A.C. No. 10261 - Lim vs. Mendoza

The plaintiff-appellant, Ladislao Palma, initiated an action to recover damages on account of allegations that criminal cases were instituted against him.
Two criminal cases were involved:

Criminal case No. V-2135 for "frauds against the public treasury," which was later dismissed.
Criminal case No. V-2763 for malversation of public funds, in which he was acquitted.

The complaint charged that the criminal cases were instituted through "malicious machination" and in "bad faith."
It was alleged that the information in the cases was filed "without any probable cause" and with the deliberate intention of:

Accused of acting with "evident premeditation" and personal hatred and vengeance against the plaintiff.

The political subdivisions – the City of Cebu and the province of Cebu – were also included as defendants.

All four defendants filed separate motions to dismiss the complaint on the ground that it stated no cause of action.
On August 12, 1953, the Court of First Instance of Cebu granted the motions and dismissed the complaint.
The dismissal prompted the filing of an appeal by the plaintiff.

The primary issue revolved around whether the plaintiff’s complaint sufficiently stated a cause of action against the defendants.
A further inquiry was made into the character of the parties’ acts, particularly assessing if certain actions were undertaken "contrary to law" without the sanction of the respective political subdivisions.

Whether the allegations contained in the plaintiff’s complaint constitute a valid cause of action against any of the defendants.
Whether the trial court exceeded its jurisdiction by inquiring into the veracity of the allegations, thereby effectively deciding the case on the merits in a preliminary stage.
To what extent the acts of defendants Manuel Cuenco and Honorato Graciano, when performed in bad faith and outside the scope of their official duties, render them personally liable for damages.
Whether the City of Cebu and the province of Cebu can be held liable for acts of their officers when such acts are carried out without the authority or approval of the political subdivisions.