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COURT OF APPEALS, HEIRS OF EGMIDIO OCTAVIANO AND JUAN VALDEZ, respondents. Valdez, Ereso, Polido & Associates for petitioner. Claustro, Claustro, Claustro Law Office collaborating counsel for petitioner. Jaime G. de Leon for the Heirs of Egmidio Octaviano. Cotabato Law Office for the Heirs of Juan Valdez.
court promulgated its Decision, dated November 17, 1965, confirming the registrable title of VICAR to Lots 1, 2, 3, and 4. The Heirs of Juan Valdez (plaintiffs in the herein Civil Case No. 3655) and the Heirs of Egmidio Octaviano (plaintiffs in the herein Civil Case No. 3607) appealed the decision of the land registration court to the then Court of Appeals, docketed as CA-G.R. No. 38830-R. The Court of Appeals rendered its decision, dated May 9, 1977, reversing the decision of the land registration court and dismissing the VICAR's application as to Lots 2 and 3, the lots claimed by the two sets of oppositors in the land registration case (and two sets of plaintiffs in the two cases now at bar), the first lot being presently occupied by the convent and the second by the women's dormitory and the sister's convent. On May 9, 1977, the Heirs of Octaviano filed a motion for reconsideration praying the Court of Appeals to order the registration of Lot 3 in the names of the Heirs of Egmidio Octaviano, and on May 17, 1977, the Heirs of Juan Valdez and Pacita Valdez filed their motion for reconsideration praying that both Lots 2 and 3 be ordered registered in the names of the Heirs of Juan Valdez and Pacita Valdez. On August 12,1977, the Court of Appeals denied the motion for reconsideration filed by the Heirs of Juan Valdez on the ground that there was "no sufficient merit to justify reconsideration one way or the other ...," and likewise denied that of the Heirs of Egmidio Octaviano. Thereupon, the VICAR filed with the Supreme Court a petition for review on certiorari of the decision of the Court of Appeals dismissing his (its) application for registration of Lots 2 and 3, docketed as G.R. No. L-46832, entitled 'Catholic Vicar Apostolic of the Mountain Province vs. Court of Appeals and Heirs of Egmidio Octaviano.' From the denial by the Court of Appeals of their motion for reconsideration the Heirs of Juan Valdez and Pacita Valdez, on September 8, 1977, filed with the Supreme Court a petition for review, docketed as G.R. No. L-46872, entitled, Heirs of Juan Valdez and Pacita Valdez vs. Court of Appeals, Vicar, Heirs of Egmidio Octaviano and Annable O. Valdez. On January 13, 1978, the Supreme Court denied in a minute resolution both petitions (of VICAR on the one hand and the Heirs of Juan Valdez and Pacita Valdez on the other) for lack of merit. Upon the finality of both Supreme Court resolutions in G.R. No. L-46832 and G.R. No. L- 46872, the Heirs of Octaviano filed with the then Court of First Instance of Baguio, Branch II, a Motion For Execution of Judgment praying that the Heirs of Octaviano be placed in possession of Lot 3. The Court, presided over by Hon. Salvador J. Valdez, on December 7, 1978, denied the motion on the ground that the Court of Appeals decision in CA-G.R. No. 38870 did not grant the Heirs of Octaviano any affirmative relief. On February 7, 1979, the Heirs of Octaviano filed with the Court of Appeals a petitioner for certiorari and mandamus, docketed as CA-G.R. No. 08890-R, entitled Heirs of Egmidio Octaviano vs. Hon. Salvador J. Valdez, Jr. and Vicar. In its decision dated May 16, 1979, the Court of Appeals dismissed the petition. It was at that stage that the instant cases were filed. The Heirs of Egmidio Octaviano filed Civil Case No. 3607 (419) on July 24, 1979, for recovery of possession of Lot 3; and the Heirs of Juan Valdez filed Civil Case No. 3655 (429) on September 24, 1979, likewise for recovery of possession of Lot 2 (Decision, pp. 199-201, Orig. Rec.).
GANCAYCO, J.: The principal issue in this case is whether or not a decision of the Court of Appeals promulgated a long time ago can properly be considered res judicata by respondent Court of Appeals in the present two cases between petitioner and two private respondents. Petitioner questions as allegedly erroneous the Decision dated August 31, 1987 of the Ninth Division of Respondent Court of Appeals 1 in CA-G.R. No. 05148 [Civil Case No. 3607 (419)] and CA-G.R. No. 05149 [Civil Case No. 3655 (429)], both for Recovery of Possession, which affirmed the Decision of the Honorable Nicodemo T. Ferrer, Judge of the Regional Trial Court of Baguio and Benguet in Civil Case No. 3607 (419) and Civil Case No. 3655 (429), with the dispositive portion as follows: WHEREFORE, Judgment is hereby rendered ordering the defendant, Catholic Vicar Apostolic of the Mountain Province to return and surrender Lot 2 of Plan Psu-194357 to the plaintiffs. Heirs of Juan Valdez, and Lot 3 of the same Plan to the other set of plaintiffs, the Heirs of Egmidio Octaviano (Leonardo Valdez, et al.). For lack or insufficiency of evidence, the plaintiffs' claim or damages is hereby denied. Said defendant is ordered to pay costs. (p. 36, Rollo) Respondent Court of Appeals, in affirming the trial court's decision, sustained the trial court's conclusions that the Decision of the Court of Appeals, dated May 4,1977 in CA-G.R. No. 38830-R, in the two cases affirmed by the Supreme Court, touched on the ownership of lots 2 and 3 in question; that the two lots were possessed by the predecessors-in-interest of private respondents under claim of ownership in good faith from 1906 to 1951; that petitioner had been