Barreda Corp. v. Ballenger , 116 S.W.2d 442 ( 1938 )

The writer believes this judgment ought to be reversed and remanded for the reason that it was obtained by the aid of counsel who by the most elemental principles of legal ethics was denied the right to participate. The majority agree that Mr. Seabury was disqualified and that the trial court erred in overruling appellants' motion to disqualify. They have held, however, that on the facts appearing of record, and independently of any special knowledge that Mr. Seabury may have gained while representing Mr. Barreda, the Barreda Corporation, and the irrigation district, appellees were entitled to an instructed verdict, and so the same judgment would have to be entered upon a new trial.

I cannot concur in that conclusion for two reasons. In the first place, I think appellants should be allowed to go to the jury on the issues of fraud and illegality affecting the $37,046.35 note, and the trustee's sale made by virtue of the mortgage securing it. It will be noted that the majority hold Mr. Barreda barred from urging said defenses because the deed of trust securing the note was foreclosed by a trustee's sale, and that under the rule announced in Hall v. Edwards, Tex.Com.App., 222 S.W. 167, the invalidity of the original indebtedness cannot be inquired into in the present suit. As I view the facts of this case, and as reflected by the findings of the majority, the Edwards Case should not be given application. In giving it application it seems to me the majority overlook the important fact that at the time Mr. Barreda gave the $37,046.35 note to appellee Ballenger, Mr. Seabury was Barreda's attorney, and had been for many years. It was upon Mr. Seabury's advice that Barreda indorsed the note for the "retained percentage" of Ballenger and gave the deed of trust on properties worth $240,000 as security. Mr. Seabury prepared the papers and even executed the papers as an officer of the Barreda Corporation. He then, for some reason, ceased to represent Mr. Barreda, the Barreda Corporation, and the irrigation district, and accepted employment from Ballenger, payee of the note and holder of the lien. As such attorney for Ballenger he advised and acted as legal counsel at the trustee's sale, at which $240,000 worth of his former client's property was bought in by Ballenger for a little more than $40,000. Mr. Seabury was, of course, familiar with all of the transactions which Mr. Barreda contends were illegal and fraudulent, for he had participated in them and directed them at the time they were committed. With that knowledge he advised Ballenger in and directed the form of foreclosure by trustee's sale, which the majority have held had the effect, under the Edwards Case, of denying to his former client, Barreda, the right to assert those defenses. It is the writer's belief that such conduct on the part of counsel so tainted the trustee's sale that same should not be given the effect of precluding any defenses which Mr. Seabury's former clients, the appellants, may have against the original obligation.

In the second place, even if the writer should be in error in his belief that the defenses of fraud and illegality are available to appellants, still the case ought to be reversed and remanded. To my way of thinking counsel's conduct in this case was such that public policy demands at the hands of the court a holding that a judgment so obtained should not be permitted to stand in a Texas court. Both the courts and the legal profession have a serious responsibility to the public. The maintenance by a free people of a government according to law is grounded primarily upon the faith of the people in the integrity of their judicial tribunals, and their respect for and confidence in the agencies through which the law is administered. An attorney is more than a mere practitioner of the law. He is an officer of the court. And whenever an attorney is guilty of conduct which so seriously breaches the canons of legal ethics that it tends to bring the legal profession into disrepute, he not only injures his brethren of the bar, but injures the public as a whole by tending to weaken public confidence in the integrity of the legal institutions by which they are governed. It is one of the glories of the legal profession that citizens of this country universally have from time immemorial freely counseled with attorneys of their selection and submitted to them without fear or restraint the most delicate and important private matters with the assurance that the confidence so reposed would be held inviolate. Rare has been the occasion when such confidence has been breached by an attorney to the extent that a former client would be compelled to face him in the courtroom in the conduct of litigation for an adversary which had its origin under the counsel and direction of that same attorney. The very scarcity of precedents in the published opinions of the courts of this country testifies eloquently to the fidelity with which the thousands of lawyers throughout the nation, past and present, have kept the faith of their clients. In the case before us I conceive it to be the duty of the court to reverse and remand this case if for no other reason than to bar from the counsel table in the trial of it counsel who by the most fundamental rules of legal ethics all members of this court agree should not participate. It should not be deemed essential that the appellants here labor under the burden of showing that some positive injury came to them in the rendition of this particular judgment by reason of the participation of their former attorney. To so hold is to completely ignore the public policy feature here presented. For to permit the judgment to stand, as the majority have done, will not only permit counsel to reap all the benefits, fees, and emoluments of his representation of the appellees, but what is far more serious, will tend to create the impression that our courts are either powerless or are too deferential in their consideration of an individual member of the bar to perform the unpleasant but vitally important duty of serving as a bulwark against a breach of the canons of legal ethics.