legal ethics report: special disabilities of lawyers

7/28/2019 Legal Ethics Report: SPECIAL DISABILITIES OF LAWYERS

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SPECIALDISABILITIESOF LAWYERSReported by:

Sheila Mae Cabahug


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Purchase of Property or Rights

of Clients Subject toLitigation, Prohibited:

Purchase is VOID.

ARTICLE 1491 of the CIVIL CODE OF THEPHILIPPINES.


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The following persons cannot acquire

by purchase, even at a public orjudicial auction, either in person orthrough the mediation of another:

1.) Guardians

2.) Agents

3.) Administrators

4.) Public Officers and Employees5.) Judicial Officers and Employees

6.) Prosecuting Attorneys and Lawyers

7.) Others specially disqualified by law


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Purchase Cannot Be Ratified

The nullity of such definitive contracts is definiteand permanent and cannot be cured byratification.

The public interest and public policy remainparamount and do not permit of compromise orratification.


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Lawyer Shall Hold The Property In

Trust For The Client.

Any contract of sale in violation of the statutory

prohibition ( Art. 1491, NCC ) is VOID and the lawyer-purchaser shall hold the same in trust for the clientand he cannot acquire it by prescription.

The client can recover the property including thefruits but he must return the purchase price with legalintersest.


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There is Violation Even If the Lawyer Did

Not Pay Money For It.

The prohibition under article 1491 applies even if

the lawyer has not paid money for the property.

It does not matter whether the sale was at thebehest of the client.

Lawyers good faith is no defense .


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In re: RUSTE

70 Phil. 243Facts: In cadastral case No. 6, G. L. R. O. Record No. 483 of the Court of First Instance of Zamboanga, the

respondent, Melchor E. Ruste, appeared for and represented, as counsel, Severa Ventura and her husband,Mateo San Juan, the herein complainant, who claimed lot No. 3765; and as a result of said cadastralproceedings, an undivided eleven-twentieth (11/20) share of said lot was adjudicated by said court to said

claimants. There was no agreement the respondent and his said clients as to the amount of his fees; butthat they paid to him upon demand on different occasions the sums of (30 and P25 as attorney's fees. Aftersaid payments, the respondent again demanded of the complainant and his wife as additional fees the sumof P25, but they had no money to pay, him, and so he asked them to execute in his favour a contract oflease, and a contract of sale, of their share in said lot No. 3764 in order that he may be able to borrow orraise said sum of P25;

Issue:Whether or not the respondent has failed to account to the aggrieved spouses for the various amountsreceived by him on account of the transactions effected by him pertaining to the portion of lot No. 3764?

Held:There is evidence to show that the respondent has failed to account to the aggrieved spouses for thevarious amounts received by him on account of the transactions effected by him pertaining to the portionof lot No. 3764. However, as the evidence is conflicting and the statements of the parties are contradictoryon this point, it is believed that the determination of the exact amount due them by the respondentshould better elucidated and determined in an appropriate action which the complaint and his spousemay institute against the respondent for this purpose. The property being thus in suit, which therespondent was waging on behalf of his clients, his acquisition thereof by the deed of sale, Exhibit B,constitutes malpractice. (Hernandez vs. Villanueva, 40 Phil., 775; In re Calderon, 7 Phil. 427.) Whether thedeed of sale in question was executed at the instance of the spouses driven by financial necessity, ascontended by the respondent, or at the latter's behest, as contended by the complainant, is of no moment.In either case as attorney occupies a vantage position to press upon or dictate his terms to a harassedclient, in breach of the "rule so amply protective of the confidential relations, which must necessarily exist

between attorney and client, and of the rights of both." (Hernandez vs. Villanueva, supra.). Therespondent is found guilty of malpractice and is hereby suspended for a period of one year.


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When Purchase Of The Clients Property Is Not

Violation Of The Law?

When the property he purchased from the client isnot subject of a litigation

If he acquired it before he become counsel for theclient.

He acquired it after the case involving the propertyhad terminated.


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Extension of Prohibition In Article 1491:

1.) Legal Redemption It is when the debtor obtains legal title to collateral for a debt by paying

the creditor the replacement value of the collateral in a lump sum.

2.)Compromises A settlement of differences by arbitration or by consent reached by

mutual agreement.

3.)Renunciation Give up, refuse, or resign usually by formal declaration.

( Article 1492, NCC )

I S i f h P i f L i h T i f G f A


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In re: Suspension from the Practice of Law in the Territory of Guam of Atty.Leon G. Maquera.

FACTS: Atty. Leon G. Maquera was suspended from the practice of law in Guam for misconduct, as heacquired his client's property as payment for his legal services, then sold it and as a consequence obtainedan unreasonably high fee for handling his client's case. Edward Benavente, the creditor of a certain Castro,obtained a judgment against Castro in a civil case. Maquera served as Castro's counsel in said case.Castro's property subject of the case, a parcel of land, was to be sold at a public auction in satisfaction ofhis obligation to Benavente. Castro, however, retained the right of redemption over the property for one

year. The right of redemption could be exercised by paying the amount of the judgment debt within theaforesaid period.At the auction sale, Benavente purchased Castro's property for Five Hundred U.S. Dollars(US$500.00), the amount which Castro was adjudged to pay him.On December 21, 1987, Castro, inconsideration of Maquera's legal services in the civil case involving Benavente, entered into an oralagreement with Maquera and assigned his right of redemption in favor of the latter.On January 8, 1988,Maquera exercised Castro's right of redemption by paying Benavente US$525.00 in satisfaction of the

judgment debt. Thereafter, Maquera had the title to the property transferred in his name. On December31, 1988, Maquera sold the property to C.S. Chang and C.C. Chang for Three Hundred Twenty ThousandU.S. Dollars (US$320,000.00).

