MACARIOLA V ASUNCION 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
FACTS Rules and Canon 25 of the Canons of Judicial Ethics when he associated
himself with Traders Manufacturing and Fishing Industries, Inc., as
Reyes siblings filed a complaint for partition against Macariola, concerning stockholder and a ranking officer
the properties left by their common father, Francisco Reyes. Asuncion was
the judge who rendered the decision, which became final for lack of an HELD
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 1. NO. Although Art 1491 (5) of the Civil Code prohibits justices, judges
counsel of the parties, who assured the judge that they were given among others from acquiring by purchase the property and rights in
authorization to do so. One of the properties in the project of partition was litigation or levied upon an execution before the court, the SC has ruled,
Lot 1184, which was subdivided into 5 lots. One of these lots (Lot 1184-D) however, that for the prohibition to operate, the sale or assignment of the
was sold to Anota, a stenographer of the court, while another (Lot 1184-E) property must take place during the pendency of the litigation involving the
was sold to Dr. Galapon, who later on sold a portion of the same lot to Judge property. In this case, when Judge Asuncion purchased a portion of Lot
Asuncion and his wife. A year after, spouses Asuncion and Dr. Galapon sold 1184-E, the decision in the partition case was already final because none of
their respective shares over the lot to Traders Manufacturing and Fishing the parties filed an appeal within the reglementary period. Thus, the lot in
Industries. At the time of the sale, Judge Asuncion and his wife were both question was no longer subject of the litigation. Moreover, Judge Asuncion
stockholders, with Judge Asuncion as President and his wife as secretary of did NOT buy the lot directly from the plaintiffs in the partition case but from
said company. A year after the company’s registration with the SEC, Dr. Galapon, who earlier purchased the lot from the plaintiffs. The
Macariola filed a complaint against Judge Asuncion alleging: • that he subsequent sale from Dr. Galapon to Judge Asuncion is NOT a scheme to
violated Art. 1491 (5) of the Civil Code in acquiring a portion of the lot, which conceal the illegal and unethical transfer of said lot as a consideration for the
was one of those properties involved in the partition case; and • that he approval of the project of partition. As pointed out by the Investigating
violated Art 14 (1 and 5) of the Code of Commerce, Sec 3 (H) of RA 3019, Sec Justice, there is no evidence in the record showing that Dr. Galapon acted as
12, Rule XVIII of the Civil Service Rules, and Canon 25 of the Canons of a mere dummy of Judge Asuncion. In fact, Dr. Galapon appeared to be a
Judicial Ethics by associating himself with a private company while he was respectable citizen, credible and sincere, having bought the subject lot in
a judge of the CFI of Leyte. This case was referred to Justice Palma of the CA good faith and for valuable consideration, without any intervention of Judge
for investigation, report and recommendation. After hearing, the said Asuncion.
Investigating Justice recommended that Judge Asuncion should be
reprimanded or warned in connection with the complaints filed against him.
Although Judge Asuncion did NOT violate Art 1491 (5) of the Civil Code, it
ISSUE 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
1. Whether or not Judge Asuncion violated Art 1491 (5) of the Civil Code in from the appearance of impropriety. It was unwise and indiscreet on the part
acquiring by purchase a portion of Lot 1184-E, which was among those of Judge Asuncion to have purchased the property that was or had been in
properties involved in the partition case. 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 Judiciary department. Moreover, only permanent officers in the classified
actuations must not cause doubt and mistrust in the uprightness of his service are subject to the jurisdiction of the CSC. Judges, however, are not
administration of justice. within this classification, as they are considered to be non-competitive or
unclassified service of the government as a Presidential appointee. Canon 25
2. NO. Art 14 (1 and 5) of the Code of Commerce prohibits justices of the SC, of the Canons of Judicial Ethics reminds judges to abstain from making
judges and officials of the department of public prosecution in active service personal investments in enterprises, which are apt to be involved in
from engaging in commerce, either in person or proxy or from holding any litigation in his court. Judge Asuncion and his wife, however, had withdrawn
office or have an direct, administrative or financial intervention in from the corporation and sold their shares to third parties only 22 days after
commercial or industrial companies within the limits of the territory in its incorporation, which indicates that Judge Asuncion realized that their
which they discharge their duties. However, this Code is the Spanish Code interest in the corporation contravenes said Canon. The Court even
of Commerce of 1885, which was extended to the Philippines by a Royal commended the spouses for such act.
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