Sosmeña vs. Bonafe

Malicious prosecution may arise from a preliminary investigation that terminates in dismissal, and the four elements are satisfied with necessary modifications: (1) the prosecution or preliminary investigation occurred and the defendant instigated its commencement; (2) it finally ended in acquittal or dismissal; (3) the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice. The mere act of submitting a case to the authorities for prosecution does not by itself make one liable; liability requires deliberate initiation with knowledge that the charges were false and groundless.

Menandro A. Sosmeña was the managing director of Expo Logistics Philippines, Inc., a freight forwarding company doing business in the Philippines and the local partner of Plettac Roeder Asia Pte Ltd., a Singaporean company providing pavilion hall tents for exhibitions and other events in the Philippines. Respondents Benigno M. Bonafe, Jimmy A. Escobar, Joel M. Gomez, and Hector B. Pangilinan worked at Expo Logistics in various capacities. The dispute implicated Article 19 of the Civil Code, which requires every person to act with justice, give everyone his due, and observe honesty and good faith, and the civil action for malicious prosecution.

Menandro A. Sosmeña was the managing director of Expo Logistics Philippines, Inc., a freight forwarding company and local partner of Plettac Roeder Asia Pte Ltd., which provided pavilion hall tents for exhibitions and other events in the Philippines. Benigno M. Bonafe was engaged by petitioner as Air Conditioning Assistant in January 2001, with services required for installing and maintaining air conditioning units for the pavilion hall tents. Jimmy A. Escobar and Joel M. Gomez were hired as petitioner’s assistants, and Hector B. Pangilinan was the lead carpenter, all at Expo Logistics; Pangilinan resigned in April 2001. Respondents lived in the same area and were almost always together at work, developing close camaraderie.

Petitioner’s foreign business partner, Abdul Majid Sattar, became suspicious that petitioner had been erecting tent pavilion halls in local markets without reporting the transactions to him. Abdul approached Benigno and asked him to spy against petitioner, and Benigno agreed. Not long after, petitioner discovered that Benigno was surveilling him, and they had a falling out. Petitioner’s relationship with Jimmy and Joel also became strained; petitioner maneuvered to ruin Benigno’s efficiency and camaraderie with Jimmy and Joel and blamed Benigno for the crash of air conditioners at the tent pavilions after discovering the spying. Benigno resigned from Expo Logistics in September 2001 because he felt his working conditions had become hostile. After Benigno resigned, petitioner’s nephew berated Hector and his co-workers for stopping work when it was raining, and Hector and his co-workers went home and never reported back for work. Petitioner also called Jimmy’s attention about his and his co-workers’ slow work, which came to a head on October 7, 2001 when he cursed them; Jimmy and his co-workers refused to return to work thereafter. Petitioner threatened to have respondents arrested, and Joel corroborated these events; respondents memorialized petitioner’s harsh treatment in their respective affidavits. Jimmy and Joel followed Benigno in resigning in October 2001.

On February 4, 2002, petitioner filed criminal cases against Benigno, Jimmy, Joel, and Hector with the Office of the City Prosecutor in Pasay City. He accused them of conspiring to commit malicious mischief by allegedly cutting off the cable wires of five air conditioning units in the evening of October 8, 2001, and thereafter concealing them to damage petitioner’s business to the tune of P30 million, which did not happen because the cables were located in time for the event. The air conditioning units were installed at a tent pavilion hall for an exhibit by the Philippine government. Petitioner also charged Benigno separately for allegedly absconding with P29,000.00 cash, and Jimmy and Joel with theft of materials of an undetermined value and P2,000.00 cash.

On May 10, 2002, 3rd Assistant City Prosecutor Manuel Ortega dismissed the complaints for insufficiency of evidence. He concluded that the charges were motivated by petitioner’s grudge against each respondent and that petitioner filed the complaints just to prejudice them. Respondents then sued petitioner for malicious prosecution, claiming that the criminal complaints forced them to hire lawyers and plead with a witness to testify on their behalf and caused them anguish, mental torture, and public ridicule. Benigno received the subpoena at his workplace, which led his employer to halt his employment so he could attend to the complaints. Respondents assailed petitioner for violating Article 19 of the Civil Code and demanded moral damages, exemplary damages of not less than P100,000.00, and P100,000.00 attorney’s fees. Petitioner defended himself by claiming good faith in filing the criminal complaints and said he did not appeal the dismissal because he was busy with business engagements.

