VOL.

1, FEBRUARY 27, 1961 593

Mendiola vs. Macadaeg

No. L-16874. February 27, 1961.

DIOSDADO S. MENDIOLA, DOMINGO B. JOLA,

TEODORO G. DE LA CRUZ, and HERMOGENES
CONCEPCION, JR., petitioners, vs. HON. HIGINO
MACADAEG, Judge of the Court of First Instance of
Manila, PABLO ROMAN, RAMON RACELIS, ARMANDO
ABAD, JR., JUAN J. BUENAFE, LUCIANO BUENAFE,
HELMUTH HOLLNSTEINER, CONSUELO S. PEREZ,
MELCHOR TUAZON, JR., MARIA TERESA CONUI, and
VICENTE R. DE LEON, respondents.

Prejudicial question.—A civil case, to be considered

prejudicial to a criminal action as to cause the suspension of the
latter, pending its (civil case) determination, must not only
involve the same facts upon which the criminal prosecution would
be based, but also that the resolution of the issue or issues in said
civil case would necessarily be determinative of the guilt or
innocence of the accused.

Same; Falsification and civil action to quiet title.—Certain

minority stockholders of the Republic Savings Bank filed a
complaint in the City Fiscal's Office, Manila against certain
officers of the bank and against Consuelo Salazar-Perez and other
persons for falsification under the Revised Penal Code, in relation
to certain provisions of the General Banking Act (Rep. Act No.
337). The complainants alleged that the falsification charged had
caused the fraudulent disbursements of the funds of the Republic
Savings Bank. The validity of the transfers of certain parcels of
land is merely incidental. Hence, even if the ownership of Mrs.
Perez is upheld in the civil case to quiet title, such a decision will
not f inally conclude that the respondents, who are not parties to
the civil case, are innocent of the falsification that enabled them
to obtain, through the alleged falsification, the illegal
disbursements of the f unds of the bank in the way of loans. Held:
The civil action to quiet title is not prejudicial to the criminal
action.
ORIGINAL ACTION in the Supreme Court. Certiorari,
prohibition and mandamus.

The facts are stated in the opinion of the Court.

Laurel Law Offices for petitioners.
Norberto S. Quisumbing for respondents.

BARRERA, J.:

This is a petition for certiorari, prohibition, and/or

mandamus filed by the City Fiscal of Manila, together with
594

594 SUPREME COURT REPORTS ANNOTATED

Mendiola vs. Macadaeg

Diosdado Mendiola, Domingo Jola, and Teodoro C. de la

Cruz, minority stockholders of the Republic Savings Bank,
seeking to nullify the preliminary writ of injunction issued
in Civil Case No. 41454 of the Court of First Instance of
Manila, restraining the petitioner City Fiscal from
proceeding with his investigation of a complaint for
falsification of public and/or commercial documents filed
against respondents Pablo Roman, Ramon Racelis,
Armando Abad, Jr,, Juan J. Buenafe, Luciano Buenafe,
Helmuth Hollnsteiner, Consuelo S. Perez, Melchor Tuazon,
Jr., Maria Teresa Conui, and Vicente R. de Leon.
The antecedents are as follows:
In a letter-complaint dated March 2, 1959, later
amended on May 9, 1959, and filed with the City Fiscal of
Manila, Diosdado S. Mendiola, Domingo B. Jola, and
Teodoro S. de la Cruz, minority stockholders of the
Republic Savings Bank, accused Pablo Roman, Ramon
Racelis, Luciano F. Buenafe, Juan J. Buenafe, Maria
Teresa Conui, and Vicente R. de Leon (officials and
employees of the Republic Savings Bank), together with
Helmuth Hollnsteiner, Armando Abad, Jr., Consuelo
Salazar-Perez, Melchor Tuazon, Jr., John Doe, Peter Doe,
James Doe, Richard Doe, and Mary Doe, of the crime of
falsification of public and/or commercial documents under
Article 171, paragraphs 2, 8, and 4, and Article 172,
paragraph 1 of the Revised Penal Code, in relation to
Sections 75, 76, 77, 78, 83, and 87 of the Banking Act
(Republic Act 337), allegedly committed by the respondents
Bank officials and employees, in connivance with the other
respondents, in preparing or causing the preparation of the
following documents:
 (1) Four deeds of absolute sale, all dated December 10
1957, by virtue of which Pablo M. Sarangaya
purportedly sold and conveyed ownership of the
properties separately described therein unto
Felizardo Africa, Honorato Galang, Raul Suarez,
and Conrado Enrile, respectively. These deeds were
all signed by Melchor Tuazon, Jr. and Peter Doe, as
witnesses, and notarized and acknowledged by
Armando Abad, Jr.
(2) Four deeds of mortgage, all dated December 11,
1957, allegedly executed by vendee Africa, Galang,
Suarez, and Enrile in favor of the Republic Savings
Bank, to secure their respective loans of
P85,000.00, P210,000.00,

