EN BANC

[Adm. C+se No. 133-J. M+y 31, 1982.]

BERNARDITA R. MACARIOLA, Compl&in&nt, v. HONORABLE ELIAS B.

ASUNCION, Judge of the Court of First Inst+nce of Leyte, Respondent.

SYNOPSIS

Respondent judge w.s ch.rged for h.ving viol.ted (1) Article 1491 of the New
Civil Code when he .cquired by purch.se portion of . lot which w.s involved in .
civil c.se decided by him; (2) Article 14 of the Code of Commerce, the Anti-Gr.ft
.nd Corrupt Pr.ctices Act, the Civil Service Rules, .nd the C.nons of Judici.l
Ethics, when he .ssoci.ted himself with the Tr.ders M.nuf.cturing .nd Fishing
Industries, Inc., .s . stockholder .nd . r.nking officer while he w.s . judge of the
Court of First Inst.nce.

The Supreme Court held th.t there w.s no viol.tion of P.r.gr.ph 5, Article 1491
of the New Civil Code bec.use the s.le took pl.ce .fter fin.lity of the decision;
th.t respondent m.y not be held li.ble under p.r.gr.phs 1 .nd 5, Article 14 of the
Code of Commerce (which is of Sp.nish vint.ge), bec.use the provision p.rt.kes
of the n.ture of . politic.l l.w .s it regul.tes the rel.tionship between the
government .nd cert.in public officers .nd employees .nd .s such is deemed to
h.ve been .utom.tic.lly .brog.ted with the ch.nge of sovereignty from Sp.in to
the United St.tes; th.t respondent c.nnot be held li.ble under P.r.gr.ph H,
Section 3 of the Anti-Gr.ft .nd Corrupt Pr.ctices Act bec.use there is no showing
(.) th.t he p.rticip.ted or intervened in his offici.l c.p.city in the business or
tr.ns.ction of the Tr.ders M.nuf.cturing .nd Fishing Industries, Inc., or (b) th.t
s.id corpor.tion g.ined .ny undue .dv.nt.ge by re.son of respondentʼs fin.nci.l
involvement in it, .nd bec.use neither the 1935 nor the 1973 Constitution of the
Philippines or .ny existing l.w expressly prohibits members of the Judici.ry from
eng.ging or h.ving .ny interest in .ny l.wful business.

Respondent is reminded to be more discreet in his priv.te .nd business .ctivities.

SYLLABUS
1. CIVIL LAW; CONTRACTS; SALES; PROHIBITION TO BUY IN ARTICLE 1491
REFERS TO PROPERTIES UNDER LITIGATION; NO VIOLATION IN CASE AT BAR. —
The prohibition in Article 1491 of the Civil Code .pplies only to the s.le or
.ssignment of the property which is the subject of litig.tion to the persons
disqu.lified therein. WE h.ve .lre.dy ruled th.t." . . for the prohibition to oper.te,
the s.le or .ssignment of the property must t.ke pl.ce during the pendency of
the litig.tion involving the property" (The Director of L.nds v. Ab.b., Et Al., 88
SCRA 513). Consequently, the s.le of . portion of Lot 1184-E to respondent Judge
h.ving t.ken pl.ce over one ye.r .fter the fin.lity of the decision in Civil C.se No.
3010 .s well .s the two orders .pproving the project of p.rtition, .nd not during
the pendency of the litig.tion, there w.s no viol.tion of p.r.gr.ph 5, Article 1491
of the New Civil Code.

2. JUDICIAL ETHICS; CANONS OF JUDICIAL ETHICS; JUDGEʼS CONDUCT

SHOULD BE FREE FROM APPEARANCE OF IMPROPRIETY; JUDGEʼS
TRANSACTIONS REGARDING PROPERTIES LITIGATED IN HIS COURT, NOT
PROPER. — Fin.lly, while it is true th.t respondent Judge did not viol.te
p.r.gr.ph 5, Article 1491 of the New Civil Code in .cquiring by purch.se . portion
of Lot 1184-E which w.s in litig.tion in his court, it w.s, however, improper for him
to h.ve .cquired the s.me. He should be reminded of C.non 3 of the C.nons of
Judici.l Ethics which requires th.t: "A judgeʼs offici.l conduct should be free from
the .ppe.r.nce of impropriety, .nd his person.l beh.vior, not only upon the
bench .nd in the perform.nce of judici.l duties, but .lso in his everyd.y life,
should be beyond repro.ch." Even if respondent honestly believed th.t Lot 1184-E
w.s no longer in litig.tion in his court .nd th.t he w.s purch.sing it from . third
person .nd not from the p.rties to the litig.tion, he should nonetheless h.ve
refr.ined from buying it for himself .nd tr.nsferring it to . corpor.tion in which he
.nd his wife were fin.nci.lly involved, to .void possible suspicion th.t his
.cquisition w.s rel.ted in one w.y or .nother to his offici.l .ctu.tions in civil
c.se 3010. The conduct of respondent g.ve c.use for the litig.nts in civil c.se
3010, the l.wyers pr.ctising in his court, .nd the public in gener.l to doubt the
honesty .nd f.irness of his .ctu.tions .nd the integrity of our courts of justice.

3. MERCANTILE LAW; CODE OF COMMERCE; ARTICLE 14 THEREOF PARTAKES OF

THE NATURE OF A POLITICAL LAW. — Although Article 14 of the Code of
Commerce is p.rt of the commerci.l l.ws of the Philippines, it, however, p.rt.kes
of the n.ture of . politic.l l.w .s it regul.tes the rel.tionship between the
government .nd cert.in public officers .nd employees, like justices .nd judges.

4. CONSTITUTIONAL LAW; POLITICAL LAW, DEFINED. — Politic.l l.w h.s been

defined .s th.t br.nch of public l.w which de.ls with the org.niz.tion .nd
oper.tion of the government.l org.ns of the St.te .nd defines the rel.tions of the
st.te with the inh.bit.nts of its territory (People v. Perfecto, 43 Phil. 887). It must
be rec.lled th.t . politic.l l.w embr.ces constitution.l l.w, l.w of public
corpor.tions, .dministr.tive l.w including the l.w on public officers .nd election.

5. MERCANTILE LAW; CODE OF COMMERCE, ARTICLE 14 THEREOF ABROGATED

BY CHANGE OF SOVEREIGNTY. — Upon the tr.nsfer of sovereignty from Sp.in to
the United St.tes to the Republic of the Philippines, Article 14 of this Code of
Commerce must be deemed to h.ve .brog.ted bec.use where there is ch.nge of
sovereignty, the politic.l l.ws of the former sovereign, whether comp.tible or not
with those of the new sovereign, .re .utom.tic.lly .brog.ted, unless they .re
expressly re-en.cted by .ffirm.tive .ct of the new sovereign.

6. CRIMINAL LAW; ANTI-GRAFT AND CORRUPT PRACTICES ACT; PROHIBITED

PECUNIARY INTEREST UNDER PARAGRAPH H OF SECTION 3 THEREOF REFERS
TO ONE HERE THE PUBLIC OFFICER INTERVENES OR TAKES PART IN HIS
OFFICIAL CAPACITY. — Respondent Judge c.n not be held li.ble under p.r.gr.ph
4 Section 3 of the Anti-Gr.ft .nd Corrupt Pr.ctices Act bec.use there is- no
showing th.t respondent p.rticip.ted or intervened in his offici.l c.p.city in the
business or tr.ns.ctions of the Tr.ders M.nuf.cturing And Fishing Industries, Inc.
In the c.se .t b.r, the business of the corpor.tion in which respondent
p.rticip.ted h.s obviously no rel.tion or connection with his offici.l office. The
business of s.id corpor.tion is not th.t kind where respondent intervenes or t.kes
p.rt in his c.p.city .s Judge of the Court of First Inst.nce. As w.s held in one
c.se involving the .pplic.tion of Article 216 of the Revised Pen.l Code which h.s
. simil.r prohibition on public officers .g.inst directly or indirectly becoming
interested in .ny contr.ct or business in which it is his offici.l duty to intervene,
"It is not enough to be . public offici.l to be subject to this crime; it is necess.ry
th.t by re.son of his office, he h.s to intervene in s.id contr.cts or tr.ns.ctions;
.nd hence, the offici.l who intervenes in contr.cts or tr.ns.ctions which h.ve no
rel.tion to his office c.n not commit this crime" (People v. Meneses, C.A. 40 C.G.
11th Supp. 134; Revised Pen.l Code, p. 1174, Vol 11(1976).

