A.C. No. 11439 - Bataan Shipyard and Engineering Co., Inc. vs. Consunji

Case Summary (A.C. No. 11439)

Factual Background

BATAAN SHIPYARD AND ENGINEERING COMPANY INC. engaged ATTY. ANTHONY JAY B. CONSUNJI as its legal counsel. BASECO advanced an aggregate of P20,593,781.42 to Atty. Consunji purportedly for professional fees and for payment of taxes and registration fees to government agencies. The Court reproduced the disbursement breakdown and noted that P12,312,781.42 represented advances for transfer taxes, capital gains taxes, documentary stamp taxes and registration fees; P4,350,000.00 and P2,730,000.00 represented various professional fees tied to the titling of unregistered parcels and the reconstitution of lost titles in Engineering Island. BASECO alleged that Atty. Consunji failed to render accounting and liquidation, failed to issue or to produce official receipts for taxes and fees, and did not complete the legal work for which he was paid.

Procedural History

BASECO sent demand letters, including one dated December 14, 2012, seeking accounting and refund. When Atty. Consunji did not provide the demanded accounting, BASECO filed complaints with the Office of the Ombudsman (docketed OMB-C-C-13-0429) and later filed the present administrative complaint with the Court. The Court required a Comment from respondent on August 17, 2016; respondent filed a Comment on December 22, 2016. The Court later referred the matter to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation on August 9, 2017.

Proceedings before the Integrated Bar of the Philippines

The IBP Commission on Bar Discipline scheduled a mandatory conference for July 26, 2018. Respondent sought cancellation but the CBD proceeded. Neither party appeared at the mandatory conference. Respondent later submitted a verified position paper reiterating his defense and relying on an Ombudsman resolution that had acquitted him of plunder and Anti-Graft charges for lack of substantial proof. BASECO did not participate in the IBP proceedings; notices returned unserved after the complainant moved without notifying the Court or the IBP.

IBP Report and Recommendation

The IBP-CBD, through its Investigating Commissioner, recommended dismissal of the administrative complaint for lack of merit in a Memorandum dated November 23, 2018, finding that BASECO failed to substantiate its allegations and that respondent presented evidence supporting his defense. The IBP Board of Governors approved and adopted that recommendation but imposed a P5,000.00 fine on respondent for failing to comply with the mandatory hearing requirement. The matter was then returned to the Court for final resolution.

Issue

The dispositive question before the Court was whether ATTY. ANTHONY JAY B. CONSUNJI should be administratively disciplined for alleged failure to account for cash advances and for failing to render the professional services for which he was compensated, in violation of the Code of Professional Responsibility.

Ruling of the Court

The Court reversed the IBP’s dismissal and found ATTY. ANTHONY JAY B. CONSUNJI guilty of violating Rule 16.01, Canon 16, and Rules 18.01 and 18.03, Canon 18 of the Code of Professional Responsibility. The Court concluded that respondent’s explanations and documentary proffers were inadequate to overcome the complainant’s prima facie burden, that he failed to keep and produce proper receipts and originals of liquidation documents, and that he neglected and failed to complete the legal services for which he had been paid.

Legal Basis and Reasoning

The Court reiterated that the lawyer-client relationship is fiduciary and that a lawyer must account for all money or property collected for or from a client under Rule 16.01, Canon 16. Money entrusted for a specific purpose but not used must be returned upon demand, and failure to do so raises a presumption of appropriation. The Court found undisputed that respondent received the cash advances and that he failed to produce original Official Receipts or liquidation reports. Respondent’s claim that originals were in BASECO’s Finance Department or seized by the PCGG did not excuse his failure to secure copies or to seek judicial or investigative compulsion to produce the records. The Court noted the availability of legal remedies under Rules 21 and 27 of the Rules of Court and the subpoena and investigatory powers of IBP investigators under Sections 8 and 9 of Rule 139-B. The Court further held that respondent’s reliance on unsigned, unspecific or self-serving affidavits, and his issuance of acknowledgment receipts instead of official receipts, did not satisfy his burden to show proper liquidation. Regarding competence and diligence under Canon 18, the Court observed that respondent received substantial fees but did not deliver the certificates of title or otherwise complete the engagements as required by the March 21, 2011 Memorandum of Agreement. The MOA provided for an acceptance fee of P1,200,000.00 and a success contingent fee of twenty-five percent of fair market value upon delivery of certificates of title. The Court found that respondent was not entitled to the contingent fees absent delivery of titles and that he did not demonstrate substantial performance sufficient to retain the excess fees.