595

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Mendiola vs. Macadaeg

P250.000.00, and P200,000.00, incurred to pay the

balance of the purchase price of the aforementioned
properties. Said deeds of mortgage were witnessed
by Maria Teresa Conui and John Doe, and
notarized and acknowledged by Luciano F. Buenafe.
(3) Four deeds of sale with assumption of mortgage, all
dated September 3, 1958, allegedly executed by
Felizardo Africa, Honorato Galang, Raul Suarez,
and Conrado Enrile, the first two in favor of the
Beneficial Financing Corporation of which Consuelo
S. Perez is the President and majority stockholder,
and the other two in favor of Consuelo Salazar-
Perez personally.

Specifically, the charge was that respondents made

untruthful statements in the respective narration of facts,
by causing it to appear in said deeds that the alleged
vendees Africa, Galang, Suarez, and Enrile took part in the
acts and proceedings indicated therein when in fact they
did not; that by the unlawful and deliberate preparation,
execution, and accomplishment of the aforementioned
documents, the Register of Deeds of Rizal was induced to
issue the corresponding transfer certificate of title for each
of said properties, and the registration thereof in the
names of Africa, Galang, Suarez, and Enrile, and to
register the deeds of mortgage allegedly executed by the
purchasers in favor of the Republic Savings Bank, as well
as the supposed subsequent sale of the same properties,
subject to said mortgages, in favor of Consuelo Salazar-
Perez and the Beneficial Financing Corporation (of which
Mrs. Perez is the President and majority stockholder); that
by virtue of such fraudulent transactions, respondents were
able to cause the unlawful disbursement of the funds of the
Republic Savings Bank in the total sum of P745,000.00 in
violation of their trust and which could not have been
accomplished without the misrepresentations and
falsifications complained of. This complaint was docketed
as I.S. No. 6876 of the City Fiscal's Office.
With full knowledge of the filing of this complaint in the
respondent City Fiscal's Office, and notwithstanding the
summons issued by this official, the Beneficial Financing
Corporation and Consuelo Salazar-Perez, on April 3, 1959,
entered into a contract with Top Service, Inc. whereby they
promised to sell to the latter the four (4) parcels of land for
the sum of P794,764.30 for the first two parcels,
596