The trial court found that respondents could not have committed the imputed crimes, that their statements and testimonies were consistent, and that petitioner’s and his witnesses’ testimonies were contrary to each other. It noted that petitioner took almost four months to file the cases, knew that the prosecutor’s dismissal was not final and could be re-filed, yet never re-filed, and gave an unacceptable excuse of being busy; it also found that he claimed to have consulted a lawyer but did not name the lawyer. The Court of Appeals similarly found bad faith, noting that the security guard’s testimony about the incident was doubtful because the disturbance was not recorded in the log book and that petitioner’s delay in initiating the action suggested legal malice. These findings, together with the prosecutor’s finding of no probable cause and ill will, were the factual bases for the Supreme Court’s ruling.

• Absence of Acquittal: Petitioner argued that he could not be guilty of malicious prosecution because the element that “the criminal action ended in plaintiff’s acquittal” is missing; the criminal complaints were dismissed during the preliminary investigation stage, so there was no acquittal to speak of.
• Mere Filing Not Liability: Petitioner argued that the mere act of submitting a criminal complaint to the authorities does not automatically make a person liable for malicious prosecution, and resort to judicial processes is not itself evidence of ill will.
• Probable Cause: Petitioner insisted that there was probable cause for malicious mischief and theft against respondents.
• Good Faith / Lack of Malice: Petitioner claimed good faith when he filed the criminal complaints and maintained that he was not motivated by malice or bad faith; he also said he did not appeal the dismissal because he was busy with business engagements.

• Elements Present: Benigno countered that all elements of malicious prosecution were present; petitioner had instigated a criminal complaint against respondents, and the subsequent dismissal of the complaints sufficiently satisfied the element of “the criminal action ended in plaintiff’s acquittal.”
• No Probable Cause: Respondent echoed the prosecutor’s finding of absence of probable cause for malicious mischief and theft.
• Sinister Design: Respondent stressed that petitioner had been prompted by a sinister design to vex and humiliate him and the other respondents.
• Credibility and Factual Findings: In the present petition, Benigno riposted that petitioner was unable to establish probable cause; the Court of Appeals’ assessment of credibility should be respected and its factual findings affirmed as supported by the trial record.

• Probable Cause and Malice: Whether, upon the facts established, petitioner acted without probable cause and was motivated by malice and bad faith in initiating the criminal complaints against respondents, and therefore is guilty of malicious prosecution.
• Damages: Whether the amounts of moral damages, exemplary damages, and attorney’s fees awarded should be reduced pursuant to jurisprudence.

• Probable Cause and Malice: Yes. The petition was denied. The elements of malicious prosecution were present with necessary modifications: the preliminary investigation occurred and petitioner instigated it; it ended in dismissal; petitioner acted without probable cause; and he was impelled by legal malice. The Court of Appeals decision was affirmed.
• Damages: Reduced. The Court reduced the awards to P30,000.00 moral damages, P20,000.00 exemplary damages, and P10,000.00 attorney’s fees for each respondent, with 6% interest per annum from finality until fully paid.