in possession of the same lots as bailee in commodatum up to 1951, when petitioner repudiated the trust and when it applied for registration in 1962; that petitioner had just been in possession as owner for eleven years, hence there is no possibility of acquisitive prescription which requires 10 years possession with just title and 30 years of possession without; that the principle of res judicata on these findings by the Court of Appeals will bar a reopening of these questions of facts; and that those facts may no longer be altered. Petitioner's motion for reconsideation of the respondent appellate court's Decision in the two aforementioned cases (CA G.R. No. CV-05418 and 05419) was denied. The facts and background of these cases as narrated by the trail court are as follows — ... The documents and records presented reveal that the whole controversy started when the defendant Catholic Vicar Apostolic of the Mountain Province (VICAR for brevity) filed with the Court of First Instance of Baguio Benguet on September 5, 1962 an application for registration of title over Lots 1, 2, 3, and 4 in Psu-194357, situated at Poblacion Central, La Trinidad, Benguet, docketed as LRC N-91, said Lots being the sites of the Catholic Church building, convents, high school building, school gymnasium, school dormitories, social hall, stonewalls, etc. On March 22, 1963 the Heirs of Juan Valdez and the Heirs of Egmidio Octaviano filed their Answer/Opposition on Lots Nos. 2 and 3, respectively, asserting ownership and title thereto. After trial on the merits, the land registration
038830 WAS AFFIRMED BY THE SUPREME COURT. First Division 5 in CA-G. 3 The petition is bereft of merit. The defendant dispensed with the testimony of Mons. who testified on the alleged ownership of the land in question (Lot 3) by their predecessor-in-interest. 38830-R. they became bailors in commodatum and the petitioner the bailee. No. which are not in question. ERROR IN FINDING THAT THE DECISION OF THE COURT OF APPEALS IN CA G. When petitioner applied for registration of Lots 2 and 3 in 1962.1977 in CA-G. neither was it declared that they were not owners of the land. Private respondents were able to prove that their predecessors' house was borrowed by petitioner Vicar after the church and the convent were destroyed. ERROR IN APPLYING LAW OF THE CASE AND RES JUDICATA. when it clearly held that it was in agreement with the findings of the trial court that the Decision of the Court of Appeals dated May 4. with claim of ownership in good faith from 1906 to 1951. Petitioner Vicar only declared Lots 2 and 3 for taxation purposes in 1951. 38830-R) did not positively declare private respondents as owners of the land. would testify that defendant Vicar has been in possession of Lot 3. 038830 TOUCHED ON OWNERSHIP OF LOTS 2 AND 3 AND THAT PRIVATE RESPONDENTS AND THEIR PREDECESSORS WERE IN POSSESSION OF LOTS 2 AND 3 UNDER A CLAIM OF OWNERSHIP IN GOOD FAITH FROM 1906 TO 1951.R. Defendant Vicar contends that only the dispositive portion of the decision. When petitioner Vicar was notified of the oppositor's claims. They can no longer be altered by presentation of evidence because those issues were resolved with finality a long time ago. when it repudiated the trust by declaring the properties in its name for taxation purposes. ERROR IN FINDING THAT VALDEZ AND OCTAVIANO HAD FREE PATENT APPLICATIONS AND THE PREDECESSORS OF PRIVATE RESPONDENTS ALREADY HAD FREE PATENT APPLICATIONS SINCE 1906. CA-G. ERROR IN FINDING THAT THE TRIAL COURT RULED THAT LOTS 2 AND 3 WERE ACQUIRED BY PURCHASE BUT WITHOUT DOCUMENTARY EVIDENCE PRESENTED.00 per month. B—B-4 ) to defendant Vicar for the return of the land to them. 1977. Fructuoso Valdez. on the question of ownership of Lots 2 and 3. By the very admission of petitioner Vicar.R. 5. The improvements oil Lots 1.R. ERROR IN FINDING THAT PETITIONERS' CLAIM IT PURCHASED LOTS 2 AND 3 FROM VALDEZ AND OCTAVIANO WAS AN IMPLIED ADMISSION THAT THE FORMER OWNERS WERE VALDEZ AND OCTAVIANO. ERROR IN FINDING THAT PETITIONER IS A POSSESSOR AND BUILDER IN GOOD FAITH WITHOUT RIGHTS OF RETENTION AND REIMBURSEMENT AND IS BARRED BY THE FINALITY AND CONCLUSIVENESS OF THE DECISION IN CA G. No. 4. We see no error in respondent appellate court's ruling that said findings are res judicata between the parties.R.In Civil Case No. Both Valdez and Octaviano had Free Patent Application for those lots since 1906. C. 1129 OF THE CIVIL CODE FOR ORDINARY ACQUISITIVE PRESCRIPTION OF 10 YEARS. it had been in possession in concept of owner only for eleven years. 3655. 7. NO. on its evaluation of evidence and conclusion of facts. AND NOT PETITIONER. not petitioner Vicar. Decision. The Court of Appeals found that petitioner did not meet the requirement of 30 years possession for acquisitive prescription over Lots 2 and 3. The appellate court did not believe the findings of the trial court that Lot 2 was acquired from Juan Valdez by purchase and Lot 3 was acquired also by purchase from Egmidio Octaviano by petitioner Vicar because there was absolutely no documentary evidence to support the same and the alleged purchases were never mentioned in the application for registration. Egmidio Octaviano (Exh. No. but when they allowed its free use. Atty. 8. ERROR IN FINDING THAT PETITIONER DECLARED LOTS 2 AND 3 ONLY IN 1951 AND JUST TITLE IS A PRIME NECESSITY UNDER ARTICLE 1134 IN RELATION TO ART. Plaintiffs contend that the question of possession and ownership have already been determined by the Court of Appeals (Exh. Ordinary acquisitive prescription requires possession for ten years. Lots 2 and 3 were owned by Valdez and Octaviano. 