596 SUPREME COURT REPORTS ANNOTATED

Mendiola vs. Macadaeg

and P597,031.30 for the last two parcels. Subsequently,

Beneficial Financing Corporation conveyed the two parcels
of land it obtained from Africa and Galang to Mrs. Perez
who thereby became the owner of the f our parcels.
Thereafter, respondents filed a motion to quash the
criminal complaint and an alternative motion to postpone
the investigation on the ground that the nullity of the
mortgage contracts is a prejudicial question to the charge
for falsification. Evidently to bolster up this theory, Top
Service, Inc. subsequently instituted in the Court of First
Instance of Pasig (Civil Case No. 5584) an action against
Consuelo Salazar-Perez purportedly "to quiet title" of Mrs.
Perez, alleging, among others, the agreement to sell
secured in its favor in virtue of which plaintiff averred to
have already paid the total amount of P50,000.00 as
advance payment, and was to undertake, as it did
undertake, to subdivide the parcels of land into small lots,
lay out streets and plazas; that it had already spent more
than P300,000.00 and was expected to spend around
Pl,000,000.00 more to complete the subdivision work; that
it learned of the filing by the three minority stockholders of
the Republic Savings Bank of the complaint for falsification
involving the parcels subject of their contract; that such
proceeding was prejudicial to its 1-ights, title, and interest
under the aforementioned promise to sell. Thus, it was
prayed that the court render judgment "to remove such
cloud or to quiet the title of the af oresaid real property".
The defendant, Consuelo Salazar-Perez answered the
complaint denying the alleged falsification and asserting
the validity of her title over the said properties.
After the issues in said civil case have thus been
apparently joined, the respondents in I.S. No. 6976 of the
City Fiscal's Office reiterated their motion to quash or
suspend the Investigation of the criminal complaint,
inviting attention to the civil action filed in Pasig and
insisting that the same is an existing prejudicial civil
question that warrants the suspension of the preliminary
investigation. Upon its denial by the investigating fiscal,
respondents appealed to the City Fiscal. Ruling that a
decision in Civil Case No. 5584, filed in Pasig, purport-
597

VOL. 1, FEBRUARY 27, 1961 597

Mendiola vs. Macadaeg

edly to quiet title over the properties involved therein, is

not essential to the determination of the criminal liability
of the respondents for falsification as charged in the
complaint, the City Fiscal ordered the continuation of the
preliminary investigation, setting the same for September
16, 1959, at 1:30 P.M. On the appointed date, but before
the actual investigation could take place, however, the City
Fiscal received a writ of preliminary injunction, issued ex-
parte by the1 Court of First Instance of Manila in Civil Case
No. 41454, enjoining him to refrain from conducting the
preliminary investigation of I.S. 6976. Their separate
motions to dismiss the case and to dissolve the injunction
having been denied, the City Fiscal, together with the
complainants in the criminal investigation, filed the
instant petition for the purpose heretofore stated, viz, to set
aside the preliminary writ of injunction restraining the
City Fiscal from proceeding with his investigation.
The only question to be resolved in this instance is,
whether the proceedings in I.S. No. 6976 of the City
Fiscal's Office may be stopped or suspended pending the
final determination of the question involved in Civil Case
No. 5584 of the Court of First Instance of Rizal (Pasig), or,
differently stated, whether Civil Case No. 5584 is a
prejudicial civil action to the falsification case subject of
I.S. No. 6976.
 In the leading case of De Leon v. Mabanag (70 Phil.
202), cited by both parties, this Court, providing the
criteria of when a prejudicial civil question exists, stated:

"x x x por regla general, el tribunal que entiende de un asunto

criminal tiene competencia para decidir cuestiones prejudiciales,
para solo el efecto de la represion, cuando tales cuestiones
aparezcan tan intimamente ligadas al hecho punible que sea
racionalmente imposible su separacion. Pero el articulo 4.
consagra una excepcion, y es cuando la cuestion prejudicial sea
determinante de la culpabilidad o inocencia del acusado,

_______________

1 A complaint against the City Fiscal and complainants Mendiola, Jola,

and Dela Cruz, praying for the issuance of a writ of preliminary injunction
to restrain the City Fiscal from proceeding with the preliminary
investigation of I.S. No. 6976, and for the declaration, after trial, that a
prejudicial question exists in Civil Case No. 5584 of the Court of First
Instance of Rizal.

