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ROSACIA V. BULALACAO

 Background Facts of the Case:

1. By virtue of a written Agreement, Bulalacao was hired as retained counsel of Tacma Corporation.

2. Later on, the lawyer-client relationship etween the respondent and Tacma !hils., "nc. was severed asshown y another agreement of even date

#. After almost nine $%& months from the date respondent's retainer agreement with Tacma, !hils., "nc. wasterminated, several employees of the corporation consulted the respondent for the purpose of filing anaction for illegal dismissal.

(. Thereafter, he agreed to handle the case for the said employees as against Tacma, !hils., "nc. y filing acomplaint efore the )ational Laor *elations Commission, and appearing in their ehalf. 3

+. Because of this, *osacia, president of Tacma, !hils., "nc., filed a complaint for disarment Bulalacao for  reach of lawyer-client trust even after the termination of their relation.

. Acting on the complaint, the Court in a resolution dated eruary 2(, 1%%2, resolved to refer the case to the"ntegrated Bar of the !hilippines $"B!& for investigation, report and recommendation.

. The "B! investigating commissioner found that respondent reached his oath of office and accordinglyrecommended respondent's suspension from the practice of law for three $#& months which was later onadopted y the oard. 

 Issue presented before us:

/. The sole issue to e addressed is whether or not respondent reached his oath of office for representing theemployees of his former client, Tacma, !hils., "nc., after the termination of their attorney-clientrelationship.

 Ruling of the Court:

1. 0es, the respondent reached his oath of office. *espondent is herey suspended from the practice of lawfor three months.

2. *espondent even does not now dispute this. "n fact, in his motion for reconsideration, respondent admittedthat he did commit an act ordering on grave misconduct, if not outright violation of his attorney's oath.  4

owever, respondent is pleading for the Court's compassion and leniency to reduce the "B! recommendedthree months suspension to either fine or admonition

#. The Court reiterates that an attorney owes loyalty to his client not only in the case in which he has

represented him but also after the relation of attorney and client has terminated  as it is not good practice to permit him afterwards to defend in another case other person against his former client under the prete3t that the case is distinct from, and independent of the former case.   "t ehooves respondent not onlyto 4eep inviolate the client's confidence, ut also to a!oid the a""earance of treachery and double

dealin# for only then can litigants e encouraged to entrust their secrets to their attorneys which is of  paramount importance in the administration of 5ustice.  $ The relation of attorney and client is one of confidence and trust in the highest degree.  % A lawyer owes fidelity to the cause of his client and he ought to e mindful of the trust and confidence reposed in him.  & An attorney not only ecomes familiar with all thefacts connected with his client's cause, ut also learns from his client the wea4 and strong points of thecase. )o opportunity must e given attorneys to ta4e advantage of the secrets of clients otained while the

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confidential relation of attorney and client e3ists. 6therwise, the legal profession will suffer y the loss of the confidence of the people. 

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 Background Facts of the Case:

1. Atty. 7a8uera is lawyer oth in 9uam and in the !hilippines.

2. The :uperior Court of 9uam suspended Atty. 7a8uera from the practice of law in 9uam for 2 years on theground of misconduct, as he ac8uired his clients property as payment for his legal services, then sold it andas a conse8uence otained an unreasonaly high fee for handling his client;s case.

#. "n its <ecision, the :uperior Court of 9uam stated that on August , 1%/, =dward Benavente, the creditor of a certain Castro, otained a 5udgment against Castro in a civil case. 7a8uera served as Castros counselin said case. Castros property su5ect of the case, a parcel of land, was to e sold at a pulic auction insatisfaction of his oligation to Benavente. Castro, however, retained the right of redemption over the property for one year. The right of redemption could e e3ercised y paying the amount of the 5udgmentdet within the aforesaid period.

(. At the auction sale, Benavente purchased Castros property for ive undred >.:. <ollars $>:?+@@.@@&, theamount which Castro was ad5udged to pay him.

+. Castro, in consideration of 7a8ueras legal services in the civil case involving Benavente, entered into anoral agreement with 7a8uera and assigned his right of redemption in favor of the latter.

. 7a8uera then e3ercised Castros right of redemption y paying Benavente >:?+2+.@@ in satisfaction of the 5udgment det. Thereafter, 7a8uera had the title to the property transferred in his name.

. :use8uently, 7a8uera sold the property to C.:. Chang and C.C. Chang for Three undred TwentyThousand >.:. <ollars $>:?#2@,@@@.@@&.

/. 6n anuary 1+, 1%%(, the 9uam Bar =thics Committee $Committee& conducted hearings regarding7a8ueras alleged misconduct.

