1. People v.

Perfecto

G.R. No. L-18463 October 4, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
GREGORIO PERFECTOR, defendant-appellant.

Alfonso E. Mendoza and the appellant in behalf of the latter.

Attorney-General Villa-Real for appellee.

MALCOLM, J.:

The important question is here squarely presented of whether article 256 of the Spanish Penal
Code, punishing "Any person who, by . . . writing, shall defame, abuse, or insult any Minister of
the Crown or other person in authority . . .," is still in force.

About August 20, 1920, the Secretary of the Philippine Senate, Fernando M. Guerrero,
discovered that certain documents which constituted the records of testimony given by
witnesses in the investigation of oil companies, had disappeared from his office. Shortly
thereafter, the Philippine Senate, having been called into special session by the Governor-
General, the Secretary for the Senate informed that body of the loss of the documents and of
the steps taken by him to discover the guilty party. The day following the convening of the
Senate, September 7, 1920, the newspaper La Nacion, edited by Mr. Gregorio Perfecto,
published an article reading as follows:

Half a month has elapsed since the discovery, for the first time, of the scandalous
robbery of records which were kept and preserved in the iron safe of the Senate, yet up
to this time there is not the slightest indication that the author or authors of the crime
will ever be discovered.

To find them, it would not, perhaps, be necessary to go out of the Sente itself, and the
persons in charge of the investigation of the case would not have to display great skill in
order to succeed in their undertaking, unless they should encounter the insuperable
obstacle of offical concealment.

In that case, every investigation to be made would be but a mere comedy and nothing
more.

After all, the perpetration of the robbery, especially under the circumstances that have
surrounded it, does not surprise us at all.
 The execution of the crime was but the natural effect of the environment of the place in
which it was committed.

How many of the present Senators can say without remorse in their conscience and
with serenity of mind, that they do not owe their victory to electoral robbery? How
may?

The author or authors of the robbery of the records from the said iron safe of the
Senate have, perhaps, but followed the example of certain Senators who secured their
election through fraud and robbery.

The Philippine Senate, in its session of September 9, 1920, adopted a resolution authorizing its
committee on elections and privileges to report as to the action which should be taken with
reference to the article published in La Nacion. On September 15, 1920, the Senate adopted a
resolution authorizing the President of the Senate to indorse to the Attorney-General, for his
study and corresponding action, all the papers referring to the case of the newspaper La
Nacion and its editor, Mr. Gregorio Perfecto. As a result, an information was filed in the
municipal court of the City of Manila by an assistant city fiscal, in which the editorial in question
was set out and in which it was alleged that the same constituted a violation of article 256 of
the Penal Code. The defendant Gregorio Perfecto was found guilty in the municipal court and
again in the Court of First Instance of Manila.

During the course of the trial in the Court of First Instance, after the prosecution had rested,
the defense moved for the dismissal of the case. On the subject of whether or not article 256 of
the Penal Code, under which the information was presented, is in force, the trial judge, the
Honorable George R. Harvey, said:

This antiquated provision was doubtless incorporated into the Penal Code of Spain for
the protection of the Ministers of the Crown and other representatives of the King
against free speech and action by Spanish subjects. A severe punishment was prescribed
because it was doubtless considered a much more serious offense to insult the King's
representative than to insult an ordinary individual. This provision, with almost all the
other articles of that Code, was extended to the Philippine Islands when under the
dominion of Spain because the King's subject in the Philippines might defame, abuse or
insult the Ministers of the Crown or other representatives of His Majesty. We now have
no Ministers of the Crown or other persons in authority in the Philippines representing
the King of Spain, and said provision, with other articles of the Penal Code, had
apparently passed into "innocuous desuetude," but the Supreme Corut of the Philippine
Islands has, by a majority decision, held that said article 256 is the law of the land to-
day. . . .

The Helbig case is a precedent which, by the rule of stare decisis, is binding upon this
court until otherwise determined by proper authority.
In the decision rendered by the same judge, he concluded with the following language:

In the United States such publications are usually not punishable as criminal offense,
and little importance is attached to them, because they are generally the result of
political controversy and are usually regarded as more or less colored or exaggerated.
Attacks of this character upon a legislative body are not punishable, under the Libel Law.
Although such publications are reprehensible, yet this court feels some aversion to the
application of the provision of law under which this case was filed. Our Penal Code has
come to us from the Spanish regime. Article 256 of that Code prescribes punishment for
persons who use insulting language about Ministers of the Crown or other "authority."
The King of Spain doubtless left the need of such protection to his ministers and others
in authority in the Philippines as well as in Spain. Hence, the article referred to was
made applicable here. Notwithstanding the change of sovereignty, our Supreme Court,
in a majority decision, has held that this provision is still in force, and that one who
made an insulting remark about the President of the United States was punishable
under it. (U.S. vs. Helbig, supra.) If it applicable in that case, it would appear to be
applicable in this case. Hence, said article 256 must be enforced, without fear or favor,
until it shall be repealed or superseded by other legislation, or until the Supreme Court
shall otherwise determine.

In view of the foregoing considerations, the court finds the defendant guilty as charged
in the information and under article 256 of their Penal Code sentences him to suffer two
months and one day of arresto mayor and the accessory penalties prescribed by law,
and to pay the costs of both instances.

The fifteen errors assigned by the defendant and appellant, reenforced by an extensive brief,
and eloquent oral argument made in his own behalf and by his learned counsel, all reduce
themselves to the pertinent and decisive question which was announced in the beginning of
this decision.

It will be noted in the first place that the trial judge considered himself bound to follow the rule
announced in the case of United States vs. Helbig (R. G. No. 14705, 1 not published). In that
case, the accused was charged with having said, "To hell with the President and his
proclamations, or words to that effect," in violation of article 256 of the Penal Code. He was
found guilty in a judgment rendered by the Court of First Instance of Manila and again on
appeal to the Supreme Court, with the writer of the instant decision dissenting on two principal
grounds: (1) That the accused was deprived of the constitutional right of cross-examination,
and (2) that article 256 of the Spanish Penal Code is no longer in force. Subsequently, on a
motion of reconsideration, the court, being of the opinion that the Court of First Instance had
committed a prejudicial error in depriving the accused of his right to cross-examine a principal
witness, set aside the judgment affirming the judgment appealed from and ordered the return
of the record to the court of origin for the celebration of a new trial. Whether such a trial was
actually had, is not known, but at least, the record in the Helbig case has never again been
elevated to this court.
There may perchance exist some doubt as to the authority of the decision in the Helbig case, in
view of the circumstances above described. This much, however, is certain: The facts of the
Helbig case and the case before us, which we may term the Perfecto case, are different, for in
the first case there was an oral defamation, while in the second there is a written defamation.
Not only this, but a new point which, under the facts, could not have been considered in the
Helbig case, is, in the Perfecto case, urged upon the court. And, finally, as is apparent to all, the
appellate court is not restrained, as was the trial court, by strict adherence to a former decision.
We much prefer to resolve the question before us unhindered by references to the Helbig
decision.

This is one of those cases on which a variety of opinions all leading to the same result can be
had. A majority of the court are of the opinion that the Philippine Libel Law, Act No. 277, has
had the effect of repealing so much of article 256 of the Penal Code as relates to written
defamation, abuse, or insult, and that under the information and the facts, the defendant is
neither guilty of a violation of article 256 of the Penal Code, nor of the Libel Law. The view of
the Chief Justice is that the accused should be acquitted for the reason that the facts alleged in
the information do not constitute a violation of article 156 of the Penal Code. Three members
of the court believe that article 256 was abrogated completely by the change from Spanish to
American sovereignty over the Philippines and is inconsistent with democratic principles of
government.

Without prejudice to the right of any member of the court to explain his position, we will
discuss the two main points just mentioned.

