Macariola vs Asuncion

Facts: Sinforosa Balez. Ruz Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes, and Priscilla
Reyes filed a complaint for partition againt Bernardita Macariola concering the properties left by
deceased Francisco Reyes, the common father of both parties.

Macariola alleged that Bales was not a daughter of the deceased Francisco Reyes, and the only heirs were
Macariola herself, being the offspring heir of the first marriage of Francisco Reyes with Felisa Espiras,
and the other children were offsprings of the deceased through the second marriage with Irene Ordonez.
Macariola also alleged the the properties left by the deceased were conjugal property of Francisco and his
first wife, and no propertie were acquired by the deceased during his second marriage, and if there was
any partition made, the congugal property will be partitioned into two parts: first part which is to be
adjudicated solely to Macariola it being the share of her deceased mother, and the other half being the
share of Francisco Reyes, which are to be divided equally among the children by his two marriages, with
Bales receiving only 2/5 of the share.

The Court ruled declaring Bakunawa, Anacorita, Ruperto, Adela and Priscilla reyes as legitimate children
of the deceased by the second marriage, Sinforosa Balez being an illegitimate child of the deceased and
Macariola being the sole child by the first marriage of the deceased. Macariola gained her deceased
mother’s portion(1/2) of the conjugal property. While Ordonez is entitled to 1/12 of the common property
between her and Francisco’s marriage, being the surviving spouse, with the remaining property divided
between the remaining children. The case was dismissed for lack of appeal.

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.

Macariola filed an instant complaint, alleging that Judge Asuncion violated Article 1491, par. 5 of the
New Civil Code and Article 14 and 15 of the New Code of Commerce, Section 3 par. H of RA 3019, or
the Anti Graft and Corrupt Practices Act, Sec. 12, Rule 18 of the Civil Service Rules, and Canon 25 of the
Canons of Judicial Ethics, that Judge Asuncion was guilty of coddling an impostor and acted in disregard
of judicial decorum by closely fraternizing with Dominador Agripa Tan, who openly advertised himself
as an attorney when his name does not appear on the Roll of Attorneys, and that there was culpable
defiance of law and utter disregard for ethics by respondent judge.

Judge Jose Nepomuceno rendered a decision dismissing the complaint against Judge Asuncion, ordering
Macariola to pay Asuncion moral and exemplary damages, nominal damages and attorney’s fees, and
dismissing several complaints. The case was then referred to Judge Palma and the Court of Appeals for
investigation, report and recommendation. After the hearing, Judge Palma recommended that Judge
Asuncion should be reprimanded or warned with the complaints filed against him.

Issues:
 1.) WON Judge Asuncion violated Par. 1 and 5, Art. 14 of the Code of Commerce when he
associated himself with Traders Manufacturing and Fishing Industries Inc. as a stockholder and
High Ranking Officer.
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

Ruling:

1.) Judge Asuncion did not violae Art 14, Par1 and 5 of the Code of Commerce. 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.

WHEREFORE, RESPONDENT ASSOCIATE JUDGE OF THE COOURT OF APPEALS IS HEREBY

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