SECOND DIVISION

[G.R. No. L-27523. February 25, 1975.]

DIONISIO L. FALGUI, JR., AMOR M. PALACIO, EDNA M. PALACIO, PEDRO ALARAS, PEDRO M.
PALACIO, JR., EXALTACION M. PALACIO, GIL M. PALACIO, EMELITA M. PALACIO, PEDRO
PALACIO, SR., and JULIANA MACALALAD-PALACIO, Petitioners, v. THE HONORABLE
PROVINCIAL FISCAL OF BATANGAS, ASSISTANT PROVINCIAL FISCAL CARMELO Q. QUIZON
and GUILLERMO T. RAMOS, Respondents.

Felix S. Falgui, for Petitioners.

G. F. Mabunga for Respondents.

SYNOPSIS
Private respondent executed a deed of absolute sale over three parcels of land in favor of petitioners
for P60,000.00. Subsequently, petitioners reconveyed to private respondent the same property for P
133,000.00. After the consummation of these transactions, petitioners sued respondent for damages
alleging that the latter had been spreading malicious and defamatory statements to the effect that the
transactions were "usurious." Respondent in turn filed a criminal complaint for usury with the
Provincial Fiscal. Petitioners filed a second complaint for damages against private respondent for
allegedly publishing defamatory statements in newspapers. In the criminal case for usury, petitioners
asked the Fiscal to suspend the preliminary investigation on the ground that the questions involved in
the two civil cases are pre-judicial questions. The Fiscal denied the motion. On writs of certiorari and
prohibition, the Supreme Court sustained the Fiscal reiterating the rule that the time to ask for
suspension of a criminal action on the pendency of a pre-judicial question is not during the preliminary
investigation but after the Fiscal has filed corresponding information.

SYLLABUS

1. REMEDIAL LAW; PRE-JUDICIAL QUESTION; DEFINITION. A prejudicial question is one that arises
in a case, the resolution of which is a logical antecedent of the issue involved in said case, and
cognizance of which pertains to another tribunal. It is based on the fact distinct and separate from the
crime but so intimately connected with it that it is determinative of the guilt or innocence of the
accused.

2. ID.; ID.; WHEN IT MAY BE INVOKED. The doctrine of prejudicial question comes into play
generally in a situation where a civil action and a criminal action are both pending and there exists in
the former an issue which must be preemptively resolved before the criminal action may proceed,
because howsoever the issue raised in the civil action is resolved would be determinative juris et de
jure of the guilt or innocence of the accused in the criminal case.

3. ID.; ID.; REQUIREMENT OF CRIMINAL ACTION. The requirement that there should be a criminal
action pending in court is pursuant to the express provisions of Section 5, Rule III of the Revised
Rules of the Court which provides that "a petition for suspension of the criminal action based upon the
pendency of a pre-judicial question in a civil case, may only be presented by any party before or
during the trial of the criminal action."cralaw virtua1aw li brary

4. ID.; ID.; ID.; TIME TO ASK FOR SUSPENSION. The time to ask for suspension of a criminal case
due to a pre-judicial question is not during the preliminary investigation but after the Fiscal has filed
the corresponding information. Hence, even if the resolution of the issues involved in the civil case
would be determinative jures et de jure of the guilt or innocence of the petitioners in the pending
preliminary investigation, the suspension of such preliminary investigation based on that reason may
not be sustained.

5. ID.; SECTION 5 of RULE III CONSTRUED IN RELATION TO ARTICLE 36 OF CIVIL CODE. Article 36
of the Civil Code, providing that a pre-judicial question must be decided before the criminal action
may proceed, did not fix at what precise stage of the criminal prosecution the doctrine of the pre-
judicial question may be invoked to warrant the suspension of the criminal proceedings; but expressly
left that matter to "the rules of court which the Supreme Court shall promulgate." Section 5 of Rule
III, which provides that the pre-judicial question may only be raised after the finding of probable
cause and the case is already in the court of proper jurisdiction for trial, in effect fixes the time when
the same may be raised and, therefore, this is in conformity with the aforecited statutory provision.


