G.R. No.

139680 April 12, 2000

WILLIAM R. BAYANI, petitioner,

vs.
PANAY ELECTRIC CO., INC., respondent.

RESOLUTION

QUISUMBING, J.:

This is a petition for certiorari of the decision1 dated October 26, 1998, of the Court of
Appeals in CA-G.R. SP No. 46012, which set aside the orders of the Regional Trial Court of
Iloilo City, Branch 34, in Civil Case No. 23276, for having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction.

The facts of the case are as follows:

In March 1996, private respondent, Panay Electric Company, Inc. (PECO), discontinued
supplying electrical services to two pension houses, the Bayani Drive Inn at Calumpang,
Molo, Iloilo City and the William Bayani Hotel in Mandurriao, Iloilo City, both owned by
petitioner. Alleging that it had discovered theft of electricity in petitioner's business
establishments, PECO filed two complaints for violation of R.A. No. 78322 against petitioner
with the City Prosecutor of Iloilo City. The City Prosecutor dismissed the complaints on
August 8, 1996 and August 19, 1996, respectively. PECO appealed the dismissal to the
Secretary of Justice.

On October 10, 1996, petitioner filed Civil Case No. 23276 with the Regional Trial Court, Iloilo
City, for injunction and damages arising from malicious prosecution. PECO moved to dismiss
the petition. Pending resolution of the motion to dismiss, petitioner, on January 20, 1997,
amended his complaint to add a prayer for writ of preliminary prohibitory injunction to make
PECO desist from making "false imputations that plaintiff allegedly continued to commit
violations" of R.A. No. 7832.3 PECO filed a motion to dismiss the amended complaint, but
said motion was denied by the trial court in its order dated March 20, 1997. The court also
denied its motion for reconsideration on August 27, 1997.

On September 2, 1997, the trial court granted petitioner's request for the issuance of a writ
of preliminary mandatory injunction as follows:

WHEREFORE, IN VIEW OF THE FOREGOING, let a Writ of Preliminary Mandatory

Injunction issue after the plaintiff puts up a bond in the amount of Three Hundred
Thousand Pesos (P300,000.00). Upon the filing of the Injunctive Bond by the plaintiff
and approval of the same by the Court, the Defendant is ordered to immediately
restore the electric services to the Bayani Drive Inn, Calumpang, Molo, Iloilo City and
the William Bayani Hotel at Mandurriao, Iloilo City.

1
 SO ORDERED.4

Petitioner initially submitted a surety bond but later substituted a cashier's check for the
surety. The trial court approved the substitution on September 10, 1997.

On September 15, 1997, PECO filed its answer with counterclaim for damages for alleged
injuries done to its good name and business standing.

On November 17, 1997, PECO filed a petition, CA-G.R. SP No. 46012, for certiorari and
prohibition with the Court of Appeals, praying that the appellate court declare the orders of
the trial court dated March 20, 1997, August 27, 1997, September 2, 1997 and September 10,
1997 null and void. PECO likewise sought the dismissal of herein petitioner's complaint in the
lower court.

The Secretary of Justice upheld the dismissal of the complaints for violations of R.A. No.
7832, on March 4, 1998.

On October 26, 1998, respondent appellate court disposed of the petition, CA-G.R. SP No.
46012, as follows:

WHEREFORE, premises considered, the assailed orders of the public respondent

dated 20 March 1997, 27 August 1997, 2 September 1997 and 10 September 1997,
respectively, are hereby SET ASIDE and the complaint for injunction and damages
filed by private respondent against petitioner is hereby ordered DISMISSED for lack
of merit.1wphi1.nt

SO ORDERED.5

On November 12, 1998, petitioner moved for reconsideration, which the appellate court
denied in its resolution dated July 15, 1999.

Hence, the instant petition for review before us, with petitioner raising the following issues:

I. Whether or not the Court of Appeals erred in dismissing Civil Case No. 23276 filed by
petitioner against respondent in ruling that said case is based on malicious
prosecution, the element of final termination of the action resulting in acquittal is
absent and therefore premature?

II. Whether or not the Court of Appeals erred in ruling that the Regional Trial Court
acted with grave abuse of discretion amounting to lack or excess of jurisdiction in
issuing the orders appealed from, as well as the subsequent orders dated 2
September 1997 and 10 September 1997 granting the issuance of a writ of Preliminary
Mandatory Injunction and admitting the cashier's check in the amount of
P300,000.00 as substitute for the surety bond earlier submitted as injunctive bond?

2
 III. Whether or not the Court of Appeals erred in ruling that the period to assail the
order denying the motion to dismiss filed by respondent has long expired so the
latter has already lost the right to question the same and had already submitted to
the jurisdiction of the Regional Trial Court when it filed its Answer with Counterclaim
to join the issues raised, when it proceeded to cross-examine the witnesses of the
petitioner and presented its evidence to prove his defenses and causes of action?

Notwithstanding petitioner's formulation of the issues, the pertinent issues in this case now
are:

(1) Is Civil Case No. 23276 a case based on malicious prosecution?

(2) Was Civil Case No. 23276 prematurely filed with the Regional Trial Court?

Petitioner faults respondent court for finding that his complaint in Civil Case No. 23276 was
one for malicious prosecution. Petitioner insists that its complaint was based on other
causes of action, independent from malicious prosecution. He alleged in particular, that by
summarily disconnecting electrical service to petitioner's business establishments, PECO
violated Articles 196 and 217 of the Civil Code.

A review of petitioner's Amended Complaint,8 however, clearly shows that petitioner's

allegations deal mainly with the criminal complaints instituted by PECO against petitioner for
violating R.A. No. 7832. In addition to damages, petitioner had sought a prohibitory
injunction to prohibit private respondent from making "false imputations that plaintiff
allegedly continued to commit violations" of R.A. No. 7832."9 What determines the nature
of an action are the allegations in the complaint and the character of the relief sought. 10
Conformably, no reversible error was committed by the Court of Appeals in finding that
petitioner's action was one based on malicious prosecution.

