No. L-60033. April 4, 1984.*
TEOFISTO GUINGONA, JR., ANTONIO L.
MARTIN, and TERESITA SANTOS,
petitioners, vs. THE CITY FISCAL OF MANILA,
HON. JOSE B. FLAMINIANO, ASST. CITY
FISCAL FELIZARDO N. LOTA and CLEMENT
DAVID, respondents.
Banks; Criminal Law; Contracts; A bank time or
savings deposit constitutes a simple loan, not a
contract of deposit. Non-payment of the said
bank deposit does not constitute estafa.—It must
be pointed out that when private respondent
David invested his money on time and savings
deposits with the aforesaid bank, the contract
that was perfected was a contract of simple loan
or mutuum and not a contract of deposit.
Same; Same; Same; Same.—Hence, the
relationship between the private respondent and
the Nation Savings and Loan Association 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, however, no
obligation to return or deliver the same
money that was deposited, And, the failure of the
Bank to return the amount deposited will not
constitute estafa through misappropriation
punishable under Article 315, par. 1(b) of the
Revised Penal Code, but it will only give rise to
civil liability over which the public respondents
have no jurisdiction.
Same; Same; Same; Same; Where a bank’s
obligation to a depositor was assumed by
another, the trust relationship is converted into
creditor-debtor relationship which cannot give
rise to estafa.—But even granting that the failure
of the bank to pay the time and savings deposits
of private respondent David would constitute a
violation of paragraph 1 (b) of Article 315 of the
Revised Penal Code, nevertheless any incipient
criminal liability was deemed avoided, because
when the aforesaid bank was placed under
receivership by the Central Bank, petitioners
Guingona and Martin assumed the obligation of
the bank to private respondent David,
_______________
* SECOND DIVISION.
578
578 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
thereby resulting in the novation of the original
contractual obligation arising from deposit into a
contract of loan and converting the original trust
relation between the bank and private respondent
David into an ordinary debtor-creditor relation
between the petitioners and private respondent.
Consequently, the failure of the bank or
petitioners Guingona and Martin to pay the
deposits of private respondent would not
constitute a breach of trust but would merely be a
failure to pay the obligation as a debtor.
Same; Same; Same; Novation of contract of
deposit will prevent criminal liability where it
occurs before filing of information.—Moreover,
while it is true that novation does not extinguish
criminal liability, it may however, prevent the rise
of criminal liability as long as it occurs prior to the
filing of the criminal information in court.
Same; Same; Same; Same.—It may be observed
in this regard that novation is not one of the
means recognized by the Penal Code whereby
criminal liability can be extinguished; hence, the
role of novation may only be to either prevent the
rise of criminal liability or to cast doubt on the true
nature of the original basic transaction, whether
or not it was such that its breach would not give
rise to penal responsibility, as when money
loaned is made to appear as a deposit, or other
similar disguise is resorted to (cf. Abeto vs.
People, 90 Phil. 581; U.S. vs. Villareal, 27 Phil.
481).
Same; Same; Central Bank; Petitioners’
contention that they did not engage in prohibited
dollar transactions is meritorious as Clement
David’s dollar draft was first converted to pesos
before the money was accepted as bank
deposit.—It appears from the records that when
respondent David was about to make a deposit of
a bank draft issued in his name in the amount of
US$50,000.00 with the Nation Savings and Loan
Association, the same had to be cleared first and
converted into Philippine currency. Accordingly,
the bank draft was endorsed by respondent
David to petitioner Guingona, who in turn
deposited it to his dollar account with the Security
Bank and Trust Company. 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.
579
VOL. 128, APRIL 4, 1984 579
Guingona, Jr. vs. City Fiscal of Manila
Same; Same; Same; Same.—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 (see
paragraphs p and q, Sec. 5, Rule 131, Rules of
Court).
Criminal Procedure; Injunction may issue to
enjoin fiscal from prosecuting a case in extreme
cases.—While as a rule, the prosecution in a
criminal offense cannot be the subject of
prohibition and injunction, this Court has
recognized the resort to the extraordinary writs of
prohibition and injunction in extreme cases.
PETITION for prohibition and injunction to review
the order of the City Fiscal of Manila.
The facts are stated in the opinion of the Court.
MAKASIAR, Actg. C.J.:
This is a petition for prohibition and injunction
with a prayer for the immediate issuance of
restraining order and/or writ of preliminary
injunction filed by petitioners on March 26, 1982.