D E C I S I O N


ANTONIO, J.:


Petition for certiorari and prohibition, with prayer for preliminary injunction, to annul the order issued
by respondent Provincial Fiscal of Batangas on April 26, 1967, denying petitioners motion to suspend
the preliminary investigation of I. S. No. 593 for alleged violation of the Usury Law filed by private
respondent Guillermo T. Ramos against petitioners, and to prohibit and enjoin respondents and/or
their representatives from proceeding with the preliminary investigation until the alleged prejudicial
question involved in Civil Case No. 69104 of the Court of First Instance of Manila and Civil Case No.
660 of the Court of First Instance of Batangas (Balayan Branch), pending between petitioners and
private respondent, is finally resolved.

On August 5, 1965, private respondent Guillermo T. Ramos, with the written consent of his wife
Vedasta Ramos, executed in Manila a deed of absolute sale in favor of the children of petitioners-
spouses Pedro Palacio, Sr. and Juliana Macalalad-Palacio (Pedro M. Palacio, married to Exaltacion M.
Palacio; Edna M. Palacio, married to Pedro Alaras; Gil M. Palacio, Emelita M. Palacio, and Amor M.
Palacio, married to Dionisio L. Falgui, Jr.), who are the other petitioners in this case (hereinafter
referred to as the other petitioners), over three (3) parcels of sugarland covered by TCT Nos. 11434
and 11435 of the Register of Deeds of Batangas. The consideration that appears in the deed of sale is
P60,000.00. The vendor, respondent Ramos, appears to have executed a receipt on the same date, to
the effect that he received from the aforementioned vendees referred to in the aforecited Deed of
Sale, the sum of P90,000.00." . . representing the true consideration of the Deed of Absolute Sale . .
.." According to petitioners, this second document was executed by Ramos because he had requested
the other petitioners to indicate in the deed of sale the sum of P60,000.00, instead of P90,000.00, as
the consideration of the sale, to reduce the expenses in connection with execution and registration of
said document, considering that Ramos would be the one to defray the same; and in view of the good
relations existing between petitioners and Ramos, the former acceded provided that for record
purposes respondent Ramos would acknowledge in writing his receipt of the true amount. This Deed of
Absolute Sale was duly registered and Transfer Certificates of Title Nos. 11457 and 11458 were issued
to the vendees. The following day, August 6, 1965, the other petitioners, in an agreement designated
as a "Contract to Sell", granted an option to respondent Ramos to purchase the same properties for
the sum of P133,000.00 in cash, with the understanding that during the period of the option or from
the date of the signing of the contract to August 5, 1967, respondent Ramos shall be entitled to take
possession of the aforedescribed parcels of land so that he could cultivate the same and benefit from
the crops thereon. On February 6, 1967, upon receipt of the sum of P133,000.00 the other petitioners
executed a Deed of Absolute Sale wherein they conveyed and transferred, by way of absolute sale, the
same properties to respondent Ramos.

On April 5, 1967, the "other petitioners" filed a complaint for damages against respondent Ramos in
the sum of P220,000.00, in addition to attorneys fees and costs, with the Court of First Instance of
Manila (Civil Case No. 69104), alleging inter alia that after the consummation of the transactions
mentioned above, defendant Ramos "started and engaged in willful and malicious campaigns, schemes
and intrigues against plaintiffs, spreading malicious, slanderous and defamatory statements,
utterances and gossips among the friends and neighbors of the plaintiffs, to the effect that the above
enumerated transactions, covered by Annexes A, C and E, are usurious; that plaintiffs herein, the
whole family, are all usurers and corrupt in all their dealings; that they are persons who would lose
their honors and morals when it comes to money; and, that they are persons who would take
advantage of their friends and neighbors and should not be trusted and should be shunned or
avoided."cralaw virtua1aw li brary