There is malicious prosecution when a person directly insinuates or imputes to an innocent

person the commission of a crime and the maliciously accused is compelled to defend
himself in court. 11 While generally associated with unfounded criminal actions, "the term
has been expanded to include unfounded civil suits instituted just to vex and humiliate the
defendant despite the absence of a cause of action or probable cause." 12 The basis for a
civil action for damages arising from malicious prosecution is found in Articles 19, 21, 29, 13
35, 14 of the Civil Code.1wphi1

The requisites for an action for damages based on malicious prosecution are: (1) the fact of
the prosecution and the further fact that the defendant was himself the prosecutor, and
that the action was finally terminated with an acquittal; (2) that in bringing the action, the
prosecutor acted without probable cause; and (3) the prosecutor was actuated or impelled
by legal malice. 15 Considering the facts in this case, we agree with the respondent appellate
court that one of the elements for an action based on malicious prosecution, the element of
final termination of the action resulting in an acquittal, was absent at the time petitioner

3
filed Civil Case No. 23276. The records show that petitioner's action for injunction and
damages was filed on October 10, 1996, whereas the Secretary of Justice dismissed with
finality PECO's criminal complaints against herein petitioner only on March 4, 1998. Hence,
Civil Case No. 23276 was prematurely filed.1wphi1

WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals in
CA-G.R. SP No. 46012 is AFFIRMED.

This resolution, however, shall in no way prejudice re-filing of the civil case within the
reglementary period.

SO ORDERED.

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G.R. No. L-26760 April 30, 1971

JOAQUINA VENTURA assisted by her husband, JOSE VENTURA, plaintiff-appellant,

vs.
EUSEBIO BERNABE, defendant-appellee.

Adriano R. Osorio for plaintiff-appellant.

Felizardo Y. Viray for defendant-appellee.

BARREDO, J.:

Appeal from the order of the Court of First Instance of Rizal, Caloocan City Branch,
dismissing on the ground that the "complaint states no cause of action" its Civil Case
No. C-628, an action for damages based upon an alleged malicious prosecution.

According to the record on appeal, for the crime of falsification of a private document
allegedly committed against appellee Eusebio Bernabe, appellant Joaquina Ventura stood
trial in the Court of First Instance of Rizal upon the following complaint filed with the fiscal's
office:

The undersigned accuses JOAQUINA DE VENTURA of the crime of

"Falsification of Private Document" under Art. 172 subpar. (2) of the Revised
Penal Code, committed as follows:

That on or about October 4, 1958, in the Municipality of Caloocan, Province of

Rizal, Philippines, and within the jurisdiction of this Honorable Court, the said
accused, did then and there willfully and feloniously commit falsification in a
private document, to wit: the said accused WILLFULLY, UNLAWFULLY and
FELONIOUSLY presented to Mr. Eusebio B. Bernabe a supposed letter of
Cmdr. Marcelino Calinawan, Jr. of the Presidential Fact Finding Committee
addressed to Mr. Bernabe asking for a loan of P350.00 and the accused
further stating that Cmdr. Calinawan was then in her residence waiting for the
money and with the instruction to hand to her the money for delivery to
Cmdr. Calinawan which Mr. Bernabe did by issuing a Bank of America Check
No. 703659 dated October 5, 1958 for P350.00 and handing the same to the
accused; that upon verification, it has been found out that the letter above
referred to was never and has never been made by Cmdr. Calinawan and that
the signature appearing on the same is not the signature of Cmdr. Calinawan;
that the said check has already been cash(ed) on or about October 7, 1958 to
the damage and prejudice of Mr. Eusebio B. Bernabe in the sum of P350.00
Philippine Currency.

5
 CONTRARY TO LAW

and was ultimately acquitted in a decision of said court as follows:

During the trial of this case, Eusebio Bernabe pointed at the accused and told
the Court that he had known her and her husband as early as 1958; that he
and accused's husband, are compadres. Bernabe testified that Maj. Ventura,
accused's husband, in the year 1958, was one of the members of the
Presidential Fact Finding Committee, which was under the chairmanship of
Commander Calinawan. He said that he was an agent of Ventura and as such
he had some dealings with Commander Calinawan, thru Ventura; that during
the year 1968, Marcelino Calinawan on five occasions asked him for sums of
money thru Maj. Ventura, which sums all amounted to P2,000.00; that he gave
all this money to Marcelino Calinawan thru Ventura altho he admitted that he
does not know and has not yet met the said Commander Calinawan. On
October 4, 1958, Bernabe said the accused went to his house and showed to
him a letter purporting to be, signed by Commander Calinawan, asking for the
sum of P350.00; that on the strength of this letter and the representation of
the accused that Calinawan was in her house waiting for the money, he right
away made a check, Exh. B, and delivered it to the said accused, Bernabe
further testified that later on he went to see Commander Calinawan and
inquired whether he received the money and the latter replied that he never
received any; that he showed Calinawan the letter, Exh. A, and the latter
denied that he wrote the said letter.

In her defense, the accused vigorously denied that she went to the house of
Eusebio Bernabe and gave the letter, Exh. A. She also denied having received
the check on October 4, 1962. She said that on October 4, 1962 she did not go
out of her house because she has just delivered and was still weak. The
accused further testified that the complainant in filing this case against her
must have been motivated because of a series of misunderstandings he had
with her husband. The accused claims that she does not know Commander
Calinawan.

After hearing the evidence of the prosecution and that of the accused the
Court finds the following as established facts: That Eusebio Bernabe was an
agent of Maj. Ventura. Major Ventura in turn was an agent of Commander
Calinawan who was at that time the Chairman of the Presidential Fact Finding
Committee. Bernabe does not know Calinawan and has no direct contact with
him, and that as an agent of Maj. Ventura Bernabe has been giving money to
Calinawan which totalled all in all P2,000.00.

