G.R. No. 175277 - Unicapital, Inc. vs. Consing, Jr.

Case Summary (G.R. No. 175277)

Key Dates and Procedural Identifiers

Loan transactions: July 24 and August 1, 1997 (total P18,000,000.00).
Pasig action filed: May 3, 1999 (SCA No. 1759).
Makati collection action filed: August 4, 1999 (Civil Case No. 99‑1418).
Relevant appellate dispositions of the CA: Joint Decision October 20, 2005 and Resolution October 25, 2006 (CA‑G.R. SP Nos. 64019 & 64451); Decision September 30, 2009 and Resolution April 28, 2010 (CA‑G.R. SP No. 101355).
Supreme Court disposition: affirmed CA decisions (denial of petitions) — petitions consolidated and decided in the cited matter.

Applicable Law and Governing Standards

Constitutional basis: 1987 Philippine Constitution (applicable to decisions rendered post‑1990).
Governing statutory and procedural provisions relied upon in the decisions: Rules of Court — Section 1(g), Rule 16 (motion to dismiss for failure to state a cause of action); Sections 5 and 6, Rule 2 (joinder and misjoinder of causes of action); Section 1, Rule 31 (consolidation); Section 2, Rule 141 (fees in lien).
Civil Code provisions central to the causes of action: Article 19 (exercise of rights with justice, honesty, good faith); Article 26 (protection of dignity, personality, privacy and peace of mind); Article 2219(10) (moral damages for acts referred in Article 26).
Special law referenced: Batas Pambansa Blg. 22 (Anti‑Bouncing Check Law) as alleged to have been implicated by coercive demands.

Factual Background — Transactions and Title Issues

Consing, Jr. and his mother, Dela Cruz, received an P18,000,000 loan from Unicapital in 1997 secured by promissory notes and a real estate mortgage over a 42,443 sq. m. parcel in Imus, Cavite (TCT No. T‑687599). PBI had interest in developing the property, entered a joint venture with Unicapital/URI, and the mortgage/loan arrangement evolved into an Option to Buy. Dela Cruz, by attorney‑in‑fact Consing, Jr., sold portions of the property: URI purchased one half and PBI the other (sale proceeds used to offset outstanding loan obligations). Title was subdivided into three new TCTs (URI, PBI, and a road lot). Prior to transfer, Teng and Yu asserted ownership by virtue of TCT No. T‑114708 and claimed Dela Cruz’s title was forged; subsequent investigation by PBI revealed doubts about Dela Cruz’s title. Demand letters were sent to Dela Cruz and Consing, Jr. seeking return of purchase price. Those events precipitated separate but related lawsuits.

Pleadings and Primary Claims in the Pasig Action (SCA No. 1759)

Consing, Jr. filed a complex action for declaratory and injunctive relief (later amended), alleging sustained harassment, coercion to issue post‑dated checks despite insufficient funds (asserting exposure to Batas Pambansa Blg. 22), demands that he sign blank deeds, libelous statements in business circles, and other fraudulent schemes allegedly perpetrated by Unicapital and PBI. Reliefs sought included declaratory relief as agent only, injunction against harassment and derogatory speech, and substantial actual, moral and exemplary damages plus attorney’s fees. Defendants (Unicapital, URI, Martirez; PBI and Martinez) filed motions to dismiss arguing failure to state a cause of action, defective verification, jurisdictional defects (insufficient docket fees), lack of specificity for libelous statements, and improper venue for corporate/securities claims.

RTC‑Pasig and CA Rulings on Motion to Dismiss

The RTC‑Pasig denied the motions to dismiss (Resolution dated September 14, 1999; reconsideration denied February 15, 2001), finding that the complaint sufficiently alleged torts and damages under Article 19 and that civil defamation/abusive conduct differs from criminal libel. The RTC applied a liberal construction to the verification defect and required defendants to answer and comment on potential parallel proceedings in Makati. The CA affirmed (Joint Decision October 20, 2005; Resolution October 25, 2006), holding that non‑payment of docket fees does not automatically require dismissal if paid within a reasonable period, that the amended complaint copy was duly notarized, and that the complaint, despite some vagueness, stated causes of action which could be clarified by bill of particulars.

Standards for Evaluating a Motion to Dismiss — Legal Framework Applied

The Supreme Court reiterated the established test: a complaint should not be dismissed for failure to state a cause of action if, accepting the pleadings’ allegations as true, the plaintiff would be entitled to the relief sought. The inquiry concerns sufficiency, not veracity, of material allegations. The Court relied on precedents cited in the record (Pioneer Concrete v. Todaro; HSBC v. Catalan) to emphasize that a motion to dismiss is inappropriate where the complaint alleges facts which, if true, justify relief. The Court also noted that failure to list particular statutes allegedly violated or to plead every element of a complex claim does not render the complaint dismissible at the pleading stage.