• Probable Cause and Malice: Because a petition for review on certiorari under Section 1, Rule 45 raises only questions of law, the factual findings below were binding, and the exceptions to the rule must be alleged, substantiated, and proved; petitioner did not invoke any exception. The issue was a question of law—the legal consequences of the established facts. Malicious prosecution is 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 termination in favor of the defendant. The four elements are: (1) the prosecution occurred and the defendant was the prosecutor or instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice. Malicious prosecution also pertains to preliminary investigations. Here, the first two elements were present with necessary modifications: the preliminary investigation occurred and petitioner instigated it, and it ended in dismissal. As to the last two elements, the burden was on respondents to prove malice by preponderance of evidence. The trial court and Court of Appeals found respondents discharged that burden, and the Supreme Court agreed. The established facts showed petitioner’s ill will and bad blood toward respondents; he delayed in initiating the criminal complaints and in challenging the prosecutor’s findings; and his evidence of probable cause was found contrived and lacking credibility. The security guard identified Benigno only in a supplemental affidavit executed months after his first affidavit, suggesting an afterthought, and he had no contemporaneous document such as an incident report. Thus, more likely than not, petitioner was motivated by ill will and bad blood, had no legitimate grievances, and his evidence did not confirm probable cause. The finding of malicious prosecution was therefore affirmed.
• Damages: The Court reduced the amounts awarded pursuant to jurisprudence. It cited Meyr Enterprises Corporation vs. Cordero, where P50,000.00 moral damages and P20,000.00 attorney’s fees were awarded and no exemplary damages; Coca Cola Bottlers Philippines Inc. vs. Roque, where P50,000.00 moral damages, P50,000.00 exemplary damages, P50,000.00 attorney’s fees, and costs were granted; Spouses Kapoe vs. Masa, where an aggregate of P29,000.00 for 11 plaintiffs representing moral and exemplary damages, P2,200.00 exemplary damages for all, and P3,000.00 attorney’s fees for all 11 plaintiffs were awarded; and Tiongco vs. Deguma, where the Court held that moral and exemplary damages are not punitive or corrective, are not meant to enrich the complainant at the expense of the defendant, and may be reduced where no actual damages are adjudicated. Applying these guidelines, the Court reduced the award to P30,000.00 moral damages, P20,000.00 exemplary damages, and P10,000.00 attorney’s fees, which the dispositive portion ordered paid to each respondent, subject to 6% interest per annum from finality until fully paid.

• Malicious Prosecution — 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. The four elements are: (1) the prosecution did occur, and the defendant was himself the prosecutor or instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) in bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice—an improper or sinister motive. The gravamen is not the filing of a complaint based on the wrong provision of law, but the deliberate initiation of an action with knowledge that the charges were false and groundless. The Court applied the doctrine to a preliminary investigation that ended in dismissal, modifying the first two elements accordingly.
• Question of Law vs. Question of Fact in Rule 45 Petitions — A petition for review on certiorari under Section 1, Rule 45 raises only questions of law; factual findings of the Court of Appeals are binding, and exceptions must be alleged, substantiated, and proved. A question of law exists when the doubt or difference arises as to what the law is on a certain set of facts; a question of fact exists when the doubt or difference arises as to the truth or falsehood of the alleged facts. The Court applied this rule by refusing to re-weigh the evidence and by resolving only the legal consequences of the facts established below.
• Preponderance of Evidence — Under Rule 133, Section 1, in civil cases the party having the burden of proof must establish his case by a preponderance of evidence. The Court placed the burden on respondents to prove malice and found that it was more likely than not that petitioner knew his charges were false and groundless and yet deliberately initiated the criminal complaints.
• Damages in Malicious Prosecution — Moral and exemplary damages are not punitive or corrective in nature; they are designed to compensate the claimant for injury suffered and are not meant to enrich the complainant at the expense of the defendant. Where no actual damages are adjudicated, the Supreme Court may reduce moral and exemplary damages. The Court applied this doctrine to reduce the awards to P30,000.00 moral damages, P20,000.00 exemplary damages, and P10,000.00 attorney’s fees for each respondent.
• Article 19, Civil Code / Abuse of Rights — Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. The trial court found petitioner violated this provision, and the Supreme Court affirmed liability for malicious prosecution.