Now, on these facts, several questions puzzled the Court. Why was Bernabe
giving money to Calinawan when according to his own testimony he does not

6
 know the said Calinawan? Why did Bernabe go to Calinawan in order to verify
about the letter, Exh. A, and also to find out whether he has received the
money that he gave to the accused when he did not do so when he gave
Calinawan the sums of money that totalled all in all P2,000.00? The failure of
Bernabe to explain these circumstances has made the evidence of the
prosecution incoherent and vague and, eventually, affected the credibility of
the said Bernabe. On the other hand, the Court finds that the testimony of the
accused is more credible. The accused said that Bernabe filed the instant case
because of a series of misunderstandings that the said Bernabe had with her
husband, Maj. Ventura. This was not even rebutted by the prosecution.

IN VIEW OF THE FOREGOING, the Court finds the accused NOT GUILTY of the
crime charged, and, therefore ACQUITS her, with costs de oficio.

SO ORDERED.

Subsequent to this acquittal, appellant, with the assistance of her husband, her co-appellant,
filed the above-mentioned civil case against appellee Bernabe praying "that judgment be
rendered in favor of the plaintiff and against the defendant:

(a) ordering the defendant to pay the plaintiff the sum of P30,000.00 for
moral damages and another amount of P10,000.00 as exemplary and/or
corrective damages;

(b) ordering the defendant to pay the plaintiff the sum of P2,000.00 for actual
damages for attorney's fees incurred in connection with Criminal Case No.
9003, the sum of P720.00 for premium paid on plaintiff's bail bond for 4 years
in connection with the Criminal Case No. 9003 and another sum of P2,000.00
as attorney's fees in the instant case;

(c) and to pay the cost of suit and such other just and equitable reliefs and
remedies in and about the premises.

upon the allegation that said "defendant formulated against the plaintiff (the above)
criminal charge before the Fiscal's Office, with malicious intent and/or malice aforethought,
and without justifiable cause or motive whatsoever, other than to wreck vengeance on the
plaintiff and her husband (against) whom defendant had an axe to grind, and for the
purpose of smearing the honor, reputation and prestige of the plaintiff and her family and to
embarrass and expose her to public ridicule and contempt, which led to the filing before the
Court of First Instance of Rizal of a criminal case docketed as No. 9003 for Estafa thru
Falsification of Private Document; copy of the information (criminal complaint above-
quoted) is hereto attached and marked Annex A of this complaint" and "by reason of
defendant's malicious and unjustifiable filing of the criminal action", she suffered the
damages claimed in the above-quoted prayer.

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In due time, appellee filed a motion to dismiss grounded thus:

It is the theory of the defendant that the facts alleged in the complaint does
not state a cause of action because the Supreme Court ruled that:

"No civil action for damages on account of malicious

prosecution can be maintained unless the court in acquitting
the defendant of the criminal charge orders a criminal
prosecution to be commenced against the complaining witness
for false prosecution. (Gonzales Quiros vs. Palanca Tan Guinlay,
5 Phil. 675; Herrera vs. Escoto, 56 Phil. 804; Eclarin vs.
Municipality of Tayabas, 32 Phil. 368; US vs. Barrera, 4 Phil. 461)"

"(For) An action instituted for the recovery for (the) injury and
damage as a result of a false denunciation or libelous
accusation, (may) to be proper and maintainable before the
courts it is indispensable that, in the judgment, whereby the
accused is absolved or in the order of the final dismissal, the
said denunciation or accusation is expressly certified to be false
or libelous, otherwise the action cannot prosper. (Grattage vs.
Standard Fuel Co., 20 Phil. 460)"

As gleaned from the above-named rulings of the Supreme Court, action for
damages based on malicious prosecution would only lie if the court that
renders the decision acquitting the accused declares that the offense charged
is false and malicious or orders the prosecution of the complaining witness. A
careful perusal of the decision at bar, will show that the same does not
contain such declaration or order. The Honorable Judge Andres Reyes simply
absolved the accused or the herein plaintiff of the offense charged without,
however, making any pronouncement or explicit statements that the
accusation is false and libelous; neither did he order that the complaining
witness or the herein defendant be proceeded against through an information
by the prosecuting officer.

Moreover, after examining the findings of the Court in the instant case, it is
safe to conclude that the herein plaintiff was acquitted not because the
accusation against him is fabricated but on the ground of insufficiency of
evidence or failure of the prosecution to prove his guilt beyond reasonable
doubt.

and over the vigorous objection of the appellant, the trial court issued the appealed order of
dismissal, pertinent portions of which read:

8
 Acting now on said motion and upon careful consideration and study of the
case at bar, as well as the arguments adduced for and against said motion, the
Court is of the opinion that the complaint states no cause of action. This
conclusion is buttressed by the doctrine enunciated in the case of Grattage vs.
Standard Fuel Co., Inc., 20 Phil. 460 wherein it is stated that:

Malicious Prosecution; Declaration by the Trial Judge; Action for Damages.

In order that an action for damages may lie upon a false charge or accusation
of a crime of a public nature, it is indispensable that the final decree of
acquittal or dismissal in such case should declare that it is false and
slanderous. In the absence of such declaration, the false accuser can not be
prosecuted upon a claim for indemnity under article 326 of the Penal Code.