1. Effect of the Philippine Libel Law, Act No. 277, on article 256 of the Spanish Penal
Code. — The Libel Law, Act No. 277, was enacted by the Philippine Commission shortly
after organization of this legislative body. Section 1 defines libel as a "malicious
defamation, expressed either in writing, printing, or by signs or pictures, or the like, or
public theatrical exhibitions, tending to blacken the memory of one who is dead or to
impeach the honesty, virtue, or reputation, or publish the alleged or natural deffects of
one who is alive, and thereby expose him to public hatred, contempt or ridicule."
Section 13 provides that "All laws and parts of laws now in force, so far as the same may
be in conflict herewith, are hereby repealed. . . ."

That parts of laws in force in 1901 when the Libel Law took effect, were in conflict therewith,
and that the Libel Law abrogated certain portion of the Spanish Penal Code, cannot be gainsaid.
Title X of Book II of the Penal Code, covering the subjects of calumny and insults, must have
been particularly affected by the Libel Law. Indeed, in the early case of Pardo de
Tavera vs. Garcia Valdez ([1902], 1. Phil., 468), the Supreme Court spoke of the Libel Law as
"reforming the preexisting Spanish law on the subject of calumnia and injuria." Recently,
specific attention was given to the effect of the Libel Law on the provisions of the Penal Code,
dealing with calumny and insults, and it was found that those provisions of the Penal Code on
the subject of calumny and insults in which the elements of writing an publicity entered, were
abrogated by the Libel Law. (People vs. Castro [1922], p. 842, ante.)
The Libel Law must have had the same result on other provisions of the Penal Code, as for
instance article 256.

The facts here are that the editor of a newspaper published an article, naturally in writing,
which may have had the tendency to impeach the honesty, virtue, or reputation of members of
the Philippine Senate, thereby possibly exposing them to public hatred, contempt, or ridicule,
which is exactly libel, as defined by the Libel Law. Sir J. F. Stephen is authority for the statement
that a libel is indictable when defaming a "body of persons definite and small enough for
individual members to be recognized as such, in or by means of anything capable of being a
libel." (Digest of Criminal Law, art. 267.) But in the United States, while it may be proper to
prosecute criminally the author of a libel charging a legislator with corruption, criticisms, no
matter how severe, on a legislature, are within the range of the liberty of the press, unless the
intention and effect be seditious. (3 Wharton's Criminal Law, p. 2131.) With these facts and
legal principles in mind, recall that article 256 begins: Any person who, by . . . writing, shall
defame, abuse, or insult any Minister of the Crown or other person in authority," etc.

The Libel Law is a complete and comprehensive law on the subject of libel. The well-known rule
of statutory construction is, that where the later statute clearly covers the old subject-matter of
antecedent acts, and it plainly appears to have been the purpose of the legislature to give
expression in it to the whole law on the subject, previous laws are held to be repealed by
necessary implication. (1 Lewis' Sutherland Statutory Construction, p. 465.) For identical
reasons, it is evident that Act No. 277 had the effect so much of this article as punishes
defamation, abuse, or insults by writing.

Act No. 292 of the Philippine Commission, the Treason and Sedition Law, may also have
affected article 256, but as to this point, it is not necessary to make a pronouncement.

2. Effect of the change from Spanish to Amercian sevoreignty over the Philippine son
article 256 of the Spanish Penal Code. — Appellant's main proposition in the lower court
and again energetically pressed in the appellate court was that article 256 of the Spanish
Penal Code is not now in force because abrogated by the change from Spanish to
American sovereignty over the Philippines and because inconsistent with democratic
principles of government. This view was indirectly favored by the trial judge, and, as
before stated, is the opinion of three members of this court.

Article 256 is found in Chapter V of title III of Book II of the Spanish Penal Code. Title I of Book II
punishes the crimes of treason, crimes that endanger the peace or independence of the state,
crimes against international law, and the crime of piracy. Title II of the same book punishes the
crimes of lese majeste, crimes against the Cortes and its members and against the council of
ministers, crimes against the form of government, and crimes committed on the occasion of the
exercise of rights guaranteed by the fundamental laws of the state, including crime against
religion and worship. Title III of the same Book, in which article 256 is found, punishes the
crimes of rebellion, sedition, assaults upon persons in authority, and their agents, and
contempts, insults, injurias, and threats against persons in authority, and insults, injurias, and
threats against their agents and other public officers, the last being the title to Chapter V. The
first two articles in Chapter V define and punish the offense of contempt committed by any one
who shall be word or deed defame, abuse, insult, or threathen a minister of the crown, or any
person in authority. The with an article condemning challenges to fight duels intervening,
comes article 256, now being weighed in the balance. It reads as follows: "Any person who, by
word, deed, or writing, shall defame, abuse, or insult any Minister of the Crown or other person
in authority, while engaged in the performance of official duties, or by reason of such
performance, provided that the offensive minister or person, or the offensive writing be not
addressed to him, shall suffer the penalty of arresto mayor," — that is, the defamation, abuse,
or insult of any Minister of the Crown of the Monarchy of Spain (for there could not be a
Minister of the Crown in the United States of America), or other person in authority in the
Monarchy of Spain.

It cannot admit of doubt that all those provisions of the Spanish Penal Code having to do with
such subjects as treason, lese majeste, religion and worship, rebellion, sedition, and contempts
of ministers of the crown, are not longer in force. Our present task, therefore, is a
determination of whether article 256 has met the same fate, or, more specifically stated,
whether it is in the nature of a municipal law or political law, and is consistent with the
Constitution and laws of the United States and the characteristics and institutions of the
American Government.

It is a general principle of the public law that on acquisition of territory the previous political
relations of the ceded region are totally abrogated. "Political" is here used to denominate the
laws regulating the relations sustained by the inhabitants to the sovereign. (American Insurance
Co. vs. Canter [1828], 1 Pet., 511; Chicago, Rock Island and Pacific Railway Co. vs. McGlinn
[1885], 114 U.S., 542; Roa vs. Collector of Customs [1912], 23 Phil., 315.) Mr. Justice Field of the
United States Supreme Court stated the obvious when in the course of his opinion in the case
of Chicago, Rock Island and Pacific Railway Co. vs. McGlinn, supra, he said: "As a matter of
course, all laws, ordinances and regulations in conflict with the political character, institutions
and Constitution of the new government are at once displaced. Thus, upon a cession of political
jurisdiction and legislative power — and the latter is involved in the former — to the United
States, the laws of the country in support of an established religion or abridging the freedom of
the press, or authorizing cruel and unusual punishments, and he like, would at once cease to be
of obligatory force without any declaration to that effect." To quote again from the United
States Supreme Court: "It cannot be admitted that the King of Spain could, by treaty or
otherwise, impart to the United States any of his royal prerogatives; and much less can it be
admitted that they have capacity to receive or power to exercise them. Every nation acquiring
territory, by treaty or otherwise, must hold it subject to the Constitution and laws of its own
government, and not according to those of the government ceding it." (Pollard vs. Hagan
[1845], 3 Hos., 210.)

On American occupation of the Philippines, by instructions of the President to the Military

Commander dated May 28, 1898, and by proclamation of the latter, the municipal laws of the
conquered territory affecting private rights of person and property and providing for the
punishment of crime were nominally continued in force in so far as they were compatible with
the new order of things. But President McKinley, in his instructions to General Merritt, was
careful to say: "The first effect of the military occupation of the enemy's territory is the
severance of the former political relation of the inhabitants and the establishment of a new
political power." From that day to this, the ordinarily it has been taken for granted that the
provisions under consideration were still effective. To paraphrase the language of the United
States Supreme Court in Weems vs. United States ([1910], 217 U. S., 349), there was not and
could not be, except as precise questions were presented, a careful consideration of the codal
provisions and a determination of the extent to which they accorded with or were repugnant to
the "'great principles of liberty and law' which had been 'made the basis of our governmental
system.' " But when the question has been squarely raised, the appellate court has been forced
on occasion to hold certain portions of the Spanish codes repugnant t democratic institutions
and American constitutional principles. (U.S. vs. Sweet [1901], 1 Phil., 18; U.S. vs. Balcorta
[1913], 25 Phil., 273; U.S. vs. Balcorta [1913], 25 Phil., 533; Weems vs. U.S., supra.)

