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Bernardita R. Macariola vs. Honorable Elias B. Asuncion, Judge of the Court of First Instance of Leyte A.M.

133-J, 31 May 1982 114 SCRA 77

FACTS When the decision in Civil Case No. 3010 rendered by respondent Hon. Judge Elias B. Asuncion of Court of First Instance (CFI) of Leyte became final for lack of an appeal from the parties involved, a project partition was submitted to him which he later approved in a subsequent order. Among the parties thereto was complainant Bernardita R. Macariola. One of the properties mentioned in the project of partition was Lot 1184. Said lot, according to the decision rendered by Judge Asuncion was adjudicated to the plaintiffs Reyes in equal shares subdividing it into five lots denominated as Lots 1184-A to 1184-E. Lot 1184-E was sold to Dr. Arcadio Galapon who later sold a portion of it to Judge Asuncion and his wife, Victoria Asuncion. Thereafter, spouses Asuncion and spouses Galapon conveyed their respective shares and interests in Lot 1184-E to the Traders Manufacturing and Fishing Industries, Inc. wherein Judge Asuncion was the president, and his wife, the secretary. Macariola then filed an instant complaint in the CFI of Leyte against Judge Asuncion in acquiring by purchase a portion of Lot 1184-E violating, among others, Article 1491, pararagraph 5 of the New Civil Code (NCC) and Article 14 of the Code of Commerce.

ISSUE Whether or not Judge Asuncion, in acquiring by purchase a portion of property in a civil case previously handled by him and his engagement in business by joining a private corporation during his incumbency, as a Judge of the CFI of Leyte, violated Article 1491 of the NCC and Article 14 of the Code of Commerce, respectively.

RULING Article 1491, paragraph 5 of the NCC, applies only to the sale or assignment of the property which is the subject of litigation to the persons qualified therein. The Supreme Court (SC) held that for the prohibition to operate, the sale or assignment must take place during the pendency of the litigation involving the property. In the case at bar, when respondent Judge Asuncion purchased a portion of Lot 1184-E, the decision he rendered on Civil Case No. 3010 was already final because none of the parties filed an appeal within the reglementary period. Hence, the lot in question was no longer a subject of litigation. Moreover, respondent Judge Asuncion did not purchase the lot in question directly from the plaintiffs but from Dr. Arcadio Galapon, who earlier purchased a parcel of Lot 1184-E from three of the plaintiffs Reyes after the finality of the decision in the foregoing case.

Likewise, respondent Judge may not be held liable under paragraphs 1 and 5 of Article 14 of the Code of Commerce (which is of a Spanish vintage). Said provision, although incorporated in the Code of Commerce which is part of the commercial laws of the Philippines, partakes of the nature of a political law as it regulates the relationship between the government and certain public officers and employees, like justices and judges. Political Law, as defined, is that branch of public law which deals with the organization and operation of the governmental organs of the State and defines the relations of the state with the inhabitants of its territory (People vs. Perfecto). It embraces constitutional law, law of public corporations and administrative law including the law on public officers and elections. Specifically, Article 14 of the Code of Commerce partakes more of the nature of an administrative law because it regulates the conduct of certain public officers and employees with respect to engaging in business: hence, political in essence. The SC stated that upon the transfer of sovereignty from Spain to the United States (US) and later on from the US to the Republic of the Philippines, Article 14 of the Code of Commerce must be deemed to have been abrogated because there is a change of sovereignty. The political laws of the former sovereign, whether compatible or not with those of the new sovereign, are automatically abrogated, unless they are expressly reenacted by the affirmative act of the new sovereign. In the case of American and Ocean Ins. Cos. vs. 356 Bales of Cotton (1 Pet. [26 U.S.] 511, 542, 7 L. Ed. 242), Chief Justice Marshall said: On such transfer (by cession) of territory, it has never been held that the relations of the inhabitants with each other undergo any change. Their relations with their former sovereign are dissolved, and new relations are created between them and the government which has acquired their territory. The same act which transfers their country, transfers the allegiance of those who remain in it; and the law which may be denominated political, is necessarily changed, although that which regulates the intercourse and general conduct of individuals, remains in force, until altered by the newly- created power of the State. The aforestated provision of the code of Commerce has no legal and binding effect and, therefore, cannot apply to the respondent, then Judge of the CFI of Leyte, now Associate Justice of the Court of Appeals.