Id; Id; Id.When in proceedings had in the investigation of a crime falsely

charged, the judgment or order of dismissal does not expressly declare that
the denunciation or accusation is false and libelous, there is no basis upon
which to rest a claim of civil liability, which is merely a consequence of the
criminal responsibility. (Gonzales Quiros vs. Palanca Tan Guinlay, 5 Phil. Rep.
675)

In this appeal, appellants' brief, which, incidentally, leaves much room for improvement,
assigns three errors allegedly committed by the court below but centers its discussion only
on the point that His Honor has erroneously relied on old decisions of this Court applying
Article 326 of the Spanish Penal Code of 1887 which required as a condition precedent for
the filing of a suit for malicious prosecution (acusacion o denuncia falsa) a previous court
finding specifically to the effect that the previous accusation was false, inasmuch as,
according to appellants, said Article 326 has not been carried over in the Revised Penal Code.
While it is obvious that the argument that the stated requirement of the old penal code
Article 326 no longer holds under the present laws under which appellants' complaint was
filed is well taken, appellants' brief has left it to this Court to note by itself what in fact is the
more serious and fatal error committed by the trial court, namely, that it dismissed
appellants' complaint notwithstanding that it sufficiently states in form and in substance a
cause of action for malicious prosecution under Article 2219 and related provisions of the
Civil Code. Exercising Our discretion as authorized by Section 7 of Rule 51 of the Rules of
Court, We opt to consider said plain error on Our own initiative and, in consequence, We
reverse the appealed order of dismissal.

The sole point raised by appellants regarding Article 326 of the Spanish Penal Code and the
decisions applying the same, Grattage v. Standard Fuel Co., 20 Phil. 460; Gonzales Quiros v.
Palanca Tan Guinlay, 5 Phil. 675; Herrera v. Escoto, 56 Phil. 804; U.S. v. Barrera, 4 Phil. 461 and
Eclarin v. Municipality of Tayabas, 32 Phil. 368, cited by the trial court as well as by appellee,
needs no elaborate discussion. People vs. Rivera, 59 Phil. 326, settled definitely that Article
326 of the Spanish Penal Code "does not appear in the Revised Penal Code, which contains
no offense denominated "acusacion o denuncia falsa" or its equivalent." The only provision

9
of the Revised Penal Code which may be said to refer to the same subject is Article 363 on
Incriminatory Machination providing thus:

ART. 363. Incriminating innocent person.Any person who, by any act not
constituting perjury, shall directly incriminate or impute to an innocent person
the commission of a crime shall be punished by arresto mayor.

As has already been held in Rivera, this article does not contemplate the idea of malicious
prosecution in the sense of someone prosecuting or instigating a criminal charge in court:

Comparing now article 363 of the Revised Penal Code with article 326 of the
old Penal Code, it will be observed that under article 326 of the former Penal
Code, the gravamen of the offense is the imputation itself when made before
an administrative or judicial officer, whereas in article 363 of the Revised Penal
Code the gravamen (sic) of the offense is performing an act which "tends
directly" to such an imputation. Article 326 of the old Penal Code punishes
false prosecutions whereas article 363 of the Revised Penal Code punishes any
act which may tend directly to cause a false prosecution.

It is well settled law that where the text of a statute is clear, it is improper to
resort to a caption or title to make it obscure. Such secondary sources may be
resorted to in order to remove, not to create doubt. (Cf. People vs. Yabut, 58
Phil. 499.) In the present case we think it proper to call attention to the title
immediately preceding article 363 of the Revised Penal Code which is as
follows: "Asechanzas Inculpatorias", as throwing some light on the classes of
acts which tend directly to lead to false prosecutions. The word asechanza, as
defined in standard dictionaries, means as follows:

"Intriga, lazo, red, zancadilla, tranquilla, amao, engao, artificio, trama, treta
especie de maquinacion urdida, de celada dispuesta contraalguno, bien sea
para perderlo enteramente, bien para jugarle (sinhundirlo) alguno mala
pasada. Engao o artificio para hacer dao a otro. Usase, por lo comun, en el
plural, asechanzas". Accion y efecto de asechar. It seems to us a forced
extension of the term asechanza to bring aformal criminal complaint within
the conception of intriga, engao, artificio, etc. It seems the more reasonable
and sensible interpretation to limit article 363 of the Revised Penal Code to
acts of "planting" evidence and the like, which do not in themselves
constitute false prosecutions but tend directly to cause false prosecutions.

Appellants do not pretend, neither have they alleged in their complaint that appellee has
planted evidence against them. At the most, what appellee is alleged to have done is that he
had filed the criminal complaint above-quoted against appellant Joaquina Ventura without
justifiable cause or motive and had caused the same to be prosecuted, with him (appellee)
testifying falsely as witness for the prosecution. These acts do not constitute incriminatory

10
machination, particularly, because Article 363 of the Revised Penal Code punishing said
crime expressly excludes perjury1 as a means of committing the same.

To be sure, for the purposes of the present civil case, it is of no moment that there is no such
crime of malicious prosecution in the Revised Penal Code. The present civil action need not
be based on the existence of such a crime Article 2219 of the Civil Code which provides that
"moral damages may be recovered in the following cases: (8) Malicious prosecution" would
more than sufficiently serve as a basis for relief in court against a party who has maliciously
caused another to baselessly and unjustifiably undergo a criminal prosecution for an offense
he knows the latter has not committed. Related provisions like Article 21 of the same code
providing, "any person who willfully causes loss or injury to another in a manner contrary to
morals, good customs or public policy shall compensate the latter for the damage" and
Article 2176 on torts or quasi-delict may also serve the purpose.

