing alone, should not be used to determine the
Filipino ownership and control in a corporation, as it could result in an otherwise foreign
corporation rendered qualified to perform nationalized or partly nationalized activities.
Hence, it is only when the Control Test is first complied with that the Grandfather Rule
may be applied. Put in another manner, if the subject corporation's Filipino equity falls
below the threshold 60%, the corporation is immediately considered foreign-owned, in
which case, the need to resort to the Grandfather Rule disappears.

On the other hand, a corporation that complies with the 60-40 Filipino to foreign equity
requirement can be considered a Filipino corporation if there is no doubt as to who has
the "beneficial ownership" and "control" of the corporation. In that instance, there is

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no need for a dissection or further inquiry on the ownership of the corporate

shareholders in both the investing and investee corporation or the application of the
Grandfather Rule. [12] As a corollary rule, even if the 60-40 Filipino to foreign equity ratio
is apparently met by the subject or investee corporation, a resort to the Grandfather Rule
is necessary if doubt exists as to the locus of the "beneficial ownership" and "control."
In this case, a further investigation as to the nationality of the personalities with the
beneficial ownership and control of the corporate shareholders in both the investing and
investee corporations is necessary. (Narra Nickel Mining and Development Corp. v.
Redmont Consolidated Mines Corp., G.R. No. 195580, January 28, 2015)

9. Identify circumstances that constitute “doubt” which demands the application of the
Grandfather Rule.

The "doubt" that demands the application of the Grandfather Rule in addition to or in
tandem with the Control Test is not confined to, or more bluntly, does not refer to the
fact that the apparent Filipino ownership of the corporation's equity falls below the 60%
threshold. Rather, "doubt" refers to various indicia that the "beneficial ownership" and
"control" of the corporation do not in fact reside in Filipino shareholders but in foreign
stakeholders. As provided in DOJ Opinion No. 165, Series of 1984, which applied the
pertinent provisions of the Anti-Dummy Law in relation to the minimum Filipino equity
requirement in the Constitution, "significant indicators of the dummy status" have been
recognized in view of reports "that some Filipino investors or businessmen are being
utilized or [are] allowing themselves to be used as dummies by foreign investors"
specifically in joint ventures for national resource exploitation. These indicators are:

1. That the foreign investors provide practically all the funds for the joint investment
undertaken by these Filipino businessmen and their foreign partner;
2. That the foreign investors undertake to provide practically all the technological
support for the joint venture;
3. That the foreign investors, while being minority stockholders, manage the
company and prepare all economic viability studies. (Narra Nickel Mining and
Development Corp. v. Redmont Consolidated Mines Corp., G.R. No. 195580,
January 28, 2015)

10. White Gold Marine Services, Inc. (WGMS) filed a complaint with the Insurance
Commission alleging that The Steamship Mutual Underwriting Association (Bermuda)
Ltd. (Steamship) had no authority to engage in the insurance business. WGMS argued
that Steamship is a Protection and Indemnity Club (P&I Club) or an association of
shipowners who band together for the specific purpose of providing insurance cover on
a mutual basis against liabilities incidental to shipowning incurred by its members in
favor of third party. Steamship countered that it was merely an association of vessel
owners who seek to provide mutual protection against liabilities incidental to
shipowning. Is Steamship engaged in the insurance business?

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Yes. A P & I Club is "a form of insurance against third party liability, where the third party
is anyone other than the P & I Club and the members." By definition then, Steamship
Mutual as a P & I Club is a mutual insurance association engaged in the marine insurance
business. (White Gold Marine Services, Inc. v. Pioneer Insurance, G.R. No. 154514, July
28, 2005)

11. GMA-7 carried the live newsfeed of footage from Reuters which Reuters carried from
the footage belonging to ABS-CBN. ABS-CBN filed a complaint for copyright
infringement. In its defense, GMA-7 argued that it not acted in good faith as it did not
receive any notice and it was not aware that Reuters was airing footages of ABS-CBN. Is
good faith an appropriate defense for copyright infringement?

