GUINGONA VS CITY FISCAL

GUINGONA VS CITY FISCAL

G.R. No. L-60033 April 4, 1984

TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and TERESITA SANTOS, petitioners, 
THE CITY FISCAL OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY FISCAL FELIZARDO N. LOTA and CLEMENT DAVID, respondents.

Nature: Petition for prohibition and injunction with a prayer for the immediate issuance of restraining order and/or writ of preliminary injunction seeking  to prohibit the public respondent which is the City Fiscal of Manila  from proceeding with the preliminary investigation, in which they were charged by private respondent Clement David

Keywords: Bank deposits are loans, mutuum, estafa, criminal charge, civil case, thrift bank, NSLA

Summary: From March 1979 to March 1981, Clement David made several investments with the National Savings and Loan Association (NSLA). On March 21, 1981, the Bangko Sentral placed the bank under receivership. Upon David’s request, petitioners Guingona and Martin issued a joint promissory note, absorbing the obligations of the bank. On July 17, 1981, they divided the indebtedness. David filed a complaint for estafa and violation of Central Bank Circular No. 364 and related regulations regarding foreign exchange transactions before the Office of the City Fiscal of Manila. Petitioners filed the herein petition for prohibition and injunction with a prayer for immediate issuance of restraining order and/or writ of preliminary injunction to enjoin the public respondents to proceed with the preliminary investigation on the ground that the petitioners’ obligation is civil in nature.

MAKASIAR, Actg. C.J.

Facts: David invested several deposits with the Nation Savings and Loan Association [NSLA]. He said that he was induced into making said investments by an Australian national who was a close associate of the petitioners [NSLA officials]. On March 1981, NSLA was placed under receivership by the Central Bank, so David filed claims for his and his sister’s investments.

On June 1981, Guingona and Martin, upon David’s request, assumed the bank’s obligation to David by executing a joint promissory note. On July 1981, David received a report that only a portion of his investments was entered in the NSLA records.

On December 1981, David filed I.S. No. 81-31938 in the Office of the City Fiscal, which case was assigned to Asst. City Fiscal Lota for preliminary investigation. David charged petitioners with estafa and violation of Central Bank Circular No. 364 and related regulations on foreign exchange transactions.

Petitioners moved to dismiss the charges against them for lack of jurisdiction because David's claims allegedly comprised a purely civil obligation, but the motion was denied. After the presentation of David's principal witness, petitioners filed this petition for prohibition and injunction because:

a. The production of various documents showed that the transactions between David and NSLA were simple loans (civil obligations which were novated when Guingona and Martin assumed them)

b. David's principal witness testified that the duplicate originals of the instruments of indebtedness were all on file with NSLA.

A TRO was issued ordering the respondents to refrain from proceeding with the preliminary investigation in I.S. No. 81-31938.

Petitioners’ liability is civil in nature, so respondents have no jurisdiction over the estafa charge. TRO CORRECTLY ISSUED.

Issue:

1. Whether the contract between NSLA and David is a contract of depositor or a contract of loan, which answer determines whether the City Fiscal has the jurisdiction to file a case for estafa

2. Whether there was a violation of Central Bank Circular No. 364

Held:

1.  When David invested his money on time and savings deposits with NSLA, the contract that was perfected was a contract of simple loan or mutuum and not a contract of deposit. Hence, the relationship between David and NSLA is that of creditor and debtor, consequently, the ownership of the amount deposited was transmitted to the Bank upon the perfection of the contract and it can make use of the amount deposited for its banking operations, such as to pay interests on deposits and to pay withdrawals..

While the Bank has the obligation to return the amount deposited, it has no obligation to return or deliver the same money that was deposited. NSLA’s failure to return the amount deposited will not constitute estafa through misappropriation punishable under Article 315, par. L (b) of the Revised Penal Code, but it will only give rise to civil liability over which the public respondents have no jurisdiction.

Considering that petitioners’ liability is purely civil in nature and that there is no clear showing that they engaged in foreign exchange transactions, public respondents acted without jurisdiction when they investigated the charges against the petitioners. Public respondents should be restrained from further proceeding with the criminal case for to allow the case to continue would work great injustice to petitioners and would render meaningless the proper administration of justice.

Even granting that NSLA’s failure to pay the time and savings deposits would constitute a violation of RPC 315, paragraph 1(b), any incipient criminal liability was deemed avoided. When NSLA was placed under receivership, Guingona and Martin assumed the obligation to David, thereby resulting in the novation of the original contractual obligation. The original trust relation between NSLA and David was converted into an ordinary debtor-creditor relation between the petitioners and David. While it is true that novation does not extinguish criminal liability, it may prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court.

2. Petitioner Guingona merely accommodated the request of the Nation Savings and loan Association in order to clear the bank draft through his dollar account because the bank did not have a dollar account. Immediately after the bank draft was cleared, petitioner Guingona authorized Nation Savings and Loan Association to withdraw the same in order to be utilized by the bank for its operations. It is safe to assume that the U.S. dollars were converted first into Philippine pesos before they were accepted and deposited in Nation Savings and Loan Association, because the bank is presumed to have followed the ordinary course of the business which is to accept deposits in Philippine currency only, and that the transaction was regular and fair, in the absence of a clear and convincing evidence to the contrary.

In conclusion, considering that the liability of the petitioners is purely civil in nature and that there is no clear showing that they engaged in foreign exchange transactions, We hold that the public respondents acted without jurisdiction when they investigated the charges against the petitioners. Consequently, public respondents should be restrained from further proceeding with the criminal case for to allow the case to continue, even if the petitioners could have appealed to the Ministry of Justice, would work great injustice to petitioners and would render meaningless the proper administration of justice

Ruling: WHEREFORE, THE PETITION IS HEREBY GRANTED; THE TEMPORARY RESTRAINING ORDER PREVIOUSLY ISSUED IS MADE PERMANENT.

Note:

GENERAL RULE: Criminal prosecution may not be blocked by court prohibition or injunction.

EXCEPTIONS

1. For the orderly administration of justice

2. To prevent the use of the strong arm of the law in an oppressive and vindictive manner

3. To avoid multiplicity of actions

4. To afford adequate protection to constitutional rights

5. In proper cases, because the statute relied upon is unconstitutional or was held invalid