38830-R.R.William Brasseur when the plaintiffs admitted that the witness if called to the witness stand. There is evidence that petitioner Vicar occupied Lots 1 and 4. but it held that the predecessors of private respondents were possessors of Lots 2 and 3. Lots 2 and 3 were surveyed by request of petitioner Vicar only in 1962. because the buildings standing thereon were only constructed after liberation in 1945. 3. the plaintiffs arque that the defendant Vicar is barred from setting up the defense of ownership and/or long and continuous possession of the two lots in question since this is barred by prior judgment of the Court of Appeals in CA-G.R. 8). 6. the parish priest offered to buy the lot from Fructuoso Valdez. An examination of the Court of Appeals Decision dated May 4. 3607 (419) trial was held. the parties admitting that the material facts are not in dispute. for seventy-five (75) years continuously and peacefully and has constructed permanent structures thereon. On his part. 2 The alleged errors committed by respondent Court of Appeals according to petitioner are as follows: 1. defendant Vicar presented the Register of Deeds for the Province of Benguet. 038830-R under the principle of res judicata. 4 On the above findings of facts supported by evidence and evaluated by the Court of Appeals in CA-G. affirmed by this Court. 10. To ignore the principle of res judicata would be to open the door to endless litigations by continuous determination of issues without end. submitted the case on the sole issue of whether or not the decisions of the Court of Appeals and the Supreme Court touching on the ownership of Lot 2. Minute Resolution of the Supreme Court). The action of petitioner Vicar . NO. 038830-R merely dismissed their application for registration and titling of lots 2 and 3. A GRATUITOUS LOAN FOR USE. No. 038830-R) and affirmed by the Supreme Court (Exh. 4 were paid for by the Bishop but said Bishop was appointed only in 1947. 3. 2. 05148 and 05149.R. who testified that the land in question is not covered by any title in the name of Egmidio Octaviano or any of the plaintiffs (Exh. ERROR IN FINDING THAT IT WAS PREDECESSORS OF PRIVATE RESPONDENTS WHO WERE IN POSSESSION OF LOTS 2 AND 3 AT LEAST FROM 1906. The bailees' failure to return the subject matter of commodatum to the bailor did not mean adverse possession on the part of the borrower. Neither did it satisfy the requirement of 10 years possession for ordinary acquisitive prescription because of the absence of just title.R. 9. ERROR IN FINDING THAT PETITIONER HAD BEEN IN POSSESSION OF LOTS 2 AND 3 MERELY AS BAILEE BOR ROWER) IN COMMODATUM. which in effect declared the plaintiffs the owners of the land constitute res judicata. Petitioner questions the ruling of respondent Court of Appeals in CA-G. and not its body. No. the church was constructed only in 1951 and the new convent only 2 years before the trial in 1963. On the other hand. but always with just title. The plaintiffs Heirs of Egmidio Octaviano presented one (1) witness. his written demand (Exh. 038830. 38830-R. The adverse claim of petitioner came only in 1951 when it declared the lots for taxation purposes. NO. ERROR IN FINDING THAT THE DECISION IN CA G. They never asked for the return of the house.R. C ). were in possession of the questioned lots since 1906. In Civil Case No. No. Extraordinary acquisitive prescription requires 30 years. In these two cases .R. The predecessors of private respondents.000. Nicanor Sison. shows that it reversed the trial court's Decision 6 finding petitioner to be entitled to register the lands in question under its ownership. The bailee held in trust the property subject matter of commodatum. declared that the said Court of Appeals Decision CA-G. but not Lots 2 and 3. Petitioner was in possession as borrower in commodatum up to 1951. Nos. 1. and the reasonable rentals for the use of the land at P10.R. defendant Vicar maintains that the principle of res judicata would not prevent them from litigating the issues of long possession and ownership because the dispositive portion of the prior judgment in CA-G. No. is the controlling pronouncement of the Court of Appeals. 2.
under the principle of res judicata. when it held that the Decision of the Court of Appeals in CA-G. The Court of Appeals found that the predecessors-in-interest and private respondents were possessors under claim of ownership in good faith from 1906. We find no reason to disregard or reverse the ruling of the Court of Appeals in CA-G. that petitioner Vicar was only a bailee in commodatum. No.by such adverse claim could not ripen into title by way of ordinary acquisitive prescription because of the absence of just title.R. This Court declined to review said decision. 38830-R. thereby in effect. 1987 in CA-G. affirming it. and that the adverse claim and repudiation of trust came only in 1951. Respondent appellate court did not commit any reversible error. It has become final and executory a long time ago. with costs against petitioner. much less grave abuse of discretion. hence the rule. 31. . 05148 and CA-G. this petition is DENIED for lack of merit. 38830-R is governing. No. No. in the present cases CA-G.R. by respondent Court of Appeals is AFFIRMED.R. The facts as supported by evidence established in that decision may no longer be altered. the Decision dated Aug. 05149. Nos. WHEREFORE AND BY REASON OF THE FOREGOING.R. 05148 and 05149.R. No. Its findings of fact have become incontestible. SO ORDERED.
