G.R. No. L-24017, August 31, 1970
FRANCISCO P. MARTINEZ, Plaintiff-Appellant, v. UNITED FINANCE CORPORATION and/or IFC SERVICE LEASING AND ACCEPTANCE CORPORATION, Defendant-Appellee.

FACTS

Plaintiff-appellant Francisco P. Martinez, a general merchant, sold postdated checks at a discount to defendant-appellee United Finance Corporation. As of November 29, 1960, his unpaid balance was P58,381.13. To secure payment, he executed a chattel mortgage in favor of the defendant covering the merchandise inventory of his Pasay department store. On or about May 17, 1961, the defendant extrajudicially foreclosed the mortgage, and the sheriff seized and sold the merchandise for only P6,140.81. In July 1961, the defendant filed a criminal complaint for estafa under Article 315 of the Revised Penal Code against the plaintiff with the Manila City Fiscal’s office. After a preliminary investigation, the Fiscal filed an information in the Court of First Instance of Manila on November 15, 1962. The plaintiff was acquitted on September 9, 1963. The plaintiff then filed a complaint for damages based on malicious prosecution, alleging the defendant knew he had not committed estafa but filed the case with malice and in bad faith to harass him and destroy his business standing. The defendant moved to dismiss for failure to state a cause of action. The lower court granted the motion and dismissed the complaint.

ISSUE

Whether the complaint for damages based on malicious prosecution states a sufficient cause of action.

RULING

No, the complaint fails to state a sufficient cause of action. For a suit based on malicious prosecution, three elements must concur: (1) the defendant was the prosecutor or instigator; (2) the prosecution terminated in the plaintiff’s acquittal; (3) the prosecution was initiated without probable cause and with malice. The complaint’s own allegations, including its annexes, negate the elements of malice and want of probable cause. It states that a preliminary investigation was conducted by the City Fiscal, who thereafter certified there was reasonable ground to believe the offense was committed and filed an information. The trial court’s decision of acquittal, attached to the complaint, found that the evidence showed the plaintiff, with intent to defraud the defendant, disposed of the mortgaged merchandise weeks or months after the mortgage was executed. The acquittal was based on reasonable doubt, specifically that the deceit was not the efficient cause of the defraudation as required for estafa. These facts demonstrate the defendant was justified in submitting its grievance to the authorities, and there was probable cause for the prosecution. Therefore, the order dismissing the complaint is affirmed.