We have referred to Rivera only to show that the provision of Article 326 of the Spanish
Penal Code to the effect that "no se procedera, sin embargo, contra el denunciador o
acusador sino en virtud de sentencia firme o auto, tambien firme de sobreseimiento del
tribunal que hubiere conocido del delito imputado", whether it referred to a subsequent civil
or criminal proceeding, has no counterpart in the articles of the Civil Code just mentioned
nor in any other law or rule of court. Thus, all that the aggrieved party in a case of malicious
prosecution has to prove to merit the award of damages is that he has been denounced or
charged falsely of an offense by the defendant, that the latter knows that the charge was
false, that the said defendant acted with malice and, of course, the damages he has
suffered. In Martinez v. United Finance Corporation, G.R. No. L-24017, August 31, 1970, 34
SCRA 524, Mr. Justice Makalintal, speaking for the Court, held:

Malicious prosecution, to be the basis of a suit, requires the elements of

malice and want of probable cause in the prosecution of an action against the
plaintiff. A third element is that the defendant must himself be the prosecutor
or the instigator of the prosecution, which ended in acquittal. These elements
are discussed in the case of Buchanan vs. Vda. de Esteban, (32 Phil. 363.) thus:

"To support an action for malicious prosecution under American

law the plaintiff must prove, in the first place, the fact of the
prosecution and the fact that the defendant was himself the
prosecutor, or that he instigated its commencement, and that it
finally terminated in his acquittal, that, in bringing it, the
prosecutor had acted without probable cause, and that he was
actuated by legal malice, i.e., by improper or sinister motives.
These three elements must concur; and there is no distinction
between actions for criminal prosecution, and civil suits. Both
classes require substantially the same essentials. Malice is
essential to the maintenance of an action for malicious
prosecution and not merely to the recovery of exemplary

11
 damages. But malice alone does not make one liable for
malicious prosecution, where probable cause is shown, even
where it appears that the suit was brought for the mere
purpose of vexing, harassing and injuring his adversary. In other
words, malice and want of probable cause must both exist in
order to justify the action." (Quoted in Rehabilitation Finance
Corp. v. Koh, L-15512, Feb. 28, 1962, 4 SCRA 535, 540.)

It is true that in that case of Martinez, this Court sustained the order of dismissal of the
complaint for malicious prosecution partly because a preliminary investigation had been
conducted by the fiscal who had found probable cause for the filing of an estafa case against
Martinez, but the main consideration for such action of this Court was the fact that from the
recitals in the judgment acquitting the plaintiff, it appeared that although the court found
that said plaintiff had been guilty of deceit, the issue resolved by the court was that in law
such deceit did not constitute estafa, a matter which had been passed upon by the fiscal in a
different way, naturally, without any fault on the part of the defendant. In other words, in
Martinez case, the findings of the criminal court in the decision of acquittal negatived the
imputation of malice on the part of the defendant in charging plaintiff with estafa before the
fiscal.

In the case at bar, the complaint alleges, as earlier stated, that "defendant formulated
against the plaintiff (the above) criminal charge before the Fiscal's Office, with malicious
intent and/or malice aforethought, and without justifiable cause or motive whatsoever,
other than to wreck vengeance on the plaintiff and her husband (against) whom defendant
had an axe to grind, and for the purpose of smearing the honor, reputation and prestige of
the plaintiff and her family and to embarrass and expose her to public ridicule and
contempt, which led to the filing before the Court of First Instance of Rizal of a criminal case
docketed as No. 9003 for Estafa thru Falsification of Private Document; copy of the
information (criminal complaint above-quoted) is hereto attached and marked Annex A of
this complaint" and "by reason of defendant's malicious and unjustifiable filing of the
criminal action", she suffered the damages claimed in the above-quoted prayer. Unlike in the
Martinez case, We cannot say that the aforequoted decision that acquitted Bernabe
suggests clearly that said respondent had good reasons to accuse appellant Joaquina
Ventura as he did. Quite on the contrary, the findings of the court that the "testimony of the
accused is more credible" and that the testimony of said accused that "Bernabe filed the
instant case because of a series of misunderstanding that the said Bernabe had with her
husband, Maj. Ventura was not even rebutted by the prosecution", would seem to
indicate otherwise, that is, that the exculpatory version of the accused was the true one.

In any event, whether or not all the circumstances would show actual or legal malice is a
matter of proof. At this juncture, the only question before Us is whether or not the
complaint of appellants make out a case of damages for malicious prosecution. In Palma vs.
Graciano, 99 Phil. 72, penned by no less than our present Chief Justice Concepcion, it was
pertinently pointed out:

12
 ... The order of dismissal complained of is predicated upon the theory that the
filing of the information above referred to, is "presumed" to have been made
"in good faith" and that, in fact, the proper court had found the existence of
probable cause against plaintiff herein, contrary to the allegations in the
complaint, which specifically charges "bad faith", lack of "any probable
cause", desire to give vent to "personal hatred and vengeance," and intent to
harass and embarrass the plaintiff and to besmirch his honor and reputation.
The only question for determination by the court, at the time of the issuance
of said order, was whether or not the complaint states a cause of action. This
implied that said issue was to be passed upon on the basis of allegations of
the complaint, assuming them to be true. Instead, his honor, the trial judge
inquired into the truth of said allegations and, in effect, found them to be
false. And this it did without giving the plaintiff an opportunity to prove his
aforesaid allegations. Thus, the lower court had, not only exceeded its
jurisdiction, by going beyond the purview of the issue posed by defendants'
motion to dismiss, but, also, denied due process of law to plaintiff herein, by,
in effect deciding the case on the merits, before it had been submitted for
decision and before plaintiff had a chance to introduce evidence in support of
the allegations of his complaint."

As may be noted, the phraseology of the material allegations of the complaint in this case
and those in the above case of Palma are practically identical, for which reason, a similar
result is called for. After all, what could be a safe test as to whether or not there is malicious
prosecution is indicated in Buenaventura, et al. v. Sto. Domingo and Ignacio, 103 Phil. 239,
thus:

It is true that the present action is not criminal but civil in nature, but the
provisions of the Civil Code in making reference to malicious prosecution must
necessarily imply that the person to be held liable to pay moral damages
should have acted deliberately and with knowledge that his accusation of the
person subject to such malicious prosecution, was false and groundless. The
same thing is true as regards the demand for attorney's fees and expenses of
litigation authorized under Article 2208, No. 3 of the Civil Code.

