B.M. No. 793 - IN RE: Atty. Leon G. Maquera

Case Summary (B.M. No. 793)

Petitioner

Guam Bar Ethics Committee (initiated disciplinary proceedings against Maquera in Guam and petitioned the Guam Superior Court for sanctions).

Respondent

Atty. Leon G. Maquera (subject of the Guam disciplinary proceedings and subsequent Philippine proceedings).

Key Dates

Admission to Philippine Bar: February 28, 1958.
Admission to practice in Guam: October 18, 1974.
Relevant events in Guam: auction and redemption events (1987–1988).
Guam Superior Court Decision suspending Maquera: May 7, 1996.
Guam District Court letter to the Philippine Supreme Court: August 20, 1996.
Philippine Supreme Court interim actions and IBP proceedings: 1996–2003.
Supreme Court Resolution ordering show cause and interim suspension: July 30, 2004.

Applicable Law and Rules (as stated in the record)

1987 Philippine Constitution is the constitutional basis (decision date post-1990).
Section 27, Rule 138, Revised Rules of Court (disbarment or suspension by reason of foreign disciplinary action where attorney is likewise admitted).
Section 10, Rule 139-A, Revised Rules of Court (IBP membership dues delinquency as ground for suspension/removal from Roll).
Sections 24, 25 in relation to Section 19(a), Rule 132 (admissibility/certification of foreign public documents).
Section 48, Rule 139 (foreign judgment as presumptive evidence).
Section 8, Rule 139-B (investigation procedures, notice, opportunity to defend; ex parte only upon failure to appear).
Civil Code provisions: Article 1491(5) (prohibition on lawyer acquiring property or rights in litigation, including acquisition by assignment) and Article 1492 (applicability to sales in legal redemption).
Model Rules of Professional Conduct (Rules 1.5 — fees; 1.8(a) — business transactions with client) as applied by the Guam court.
Code of Professional Responsibility (Canon 17 — fidelity to client; Rule 1.01 — prohibition on unlawful, dishonest or deceitful conduct).

Facts Found by the Guam Superior Court

The Guam court found that Maquera represented a client, Castro, in a civil action in which creditor Benavente obtained a judgment. The property subject to execution and sale was purchased at auction by Benavente for the judgment amount (US$500). Castro retained a one-year right of redemption. On December 21, 1987, in consideration for legal services, Castro orally assigned his right of redemption to Maquera. Maquera exercised the right on January 8, 1988 by paying US$525, had the title transferred to his name, and on December 31, 1988 sold the property to purchasers for US$320,000. The Guam Ethics Committee alleged violations of Model Rules 1.5 (unreasonable fee) and 1.8(a) (business transaction with client), and the Superior Court concluded Maquera profited excessively relative to the legal fees (found fees to be approximately US$45,000), and that the assignment occurred while the attorney-client relationship still existed.

IBP Investigation and Procedural History in the Philippines

The District Court of Guam notified the Philippine Supreme Court of Maquera’s suspension; the Court referred the matter to the Bar Confidant, who sought the Guam case record. The certified record was received and the case was referred to the IBP for investigation and recommendation. The IBP attempted to serve Maquera but the notice returned unserved because he had moved from his last known Guam address without leaving a forwarding address. The IBP reported that, while the Guam court found Maquera liable for misconduct, there was no direct evidence that the same breach occurred in the Philippines. Nevertheless, the IBP recommended suspension for Maquera’s longstanding nonpayment of IBP dues, which is independently a ground for disciplinary action.

Legal Basis for Philippine Discipline from Foreign Action

Section 27, Rule 138 provides that disbarment or suspension by a competent foreign court where the attorney has also been admitted is a ground for disbarment or suspension in the Philippines if the foreign action is based on deceit, malpractice, gross misconduct, grossly immoral conduct, conviction of a crime involving moral turpitude, or violation of the lawyer’s oath. The foreign judgment or order serves as prima facie evidence of the ground for disbarment or suspension. The Philippine Supreme Court thus must determine whether the acts found by the Guam court fall within the enumerated grounds under Philippine rules and whether such finding warrants reciprocal discipline here.