No. The Intellectual Property Code requires strict liability for copyright infringement
whether for a civil action or a criminal prosecution; it does not require mens rea or culpa.
It is the act of infringement, not the intent, which causes the damage. To require or
assume the need to prove intent defeats the purpose of intellectual property protection.
(ABS-CBN v. Gozon, G.R. No. 195956, March 11, 2015)

12. What is the rule on reciprocity in relation to critical infrastructure under Republic Act
No. 11659?

Section 25 of Republic Act No. 11659 states: Foreign nationals shall not be allowed to
own more than fifty percent (50%) of the capital of entities engaged in the operation and
management of critical infrastructure unless the country of such foreign national accords
reciprocity to Philippine Nationals as may be provided by foreign law, treaty or
international agreement. Reciprocity may be satisfied by according rights of similar value
in other economic sectors. The NEDA shall promulgate rules and regulations for this
purpose.

13. St. John Medical Center is organized as a non-stock and non-profit charitable institution
but admits that it has income-generating activities. Nevertheless, due to its
organization, it argued that it is exempt from the payment of real property taxes and
from income taxes. Is St. John automatically exempt from the payment of real property
and income taxes?

No. There is no dispute that St. Luke's is organized as a non-stock and non-profit charitable
institution. However, this does not automatically exempt St. Luke's from paying taxes.
This only refers to the organization of St. Luke's. Even if St. Luke's meets the test of charity,
a charitable institution is not ipso facto tax exempt. To be exempt from real property
taxes, Section 28(3), Article VI of the Constitution requires that a charitable institution use
the property "actually, directly and exclusively" for charitable purposes. To be exempt
from income taxes, Section 30(E) of the NIRC requires that a charitable institution must

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be "organized and operated exclusively" for charitable purposes. Likewise, to be exempt

from income taxes, Section 30(G) of the NIRC requires that the institution be "operated
exclusively" for social welfare… hus, even if the charitable institution must be "organized
and operated exclusively" for charitable purposes, it is nevertheless allowed to engage in
"activities conducted for profit" without losing its tax exempt status for its not-for-profit
activities. The only consequence is that the "income of whatever kind and character" of a
charitable institution "from any of its activities conducted for profit, regardless of the
disposition made of such income, shall be subject to tax." Prior to the introduction of
Section 27(B), the tax rate on such income from for-profit activities was the ordinary
corporate rate under Section 27(A). With the introduction of Section 27(B), the tax rate is
now 10%. (CIR v. St. Luke’s Medical Center, G.R. No. 195909, September 26, 2012)

14. The National Power Corporation (NPC) was assessed real property tax for its lands and
machineries by the Bulacan Local Government. NPC protested the assessments before
the LBAA as the properties were exempt since these were actually, directly, and
exclusively used in generating and transmitting electricity. The Bulacan Local
Government argued that NPC’s failure to pay the tax rendered its protest without any
effect. NPC countered that since it is not questioning the reasonableness or correctness
of the assessment payment under protest is not required. Is NPC correct?

No. the authority or power of the municipal assessor to impose RPT on the NPC's
properties is not being questioned. Nothing in the Petition filed with the LBAA supported
NPC's claim regarding the assessor's alleged lack of authority. Instead, the Petition
primarily involved factual questions on the correctness of the assessment based on two
grounds: first, the properties listed in the Machineries Assessment are exempt from RPT
because they are actually, directly, and exclusively used for the generation of electricity;
second, the computation of RPT in the Land Assessment is erroneous. Having failed to pay
the tax, NPC’s protest was not perfected. (National Power Corp. v. Provincial Government
of Bulacan, G.R. No. 207140, January 30, 2023 [JMVL])

15. Is an assessment for deficiency taxes a prerequisite for collection of the taxpayer-
accused's civil liability in the criminal prosecution for tax law violations?

No. The following rules shall govern the prosecution of criminal tax law violations and the
corresponding civil liability for unpaid taxes:

(1) When a criminal action for violation of the tax laws is filed, a prior assessment is
not required. Neither a final assessment is a precondition to collection of delinquent
taxes in the criminal tax case. The criminal action is deemed a collection case.
Therefore, the government must prove two things: one, the guilt of the accused by
proof beyond reasonable doubt, and two, the accused's civil liability for taxes by
competent evidence (other than an assessment).

