View full case

BATAAN SHIPYARD v. ATTY. ANT JAY B. CONSUNJI

FACTS:

Bataan Shipyard and Engineering Company Inc. (BASECO) filed an administrative case against Atty. Anthony Jay B. Consunji for receiving excessive cash advances and professional fees without providing an accounting and liquidation of the funds. BASECO alleged that Atty. Consunji received cash advances totaling P20,593,781.42 for professional services and taxes, but failed to liquidate or account for these funds. They also claimed that they were able to secure the re-issuance of land titles with the help of other lawyers for a lesser amount. Despite demands, Atty. Consunji did not give an accounting or refund the cash advances. He denied the charges and submitted affidavits to support his defense. BASECO argued that he should be held accountable and refund the professional fees.

BASECO sent demand letters to Atty. Consunji asking for the accounting and liquidation of the cash advances, but he failed to comply. The Integrated Bar of the Philippines (IBP) conducted an investigation and recommended the dismissal of the administrative complaint, but imposed a fine of P5,000.00 for Atty. Consunji's failure to comply with the mandatory hearing requirement. The Court reverses the findings and recommendation of the IBP and holds Atty. Consunji administratively liable for violating the Code of Professional Responsibility.

Atty. Consunji argues that he already provided an accounting and liquidation of the fees he received, but claims that he cannot access the reports due to the seizure of BASECO's documents. However, he fails to substantiate his explanations. The Court also finds that he did not issue official receipts and did not retain copies of the receipts. Thus, the Court finds that Atty. Consunji did not provide sufficient evidence to prove that he properly accounted for and liquidated the cash advances.

ISSUES:

  1. Whether Atty. Consunji properly accounted for and liquidated the cash advances he received from BASECO.

  2. Whether Atty. Consunji provided sufficient evidence to show that he utilized the funds for their intended purpose and issued official receipts.

  3. Whether Atty. Consunji was negligent in fulfilling his legal obligation to process the registration of untitled lands and reconstitution of lost titles.

  4. Whether Atty. Consunji was entitled to the compensation he received despite not successfully delivering the certificates of title and completing the reconstitution of lost titles.

  5. Whether Atty. Consunji violated his obligations as a lawyer by failing to fulfill his legal obligations, not rendering an accounting and liquidation of received funds, and charging exorbitant legal fees.

  6. Whether Atty. Consunji's actions warrant the penalty of disbarment.

  7. Whether Atty. Lavadia violated his duty under Rule 18.03, Canon 18 of the Code of Professional Responsibility.

  8. Whether Atty. Consunji should return the amount of P12,312,781.42 to BASECO.

  9. Whether Atty. Consunji should return the excess legal fees in the amount of P3,150,000.00.

  10. Whether Atty. Consunji should return the amount of P2,530,000.00 as excess legal compensation for the reconstitution of lost titles.

RULING:

  1. Atty. Consunji failed to provide evidence to show that he has already accounted for and liquidated the cash advances he received from BASECO. He did not submit copies of receipts issued to BASECO or official receipts for payment of taxes to the Province of Bataan and BIR. His claim that the liquidation records were with the Finance Department of BASECO, which were seized by the PCGG, was not given weight as he could have requested the IBP or the Court to order the production of these records. Therefore, it was found that no actual accounting and liquidation was done.

  2. Atty. Consunji violated Rules 16.01, 18.01, and 18.03 of Canon 16 and Canon 18 of the Code of Professional Responsibility (CPR). Rule 16.01 states that lawyers are accountable for the money entrusted to them by their clients and should issue and keep receipts. Rule 18.01 prohibits lawyers from undertaking legal services they are not qualified to render, and Rule 18.03 requires lawyers to attend to their client's cause with competence and diligence. Atty. Consunji failed to issue official receipts for professional fees and did not keep copies of the receipts he issued. He also did not provide sufficient evidence to support the utilization of funds for their intended purpose.

  3. The Supreme Court found Atty. Consunji to be negligent in fulfilling his legal obligation. He failed to prove that he has duly complied with his obligation or that he has substantially performed tasks to fulfill the same but was prevented from completing it for reasons not attributable to him. Atty. Consunji did not present documentary or object evidence to support his claim that he has done substantial preparatory works for the processing of the titles. Therefore, he violated Canon 18 of the Code of Professional Responsibility, which requires a lawyer to serve his client with competence and diligence.

  4. Despite the nonfulfillment of his legal obligation, Atty. Consunji received excess compensation. He was not entitled to the compensation he received because he did not successfully deliver the certificates of title and complete the reconstitution of lost titles.

  5. Yes, Atty. Consunji violated his obligations as a lawyer by failing to fulfill his legal obligations, not rendering an accounting and liquidation of received funds, and charging exorbitant legal fees.

  6. Yes, Atty. Consunji's actions warrant the penalty of disbarment.

  7. Atty. Lavadia is found guilty of violating Rule 18.03, Canon 18 of the Code of Professional Responsibility.

  8. Atty. Consunji is ordered to return the amount of P12,312,781.42 to BASECO for the payment of taxes to the Province of Bataan and the Bureau of Internal Revenue.

  9. Atty. Consunji is ordered to return the excess legal fees in the amount of P3,150,000.00.

  10. Atty. Consunji is ordered to return the amount of P2,530,000.00 as excess legal compensation for the reconstitution of lost titles, but is allowed to retain P200,000.00 as legal fees for the preparatory work done.

PRINCIPLES:

  • Lawyers are accountable for the money entrusted to them by clients and should issue and keep receipts. (Rule 16.01, CPR)

  • Lawyers should keep records of their transactions with clients as a matter of prudence and due diligence. (Case law)

  • Lawyers should not undertake legal services they are not qualified to render. (Rule 18.01, CPR)

  • Lawyers should serve their clients with competence and diligence. (Rule 18.03, CPR)

  • A lawyer is required to serve his client with competence and diligence.

  • A lawyer must exert his best efforts and ability to preserve his client's cause.

  • A lawyer is expected to act with unwavering loyalty to his client.

  • Lawyers have corresponding duties to their clients, the court, the bar, and the public. Failure to comply with these duties subjects the lawyer to administrative sanction.

  • A lawyer may be penalized, including disbarment or suspension, for violating the lawyer's oath and/or breach of ethics in the legal profession.

  • Lawyers should bear in mind that the practice of law is a profession and a public trust, and lawyers should possess good moral character.

  • Lawyers should maintain honest and fair dealings with their clients and should not unjustly enrich themselves at the expense of their clients.

  • The appropriate penalty for a delinquent lawyer depends on sound judicial discretion.

  • Violations of legal duties, moral obligations, and causing damage or prejudice to a client may warrant disbarment.

  • Lawyers must exhibit personal honesty and good moral character to deserve public confidence.

  • Lawyers should fulfill their duties and responsibilities to the court, their clients, and the legal profession. Failure to do so may lead to disciplinary action, including disbarment.

  • The practice of law is a privilege granted only to those of good moral character.

  • Lawyers must conduct themselves beyond reproach at all times.

  • Violation of the high moral standards of the legal profession justifies the imposition of the appropriate penalty.

  • Lawyers have a duty to act diligently and in the best interest of their clients.

  • Lawyers must comply with the Code of Professional Responsibility.