that the liabilities of NSLA to David were civil in nature. and one John Doe) with estafa and violation of Central Bank Circular No. Jr. 81-31938 misappropriated the balance of the investments. that the Philippine Deposit Insurance Corporation had already reimbursed David within the legal limits. As can be gleaned from the above. or prior to those transactions.94 on savings account deposits (jointly with his sister. Actg. the respondents in I. But. Banker's Acceptance. Paz. after the presentation of David's principal witness. thereby reducing the amounts misappropriated to P959. 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.00 was cleared through Guingona.S. while Santos was General Manager up to November 1980. 1980.) filed Civil Case No.1981.:ñé+." Petitioner.) had resigned as NSLA president in March 1978. Denise Kuhne).307.. On March 31. L-60033 April 4. C.. that David's check for US$50. in which petitioners were charged by private respondent Clement David. US$10. 364 and related Central Bank regulations on foreign exchange transactions.00. £îhqwâ£ "That he had no hand whatsoever in the transactions between David and NSLA since he (Guingona Jr. respondents.92 of those investments were entered in the records of NSLA.00 which David refused to accept. Inc.) bound himself to pay David the sums of P668.) and served as such until October 30.S. 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. No. ANTONIO I. filed a joint counter-affidavit (Petition.000. JR. No.000. HON. 47-48. 364 and related regulations regarding foreign exchange transactions principally. and. 364 and related Central Bank regulations on foreign exchange transactions.078. Martin and Santos.000.000. his investments were treated as special. (hereinafter called NSLA) the sum of P1. Fiscal Lota denied the motion to dismiss (Petition.. Jr.£îhqwâ£ On December 23.00 in stated installments. Perfecto Manalac.S.500.00 under a receipt and guarantee of payment and US$50. that in a Promissory Note dated June 17." Petitioners. an 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.£ªwph!1 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. petitioners. 81-31938 in the Office of the City Fiscal of Manila. 1983.000.£îhqwâ£ "That Martin became President of NSLA in March 1978 (after the resignation of Guingona. 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. p.J.14 and US$75. 1980 (au jointly with Denise Kuhne).000. petitioner Martin. Jr. David invested with the Nation Savings and Loan Association.000. Martin executed a promissory note in David's favor and caused the transfer to him of a nine and on behalf (9 1/2) carat diamond ring with a net value of P510. JOSE B. and Martin assumed them. FLAMINIANO. Dionisio. Jr. Annex' B') in which they stated the following. showed that petitioners' obligation is civil in nature. he (Guingona. allegedly committed as follows (Petition.) secured payment of those amounts with second mortgages over two (2) parcels of land under a deed of Second Real Estate Mortgage (Petition. as well as the testimony of private respondent's principal witness and the evidence through said witness. private respondent David filed I.20 on nine deposits. CITY FISCAL FELIZARDO N. therefore.531. that on March 21. so that David filed claims therewith for his investments and those of his sister. their officers. rec. at the same time violating Central Bank Circular No.) paid P200.'s dollar account because NSLA did not have one. Annex' C') stated the following:têñ. to effect the release of the mortgage over one (1) of the two parcels of land conveyed to David under second mortgages. that he (Guingona.£îhqwâ£ "From March 20.00 which was a personal loan of Santos. that . that because NSLA was urgently in need of funds and at David's insistence. that. a temporary restraining order was duly issued ordering the respondents.. 1984 TEOFISTO GUINGONA. which case was assigned to respondent Lota for preliminary investigation (Petition. US$15. private respondent Clement David filed a motion to lift restraining order which was denied in the resolution of this Court dated May 18.G. On January 24. 81-31938. No. P13. 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.546. as follows:têñ.00 on time deposit. on the ground of lack of jurisdiction in that the allegations of the charged.e. No.S.00 was placed in the name of one Paz Roces because of a pending transaction with her. civil obligations on the part of NSLA which were novated when Guingona.000. We hereby adopt the antecedent facts narrated by the Solicitor General in its Comment dated June 28.00. petitioners filed the instant petition because: (a) the production of the Promisory Notes. Guingona.1982. For purposes of brevity. that on July 22.). that he assumed a portion o. Paulino B. namely Homero Gonzales. 1979 to March. 1982. 8). and TERESITA SANTOS.000." At the inception of the preliminary investigation before respondent Lota. petitioner Guingona Jr. LOTA and CLEMENT DAVID. 1981 David received a report from the Central Bank that only P305.145. MARTIN. Flavio Macasaet. then NSLA General Manager. that majority of the stockholders of NSLA had filed Special Proceedings No.accounts with interest above the legal rate. Jr. and MAKASIAR. that a draft of US$30. David charged petitioners (together with one Robert Marshall and the following directors of the Nation Savings and Loan Association. i. 1983. ASST. in his counter-affidavit (Petition. No. after demands. hence. the instant petition seeks to prohibit public respondents from proceeding with the preliminary investigation of I.000. 1982. 8). Jr. THE CITY FISCAL OF MANILA. agents. Juan Merino. 1981 N LA was placed under receivership by the Central Bank.têñ. 1981 (Petition. p.01 and US$37. Jr. 81-31938. 8131938 of the Office of the City Fiscal of Manila (pp. paid only P200. Q33865 in the Court of First Instance of Rizal at Quezon City. In I. then NSLA Executive Vice-President of NSLA and petitioner Santos. then NSLA President.. by virtue of a court resolution issued by this Court on the same date. 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.. vs. Annex "D") he (Guingona. Jr.000.. Jr.00 and tendered another P300. that all transactions with David were recorded except the sum of US$15.R. Jaime V. Annex "A"):têñ. Certificates of Time Deposits and Savings Account allegedly showed that the transactions between David and NSLA were simple loans.00 under a receipt dated June 8. 1981. that he (Guingona.821. 82-1695 in the Court of First Instance to contest its (NSLA's) closure. with estafa and violation of Central Bank Circular No.00. Victor Gomez. that after NSLA was placed under receivership.