The nature of the government which has been set up in the Philippines under American
sovereignty was outlined by President McKinley in that Magna Charta of Philippine liberty, his
instructions to the Commission, of April 7, 1900. In part, the President said:

In all the forms of government and administrative provisions which they are authorized
to prescribe, the Commission should bear in mind that he government which they are
establishing is designed not for our satisfaction or for the expression of our theoretical
views, but for the happiness, peace, and prosperity of the people of the Philippine
Islands, and the measures adopted should be made to conform to their customs, their
habits, and even their prejudices, to the fullest extent consistent with the
accomplishment of the indispensable requisites of just and effective government. At the
same time the Commission should bear in mind, and the people of the Islands should be
made plainly to understand, that there are certain great principles of government which
have been made the basis of our governmental system, which we deem essential to the
rule of law and the maintenance of individual freedom, and of which they have,
unfortunately, been denied the experience possessed by us; that there are also certain
practical rules of government which we have found to be essential to the preservation of
these great principles of liberty and law, and that these principles and these rules of
government must be established and maintained in their islands for the sake of their
liberty and happiness, however much they may conflict with the customs or laws of
procedure with which they are familiar. It is evident that the most enligthened thought
of the Philippine Islands fully appreciates the importance of these principles and rules,
and they will inevitably within a short time command universal assent.

The courts have naturally taken the same view. Mr. Justice Elliott, speaking for our Supreme
Court, in the case of United States vs. Bull ([1910], 15 Phil., 7), said: "The President and
Congress framed the government on the model with which American are familiar, and which
has proven best adapted for the advancement of the public interests and the protection of
individual rights and privileges."
Therefore, it has come with somewhat of a shock to hear the statement made that the
happiness, peace, and prosperity of the people of the Philippine Islands and their customs,
habits, and prejudices, to follow the language of President McKinley, demand obeisance to
authority, and royal protection for that authority.

According to our view, article 256 of the Spanish Penal Code was enacted by the Government of
Spain to protect Spanish officials who were the representatives of the King. With the change of
sovereignty, a new government, and a new theory of government, as set up in the Philippines.
It was in no sense a continuation of the old, although merely for convenience certain of the
existing institutions and laws were continued. The demands which the new government made,
and makes, on the individual citizen are likewise different. No longer is there a Minister of the
Crown or a person in authority of such exalted position that the citizen must speak of him only
with bated breath. "In the eye of our Constitution and laws, every man is a sovereign, a ruler
and a freeman, and has equal rights with every other man. We have no rank or station, except
that of respectability and intelligence as opposed to indecency and ignorance, and the door to
this rank stands open to every man to freely enter and abide therein, if he is qualified, and
whether he is qualified or not depends upon the life and character and attainments and
conduct of each person for himself. Every man may lawfully do what he will, so long as it is
not malum in se or malum prohibitum or does not infringe upon the qually sacred rights of
others." (State vs. Shepherd [1903], 177 Mo., 205; 99 A. S. R., 624.)

It is true that in England, from which so many of the laws and institutions of the United States
are derived, there were once statutes of scandalum magnatum, under which words which
would not be actionable if spoken of an ordinary subject were made actionable if spoken of a
peer of the realm or of any of the great officers of the Crown, without proof of any special
damage. The Crown of England, unfortunately, took a view less tolerant that that of other
sovereigns, as for instance, the Emperors Augustus, Caesar, and Tiberius. These English statutes
have, however, long since, become obsolete, while in the United States, the offense
of scandalum magnatum is not known. In the early days of the American Republic, a sedition
law was enacted, making it an offense to libel the Government, the Congress, or the President
of the United States, but the law met with so much popular disapproval, that it was soon
repealed. "In this country no distinction as to persons is recognized, and in practice a person
holding a high office is regarded as a target at whom any person may let fly his poisonous
words. High official position, instead of affording immunity from slanderous and libelous
charges, seems rather to be regarded as making his character free plunder for any one who
desires to create a senation by attacking it." (Newell, Slander and Libel, 3d ed., p. 245;
Sillars vs. Collier [1890], 151 Mass., 50; 6 L.R.A., 680.)

Article 256 of the Penal Code is contrary to the genius and fundamental principles of the
American character and system of government. The gulf which separates this article from the
spirit which inspires all penal legislation of American origin, is as wide as that which separates a
monarchy from a democratic Republic like that of the United States. This article was crowded
out by implication as soon as the United States established its authority in the Philippine
Islands. Penalties out of all proportion to the gravity of the offense, grounded in a distorted
monarchical conception of the nature of political authority, as opposed to the American
conception of the protection of the interests of the public, have been obliterated by the
present system of government in the Islands. 1awph!l.net

From an entirely different point of view, it must be noted that this article punishes contempts
against executive officials, although its terms are broad enough to cover the entire official class.
Punishment for contempt of non-judicial officers has no place in a government based upon
American principles. Our official class is not, as in monarchies, an agent of some authority
greater than the people but it is an agent and servant of the people themselves. These officials
are only entitled to respect and obedience when they are acting within the scope of their
authority and jurisdiction. The American system of government is calculated to enforce respect
and obedience where such respect and obedience is due, but never does it place around the
individual who happens to occupy an official position by mandate of the people any official
halo, which calls for drastic punishment for contemptuous remarks.

The crime of lese majeste disappeared in the Philippines with the ratification of the Treaty of
Paris. Ministers of the Crown have no place under the American flag.

To summarize, the result is, that all the members of the court are of the opinion, although for
different reasons, that the judgment should be reversed and the defendant and appellant
acquitted, with costs de officio. So ordered.

Ostrand and Johns, JJ., concur.

Separate Opinions

ARAULLO, C.J., concurring:

I concur with the dispositive part of the foregoing decision, that is, with the acquittal of the
accused, for the sole reason that the facts alleged in the information do not constitute a
violation of article 256 of the Penal Code; for although that article is in force with respect to
calumny, injuria, or insult, by deed or word, against an authority in the performance of his
duties or by reason thereof, outside of his presence, it is repealed by the Libel Law in so far as it
refers to calumny, injuria, or insult committed against an authority by writing or printing, as
was that inserted in the said information.

ROMUALDEZ, J., concurring:

I concur with the result. I believe that the responsibility of the accused has not been shown
either under article 256 of the Penal Code or under the Libel Law.

I am of the opinion that article 256 of the Penal Code is still in force, except as it refers to
"Ministers of the Crown," whom we do not have in our Government, and to calumny, injuria, or
insult, by writing or printing, committed against an authority in the performance of his duties or
by reason thereof, which portion was repealed by the Libel Law.

2. Macariola v. Asuncion

A.M. No. 133-J May 31, 1982

BERNARDITA R. MACARIOLA, complainant,

vs.
HONORABLE ELIAS B. ASUNCION, Judge of the Court of First Instance of Leyte, respondent.

MAKASIAR, J:

In a verified complaint dated August 6, 1968 Bernardita R. Macariola charged respondent Judge
Elias B. Asuncion of the Court of First Instance of Leyte, now Associate Justice of the Court of
Appeals, with "acts unbecoming a judge."

The factual setting of the case is stated in the report dated May 27, 1971 of then Associate
Justice Cecilia Muñoz Palma of the Court of Appeals now retired Associate Justice of the
Supreme Court, to whom this case was referred on October 28, 1968 for investigation, thus:

Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint for
partition filed by Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes, Ruperto
Reyes, Adela Reyes, and Priscilla Reyes, plaintiffs, against Bernardita R.
Macariola, defendant, concerning the properties left by the deceased Francisco
Reyes, the common father of the plaintiff and defendant.