Civil Code Prohibitions and Public Policy Considerations

Article 1491(5) and Article 1492 of the Civil Code prohibit acquisition by lawyers of property or rights involved in litigation where they represent a party, including acquisition by assignment and sales in legal redemption. The bar on such transactions is grounded in public policy to prevent exploitation of the client’s trust, to avoid undue influence by an attorney over a vulnerable client, and to prevent unjust enrichment at the client’s expense. The Guam court’s finding that Maquera accepted assignment of the redemption right and later sold the property for substantial profit places his conduct squarely within the conduct proscribed by those Civil Code provisions and the policy considerations supporting them.

Ethical Violations under the Code of Professional Responsibility and Model Rules

The Guam findings were that Maquera entered into a business transaction with his client without the requisite written disclosures, and obtained an unreasonably high pecuniary benefit relative to his legal fees. Under the Model Rules (Rule 1.8(a)) such business transactions with clients must be fair and reasonable, fully disclosed in writing, and the client given opportunity to seek independent advice, with written consent. Under the Philippine Code of Professional Responsibility, Canon 17 and Rule 1.01 require fidelity to the client and prohibit deceitful or dishonest conduct. The facts as found (oral assignment while relationship was ongoing; substantial profit far exceeding reasonable fees) implicate those ethical standards and support a determination of misconduct under Philippine ethics rules.

Prima Facie Effect of Foreign Judgment and Burden of Proof

The Guam judgment constitutes prima facie evidence under Section 27, Rule 138. However, it does not automatically result in reciprocal discipline in the Philippines. The foreign judgment’s prima facie character may be rebutted by showing clear mistake of law or contrary evidence; likewise, the Philippine disciplinary process must independently determine whether the acts complained of constitute grounds under Philippine rules. Thus the Philippine Supreme Court must afford due process and pursue an investigation under Rule 139-B to allow the respondent to rebut or explain the charged misconduct.

Due Process Requirements and Necessity of Proper Notice

Rule 139-B requires that a respondent lawyer be notified of the charges and given full opportunity to present evidence, witnesses, and argument. An investigation may proceed ex parte only after reasonable notice and the respondent’s failure to appear. In this matter, service of the IBP hearing notice failed and Maquera has not yet been able to present evidence in his defense; hence, the Court directed the Bar Confidant to ascertain and serve Maquera’s current address in Guam and ordered that he be given a show-cause opportunity within fifteen (15) days to explain why he should not be suspended or disbarred. This adheres to the requirement that foreign disciplinary findings be tested in a domestic proceeding that respects procedural due process.

IBP Recommendation on Membership Dues

Case Syllabus (B.M. No. 793)

Case Title, Citation and Nature

Full title as extracted from the source: IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA.
Citation: 479 Phil. 322, En Banc, B.M. No. 793, July 30, 2004.
Nature: A disciplinary matter invoking Section 27, Rule 138 of the Revised Rules of Court concerning whether disciplinary action imposed on a Philippine-bar member by a foreign jurisdiction (Guam) may be the basis for disbarment or suspension in the Philippines; includes concurrent IBP disciplinary issues (non-payment of IBP dues).

Procedural Posture Leading to Supreme Court Resolution

On August 20, 1996, the District Court of Guam notified the Supreme Court of the Philippines of Atty. Leon G. Maquera's two-year suspension from practice in Guam, pursuant to the Superior Court of Guam Decision dated May 7, 1996 (Special Proceedings Case No. SP0075-94).
The Supreme Court referred the matter to the Bar Confidant for comment in its Resolution dated November 19, 1996.
Bar Confidant (Atty. Erlinda C. Verzosa) on February 20, 1997 recommended obtaining complete records because initial transmittals lacked factual and legal bases for the Guam suspension and were insufficient to determine Philippine ethical culpability.
Pursuant to a March 18, 1997 directive, the Bar Confidant requested certified copies of the disciplinary record from the District Court of Guam on November 13, 1997; the certified records were received December 8, 1997.
The case was referred to the Integrated Bar of the Philippines (IBP) for investigation and recommendation, with a 60‑day period for the IBP to act upon receipt of the records.
The IBP served Maquera a Notice of Hearing for July 28, 1998; the notice was returned unserved because Maquera had moved from his last known Guam address and left no forwarding address.
On October 9, 2003, the IBP submitted its Report and Recommendation and Resolution No. XVI-2003-110, indefinitely suspending Maquera from practicing law in the Philippines until and unless he updates and pays his IBP membership dues in full.