the related civil complaints and the supporting sworn statements. i. goods or personal property borrowed Being the owner. 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.01 (1/2 of P1. together with one Robert Marshall and the other directors of the Nation Savings and Loan Association. the failure of the Bank to return the amount deposited will not constitute estafa through misappropriation punishable under Article 315. savings. the various pleadings and documents filed by private respondent David. 1953. it must be proven that he has the obligation to deliver or return the some money. and petitioner Guingona executed another promissory note antedated to June 17. Martin and Teresita G. l(b) of the Revised Penal Code. 1981 whereby he personally acknowledged an indebtedness of P668.e. 62 Phil. The petitioner here in making time deposits that earn interests will respondent Overseas Bank of Manila was in reality a creditor of the respondent Bank and not a depositor. as such. one of the parties delivers to another.). Santos. It must be pointed out that when private respondent David invested his money on nine.119 . Pacific Coast Biscuit Co.jurisdiction. or current are to be treated as loans and are to be covered by the law on loans (Art." It can be readily noted from the above-quoted provisions that in simple loan (mutuum).. rec. 34 . Gopoco Grocery vs. vs.). Fletcher American National Bank vs. 364 and related regulations regarding foreign exchange transactions) subject matter of I. Petitioners alleged that they did not exhaust available administrative remedies because to do so would be futile (Petition. A casual perusal of the December 23. rec. This is so because as clearly as stated in criminal complaints. 1981. 6-632 and 29-742.00 (p.£îhqwâ£ It should be noted that fixed.00) in favor of private respondent (p.têñ. rec. 17.02) and US$37. The respondent Bank was in turn a debtor of petitioner. invested with the Nation Savings and Loan Association the sum of P1. 66 Phil 414. 65 PhiL 429.S. 80. "In commodatum the bailor retains the ownership of the thing loaned while in simple loan.. It appears further that private respondent David. as contrasted to commodatum the borrower acquires ownership of the money. While the Bank has the obligation to return the amount deposited. and savings deposits with the aforesaid bank. made investments in the aforesaid bank in the amount of US$75. par. American Apothecaries Co. upon the condition that the same amount of the same kind and quality shall he paid in which case the contract is simply called a loan or mutuum. such as to pay interests on deposits and to pay withdrawals. are not preferred credits (Art. 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 arising from a depositary's failure to return the subject matter of the deposit (Emphasis supplied). Phil. 519). or money or other consumable thing. petitioners Guingona and Martin agreed to divide the said indebtedness. "Art. They are really 'loans because they earn interest. public respondents have no jurisdiction over the charge of estafa. 1933. Moreover. are considered simple loans and.. Denise Kuhne. Morfe (63 SCRA 114. Thereafter. American Apothecaries Co.000.336. or on July 17. and current deposits of-money in banks and similar institutions shall be governed by the provisions concerning simple loan. whether fixed.546.531.307.078. or a total of P1. 1980 Civil Code.£îhqwâ£ Article 1980. assumed the obligation of the bank to private respondent David by executing on June 17.614.613.and return it. 9) [pp. Thus. — By the contract of loan. savings. ownership passes to the borrower. before this Court indisputably show that he has indeed invested his money on time and savings deposits with the Nation Savings and Loan Association. roc. and is bound to pay to the creditor an equal amount of the same kind and quality. 1981. — A person who receives a loan of money or any other fungible thing acquires the ownership thereof. 94 SCRA 30. 1981 prepared by the private respondent (p. the contract that was perfected was a contract of simple loan or mutuum and not a contract of deposit. and current deposits of money in banks and similar institutions are hat true deposits. Furthermore.]. Pacific Commercial Co. pp. Current and saving deposits. In re Liquidation of Mercantile Batik of China Tan Tiong Tick vs. £îhqwâ£ "Art. 1981 affidavit. 25. 81.000. Antonio I. Malik. it has. 443). There is merit in the contention of the petitioners that their liability is civil in nature and therefore. Ang Chong UM 66 PWL 385.000. savings. Civil Code) and his act will not be considered misappropriation thereof' (Yam vs. Article 1980 of the New Civil Code provides that:têñ. will show that from March 20. No. complaint filed in the Office of the City Fiscal of Manila by private respondent David against petitioners Teopisto Guingona. 15-16. 153-157. Central Bank of the Philippines (96 SCRA 102 ) that:têñ. together with his sister.02 and US$75. but it will only give rise to civil liability over which the public respondents have no. 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. 375.(b) David's principal witness allegedly testified that the duplicate originals of the aforesaid instruments of indebtedness were all on file with NSLA. As correctly pointed out by the Solicitor General. National Bank. private respondent David.336. Emphasis supplied). Jr.). the sums of money that petitioners received were loans.145. 1979 to March.).159. And.94 on savings account deposits covered by passbook nos.65 Phil. consequently. In the case of Central Bank of the Philippines vs. 1981. 1981 a joint promissory note in favor of private respondent acknowledging an indebtedness of Pl. rec. The nature of simple loan is defined in Articles 1933 and 1953 of the Civil Code. 8-9). the borrower can dispose of the thing borrowed (Article 248.). Fixed. This promissory note was based on the statement of account as of June 30. 81-31938.20.00 (p. Pacific Coast Biscuit CO.00 (1/2 of US$75." This Court also declared in the recent case of Serrano vs. We said:têñ. Chinese Grocers Association 65 Phil. in which case the contract is called a commodatum.20 on time deposits covered by Bankers Acceptances and Certificates of Time Deposits and the sum of P13. contrary to David's claim that some of his investments were not record (Petition. . the records reveal that when the aforesaid bank was placed under receivership on March 21. p. WE have already laid down the rule that:têñ. together with his sister. 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. "Simple loan may be gratuitous or with a stipulation to pay interest.£îhqwâ£ In order that a person can be convicted under the above-quoted provision. Hence. upon the request of private respondent David. either something not consumable so that the latter may use the same for a certain time. are loans to a bank because it can use the same. the bills or coins. however.614..500. vs.£îhqwâ£ Bank deposits are in the nature of irregular deposits. rec. 1980 Civil Code Gullas vs. "Commodatum is essentially gratuitous. which they received from private respondents. the sole issue for resolution is whether public respondents acted without jurisdiction when they investigated the charges (estafa and violation of CB Circular No.14 (pp. All kinds of bank deposits. the relationship between the private respondent and the Nation Savings and Loan Association is that of creditor and debtor. no obligation to return or deliver the same money that was deposited. goods or personal property that he receivedPetitioners had no such obligation to return the same money.. petitioners Guingona and Martin.