In her defenses to the complaint for partition, Mrs. Macariola alleged among
other things that; a) plaintiff Sinforosa R. Bales was not a daughter of the
deceased Francisco Reyes; b) the only legal heirs of the deceased were
defendant Macariola, she being the only offspring of the first marriage of
Francisco Reyes with Felisa Espiras, and the remaining plaintiffs who were the
children of the deceased by his second marriage with Irene Ondez; c) the
properties left by the deceased were all the conjugal properties of the latter and
his first wife, Felisa Espiras, and no properties were acquired by the deceased
during his second marriage; d) if there was any partition to be made, those
conjugal properties should first be partitioned into two parts, and one part is to
be adjudicated solely to defendant it being the share of the latter's deceased
mother, Felisa Espiras, and the other half which is the share of the deceased
Francisco Reyes was to be divided equally among his children by his two
marriages.
On June 8, 1963, a decision was rendered by respondent Judge Asuncion in Civil
Case 3010, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court, upon a

preponderance of evidence, finds and so holds, and hereby
renders judgment (1) Declaring the plaintiffs Luz R. Bakunawa,
Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes
as the only children legitimated by the subsequent marriage of
Francisco Reyes Diaz to Irene Ondez; (2) Declaring the plaintiff
Sinforosa R. Bales to have been an illegitimate child of Francisco
Reyes Diaz; (3) Declaring Lots Nos. 4474, 4475, 4892, 5265, 4803,
4581, 4506 and 1/4 of Lot 1145 as belonging to the conjugal
partnership of the spouses Francisco Reyes Diaz and Felisa
Espiras; (4) Declaring Lot No. 2304 and 1/4 of Lot No. 3416 as
belonging to the spouses Francisco Reyes Diaz and Irene Ondez in
common partnership; (5) Declaring that 1/2 of Lot No. 1184 as
belonging exclusively to the deceased Francisco Reyes Diaz; (6)
Declaring the defendant Bernardita R. Macariola, being the only
legal and forced heir of her mother Felisa Espiras, as the exclusive
owner of one-half of each of Lots Nos. 4474, 4475, 4892, 5265,
4803, 4581, 4506; and the remaining one-half (1/2) of each of said
Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and one-half
(1/2) of one-fourth (1/4) of Lot No. 1154 as belonging to the
estate of Francisco Reyes Diaz; (7) Declaring Irene Ondez to be the
exclusive owner of one-half (1/2) of Lot No. 2304 and one-half
(1/2) of one-fourth (1/4) of Lot No. 3416; the remaining one-half
(1/2) of Lot 2304 and the remaining one-half (1/2) of one-fourth
(1/4) of Lot No. 3416 as belonging to the estate of Francisco Reyes
Diaz; (8) Directing the division or partition of the estate of
Francisco Reyes Diaz in such a manner as to give or grant to Irene
Ondez, as surviving widow of Francisco Reyes Diaz, a hereditary
share of. one-twelfth (1/12) of the whole estate of Francisco
Reyes Diaz (Art. 996 in relation to Art. 892, par 2, New Civil Code),
and the remaining portion of the estate to be divided among the
plaintiffs Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes,
Ruperto Reyes, Adela Reyes, Priscilla Reyes and defendant
Bernardita R. Macariola, in such a way that the extent of the total
share of plaintiff Sinforosa R. Bales in the hereditary estate shall
not exceed the equivalent of two-fifth (2/5) of the total share of
any or each of the other plaintiffs and the defendant (Art. 983,
New Civil Code), each of the latter to receive equal shares from
the hereditary estate, (Ramirez vs. Bautista, 14 Phil. 528; Diancin
vs. Bishop of Jaro, O.G. [3rd Ed.] p. 33); (9) Directing the parties,
within thirty days after this judgment shall have become final to
 submit to this court, for approval a project of partition of the
hereditary estate in the proportion above indicated, and in such
manner as the parties may, by agreement, deemed convenient
and equitable to them taking into consideration the location, kind,
quality, nature and value of the properties involved; (10) Directing
the plaintiff Sinforosa R. Bales and defendant Bernardita R.
Macariola to pay the costs of this suit, in the proportion of one-
third (1/3) by the first named and two-thirds (2/3) by the second
named; and (I 1) Dismissing all other claims of the parties [pp 27-
29 of Exh. C].

The decision in civil case 3010 became final for lack of an appeal, and on October
16, 1963, a project of partition was submitted to Judge Asuncion which is
marked Exh. A. Notwithstanding the fact that the project of partition was not
signed by the parties themselves but only by the respective counsel of plaintiffs
and defendant, Judge Asuncion approved it in his Order dated October 23, 1963,
which for convenience is quoted hereunder in full:

The parties, through their respective counsels, presented to this

Court for approval the following project of partition:

COMES NOW, the plaintiffs and the defendant in the above-

entitled case, to this Honorable Court respectfully submit the
following Project of Partition:

l. The whole of Lots Nos. 1154, 2304 and 4506 shall belong
exclusively to Bernardita Reyes Macariola;

2. A portion of Lot No. 3416 consisting of 2,373.49 square meters

along the eastern part of the lot shall be awarded likewise to
Bernardita R. Macariola;

3. Lots Nos. 4803, 4892 and 5265 shall be awarded to Sinforosa

Reyes Bales;

4. A portion of Lot No. 3416 consisting of 1,834.55 square meters

along the western part of the lot shall likewise be awarded to
Sinforosa Reyes-Bales;

5. Lots Nos. 4474 and 4475 shall be divided equally among Luz
Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes
and Priscilla Reyes in equal shares;
6. Lot No. 1184 and the remaining portion of Lot No. 3416 after
taking the portions awarded under item (2) and (4) above shall be
awarded to Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes,
Adela Reyes and Priscilla Reyes in equal shares, provided,
however that the remaining portion of Lot No. 3416 shall belong
exclusively to Priscilla Reyes.

WHEREFORE, it is respectfully prayed that the Project of Partition

indicated above which is made in accordance with the decision of
the Honorable Court be approved.

Tacloban City, October 16, 1963.

(SGD) BONIFACIO RAMO Atty. for the Defendant Tacloban City

(SGD) ZOTICO A. TOLETE Atty. for the Plaintiff Tacloban City

While the Court thought it more desirable for all the parties to
have signed this Project of Partition, nevertheless, upon assurance
of both counsels of the respective parties to this Court that the
Project of Partition, as above- quoted, had been made after a
conference and agreement of the plaintiffs and the defendant
approving the above Project of Partition, and that both lawyers
had represented to the Court that they are given full authority to
sign by themselves the Project of Partition, the Court, therefore,
finding the above-quoted Project of Partition to be in accordance
with law, hereby approves the same. The parties, therefore, are
directed to execute such papers, documents or instrument
sufficient in form and substance for the vesting of the rights,
interests and participations which were adjudicated to the
respective parties, as outlined in the Project of Partition and the
delivery of the respective properties adjudicated to each one in
view of said Project of Partition, and to perform such other acts as
are legal and necessary to effectuate the said Project of Partition.

SO ORDERED.

Given in Tacloban City, this 23rd day of October, 1963.

(SGD) ELIAS B. ASUNCION Judge

EXH. B.
 The above Order of October 23, 1963, was amended on November 11, 1963,
only for the purpose of giving authority to the Register of Deeds of the Province
of Leyte to issue the corresponding transfer certificates of title to the respective
adjudicatees in conformity with the project of partition (see Exh. U).

One of the properties mentioned in the project of partition was Lot 1184 or
rather one-half thereof with an area of 15,162.5 sq. meters. This lot, which
according to the decision was the exclusive property of the deceased Francisco
Reyes, was adjudicated in said project of partition to the plaintiffs Luz, Anacorita
Ruperto, Adela, and Priscilla all surnamed Reyes in equal shares, and when the
project of partition was approved by the trial court the adjudicatees caused Lot
1184 to be subdivided into five lots denominated as Lot 1184-A to 1184-E
inclusive (Exh. V).

Lot 1184-D was conveyed to Enriqueta D. Anota, a stenographer in Judge

Asuncion's court (Exhs. F, F-1 and V-1), while Lot 1184-E which had an area of
2,172.5556 sq. meters was sold on July 31, 1964 to Dr. Arcadio Galapon (Exh. 2)
who was issued transfer certificate of title No. 2338 of the Register of Deeds of
the city of Tacloban (Exh. 12).