7. JUDICIAL ETHICS; JUDGES NOT PROHIBITED FROM ENGAGING IN LAWFUL

BUSINESS. — There is no provision in both the 1935 .nd 1973 Constitutions of the
Philippines, nor is there .n existing l.w expressly prohibiting members of the
Judici.ry from eng.ging or h.ving interest in .ny l.wful business. It m.y be
pointed out th.t Republic Act No. 296, .s .mended, .lso known .s the Judici.ry
Act of 1948, does not cont.in .ny prohibition to th.t effect. As . m.tter of f.ct,
under Section 77 of s.id l.w, municip.l judges m.y eng.ge in te.ching or other
voc.tion not involving the pr.ctice of the l.w .fter office hours but with the
permission of the district judge concerned. Likewise, Article 14 of the Code of
Commerce which prohibits judges from eng.ging in commerce is, .s heretofore
st.ted, deemed .brog.ted .utom.tic.lly upon the tr.nsfer of sovereignty from
Sp.in to Americ., bec.use it is politic.l in n.ture.
8. ID.; ID.; CIVIL SERVICE ACT AND RULES PROMULGATED THEREUNDER NOT
APPLICABLE TO MEMBERS OF THE JUDICIARY. — On the contention of
compl.in.nt th.t respondent Judge viol.ted Section 12, Rule XVIII of the Civil
Service Rules, We hold th.t the Civil Service Act of 1959 (R.A. No. 2260) .nd the
Civil Service Rules promulg.ted thereunder, p.rticul.rly Section 12 of Rule XVIII,
do not .pply to the members of the Judici.ry. It must be emph.sized .t the outset
th.t respondent, being . member of the Judici.ry, 45 covered by Republic Act No.
296, .s .mended, otherwise known .s the Judici.ry Act of 1948 .nd by Section 7,
Article X, 1973 Constitution. Judges c.nnot be considered .s subordin.te civil
service officers or employees subject to the disciplin.ry .uthority of the
Commissioner of Civil Service; for, cert.inly. the Commissioner is not the he.d of
the Judici.l Dep.rtment to which they belong. The Revised Administr.tive Code
(Section 89) .nd the Civil Service L.w itself st.te thru the Chief Justice is the
dep.rtment he.d of the Supreme Court (Sec. 20, R.A. No. 2260 [1959]); .nd
under the 1973 Constitution, the Judici.ry is the only other or second br.nch of
the government (Sec. 1, Art. X, 1973 Constitution). Besides, . viol.tion of Section
12, Rule XVIII c.nnot be considered .s . ground for disciplin.ry .ction .g.inst
judges bec.use to recognize the s.me .s .pplic.ble to them, would be .dding
.nother ground for the discipline of judges .nd, .s .forest.ted, Section 67 of the
Judici.ry Act recognizes only two grounds for their remov.l, n.mely, serious
misconduct .nd inefficiency.

9. ID.; ID.; JUDGES; ENGAGING IN PRIVATE BUSINESS, IMPROPER UNDER THE

CANONS. — Although the .ctu.tion of respondent Judge in eng.ging in priv.te
business by joining the Tr.ders M.nuf.cturing .nd Fishing Industries, Inc. .s .
stockholder .nd . r.nking officer, is not viol.tive of the provisions of Article 14 of
the Code of Commerce .nd Section 3 (h) of the Anti-Gr.ft .nd Corrupt Pr.ctices
Act .s well .s Section 12, Rule XVIII of the Civil Service Rules promulg.ted
pursu.nt to the Civil Service Act of 1959, the impropriety of the s.me is cle.rly
unquestion.ble bec.use C.non 25 of the C.nons of Judici.l Ethics expressly
decl.res th.t: "A judge should .bst.in from m.king person.l investments in
enterprises which .re .pt to be involved in litig.tion in his court; .nd, .fter his
.ccession to the bench, he should not ret.in such investments previously m.de,
longer th.n . period sufficient to en.ble him to dispose of them without serious
loss The dispos.l or s.le by respondent .nd his wife of their sh.res in the
corpor.tion only 22 d.ys .fter the incorpor.tion of the corpor.tion, indic.tes th.t
‘ respondent re.lized th.t e.rly th.t their interest in the corpor.tion contr.venes
the .fores.id C.non 25. Respondent Judge .nd his wife therefore deserve
commend.tion for their immedi.te withdr.w.l from the firm .fter its incorpor.tion
.nd before it bec.me involved in .ny court litig.tion.
 DECISION

MAKASIAR, J.:

In . verified compl.int d.ted August 6, 1968 Bern.rdit. R. M.c.riol. ch.rged

respondent Judge Eli.s B. Asuncion of the Court of First Inst.nce of Leyte, now
Associ.te Justice of the Court of Appe.ls, with ".cts unbecoming . judge."cr.l.w
virtu.1.w libr.ry

The f.ctu.l setting of the c.se is st.ted in the report d.ted M.y 27, 1971 of then
Associ.te Justice Cecili. Muñoz P.lm. of the Court of Appe.ls now retired
Associ.te Justice of the Supreme Court, to whom this c.se w.s referred on
October 28, 1968 for investig.tion, thus:ch.nrobles l.wlibr.ry : redn.d

"Civil C.se No. 3010 of the Court of First Inst.nce of Leyte w.s . compl.int for
p.rtition filed by Sinforos. R. B.les, Luz R. B.kun.w., An.corit. Reyes, Ruperto
Reyes, Adel. Reyes, .nd Priscill. Reyes, pl.intiffs, .g.inst Bern.rdit. R.
M.c.riol., defend.nt, concerning the properties left by the dece.sed Fr.ncisco
Reyes, the common f.ther of the pl.intiff .nd defend.nt.

"In her defenses to the compl.int for p.rtition, Mrs. M.c.riol. .lleged .mong
other things th.t: .) pl.intiff Sinforos. R. B.les w.s not . d.ughter of the
dece.sed Fr.ncisco Reyes; b) the only leg.l heirs of the dece.sed were
defend.nt M.c.riol., she being the only offspring of the first m.rri.ge of
Fr.ncisco Reyes with Felis. Espir.s, .nd the rem.ining pl.intiffs who were the
children of the dece.sed by his second m.rri.ge with Irene Ondes; c) the
properties left by the dece.sed were .ll the conjug.l properties of the l.tter .nd
his first wife, Felis. Espir.s, .nd no properties were .cquired by the dece.sed
during his second m.rri.ge; d) if there w.s .ny p.rtition to be m.de, those
conjug.l properties should first be p.rtitioned into two p.rts, .nd one p.rt is to be
.djudic.ted solely to defend.nt it being the sh.re of the l.tterʼs dece.sed
mother, Felis. Espir.s, .nd the other h.lf which is the sh.re of the dece.sed
Fr.ncisco Reyes w.s to be divided equ.lly .mong his children by his two
m.rri.ges.

"On June 8, 1963, . decision w.s rendered by respondent Judge Asuncion in Civil
C.se 3010, the dispositive portion of which re.ds:jgc:ch.nrobles.com.ph

"‘IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court, upon .

preponder.nce of evidence, finds .nd so holds, .nd hereby renders judgment (1)
Decl.ring the pl.intiffs Luz R. B.kun.w., An.corit. Reyes, Ruperto Reyes, Adel.
Reyes .nd Priscill. Reyes .s the only children legitim.ted by the subsequent
m.rri.ge of Fr.ncisco Reyes Di.z to Irene Ondez; (2) Decl.ring the pl.intiff
Sinforos. R. B.les to h.ve been .n illegitim.te child of Fr.ncisco Reyes Di.z; (3)
Decl.ring Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 .nd 1/4 of Lot
1145 .s belonging to the conjug.l p.rtnership of the spouses Fr.ncisco Reyes
Di.z .nd Felis. Espir.s; (4) Decl.ring Lot No. 2304 .nd 1/4 of Lot No. 3416 .s
belonging to the spouses Fr.ncisco Reyes Di.z .nd Irene Ondez in common
p.rtnership; (5) Decl.ring th.t 1/2 of Lot No. 1184 .s belonging exclusively to the
dece.sed Fr.ncisco Reyes Di.z; (6) Decl.ring the defend.nt Bern.rdit. R.
M.c.riol., being the only leg.l .nd forced heir of her mother Felis. Espir.s, .s
the exclusive owner of one-h.lf of e.ch of Lots Nos. 4474, 4475, 4892, 5265,
4803, 4581, 4506; .nd the rem.ining one-h.lf (1/2) of e.ch of s.id Lots Nos.
4474, 4475, 4892, 5265, 4803, 4581, 4506 .nd one-h.lf (1/2) of one-fourth (1/4)
of Lot No. 1154 .s belonging to the est.te of Fr.ncisco Reyes Di.z; (7) Decl.ring
Irene Ondez to be the exclusive owner of one-h.lf (1/2) of Lot No. 2304 .nd one-
h.lf (1/2) of one-fourth (1/4) of Lot No. 3416; the rem.ining one-h.lf (1/2) of Lot
2304 .nd the rem.ining one-h.lf (1/2) of one fourth (1/4) of Lot No. 3416 .s
belonging to the est.te of Fr.ncisco Reyes Di.z; (8) Directing the division or
p.rtition of the est.te of Fr.ncisco Reyes Di.z in such . m.nner .s to give or
gr.nt to Irene Ondez, .s surviving widow of Fr.ncisco Reyes Di.z, . heredit.ry
sh.re of one-twelfth (1/12) of the whole est.te of Fr.ncisco Reyes Di.z (Art. 996
in rel.tion to Art. 892, p.r 2, New Civil Code), .nd the rem.ining portion of the
est.te to be divided .mong the pl.intiffs Sinforos. R. B.les, Luz R. B.kun.w.,
An.corit. Reyes, Ruperto Reyes, Adel. Reyes, Priscill. Reyes .nd defend.nt
Bern.rdit. R. M.c.riol., in such . w.y th.t the extent of the tot.l sh.re of
pl.intiff Sinforos. R. B.les in the heredit.ry est.te sh.ll not exceed the equiv.lent
of two-fifth (2/5) of the tot.l sh.re of .ny or e.ch of the other pl.intiffs .nd the
defend.nt (Art. 983, New Civil Code), e.ch of the l.tter to receive equ.l sh.res
from the heredit.ry est.te, (R.mirez v. B.utist., 14 Phil. 528; Di.ncin v. Bishop of
J.ro, O.G. [3rd Ed.] p. 33); (9) Directing the p.rties, within thirty d.ys .fter this
judgment sh.ll h.ve become fin.l to submit to this court, for .pprov.l, . project
of p.rtition of the heredit.ry est.te in the proportion .bove indic.ted, .nd in such
m.nner .s the p.rties m.y, by .greement, deemed convenient .nd equit.ble to
them t.king into consider.tion the loc.tion, kind, qu.lity, n.ture .nd v.lue of the
properties involved; (10) Directing the pl.intiff Sinforos. R. B.les .nd defend.nt
Bern.rdit. R. M.c.riol. to p.y the costs of this suit, in the proportion of one-third
(1/3) by the first n.med .nd two-thirds (2/3) by the second n.med; .nd (11)
Dismissing .ll other cl.ims of the p.rties [pp. 27-29 of Exh. C].