598

598 SUPREME COURT REPORTS ANNOTATED

Mendiola vs. Macadaeg

en, cuyo caso el tribunal que conoce de la causa criminal debe

suspender esta y hacer que se falle la cuestion prejudicial en juicio
civil o administrativo. Esto es exactamente lo que ocurre ahora.
lLa falsificacion del documento V-1, o mejor dicho, los hechos en

que consisten la misma y su sustitucion durante el curso del juicio

afectan directamente a la moralidad del recurrente como miembro
del foro y es deber de este Tribunal determinar si el mismo es
culpable de malas practicas, determinacion que constituvo en este
caso la cuestion prejudicial de caracter administrativo que debe
resolverse separadamente en el expediente administrativo en vista
de que determinara a su vez la culpabilidad o inocencia del
recurrente en relacion con el proceso criminal por el delito de
falsificacion. x x x La necesidad de suspender la investigacion
preliminar que ha iniciado el recurrido asi como la incoacion del
proceso criminal por el delito de falsificacion del documento V-1
resulta mas patente si se considera que la falsedad del documento
y su sustitucion se hallan aun sub-judice y si este Tribunal
decidiese que el mismo es genuino y no ha sido sustituido y por
consiguiente el recurrente no es culpable de malas practicas, tal
fallo estaria en pugna con el critirio sustantado por el recurrido."
(Emphasis supplied.)
Under the foregoing doctrine, for a civil case to be
considered prejudicial to a criminal action as to cause the
suspension of the latter pending its (civil case) final
determination, it must appear not only that the said civil
case involves the same facts upon which the criminal
prosecution would be based, but also that in the resolution
of the issue or issues raised in the aforesaid civil action, the
guilt or innocence of the accused would necessarily be
determined.
In the case at bar, the burden of the criminal complaint
(I.S. No. 6976) is that the falsification therein charged had
caused the fraudulent and illegal disbursements of the
funds of the Republic Savings Bank in violation of the
Banking Law and of the Revised Penal Code. The validity
of the transfers of ownership over the land is but an
incident. Consequently, even if the ownership of Consuelo
Salazar-Perez is upheld in the case to quiet title, such a
decision will not finally conclude that the herein
respondents, who are not parties to the said civil action,
are innocent of the falsification that enabled them to
obtain, through fraudulent misrepresentations and false
nar-
599

VOL. 1, FEBRUARY 28, 1961 599

Lee Bag & Company vs. Hanover Fire Ins. Co. of theCity of
New York

ration of facts in the public documents, the illegal

disbursements of the bank's funds in the way of loans.
Moreover, the civil case is an action between Top
Service, Inc. and Consuelo Salazar-Perez alone. Both
parties are interested in the same proposition, the clearing
of doubt in the title of Mrs. Perez, In such a situation, who
would raise the question of falsification of the documents
relied on by both. parties? How could a judgment rendered
under such circumstances be determinative of the guilt or
innocence of the respondents who could not be bound by the
decision without their intervention or the intervention of
those who charge the falsification. Clearly, the issue in
Civil .Case No. 5584 does not constitute a prejudicial
question that would warrant the suspension of the
investigation, sought to be conducted by the petitioner City
Fiscal, of the criminal complaint for falsification filed in his
office ahead of the civil case.
WHEREFORE, the petition is hereby granted, and the
preliminary injunction issued by the respondent court (in
 Civil Case No. 41454) restraining the City Fiscal of Manila
from proceeding with the preliminary investigation of I.S.
No. 6976 dissolved. Costs are taxed against the
respondents, petitioners in said Civil Case No. 41454. So
ordered.

Bengzon, Actg. C.J., Padilla, Bautista Angelo,

Concepcion, Reyes, J.B.L., Paredes and Dizon, JJ., concur.

Petition granted.

Notes.—As to other cases involving the Republic Bank,

see Republic Bank vs. Cuaderno, L-22399, March 30, 1967,
19 Supreme Court Reports Annotated 671, and Perez vs,
Monetary Board, L-23307, JuneBO, 1967, 20 Supreme
Court Reports Annotated 592.
See annotation on prejudicial question under Fortich-
Celdran, vs. Celdran, L-22677, Feb. 28, 1967, 19 Supreme
Court Reports Annotated 502, 507.

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