On April 11, 1967, respondent Ramos filed a criminal complaint for usury against petitioners with the
Office of the Provincial Fiscal of Batangas (I. S. No. 593). In his affidavit-complaint Ramos stated,
among others, that what he asked for and obtained from petitioner spouses Pedro Palacio, Sr. and
Juliana Macalalad-Palacio, was a loan in the amount of P60,000.00; that, however, the Palacio spouses
asked him to execute a deed of sale on August 5, 1965 in favor of their heirs (the other petitioners)
over three (3) parcels of land with an aggregate area of sixty-nine (69) hectares whose market value
was about P300,000.00; that on the same day he and the other petitioners executed a Contract to Sell
(which was, however, dated August 6, 1965) whereby the Palacios granted him an option to
repurchase the property for P133,000.00 within two (2) years; that on January 17, 1967, or some
seven (7) months before the expiration of the repurchase period, he wrote the Palacios offering to
repurchase the property, with a request for the reduction of interest upon the principal amount which
he allegedly obtained from the Palacios by way of a loan; that his request for reduction of interest was
rejected by the Palacio spouses, who insisted on the repurchase price of P133,000.00; that in view of
pressing circumstances, he had to pay the Palacios the said sum of P133,000.00, thus he was
compelled to pay the Palacios the sum of P73,000.00 by way of interest for seventeen (17) months on
the principal loan of only P60,000.00

On April 15, 1967, petitioners received copy of the summons issued by respondent Assistant Provincial
Fiscal Carmelo Q. Quizon setting the preliminary investigation of I. S. No. 593 for April 26, 1967.

On April 18, 1967, respondent Ramos filed his Answer with Counterclaim in Civil Case No. 69104 of
the Court of First Instance of Manila alleging inter alia that the Deed of Absolute Sale dated August 5,
1965, the receipt dated August 5, 1965, the Contract to Sell dated August 6, 1965, and the Deed of
Absolute Sale dated February 6, 1967, "were executed at the instance of the plaintiffs in order to
cover up a usurious loan transaction, and that said documents are made to reflect agreements other
than the true intention of the parties and are therefore void and without legal force and effect," and
that the true transaction between the plaintiffs and defendant Ramos is an equitable mortgage.

On April 24, 1967, petitioner spouses Pedro Palacio, Sr. and Juliana Macalalad-Palacio filed with the
Court of First Instance of Batangas (Balayan Branch) a complaint for damages (Civil Case No. 660)
against respondent Ramos for allegedly causing the publication in three (3) metropolitan newspapers
of malicious, libelous and defamatory contents of his affidavit to the effect that petitioner spouses
"loaned" to respondent the amount of P60,000.00 and that said petitioners charged respondent Ramos
with interest in the amount of P73,000.00.

On April 26, 1967, petitioners filed a motion in I.S. No. 593 asking respondent Provincial Fiscal of
Batangas to suspend the preliminary investigation on the ground that prejudicial questions are
involved in Civil Case No. 69104 of the Court of First Instance of Manila and in Civil Case No. 660 of
the Court of First Instance of Batangas (Balayan Branch). The motion was opposed by respondent
Ramos. After extensive arguments between the parties on the issue of prejudicial question,
respondent Assistant Provincial Fiscal denied petitioners motion for suspension of the preliminary
investigation. Petitioners filed a motion for reconsideration, but the same was denied.

On May 6, 1967, the present petition was filed with this Court. We gave due course to the petition,
and on June 2, 1967, a writ of preliminary injunction was issued restraining respondents Provincial
Fiscal and Assistant Provincial Fiscal of Batangas from proceeding with the preliminary investigation of
I. S. No. 593.