"The decision in civil c.se 3010 bec.me fin.l for l.ck of .n .ppe.l, .nd on
October 16, 1963, . project of p.rtition w.s submitted to Judge Asuncion which is
m.rked Exh. A. Notwithst.nding the f.ct th.t the project of p.rtition w.s not
signed by the p.rties themselves but only by the respective counsel of pl.intiffs
.nd defend.nt, Judge Asuncion .pproved it in his Order d.ted October 23, 1963,
which for convenience is quoted hereunder in full:ch.nrob1es virtu.l 1.w libr.ry

‘The p.rties, through their respective counsels, presented to this Court for
.pprov.l the following project of p.rtition:ch.nrobles virtu.l.wlibr.ry
ch.nrobles.com:ch.nrobles.com.ph

‘COMES NOW, the pl.intiffs .nd the defend.nt in the .bove-entitled c.se, to this
Honor.ble Court respectfully submit the following Project of P.rtition:ch.nrob1es
virtu.l 1.w libr.ry

‘1. The whole of Lots Nos. 1154, 2304 .nd 4506 sh.ll belong exclusively to
Bern.rdit. Reyes M.c.riol.;

‘2. A portion of Lot No. 3416 consisting of 2,373.49 squ.re meters .long the
e.stern p.rt of the lot sh.ll be .w.rded likewise to Bern.rdit. R. M.c.riol.;

‘3. Lots Nos. 4803, 4892 .nd 5265 sh.ll be .w.rded to Sinforos. Reyes B.les;

‘4. A portion of Lot No. 3416 consisting of 1,834.55 squ.re meters .long the
western p.rt of the lot sh.ll likewise be .w.rded to Sinforos. Reyes-B.les;

‘5. Lots Nos. 4474 .nd 4475 sh.ll be divided equ.lly .mong Luz Reyes
B.kun.w., An.corit. Reyes, Ruperto Reyes, Adel. Reyes .nd Priscill. Reyes in
equ.l sh.res;

‘6. Lot No. 1184 .nd the rem.ining portion of Lot No. 3416 .fter t.king the
portions .w.rded under item (2) .nd (4) .bove sh.ll be .w.rded to Luz Reyes
B.kun.w., An.corit. Reyes, Ruperto Reyes, Adel. Reyes .nd Priscill. Reyes in
equ.l sh.res, provided, however th.t the rem.ining portion of Lot No. 3416 sh.ll
belong exclusively to Priscill. Reyes.

‘WHEREFORE, it is respectfully pr.yed th.t the Project of P.rtition indic.ted

.bove which is m.de in .ccord.nce with the decision of the Honor.ble Court be
.pproved.

‘T.clob.n City, October 16, 1963.

(SGD) BONIFACIO RAMO

Atty. for the

Defend.nt
T.clob.n City

‘(SGD) ZOTICO A. TOLETE

Atty. for the Pl.intiff

T.clob.n City

‘While the Court thought it more desir.ble for .ll the p.rties to h.ve signed this
Project of P.rtition, nevertheless, upon .ssur.nce of both counsels of the
respective p.rties to this Court th.t the Project of P.rtition, .s .bove-quoted, h.d
been m.de .fter . conference .nd .greement of the pl.intiffs .nd the defend.nt
.pproving the .bove Project of P.rtition, .nd th.t both l.wyers h.d represented
to the Court th.t they .re given full .uthority to sign by themselves the Project of
P.rtition, the Court, therefore, finding the .bove-quoted project of P.rtition to be
in .ccord.nce with l.w, hereby .pproves the s.me. The p.rties, therefore, .re
directed to execute such p.pers, documents or instrument sufficient in form .nd
subst.nce for the vesting of the rights, interests .nd p.rticip.tions which were
.djudic.ted to the respective p.rties, .s outlined in the Project of P.rtition .nd
the delivery of the respective properties .djudic.ted to e.ch one in view of s.id
Project of P.rtition, .nd to perform such other .cts .s .re leg.l .nd necess.ry to
effectu.te the s.id Project of P.rtition.

‘SO ORDERED.

‘Given in T.clob.n City, this 23rd d.y of October, 1963.

‘(SGD) ELIAS B. ASUNCION

Judgeʼ

"EXH. B.

"The .bove Order of October 23, 1963, w.s .mended on November 11, 1963, only
for the purpose of giving .uthority to the Register of Deeds of the Province of
Leyte to issue the corresponding tr.nsfer certific.tes of title to the respective
.djudic.tees in conformity with the project of p.rtition (see Exh. U).

"One of the properties mentioned in the project of p.rtition w.s Lot 1184 or r.ther
one-h.lf thereof with .n .re. of 15,162.5 sq. meters. This lot, which .ccording to
the decision w.s the exclusive property of the dece.sed Fr.ncisco Reyes, w.s
.djudic.ted in s.id project of p.rtition to the pl.intiffs Luz, An.corit., Ruperto,
Adel., .nd Priscill. .ll surn.med Reyes in equ.l sh.res, .nd when the project of
p.rtition w.s .pproved by the tri.l court the .djudic.tees c.used Lot 1184 to be
subdivided into five lots denomin.ted .s Lot 1184-A to 1184-E inclusive (Exh. V).

"Lot 1184-D w.s conveyed to Enriquet. D. Anot., . stenogr.pher in Judge

Asuncionʼs court (Exhs. F, F-1 .nd V-1), while Lot 1184-E which h.d .n .re. of
2,172.5556 sq. meters w.s sold on July 31, 1964 to Dr. Arc.dio G.l.pon (Exh. 2)
who w.s issued tr.nsfer certific.te of title No. 2338 of the Register of Deeds of
the city of T.clob.n (Exh. 12).

"On M.rch 6, 1965, Dr. Arc.dio G.l.pon .nd his wife sold . portion of Lot 1184-E
with .n .re. of .round 1,306 sq. meters to Judge Asuncion .nd his wife, Victori.
S. Asuncion (Exh. 11), which p.rticul.r portion w.s decl.red by the l.tter for
t.x.tion purposes (Exh. F).

"On August 31, 1966, spouses Asuncion .nd spouses G.l.pon conveyed their
respective sh.res .nd interest in Lot 1184-E to ‘The Tr.ders M.nuf.cturing .nd
Fishing Industries Inc.ʼ (Exh. 15 & 16). At the time of s.id s.le the stockholders of
the corpor.tion were Domin.dor Arigp. T.n, Humili. J.l.ndoni T.n, J.ime Arigp.
T.n, Judge Asuncion, .nd the l.tterʼs wife, Victori. S. Asuncion, with Judge
Asuncion .s the President .nd Mrs. Asuncion .s the secret.ry (Exhs. E-4 to E-7).
The Articles of Incorpor.tion of ‘The Tr.ders M.nuf.cturing .nd Fishing
Industries, Inc.ʼ which we sh.ll henceforth refer to .s ‘TRADERSʼ were registered
with the Securities .nd Exch.nge Commission only on J.nu.ry 9, 1967 (Exh.
E)" [pp. 378-385, rec.].

