SALN Declarations and Judicial Ethics: Lessons from a Judge's Insurance Business Case

The Supreme Court recently reminded the judiciary that owning a business—even one inherited and transparently declared—can still violate ethical rules. In Intia v. Ferrer (A.M. No. RTJ-24-064, May 13, 2024), the Court fined a retired judge PHP 35,000.00 for failing to divest his interest in an insurance agency, despite his honest declarations in his Statement of Assets, Liabilities, and Net Worth (SALN). The ruling offers important guidance on how the Court treats good faith errors in financial disclosures.

The Case Against the Judge

Judge Erwin Virgilio P. Ferrer faced several administrative charges from a fellow judge: allegedly instigating a lawyer against a colleague, engaging in an insurance business, and delaying cases involving persons deprived of liberty (PDLs).

The Court dismissed most charges. The accusation that Ferrer influenced a lawyer to file complaints against another judge failed for lack of evidence—the lawyer himself executed an affidavit denying any such instigation. Claims about mistreating a police officer and a barangay captain were dismissed as hearsay, since the complaining judge had no personal knowledge of the incidents. Similarly, the delay-of-cases charge failed because a jail warden's list of pending cases was insufficient proof; an official judicial audit found no undue delay.

The Insurance Business Violation

The one charge that stuck concerned Ferrer's ownership of EVPF Insurance Agency, a family business he inherited from his father. Administrative Circular No. 5 (October 4, 1988) prohibits all judiciary officials and employees from being commissioned as insurance agents or engaging in related activities.

The Court explained that this prohibition is absolute. Even though Ferrer did not solicit clients, was not involved in daily operations, and the business was located outside his court's jurisdiction, his mere ownership violated the rule. The policy behind the circular is straightforward: judiciary personnel must devote their full time and attention to public service to maintain public confidence in the courts.

Why Good Faith Mattered

What saved Ferrer from a harsher penalty were the circumstances showing good faith. He inherited the business from his father, never used his position to attract clients, consistently declared his business interest in his SALN, and signed public documents transparently bearing his name.

The Court found he had no intention of circumventing the rules—his only fault was failing to divest his financial interest upon becoming a judge. This distinction mattered. The Court imposed the minimum fine of PHP 35,000.00 under Section 17, Rule 140 of the Rules of Court, rather than a higher penalty or suspension.

The SALN Connection

The ruling underscores the importance of SALN declarations. Ferrer's consistent disclosure of his business interest demonstrated transparency and good faith, which the Court considered a mitigating factor. This sends a clear message: honest declarations do not excuse violations, but they can significantly affect the penalty imposed.

Practical Takeaways

• Disclosure is not immunity. Declaring a business interest in a SALN shows good faith but does not cure an absolute prohibition. Judges and court personnel must divest prohibited interests upon assuming office.
• Inherited businesses still count. Ownership alone triggers liability under Administrative Circular No. 5, even if the owner does not manage operations or solicit clients.
• Hearsay cannot support administrative charges. Complaints based on secondhand information, without affidavits from alleged victims, will be dismissed for lack of substantial evidence.
• A list of pending cases is not proof of delay. To establish undue delay, there must be concrete evidence that a judge failed to act within prescribed periods.
• Good faith affects penalties, not liability. Transparent SALN declarations and clean motives can reduce fines but do not erase the violation itself.

For judiciary personnel, the lesson is clear: when in doubt about a business interest, divest it. Transparency is commendable, but compliance is required.

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