Disposition, Penalties and Monetary Awards

The Court declared ATTY. ANTHONY JAY B. CONSUNJI disbarred and ordered his name stricken from the Roll of Attorneys. The Court ordered respondent to return P12,312,781.42 representing funds intended for payment of taxes to the Province of Bataan and the Bureau of Internal Revenue. The Court further ordered respon

Case Syllabus (A.C. No. 11439)

Parties and Procedural Posture

BATAAN SHIPYARD AND ENGINEERING COMPANY INC. was the complainant that alleged non‑accounting and nonperformance by its former counsel.
ATTY. ANTHONY JAY B. CONSUNJI was the respondent and former legal counsel of the complainant from 2005 to 2011.
The Office of the Ombudsman docketed a related criminal investigation as OMB‑C‑C‑13‑0429, which resulted in an acquittal for lack of substantial proof.
The case was referred by the Court to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation pursuant to Court resolution.
The IBP Investigating Commissioner recommended dismissal for lack of merit, and the IBP Board of Governors adopted the recommendation but imposed a P5,000.00 fine for nonappearance.
The Court reviewed the IBP findings en banc and ultimately reversed the IBP recommendation and promulgated the present administrative decision.

Key Factual Allegations

BASECO advanced a total of P20,593,781.42 purportedly for professional fees and payment of taxes, as reflected in the complaint annexes.
The cash advances included payments identified as taxes to the Province of Bataan and BIR totaling P12,312,781.42.
BASECO paid Atty. Consunji P4,350,000.00 as representation and titling fees for four parcels and P2,730,000.00 as fees for reconstitution of lost titles in Engineering Island.
BASECO alleged that Atty. Consunji failed to render accounting and liquidation of the cash advances and failed to issue or produce Official Receipts for taxes and official receipts for legal fees.
BASECO sent demand letters requesting accounting, liquidation, and refund, and later engaged other counsel to accomplish reconstitution of titles for P200,000.00.
BASECO alleged that material documents were seized by security personnel of the Presidential Commission on Good Government (PCGG) on June 23, 2011, which impeded access to records.

Procedural History

The Court required respondent to file a Comment and granted extensions after which respondent filed a Comment and later a position paper before the IBP‑CBD.
Respondent invoked the Ombudsman acquittal in OMB‑C‑C‑13‑0429 as part of his defense before the IBP.
The IBP proceeded with mandatory conference proceedings in which the complainant did not participate and ultimately filed a memorandum recommending dismissal.
The IBP Board of Governors adopted the dismissal recommendation but imposed a P5,000.00 fine for respondent’s failure to attend the mandatory conference.
The Court reviewed the record, found merit in the complaint, and issued the present en banc decision reversing the IBP recommendation and imposing disciplinary and remedial sanctions.

Issue

The primary issue was whether respondent should be administratively disciplined for violating duties under the Code of Professional Responsibility by failing to account for cash advances and by failing to competently and diligently perform agreed legal services.

Ruling and Disposition

The Court found respondent guilty of violating Rule 16.01, Canon 16, and Rules 18.01 and 18.03, Canon 18 of the Code of Professional Responsibility.
The Court ordered the respondent disbarred and his name stricken off the Roll of Attorneys.
The Court ordered respondent to return P12,312,781.42 intended for tax payments to the Province of Bataan and the BIR.
The Court ordered respondent to return excess legal fees of P3,150,000.00 relating to the registration of untitled parcels in Engineering Island.
The Court ordered respondent to return excess legal fees of P2,530,000.00 for the reconstitution of lost titles, but allowed him to retain P200,000.00 on a quantum meruit basis.
All ordered restitutions were to earn interest of six per