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.
Reyes siblings filed a complaint for partition against Macariola, concerning the properties left by their common
father, Francisco Reyes.Judge Asuncion was the judge who rendered the decision, which became final for lack of an
appeal. A project of partition was submitted to Judge Asuncion after the finality of the decision. This project of partition
was only signed by the counsel of the parties, who assured the judge that they were given authorization to do so.
One of the properties in the project of partition was Lot 1184, which was subdivided into 5 lots. One of these lots (Lot
1184-D) was sold to Anota, a stenographer of the court, while another (Lot 1184-E) was sold to Dr. Galapon, who later
on sold a portion of the same lot to Judge Asuncion and his wife. A year after, spouses Asuncion and Dr. Galapon sold
their respective shares over the lot to Traders Manufacturing and Fishing Industries. At the time of the sale, Judge
Asuncion and his wife were both stockholders, with Judge Asuncion as President and his wife as secretary of said
company.
A year after the company’s registration with the SEC, Macariola filed a complaint against Judge Asuncion
alleging: • that he violated Art. 1491 (5) of the Civil Code in acquiring a portion of the lot, which was one of those
properties involved in the partition case; and • that he violated Art 14 (1 and 5) of the Code of Commerce, Sec 3 (H) of
RA 3019, Sec 12, Rule XVIII of the Civil Service Rules, and Canon 25 of the Canons of Judicial Ethics by associating
himself with a private company while he was a judge of the CFI of Leyte. This case was referred to Justice Palma of
the CA for investigation, report and recommendation. After hearing, the said Investigating Justice recommended that
Judge Asuncion should be reprimanded or warned in connection with the complaints filed against him.
ISSUE
Whether or not Judge Asuncion violated Art 14 (1 and 5) of the Code of Commerce, Sec 3 (H) of RA 3019, Sec 12,
Rule XVIII of the Civil Service Rules and Canon 25 of the Canons of Judicial Ethics when he associated himself with
Traders Manufacturing and Fishing Industries, Inc., as stockholder and a ranking officer
HELD:
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.