When a Judge's Business Dealings Amount to Conduct Unbecoming a Judge

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A judge's private business activities can become a matter of public concern when they involve court employees and other persons who may come before the court. In Mendoza v. Diasen (A.M. No. MTJ-17-1900, August 9, 2017), the Supreme Court ruled that a Makati City judge who engaged in selling rice to court employees committed conduct unbecoming a judge, even though the sale ultimately did not push through.

The case reminds every member of the judiciary that the ethical standards governing judges extend beyond the courtroom. A judge's personal financial dealings must never create even the appearance of impropriety.

The Facts of the Case

The complainant, a public utility vehicle driver, alleged that Judge Marcos C. Diasen, Jr. of the Metropolitan Trial Court, Branch 62, Makati City, engaged his services and later asked him to assist in purchasing rice. According to the complainant, the judge issued a post-dated check for 70 sacks of rice, which was subsequently dishonored for insufficient funds.

Judge Diasen gave a different account. He admitted lending money to an acquaintance named Cristy Flores, who wanted to sell rice to Makati City Hall employees. He issued a post-dated check to Flores as a loan, on the condition that she would show him the rice and repay the loan from sales proceeds. When Flores failed to deliver the rice, he stopped payment on the check.

The Issue Before the Court

The central question was whether Judge Diasen's involvement in the rice-selling scheme violated the Code of Judicial Conduct, specifically Canon 5, Rule 5.02.

The Office of the Court Administrator found that Judge Diasen had taken an active role in the prospective sale by notifying employees of the Makati City Hall and advising would-be buyers to return the following day when Flores failed to arrive with the rice. The Court adopted these findings.

The Ruling: Impropriety and the Appearance of Impropriety

The Supreme Court emphasized that the Code of Judicial Conduct requires judges to "avoid impropriety and the appearance of impropriety in all activities." Judges must conduct themselves beyond reproach to maintain public confidence in the judiciary.

Rule 5.02 of the Code of Judicial Conduct states that a judge shall refrain from financial and business dealings that tend to reflect adversely on the court's impartiality, interfere with judicial duties, or increase involvement with lawyers or persons likely to come before the court.

The Court found that Judge Diasen's act of attempting to sell rice to his employees and to employees of other branches was "highly improper." As a judge, he exercised moral ascendancy and supervision over these employees. Had the sale pushed through, he would have profited from his position.

The Court quoted its earlier ruling in Dionisio v. Escano (362 Phil. 46 [1999]), which explained that restrictions on judges' business interests exist because such involvements may interfere with judicial duties and "tend to corrode the respect and dignity of the courts as the bastion of justice."

The Penalty

The Court classified conduct unbecoming a judge as a light charge under Rule 140 of the Rules of Court. Since this was Judge Diasen's first offense and he had already retired from the judiciary, a reprimand would not serve its purpose. The Court instead imposed a fine of P5,000.00.

Practical Takeaways

• Judges must avoid financial dealings with court employees. Selling goods to subordinates or employees of other court branches creates an inherent conflict, as judges exercise moral ascendancy over these individuals.
• The appearance of impropriety is enough. Even if a transaction does not push through, the mere attempt to profit from one's judicial position can constitute misconduct.
• Private business activities are not truly private for judges. The ethical standards of the judiciary follow judges beyond the courtroom and into their personal financial affairs.
• Lending money or engaging in business with persons who may come before the court is risky. Such dealings can trigger disqualification and expose judges to administrative liability.
• First-time offenders may still face fines. While reprimands are common for light charges, the Court may impose a fine when a reprimand would no longer serve a corrective purpose.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.