Compl.in.nt Bern.rdit. R. M.c.riol. filed on August 9, 1968 the inst.nt

compl.int d.ted August 6, 1968 .lleging four c.uses of .ction, to wit: [1] th.t
respondent Judge Asuncion viol.ted Article 1491, p.r.gr.ph 5, of the New Civil
Code in .cquiring by purch.se . portion of Lot No. 1184-E which w.s one of those
properties involved in Civil C.se No. 3010 decided by him; [2] th.t he likewise
viol.ted Article 14, p.r.gr.phs 1 .nd 5 of the Code of Commerce, Section 3,
p.r.gr.ph H, of R.A. 3019, otherwise known .s the Anti-Gr.ft .nd Corrupt
Pr.ctices Act, Section 12, Rule XVIII of the Civil Service Rules, .nd C.non 25 of
the C.nons of Judici.l Ethics, by .ssoci.ting himself with the Tr.ders
M.nuf.cturing .nd Fishing Industries, Inc., .s . stockholder .nd . r.nking officer
while he w.s . judge of the Court of First Inst.nce of Leyte; [3] th.t respondent
w.s guilty of coddling .n impostor .nd .cted in disreg.rd of judici.l decorum by
closely fr.ternizing with . cert.in Domin.dor Arigp. T.n who openly .nd publicly
.dvertised himself .s . pr.ctising .ttorney when in truth .nd in f.ct his n.me
does not .ppe.r in the Rolls of Attorneys .nd is not . member of the Philippine
B.r; .nd [4] th.t there w.s . culp.ble defi.nce of the l.w .nd utter disreg.rd for
ethics by respondent Judge (pp. 1-7, rec.).
Respondent Judge Asuncion filed on September 24, 1968 his .nswer to which .
reply w.s filed on October 16, 1968 by herein compl.in.nt. In Our resolution of
October 28, 1968, We referred this c.se to then Justice Cecili. Muñoz P.lm. of
the Court of Appe.ls, for investig.tion, report .nd recommend.tion. After he.ring,
the s.id Investig.ting Justice submitted her report d.ted M.y 27, 1971
recommending th.t respondent Judge should be reprim.nded or w.rned in
connection with the first c.use of .ction .lleged in the compl.int, .nd for the
second c.use of .ction, respondent should be w.rned in c.se of . finding th.t he
is prohibited under the l.w to eng.ge in business. On the third .nd fourth c.uses
of .ction, Justice P.lm. recommended th.t respondent Judge be
exoner.ted.ch.nrobles l.w libr.ry : red

The records .lso reve.l th.t on or .bout November 9 or 11, 1968 (pp. 481, 477,
rec.), compl.in.nt herein instituted .n .ction before the Court of First Inst.nce of
Leyte, entitled "Bern.rdit. R. M.c.riol., pl.intiff, versus Sinforos. R. B.les, Et
Al., Defend&nts," which w.s docketed .s Civil C.se No. 4235, seeking the
.nnulment of the project of p.rtition m.de pursu.nt to the decision in Civil C.se
No. 3010 .nd the two orders issued by respondent Judge .pproving the s.me, .s
well .s the p.rtition of the est.te .nd the subsequent convey.nces with
d.m.ges. It .ppe.rs, however, th.t some defend.nts were dropped from the civil
c.se. For one, the c.se .g.inst Dr. Arc.dio G.l.pon w.s dismissed bec.use he
w.s no longer . re.l p.rty in interest when Civil C.se No. 4234 w.s filed, h.ving
.lre.dy conveyed on M.rch 6, 1965 . portion of lot 1184-E to respondent Judge
.nd on August 31, 1966 the rem.inder w.s sold to the Tr.ders M.nuf.cturing .nd
Fishing Industries, Inc. Simil.rly, the c.se .g.inst defend.nt Victori. Asuncion
w.s dismissed on the ground th.t she w.s no longer . re.l p.rty in interest .t the
time the .fores.id Civil C.se No. 4234 w.s filed .s the portion of Lot 1184
.cquired by her .nd respondent Judge from Dr. Arc.dio G.l.pon w.s .lre.dy sold
on August 31, 1966 to the Tr.ders M.nuf.cturing .nd Fishing Industries, Inc.
Likewise, the c.ses .g.inst defend.nts Ser.fin P. R.mento, C.t.lin. C.bus, Ben
B.rr.z. Go, Jesus Perez, Tr.ders M.nuf.cturing .nd Fishing Industries, Inc.,
Alfredo R. Celesti.l .nd Pil.r P. Celesti.l, Leopoldo Petill. .nd Remedios Petill.,
S.lv.dor Anot. .nd Enriquet. Anot. .nd Atty. Zotico A. Tolete were dismissed
with the conformity of compl.in.nt herein, pl.intiff therein, .nd her counsel.

On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First Inst.nce

of Leyte, who w.s directed .nd .uthorized on June 2, 1969 by the then Secret.ry
(now Minister) of Justice .nd now Minister of N.tion.l Defense Ju.n Ponce Enrile
to he.r .nd decide Civil C.se No. 4234, rendered . decision, the dispositive
portion of which re.ds .s follows:jgc:ch.nrobles.com.ph

"A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION —

"(1) decl.ring th.t only Br.nch IV of the Court of First Inst.nce of Leyte h.s
jurisdiction to t.ke cogniz.nce of the issue of the leg.lity .nd v.lidity of the
Project of P.rtition [Exhibit "B" ] .nd the two Orders [Exhibits ‘Cʼ .nd ‘C-3ʼ]
.pproving the p.rtition;

"(2) dismissing the compl.int .g.inst Judge Eli.s B. Asuncion;

"(3) .djudging the pl.intiff, Mrs. Bern.rdit. R. M.c.riol. to p.y defend.nt Judge
Eli.s B. Asuncion,

"(.) the sum of FOUR HUNDRED THOUSAND PESOS [P400,000.00] for mor.l
d.m.ges;

"(b) the sum of TWO HUNDRED THOUSAND PESOS [P200,000.00] for exempl.ry
d.m.ges;

"(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nomin.l d.m.ges; .nd

"(d) the sum of TEN THOUSAND PESOS [P10,000.00] for Attorneyʼs Fees.

"B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN, FOR HERSELF
AND FOR THE HEIRS OF THE DECEASED GERARDO VILLASIN —

"(1) Dismissing the compl.int .g.inst the defend.nts M.riquit. Vill.sin .nd the
heirs of the dece.sed Ger.rdo Vill.sin;

"(2) Directing the pl.intiff to p.y the defend.nts M.riquit. Vill.sin .nd the heirs
of Ger.rdo Vill.sin the cost of the suit.

"C. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R. BALES, ET AL., WHO
WERE PLAINTIFFS IN CIVIL CASE NO. 3010 —

"(1) Dismissing the compl.int .g.inst defend.nts Sinforos. R. B.les, Adel. R.

Herrer, Priscill. R. Solis, Luz R. B.kun.w., An.corit. R. Eng .nd Ruperto O.
Reyes.

"D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO —

"(1) Dismissing the compl.int .g.inst Bonif.cio R.mo;

"(2) Directing the pl.intiff to p.y the defend.nt Bonif.cio R.mo the cost of the
suit.
"SO ORDERED" [pp. 531-533, rec.].

It is further disclosed by the record th.t the .fores.id decision w.s elev.ted to
the Court of Appe.ls upon perfection of the .ppe.l on Febru.ry 22, 1971.

WE find th.t there is no merit in the contention of compl.in.nt Bern.rdit. R.

M.c.riol., under her first c.use of .ction, th.t respondent Judge Eli.s B.
Asuncion viol.ted Article 1491, p.r.gr.ph 5, of the New Civil Code in .cquiring by
purch.se . portion of Lot No. 1184-E which w.s one of those properties involved
in Civil C.se No. 3010.

Th.t Article provides:jgc:ch.nrobles.com.ph

"Article 1491. The following persons c.nnot .cquire by purch.se, even .t . public
or judici.l .ction, either in person or through the medi.tion of .nother:ch.nrob1es
virtu.l 1.w libr.ry

x       x       x

"(5) Justices, judges, prosecuting .ttorneys, clerks of superior .nd inferior courts,
.nd other officers .nd employees connected with the .dministr.tion of justice,
the property .nd rights in litig.tion or levied upon .n execution before the court
within whose jurisdiction or territory they exercise their respective functions; this
prohibition includes the .ct of .cquiring by .ssignment .nd sh.ll .pply to l.wyers,
with respect to the property .nd rights which m.y be the object of .ny litig.tion in
which they m.y t.ke p.rt by virtue of their profession" [It&lics supplied].

The prohibition in the .fores.id Article .pplies only to the s.le or .ssignment of
the property which is the subject of litig.tion to the persons disqu.lified therein.
WE h.ve .lre.dy ruled th.t." . . for the prohibition to oper.te, the s.le or
.ssignment of the property must t.ke pl.ce during the pendency of the litig.tion
involving the property" (The Director of L.nds v. Ab.b., Et Al., 88 SCRA 513, 519
[1979]; Ros.rio vd.. de L.ig v. Court of Appe.ls, 86 SCRA 641, 646 [1978]).

In the c.se .t b.r, when the respondent Judge purch.sed on M.rch 6, 1965 .
portion of Lot 1184-E, the decision in Civil C.se No. 3010 which he rendered on
June 8, 1963 w.s .lre.dy fin.l bec.use none of the p.rties therein filed .n .ppe.l
within the reglement.ry period; hence, the lot in question w.s no longer subject of
the litig.tion. Moreover, .t the time of the s.le on M.rch 6, 1965, respondentʼs
order d.ted October 23, 1963 .nd the .mended order d.ted November 11, 1963
.pproving the October 16, 1963 project of p.rtition m.de pursu.nt to the June 8,
1963 decision, h.d long become fin.l for there w.s no .ppe.l from s.id orders.