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(2) If before the institution of the criminal action, the government filed (1) a civil suit
for collection, or (2) an answer to the taxpayer's petition for review before the CTA,
the civil action or the resolution of the taxpayer's petition for review shall be
suspended before judgment on the merits until final judgment is rendered in the
criminal action. However, before judgment on the merits is rendered in the civil
action, it may be consolidated with the criminal action. In such a case, the judgment
in the criminal action shall include a finding of the accused's civil liability for unpaid
taxes relative to the criminal case. (People v. Mendez, G.R. Nos. 208310-11 & 208662,
March 28, 2023 [JMVL])

16. When is a penalty of 25% on the tax due imposable?

A penalty of 25% on the amount due will be imposed in the following cases: (a) failure to
file any return AND pay the tax due; (b) filing a return with an internal revenue officer
other than those with whom the return is required to be filed; (c) failure to pay the
deficiency tax within the time prescribed in the notice of assessment; and (d) failure to
pay the full or part of the amount of tax stated in the return (or full amount when no
return is required) on or before the date prescribed for its payment.

17. In a local tax case initiated by a frustrated taxpayer against the City of Baguio, the RTC
granted an application for a writ of preliminary injunction. The City of Manila sought
for reconsideration but was denied by the court. Consequently, the City of Manila filed
a special civil action for certiorari before the CA. The taxpayer moved for dismissal
alleging that the CTA, not the CA, has jurisdiction over the case. The City of Baguio
countered that it is the CA which has jurisdiction since what was sought to be nullified
was a mere interlocutory order issued by the RTC. Is the City of Baguio correct?

A: The City of Baguio is not correct. It has been held that the CTA has the power to
determine whether or not there has been grave abuse of discretion on the part of the RTC
in issuing interlocutory orders in cases falling within the exclusive appellate jurisdiction of
the tax court. Here, the RTC’s order granting the application for a writ of preliminary
injunction is an interlocutory order and the exclusive appellate jurisdiction over local tax
cases decided by the RTC is with the CTA. Thus, the City of Baguio is not correct in stating
that it is the CA which has jurisdiction.

18. In 2020, Fermin, a resident alien, died leaving an estate composed of a family home
with a zonal value of PHP 10,000,000 but with a fair market value of PHP 5,000,000
based on its tax declaration. How much is taxable estate of X if any?

A: X has no taxable estate. Under the Law on Estate Taxation, the gross estate is subject
to a deduction of the value of the family home and a standard deduction of P5 million.
Here, from the gross estate of P10 million is deducted P5 million value of the family home

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since the fair market value per tax declaration is lesser than the zonal value. Also
deducted from the gross estate is P5 million representing the standard deduction.

19. Luther borrowed PHP 100,000 from his friend Bryan payable in one year without
interest. After a year, Luther told Bryan that he could not pay the loan because he had
to spend twice that amount for his mother’s hospitalization. Bryan took pity and
decided not to collect the loan anymore from Luther. Did Luther derive any income from
the condonation of his indebtedness to Bryan? Note that Luther was solvent at the time
the loan was condoned.

A: No. There was a remission or condonation of the debt since there was no cause or
consideration. Hence, the same is considered as a gift or donation and should not be
included in Luther's gross income.

20. Caltex leased a parcel of land from Joanna, who owned a 500 meter lot in Bulacan.
Caltex turned the land into a gasoline station and installed underground tanks. Are the
underground tanks installed by Caltex, a mere lessee, considered as real property for
purposes of real property taxation?

Yes. The Court has held in Caltex v. CBOAA that underground tanks of a gasoline station
located on leased land are considered as real property under the Local Government Code.
[114 SCRA 296]

21. May corporations be entitled to moral damages?

As a rule, that moral damages cannot be granted in favor of a corporation. Being an

artificial person and having existence only in legal contemplation, a corporation has no
feelings, no emotions, no senses. It cannot, therefore, experience physical suffering,
mental anguish, fright, serious anxiety, wounded feelings or moral shock or social
humiliation, which can be suffered only by one having a nervous system. Exceptions: (1)
Besmirched Reputation and (2) Tainted Goodwill. (Hanil v. Court of Appeals, G.R. No.
113176, July 30, 2001).

22. Kiel applied for life insurance with Sun Life Insurance Company. The application paper
asked her if she ever had any ailment or disease of the stomach or intestines, liver, or
kidney. Kiel, being a mere taxi driver who had no medical knowledge, answered “No”.
The application was approved and Kiel paid the premium. Seven months after the
issuance of the policy, Kiel died from kidney failure. The post-mortem examination
shows that Kiel was already suffering from Kidney problems at the time he applied for
the policy. Can Kiel’s beneficiary collect on the policy?