%. 7a8uera did not deny that Castro e3ecuted a 8uitclaim deed to the property in his favor as compensationfor past legal services and that the transaction, e3cept for the deed itself, was oral and was not made pursuant to a prior written agreement. owever, he contended that the transaction was made three daysfollowing the alleged termination of the attorney-client relationship etween them, and that the property didnot constitute an e3oritant fee for his legal services to Castro.

Conclusions of the Superior Court of Guam:

1@. The :uperior court of 9uam found that

a. the attorney-client relationship etween 7a8uera and Castro was not yet completely terminatedwhen they entered into the oral agreement to transfer Castros right of redemption to 7a8uera on<ecemer 21, 1%/.

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 . "t also held that 7a8uera profited too much from the eventual transfer of Castros property to himsince he was ale to sell the same to the Changs with more than >:?2@@,@@@.@@ in profit, whereashis legal fees for services rendered to Castro amounted only to >:?(+,@@@.@@.

11. The :upreme Court of the !hilippines was later on informed y the <istrict Court of 9uam aout this.

 Proceedings in the Philippines:

12. The :upreme Court referred the matter of 7a8uera;s suspension in 9uam to the Bar Confidant for comment in its *esolution dated )ovemer 1%, 1%%. >nder :ection 2, *ule 1#/ of the *evised *ules of Court, the disarment or suspension of a memer of the !hilippine Bar in a foreign 5urisdiction, where hehas also een admitted as an attorney, is also a ground for his disarment or suspension in this realm, provided the foreign courts action is y reason of an act or omission constituting deceit, malpractice or other gross misconduct, grossly immoral conduct, or a violation of the lawyers oath.

1#. 6n 6ctoer %, 2@@#, the "B! sumitted to the Court its *eport and *ecommendation and its *esolution )o.D"-2@@#-11@, indefinitely suspending 7a8uera from the practice of law within the !hilippines until andunless he updates and pays his "B! memership dues in full.

1(. 6n the asis of the <ecision of the :uperior Court of 9uam, the "B! concluded that although the said courtfound 7a8uera liale for misconduct, there is no evidence to estalish that E7a8ueraF committed a reachof ethics in the !hilippines. owever, the "B! still resolved to suspend him indefinitely for his failure to pay his annual dues as a memer of the "B! since 1%, which failure is, in turn, a ground for removal of the name of the delin8uent memer from the *oll of Attorneys under :ection 1@, *ule 1#%-A of the*evised *ules of Court.

 Issue presented before us:

1+. The issue is whether a memer of the !hilippine Bar who was disarred or suspended from the practice of law in a foreign 5urisdiction where he has also een admitted as an attorney may e meted the samesanction as a memer of the !hilippine Bar for the same infraction committed in the foreign 5urisdiction.

 Ruling of the Court:

1. 0es, he may e.

1. 7a8uera;s acts in 9uam which resulted in his two $2&-year suspension from the practice of law in that 5urisdiction are also valid grounds for his suspension from the practice of law in the !hilippines. :uch actsare violative of a lawyer;s sworn duty to act with fidelity toward his clients. They are also violative of theCode of !rofessional *esponsiility, specifically, Canon 1 which states that EaF lawyer owes fidelity to thecause of his client and shall e mindful the trust and confidence reposed in himG and *ule 1.@1 which prohiits lawyers from engaging in unlawful, dishonest, immoral or deceitful conduct. The re8uirement of good moral character is not only a condition precedent to admission to the !hilippine Bar ut is also acontinuing re8uirement to maintain ones goods standing in the legal profession.

1/. Ta4e note though that the 9uam :uperior Courts 5udgment ordering 7a8ueras suspension from the practiceof law in 1uam does not automatically result in his sus"ension or disbarment in the *hili""ines.

Under Section %5346 Rule 73& of the Re!ised Rules of Court the acts 8hich led to his sus"ension in

1uam are mere #rounds for disbarment or sus"ension in this 9urisdiction at that only if the asis of the foreign courts action includes any of the grounds for disarment or suspension in this 5urisdiction.Li:e8ise the 9ud#ment of the Su"erior Court of 1uam only constitutes  prima facie  e!idence of 

,a;ueras unethical acts as a la8yer. 7ore fundamentally, due process demands that he e given theopportunity to defend himself and to present testimonial and documentary evidence on the matter in an

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investigation to e conducted in accordance with *ule 1#%-B of the *evised *ules of Court. :aid rulemandates that a respondent lawyer must in all cases e notified of the charges against him. "t is only after reasonale notice and failure on the part of the respondent lawyer to appear during the scheduledinvestigation that an investigation may e conducted e3 parte.