On March 6, 1965, Dr. Arcadio Galapon and his wife Sold a portion of Lot 1184-E
with an area of around 1,306 sq. meters to Judge Asuncion and his wife, Victoria
S. Asuncion (Exh. 11), which particular portion was declared by the latter for
taxation purposes (Exh. F).

On August 31, 1966, spouses Asuncion and spouses Galapon conveyed their
respective shares and interest in Lot 1184-E to "The Traders Manufacturing and
Fishing Industries Inc." (Exit 15 & 16). At the time of said sale the stockholders of
the corporation were Dominador Arigpa Tan, Humilia Jalandoni Tan, Jaime
Arigpa Tan, Judge Asuncion, and the latter's wife, Victoria S. Asuncion, with
Judge Asuncion as the President and Mrs. Asuncion as the secretary (Exhs. E-4 to
E-7). The Articles of Incorporation of "The Traders Manufacturing and Fishing
Industries, Inc." which we shall henceforth refer to as "TRADERS" were
registered with the Securities and Exchange Commission only on January 9, 1967
(Exh. E) [pp. 378-385, rec.].

Complainant Bernardita R. Macariola filed on August 9, 1968 the instant complaint dated
August 6, 1968 alleging four causes of action, to wit: [1] that respondent Judge Asuncion
violated Article 1491, paragraph 5, of the New Civil Code in acquiring by purchase a portion of
Lot No. 1184-E which was one of those properties involved in Civil Case No. 3010 decided by
him; [2] that he likewise violated Article 14, paragraphs I and 5 of the Code of Commerce,
Section 3, paragraph H, of R.A. 3019, otherwise known as the Anti-Graft and Corrupt Practices
Act, Section 12, Rule XVIII of the Civil Service Rules, and Canon 25 of the Canons of Judicial
Ethics, by associating himself with the Traders Manufacturing and Fishing Industries, Inc., as a
stockholder and a ranking officer while he was a judge of the Court of First Instance of Leyte; [3]
that respondent was guilty of coddling an impostor and acted in disregard of judicial decorum
by closely fraternizing with a certain Dominador Arigpa Tan who openly and publicly advertised
himself as a practising attorney when in truth and in fact his name does not appear in the Rolls
of Attorneys and is not a member of the Philippine Bar; and [4] that there was a culpable
defiance of the law and utter disregard for ethics by respondent Judge (pp. 1-7, rec.).

Respondent Judge Asuncion filed on September 24, 1968 his answer to which a reply was filed
on October 16, 1968 by herein complainant. In Our resolution of October 28, 1968, We referred
this case to then Justice Cecilia Muñoz Palma of the Court of Appeals, for investigation, report
and recommendation. After hearing, the said Investigating Justice submitted her report dated
May 27, 1971 recommending that respondent Judge should be reprimanded or warned in
connection with the first cause of action alleged in the complaint, and for the second cause of
action, respondent should be warned in case of a finding that he is prohibited under the law to
engage in business. On the third and fourth causes of action, Justice Palma recommended that
respondent Judge be exonerated.

The records also reveal that on or about November 9 or 11, 1968 (pp. 481, 477, rec.),
complainant herein instituted an action before the Court of First Instance of Leyte, entitled
"Bernardita R. Macariola, plaintiff, versus Sinforosa R. Bales, et al., defendants," which was
docketed as Civil Case No. 4235, seeking the annulment of the project of partition made
pursuant to the decision in Civil Case No. 3010 and the two orders issued by respondent Judge
approving the same, as well as the partition of the estate and the subsequent conveyances with
damages. It appears, however, that some defendants were dropped from the civil case. For
one, the case against Dr. Arcadio Galapon was dismissed because he was no longer a real party
in interest when Civil Case No. 4234 was filed, having already conveyed on March 6, 1965 a
portion of lot 1184-E to respondent Judge and on August 31, 1966 the remainder was sold to
the Traders Manufacturing and Fishing Industries, Inc. Similarly, the case against defendant
Victoria Asuncion was dismissed on the ground that she was no longer a real party in interest at
the time the aforesaid Civil Case No. 4234 was filed as the portion of Lot 1184 acquired by her
and respondent Judge from Dr. Arcadio Galapon was already sold on August 31, 1966 to the
Traders Manufacturing and Fishing industries, Inc. Likewise, the cases against defendants
Serafin P. Ramento, Catalina Cabus, Ben Barraza Go, Jesus Perez, Traders Manufacturing and
Fishing Industries, Inc., Alfredo R. Celestial and Pilar P. Celestial, Leopoldo Petilla and Remedios
Petilla, Salvador Anota and Enriqueta Anota and Atty. Zotico A. Tolete were dismissed with the
conformity of complainant herein, plaintiff therein, and her counsel.

On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First Instance of Leyte, who
was directed and authorized on June 2, 1969 by the then Secretary (now Minister) of Justice
and now Minister of National Defense Juan Ponce Enrile to hear and decide Civil Case No. 4234,
rendered a decision, the dispositive portion of which reads as follows:

A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION

(1) declaring that only Branch IV of the Court of First Instance of Leyte has
jurisdiction to take cognizance of the issue of the legality and validity of the
Project of Partition [Exhibit "B"] and the two Orders [Exhibits "C" and "C- 3"]
approving the partition;

(2) dismissing the complaint against Judge Elias B. Asuncion;

(3) adjudging the plaintiff, Mrs. Bernardita R. Macariola to pay defendant Judge
Elias B. Asuncion,

(a) the sum of FOUR HUNDRED THOUSAND PESOS [P400,000.00]

for moral damages;

(b) the sum of TWO HUNDRED THOUSAND PESOS [P200,000.001

for exemplary damages;

(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nominal

damages; and

(d) he sum of TEN THOUSAND PESOS [PI0,000.00] for Attorney's

Fees.

B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN,

FOR HERSELF AND FOR THE HEIRS OF THE DECEASED GERARDO
VILLASIN —

(1) Dismissing the complaint against the defendants Mariquita Villasin and the
heirs of the deceased Gerardo Villasin;

(2) Directing the plaintiff to pay the defendants Mariquita Villasin and the heirs
of Gerardo Villasin 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 complaint against defendants Sinforosa R. Bales, Adela R.

Herrer, Priscilla R. Solis, Luz R. Bakunawa, Anacorita R. Eng and Ruperto O. Reyes.

D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO —

(1) Dismissing the complaint against Bonifacio Ramo;

(2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the
suit.
 SO ORDERED [pp. 531-533, rec.]

It is further disclosed by the record that the aforesaid decision was elevated to the Court of
Appeals upon perfection of the appeal on February 22, 1971.

WE find that there is no merit in the contention of complainant Bernardita R. Macariola, under
her first cause of action, that respondent Judge Elias B. Asuncion violated Article 1491,
paragraph 5, of the New Civil Code in acquiring by purchase a portion of Lot No. 1184-E which
was one of those properties involved in Civil Case No. 3010. 'That Article provides:

Article 1491. The following persons cannot acquire by purchase, even at a public
or judicial action, either in person or through the mediation of another:

xxx xxx xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts,
and other officers and employees connected with the administration of justice,
the property and rights in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their respective functions;
this prohibition includes the act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession [emphasis
supplied].

The prohibition in the aforesaid Article applies only to the sale or assignment of the property
which is the subject of litigation to the persons disqualified therein. WE have already ruled 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" (The Director of Lands vs. Ababa et al., 88
SCRA 513, 519 [1979], Rosario vda. de Laig vs. Court of Appeals, 86 SCRA 641, 646 [1978]).

In the case at bar, when the respondent Judge purchased on March 6, 1965 a portion of Lot
1184-E, the decision in Civil Case No. 3010 which he rendered on June 8, 1963 was already final
because none of the parties therein filed an appeal within the reglementary period; hence, the
lot in question was no longer subject of the litigation. Moreover, at the time of the sale on
March 6, 1965, respondent's order dated October 23, 1963 and the amended order
dated November 11, 1963 approving the October 16, 1963 project of partition made pursuant
to the June 8, 1963 decision, had long become final for there was no appeal from said orders.

