Malicious Prosecution and Damages

When someone may be liable for malicious prosecution.

In Antonio Diaz v. Davao Light & Power Corp., et al., G.R. No. 160959, April 4, 2007 (Callejo, J), petitioner unilaterally installed a meter to replace another one. There was a notice of disconnection and eventually, the connection was cut. There was a petition for mandatory injunction to restore connection. It was however settled by way of a compromise agreement where the parties agreed to reduce the respondent’s claim and to waive the counterclaim and to install the electric service. There was no agreement to bar the institution of other action. Thereafter, respondent filed criminal cases for theft against the petitioner, hence, a complaint for damages for abuse of right under Article 19, NCC was filed.

Petitioner insisted that the compromise agreement as well as the decision based on it already settled the controversies between them; yet, DLPC instituted the theft case against petitioner, and worse, instituted another action for violation of P.D. 401, as amended by B.P. 876. Thus, the only conclusion that can be inferred from the acts of DLPC is that they were designed to harass, embarrass, prejudice, and ruin him. He further averred that the compromise agreement in civil case completely erased litigious matters that could necessarily arise out of either Electric Meter No. 84737 or 86673509. Moreover, he asserted that the evidence he presented is sufficient to prove the damages he suffered by reason of the malicious institution of the criminal cases. In brushing aside his contentions, the SC

Held: Article 2028 of the Civil Code defines a compromise as a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. The purpose of compromise is to settle the claims of the parties and bar all future disputes and controversies. However, criminal liability is not affected by compromise for it is a public offense which must be prosecuted and punished by the Government on its own motion, though complete reparation should have been made of the damages suffered by the offended party. A criminal case is committed against the People, and the offended party may not waive or extinguish the criminal liability that the law imposes for the commission of the offense. Moreover, a compromise is not one of the grounds prescribed by the Revised Penal Code for the extinction of criminal liability.

Petitioner is not entitled to damages under Articles 19, 20 and 21, and Article 2217 and 2219(8) of the New Civil Code.

The elements of abuse of rights are the following: (a) the existence of a legal right or duty; (b) which is exercise in bad faith; and (c) for the sole intent of prejudicing or injuring another. (Hongkong and Shanghai Banking Corp., Limited v. Catalan, G.R. No. 159591, October 18, 2004, 440 SCRA 498, 511-512; Saber v. Court of Appeals, G.R. No. 132981, August 31, 2004, 437 SCRA 259). Thus, malice or bad faith is at the core of the above provisions. Good faith refers to the state of the mind which is manifested by the acts of the individual concerned. In consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. Good faith is presumed and he who alleges bad faith has the duty to prove the same. Bad faith, on the other hand, does not simply connote bad judgment to simple negligence, dishonest purpose or some moral obloquy and conscious doing of a wrong, a breach of known duty due to some motives or interest or ill-will that partakes of the nature of fraud. Malice connotes ill-will or spite and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.

There was no malice or bad faith. Petitioner himself alleged in his complaint that he unilaterally installed a meter after it was removed by DLPC. No less than the Court, admonished petitioner and reminded him that connections of electrical service and installations of electric meters should always be upon mutual contract of the parties, and that payments for electrical consumption should also be made promptly whenever due. Based on these established facts, petitioner has not shown that the acts of respondent were done with the sole intent of prejudicing and injuring him.

Petitioner may have suffered damages as a result of the filing of the complaints. However, there is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone; the law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These situations are often called damnum absque injuria. (Far East Bank and Trust Company v. Pacilan, Jr., G.R. No. 157314, July 29, 2005, 465 SCRA 372, 384-385). Whatever damages petitioner may have suffered would have to be borne by him alone since it was his acts which led to the filing of the complaints against him.

Concept of malicious prosecution.

On the other hand, malicious prosecution has been defined as an action for damages brought by or against who 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. (Yasonña v. De Ramos, 440 SCRA           154 (2004). It is an established rule that in order for malicious prosecution to prosper, the following requisites must be proven by petitioner: (1) the fact of prosecution and the further fact that the defendant (respondent) was himself the prosecutor, and that the action finally terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor was actuated or impelled by legal malice, that is, by improper or sinister motive. The foregoing are necessary to preserve a person’s right to litigate which may be emasculated by the undue filing of malicious prosecution cases. From the foregoing requirements, it can be inferred that malice and want of probable cause must both be clearly established to justify an award of damages based on malicious prosecution. (Id. At 158-159; Villanueva v. UCPB, G.R. No. 138291, March 7, 2000, 327 SCRA 391, 400; Ponce v. Legaspi, G.R. No. 79184, May 6, 1992, 208 SCRA 377, 388).