1%. The power of the Court to disar or suspend a lawyer for acts or omissions committed in a foreign

 5urisdiction is found in :ection 2, *ule 1#/ of the *evised *ules of Court, as amended y :upreme Court*esolution dated eruary 1#, 1%%2, which states

H:ection 2. <isarment or suspension of attorneys y :upreme Court, grounds therefor.A memer of the ar may e disarred or suspended from his office as attorney y the :upreme Court for any deceit, malpractice,or other gross misconduct in such office, grossly immoral conduct, or y reason of his conviction of a crimeinvolving moral turpitude, or for any violation of the oath which he is re8uired to ta4e efore admission to

 practice, or for a willful disoedience appearing as attorney for a party to a case without authority to do so.The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or 

 ro4ers, constitutes malpractice.

The disarment or suspension of a memer of the !hilippine Bar y a competent court or other disciplinatory agency in a foreign 5urisdiction where he has also een admitted as an attorney is a ground for his disarment or suspension if the asis of such action includes any of the acts hereinaove enumerated.

-he 9ud#ment resolution or order of the forei#n court or disci"linary a#ency shall be  prima

 facie e!idence of the #round for disbarment or sus"ension.<

2@. The Court must therefore determine whether 7a8uera;s acts, namely ac8uiring y assignment Castrosright of redemption over the property su5ect of the civil case where 7a8uera appeared as counsel for himGe3ercising the right of redemptionG and, suse8uently selling the property for a huge profit, violate!hilippine law or the standards of ethical ehavior for memers of the !hilippine Bar and thus constitutegrounds for his suspension or disarment in this 5urisdiction.

7. The :uperior Court of 9uam found that 7a8uera ac8uired his clients property y e3ercising the right of redemption previously assigned to him y the client in payment of his legal services. Such transaction

falls s;uarely under Article 74= in relation to Article 74=7 "ara#ra"h of the Ci!il Code of the

*hili""ines. *ara#ra"h of Article 74=7 "rohibits the la8yers ac;uisition by assi#nment of theclients "ro"erty 8hich is the sub9ect of the liti#ation handled by the la8yer. Under Article 74= the

"rohibition e>tends to sales in le#al redem"tion.

22. The prohiition ordained in paragraph + of Article 1(%1 and Article 1(%2 is founded on pulic policy ecause, y virtue of his office, an attorney may easily ta4e advantage of the credulity and ignorance of hisclient and unduly enrich himself at the e3pense of his client.

2#. The case of  In re: Ruste illustrates the significance of the aforementioned prohiition. "n that case, theattorney ac8uired his clients property su5ect of a case where he was acting as counsel pursuant to a deed of sale e3ecuted y his clients in his favor. e contended that the sale was made at the instance of his clients ecause they had no money to pay him for his services. The Court ruled that the lawyers ac8uisition of the property of his clients under the circumstances otaining therein rendered him liale for malpractice. The

Court held

HIhether the deed of sale in 8uestion was e3ecuted at the instance of the spouses driven y financialnecessity, as contended y the respondent, or at the latter;s ehest, as contended y the complainant, is of nomoment. "n either case an attorney occupies a vantage position to press upon or dictate his terms to a harassedclient, in reach of the rule so amply protective of the confidential relations, which must necessarily e3ist

 etween attorney and client, and of the rights of oth.J

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2(. The :uperior Court of 9uam also hinted that 7a8ueras ac8uisition of Castros right of redemption , his

 subsequent eercise of said right, and his act of selling the redeemed propert! for huge profits "ere tainted 

"ith deceit and bad faith "hen it concluded that #aquera charged Castro an eorbitant fee for his legal 

 ser$ices% The court held that since the assignment of the right of redemption to 7a8uera was in payment for his legal services, and since the property redeemed y him had a mar4et value of >:?2(/,22@.@@ as of <ecemer 21, 1%/ $the date when the right of redemption was assigned to him&, he is liale for misconduct for accepting payment for his legal services way eyond his actual fees which amounted onlyto >:?(+,@@@.@@.

&n the matter of non'pa!ment of IBP dues as a ground for suspension:

25.  )evertheless, the Court agrees with the "B! that 7a8uera should e suspended from the practice of law for non-payment of his "B! memership dues from 1% up to the present. >nder :ection 1@, *ule 1#%-A of the *evised *ules of Court, non-payment of memership dues for si3 $& months shall warrant suspensionof memership in the "B!, and default in such payment for one year shall e ground for removal of thename of the delin8uent memer from the *oll of Attorneys.