Furthermore, respondent Judge did not buy the lot in question on M.rch 6, 1965
directly from the pl.intiffs in Civil C.se No. 3010 but from Dr. Arc.dio G.l.pon
who e.rlier purch.sed on July 31, 1964 Lot 1184-E from three of the pl.intiffs,
n.mely, Priscill. Reyes, Adel. Reyes, .nd Luz R. B.kun.w. .fter the fin.lity of the
decision in Civil C.se No. 3010. It m.y be rec.lled th.t Lot 1184 or more
specific.lly one-h.lf thereof w.s .djudic.ted in equ.l sh.res to Priscill. Reyes,
Adel. Reyes, Luz B.kun.w., Ruperto Reyes .nd An.corit. Reyes in the project of
p.rtition, .nd the s.me w.s subdivided into five lots denomin.ted .s Lot 1184-A
to 1184-E. As .forest.ted, Lot 1184-E w.s sold on July 31, 1964 to Dr. G.l.pon for
which he w.s issued TCT No. 2338 by the Register of Deeds of T.clob.n City, .nd
on M.rch 6, 1965 he sold . portion of s.id lot to respondent Judge .nd his wife
who decl.red the s.me for t.x.tion purposes only. The subsequent s.le on
August 31, 1966 by spouses Asuncion .nd spouses G.l.pon of their respective
sh.res .nd interest in s.id Lot 1184-E to the Tr.ders M.nuf.cturing .nd Fishing
Industries, Inc., in which respondent w.s the president .nd his wife w.s the
secret.ry, took pl.ce long .fter the fin.lity of the decision in Civil C.se No. 3010
.nd of the subsequent two .fores.id orders therein .pproving the project of
p.rtition.ch.nrobles l.w libr.ry

While it .ppe.rs th.t compl.in.nt herein filed on or .bout November 9 or 11, 1968
.n .ction before the Court of First Inst.nce of Leyte docketed .s Civil C.se No.
4234, seeking to .nnul the project of p.rtition .nd the two orders .pproving the
s.me, .s well .s the p.rtition of the est.te .nd the subsequent convey.nces, the
s.me, however, is of no moment.

The f.ct rem.ins th.t respondent Judge purch.sed on M.rch 6, 1965 . portion of
Lot 1184-E from Dr. Arc.dio G.l.pon; hence, .fter the fin.lity of the decision
which he rendered on June 8, 1963 in Civil C.se No. 3010 .nd his two questioned
orders d.ted October 23, 1963 .nd November 11, 1963. Therefore, the property
w.s no longer subject of litig.tion.

The subsequent filing on November 9, or 11, 1968 of Civil C.se No. 4234 c.n no
longer .lter, ch.nge or .ffect the .fores.id f.cts — th.t the questioned s.le to
respondent Judge, now Court of Appe.ls Justice, w.s effected .nd consumm.ted
long .fter the fin.lity of the .fores.id decision or orders.

Consequently, the s.le of . portion of Lot 1184-E to respondent Judge h.ving

t.ken pl.ce over one ye.r .fter the fin.lity of the decision in Civil C.se No. 3010
.s well .s the two orders .pproving the project of p.rtition, .nd not during the
pendency of the litig.tion, there w.s no viol.tion of p.r.gr.ph 5, Article 1491 of
the New Civil Code.

It is .lso .rgued by compl.in.nt herein th.t the s.le on July 31, 1964 of Lot 1184-
E to Dr. Arc.dio G.l.pon by Priscill. Reyes, Adel. Reyes .nd Luz R. B.kun.w.
w.s only . mere scheme to conce.l the illeg.l .nd unethic.l tr.nsfer of s.id lot to
respondent Judge .s . consider.tion for the .pprov.l of the project of p.rtition.
In this connection, We .gree with the findings of the Investig.ting Justice
thus:jgc:ch.nrobles.com.ph

"And so we .re now confronted with this .ll-import.nt question whether or not the
.cquisition by respondent of . portion of Lot 1184-E .nd the subsequent tr.nsfer
of the whole lot to ‘TRADERSʼ of which respondent w.s the President .nd his wife
the Secret.ry, w.s intim.tely rel.ted to the Order of respondent .pproving the
project of p.rtition, Exh. A.

"Respondent vehemently denies .ny interest or p.rticip.tion in the tr.ns.ctions

between the Reyeses .nd the G.l.pons concerning Lot 1184-E, .nd he insists th.t
there is no evidence wh.tsoever to show th.t Dr. G.l.pon h.d .cted, in the
purch.se of Lot 1184-E, in medi.tion for him .nd his wife. (See p. 14 of
Respondentʼs Memor.ndum).

x       x       x

"On this point, I .gree with respondent th.t there is no evidence in the record
showing th.t Dr. Arc.dio G.l.pon .cted .s . mere ‘dummyʼ of respondent in
.cquiring Lot 1184-E from the Reyeses. Dr. G.l.pon .ppe.red to this investig.tor
.s . respect.ble citizen, credible .nd sincere, .nd I believe him when he testified
th.t he bought Lot 1184-E in good f.ith .nd for v.lu.ble consider.tion from the
Reyeses without .ny intervention of, or previous underst.nding with Judge
Asuncion" (pp. 391-394, rec.).

On the contention of compl.in.nt herein th.t respondent Judge .cted illeg.lly in

.pproving the project of p.rtition .lthough it w.s not signed by the p.rties, We
quote with .pprov.l the findings of the Investig.ting Justice, .s
follows:jgc:ch.nrobles.com.ph

"1. I .gree with compl.in.nt th.t respondent should h.ve required the sign.ture
of the p.rties more p.rticul.rly th.t of Mrs. M.c.riol. on the project of p.rtition
submitted to him for .pprov.l; however, wh.tever error w.s committed by
respondent in th.t respect w.s done in good f.ith .s .ccording to Judge
Asuncion he w.s .ssured by Atty. Bonif.cio R.mo, the counsel of record of Mrs.
M.c.riol., th.t he w.s .uthorized by his client to submit s.id project of p.rtition,
(See Exh. B .nd tsn. p. 24, J.nu.ry 20, 1969). While it is true th.t such written
.uthority if there w.s .ny, w.s not presented by respondent in evidence, nor did
Atty. R.mo .ppe.r to corrobor.te the st.tement of respondent, his .ffid.vit being
the only one th.t w.s presented .s respondentʼs Exh. 10, cert.in .ctu.tions of
Mrs. M.c.riol. le.d this investig.tor to believe th.t she knew the contents of the
project of p.rtition, Exh. A, .nd th.t she g.ve her conformity thereto. I refer to the
following documents:jgc:ch.nrobles.com.ph

"1) Exh. 9 — Certified true copy of OCT No. 19520 covering Lot 1154 of the
T.clob.n C.d.str.l Survey in which the dece.sed Fr.ncisco Reyes holds . ‘1/4
sh.reʼ (Exh. 9-.). On this certific.te of title the Order d.ted November 11, 1963,
(Exh. U) .pproving the project of p.rtition w.s duly entered .nd registered on
November 26, 1963 (Exh. 9-D);

"2) Exh. 7 — Certified copy of . deed of .bsolute s.le executed by Bern.rdit.

Reyes M.c.riol. on October 22, 1963, conveying to Dr. Hector Decen. the one-
fourth sh.re of the l.te Fr.ncisco Reyes-Di.z in Lot 1154. In this deed of s.le the
vendee st.ted th.t she w.s the .bsolute owner of s.id one-fourth sh.re, the
s.me h.ving been .djudic.ted to her .s her sh.re in the est.te of her f.ther
Fr.ncisco Reyes Di.z .s per decision of the Court of First Inst.nce of Leyte under
c.se No. 3010 (Exh. 7-A). The deed of s.le w.s duly registered .nd .nnot.ted .t
the b.ck of OCT 19520 on December 3, 1963 (see Exh. 9-e).

"In connection with the .bovementioned documents it is to be noted th.t in the

project of p.rtition d.ted October 16, 1963, which w.s .pproved by respondent
on October 23, 1963, followed by .n .mending Order on November 11, 1963, Lot
1154 or r.ther 1/4 thereof w.s .djudic.ted to Mrs. M.c.riol.. It is this 1/4 sh.re in
Lot 1154 which compl.in.nt sold to Dr. Decen. on October 22, 1963, sever.l d.ys
.fter the prep.r.tion of the project of p.rtition.

"Counsel for compl.in.nt stresses the view, however, th.t the l.tter sold her one-
fourth sh.re in Lot 1154 by virtue of the decision in Civil C.se 3010 .nd not
bec.use of the project of p.rtition, Exh. A. Such contention is .bsurd bec.use
from the decision, Exh. C, it is cle.r th.t one-h.lf of one-fourth of Lot 1154
belonged to the est.te of Fr.ncisco Reyes Di.z while the other h.lf of s.id one-
fourth w.s the sh.re of compl.in.ntʼs mother, Felis. Espir.s; in other words, the
decision did not .djudic.te the whole of the one-fourth of Lot 1154 to the herein
compl.in.nt (see Exhs. C-3 & C-4). Compl.in.nt bec.me the owner of the entire
one fourth of Lot 1154 only by me.ns of the project of p.rtition, Exh. A. Therefore,
if Mrs. M.c.riol. sold Lot 1154 on October 22, 1963, it w.s for no other re.son
th.n th.t she w.s well .w.re of the distribution of the properties of her dece.sed
f.ther .s per Exhs. A .nd B. It is .lso signific.nt .t this point to st.te th.t Mrs.
M.c.riol. .dmitted during the cross-ex.min.tion th.t she went to T.clob.n City
in connection with the s.le of Lot 1154 to Dr. Decen. (tsn. p. 92, November 28,
1968) from which we c.n deduce th.t she could not h.ve been kept ignor.nt of
the proceedings in civil c.se 3010 rel.tive to the project of p.rtition.