• "This Court has drawn the four elements that must be shown to concur to recover damages for malicious prosecution. Therefore, for a malicious prosecution suit to prosper, the plaintiff must prove the following: (1) the prosecution did occur, and the defendant was himself the prosecutor or that he instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) in bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice -- an improper or a sinister motive. The gravamen of malicious prosecution is not the filing of a complaint based on the wrong provision of law, but the deliberate initiation of an action with the knowledge that the charges were false and groundless." — States the canonical four-element test for malicious prosecution and the gravamen of the action, which the Court applied to the facts.
• "Malicious prosecution does not only pertain to criminal prosecutions but also to any other legal proceeding such as a preliminary investigation." — Extends the cause of action to preliminary investigations, which was decisive because the criminal complaints were dismissed at that stage.
• "Here, there should be no question that the first two elements of this cause of action are present with necessary modifications: (1) the preliminary investigation did occur, and petitioner himself instigated its commencement; (2) the preliminary investigation finally ended with a dismissal of the complaints." — Applies the first two elements to a preliminary investigation that ended in dismissal rather than acquittal.
• "To sum up, in all probability, petitioner was motivated by ill will and bad blood against respondents in the initiation of the criminal complaints at the Office of the City Prosecutor. More likely than not, he had no legitimate grievances that had spurred him to so act. Finally, his evidence probably does not confirm probable cause for the crimes he ascribed to respondents. These legal conclusions flow more likely than not from the facts validated by the investigating prosecutor, the trial court, and the Court of Appeals." — Summarizes the preponderance-of-evidence finding on malice and absence of probable cause.

• Magbanua vs. Junsay, 544 Phil. 349, 364 (2007) — Explained the cause of action of malicious prosecution, including its definition and four elements; the Court relied on it for the elements and the rule that malicious prosecution may cover other legal proceedings.
• Drilon vs. Court of Appeals — Cited in Magbanua for the definition of malicious prosecution and the statutory basis in the Civil Code; no citation is given in the text.
• Yasoña vs. De Ramos, 483 Phil. 162, 168 (2004) — Cited for the definition of malicious prosecution and the principle that the mere act of submitting a case to authorities does not make one liable.
• Pascual vs. Burgos, 776 Phil. 167, 169 (2016) — Cited for the rule that only questions of law may be raised in a petition for review on certiorari and that factual findings bind the Court unless exceptions are alleged, substantiated, and proved.
• Gatan vs. Vinarao, G.R. No. 205912, October 18, 2017 — Cited for the binding effect of the Court of Appeals’ factual findings.
• Meyr Enterprises Corporation vs. Cordero, 742 Phil. 320 (2014) — Cited as a guideline for reducing damages in malicious prosecution; awarded P50,000.00 moral damages and P20,000.00 attorney’s fees, with no exemplary damages.
• Coca Cola Bottlers Philippines Inc. vs. Roque, 367 Phil. 493, 504 (1999) — Cited as a guideline for damages; granted P50,000.00 moral damages, P50,000.00 exemplary damages, P50,000.00 attorney’s fees, and costs.
• Spouses Kapoe vs. Masa, G.R. No. L-50473, January 21, 1985 — Cited as a guideline for damages; awarded an aggregate of P29,000.00 for 11 plaintiffs representing moral and exemplary damages, P2,200.00 exemplary damages for all, and P3,000.00 attorney’s fees for all 11 plaintiffs.
• Tiongco vs. Deguma, 375 Phil. 978, 994-995 (1999) — Cited for the principles that moral and exemplary damages are not punitive or corrective, are not meant to enrich the complainant, and may be reduced where no actual damages are adjudicated.
• Madera vs. Heirs of Salvador Lopez, G.R. No. 37105, February 10, 1981 — Cited by the trial court for the statutory basis of moral damages due to malicious prosecution under Articles 19, 2176, and 2219 of the Civil Code.

• Article 19, Civil Code — Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. The trial court found petitioner violated this provision, and the Supreme Court affirmed liability for malicious prosecution.
• Articles 2176 and 2219, Civil Code — Cited as part of the statutory basis for moral damages due to malicious prosecution.
• Article 2234, Civil Code — Cited by the trial court as justifying exemplary damages once moral damages are established.
• Article 2208(1), Civil Code — Cited by the trial court as basis for attorney’s fees, tempered by quantum meruit.
• Rule 45, Section 1, Rules of Court — Petitions for review on certiorari shall raise only questions of law; the Court applied this to decline re-weighing evidence and to resolve only the legal consequences of established facts.
• Rule 133, Section 1, Rules of Court — In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence; the Court applied this to respondents’ burden to prove malice.
• Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217, and 2219(8), Civil Code — Cited in the Court’s discussion of the statutory basis for a civil action for damages for malicious prosecution.

Peralta, C.J. (Chairperson); Caguioa, J.; Reyes, Jr., J.; and Lopez, J. concurred.