Substantially, if not literally, and on the whole, this is what the complaint here in question
alleges, hence Our conclusion that the same states a cause of action.

For the rest, it might just as well be clarified here, lest some statements in Martinez and
Buenaventura relative to the materiality of the fiscal's having filed an information on the
question of malice of the accuser may be misunderstood, that such participation of the fiscal
is not decisive and that malice may still be shown, the holding of a preliminary investigation
and the finding of probable cause by the fiscal notwithstanding. The same may be said of
cases where preliminary investigations are conducted by judges. The determination of the
issue of malice must always be made to rest on all the attendant circumstances, including

13
the possibility of the fiscal or judge being some-how misled by the accuser's evidence. No
doubt, the very purpose of preliminary investigations is to avoid baseless and malicious
prosecutions, still, whether or not in a particular case such an objective has been duly
pursued is a matter of proof. Just as it is bad to encourage the indiscriminate filing of actions
for damages by accused persons after they have been acquitted, whether correctly or
incorrectly, a blanket clearance of all who may be minded to charge others with offenses,
fancied or otherwise, without any chance of the aggrieved parties in the appropriate cases
of false accusation to obtain relief, is in Our opinion short of being good law.

In this connection, it may be mentioned that in the original draft of the Civil Code prepared
by the Code Commission, the present provisions on human relations, evidencing concern so
that offended parties in criminal cases may have redress in civil actions independently of the
fate of the corresponding criminal case or even without this, were in a sense counter-
balanced by a proposal to make the state itself liable in damages to anyone who might, on
the other hand, be erroneously or falsely charged with an offense by the government
prosecutor. As has happened, however, such an idea did not gain legislative approval. This
accounts for the absence of any specific provision on malicious prosecution in the chapter
on human relations, but it also indicates that in the mind of the legislators the primary
responsibility for a false charge is with the person who initiates or instigates the criminal
prosecution and Articles 2219, 21 and 2176 may be availed of in particular instances where
such person is actuated by malice or other evil motive.

IN VIEW OF ALL THE FOREGOING, the appealed decision is reversed and this case is ordered
remanded to the court of origin for further proceedings not inconsistent with the above
opinion, with costs against appellee.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Teehankee,
Villamor and Makasiar, JJ., concur.

14
G.R. No. 185121 January 18, 2010

LIMANCH-O HOTEL AND LEASING CORPORATION and CONRADO TIU, Petitioners,

vs.
CITY OF OLONGAPO, ATTY. MA. ELLEN AGUILAR, ENGR. RAMON ZAVALLA, ENGR. ANDREW
DAYOT, and ENGR. REYNALDO EDRAISA, Respondents.

DECISION

ABAD, J.:

This case is about a claim for damages based on malicious prosecution.

The Facts and the Case

Sometime in 1993, the respondent City of Olongapo assessed, through its Public Utilities
Department (PUD), petitioner Conrado Tiu (the owner, president, and general manager of
petitioner Limanch-O Hotel and Leasing Corporation) his unregistered electricity
consumption from November 1988 to February 1993 in the amount of 9,364,276.50. The
City threatened to cut off his electric supply if he did not immediately settle the amount.

Petitioner Tiu filed an action against the City before the Regional Trial Court (RTC) of
Olongapo for injunction with damages, which he won. The RTC enjoined the City from
collecting the deficiency amount and from cutting off Tius power supply.1

Pending the RTCs resolution of its motion for reconsideration, the City filed criminal
complaints against petitioner Tiu for: (a) theft of electrical current punished under
Presidential Decree (P.D.) 401; and (b) disengaging and tampering with his electric meters
potential link, thereby resulting to a zero-zero power consumption in violation of City
Ordinance 23, series of 1989, and P.D. 401.

After the preliminary investigation, the state prosecutor issued a resolution, dismissing the
complaints for insufficiency of evidence.2 On appeal, however, the Acting Secretary of
Justice modified the State Prosecutors resolution and directed the filing of the
corresponding information for theft of electricity against petitioner Tiu.3 Subsequently,
however, the Secretary of Justice reconsidered and ordered instead the withdrawal of any
information that might in the meantime have been filed in court.4 When the matter was
elevated to the Court of Appeals (CA) and, ultimately, to this Court, both courts affirmed the
dismissal of the Citys complaints against Tiu.5

Claiming that petitioner Tiu suffered mental anguish, serious anxiety, besmirched
reputation, wounded feelings, moral shock and social humiliation and that petitioner
Limanch-O Hotel suffered loss of business goodwill, financial reverses, and injured

15
reputation, both filed an action for damages against the City for having filed a malicious and
unfounded charge of theft of electricity against them.6

In its answer, the City denied any ill motive in filing the criminal complaint. It explained that it
filed the criminal action following an examination of the electric meter installed at petitioner
Tius building and registered in his name. The examination showed reverse polarity markings
on the electric meter, causing it not to register Tius correct power consumption. Since this
brought tremendous losses to the PUD and to the City, the latter argued that it should not
be faulted for doing its job of going after those who pilfer electricity and tamper with
metering devices.

After petitioners Tiu and Limanch-O Hotel rested their case, the City filed a demurrer to the
evidence. The RTC granted the same and dismissed the complaint. On appeal,7 the CA
affirmed the RTC decision, having found no reversible error in the same. Tiu and Limanch-O
Hotel, said the appellate court, were unable to prove the elements that will support an
action for malicious prosecution, namely: (a) absence of probable cause in the filing of the
criminal case and (b) a showing of legal malice.8 Their motion for reconsideration having
been denied,9 Tiu and Limanch-O Hotel are now before this Court on a petition for review.10

Issue Presented

The issue in this case is whether or not the CA erred in its finding that petitioners Tiu and
Limanch-O Hotel failed to present sufficient evidence showing that respondent City
instituted the criminal complaint for theft of electricity against them maliciously and without
probable cause.

