Title
Cabaero vs. Cantos
Case
G.R. No. 102942
Decision Date
Apr 18, 1997
Petitioners charged with estafa; counterclaim for malicious prosecution expunged as premature, to be pursued separately post-criminal resolution.

Case Summary (G.R. No. 102942)

Procedural Background and Relief Sought

Crim. Case No. 90-18826 began with an Information filed October 18, 1990, charging petitioners with estafa. Petitioners pleaded not guilty at arraignment (January 7, 1991). After Judge Elisa R. Israel inhibited, the case was re-raffled to Branch VII. Petitioners filed an Answer with Counterclaim (April 2, 1991). The private prosecutor moved orally at the initial hearing (April 15, 1991) to expunge and/or dismiss the answer with counterclaim; respondent Judge Cantos ordered expungement by Order dated July 1, 1991, and denied reconsideration on August 21, 1991. Petitioners invoked certiorari (Rule 65) alleging the challenged orders were contrary to law, issued in excess of jurisdiction and with grave abuse of discretion.

Factual Basis of the Criminal Charge

The Information alleged that during September–October 1987 petitioners conspired to defraud Epifanio Ceralde of P1,550,000.00 by inducing him to advance funds for purchase of six parcels in Pangasinan; alleged scheme involved Aqualand Ventures & Management Corporation and a Solid Bank check for P1,500,000.00 purportedly received and encashed by petitioner Perez and not turned over to Ceralde. The criminal prosecution thus included an implied civil action for recovery of civil liability under Rule 111 §1.

Contents and Reliefs Claimed in the Answer with Counterclaim

In their Answer with Counterclaim petitioners denied personal misappropriation, asserted the funds were properly applied to the land purchase, and alleged the Information was unjustified and malicious. They prayed that the Information and the implied civil action be dismissed or quashed and sought an award against Ceralde of P1,500,000.00 (moral damages), P500,000.00 (exemplary damages), P100,000.00 (attorney’s fees) and P20,000.00 (litigation expenses).

Trial Court’s Basis for Expungement and Parties’ Contentions

The private prosecutor’s memorandum argued two grounds for expungement: (1) lack of payment of prescribed docket fees, and (2) that the counterclaim was barred for not being filed before arraignment. Judge Cantos ordered the answer with counterclaim expunged on the ground that “this is a criminal case wherein the civil liability of the accused is impliedly instituted therein.” Petitioners contended the counterclaim was compulsory by reason of the implied civil action and therefore properly filed, relied on Javier to justify permissibility, and argued no docket fees were required for compulsory counterclaims. Petitioners also complained that the expungement Order failed to state legal basis as required by Section 14, Article VIII of the Constitution.

Issue Presented to the Supreme Court

Whether the respondent judge committed grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the expungement from the records of the petitioners’ Answer with Counterclaim and related pleadings in Criminal Case No. 90-18826.

Preliminary Matter — Litis Pendentia Raised by Private Respondent

Private respondent belatedly asserted litis pendentia based on cross-claims in an unrelated civil case (Civil Case No. 90-53035). The Supreme Court declined to entertain this defense because it was not raised in the trial court; under Rule 15 §8 motions attacking pleadings must include all objections then available, and omitted objections are deemed waived.

Preliminary Matter — Filing Fees for Counterclaims

The Court held that a compulsory counterclaim does not require the payment of docket fees, invoking Sun Insurance Office, Ltd. v. Asuncion. The Court distinguished permissive counterclaims (which require a filing fee and are not considered filed until fee payment) from compulsory counterclaims (which arise out of the same transaction and do not require separate docket fees).

Javier Precedent and the Nature of a Compulsory Counterclaim

The Court revisited Javier v. IAC, which held that a claim for malicious prosecution is a compulsory counterclaim that must be raised in the criminal action when a civil action is impliedly instituted, to avoid multiplicity of suits. The Court reiterated definitions: a counterclaim is any claim for money or relief by a defending party against an opposing party; a compulsory counterclaim arises out of or is necessarily connected with the transaction that is the subject matter of the plaintiff’s claim and, if within jurisdiction and not requiring absent third parties, must be set up or will be barred.

The Court’s Practical Reservations About Applying Javier Rigidly

The Court identified significant procedural and practical problems arising from permitting or requiring the adjudication of counterclaims (and related civil claims) within criminal proceedings where the civil action is impliedly instituted:

  • The Rules of Criminal Procedure do not provide clear procedures for adjudicating a counterclaim arising from an implied civil action.
  • Criminal judgments are structured primarily to determine guilt and may not address counterclaims in the form civil judgments do.
  • Hearing counterclaims, cross-claims, and third‑party complaints in criminal trials will complicate and delay criminal proceedings, impinge on the state prosecutor’s control of the criminal case, and risk infringing an accused’s right to a speedy trial.
  • Civil procedural mechanisms (admissions by silence, affirmative defenses such as res judicata or prescription, and default consequences) do not fit neatly into criminal practice.
  • Informations do not contain the ultimate facts required to put an accused on notice of the specific civil claims, leading to demands for bills of particulars and discovery that would further delay the criminal trial.
  • The Rules do not specify when an answer in an implied civil action must be filed; the criminal concept of arraignment and plea does not equate to service of summons in civil cases.
  • The offended party may reserve the civil action until prosecution starts presenting evidence, further complicating timing.
  • These uncertainties would encourage interlocutory appeals over collateral civil issues and stall criminal trials, risking witnesses’ availability and the accused’s speedy trial rights.
  • A cause of action for malicious prosecution is conceptually premature until there is a final dismissal or acquittal; adjudicating such claims concurrently may be premature.

Court’s Resolution and Holding

Balancing the Javier principle against the substantial procedural difficulties and absence of definitive procedural rules, the Supreme Court held that a counterclaim such as the one filed by petitioners should not be tried together with the criminal case because doing so would unnecessarily complicate and delay the criminal proceedings. The Court therefore modified the RTC orders: the counterclaim of the accused was set aside without prejudice, and the respondent RTC of Manila was directed to proceed with the criminal trial and the civil action arising from the criminal offense (the implied civil action) with all reasonable dispatch. The Court thereby preserved petitioners’ ability to litigate their counterclaim in separate proceedings after the criminal case is terminated or in accordance with future rules addressing the lacuna.

Rationale on Remedy and Procedural Direction

The Court emphasized the absence of clear procedural rules governing the pros

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