On August 21, 1967, respondent Ramos filed in Civil Case No. 660 of the Court of First Instance of
Batangas (Balayan Branch) his Answer to Amended Complaint with Counterclaim alleging inter alia
that the Deed of Absolute Sale dated August 5, 1965 and the other documents related thereto "were
executed at the instance of plaintiffs in conspiracy with the children and in-laws in order to cover up a
usurious loan transaction, and that said documents are made to reflect agreements other than the
true intention of the parties and are therefore void and without legal force and effect," and that the
true transaction between the plaintiffs and defendant Ramos is an equitable mortgage.
I


The crucial question for determination is whether the petitioners could ask for the suspension of the
preliminary investigation on the ground that the question of usury, an issue involved in Civil Case No.
69104 (CFI, Manila) and Civil Case No. 660 (CFI, Batangas) should first be resolved before proceeding
with said preliminary investigation, being a prejudicial question to the criminal case for usury pending
investigation.

A prejudicial question is one that arises in a case, the resolution of which is a logical antecedent of the
issue involved in said case, and the cognizance of which pertains to another tribunal. 1 It is based on
a fact distinct and separate from the crime but so intimately connected with it that it is determinative
of the guilt or innocence of the accused. 2 We have heretofore ruled that a prejudicial question must
be determinative of the case before the court and jurisdiction to try the same must be lodged in
another tribunal. 3 In Flordelis v. Castillo, We explained that "doctrine of prejudicial question comes
into play generally in a situation where a civil action and a criminal action both pend and there exists
in the former an issue which must be preemptively resolved before the criminal action may proceed,
because howsoever the issue raised in the civil action is resolved would be determinative juris et de
jure of the guilt or innocence of the accused in the criminal case." 4 In connection with the
requirement that the jurisdiction to hear and decide the prejudicial question must be lodged in another
tribunal, We ruled that the court, when exercising its jurisdiction over the civil action is considered as
a court distinct and different from itself when trying the criminal action. 5

Implicit, therefore, is the pendency of both the civil action and the criminal action, and the resolution
of the issue raised in the civil action would be determinative of the guilt or innocence of the accused in
the criminal case. The requirement that there should be a criminal action pending in court is pursuant
to the express provisions of Section 5, Rule 111, of the Revised Rules of Court which provides that "A
petition for the suspension of the criminal action based upon the pendency of a prejudicial question in
a civil case, may only be presented by any party before or during the trial of the criminal action." The
abovequoted rule is a reiteration of Our ruling in Dasalla, Et Al., v. City Attorney of Quezon City, Et
Al., 6 that the time to ask for the suspension of a criminal case due to a pre- judicial question is not
during the preliminary investigation but after the Fiscal has filed the corresponding information. 7
Consequently, even conceding that the resolution of the issues involved in the two civil cases (Civil
Case No. 69104, Court of First Instance of Manila and Civil Case No. 660, Court of First Instance of
Batangas) would be determinative juris et de jure of the guilt or innocence of the petitioners in the
case pending preliminary investigation in the Office of the Provincial Fiscal of Batangas, the
suspension of such preliminary investigation based upon that reason may not be sustained.
II


It is, however, insisted that both the aforecited Section 5, Rule 111, of the Revised Rules of Court and
Our ruling in Dasalla, Et. Al. v. City Attorney of Quezon City, Et. Al. are inconsistent with the
provisions of Article 36 of the Civil Code and, therefore, should be modified to conform to the
imperative commands of the statute. The statutory provision in question provides: "Pre-judicial
questions, which must be decided before any criminal prosecution may be instituted or may proceed,
shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be
in conflict with the provisions of this Code."cralaw vi rtua1aw library

It is the view of petitioners that Article 36 of the Civil Code is based on the ruling of this Court in De
Leon v. Mabanag 8 where this Court "ruled that the pre-judicial questions can be raised even during
the preliminary investigation and ordered the respondent Fiscal therein to abstain from further
proceeding with the preliminary investigation." 9

We have explained in Isip v. Gonzales, 10 that while Article 36 of the Civil Code provides that a pre-
judicial question must be decided before the criminal action may proceed, it did not fix at what precise
stage of the criminal prosecution the doctrine of the pre-judicial question may be invoked to warrant
the suspension of the criminal proceedings. It expressly left that matter to "the rules of court which
the Supreme Court shall promulgate." Thus, We held that Section 5 of Rule 111, which provided that
the pre-judicial question may only be raised after a finding of probable cause and the case is already
in court of proper Jurisdiction for trial, in effect fixes the time when the same may be raised and,
therefore, this is in conformity with the aforecited statutory provision.

