G.R. No. L-62408 August 24, 1984
LUIS TAN AND ESPERANZA ANG, in the LATTER’S CAPACITY AS OWNER AND SOLE PROPRIETOR OF THE UNITED BAZAAR, petitioners, vs. THE HONORABLE COURT OF APPEALS and HORACIO YAPTINCHAY, respondents.

FACTS

Petitioner Luis Tan, General Manager of the United Bazaar owned by co-petitioner Esperanza Ang, purchased goods in Manila for delivery to Baguio via Highway Express, Inc., a common carrier owned by private respondent Horacio Yaptinchay. The goods failed to arrive. Despite repeated inquiries and a formal demand letter from the Filipino-Chinese Chamber of Commerce, petitioners received no satisfactory explanation from Highway Express regarding the loss. Consequently, Tan filed a criminal complaint for estafa against Yaptinchay and several company employees before the Baguio City Fiscal.
After preliminary investigation, the Fiscal dismissed the complaint against Yaptinchay for lack of probable cause but filed an Information for estafa against the dispatcher and receiving clerk. These employees were later acquitted by the City Court, which found the goods were lost due to robbery or hijacking in transit, negating criminal misappropriation. Subsequently, Yaptinchay filed a civil case for damages against petitioners, alleging malicious prosecution. The trial court ruled in Yaptinchay’s favor, awarding moral damages and attorney’s fees, a decision modified but substantially affirmed by the Court of Appeals, which reduced the moral damages.

ISSUE

Whether petitioners are liable for damages for malicious prosecution for filing the estafa complaint against respondent Yaptinchay.

RULING

No. The Supreme Court reversed the Court of Appeals and dismissed the suit for damages. For a malicious prosecution suit to succeed, the plaintiff must prove that the prosecutor acted without probable cause and was motivated by legal malice. Both elements must concur. The Court found that probable cause existed when Tan filed the complaint. The circumstances—the unexplained loss of the goods, the carrier’s failure to provide a clear account despite demands, and the initial lack of knowledge that the loss was due to hijacking—were sufficient to excite a reasonable belief in Tan’s mind that a crime might have been committed. The subsequent dismissal of the charge against Yaptinchay by the Fiscal and the acquittal of the employees based on a defense revealed only during trial do not retroactively negate the existence of probable cause at the time of filing.
Furthermore, the element of malice was not established. There was no clear and preponderant evidence that Tan instituted the charge with knowledge of its falsity or with a sinister design to vex, humiliate, or injure Yaptinchay. The law upholds the policy of encouraging free resort to courts for redress of grievances. A person should not be held liable in damages simply because a criminal prosecution, initiated in good faith based on an honest belief in one’s right, ultimately fails. To rule otherwise would deter individuals from seeking judicial relief for legitimate wrongs.