MACARIOLA v.

ASUNCION
114 SCRA 77

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.