Furthermore, respondent Judge did not buy the lot in question on March 6, 1965 directly from
the plaintiffs in Civil Case No. 3010 but from Dr. Arcadio Galapon who earlier purchased on July
31, 1964 Lot 1184-E from three of the plaintiffs, namely, Priscilla Reyes, Adela Reyes, and Luz R.
Bakunawa after the finality of the decision in Civil Case No. 3010. It may be recalled that Lot
1184 or more specifically one-half thereof was adjudicated in equal shares to Priscilla Reyes,
Adela Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in the project of partition, and
the same was subdivided into five lots denominated as Lot 1184-A to 1184-E. As aforestated,
Lot 1184-E was sold on July 31, 1964 to Dr. Galapon for which he was issued TCT No. 2338 by
the Register of Deeds of Tacloban City, and on March 6, 1965 he sold a portion of said lot to
respondent Judge and his wife who declared the same for taxation purposes only. The
subsequent sale on August 31, 1966 by spouses Asuncion and spouses Galapon of their
respective shares and interest in said Lot 1184-E to the Traders Manufacturing and Fishing
Industries, Inc., in which respondent was the president and his wife was the secretary, took
place long after the finality of the decision in Civil Case No. 3010 and of the subsequent two
aforesaid orders therein approving the project of partition.

While it appears that complainant herein filed on or about November 9 or 11, 1968 an action
before the Court of First Instance of Leyte docketed as Civil Case No. 4234, seeking to annul the
project of partition and the two orders approving the same, as well as the partition of the
estate and the subsequent conveyances, the same, however, is of no moment.

The fact remains that respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E
from Dr. Arcadio Galapon; hence, after the finality of the decision which he rendered on June 8,
1963 in Civil Case No. 3010 and his two questioned orders dated October 23, 1963 and
November 11, 1963. Therefore, the property was no longer subject of litigation.

The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234 can no longer alter,
change or affect the aforesaid facts — that the questioned sale to respondent Judge, now Court
of Appeals Justice, was effected and consummated long after the finality of the aforesaid
decision or orders.

Consequently, the sale of a portion of Lot 1184-E to respondent Judge having taken place over
one year after the finality of the decision in Civil Case No. 3010 as well as the two orders
approving the project of partition, and not during the pendency of the litigation, there was no
violation of paragraph 5, Article 1491 of the New Civil Code.

It is also argued by complainant herein that the sale on July 31, 1964 of Lot 1184-E to Dr.
Arcadio Galapon by Priscilla Reyes, Adela Reyes and Luz R. Bakunawa was only a mere scheme
to conceal the illegal and unethical transfer of said lot to respondent Judge as a consideration
for the approval of the project of partition. In this connection, We agree with the findings of the
Investigating Justice thus:

And so we are now confronted with this all-important question whether or not
the acquisition by respondent of a portion of Lot 1184-E and the subsequent
transfer of the whole lot to "TRADERS" of which respondent was the President
and his wife the Secretary, was intimately related to the Order of respondent
approving the project of partition, Exh. A.
 Respondent vehemently denies any interest or participation in the transactions
between the Reyeses and the Galapons concerning Lot 1184-E, and he insists
that there is no evidence whatsoever to show that Dr. Galapon had acted, in the
purchase of Lot 1184-E, in mediation for him and his wife. (See p. 14 of
Respondent's Memorandum).

xxx xxx xxx

On this point, I agree with respondent that there is no evidence in the record
showing that Dr. Arcadio Galapon acted as a mere "dummy" of respondent in
acquiring Lot 1184-E from the Reyeses. Dr. Galapon appeared to this investigator
as a respectable citizen, credible and sincere, and I believe him when he testified
that he bought Lot 1184-E in good faith and for valuable consideration from the
Reyeses without any intervention of, or previous understanding with Judge
Asuncion (pp. 391- 394, rec.).

On the contention of complainant herein that respondent Judge acted illegally in approving the
project of partition although it was not signed by the parties, We quote with approval the
findings of the Investigating Justice, as follows:

1. I agree with complainant that respondent should have required the signature
of the parties more particularly that of Mrs. Macariola on the project of partition
submitted to him for approval; however, whatever error was committed by
respondent in that respect was done in good faith as according to Judge
Asuncion he was assured by Atty. Bonifacio Ramo, the counsel of record of Mrs.
Macariola, That he was authorized by his client to submit said project of
partition, (See Exh. B and tsn p. 24, January 20, 1969). While it is true that such
written authority if there was any, was not presented by respondent in evidence,
nor did Atty. Ramo appear to corroborate the statement of respondent, his
affidavit being the only one that was presented as respondent's Exh. 10, certain
actuations of Mrs. Macariola lead this investigator to believe that she knew the
contents of the project of partition, Exh. A, and that she gave her conformity
thereto. I refer to the following documents:

1) Exh. 9 — Certified true copy of OCT No. 19520 covering Lot 1154 of the
Tacloban Cadastral Survey in which the deceased Francisco Reyes holds a "1/4
share" (Exh. 9-a). On tills certificate of title the Order dated November 11, 1963,
(Exh. U) approving the project of partition was duly entered and registered on
November 26, 1963 (Exh. 9-D);

2) Exh. 7 — Certified copy of a deed of absolute sale executed by Bernardita

Reyes Macariola on October 22, 1963, conveying to Dr. Hector Decena the one-
fourth share of the late Francisco Reyes-Diaz in Lot 1154. In this deed of sale the
vendee stated that she was the absolute owner of said one-fourth share, the
 same having been adjudicated to her as her share in the estate of her father
Francisco Reyes Diaz as per decision of the Court of First Instance of Leyte under
case No. 3010 (Exh. 7-A). The deed of sale was duly registered and annotated at
the back of OCT 19520 on December 3, 1963 (see Exh. 9-e).

In connection with the abovementioned documents it is to be noted that in the

project of partition dated October 16, 1963, which was approved by respondent
on October 23, 1963, followed by an amending Order on November 11, 1963, Lot
1154 or rather 1/4 thereof was adjudicated to Mrs. Macariola. It is this 1/4 share
in Lot 1154 which complainant sold to Dr. Decena on October 22, 1963, several
days after the preparation of the project of partition.

Counsel for complainant stresses the view, however, that the latter sold her one-
fourth share in Lot 1154 by virtue of the decision in Civil Case 3010 and not
because of the project of partition, Exh. A. Such contention is absurd because
from the decision, Exh. C, it is clear that one-half of one- fourth of Lot 1154
belonged to the estate of Francisco Reyes Diaz while the other half of said one-
fourth was the share of complainant's mother, Felisa Espiras; in other words, the
decision did not adjudicate the whole of the one-fourth of Lot 1154 to the herein
complainant (see Exhs. C-3 & C-4). Complainant became the owner of the entire
one-fourth of Lot 1154 only by means of the project of partition, Exh. A.
Therefore, if Mrs. Macariola sold Lot 1154 on October 22, 1963, it was for no
other reason than that she was wen aware of the distribution of the properties
of her deceased father as per Exhs. A and B. It is also significant at this point to
state that Mrs. Macariola admitted during the cross-examination that she went
to Tacloban City in connection with the sale of Lot 1154 to Dr. Decena (tsn p. 92,
November 28, 1968) from which we can deduce that she could not have been
kept ignorant of the proceedings in civil case 3010 relative to the project of
partition.

Complainant also assails the project of partition because according to her the
properties adjudicated to her were insignificant lots and the least valuable.
Complainant, however, did not present any direct and positive evidence to prove
the alleged gross inequalities in the choice and distribution of the real properties
when she could have easily done so by presenting evidence on the area,
location, kind, the assessed and market value of said properties. Without such
evidence there is nothing in the record to show that there were inequalities in
the distribution of the properties of complainant's father (pp. 386389, rec.).