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. 1982 reply to public respondents' comment and reiterated in petitioners' memorandum filed on October 30. even if the petitioners could have appealed to the Ministry of Justice. Serrano ( 25 SCRA 64. 364 and other related regulations regarding foreign exchange transactions by accepting foreign currency deposit in the amount of US$75.000. Gervacio. Likewise. and that the transaction was regular and fair. 43 Phil. 3. Thus. because the statute relied upon is unconstitutional or was held invalid" ( Primicias vs. declaring that:têñ.S. thus:têñ. 93 SCRA 462. citing Ramos vs. this Court reiterated the ruling in People vs. in the absence of a clear and convincing evidence to the contrary (see paragraphs p and q. In the case at bar. Fajardo. the role of novation may only be to either prevent the rise of criminal habihty or to cast doubt on the true nature of the original basic transaction. 90 Phil. 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. Respondent David has not denied the aforesaid contention of herein petitioners despite the fact that it was raised. are allowed in the following instances:têñ. Nery ( 10 SCRA 244  ). Pangasinan. vs. 1981 assuming the obligation of the bank to private respondent David. 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. Villareal. to afford adequate protection to constitutional rights. Petitioners herein were likewise charged with violation of Section 3 of Central Bank Circular No. Montanes. 580-581  ). as extraordinary legal remedies. Municipality of Urdaneta. 469-470 . 5. as aforestated. 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. the same had to be cleared first and converted into Philippine currency.£îhqwâ£ On the issue of whether a writ of injunction can restrain the proceedings in Criminal Case No. Immediately after the bank draft was cleared. 385. to prevent the unlawful and oppressive exercise of legal authority and to provide for a fair and orderly administration of justice. Petitioners' contention is worthy of behelf for the following reasons: 1.£îhqwâ£ The novation theory may perhaps apply prior to the filling 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. The crime being an offense against the state.00 with the Nation Savings and Loan Association. Consequently. who in turn deposited it to his dollar account with the Security Bank and Trust Company. 1981 with the Office of the City Fiscal. while the criminal complaint for estafa was filed on December 23.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. 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. hence. "5. Again. Velasco. for the orderly administration of justice. and Hernandez vs. in the latest case of Ong vs. Rule 131. criminal prosecution may not be blocked by court prohibition or injunction. 47 Phil. 1982 to private respondent's comment and in the July 27. 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. U. public respondents should be restrained from further proceeding with the criminal case for to allow the case to continue. Trinidad. in Yu Kong Eng vs. Nery. People. We also admitted a petition to restrain the prosecution of certain chiropractors although. "3.000. 8 Phil. But after the justice authorities have taken cognizance of the crime and instituted action in court.£îhqwâ£ As pointed out in People vs. 3140. 1982. while it is true that novation does not extinguish criminal liability. 621-622 ).£îhqwâ£ The writs of certiorari and prohibition. in proper cases. in Gonzales vs.£îhqwâ£ "1. as when money loaned is made to appear as a deposit. Torres. The City Judge. whether or not it was such that its breach would not give rise to penal responsibility. thereby adding more support to the conclusion that the US$75. respondent David should have promptly denied petitioners' allegation. to avoid multiplicity of actions. 25 SCRA 557 . thereby placing the complainant in estoppel to insist on the original trust. 42 Phil. the offended party may no longer divest the prosecution of its power to exact the criminal liability. our action in the premises being based on the public welfare policy the advancement of public policy. however. While as a rule. 69 ) We held that:têñ. because the bank is presumed to have followed the ordinary course of the business which is to accept deposits in Philippine currency only. 304. Moreover. are in the ultimate analysis. 581. Court of Appeals (L-58476. as distinguished from the civil. 76. They contend however. the general rule is that "ordinarily. intended to annul void proceedings. We hold that the public respondents acted without jurisdiction when they investigated the charges against the petitioners. People vs. in petitioners' reply filed on May 7. petitioner Guingona authorized Nation Savings and Loan Association to withdraw the same in order to be utilized by the bank for its operations.00 without authority from the Central Bank. would work great injustice to petitioners and would render meaningless the proper administration of justice. 2. 54 Off. "4. to prevent the use of the strong arm of the law in an oppressive and vindictive manner. We gave due course to their petition for the orderly administration of justice and to . Albano. they could have appealed. there is no dispute that petitioners Guingona and Martin executed a promissory note on June 17. 620). It is safe to assume that the U.S.000. Thus. 27 Phil. et al. prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court. U. Abeto vs." Exceptions. Consequently. Rules of Court). 96 ). because when the aforesaid bank was placed under receivership by the Central Bank. Hence. 19 SCRA 95. In Dimayuga vs.S. the prosecution in a criminal offense cannot be the subject of prohibition and injunction.Sec. 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. and place the complainant in estoppel to insist on the original transaction or "cast doubt on the true nature" thereof. petitioners Guingona and Martin assumed the obligation of the bank to private respondent David. it may however. vs. 2898. 481). "2. ( 18 SCRA 616. We held that:têñ. Consequently. dollars were converted first into Philippine pesos before they were accepted and deposited in Nation Savings and Loan Association. 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. it is clear that novation occurred long before the filing of the criminal complaint with the Office of the City Fiscal. the bank draft was endorsed by respondent David to petitioner Guingona. 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$50.00 were really converted into Philippine currency before they were accepted and deposited into Nation Savings and Loan Association. or other similar disguise is resorted to (cf. Accordingly. 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. Gaz. Considering that this might adversely affect his case. 124 SCRA 578. only the latter can renounce it (People vs. this court has recognized the resort to the extraordinary writs of prohibition and injunction in extreme cases. in Lopez vs. if convicted. In conclusion. nevertheless any incipient criminal liability was deemed avoided.