"Compl.in.nt .lso .ss.ils the project of p.rtition bec.use .ccording to her the
properties .djudic.ted to her were insignific.nt lots .nd the le.st v.lu.ble.
Compl.in.nt, however, did not present .ny direct .nd positive evidence to prove
the .lleged gross inequ.lities in the choice .nd distribution of the re.l properties
when she could h.ve e.sily done so by presenting evidence on the .re., loc.tion,
kind, the .ssessed .nd m.rket v.lue of s.id properties. Without such evidence
there is nothing in the record to show th.t there were inequ.lities in the
distribution of the properties of compl.in.ntʼs f.ther" (pp. 386-389, rec.).

Fin.lly, while it is true th.t respondent Judge did not viol.te p.r.gr.ph 5, Article
1491 of the New Civil Code in .cquiring by purch.se . portion of Lot 1184-E which
w.s in litig.tion in his court, it w.s, however, improper for him to h.ve .cquired
the s.me. He should be reminded of C.non 3 of the C.nons of Judici.l Ethics
which requires th.t: "A judgeʼs offici.l conduct should be free from the
.ppe.r.nce of impropriety, .nd his person.l beh.vior, not only upon the bench
.nd in the perform.nce of judici.l duties, but .lso in his everyd.y life, should be
beyond repro.ch." And .s .ptly observed by the Investig.ting Justice: ". . . it w.s
unwise .nd indiscreet on the p.rt of respondent to h.ve purch.sed or .cquired .
portion of . piece of property th.t w.s or h.d been in litig.tion in his court .nd
c.used it to be tr.nsferred to . corpor.tion of which he .nd his wife were r.nking
officers .t the time of such tr.nsfer. One who occupies .n ex.lted position in the
judici.ry h.s the duty .nd responsibility of m.int.ining the f.ith .nd trust of the
citizenry in the courts of justice, so th.t not only must he be truly honest .nd just,
but his .ctu.tions must be such .s not give c.use for doubt .nd mistrust in the
uprightness of his .dministr.tion of justice. In this p.rticul.r c.se of respondent,
he c.nnot deny th.t the tr.ns.ctions over Lot 1184-E .re d.m.ging .nd render
his .ctu.tions open to suspicion .nd distrust. Even if respondent honestly
believed th.t Lot 1184-E w.s no longer in litig.tion in his court .nd th.t he w.s
purch.sing it from . third person .nd not from the p.rties to the litig.tion, he
should nonetheless h.ve refr.ined from buying it for himself .nd tr.nsferring it to
. corpor.tion in which he .nd his wife were fin.nci.lly involved, to .void possible
suspicion th.t his .cquisition w.s rel.ted in one w.y or .nother to his offici.l
.ctu.tions in civil c.se 3010. The conduct of respondent g.ve c.use for the
litig.nts in civil c.se 3010, the l.wyers pr.ctising in his court, .nd the public in
gener.l to doubt the honesty .nd f.irness of his .ctu.tions .nd the integrity of
our courts of justice" (pp. 395-396, rec.).cr.l.wn.d
 II

With respect to the second c.use of .ction, the compl.in.nt .lleged th.t
respondent Judge viol.ted p.r.gr.phs 1 .nd 5, Article 14 of the Code of
Commerce when he .ssoci.ted himself with the Tr.ders M.nuf.cturing .nd
Fishing Industries, Inc. .s . stockholder .nd . r.nking officer, s.id corpor.tion
h.ving been org.nized to eng.ge in business. S.id Article provides
th.t:jgc:ch.nrobles.com.ph

"Article 14 — The following c.nnot eng.ge in commerce, either in person or by

proxy, nor c.n they hold .ny office or h.ve .ny direct, .dministr.tive, or fin.nci.l
intervention in commerci.l or industri.l comp.nies within the limits of the districts,
provinces, or towns in which they disch.rge their duties:jgc:ch.nrobles.com.ph

"1. Justices of the Supreme Court, judges .nd offici.ls of the dep.rtment of public
prosecution in .ctive service. This provision sh.ll not be .pplic.ble to m.yors,
municip.l judges, .nd municip.l prosecuting .ttorneys nor to those who by
ch.nce .re tempor.rily disch.rging the functions of judge or prosecuting
.ttorney.

x       x       x

"5. Those who by virtue of l.ws or speci.l provisions m.y not eng.ge in
commerce in . determin.te territory."cr.l.w virtu.1.w libr.ry

It is Our considered view th.t .lthough the .forest.ted provision is incorpor.ted

in the Code of Commerce which is p.rt of the commerci.l l.ws of the Philippines,
it, however, p.rt.kes of the n.ture of . politic.l l.w .s it regul.tes the
rel.tionship between the government .nd cert.in public officers .nd employees,
like justices .nd judges.

Politic.l L.w h.s been defined .s th.t br.nch of public l.w which de.ls with the
org.niz.tion .nd oper.tion of the government.l org.ns of the St.te .nd define
the rel.tions of the st.te with the inh.bit.nts of its territory (People v. Perfecto,
43 Phil. 887, 897 [1922]). It m.y be rec.lled th.t politic.l l.w embr.ces
constitution.l l.w, l.w of public corpor.tions, .dministr.tive l.w including the l.w
on public officers .nd elections. Specific.lly, Article 14 of the Code of Commerce
p.rt.kes more of the n.ture of .n .dministr.tive l.w bec.use it regul.tes the
conduct of cert.in public officers .nd employees with respect to eng.ging in
business; hence, politic.l in essence.
It is signific.nt to note th.t the present Code of Commerce is the Sp.nish Code of
Commerce of 1885, with some modific.tions m.de by the "Comision de
Codific.cion de l.s Provinci.s de Ultr.m.r," which w.s extended to the
Philippines by the Roy.l Decree of August 6, 1888, .nd took effect .s l.w in this
jurisdiction on December 1, 1888.

Upon the tr.nsfer of sovereignty from Sp.in to the United St.tes .nd l.ter on
from the United St.tes to the Republic of the Philippines, Article 14 of this Code of
Commerce must be deemed to h.ve been .brog.ted bec.use where there is
ch.nge of sovereignty, the politic.l l.ws of the former sovereign, whether
comp.tible or not with those of the new sovereign, .re .utom.tic.lly .brog.ted,
unless they .re expressly re-en.cted by .ffirm.tive .ct of the new sovereign.

Thus, We held in Ro. v. Collector of Customs (23 Phil. 315, 330, 311 [1912])
th.t:jgc:ch.nrobles.com.ph

"‘By well-settled public l.w, upon the cession of territory by one n.tion to .nother,
either following . conquest or otherwise, . . . those l.ws which .re politic.l in their
n.ture .nd pert.in to the prerog.tives of the former government immedi.tely
ce.se upon the tr.nsfer of sovereignty.ʼ (Opinion, Atty. Gen., July 10, 1899).

"While municip.l l.ws of the newly .cquired territory not in conflict with the l.ws
of the new sovereign continue in force without the express .ssent or .ffirm.tive
.ct of the conqueror, the politic.l l.ws do not. (H.lleckʼs Int. L.w, ch.p. 34, p.r.
14). However, such politic.l l.ws of the prior sovereignty .s .re not in conflict with
the constitution or institutions of the new sovereign, m.y be continued in force if
the conqueror sh.ll so decl.re by .ffirm.tive .ct of the comm.nder-in-chief
during the w.r, or by Congress in time of pe.ce. (Elyʼs Administr.tor v. United
St.tes, 171 U.S. 220, 43 L. Ed. 142). In the c.se of Americ.n .nd Oce.n Ins. Cos.
v. 356 B.les of Cotton (1 Pet. [26 U.S.] 511, 542, 7 L. Ed. 242), Chief Justice
M.rsh.ll s.id:ch.nrob1es virtu.l 1.w libr.ry

‘On such tr.nsfer (by cession) of territory, it h.s never been held th.t the rel.tions
of the inh.bit.nts with e.ch other undergo .ny ch.nge. Their rel.tions with their
former sovereign .re dissolved, .nd new rel.tions .re cre.ted between them .nd
the government which h.s .cquired their territory. The s.me .ct which tr.nsfers
their country, tr.nsfers the .llegi.nce of those who rem.in in it; .nd the l.w which
m.y be denomin.ted politic.l, is necess.rily ch.nged, .lthough th.t which
regul.tes the intercourse .nd gener.l conduct of individu.ls, rem.ins in force,
until .ltered by the newly-cre.ted power of the St.te.ʼ" 

Likewise, in People v. Perfecto (43 Phil. 887, 897 [1922]), this Court st.ted th.t:
"It is . gener.l principle of the public l.w th.t on .cquisition of territory the
previous politic.l rel.tions of the ceded region .re tot.lly .brog.ted."cr.l.w
virtu.1.w libr.ry

There .ppe.rs no en.bling or .ffirm.tive .ct th.t continued the effectivity of the
.forest.ted provision of the Code of Commerce .fter the ch.nge of sovereignty
from Sp.in to the United St.tes .nd then to the Republic of the Philippines.
Consequently, Article 14 of the Code of Commerce h.s no leg.l .nd binding effect
.nd c.nnot .pply to the respondent, then Judge of the Court of First Inst.nce,
now Associ.te Justice of the Court of Appe.ls.