The Courts Ruling

To entitle petitioners Tiu and Limanch-O Hotel to damages for malicious prosecution, they
needed to prove the following elements: (1) that the respondent City had caused their
prosecution; (2) that the criminal action ended in their acquittal; (3) that, in bringing the
action, the City had no probable cause; and (4) that it was impelled by legal malicean
improper or a sinister motive.11 Both parties concede that the first two elements were
present in this case. What needs to be determined is whether or not petitioners Tiu and
Limanch-O Hotel have proved the last two elements.

Here, petitioners claim that this Court itself found in Public Utilities Department v. Hon.
Guingona, Jr.12 that no probable cause existed to support the charge of theft of electricity
against Tiu. This finding establishes, they said, the third element of filing of the action
without probable cause. Further, they point to the City Mayors call for the boycott of Tius
business after he was branded an electricity theft; the procurement of a search warrant to
gather evidence against him; the eventual dismissal of the complaint for theft of electricity;
and the respondent Citys dogged persistence in pursuing the case all the way to the
Supreme Court as clear proofs of legal malice.

16
But the burden in suits for malicious prosecution is being able to prove the complainants
deliberate initiation of a criminal action knowing the charge to be false and groundless.13
Here, the respondent City did not concoct out of thin air the criminal charge for theft of
electricity against petitioners Tiu and Limanch-O Hotel. It filed the case based on the result
of an investigation carried out at Tius premises which indicated a tampering of the electric
meter. Indeed, petitioners never claimed that the inspection of Tius premises was just a
farce. The City did not merely conjure the charge with the intention of vexing Tiu and
Limanch-O Hotel. It acted within its right to bring up the result of that investigation to the
authorities for evaluation and resolution.

It is not enough to say that, since the Supreme Court sustained the Secretary of Justices
finding that no probable cause for electricity theft existed against petitioners Tiu and
Limanch-O Hotel, a case for malicious prosecution already exists against the complainant.
When the Supreme Court reviewed the resolution of the Secretary of Justice, it merely
determined if he gravely abused his discretion in the matter. The Courts finding does not
amount to a judicial determination that the evidence established probable cause.141avvphi1

The test should be whether sufficient facts exist which show that, in bringing the criminal
action, complainant acted without probable cause,15 defined as the existence of such facts
and circumstances as would excite the belief in a reasonable mind that the person charged
and prosecuted in a criminal case is probably guilty of the crime or wrongdoing.16 Here, the
fact that the filing of the complaint was prompted by the result of an investigation shows
that the City had a reasonable ground to believe that a crime had probably been committed.
Additionally, the fact that the Department of Justice at first found basis for filing the charge
of theft of electricity indicates that the existence of probable cause is not clearly settled,
only that its final determination had to succumb to the sound discretion of the Secretary of
Justice under his power to review, revise, or overturn the findings of his subordinates.

Finally, no evidence was shown that there had been bad blood between respondent City and
petitioners Tiu and Limanch-O Hotel prior to the filing of the criminal charge, which
circumstance if present could justify a malicious motive in filing the charge. Resort to judicial
processes, by itself, is not an evidence of ill will which would automatically make the
complainant liable for malicious prosecution. Otherwise, peaceful recourse to the courts will
be greatly discouraged and the exercise of ones right to litigate would become meaningless
and empty.17

Even if the Court were to concede that the City branded petitioners Tiu and Limanch-O Hotel
as thieves, asked the people not to patronize their business, and had been overly zealous in
pursuing the criminal complaint that it filed, these are not the legal malice contemplated in
suits for malicious prosecution as the determining factor is evil motive in bringing the action,
not the acts exhibited by the complainant after the case had been filed.

WHEREFORE, the Court DENIES the petition and AFFIRMS the Decision dated July 8, 2008
and Resolution dated October 22, 2008 of the Court of Appeals in CA-G.R. CV 88619.

17
G.R. No. 156339 October 6, 2004

MS. VIOLETA YASOA, personally and as heir of deceased sister defendant PELAGIA
YASOA and as attorneyinfact of her brothers ALEJANDRO and EUSTAQUIO, both
YASOA and sisters: TERESITA YASOA BALLESTERO and ERLINDA YASOA TUGADI, and
mother AUREA VDA. DE YASOA, petitioners,
vs.
RODENCIO and JOVENCIO, both surnamed DE RAMOS, respondents.

DECISION

CORONA, J.:

Before this Court is a petition for review on certiorari seeking the reversal of the decision1 of
the Court of Appeals dated June 14, 2002 and its resolution dated December 12, 2002 in CA-
G.R. SP No. 69300.

The records disclose that in November 1971, Aurea Yasoa and her son, Saturnino, went to
the house of Jovencio de Ramos to ask for financial assistance in paying their loans to
Philippine National Bank (PNB), otherwise their residential house and lot, covered by TCT
No. T-32810, would be foreclosed. Inasmuch as Aurea was his aunt, Jovencio acceded to the
request. They agreed that, upon payment by Jovencio of the loan to PNB, half of Yasoas
subject property would be sold to him.

On December 29, 1971, Jovencio paid Aureas bank loan. As agreed upon, Aurea executed a
deed of absolute sale in favor of Jovencio over half of the lot consisting of 123 square
meters. Thereafter, the lot was surveyed and separate titles were issued by the Register of
Deeds of Sta. Cruz, Laguna in the names of Aurea (TCT No. 73252) and Jovencio (TCT No.
73251).