63 Phil. WHEREFORE. 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. And in Arevalo vs.avoid possible oppression by the strong arm of the law. THE TEMPORARY RESTRAINING ORDER PREVIOUSLY ISSUED IS MADE PERMANENT. SO ORDERED . 627. COSTS AGAINST THE PRIVATE RESPONDENT. THE PETITION IS HEREBY GRANTED. Nepomuceno.
the borrower asked for a renewal for another period of one year. 6 February. Quezon City. and after the defendant's death on 23 October 1951 his counsel failed to comply with section 16 of Rule 3 which provides that — Whenever a party to a pending case dies . No. the appointed administratrix of the estate of the said deceased. Bagtas borrowed from the Republic of the Philippines through the Bureau of Animal Industry three bulls: a Red Sindhi with a book value of P1. later on renewed for another year as regards one bull. Bagtas. . Bagtas wrote to the Director of Animal Industry that he would pay the value of the three bulls. son of the appellant by the late defendant. and that as such death was due to force majeure she is relieved from the duty of returning the bull or paying its value to the appellee.. Administratrix of the Intestate Estate left by the late Jose V. So. defendant. D. to with: the Sindhi. T. even if it should be through a fortuitous event: (2) If he keeps it longer than the period stipulated . It was not stipulated that in case of loss of the bull due to fortuitous event the late husband of the appellant would be exempt from liability.176. and judgment for monopoly against him. Jr. Office of the Solicitor General for plaintiff-appellee. . On 19 October 1950 the Director of Animal Industry advised him that the book value of the three bulls could not be reduced and that they either be returned or their book value paid not later than 31 October 1950. Bagtas. it shall be the duty of his attorney to inform the court promptly of such death . petitioner-appellant. On 31 January 1959 the plaintiff objected to her motion. is liable for loss of the things. whether the same be due.46. for a period of one year from 8 May 1948 to 7 May 1949 for breeding purposes subject to a government charge of breeding fee of 10% of the book value of the bulls. Highway 54. Superintendent of the NVB Station. within a period of thirty (30) days. Upon the expiration on 7 May 1949 of the contract.625. because section 17 of Rule 3 of the Rules of Court provides that — After a party dies and the claim is not thereby extinguished.53 be issued against the estate of defendant deceased Jose V.: The Court of Appeals certified this case to this Court because only questions of law are raised. However. The appellant contends that the contract was commodatum and that. Reyes. was subject to the payment by the borrower of breeding fee of 10% of the book value of the bulls. or within such time as may be granted. Felicidad M.1 If the breeding fee be considered a compensation. the surviving spouse of the defendant Jose Bagtas who died on 23 October 1951 and as administratrix of his estate. upon proper notice.. for that reason. 12818). Bagtas. for funeral expenses and expenses of the last sickness of the said decedent. . And even if the contract be commodatum. at P1. . The loan by the appellee to the late defendant Jose V. .56 and a Sahiniwal. because article 1942 of the Civil Code provides that a bailee in a contract of commodatum — . Bagtas failed to pay the book value of the three bulls or to return them. . . because she had continued possession of the bull after the expiry of the contract. (3) If the thing loaned has been delivered with appraisal of its value. A contract ofcommodatum is essentially gratuitous. he could not return the animals nor pay their value and prayed for the dismissal of the complaint. Liaison and Associates for petitioner-appellant. On 2 December 1958 granted an ex-parte motion filed by the plaintiff on November 1958 for the appointment of a special sheriff to serve the writ outside Manila. plaintiff-appellee. and to give the name and residence of the executory administrator. to file said claims with the Clerk of this Court at the City Hall Bldg. when lent and delivered to the deceased husband of the appellant the bulls had each an appraised book value. or contingent. . On 5 July 1951 Jose V.176. the court shall order. a Bhagnari. and costs. on 6 December 1958. the claim that his civil personality having ceased to exist the trial court lost jurisdiction over the case against him. It is true that on 26 June 1952 Jose M. Cagayan. of P1. this appeal certified by the Court of Appeals to this Court as stated at the beginning of this opinion. The original period of the loan was from 8 May 1948 to 7 May 1949. of P744.46.46. the Bhagnari at P1. where the animal was kept. to which depreciation the Auditor General did not object. . The appellant's contention that the demand or prayer by the appellee for the return of the bull or the payment of its value being a money claim should be presented or filed in the intestate proceedings of the defendant who died on 23 October 1951. died from gunshot wound inflicted during a Huk raid on Hacienda Felicidad Intal. Bureau of Animal Industry. both with interests. However. . Rosete and Manalo. On 6 February 1959 she filed a reply thereto. the Court denied her motion. L-17474 October 25.17 with interest on both sums of (at) the legal rate from the filing of this complaint and costs. . On 25 March 1950 Jose V.56 and the Sahiniwal at P744. still the appellant is liable.241. as the appellee retained ownership or title to the bull it should suffer its loss due to force majeure. guardian. was notified. then the contract would be a lease of the bull. Hence. unless there is a stipulation exempting the bailee from responsibility in case of a fortuitous event. as evidenced by a memorandum receipt signed by the latter (Exhibit 2). FELICIDAD M. and praying that the writ of execution be quashed and that a writ of preliminary injunction be issued.320. Jose V. On 17 October 1950 he reiterated his desire to buy them at a value with a deduction of yearly depreciation to be approved by the Auditor General. BAGTAS. the legal representative of the deceased to appear and to be substituted for the deceased. On 7 January 1959 she file a motion alleging that on 26 June 1952 the two bull Sindhi and Bhagnari were returned to the Bureau Animal of Industry and that sometime in November 1958 the third bull. or other legal representative of the deceased . After hearing. JOSE V. is not altogether without merit. sentencing the latter (defendant) to pay the sum of P3. On the same day. Bayombong. Under article 1671 of the Civil Code the lessee would be subject to the responsibilities of a possessor in bad faith.62. Baggao. the Sahiniwal. returned the Sindhi and Bhagnari bulls to Roman Remorin. The appellant contends that the Sahiniwal bull was accidentally killed during a raid by the Huk in November 1953 upon the surrounding barrios of Hacienda Felicidad Intal.G. on 30 July 1956 the trial court render judgment — . On 8 May 1948 Jose V. the Secretary of Agriculture and Natural Resources approved a renewal thereof of only one bull for another year from 8 May 1949 to 7 May 1950 and requested the return of the other two. particularly in the barrio of Baggao. Bagtas.320. PADILLA. and that other just and equitable relief be granted in (civil No. On 9 October 1958 the plaintiff moved ex parte for a writ of execution which the court granted on 18 October and issued on 11 November 1958. within six (6) months from the date of the first publication of this order. Bagtas of the three bulls for breeding purposes for a period of one year from 8 May 1948 to 7 May 1949. not due. . The loan of one bull was renewed for another period of one year to end on 8 May 1950.45 and the unpaid breeding fee in the sum of P199. through counsel Navarro. Bagtas. and of the pending appeal he had taken to the Secretary of Agriculture and Natural Resources and the President of the Philippines from the refusal by the Director of Animal Industry to deduct from the book value of the bulls corresponding yearly depreciation of 8% from the date of acquisition. and there was no reason for such failure to .46. Bagtas. Of this order appointing a special sheriff. on 20 December 1950 in the Court of First Instance of Manila the Republic of the Philippines commenced an action against him praying that he be ordered to return the three bulls loaned to him or to pay their book value in the total sum of P3.09 the total value of the three bulls plus the breeding fees in the amount of P626. . Nueva Vizcaya. That is why in its objection of 31 January 1959 to the appellant's motion to quash the writ of execution the appellee prays "that another writ of execution in the sum of P859." She cannot be held liable for the two bulls which already had been returned to and received by the appellee. 1962 REPUBLIC OF THE PHILIPPINES. Bagtas." is not a notice to the court and the appellee who were to be notified of the defendant's death in accordance with the above-quoted rule. Furthermore. BAGTAS. answered that because of the bad peace and order situation in Cagayan Valley. . But the appellant kept and used the bull until November 1953 when during a Huk raid it was killed by stray bullets.R. Bagtas had been issue letters of administration of the estate of the late Jose Bagtas and that "all persons having claims for monopoly against the deceased Jose V. . J. vs. arising from contract express or implied. . The notice by the probate court and its publication in the Voz de Manila that Felicidad M. is untenable. The contention is without merit. serving a copy thereof upon the aforementioned Felicidad M.
