G.R. No. 124062 January 21, 1999
REYNALDO T. COMETA and STATE INVESTMENT TRUST, INC., petitioners, vs. COURT OF APPEALS, HON. GEORGE MACLI-ING, in his capacity as Presiding Judge, Regional Trial Court, Quezon City, Branch 100, REYNALDO S. GUEVARA and HONEYCOMB BUILDERS, INC., respondents.

FACTS

Petitioner State Investment Trust, Inc. (SITI) is an investment house, with petitioner Reynaldo Cometa as its president. Private respondent Honeycomb Builders, Inc. (HBI) is a corporation engaged in development and construction, with private respondent Reynaldo Guevara as its president. SITI extended loans to Guevent Industrial Development Corp. (GIDC), which were not paid, leading to a foreclosure where SITI acquired properties including a Mandaluyong lot. A dispute over this lot was settled by a compromise agreement. Respondent HBI later offered to purchase the lot, and after court proceedings, SITI was directed to accept the offer. HBI built a condominium on the property and, when applying for a license to sell, submitted an Affidavit of Undertaking purportedly executed by petitioner Cometa agreeing to release the mortgage. Cometa denied executing it, and the NBI found the signature forged. A complaint for falsification was filed against Guevara. The Provincial Prosecutor initially dismissed it, but Secretary of Justice Franklin Drilon reversed this and ordered the filing of an information. The criminal case (Criminal Case No. 90-3018) was filed, but after the prosecution presented evidence, the trial court granted Guevara’s demurrer to evidence and dismissed the case. Subsequently, Guevara and HBI filed a complaint for malicious prosecution against Cometa and SITI in the Regional Trial Court. Petitioners filed a motion to dismiss, arguing the complaint stated no cause of action, that public officials were indispensable parties not impleaded, and that the action penalized the right to litigate. The trial court denied the motion. The Court of Appeals affirmed the trial court’s order, prompting this petition.

ISSUE

Whether the complaint for malicious prosecution filed by private respondents against petitioners states a cause of action.

RULING

Yes, the complaint states a cause of action. A complaint for malicious prosecution states a cause of action if it alleges: (1) the defendant instigated the prosecution; (2) the prosecution terminated in the plaintiff’s acquittal; (3) the prosecutor acted without probable cause; and (4) the prosecutor was actuated by malice. The Court examined the allegations in the complaint and found they sufficiently pleaded these elements. Paragraphs 12 to 13 allege petitioners filed the complaint that led to the prosecution. Paragraph 17 alleges the criminal case was dismissed upon demurrer to evidence. Paragraphs 18 to 20 allege the prosecution was initiated without probable cause and with malice. The Court held that the allegations, deemed hypothetically admitted for purposes of the motion to dismiss, are sufficient to sustain a cause of action. The Court also ruled that the public officials involved (Secretary of Justice, Undersecretary, prosecutor) are not indispensable parties, as the action is against the private individuals who instigated the prosecution. Furthermore, the Court found no merit in the alternative motion to drop HBI as a party plaintiff, as a corporation can be a real-party-in-interest in a civil action for malicious prosecution even though a criminal case can only be filed against its officers. The decision of the Court of Appeals was affirmed.