ISSUE:Whether or not n Atty. Maquera is liable for misconduct and within the power of the Court to disbaror suspend a lawyer for acts or omissions committed in a foreign jurisdiction?

HELD: Yes. 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 groundfor his disbarment or suspension if the basis of such action includes for any deceit, malpractice, or othergross misconduct in such office (Section 27, Rule 138 of the Revised Rules of Court). The Superior Court ofGuam found that Maquera acquired his client's property by exercising the right of redemption previouslyassigned to him by the client in payment of his legal services. Such transaction falls squarely under Article1492 in relation to Article 1491, paragraph 5 of the Civil Code of the Philippines. Paragraph 5 of Article 1491prohibits the lawyer's acquisition by assignment of the client's property which is the subject of thelitigation handled by the lawyer. Under Article 1492,the prohibition extends to sales in legalredemption.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 ignoranceof his client and unduly enrich himself at the expense of his client.


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The Prohibition Also Includes TheLeasing of Clients Property Subject Of

Litigation.

Article 1646, NCC

- The persons disqualified to buy referred to in Articles1490 and 1491, are also disqualified to become lesseesof the things mentioned therein.


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Mananquil Vs. Villegas

189 SCRA 341FACTS: In a verified complaint for disbarment dated July 5, 1982, Mauro P. Mananquil

charged respondent Atty. Crisostomo C. Villegas with gross misconduct or malpracticecommitted while acting as counsel of record of one Felix Leong in the latter's capacity asadministrator of the Testate Estate of the late Felomina Zerna in Special Proceedings No.460 before then Court of First Instance of Negros Occidental. The complainant wasappointed special administrator after Felix Leong died. Respondent committed a breachin the performance of his duties as counsel of administrator Felix Leong when he allowedthe renewal of contracts of lease for properties involved in the testate proceedings to beundertaken in favor of HIJOS DE JOSE VILLEGAS without notifying and securing the

approval of the probate court.ISSUE: Whether or not the lease contracts are covered by the prohibition against any

acquisition or lease by a lawyer of properties involved in litigation in which he takes part?

HELD:Yes. Even if the parties designated as lessees in the assailed lease contracts were the"Heirs of Jose Villegas" and the partnership HIJOS DE JOSE VILLEGAS, and respondentsigned merely as an agent of the latter, the Court rules that the lease contracts are covered

by the prohibition against any acquisition or lease by a lawyer of properties involved inlitigation in which he takes part. To rule otherwise would be to lend a stamp of judicialapproval on an arrangement which, in effect, circumvents that which is directlyprohibited by law. For, piercing through the legal fiction of separate juridical personality,the Court cannot ignore the obvious implication that respondent as one of the heirs ofJose Villegas and partner, later manager of, in HIJOS DE JOSE VILLEGAS stands tobenefit from the contractual relationship created between his client Felix Leong and his

family partnership over properties involved in the ongoing testate proceedings.


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Mortgage

A loan in which the borrower puts up the title to realestate as security (collateral)for a loan. If the borrowerdoesnt pay back the debt on time, the lender Canforeclose on the real estate and have it sold to pay off

the loan.It is deemed included within the prohibition of Article

1491 because the mortgage maybe foreclosed and theproperty sold at public auction, where the lawyer maybid to be able to collect the loan and interests.

The ultimate end is purchased.

CASE: Fornilda Vs. RTC, Pasig, 169 SCRA 351


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Other Special Disabilities:

Betrayal of Public Trust

This is committed when the lawyer undertakesthe defense of a client or having received confidentialinformation of said client in a case, shall undertake thedefense of the opposing party in the same case,without the consent of his first client.

This is representing conflict of interests.Art. 209 of RPC penalizes the lawyer withprision

correctional(minimum).


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Revelation of Secrets

A lawyer is prohibited from revealing the secretsof his client learned in his professional capacity.

o Also punishable under Art. 209 of The Revised PenalCode.


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Presentation Of Inadmissible Affidavits

Under The Rule Of Summary Procedure.

A lawyer maybe disciplined also for a violation

of Sec. 20 of the Rule on Summary Procedure, if hesubmits affidavits stating facts which are not of thedirect knowledge of the affiants and which are notadmissible in evidence and do not show the

competence of the affiants to testify thereto.


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Deliberate Non-Signing and Signing of

Pleadings In Violation Of the Rules:

Effects: An unsigned pleading has no legal effect.

*However, The court may in its discretion, allow suchdeficiency to be remedied if it shall appear that the same

was due to mere inadvertence and not intended for delay.

Counsel who deliberately files an unsigned pleading,or signs a pleading in violation of this Rule, alleges

scandalous or indecent matter therein, or fails to promptlyreport to the court a change of his address, shall be subjectto appropriate disciplinary action.

(Rule 7, Sec. 3, Revised Rules on Summary Proceedings)


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END

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