"More definitely in Estrella v. Orendain, Jr. and Quilop, G.R. No L-19611, February 27, 1971, We held
that it is settled that the matter of prejudicial questions cannot he resolved (until) . . . after the
corresponding information has already been filed.

"Of course, this is not to overlook the holding in the earlier case of De Leon v. Mabanag, heavily relied
upon by petitioners, which sustained an action for prohibition against the City Fiscal of Manila to stop
him from proceeding with the preliminary investigation of a charge of falsification of public documents
on the ground of the existence of a prejudicial question in a civil case; but Dasalla being much later in
point of time, and since, on the other hand, it already formed part of our jurisprudence when the
revised Rules of Court were promulgated in 1964, it is obvious that Section 5 of Rule 111 of said Rules
should be construed consistently with the ruling in Dasalla.

"Petitioners contend that the construction given by this Court in Section 5 of Rule 111 in the Dasalla
case makes the same inconsistent with the above-quoted Article 36 of the Civil Code. The point of
petitioners is that the phrase before any criminal prosecution may be instituted or may proceed in
said Article 36 contemplates that the prejudicial question must be decided before the preliminary
investigation, considering that in People v. Olarte, L-22465, February 28, 1967, 19 SCRA 494, We held
that the period of prescription for a criminal action is tolled by the filing of the criminal complaint in
court, even if said filing is only for purposes of preliminary investigation, hence, the preliminary
investigation is already part of the criminal prosecution. Petitioners are in error. While Article 36 does
provide logically that a prejudicial question should be decided before the criminal case proceeds, it
does not fix at what precise stage the criminal prosecution should be suspended to await the
resolution of the prejudicial questions. Precisely, Article 36 leaves the procedure for invoking,
considering and deciding prejudicial questions to the rules of court promulgated by the Supreme
Court. Inasmuch as in Section 5, Rule 111 and Dasalla and Estrella We have provided and ruled that
the question of whether or not a criminal action shall be suspended because of a prejudicial question
may not be raised during the stage of preliminary investigation but only after a finding of probable
cause and the case is already in the court of proper jurisdiction for trial, the contention of petitioners
is clearly untenable." (Isip v. Gonzales, 39 SCRA 263-264)

We reiterated this rule in Bautista v. Navarro, 11 and Rojas v. People. 12

We find no sound and cogent reason to warrant a departure from the aforesaid rulings of this Court.

In consequence hereof, the petition for certiorari and prohibition is hereby dismissed, with costs
against petitioners.

Fernando, Barredo, Fernandez and Aquino, JJ., concur.
Endnotes:


1. Zapanta v. Montesa, etc., Et Al., L-14534, February 28, 1962, 4 SCRA 510; Fortich-Celdran v.
Celdran, L-22677, February 28, 1967, 19 SCRA 502; Jimenez v. Averia, L-22759, March 29, 1968, 22
SCRA 1380.

2. Benitez v. Concepcion, Jr., L-14646, May 30, 1961, 2 SCRA 178.

3. Zapanta v. Montesa, etc., Et Al., supra Fortich-Celdran v. Celdran, supra Jimenez v. Averia, supra.

4. 58 SCRA 301, 305.

5. Merced v. Diez, 109 Phil., 155.

6. 5 SCRA 193, 196.

7. Vol. 4, p. 161, Martin, Rules of Court of the Philippines With Notes and Comments.

8. 70 Phil., 204-207.

9. Petitioners Memorandum, p. 19.

10. 39 SCRA 255.

11. L-35345, November 23, 1972, 48 SCRA 176.

12. L-22237, May 31, 1974, 57 SCRA 248.