Merits Assessment — Articles 19 and 26 Claims and Damages

The Court found that Consing, Jr.’s complaint, read in context, adequately alleged abusive exercise of rights and acts actionable under Articles 19 and 26 of the Civil Code. Specific allegations of sustained harassment, coercive demands for post‑dated checks despite knowledge of insufficiency of funds, and alleged defamatory statements in the business community were sufficient, at the pleading stage, to state a cause of action for damages and to potentially merit moral damages under Article 2219(10). The Court explained that the abusive exercise of a legal right can become a legal wrong where it is exercised in bad faith, excessively, or with intent to injure — concepts squarely within Article 19 jurisprudence cited in the record. Allegations of libel and injury to professional reputation, given Consing, Jr.’s status as an investment banker, could support moral and reputational damage claims without requiring the plaintiff at the outset to quote or particularize every allegedly libelous utterance.

Pleading Particulars, Misjoinder and Docket Fees Issues

The Court addressed objections based on misjoinder of causes of action and insufficiency of docket fees. It concluded that Consing, Jr. did not seek to hold defendants liable under specific provisions of the Corporation Code or Securities Act but sought injunctive relief and damages for alleged abusive conduct and defamation — matters properly within RTC jurisdiction and not a misjoinder under Sections 5 and 6, Rule 2. Even assuming misjoinder, the rules provide for severance rather than dismissal. Regarding docket fees, the Court applied the principle that non‑payment of prescribed fees at filing does not automatically require dismissal provided the deficiency is remedied within a reasonable period and absent fraudulent intent to evade fees; any unpaid fees later assessed may constitute a lien on any eventual judgment under Section 2, Rule 141. The Court also found that verification requirements were met because the copy of the amended complaint before the court was notarized.

Makati Collection Action and Motion to Consolidate (Civil Case No. 99‑1418)

Unicapital separately filed a collection suit in RTC‑Makati seeking recovery of indebtedness on promissory notes (P42,195,397.16 plus damages) against Consing, Jr. and Dela Cruz. Consing, Jr. moved to consolidate the Makati collection case with his Pasig injunctive/damages action. The RTC‑Makati denied consolidation (Orders dated July 16 and September 4, 2007), reasoning there was no identity of rights or causes such that consolidation was warranted, and consolidation would complica

Case Syllabus (G.R. No. 175277)

Citation and Judicial Panel

Reported at 717 Phil. 689, Second Division, G.R. Nos. 175277 & 175285 and G.R. No. 192073, decided September 11, 2013.
Decision penned by Justice Perlas-Bernabe.
Concurring: Carpio (Chairperson), Brion, Del Castillo, and Perez, JJ.

Parties

Petitioners in G.R. Nos. 175277 & 175285: Unicapital, Inc.; Unicapital Realty, Inc. (URI); Jaime J. Martirez (Director and Treasurer of Unicapital).
Respondents in G.R. Nos. 175277 & 175285: Rafael Jose Consing, Jr.; the Presiding Judge of the RTC of Pasig City, Branch 168.
Petitioner in G.R. No. 192073: Rafael Jose Consing, Jr.
Respondents in G.R. No. 192073: Hon. Marissa Macaraig-Guillen (Presiding Judge, RTC-Makati City, Branch 60); Unicapital, Inc.

Nature of the Consolidated Petitions

Consolidated petitions for review on certiorari attacking separate Court of Appeals (CA) issuances.
G.R. Nos. 175277 & 175285: petitions by Unicapital, URI, and Martirez challenging CA Joint Decision dated October 20, 2005 and CA Resolution dated October 25, 2006 in CA-G.R. SP Nos. 64019 and 64451 which affirmed RTC-Pasig City Resolution dated September 14, 1999 and Order dated February 15, 2001 in SCA No. 1759 denying motions to dismiss.
G.R. No. 192073: petition by Rafael Jose Consing, Jr. challenging CA Decision dated September 30, 2009 and CA Resolution dated April 28, 2010 in CA-G.R. SP No. 101355 which affirmed RTC-Makati City Orders dated July 16, 2007 and September 4, 2007 in Civil Case No. 99-1418 denying his motion for consolidation.