Facts Found by the Superior Court of Guam (as supplied to the Philippine Court)

Maquera was admitted to the Philippine Bar on February 28, 1958, and admitted to practice law in the territory of Guam on October 18, 1974.
August 6, 1987: Edward Benavente obtained a judgment against Castro in a civil case in Guam; Maquera acted as Castro's counsel.
The property belonging to Castro was ordered sold at public auction to satisfy the judgment; Castro retained a one-year right of redemption to pay the judgment debt and redeem the property.
At auction, Benavente purchased Castro’s property for US$500—equal to the judgment amount.
December 21, 1987: Castro, in consideration for Maquera’s legal services in the Benavente matter, entered into an oral agreement assigning his right of redemption to Maquera.
January 8, 1988: Maquera exercised Castro’s right of redemption by paying Benavente US$525 and thereafter caused the property title to be transferred to his name.
December 31, 1988: Maquera sold the property to C.S. Chang and C.C. Chang for US$320,000.
The Guam Bar Ethics Committee held hearings on January 15, 1994, and thereafter filed a Petition in the Superior Court of Guam alleging violations of Model Rules 1.5 and 1.8(a), claiming Maquera obtained an unreasonably high fee and failed to comply with Rule 1.8(a)’s requirements for business transactions with a client.
The Committee recommended: suspension for two years (with all but 30 days deferred), return to Castro of the difference between sale price and legal-service amount, payment of disciplinary costs, public reprimand, and notification of other jurisdictions of the disciplinary action.
Maquera did not deny the quitclaim deed and conceded the oral nature of the transaction (except for the deed), but claimed the agreement was made three days after alleged termination of the attorney-client relationship and asserted the property did not constitute an exorbitant fee.
May 7, 1996: The Superior Court of Guam rendered its Decision suspending Maquera for two years and ordering him to take the Multi-State Professional Responsibility Examination (MPRE) during the suspension period.
The Guam court found (inter alia) that the attorney-client relationship had not terminated at the time of the December 21, 1987 assignment, that Maquera profited in excess of US$200,000 from the sale while his legal fees were approximately US$45,000, and that he had admitted general awareness of the Model Rules’ requirements regarding business transactions with clients.

Legal Issue Presented to the Philippine Supreme Court

Central question: May a member of the Philippine Bar who was disbarred or suspended from practice in a foreign jurisdiction where he is also admitted be meted the same sanction in the Philippines for the same infraction committed in that foreign jurisdiction?
Subsidiary determinations: whether Maquera’s acts (acquisition by assignment of client’s right of redemption, exercising it, and selling the property for significant profit) violate Philippine law or ethical standards for Philippine lawyers and thus constitute grounds for suspension or disbarment here.

Controlling Philippine Rules, Statutes and Doctrines Cited

Section 27, Rule 138, Revised Rules of Court (as amended by Supreme Court Resolution dated February 13, 1992): authorizes disbarment or suspension for deceit, malpractice, gross misconduct, grossly immoral conduct, conviction of a crime involving moral turpitude, violation of the lawyer’s oath, or willful disobedience; provides that disbarment or suspension by a competent foreign court or disciplinary agency is a ground here if the basis includes any enumerated acts; a foreign judgment, resolution or order shall be prima facie evidence of the ground for disbarment or suspension (emphasis supplied).
Article 1491, paragraph 5, Civil Code: prohibits certain officers, including lawyers, from acquiring by purchase (even at public or judicial auction) property and rights in litigation in which they take part by virtue of their profession; prohibition includes acquiring by assignment.
Article 1492, Civil Code: extends the prohibitions to sales in legal redemption, compromises and renunciations.
Code of Professional Respo