No. The Court has held that concealment or misrepresentation, as a defense against
liability by the insurer on the policy, may be intentional or unintentional. Thus, although

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Kiel had no knowledge that he already had Kidney problems at the time of his application
for the policy, such cannot be used as a defense for his concealment or misrepresentation.
Thus, Kiel’s beneficiaries can no longer collect on the policy.

23. Elijah bought sets of nails at Niko’s Hardware Store using his BDO personal check. When
the check was presented for payment, it was dishonored for having been drawn against
insufficient funds. In order to file a case against Elijah, Niko wrote a letter to BDO asking
for the full address and contact details of Elijah. BDO refused. Is BDO correct?

Yes. Under the Bank Secrecy Law, the rule is that disclosure of any information concerning
bank deposits is unlawful. Here, the Elijah’s address and contact details as the drawer of
the check is an information concerning the demand deposit of the buyer with the bank.
Hence, BDO cannot lawfully disclose Elijah's details to Niko.

24. What is the grandfather rule?

The Grandfather Rule applies only when the 60-40 Filipino foreign equity ownership is in
doubt (i.e. in cases where the joint venture corporation with Filipino and foreign
stockholders with less than 60% Filipino stockholdings (or 59%) invests in another joint
venture corporation which is either 60-40% Filipino alien or 59% less Filipino). Stated
differently, where the 60-40 Filipino foreign equity ownership is not in doubt, the
Grandfather Rule will not apply [Narra Nickel Mining and Dev. Corp v. Redmont
Consolidated Mines Corp., G.R. No. 195580 (2014)].

25. Mr. A, Mr. B, and Mr. C formed a group and conducted business under the name
Company ABC even without a certificate of incorporation. Company ABC then breached
a contract with Company XYZ. Mr. A, Mr. B, and Mr. C then argued that they cannot be
held personally liable and only their company Company ABC can be held liable under
the de facto corporation doctrine. Is Company ABC correct?

No, Mr. A, Mr. B, and Mr. C cannot invoke the de facto corporation doctrine because an
association of persons cannot claim to be a corporation if it has not been issued a
certificate of incorporation since that fact belies the claim of good faith compliance with
the requirements of the law [Hall v. Piccio, G.R. No. L-2598 (1950)].

26. What are the instances when an unlicensed foreign corporation may be allowed to sue
in the Philippines?

1. When the corporation is considered “not doing business” in the Philippines

2. When the Philippine citizen or entity is estopped from challenging the foreign
corporation’s personality to sue [Merrill Lynch Futures v. Court of Appeals, G.R. No. 97816
(1992)]

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27. What are the exceptions to the bank secrecy law?

a. Upon written permission of the depositor;

b. In cases of impeachment;
c. Upon order of competent court in cases of bribery and dereliction of duty; and
d. In cases where the money deposited or invested is the subject matter of litigation

28. What kind of inventions are patentable?

a. Inventions;
b. Utility Model;
c. Industrial Designs; and
d. Lay-Out Designs [R.A. No. 8293]

29. Differentiate Personal Information and Sensitive Personal Information

Personal Information is any information whether recorded in a material form or not, from
which the identity of an individual is apparent or can be reasonably and directly
ascertained by the entity holding the information, or when put together with other
information would directly and certainly identify an individual [Sec. 3(g), DPA]

On the other hand, Sensitive Personal Information refers to information:

(a) About an individual’s race, ethnic origin, marital status, age, color, and religious,
philosophical or political affiliations;
(b) About an individual’s health, education, genetic or sexual life of a person, or to any
proceeding for any offense committed or alleged to have been committed by such
person, the disposal of such proceedings, or the sentence of any court in such
proceedings;
(c) Issued by government agencies peculiar to an individual which includes, but is not
limited to, social security numbers, previous or current health records, licenses or
their denials, suspension or revocation, and tax returns; and
(d) Specifically established by an executive order or act of Congress to be kept
classified [Sec. 3(L), DPA]

30. What are the requisites of a valid tax?

(a) For a public purpose;

(b) The rule of taxation should be uniform;
(c) The person or property taxed is within the jurisdiction of the taxing authority;
(d) Assessment and collection are in consonance with the due process clause; AND
(e) The tax must not infringe on the inherent and constitutional limitations of the power
of taxation.

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