It is .lso .rgued by compl.in.nt herein th.t respondent Judge viol.ted p.r.gr.ph

H, Section 3 of Republic Act No. 3019, otherwise known .s the Anti-Gr.ft .nd
Corrupt Pr.ctices Act, which provides th.t:jgc:ch.nrobles.com.ph

"Sec. 3. Corrupt pr.ctices of public officers. — In .ddition to .cts or omissions of

public officers .lre.dy pen.lized by existing l.w, the following sh.ll constitute
corrupt pr.ctices of .ny public officer .nd .re hereby decl.red to be
unl.wful:ch.nrob1es virtu.l 1.w libr.ry

x       x       x

"(h) Directly or indirectly h.ving fin.nci.l or pecuni.ry interest in .ny business,

contr.ct or tr.ns.ction in connection with which he intervenes or t.kes p.rt in his
offici.l c.p.city, or in which he is prohibited by the Constitution or by .ny l.w
from h.ving .ny interest."cr.l.w virtu.1.w libr.ry

Respondent Judge c.nnot be held li.ble under the .forest.ted p.r.gr.ph

bec.use there is no showing th.t respondent p.rticip.ted or intervened in his
offici.l c.p.city in the business or tr.ns.ctions of the Tr.ders M.nuf.cturing .nd
Fishing Industries, Inc. In the c.se .t b.r, the business of the corpor.tion in which
respondent p.rticip.ted h.s obviously no rel.tion or connection with his judici.l
office. The business of s.id corpor.tion is not th.t kind where respondent
intervenes or t.kes p.rt in his c.p.city .s Judge of the Court of First Inst.nce. As
w.s held in one c.se involving the .pplic.tion of Article 216 of the Revised Pen.l
Code which h.s . simil.r prohibition on public officers .g.inst directly or
indirectly becoming interested in .ny contr.ct or business in which it is his offici.l
duty to intervene," (I)t is not enough to be . public offici.l to be subject to this
crime: it is necess.ry th.t by re.son of his office, he h.s to intervene in s.id
contr.cts or tr.ns.ctions; .nd, hence, the offici.l who intervenes in contr.cts or
tr.ns.ctions which h.ve no rel.tion to his office c.nnot commit this
crime" (People v. Meneses, C.A. 40 O.G. 11th Supp. 134, cited by Justice R.mon C.
Aquino; Revised Pen.l Code, p. 1174, Vol. II [1976]).
It does not .ppe.r .lso from the records th.t the .fores.id corpor.tion g.ined
.ny undue .dv.nt.ge in its business oper.tions by re.son of respondentʼs
fin.nci.l involvement in it, or th.t the corpor.tion benefited in one w.y or .nother
in .ny c.se filed by or .g.inst it in court. It is undisputed th.t there w.s no c.se
filed in the different br.nches of the Court of First Inst.nce of Leyte in which the
corpor.tion w.s either p.rty pl.intiff or defend.nt except Civil C.se No. 4234
entitled "Bern.rdit. R. M.c.riol., pl.intiff, versus Sinforos. O. B.les, Et Al.,"
wherein the compl.in.nt herein sought to recover Lot 1184-E from the .fores.id
corpor.tion. It must be noted, however, th.t Civil C.se No. 4234 w.s filed only on
November 9 or 11, 1968 .nd decided on November 2, 1970 by CFI Judge Jose D.
Nepomuceno when respondent Judge w.s no longer connected with the
corpor.tion, h.ving disposed of his interest therein on J.nu.ry 31,
1967.ch.nrobles virtu.l l.wlibr.ry

Furthermore, respondent is not li.ble under the s.me p.r.gr.ph bec.use there is
no provision in both the 1935 .nd 1973 Constitutions of the Philippines, nor is
there .n existing l.w expressly prohibiting members of the Judici.ry from
eng.ging or h.ving interest in .ny l.wful business.

It m.y be pointed out th.t Republic Act No. 296, .s .mended, .lso known .s the
Judici.ry Act of 1948, does not cont.in .ny prohibition to th.t effect. As . m.tter
of f.ct, under Section 77 of s.id l.w, municip.l judges m.y eng.ge in te.ching or
other voc.tion not involving the pr.ctice of l.w .fter office hours but with the
permission of the district judge concerned.

Likewise, Article 14 of the Code of Commerce which prohibits judges from

eng.ging in commerce is, .s heretofore st.ted, deemed .brog.ted .utom.tic.lly
upon the tr.nsfer of sovereignty from Sp.in to Americ., bec.use it is politic.l in
n.ture.

Moreover, the prohibition in p.r.gr.ph 5, Article 1491 of the New Civil Code
.g.inst the purch.se by judges of . property in litig.tion before the court within
whose jurisdiction they perform their duties, c.nnot .pply to respondent Judge
bec.use the s.le of the lot in question to him took pl.ce .fter the fin.lity of his
decision in Civil C.se No. 3010 .s well .s his two orders .pproving the project of
p.rtition; hence, the property w.s no longer subject of litig.tion.

In .ddition, .lthough Section 12, Rule XVIII of the Civil Service Rules m.de
pursu.nt to the Civil Service Act of 1959 prohibits .n officer or employee in the
civil service from eng.ging in .ny priv.te business, voc.tion, or profession or be
connected with .ny commerci.l, credit, .gricultur.l or industri.l undert.king
without . written permission from the he.d of dep.rtment, the s.me, however,
m.y not f.ll within the purview of p.r.gr.ph h, Section 3 of the Anti-Gr.ft .nd
Corrupt Pr.ctices Act bec.use the l.st portion of s.id p.r.gr.ph spe.ks of .
prohibition by the Constitution or l.w on .ny public officer from h.ving .ny
interest in .ny business .nd not by . mere .dministr.tive rule or regul.tion. Thus,
. viol.tion of the .fores.id rule by .ny officer or employee in the civil service, th.t
is, eng.ging in priv.te business without . written permission from the Dep.rtment
He.d m.y not constitute gr.ft .nd corrupt pr.ctice .s defined by l.w.

On the contention of compl.in.nt th.t respondent Judge viol.ted Section 12, Rule
XVIII of the Civil Service Rules, We hold th.t the Civil Service Act of 1959 (R.A. No.
2260) .nd the Civil Service Rules promulg.ted thereunder, p.rticul.rly Section 12
of Rule XVIII, do not .pply to the members of the Judici.ry. Under s.id Section 12:
"No officer or employee sh.ll eng.ge directly in .ny priv.te business, voc.tion, or
profession or be connected with .ny commerci.l, credit, .gricultur.l or industri.l
undert.king without . written permission from the He.d of Dep.rtment . . ."cr.l.w
virtu.1.w libr.ry

It must be emph.sized .t the outset th.t respondent, being . member of the

Judici.ry, is covered by Republic Act No. 296, .s .mended, otherwise known .s
the Judici.ry Act of 1948 .nd by Section 7, Article X, 1973 Constitution.

Under Section 67 of s.id l.w, the power to remove or dismiss judges w.s then
vested in the President of the Philippines, not in the Commissioner of Civil Service,
.nd only on two grounds, n.mely, serious misconduct .nd inefficiency, .nd upon
the recommend.tion of the Supreme Court, which .lone is .uthorized, upon its
own motion, or upon inform.tion of the Secret.ry (now Minister) of Justice to
conduct the corresponding investig.tion. Cle.rly, the .fores.id section defines
the grounds .nd prescribes the speci.l procedure for the discipline of judges.

And under Sections 5, 6 .nd 7, Article X of the 1973 Constitution, only the
Supreme Court c.n discipline judges of inferior courts .s well .s other personnel
of the Judici.ry.ch.nrobles virtu.l l.wlibr.ry

It is true th.t under Section 33 of the Civil Service Act of 1959: "The
Commissioner m.y, for . . . viol.tion of the existing Civil Service L.w .nd rules or
of re.son.ble office regul.tions, or in the interest of the service, remove .ny
subordin.te officer or employee from the service, demote him in r.nk, suspend
him for not more th.n one ye.r without p.y or fine him in .n .mount not
exceeding six monthsʼ s.l.ry." Thus, . viol.tion of Section 12 of Rule XVIII is .
ground for disciplin.ry .ction .g.inst civil service officers .nd employees.