On March 31, 1982, by virtue of a court resolution
issued by this Court on the same date, a
temporary restraining order was duly issued
ordering the respondents, their officers, agents,
representatives and/or person or persons acting
upon their (respondents’) orders or in their place
or stead to refrain from proceeding with the
preliminary investigation in Case No. 81-31938 of
the Office of the City Fiscal of Manila (pp. 47-48,
rec.). On January 24, 1983, private respondent
Clement David filed a motion to lift restraining
order which was denied in the resolution of this
Court dated May 18, 1983.
As can be gleaned from the above, the instant
petition seeks to prohibit public respondents from
proceeding with the preliminary investigation of
I.S. No. 81-31938, in which petitioners were
charged by private respondent Clement David,
with estafa and violation of Central Bank Circular
No.
580
580 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
364 and related regulations regarding foreign
exchange transactions principally, on the ground
of lack of jurisdiction in that the allegations of the
charged, as well as the testimony of private
respondent’s principal witness and the evidence
through said witness, showed that petitioners’
obligation is civil in nature.
For purposes of brevity, We hereby adopt the
antecedent facts narrated by the Solicitor
General in its Comment dated June 28, 1982, as
follows:
“On December 23, 1981, private respondent
David filed I.S. No. 81-31938 in the Office of the
City Fiscal of Manila, which case was assigned to
respondent Lota for preliminary investigation
(Petition, p. 8).
“In I.S. No. 81-31938, David charged petitioners
(together with one Robert Marshall and the
following directors of the Nation Savings and
Loan Association, Inc., namely Homero
Gonzales, Juan Merino, Flavio Macasaet, Victor
Gomez, Jr., Perfecto Mañalac, Jaime V. Paz,
Paulino B. Dionisio, and one John Doe) with
estafa and violation of Central Bank Circular No.
364 and related Central Bank regulations on
foreign exchange transactions, allegedly
committed as follows (Petition, Annex ‘A’):
“ ‘From March 20, 1979 to March, 1981, David
invested with the Nation Savings and Loan
Association, (hereinafter called NSLA) the sum of
P1,145,546.20 on time deposits, P13,531.94 on
savings account deposits (jointly with his sister,
Denise Kuhne), US$10,000.00 on time deposit,
US$15,000.00 under a receipt and guarantee of
payment and US$50,000.00 under a receipt
dated June 8, 1980 (all jointly with Denise
Kuhne), that David was induced into making the
aforestated investments by Robert Marshall, an
Australian national, who was allegedly a close
associate of petitioner Guingona Jr., then NSLA
President, petitioner Martin, then NSLA Executive
Vice-President of NSLA and petitioner Santos,
then NSLA General Manager; that on March 21,
1981 NSLA was placed under receivership by the
Central Bank, so that David filed claims therewith
for his investments and those of his sister; that on
July 22, 1981 David received a report from the
Central Bank that only P305,821.92 of those
investments were entered in the records of
NSLA; that, therefore, the respondents in I.S. No.
81-31938 misappropriated the balance of the
investments,
581
VOL. 128, APRIL 4, 1984 581
Guingona, Jr. vs. City Fiscal of Manila
at the same time violating Central Bank Circular
No. 364 and related Central Bank regulations on
foreign exchange transactions; that after
demands, petitioner Guingona Jr. paid only
P200,000.00, thereby reducing the amounts
misappropriated to P959,078.14 and
US$75,000.00.’
“Petitioners, Martin and Santos, filed a joint
counter-affidavit (Petition, Annex ‘B’) in which
they stated the following:
“ ‘That Martin became President of NSLA in
March 1978 (after the resignation of Guingona,
Jr.) and served as such until October 30, 1980,
while Santos was General Manager up to
November 1980; that because NSLA was
urgently in need of funds and at David’s
insistence, his investments were treated as
special accounts with interests above the legal
rate, and recorded in separate confidential
documents only a portion of which were to be
reported because he did not want the Australian
government to tax his total earnings (nor) to know
his total investments; that all transactions with
David were recorded except the sum of
US$15,000.00 which was a personal loan of
Santos; that David’s check for US$50,000.00 was
cleared through Guingona, Jr.’s dollar account
because NSLA did not have one, that a draft of
US$30,000.00 was placed in the name of one
Paz Roces because of a pending transaction with
her; that the Philippine Deposit Insurance
Corporation had already reimbursed David within
the legal limits; that majority of the stockholders
of NSLA had filed Special Proceedings No. 82-
1695 in the Court of First Instance to contest its
(NSLA’s) closure; that after NSLA was placed
under receivership, Martin executed a promissory
note in David’s favor and caused the transfer to
him of a nine and one-half (9½) carat diamond
ring with a net value of P510,000.00; and, that
the liabilities of NSLA to David were civil in
nature.’