Finally, while it is. true that respondent Judge did not violate paragraph 5, Article 1491 of the
New Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation in his
court, it was, however, improper for him to have acquired the same. He should be reminded of
Canon 3 of the Canons of Judicial Ethics which requires that: "A judge's official conduct should
be free from the appearance of impropriety, and his personal behavior, not only upon the
bench and in the performance of judicial duties, but also in his everyday life, should be beyond
reproach." And as aptly observed by the Investigating Justice: "... it was unwise and indiscreet
on the part of respondent to have purchased or acquired a portion of a piece of 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. One who occupies an
exalted position in the judiciary has the duty and responsibility of maintaining the faith and
trust of the citizenry in the courts of justice, so that not only must he be truly honest and just,
but his actuations must be such as not give cause for doubt and mistrust in the uprightness of
his administration of justice. In this particular case of respondent, he cannot deny that the
transactions over Lot 1184-E are damaging and render his actuations open to suspicion and
distrust. Even if respondent honestly believed that Lot 1184-E was no longer in litigation in his
court and that he was purchasing it from a third person and not from the parties to the
litigation, he should nonetheless have refrained from buying it for himself and transferring it to
a corporation in which he and his wife were financially involved, to avoid possible suspicion that
his acquisition was related in one way or another to his official actuations in civil case 3010. The
conduct of respondent gave cause for the litigants in civil case 3010, the lawyers practising in
his court, and the public in general to doubt the honesty and fairness of his actuations and the
integrity of our courts of justice" (pp. 395396, rec.).

II

With respect to the second cause of action, the complainant alleged that respondent Judge
violated paragraphs 1 and 5, Article 14 of the Code of Commerce when he associated himself
with the Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking
officer, said corporation having been organized to engage in business. Said Article provides
that:

Article 14 — The following cannot engage in commerce, either in person or by

proxy, nor can they hold any office or have any direct, administrative, or financial
intervention in commercial or industrial companies within the limits of the
districts, provinces, or towns in which they discharge their duties:

1. Justices of the Supreme Court, judges and officials of the department of public
prosecution in active service. This provision shall not be applicable to mayors,
municipal judges, and municipal prosecuting attorneys nor to those who by
chance are temporarily discharging the functions of judge or prosecuting
attorney.

xxx xxx xxx

5. Those who by virtue of laws or special provisions may not engage in

commerce in a determinate territory.
It is Our considered view that although the aforestated provision is incorporated in the Code of
Commerce which is part of the commercial laws of the Philippines, it, however, 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 has been defined as that branch of public law which deals with the organization
and operation of the governmental organs of the State and define the relations of the state
with the inhabitants of its territory (People vs. Perfecto, 43 Phil. 887, 897 [1922]). It may be
recalled that political law embraces constitutional law, law of public corporations,
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.

It is significant to note that the present Code of Commerce is the Spanish Code of Commerce of
1885, with some modifications made by the "Commission de Codificacion de las Provincias de
Ultramar," which was extended to the Philippines by the Royal Decree of August 6, 1888, and
took effect as law in this jurisdiction on December 1, 1888.

Upon the transfer of sovereignty from Spain to the United States and later on from the United
States to the Republic of the Philippines, Article 14 of this Code of Commerce must be deemed
to have been abrogated because where there is 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 re-enacted by affirmative act of the new
sovereign.

Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311 [1912]) that:

By well-settled public law, upon the cession of territory by one nation to

another, either following a conquest or otherwise, ... those laws which are
political in their nature and pertain to the prerogatives of the former
government immediately cease upon the transfer of sovereignty. (Opinion, Atty.
Gen., July 10, 1899).

While municipal laws of the newly acquired territory not in conflict with the,
laws of the new sovereign continue in force without the express assent or
affirmative act of the conqueror, the political laws do not. (Halleck's Int. Law,
chap. 34, par. 14). However, such political laws of the prior sovereignty as are
not in conflict with the constitution or institutions of the new sovereign, may be
continued in force if the conqueror shall so declare by affirmative act of the
commander-in-chief during the war, or by Congress in time of peace. (Ely's
Administrator vs. United States, 171 U.S. 220, 43 L. Ed. 142). 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.

Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court stated that: "It is a general
principle of the public law that on acquisition of territory the previous political relations of the
ceded region are totally abrogated. "

There appears no enabling or affirmative act that continued the effectivity of the aforestated
provision of the Code of Commerce after the change of sovereignty from Spain to the United
States and then to the Republic of the Philippines. Consequently, Article 14 of the Code of
Commerce has no legal and binding effect and cannot apply to the respondent, then Judge of
the Court of First Instance, now Associate Justice of the Court of Appeals.

It is also argued by complainant herein that respondent Judge violated paragraph H, Section 3
of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, which
provides that:

Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of

public officers already penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

(h) Directly or indirectly 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 Iaw from having any
interest.

Respondent Judge cannot be held liable under the aforestated paragraph because there is no
showing that respondent participated or intervened in his official capacity in the business or
transactions of the Traders Manufacturing and Fishing Industries, Inc. In the case at bar, the
business of the corporation in which respondent participated has obviously no relation or
connection with his judicial office. The business of said corporation is not that kind where
respondent intervenes or takes part in his capacity as Judge of the Court of First Instance. As
was held in one case involving the application of Article 216 of the Revised Penal Code which
has a similar prohibition on public officers against directly or indirectly becoming interested in
any contract or business in which it is his official duty to intervene, "(I)t is not enough to be a
public official to be subject to this crime; it is necessary that by reason of his office, he has to
intervene in said contracts or transactions; and, hence, the official who intervenes in contracts
or transactions which have no relation to his office cannot commit this crime.' (People vs.
Meneses, C.A. 40 O.G. 11th Supp. 134, cited by Justice Ramon C. Aquino; Revised Penal Code, p.
1174, Vol. 11 [1976]).

It does not appear also from the records that the aforesaid corporation gained any undue
advantage in its business operations by reason of respondent's financial involvement in it, or
that the corporation benefited in one way or another in any case filed by or against it in court. It
is undisputed that there was no case filed in the different branches of the Court of First
Instance of Leyte in which the corporation was either party plaintiff or defendant except Civil
Case No. 4234 entitled "Bernardita R. Macariola, plaintiff, versus Sinforosa O. Bales, et
al.," wherein the complainant herein sought to recover Lot 1184-E from the aforesaid
corporation. It must be noted, however, that Civil Case No. 4234 was filed only on November 9
or 11, 1968 and decided on November 2, 1970 by CFI Judge Jose D. Nepomuceno when
respondent Judge was no longer connected with the corporation, having disposed of his
interest therein on January 31, 1967.

Furthermore, respondent is not liable under the same paragraph because there is no provision
in both the 1935 and 1973 Constitutions of the Philippines, nor is there an existing law
expressly prohibiting members of the Judiciary from engaging or having interest in any lawful
business.

It may be pointed out that Republic Act No. 296, as amended, also known as the Judiciary Act of
1948, does not contain any prohibition to that effect. As a matter of fact, under Section 77 of
said law, municipal judges may engage in teaching or other vocation not involving the practice
of law after office hours but with the permission of the district judge concerned.

Likewise, Article 14 of the Code of Commerce which prohibits judges from engaging in
commerce is, as heretofore stated, deemed abrogated automatically upon the transfer of
sovereignty from Spain to America, because it is political in nature.

Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil Code against the
purchase by judges of a property in litigation before the court within whose jurisdiction they
perform their duties, cannot apply to respondent Judge because the sale of the lot in question
to him took place after the finality of his decision in Civil Case No. 3010 as well as his two orders
approving the project of partition; hence, the property was no longer subject of litigation.

In addition, although Section 12, Rule XVIII of the Civil Service Rules made pursuant to the Civil
Service Act of 1959 prohibits an officer or employee in the civil service from engaging in any
private business, vocation, or profession or be connected with any commercial, credit,
agricultural or industrial undertaking without a written permission from the head of
department, the same, however, may not fall within the purview of paragraph h, Section 3 of
the Anti-Graft and Corrupt Practices Act because the last portion of said paragraph speaks of a
prohibition by the Constitution or law on any public officer from having any interest in any
business and not by a mere administrative rule or regulation. Thus, a violation of the aforesaid
rule by any officer or employee in the civil service, that is, engaging in private business without
a written permission from the Department Head may not constitute graft and corrupt practice
as defined by law.