Twenty-two years later, in August 1993, Aurea filed an estafa complaint against brothers
Jovencio and Rodencio de Ramos on the ground that she was deceived by them when she
asked for their assistance in 1971 concerning her mortgaged property. In her complaint,
Aurea alleged that Rodencio asked her to sign a blank paper on the pretext that it would be
used in the redemption of the mortgaged property. Aurea signed the blank paper without
further inquiry because she trusted her nephew, Rodencio. Thereafter, they heard nothing
from Rodencio and this prompted Nimpha Yasoa Bondoc to confront Rodencio but she
was told that the title was still with the Register of Deeds. However, when Nimpha inquired
from the Register of Deeds, she was shocked to find out that the lot had been divided into
two, pursuant to a deed of sale apparently executed by Aurea in favor of Jovencio. Aurea
averred that she never sold any portion of her property to Jovencio and never executed a
deed of sale. Aurea was thus forced to seek the advice of Judge Enrique Almario, another
relative, who suggested filing a complaint for estafa.

18
On February 21, 1994, Assistant Provincial Prosecutor Rodrigo B. Zayenis dismissed the
criminal complaint for estafa for lack of evidence. On account of this dismissal, Jovencio and
Rodencio filed a complaint for damages on the ground of malicious prosecution with the
Regional Trial Court of Sta. Cruz, Laguna, Branch 91,2 which was docketed as Civil Case No.
SC-3230. They alleged that the filing of the estafa complaint against them was done with
malice and it caused irreparable injury to their reputation, as Aurea knew fully well that she
had already sold half of the property to Jovencio.

On October 5, 2000, the trial court rendered a decision in favor of Jovencio and Rodencio.
The dispositive portion stated:

WHEREFORE, premises considered, finding that plaintiffs have established their case
by preponderance of evidence, judgment is hereby rendered in their favor and
against the defendants ordering the latter to pay the former as follows:

A) 150,000.00 by way of moral damages;

B) 30,000.00 as exemplary damages;

C) 10,000.00 as attorneys fees incurred in defending themselves from the

criminal complaint for estafa;

D) 10,000.00 as attorneys fees and cost of litigation, and to pay the costs.

There being no sufficient evidence established to prove the claim for actual damages
the same is hereby dismissed.

SO ORDERED.3

Petitioner Violeta Yasoa, personally and on behalf of her brothers and sisters and mother
Aurea, filed a petition for certiorari under Rule 65 with the Court of Appeals which dismissed
the same on June 14, 2002 on the ground that petitioners availed of the wrong remedy. Their
subsequent motion for reconsideration was likewise denied on December 12, 2000.

Hence, the instant petition.

We agree with the appellate court that the remedy availed of by petitioners was
inappropriate as Rule 65 of the Rules of Court cannot be a substitute for a lost appeal,4 and
that, in any event, petitioners are liable for malicious prosecution.

The principal question to be resolved is whether the filing of the criminal complaint for
estafa by petitioners against respondents constituted malicious prosecution.

19
In this jurisdiction, the term "malicious prosecution" has been defined as "an action for
damages brought by one against whom a criminal prosecution, civil suit, or other legal
proceeding has been instituted maliciously and without probable cause, after the
termination of such prosecution, suit, or other proceeding in favor of the defendant
therein." To constitute "malicious prosecution," there must be proof that the prosecution
was prompted by a sinister design to vex or humiliate a person, and that it was initiated
deliberately by the defendant knowing that his charges were false and groundless.5
Concededly, the mere act of submitting a case to the authorities for prosecution does not
make one liable for malicious prosecution.6

In this case, however, there is reason to believe that a malicious intent was behind the filing
of the complaint for estafa against respondents. The records show that the sale of the
property was evidenced by a deed of sale duly notarized and registered with the local
Register of Deeds. After the execution of the deed of sale, the property was surveyed and
divided into two portions. Separate titles were then issued in the names of Aurea Yasoa
(TCT No. 73252) and Jovencio de Ramos (TCT No. 73251). Since 1973, Jovencio had been
paying the realty taxes of the portion registered in his name. In 1974, Aurea even requested
Jovencio to use his portion as bond for the temporary release of her son who was charged
with malicious mischief. Also, when Aurea borrowed money from the Rural Bank of Lumban
in 1973 and the PNB in 1979, only her portion covered by TCT No. 73252 was mortgaged.

All these pieces of evidence indicate that Aurea had long acknowledged Jovencios
ownership of half of the property. Furthermore, it was only in 1993 when petitioners decided
to file the estafa complaint against respondents. If petitioners had honestly believed that
they still owned the entire property, it would not have taken them 22 years to question
Jovencios ownership of half of the property. The only conclusion that can be drawn from
the circumstances is that Aurea knew all along that she was no longer the owner of
Jovencios portion after having sold it to him way back in 1971. Likewise, other than
petitioners bare allegations, no other evidence was presented by them to substantiate their
claim.

Malicious prosecution, both in criminal and civil cases, requires the elements of (1) malice
and (2) absence of probable cause.7 These two elements are present in the present
controversy. Petitioners were completely aware that Jovencio was the rightful owner of the
lot covered by TCT No. 73251, clearly signifying that they were impelled by malice and avarice
in bringing the unfounded action. That there was no probable cause at all for the filing of the
estafa case against respondents led to the dismissal of the charges filed by petitioners with
the Provincial Prosecutors Office in Siniloan, Laguna.

Petitioners reliance on Drilon vs. Court of Appeals8 is misplaced. It must be noted that in
Drilon, the investigating panel found that there was probable cause to hold private
respondent Homobono Adaza for trial for the crime of rebellion with murder and frustrated
murder. Thus, petitioner (now Senate President) Franklin Drilon could not be held liable for
malicious prosecution as there existed probable cause for the criminal case. Here, the

20
complaint for estafa was dismissed outright as the prosecutor did not find any probable
cause against respondents. A suit for malicious prosecution will prosper where legal
prosecution is carried out without probable cause.

In sum, we find no reversible error on the part of the appellate court in dismissing the
petition and in effect affirming the trial courts decision holding petitioners liable for
damages for the malicious prosecution of respondents.

WHEREFORE, the decision declaring petitioners liable for malicious prosecution is hereby
AFFIRMED in toto.

SO ORDERED.

21