“Petitioner, Guingona, Jr., in his counter-affidavit
(Petition, Annex ‘C’) stated the following:
“ ‘That he had no hand whatsoever in the
transactions between David and NSLA since he
(Guingona Jr.) had resigned as NSLA president
in March 1978, or prior to those transactions; that
he assumed a portion of the liabilities of NSLA to
David because of the latter’s insistence that he
placed his investments with NSLA because of his
faith in Guingona, Jr.; that in a Promissory Note
dated June 17, 1981 (Petition,
582
582 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
Annex “D”) he (Guingona, Jr.) bound himself to
pay David the sums of P668,307.01 and
US$37,500.00 in stated installments; that he
(Guingona, Jr.) secured payment of those
amounts with second mortgages over two (2)
parcels of land under a deed of Second Real
Estate Mortgage (Petition, Annex “E”) in which it
was provided that the mortgage over one (1)
parcel shall be cancelled upon payment of one-
half of the obligation to David; that he (Guingona,
Jr.) paid P200,000.00 and tendered another
P300,000.00 which David refused to accept,
hence, he (Guingona, Jr.) filed Civil Case No. Q-
33865 in the Court of First Instance of Rizal at
Quezon City, to effect the release of the
mortgage over one (1) of the two parcels of land
conveyed to David under second mortgages.’
“At the inception of the preliminary investigation
before respondent Lota, petitioners moved to
dismiss the charges against them for lack of
jurisdiction because David’s claims allegedly
comprised a purely civil obligation which was
itself novated. Fiscal Lota denied the motion to
dismiss (Petition, p. 8).
“But, after the presentation of David’s principal
witness, petitioners filed the instant petition
because: (a) the production of the Promissory
Notes, Banker’s Acceptance, Certificates of Time
Deposits and Savings Account allegedly showed
that the transactions between David and NSLA
were simple loans, i.e., civil obligations on the
part of NSLA which were novated when
Guingona, Jr. and Martin assumed them; and (b)
David’s principal witness allegedly testified that
the duplicate originals of the aforesaid
instruments of indebtedness were all on file with
NSLA, contrary to David’s claim that some of his
investments were not recorded (Petition, pp. 8-9).
“Petitioners alleged that they did not exhaust
available administrative remedies because to do
so would be futile (Petition, p. 9)” [pp. 153-157,
rec.].
As correctly pointed out by the Solicitor General,
the sole issue for resolution is whether public
respondents acted without jurisdiction when they
investigated the charges (estafa and violation of
CB Circular No. 364 and related regulations
regarding foreign exchange transactions) subject
matter of I.S. No. 81-31938.
There is merit in the contention of the petitioners
that their liability is civil in nature and therefore,
public respondents
583
VOL. 128, APRIL 4, 1984 583
Guingona, Jr. vs. City Fiscal of Manila
have no jurisdiction over the charge of estafa.
A casual perusal of the December 23, 1981
affidavit-complaint filed in the Office of the City
Fiscal of Manila by private respondent David
against petitioners Teopisto Guingona, Jr.,
Antonio L. Martin and Teresita G. Santos,
together with one Robert Marshall and the other
directors of the Nation Savings and Loan
Association, will show that from March 20, 1979
to March, 1981, private respondent David,
together with his sister, Denise Kuhne, invested
with the Nation Savings and Loan Association the
sum of P1,145,546.20 on time deposits covered
by Bankers Acceptances and Certificates of Time
Deposits and the sum of P13,531.94 on savings
account deposits covered by passbook nos. 6-
632 and 29-742, or a total of P1,159,078.14 (pp.
15-16, rec.). It appears further that private
respondent David, together with his sister, made
investments in the aforesaid bank in the amount
of US$75,000.00 (p. 17, rec.).
Moreover, the records reveal that when the
aforesaid bank was placed under receivership on
March 21, 1981, petitioners Guingona and
Martin, upon the request of private respondent
David, assumed the obligation of the bank to
private respondent David by executing on June
17, 1981 a joint promissory note in favor of
private respondent acknowledging an
indebtedness of P1,336,614.02 and
US$75,000.00 (p. 80, rec.). This promissory note
was based on the statement of account as of
June 30, 1981 prepared by the private
respondent (p. 81, rec.). The amount of
indebtedness assumed appears to be bigger than
the original claim because of the added interest
and the inclusion of other deposits of private
respondent’s sister in the amount of
P116,613.20.
