In Re: Maquera

A foreign judgment suspending or disbarring a member of the Philippine Bar constitutes only prima facie evidence of the ground for local suspension or disbarment, requiring a separate due process determination where the respondent is afforded the opportunity to be heard and present evidence.

Atty. Leon G. Maquera represented a client, Castro, in a civil case in Guam. Following a judgment against Castro, his property was sold at a public auction, subject to a one-year right of redemption. Castro assigned this right of redemption to Maquera as payment for legal services. Maquera exercised the right, acquired the property for US$525.00, and sold it shortly thereafter for US$320,000.00, realizing a profit significantly exceeding his actual legal fees of US$45,000.00.

• Admission to the Bar and Guam Practice: Maquera was admitted to the Philippine Bar on February 28, 1958, and to the Guam Bar on October 18, 1974.
• The Litigated Property and Assignment: In a civil case in Guam, Maquera represented Castro, who lost the case and whose property was purchased at auction by the judgment creditor, Benavente, for US$500.00. Castro retained a one-year right of redemption. On December 21, 1987, Castro assigned this right of redemption to Maquera as compensation for legal services.
• Exercise of Redemption and Subsequent Sale: On January 8, 1988, Maquera exercised the right of redemption by paying US$525.00 to Benavente and had the title transferred to his name. On December 31, 1988, Maquera sold the property to third parties for US$320,000.00.
• Guam Suspension: The Guam Bar Ethics Committee filed a petition charging Maquera with violating Rules 1.5 and 1.8(a) of the Model Rules of Professional Conduct for obtaining an unreasonably high fee and entering into a business transaction with a client without complying with disclosure and writing requirements. The Superior Court of Guam found the attorney-client relationship was not completely terminated at the time of the assignment and that Maquera profited excessively. Maquera was suspended from the practice of law in Guam for two years.
• IBP Proceedings: The IBP concluded there was no evidence to establish a breach of ethics in the Philippines, given the acts occurred in Guam. However, the IBP noted Maquera had failed to pay his IBP membership dues since 1977 and recommended indefinite suspension pursuant to Section 10, Rule 139-A of the Revised Rules of Court.

• Unreasonable Fee: The Guam Bar Ethics Committee alleged Maquera obtained an unreasonably high fee for his services, as the profit from the sale of the property vastly exceeded the value of his legal services.
• Business Transaction with Client: The Committee alleged Maquera violated Rule 1.8(a) of the Model Rules by entering into a business transaction with a client and acquiring a pecuniary interest adverse to the client without ensuring the terms were fair and reasonable, fully disclosed, and reduced to writing.

• Termination of Attorney-Client Relationship: Maquera contended that the assignment transaction occurred three days after the attorney-client relationship between him and Castro had terminated.
• Reasonableness of Fee: Maquera maintained that the property acquired did not constitute an exorbitant fee for his legal services rendered to Castro.

• Effect of Foreign Suspension: Whether the suspension of a member of the Philippine Bar by a foreign court constitutes a ground for suspension or disbarment in the Philippines.
• Due Process Requirements: Whether a foreign judgment of suspension automatically results in suspension in the Philippines, or whether due process requires a separate determination where the respondent is given the opportunity to be heard.
• Non-Payment of IBP Dues: Whether failure to pay IBP membership dues warrants suspension from the practice of law.

• Effect of Foreign Suspension: Acts constituting deceit, malpractice, or gross misconduct in a foreign jurisdiction—specifically acquiring a client's litigated property in violation of Articles 1491 and 1492 of the Civil Code—are valid grounds for suspension or disbarment in the Philippines under Section 27, Rule 138 of the Revised Rules of Court. Maquera's acquisition of the right of redemption over the litigated property he was handling as counsel falls squarely under the prohibition against lawyers acquiring by assignment the property that is the subject of litigation.
• Due Process Requirements: A foreign judgment of suspension does not automatically result in suspension in the Philippines. Under Section 27, Rule 138, the foreign judgment constitutes only prima facie evidence of the ground for disbarment or suspension. Due process mandates that the respondent lawyer be notified of the charges and given the opportunity to defend himself and present evidence before a local sanction is imposed. Because it was uncertain whether Maquera received the prior IBP notice, a show-cause order was necessary.
• Non-Payment of IBP Dues: Suspension is warranted for non-payment of IBP membership dues. Under Section 10, Rule 139-A of the Revised Rules of Court, default in payment for one year is a ground for removal from the Roll of Attorneys. Maquera's failure to pay dues since 1977 justified his immediate suspension.

• Prima Facie Evidence Doctrine in Foreign Disbarment — Under Section 27, Rule 138 of the Revised Rules of Court, the judgment of a foreign court or disciplinary agency suspending or disbarring a member of the Philippine Bar is only prima facie evidence of the ground for local suspension or disbarment. It does not possess automatic executory force, consistent with Section 48, Rule 139, which treats foreign judgments against a person as presumptive evidence of a right that may be repelled by evidence of a clear mistake of law.
• Prohibition Against Acquisition of Litigated Property by Lawyers — Founded on public policy, Article 1491(5) in relation to Article 1492 of the Civil Code prohibits lawyers from acquiring by assignment or legal redemption the property and rights that are the object of any litigation in which they take part by virtue of their profession. This prevents lawyers from taking advantage of the credulity and ignorance of their clients and unduly enriching themselves at their clients' expense.

• "The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinatory agency in a foreign jurisdiction where he has also been admitted as an attorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated. The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension."
• "The prohibition ordained in paragraph 5 of Article 1491 and Article 1492 is founded on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at the expense of his client."

• In re: Ruste, 70 Phil. 243 (1940) — Followed. Established that a lawyer's acquisition of a client's property subject of litigation where the lawyer is counsel constitutes malpractice, regardless of whether the client initiated the transaction out of financial necessity or the lawyer dictated the terms.
• Nagarmull v. Binalbagan-Isabela Sugar Co., Inc., 144 Phil 72 (1970) — Cited by analogy. Supported the principle that a foreign judgment against a person is only presumptive evidence of a right against that person, which may be repelled by evidence of clear mistake of law.

• Section 27, Rule 138, Revised Rules of Court — Enumerates the grounds for disbarment or suspension, including deceit, malpractice, gross misconduct, and violation of the lawyer's oath. As amended in 1992, it provides that disbarment or suspension by a foreign jurisdiction is a ground for local disbarment or suspension if based on analogous acts, and that the foreign judgment serves as prima facie evidence.
• Article 1491(5), Civil Code — Prohibits lawyers from acquiring by purchase or assignment the property and rights in litigation in which they take part by virtue of their profession. Applied to Maquera's acquisition of the right of redemption over the property subject of the case he handled.
• Article 1492, Civil Code — Extends the prohibitions of Article 1491 to sales in legal redemption. Applied to Maquera's exercise of the right of redemption.
• Section 10, Rule 139-A, Revised Rules of Court — Provides that default in the payment of IBP membership dues for one year is a ground for removal of the delinquent member's name from the Roll of Attorneys. Applied to suspend Maquera for non-payment since 1977.
• Canon 17 and Rule 1.01, Code of Professional Responsibility — Require a lawyer to act with fidelity to the client's cause and prohibit unlawful, dishonest, immoral, or deceitful conduct. Cited as violated by Maquera's acts in Guam.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., Azcuna, and Chico-Nazario, JJ.