However, judges c.nnot be considered .s subordin.te civil service officers or

employees subject to the disciplin.ry .uthority of the Commissioner of Civil
Service; for, cert.inly, the Commissioner is not the he.d of the Judici.l
Dep.rtment to which they belong. The Revised Administr.tive Code (Section 89)
.nd the Civil Service L.w itself st.te th.t the Chief Justice is the dep.rtment
he.d of the Supreme Court (Sec. 20, R.A. No. 2260) [1959]); .nd under the 1973
Constitution, the Judici.ry is the only other or second br.nch of the government
(Sec. 1, Art. X, 1973 Constitution). Besides, . viol.tion of Section 12, Rule XVIII
c.nnot be considered .s . ground for disciplin.ry .ction .g.inst judges bec.use
to recognize the s.me .s .pplic.ble to them, would be .dding .nother ground for
the discipline of judges .nd, .s .forest.ted, Section 67 of the Judici.ry Act
recognizes only two grounds for their remov.l, n.mely, serious misconduct .nd
inefficiency.

Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the
Commissioner of Civil Service who h.s origin.l .nd exclusive jurisdiction" (T)o
decide, within one hundred twenty d.ys, .fter submission to it, .ll .dministr.tive
c.ses .g.inst perm.nent officers .nd employees in the competitive service, .nd,
except .s provided by l.w, to h.ve fin.l .uthority to p.ss upon their remov.l,
sep.r.tion, .nd suspension .nd upon .ll m.tters rel.ting to the conduct,
discipline, .nd efficiency of such officers .nd employees; .nd prescribe
st.nd.rds, guidelines .nd regul.tions governing the .dministr.tion of
discipline" (Emph&sis supplied). There is no question th.t . judge belong to the
non-competitive or uncl.ssified service of the government .s . Presidenti.l
.ppointee .nd is therefore not covered by the .fores.id provision. WE h.ve
.lre.dy ruled th.t." . . in interpreting Section 16(i) of Republic Act No. 2260, we
emph.sized th.t only perm.nent officers .nd employees who belong to the
cl.ssified service come under the exclusive jurisdiction of the Commissioner of
Civil Service" (Vill.luz v. Z.ldiv.r, 15 SCRA 710, 713 [1965l, Ang-Angco v. C.stillo,
9 SCRA 619 [1963]).

Although the .ctu.tion of respondent Judge in eng.ging in priv.te business by

joining the Tr.ders M.nuf.cturing .nd Fishing Industries, Inc. .s . stockholder
.nd . r.nking officer, is not viol.tive of the provisions of Article 14 of the Code of
Commerce .nd Section 3(h) of the Anti-Gr.ft .nd Corrupt Pr.ctices Act .s well .s
Section 12, Rule XVIII of the Civil Service Rules promulg.ted pursu.nt to the Civil
Service Act of 1959, the impropriety of the s.me is cle.rly unquestion.ble
bec.use C.non 25 of the C.nons of Judici.l Ethics expressly decl.res
th.t:jgc:ch.nrobles.com.ph

"A judge should .bst.in from m.king person.l investments in enterprises which
.re .pt to be involved in litig.tion in his court; .nd, .fter his .ccession to the
bench, he should not ret.in such investments previously m.de, longer th.n .
period sufficient to en.ble him to dispose of them without serious loss. It is
desir.ble th.t he should, so f.r .s re.son.bly possible, refr.in from .ll rel.tions
which would norm.lly tend to .rouse the suspicion th.t such rel.tions w.rp or
bi.s his judgment, or prevent his imp.rti.l .ttitude of mind in the .dministr.tion of
his judici.l duties. . . ."cr.l.w virtu.1.w libr.ry

WE .re not, however, unmindful of the f.ct th.t respondent Judge .nd his wife
h.d withdr.wn on J.nu.ry 31, 1967 from the .fores.id corpor.tion .nd sold their
respective sh.res to third p.rties, .nd it .ppe.rs .lso th.t the .fores.id
corpor.tion did not in .nyw.y benefit in .ny c.se filed by or .g.inst it in court .s
there w.s no c.se filed in the different br.nches of the Court of First Inst.nce of
Leyte from the time of the dr.fting of the Articles of Incorpor.tion of the
corpor.tion on M.rch 12, 1966, up to its incorpor.tion on J.nu.ry 9, 1967, .nd the
eventu.l withdr.w.l of respondent on J.nu.ry 31, 1967 from s.id corpor.tion.
Such dispos.l or s.le by respondent .nd his wife of their sh.res in the corpor.tion
only 22 d.ys .fter the in corpor.tion of the corpor.tion, indic.tes th.t respondent
re.lized th.t e.rly th.t their interest in the corpor.tion contr.venes the .fores.id
C.non 25. Respondent Judge .nd his wife therefore deserve the commend.tion
for their immedi.te withdr.w.l from the firm .fter its incorpor.tion .nd before it
bec.me involved in .ny court litig.tion.

III

With respect to the third .nd fourth c.uses of .ction, compl.in.nt .lleged th.t
respondent w.s guilty of coddling .n impostor .nd .cted in disreg.rd of judici.l
decorum, .nd th.t there w.s culp.ble defi.nce of the l.w .nd utter disreg.rd for
ethics. WE .gree, however, with the recommend.tion of the Investig.ting Justice
th.t respondent Judge be exoner.ted bec.use the .fores.id c.uses of .ction .re
groundless, .nd WE quote the pertinent portion of her report which re.ds .s
follows:jgc:ch.nrobles.com.ph

"The b.sis for compl.in.ntʼs third c.use of .ction is the cl.im th.t respondent
.ssoci.ted .nd closely fr.ternized with Domin.dor Arigp. T.n who openly .nd
publicly .dvertised himself .s . pr.ctising .ttorney (see Exhs. I, I-1 .nd J) when in
truth .nd in f.ct s.id Domin.dor Arigp. T.n does not .ppe.r in the Roll of
Attorneys .nd is not . member of the Philippine B.r .s certified to in Exh. K.

The "respondent denies knowing th.t Domin.dor Arigp. T.n w.s .n ‘impostorʼ
.nd cl.ims th.t .ll the time he believed th.t the l.tter w.s . bon. fide member of
the b.r. I see no re.son for disbelieving this .ssertion of Respondent. It h.s been
shown by compl.in.nt th.t Domin.dor Arigp. T.n represented himself publicly .s
.n .ttorney-.t-l.w to the extent of putting up . signbo.rd with his n.me .nd the
words ‘Attorney-.t-L.wʼ (Exh. I .nd I-1) to indic.te his office, .nd it w.s but
n.tur.l for respondent .nd .ny person for th.t m.tter to h.ve .ccepted th.t
st.tement on its f.ce v.lue.

"Now with respect to the .lleg.tion of compl.in.nt th.t respondent is guilty of

fr.ternizing with Domin.dor Arigp. T.n to the extent of permitting his wife to be .
godmother of Mr. T.nʼs child .t b.ptism (Exh. M & M-1), th.t f.ct even if true did
not render respondent guilty of viol.ting .ny c.non of judici.l ethics .s long .s
his friendly rel.tions with Domin.dor A. T.n .nd f.mily did not influence his
offici.l .ctu.tions .s . judge where s.id persons were concerned. There is no
t.ngible convincing proof th.t herein respondent g.ve .ny undue privileges in his
court to Domin.dor Arigp. T.n or th.t the l.tter benefitted in his pr.ctice of l.w
from his person.l rel.tions with respondent, or th.t he used his influence, if he
h.d .ny, on the Judges of the other br.nches of the Court to f.vor s.id
Domin.dor T.n.

"Of course it is highly desir.ble for . member of the judici.ry to refr.in .s much
.s possible from m.int.ining close friendly rel.tions with pr.ctising .ttorneys .nd
litig.nts in his court so .s to .void suspicion ‘th.t his soci.l or business rel.tions
or friendship constitute .n element in determining his judici.l course" (p.r. 30,
C.nons of Judici.l Ethics), but if . Judge does h.ve soci.l rel.tions, th.t in itself
would not constitute . ground for disciplin.ry .ction unless it be cle.rly shown
th.t his soci.l rel.tions beclouded his offici.l .ctu.tions with bi.s .nd p.rti.lity
in f.vor of his friends" (pp. 403-405, rec.).

In conclusion, while respondent Judge Asuncion, now Associ.te Justice of the

Court of Appe.ls, did not viol.te .ny l.w in .cquiring by purch.se . p.rcel of l.nd
which w.s in litig.tion in his court .nd in eng.ging in business by joining . priv.te
corpor.tion during his incumbency .s judge of the Court of First Inst.nce of
Leyte, he should be reminded to be more discreet in his priv.te .nd business
.ctivities, bec.use his conduct .s . member of the Judici.ry must not only be
ch.r.cterized with propriety but must .lw.ys be .bove
suspicion.ch.nrobles.com:cr.l.w:red

WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE COURT OF

APPEALS IS HEREBY REMINDED TO BE MORE DISCREET IN HIS PRIVATE AND
BUSINESS ACTIVITIES.

SO ORDERED.

Teeh.nkee, Guerrero, De C.stro, Melencio-Herrer., Pl.n., V.squez, Relov. .nd

Gutierrez, JJ., concur.

Fern.ndo, C.J. Ab.d S.ntos .nd Escolin, JJ., took no p.rt.

B.rredo, J., I vote with Justice Aquino.

Aquino, J., I vote for respondentʼs unqu.lified exoner.tion.

Concepcion, Jr., J., is on le.ve.