Thereafter, or on July 17, 1981, petitioners
Guingona and Martin agreed to divide the said
indebtedness, and petitioner Guingona executed
another promissory note antedated to June 17,
1981 whereby he personally acknowledged an
indebtedness of P668,307.01 (½ of
P1,336,614.02) and US$37,500.00 (½ of
US$75,000.00) in favor of private respondent (p.
25, rec.). The aforesaid promissory notes were
executed as a result of deposits made by
Clement David and Denise Kuhne with the Nation
Savings and Loan Association.
584
584 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
Furthermore, the various pleadings and
documents filed by private respondent David
before this Court indisputably show that he has
indeed invested his money on time and savings
deposits with the Nation Savings and Loan
Association.
It must be pointed out that when private
respondent David invested his money on time
and savings deposits with the aforesaid bank, the
contract that was perfected was a contract of
simple loan or mutuum and not a contract of
deposit. Thus, Article 1980 of the New Civil Code
provides that:
“Article 1980. Fixed, savings, and current
deposits of money in banks and similar
institutions shall be governed by the provisions
concerning simple loan.”
In the case of Central Bank of the Philippines vs.
Morfe(63 SCRA 114, 119 [1975], We said:
“It should be noted that fixed, savings, and
current deposits of money in banks and similar
institutions are not true deposits. They are
considered simple loans and, as such, are not
preferred credits (Art. 1980 Civil Code; In re
Liquidation of Mercantile Bank of China: Tan
Tiong Tick vs. American Apothecaries Co., 65
Phil. 414; Pacific Coast Biscuit Co. vs. Chinese
Grocers Association, 65 Phil. 375; Fletcher
American National Bank vs. Ang Cheng Lian, 65
Phil. 385; Pacific Commercial Co. vs. American
Apothecaries Co., 65 Phil. 429; Gopoco Grocery
vs. Pacific Coast Biscuit Co., 65 Phil. 443).”
This Court also declared in the recent case
of Serrano vs. Central Bank of the Philippines (96
SCRA 96, 102 [1980]) that:
“Bank deposits are in the nature of irregular
deposits. They are really loans because they
earn interest. All kinds of bank deposits, whether
fixed, savings, or current are to be treated as
loans and are to be covered by the law on loans
(Art. 1980, Civil Code; Gullas vs. Phil. National
Bank, 62 Phil. 519). Current and savings deposits
are loans to a bank because it can use the
same. The petitioner here in making time
deposits that earn interests with respondent
Overseas Bank of Manila was in reality a creditor
of the respondent Bank and not a depositor. The
respondent Bank was in turn a debtor of
petitioner. Failure of the respondent Bank to
honor the time deposit is failure to pay its
obligation as a debtor and not a breach of trust
585
VOL. 128, APRIL 4, 1984 585
Guingona, Jr. vs. City Fiscal of Manila
arising from a depositary’s failure to return the
subject matter of the deposit” (italics supplied).
Hence, the relationship between the private
respondent and the Nation Savings and Loan
Association 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, however, no
obligation to return or deliver the same
money that was deposited. And, the failure of the
Bank to return the amount deposited will not
constitute estafa through misappropriation
punishable under Article 315, par. 1(b) of the
Revised Penal Code, but it will only give rise to
civil liability over which the public respondents
have no jurisdiction.
WE have already laid down the rule that:
“In order that a person can be convicted under
the above-quoted provision, it must be proven
that he has the obligation to deliver or return the
same money, goods or personal property that he
received. Petitioners had no such obligation to
return the same money, i.e., the bills or coins,
which they received from private respondents.
This is so because as clearly stated in criminal
complaints, the related civil complaints and the
supporting sworn statements, the sums of money
that petitioners received were loans.
“The nature of simple loan is defined in Articles
1933 and 1953 of the Civil Code.
“ ‘Art. 1933.—By the contract of loan, one of the
parties delivers to another, either something not
consumable so that the latter may use the same
for a certain time and return it, in which case the
contract is called a commodatum; or money or
other consumable thing, upon the condition that
the same amount of the same kind and quality
shall be paid, in which case the contract is simply
called a loan or mutuum.
“ ‘Commodatum is essentially gratuitous.