A claim for damages based on malicious prosecution will prosper only if the three elements aforecited are shown to exist. In this case, the cases were dismissed by the prosecutor before they could be filed in court, hence, they did not end in acquittal.

It cannot be likewise concluded that respondent DLPC acted without probable cause when it instituted the actions. The events which led to the filing of the complaints are undisputed, and respondent DLPC cannot be faulted for filing them. In the early case of Buchanan v. Esteban, 32 Phil. 363 (1915) it was stressed that “one cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause.” As Justice Moreland explained in that case:

Probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. The general rule is well settled that one cannot be held liable in damages for maliciously instituting a prosecution where he acted with probable cause. In other words, a suit will lie only in cases where a legal prosecution has been carried on without probable cause. And the reason for the rule as stated by Blackstone, is that it would be a very great discouragement to public justice is prosecutors, who had a tolerable ground of suspicion, were liable to be sued at law when their indictments miscarried.

Thus, the element of malice and the absence of probable cause must be proved. (China Banking Corp. v. CA, G.R. No. 94182, March 28, 1994, 231 SCRA 472, 478; Albenson Enterprise Corp. v. CA, G.R. No. 88694, January 11, 1993, 217 SCRA 16, 29). There must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately knowing that the charge was false and baseless to entitle the victims to damages. The two elements must simultaneously exist; otherwise, the presence of probable cause signifies, as a legal consequence, the absence of malice. (Lucas v. Royo, G.R. No. 136185, October 30, 2000; 344 SCRA 481). In the instant case, it is evidence that respondent DLPC was not motivated by malicious intent or by a sinister design to unduly harass petitioner, but only by a well-founded anxiety to protect its rights. Respondent DLPC cannot therefore be faulted in availing of the remedies provided for by the law.

In a free society, controversies are heard and settled under the rule of law in the forum of the courts of justice. It is one of the virtues of our system of government that a person who feels aggrieved does not have to take the law into his or her hands or resort to the use of force for the vindication of injury. The courts are there to hear and act on the complaint. The right to litigate is an escape valve to relieve the pressures of personal disagreements that might otherwise explode in physical confrontation. It is necessary not only for upholding one’s claims when they are unjustly denied but also for the maintenance of peace, if not goodwill, among incipient antagonists. Without the right to litigate, conflicting claims cannot be examined and resolved in accordance with one of the primary purposes of government, which is to provide for a just and orderly society. Hence, the mere act of submitting a case to the authorities for prosecution does not render a person liable for malicious prosecution should he or she be unsuccessful, for the law could not have meant to impose a penalty on the right to litigate. (Rivera v. Roman, G.R. No. 142402, September 20, 2005, 470 SCRA 276; Saber v, CA, supra., at 290; China Banking Corp. v. CA, supra.).

Moral damages.

The award of moral and exemplary damages and attorney’s fees was likewise upheld:

“The award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante. (Roque v. Tomas, G.R. No. 157632, December 6, 2006). Moral damages are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of pecuniary computation, they must be proportionate to the suffering inflicted. (PNR v. Brunty, G.R. No. 169891, November 2, 2006). The amount of the award bears no relation whatsoever with the wealth or means of the offender.

Evidence of moral damages.

Stephen Huang the victim and his parents Richard and Carmen Huang testified to the intense suffering they continue to experience as a result of the accident. Stephen recounted the nightmares and traumas he suffers almost every night when he relives the accident. He also gets depression when he thinks of his bleak future. He feels frustration and embarrassment in needing to be helped with almost everything and in his inability to do simple things he used to do. Similarly, respondent spouses and the rest of the family undergo their own private suffering. They live with the day-to-day uncertainty of respondent Stephen Huang’s condition. They know that the chance of full recovery is nil. Moreover, respondent Stephen Huang’s paralysis has made him prone to many other illnesses. His family, especially respondent spouses, have to make themselves available for Stephen twenty-four hours a day. They have patterned their daily life around taking care of him, ministering to his daily needs, altering the lifestyle to which they had been accustomed.

Exemplary damages.

On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases of quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. At the time of the accident, the employee was driving without a license because he was previously ticketed for reckless driving. The evidence also showed that he failed to step on his brakes immediately after the impact. Had he done so, the injuries which the victim sustained could have been greatly reduced. Wanton acts such as that committed by the employer need be suppressed; and employers like Mercury Drug should be more circumspect in the observance of due diligence in the selection and supervision of their employees. The award of exemplary damages is therefore justified.

Attorney’s fees.

With the award of exemplary damages, the award of attorney’s fees was upheld. (Art. 2208(1), NCC). In addition, attorney’s fees may be granted when a party is compelled to litigate or incur expenses to protect his interest by reason of an unjustified act of the other party. (Art. 2208(4), NCC).