On the contention of complainant that respondent Judge violated Section 12, Rule XVIII of the
Civil Service Rules, We hold that the Civil Service Act of 1959 (R.A. No. 2260) and the Civil
Service Rules promulgated thereunder, particularly Section 12 of Rule XVIII, do not apply to the
members of the Judiciary. Under said Section 12: "No officer or employee shall engage directly
in any private business, vocation, or profession or be connected with any commercial, credit,
agricultural or industrial undertaking without a written permission from the Head of
Department ..."

It must be emphasized at the outset that respondent, being a member of the Judiciary, is
covered by Republic Act No. 296, as amended, otherwise known as the Judiciary Act of 1948
and by Section 7, Article X, 1973 Constitution.

Under Section 67 of said law, the power to remove or dismiss judges was then vested in the
President of the Philippines, not in the Commissioner of Civil Service, and only on two grounds,
namely, serious misconduct and inefficiency, and upon the recommendation of the Supreme
Court, which alone is authorized, upon its own motion, or upon information of the Secretary
(now Minister) of Justice to conduct the corresponding investigation. Clearly, the aforesaid
section defines the grounds and prescribes the special procedure for the discipline of judges.

And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only the Supreme Court can
discipline judges of inferior courts as well as other personnel of the Judiciary.

It is true that under Section 33 of the Civil Service Act of 1959: "The Commissioner may, for ...
violation of the existing Civil Service Law and rules or of reasonable office regulations, or in the
interest of the service, remove any subordinate officer or employee from the service, demote
him in rank, suspend him for not more than one year without pay or fine him in an amount not
exceeding six months' salary." Thus, a violation of Section 12 of Rule XVIII is a ground for
disciplinary action against civil service officers and employees.

However, judges cannot be considered as subordinate civil service officers or employees

subject to the disciplinary authority of the Commissioner of Civil Service; for, certainly, the
Commissioner is not the head of the Judicial Department to which they belong. The Revised
Administrative Code (Section 89) and the Civil Service Law itself state that the Chief Justice is
the department head of the Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and under the
1973 Constitution, the Judiciary is the only other or second branch of the government (Sec. 1,
Art. X, 1973 Constitution). Besides, a violation of Section 12, Rule XVIII cannot be considered as
a ground for disciplinary action against judges because to recognize the same as applicable to
them, would be adding another ground for the discipline of judges and, as aforestated, Section
67 of the Judiciary Act recognizes only two grounds for their removal, namely, serious
misconduct and inefficiency.

Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the Commissioner of Civil
Service who has original and exclusive jurisdiction "(T)o decide, within one hundred twenty
days, after submission to it, all administrative cases against permanent officers and employees
in the competitive service, and, except as provided by law, to have final authority to pass upon
their removal, separation, and suspension and upon all matters relating to the conduct,
discipline, and efficiency of such officers and employees; and prescribe standards, guidelines
and regulations governing the administration of discipline" (emphasis supplied). There is no
question that a judge belong to the non-competitive or unclassified service of the government
as a Presidential appointee and is therefore not covered by the aforesaid provision. WE have
already ruled that "... in interpreting Section 16(i) of Republic Act No. 2260, we emphasized that
only permanent officers and employees who belong to the classified service come under the
exclusive jurisdiction of the Commissioner of Civil Service" (Villaluz vs. Zaldivar, 15 SCRA
710,713 [1965], Ang-Angco vs. Castillo, 9 SCRA 619 [1963]).

Although the actuation of respondent Judge in engaging in private business by joining the
Traders Manufacturing and Fishing Industries, Inc. as a stockholder and a ranking officer, is not
violative of the provissions of Article 14 of the Code of Commerce and Section 3(h) of the Anti-
Graft and Corrupt Practices Act as well as Section 12, Rule XVIII of the Civil Service Rules
promulgated pursuant to the Civil Service Act of 1959, the impropriety of the same is clearly
unquestionable because Canon 25 of the Canons of Judicial Ethics expressly declares that:

A judge should abstain from making personal investments in enterprises which

are apt to be involved in litigation in his court; and, after his accession to the
bench, he should not retain such investments previously made, longer than a
period sufficient to enable him to dispose of them without serious loss. It is
desirable that he should, so far as reasonably possible, refrain from all relations
which would normally tend to arouse the suspicion that such relations warp or
bias his judgment, or prevent his impartial attitude of mind in the administration
of his judicial duties. ...

WE are not, however, unmindful of the fact that respondent Judge and his wife had withdrawn
on January 31, 1967 from the aforesaid corporation and sold their respective shares to third
parties, and it appears also that the aforesaid corporation did not in anyway benefit in any case
filed by or against it in court as there was no case filed in the different branches of the Court of
First Instance of Leyte from the time of the drafting of the Articles of Incorporation of the
corporation on March 12, 1966, up to its incorporation on January 9, 1967, and the eventual
withdrawal of respondent on January 31, 1967 from said corporation. Such disposal or sale by
respondent and his wife of their shares in the corporation only 22 days after the incorporation
of the corporation, indicates that respondent realized that early that their interest in the
corporation contravenes the aforesaid Canon 25. Respondent Judge and his wife therefore
deserve the commendation for their immediate withdrawal from the firm after its
incorporation and before it became involved in any court litigation

III

With respect to the third and fourth causes of action, complainant alleged that respondent was
guilty of coddling an impostor and acted in disregard of judicial decorum, and that there was
culpable defiance of the law and utter disregard for ethics. WE agree, however, with the
recommendation of the Investigating Justice that respondent Judge be exonerated because the
aforesaid causes of action are groundless, and WE quote the pertinent portion of her report
which reads as follows:

The basis for complainant's third cause of action is the claim that respondent
associated and closely fraternized with Dominador Arigpa Tan who openly and
publicly advertised himself as a practising attorney (see Exhs. I, I-1 and J) when in
truth and in fact said Dominador Arigpa Tan does not appear in the Roll of
Attorneys and is not a member of the Philippine Bar as certified to in Exh. K.

The "respondent denies knowing that Dominador Arigpa Tan was an "impostor"
and claims that all the time he believed that the latter was a bona fide member
of the bar. I see no reason for disbelieving this assertion of respondent. It has
been shown by complainant that Dominador Arigpa Tan represented himself
publicly as an attorney-at-law to the extent of putting up a signboard with his
name and the words "Attorney-at Law" (Exh. I and 1- 1) to indicate his office, and
it was but natural for respondent and any person for that matter to have
accepted that statement on its face value. "Now with respect to the allegation of
complainant that respondent is guilty of fraternizing with Dominador Arigpa Tan
to the extent of permitting his wife to be a godmother of Mr. Tan's child at
baptism (Exh. M & M-1), that fact even if true did not render respondent guilty
of violating any canon of judicial ethics as long as his friendly relations with
Dominador A. Tan and family did not influence his official actuations as a judge
where said persons were concerned. There is no tangible convincing proof that
herein respondent gave any undue privileges in his court to Dominador Arigpa
Tan or that the latter benefitted in his practice of law from his personal relations
with respondent, or that he used his influence, if he had any, on the Judges of
the other branches of the Court to favor said Dominador Tan.

Of course it is highly desirable for a member of the judiciary to refrain as much

as possible from maintaining close friendly relations with practising attorneys
and litigants in his court so as to avoid suspicion 'that his social or business
relations or friendship constitute an element in determining his judicial course"
(par. 30, Canons of Judicial Ethics), but if a Judge does have social relations, that
in itself would not constitute a ground for disciplinary action unless it be clearly
 shown that his social relations be clouded his official actuations with bias and
partiality in favor of his friends (pp. 403-405, rec.).

In conclusion, while respondent Judge Asuncion, now Associate Justice of the Court of Appeals,
did not violate any law in acquiring by purchase a parcel of land which was in litigation in his
court and in engaging in business by joining a private corporation during his incumbency as
judge of the Court of First Instance of Leyte, he should be reminded to be more discreet in his
private and business activities, because his conduct as a member of the Judiciary must not only
be characterized with propriety but must always be above suspicion.

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.