Factual Background — Loans, Mortgage, Sale and Titles

In 1997, Rafael Jose Consing, Jr. and his mother Cecilia Dela Cruz obtained an P18,000,000.00 loan from Unicapital: P12,000,000.00 on July 24, 1997 and P6,000,000.00 on August 1, 1997.
The loan was secured by promissory notes and a real estate mortgage over a 42,443 sq. m. parcel in Imus, Cavite, registered to Dela Cruz as TCT No. T-687599 (the subject property).
Prior to these transactions, Plus Builders, Inc. (PBI) sought to develop the subject property into a residential subdivision and entered into a joint venture with Unicapital through URI.
The loan and mortgage were later modified into an Option to Buy Real Property; after negotiation Dela Cruz decided to sell the property to Unicapital and PBI and appointed Consing, Jr. as her attorney-in-fact.
Unicapital, through URI, purchased one-half of the subject property for P21,221,500.00 (to be offset against Dela Cruz’s outstanding loan obligations); PBI purchased the other half for P21,047,000.00.
Dela Cruz caused division of TCT No. T-687599 into three titles:
- TCT No. T-851861 for URI;
- TCT No. T-851862 for PBI;
- TCT No. T-851863 designated as a road lot.
Before transfers were effected, Juanito Tan Teng and Po Willie Yu asserted ownership, presenting TCT No. T-114708, claiming they did not sell and alleging Dela Cruz’s title (T-687599) was a forgery.
PBI’s investigation revealed that Dela Cruz’s title was of dubious origin. PBI and Unicapital separately demanded return of the purchase price from Dela Cruz and from Consing, Jr. by demand letters dated April 26–27, 1999.

Facts Giving Rise to Litigation — Conduct Alleged by Consing, Jr.

On May 3, 1999, Consing, Jr. filed a complaint styled as a Complex Action for Declaratory Relief, later amended to Complex Action for Injunctive Relief, docketed SCA No. 1759 in RTC-Pasig City.
Allegations in the complaint included:
- Continuous harassment and oppressive recovery efforts by Unicapital and PBI that affected his personal and professional life.
- Coercion into committing a violation of Batas Pambansa Blg. 22 (Anti-Bouncing Check Law) through threats and forcing issuance of post-dated checks despite lack of funds.
- Requirement by Unicapital and URI that he sign blank deeds of sale and transfers and failure to cancel old deeds in violation of land registration and real estate development laws.
- Statements that Unicapital and PBI were speaking of him in an inappropriate and libelous manner, spreading their version of events in business and financial circles and harming his reputation.
- Allegations of a fraudulent scheme by unknown John Does involving falsification of transfers of land titles and deeds.
Remedies sought by Consing, Jr. included:
- Declaration that he was merely Dela Cruz’s agent and not personally obligated to Unicapital/URI/PBI for the transactions;
- Injunctive relief enjoining harassment, coercion, and derogatory statements;
- Monetary relief: actual and consequential damages P2,000,000.00; moral damages at least P1,000,000.00 per month; exemplary damages P1,000,000.00 per month from May 1, 1999 until resolution; attorney’s fees and costs.

Procedural History — Motions to Dismiss and Initial Rulings (Pasig)

Unicapital, URI, and Martirez filed motions to dismiss on grounds:
- Failure to state a cause of action (no document attached showing rights against which to test claims);
- Demands to pay and seek post-dated checks were legitimate creditor actions;
- Libelous utterances not set out; laws allegedly violated not properly identified;
- RTC lacked jurisdiction due to failure to pay proper docket fees;
- Allegations of violations of Corporation Code and Revised Securities Act should be for the SEC;
- Defective verification.
PBI and its GM, Martinez, also moved to dismiss denying targeting Consing, Jr. and asserting collection efforts were directed at both Consing, Jr. and Dela Cruz.
RTC-Pasig City Resolution dated September 14, 1999 denied the motions to dismiss, holding:
- Complaint stated a cause of action for tort and damages under Article 19 of the Civil Code;
- Courts afford relief against abusive behavior;
- Civil action standards for defamation/damages differ from criminal libel elements;
- Docket fee non-payment did not divest jurisdiction upon filing of complaint;
- Liberal construction applied to defective verification where defect not timely raised.
RTC-Pasig City denied reconsideration by Order dated February 15, 2001.

CA Review in Pasig Line (G.R. Nos. 175277 & 175285)

Unicapital and PBI elevated denials to the Court of Appeals via a petition for certiorari and prohibition (CA-G.R. SP Nos. 64019 and 64451).
CA Joint Decision dated October 20, 2005 affirmed RTC-Pasig City denial of motions to dismiss on grounds:
- While docket fee payment is jurisdictional, non-payment does not automatically cause dismissal; deficiency may constitute a lien on judgment.
- Proper verification existed on the amended complaint copy submitted to RTC-Pasig City (it was notarized).
- Complaint sufficiently stated cause of action: alleged abusive enforcement of claims could, if proven, amount to defamation, threats and coercion, fraud and falsification, breach of fiduciary duty.
- Vagueness in complaint does not warrant dismissal; bill of particulars may clarify.
- Complaint sought damages for actions of respondents rather than a specific private enforcement of Corporation Code/Securities Act; RTC had jurisdiction.
CA denied reconsideration i