“ ‘Simple loan may be gratuitous or with a
stipulation to pay interest.
586
586 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
“ ‘In commodatum the bailor retains the
ownership of the thing loaned, while in simple
loan, ownership passes to the borrower.
“ ‘Art. 1953.—A person who receives a loan of
money or any other fungible thing acquires the
ownership thereof, and is bound to pay to the
creditor an equal amount of the same kind and
quality.’
“It can be readily noted from the above-quoted
provisions that in simple loan (mutuum), as
contrasted to commodatum, the borrower
acquires ownership of the money, goods or
personal property borrowed. Being the owner, the
borrower can dispose of the thing borrowed
(Article 248, Civil Code) and his act will not be
considered misappropriation thereof’ (Yam vs.
Malik, 94 SCRA 30, 34 [1979]; italics supplied).
But even granting that the failure of the bank to
pay the time and savings deposits of private
respondent David would constitute a violation of
paragraph 1(b) of Article 315 of the Revised
Penal Code, nevertheless any incipient criminal
liability was deemed avoided, because when the
aforesaid bank was placed under receivership by
the Central Bank, petitioners Guingona and
Martin assumed the obligation of the bank to
private respondent David, thereby resulting in the
novation of the original contractual obligation
arising from deposit into a contract of loan and
converting the original trust relation between the
bank and private respondent David into an
ordinary debtor-creditor relation between the
petitioners and private respondent.
Consequently, the failure of the bank or
petitioners Guingona and Martin to pay the
deposits of private respondent would not
constitute a breach of trust but would merely be a
failure to pay the obligation as a debtor.
Moreover, while it is true that novation does not
extinguish criminal liability, it may however,
prevent the rise of criminal liability as long as it
occurs prior to the filing of the criminal
information in court. Thus, in Gonzales vs.
Serrano (25 SCRA 64, 69 [1968]) We held that:
“As pointed out in People vs. Nery, novation prior
to the filing of the criminal information—as in the
case at bar—may convert the relation between
the parties into an ordinary creditor-debtor
relation,
587
VOL. 128, APRIL 4, 1984 587
Guingona, Jr. vs. City Fiscal of Manila
and place the complainant in estoppel to insist on
the original transaction or ‘cast doubt on the true
nature’ thereof.”
Again, in the latest case of Ong vs. Court of
Appeals (L-58476, 124 SCRA 578, 580-581
[1983]), this Court reiterated the ruling in People
vs. Nery (10 SCRA 244 [1964]), declaring that:
“The novation theory may perhaps apply prior to
the filing of the criminal information in court by
the state prosecutors because up to that time the
original trust relation may be converted by the
parties into an ordinary creditor-debtor situation,
thereby placing the complainant in estoppel to
insist on the original trust. But after the justice
authorities have taken cognizance of the crime
and instituted action in court, the offended party
may no longer divest the prosecution of its power
to exact the criminal liability, as distinguished
from the civil. The crime being an offense against
the state, only the latter can renounce it (People
vs. Gervacio, 54 Off. Gaz. 2898; People vs.
Velasco, 42 Phil. 76; U.S. vs. Montañes, 8 Phil.
620).
“It may be observed in this regard that novation is
not one of the means recognized by the Penal
Code whereby criminal liability can be
extinguished; hence, the role of novation may
only be to either prevent the rise of criminal
liability or to cast doubt on the true nature of the
original basic transaction, whether or not it was
such that its breach would not give rise to penal
responsibility, as when money loaned is made to
appear as a deposit, or other similar disguise is
resorted to (cf. Abeto vs. People, 90 Phil.
581; U.S. vs. Villareal, 27 Phil. 481).”
In the case at bar, there is no dispute that
petitioners Guingona and Martin executed a
promissory note on June 17, 1981 assuming the
obligation of the bank to private respondent
David; while the criminal complaint for estafa was
filed on December 23, 1981 with the Office of the
City Fiscal. Hence, it is clear that novation
occurred long before the filing of the criminal
complaint with the Office of the City Fiscal.
Consequently, as aforestated, any incipient
criminal liability would be avoided but there will
still be a civil liability on the part of petitioners
Guingona and Martin to pay the assumed
obligation.
588
588 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
Petitioners herein were likewise charged with
violation of Section 3 of Central Bank Circular No.
364 and other related regulations regarding
foreign exchange transactions by accepting
foreign currency deposit in the amount of
US$75,000.00 without authority from the Central
Bank. They contend however, that the US dollars
intended by respondent David for deposit were all
converted into Philippine currency before
acceptance and deposit into Nation Savings and
Loan Association.
