MACARIOLA V ASUNCION

A.M No. 133-J, May 31, 1982

Makasiar, J.

FACTS

Reyes siblings filed a complaint for partition against Macariola, concerning the properties left
by their common father, Francisco Reyes. Asuncion was the judge who rendered the
decision, which became final for lack of an appeal. A project of partition was submitted to
Judge Asuncion after the finality of the decision. This project of partition was only signed by
the counsel of the parties, who assured the judge that they were given authorization to do
so.

One of the properties in the project of partition was Lot 1184, which was subdivided into 5
lots. One of these lots (Lot 1184-D) was sold to Anota, a stenographer of the court, while
another (Lot 1184-E) was sold to Dr. Galapon, who later on sold a portion of the same lot to
Judge Asuncion and his wife. A year after, spouses Asuncion and Dr. Galapon sold their
respective shares over the lot to Traders Manufacturing and Fishing Industries. At the time of
the sale, Judge Asuncion and his wife were both stockholders, with Judge Asuncion as
President and his wife as secretary of said company.

A year after the company’s registration with the SEC, Macariola filed a complaint against
Judge Asuncion alleging: • that he violated Art. 1491 (5) of the Civil Code in acquiring a
portion of the lot, which was one of those properties involved in the partition case; and • that
he violated Art 14 (1 and 5) of the Code of Commerce, Sec 3 (H) of RA 3019, Sec 12, Rule
XVIII of the Civil Service Rules, and Canon 25 of the Canons of Judicial Ethics by
associating himself with a private company while he was a judge of the CFI of Leyte. This
case was referred to Justice Palma of the CA for investigation, report and recommendation.
After hearing, the said Investigating Justice recommended that Judge Asuncion should be
reprimanded or warned in connection with the complaints filed against him.

ISSUE

1. Whether or not Judge Asuncion violated Art 1491 (5) of the Civil Code in acquiring by
purchase a portion of Lot 1184-E, which was among those properties involved in the partition
case.

2. Whether or not Judge Asuncion violated Art 14 (1 and 5) of the Code of Commerce, Sec 3
(H) of RA 3019, Sec 12, Rule XVIII of the Civil Service Rules and Canon 25 of the Canons of
Judicial Ethics when he associated himself with Traders Manufacturing and Fishing
Industries, Inc., as stockholder and a ranking officer

HELD

1. NO. Although Art 1491 (5) of the Civil Code prohibits justices, judges among others from
acquiring by purchase the property and rights in litigation or levied upon an execution before
the court, the SC has ruled, however, that for the prohibition to operate, the sale or
assignment of the property must take place during the pendency of the litigation involving the
property. In this case, when Judge Asuncion purchased a portion of Lot 1184-E, the decision
in the partition case was already final because none of the parties filed an appeal within the
reglementary period. Thus, the lot in question was no longer subject of the litigation.
Moreover, Judge Asuncion did NOT buy the lot directly from the plaintiffs in the partition
case but from Dr. Galapon, who earlier purchased the lot from the plaintiffs. The subsequent
sale from Dr. Galapon to Judge Asuncion is NOT a scheme to conceal the illegal and
unethical transfer of said lot as a consideration for the approval of the project of partition. As
pointed out by the Investigating Justice, there is no evidence in the record showing that Dr.
Galapon acted as a mere dummy of Judge Asuncion. In fact, Dr. Galapon appeared to be a
respectable citizen, credible and sincere, having bought the subject lot in good faith and for
valuable consideration, without any intervention of Judge Asuncion.

Although Judge Asuncion did NOT violate Art 1491 (5) of the Civil Code, it was IMPROPER
for him to have acquired the lot in question. Canon 3 of the Canons of Judicial Ethics
requires that judges’ official conduct should be free from the appearance of impropriety. It
was unwise and indiscreet on the part of Judge Asuncion to have purchased the property
that was or had been in litigation in his court and caused it to be transferred to a corporation
of which he and his wife were ranking officers at the time of such transfer. His actuations
must not cause doubt and mistrust in the uprightness of his administration of justice.

2. NO. Art 14 (1 and 5) of the Code of Commerce prohibits justices of the SC, judges and
officials of the department of public prosecution in active service from engaging in
commerce, either in person or proxy or from holding any office or have an direct,
administrative or financial intervention in commercial or industrial companies within the limits
of the territory in which they discharge their duties. However, this Code is the Spanish Code
of Commerce of 1885, which was extended to the Philippines by a Royal Decree. Upon the
transfer of sovereignty from Spain to the US to the Philippines, Art 14 of the Code of
Commerce must be deemed to have been abrogated because where there is change of
sovereignty, the political laws of the former sovereign are automatically abrogated, unless
they are expressly re-enacted by affirmative act of the new sovereign. There appears to be
no affirmative act that continued the effectivity of said provision.

Sec 3 (H) of RA 3019 provides for instances when public officers are considered to have
committed corrupt practices, which include having financial or pecuniary interest in any
business, contract or transaction in connection with which he intervenes or takes part in his
official capacity or in which he is prohibited by the Constitution or by any law from having any
interest. Judge Asuncion cannot be held liable under said provision because there is no
showing that he participated or intervened in his official capacity in the business or
transactions of Traders Manufacturing. In this case, the business of the corporation in which
he participated has obviously no relation to his judicial office.

Sec 12, Rule XVIII of the Civil Service Rules does NOT apply to members of the Judiciary,
who are covered under RA 296 (Judiciary Act of 1948) and Art X (7) of the 1973
Constitution. Under Sec 67 of RA 296, the power to remove or dismiss judges is vested in
the President of the Philippines, not in the CSC, and only on 2 grounds—serious misconduct
and inefficiency. Under the 1973 Constitution, only the SC can discipline judges of the
inferior courts as well as other personnel of the Judiciary. Judges cannot be considered as
subordinate civil service officers or employees because the Commissioner of the CSC is not
the head of the Judiciary department. Moreover, only permanent officers in the classified
service are subject to the jurisdiction of the CSC. Judges, however, are not within this
classification, as they are considered to be non-competitive or unclassified service of the
government as a Presidential appointee.

Canon 25 of the Canons of Judicial Ethics reminds judges to abstain from making personal
investments in enterprises, which are apt to be involved in litigation in his court. Judge
Asuncion and his wife, however, had withdrawn from the corporation and sold their shares to
third parties only 22 days after its incorporation, which indicates that Judge Asuncion
realized that their interest in the corporation contravenes said Canon. The Court even
commended the spouses for such act.