Petitioners’ contention is worthy of belief for the
following reasons:
1.It appears from the records that when
respondent David was about to make a deposit of
bank draft issued in his name in the amount of
US$50,000.00 with the Nation Savings and Loan
Association, the same had to be cleared first and
converted into Philippine currency. Accordingly,
the bank draft was endorsed by respondent
David to petitioner Guingona, who in turn
deposited it to his dollar account with the Security
Bank and Trust Company. 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.
2.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 (see
paragraphs p and q, Sec. 5, Rule 131, Rules of
Court).
3.Respondent David has not denied the aforesaid
contention of herein petitioners despite the fact
that it was raised in petitioners’ reply filed on May
7, 1982 to private respondent’s comment and in
the July 27, 1982 reply to public respondents’
comment and reiterated in petitioners’
589
VOL. 128, APRIL 4, 1984 589
Guingona, Jr. vs. City Fiscal of Manila
memorandum filed on October 30, 1982, thereby
adding more support to the conclusion that the
US$75,000.00 were really converted into
Philippine currency before they were accepted
and deposited into Nation Savings and Loan
Association. Considering that this might
adversely affect his case, respondent David
should have promptly denied petitioners’
allegation.
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.
While as a rule, the prosecution in a criminal
offense cannot be the subject of prohibition and
injunction, this court has recognized the resort to
the extraordinary writs of prohibition and
injunction in extreme cases, thus:
“On the issue of whether a writ of injunction can
restrain the proceedings in Criminal Case No.
3140, the general rule is that ‘ordinarily, criminal
prosecution may not be blocked by court
prohibition or injunction.’ Exceptions, however,
are allowed in the following instances:
“ ‘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’ ”
(Primicias vs. Municipality of Urdaneta,
Pangasinan, 93 SCRA 462, 469-470 [1979];
citing Ramos vs. Torres, 25 SCRA 557[1968];
and Hernandez vs. Albano, 19 SCRA 95, 96
[1967]).
590
590 SUPREME COURT REPORTS
ANNOTATED
Guingona, Jr. vs. City Fiscal of Manila
Likewise, in Lopez vs. The City Judge, et al. (18
SCRA 616, 621-622 [1966]), We held that;
“The writs of certiorari and prohibition, as
extraordinary legal remedies, are in the ultimate
analysis, intended to annul void proceedings; to
prevent the unlawful and oppressive exercise of
legal authority and to provide for a fair and
orderly administration of justice. Thus, in Yu
Kong Eng vs. Trinidad, 47 Phil. 385, We took
cognizance of a petition for certiorari and
prohibition although the accused in the case
could have appealed in due time from the order
complained of, our action in the premises being
based on the public welfare and the
advancement of public policy. In Dimayuga vs.
Fajardo, 43 Phil. 304, We also admitted a petition
to restrain the prosecution of certain
chiropractors although, if convicted, they could
have appealed. We gave due course to their
petition for the orderly administration of justice
and to avoid possible oppression by the strong
arm of the law. And in Arevalo vs.
Nepomuceno, 63 Phil. 627, the petition for
certiorari challenging the trial court’s action
admitting an amended information was sustained
despite the availability of appeal at the proper
time.”
WHEREFORE, THE PETITION IS HEREBY
GRANTED; THE TEMPORARY RESTRAINING
ORDER PREVIOUSLY ISSUED IS MADE
PERMANENT. COSTS AGAINST THE PRIVATE
RESPONDENT.
SO ORDERED.
Concepcion, Jr., Guerrero, De
Castro and Escolin, JJ., concur.
Aquino, J., no part.
Abad Santos, J., in the result.
Petition granted.
Notes.—An agreement to pay a promissory note
in dollars while null and void does not defeat a
creditor’s claim who shall then be paid in
Philippine Currency. (Ponce vs. Court of
Appeals,90 SCRA 533.)
Funds of a bank are, in a sense, held in trust.
(Banco de Oro vs. Bayuga, 93 SCRA 443.)
591
VOL. 128, APRIL 4, 1984 591
Saulog Transit, Inc. vs. Lazaro
All kinds of bank deposits, whether fixed savings,
or current are to be treated as loans and are to
be recovered by law on loans. Current and
saving deposits are loans to a bank because it
can use the same. (Serrano vs. Central Bank of
the Philippines, 96 SCRA 96.)
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