Special proceedings for the administration and settlement of the estate of the deceased Jose V. Bagtas having been instituted in the Court of First Instance of Rizal (Q-200). without pronouncement as to costs.63. the administratrix appointed by the court. the writ of execution appealed from is set aside.notify. because it was killed while in the custody of the administratrix of his estate. the value of the bull which has not been returned to the appellee. the money judgment rendered in favor of the appellee cannot be enforced by means of a writ of execution but must be presented to the probate court for payment by the appellant. . The appellee or its attorney or representative could not be expected to know of the death of the defendant or of the administration proceedings of his estate instituted in another court that if the attorney for the deceased defendant did not notify the plaintiff or its attorney of such death as required by the rule. because the attorney who appeared for the defendant was the same who represented the administratrix in the special proceedings instituted for the administration and settlement of his estate. As the appellant already had returned the two bulls to the appellee. ACCORDINGLY. the estate of the late defendant is only liable for the sum of P859. This is the amount prayed for by the appellee in its objection on 31 January 1959 to the motion filed on 7 January 1959 by the appellant for the quashing of the writ of execution.
and so the court received the evidence of the plaintiff. after taking his oath. As early as February 11. De Gutierrez. 90 Phil.107 received by the defendant from the Associated Insurance & surety Co. and (3) the defendant be ordered to pay to plaintiff the difference between the alleged indebtedness of plaintiff and the sum received by defendant from the aforementioned insurance company. 1953. which this Court hereby likewise orders the said defendant to refund to herein plaintiff. And an order issued in the exercise of such discretion is ordinarily not to be disturbed unless it is shown that the court has gravely abused such discretion. 1953. an equitable mortgage to secure the payment of the sum of P12.107 representing the difference of the sum loan of P12. Guerrero. with right to repurchase.000.00 for nine months as interest on the sum of P12. Atty. 1955 CHERIE PALILEO. . rendered judgment granting the relief prayed for in the complaint. even if the latter had been notified of the postponement almost a month earlier. The case was next set for hearing on April 28. On December 19. we note that the lower court made the following findings: On December 18. 184). plus the sum allegedly paid to defendant as interest on the alleged indebtedness. BEATRIZ COSIO. and consequently. Guerrero could not appear on said date because of a case he had in Cebu City. the hearing was transferred to November 6. Coming now to the merits of the case. the court rendered decision the dispositive part of which reads as follows: Wherefore.000 loaned to plaintiff and the legal interest allowed by law in this transaction does not exceed 12 per cent per annum.00 corresponding to nine months from December 18.. this Court is of the opinion. upon petition of defendant. defendant shall deliver to plaintiff only the balance of the loan of P12. Salvavs. or the sum of P1. 731. defendant filed her answer setting up as special defense that the transaction entered into between the plaintiff and defendant is one of sale with option to repurchase but that the period for repurchase had expired without plaintiff having returned the price agreed upon as a result of which the ownership of the property had become consolidated in the defendant. and more importantly. 24 Phil. and Villar for appellee. that as plaintiff had paid to the defendant the sum of P2. 1951 between the herein plaintiff and defendant completely paid and leaving still a balance in the sum of P1.000 and the collected insurance of P13.440 for one year. The original counsel of defendant was Atty. but on motion again of plaintiff. Inc. After the execution of the aforesaid document. Claro M. Guerrero's sudden and unexpected appointment. (b) that defendant shall deduct from the loan certain obligations of plaintiff to third persons amounting to P4. Guerrero and the defendant were unable to appear when the case was called for trial. Camps. and to pay the costs.. Then. J. It is averred that "The days that followed his appointment were very busy days for defendant's former counsel. plus the sum of P250 as interest for the first month. Plaintiff demanded from defendant that she be credited with the necessary amount to pay her obligation out of the insurance proceeds but defendant refused to do so. Daipan vs. 1954. Villegas. And on the strength of these facts. Defendant also set up certain counterclaims which involve a total amount of P4. the hearing was postponed to January 18. the original counsel for the defendant was substituted and the new counsel immediately moved that the judgment be set aside on the ground that. but because of several postponements asked by the parties. 1953. Santos. 1953.R. and the fact that he was given almost one month notice before the date set for trial. Bengson. BAUTISTA ANGELO. purporting to convey to defendant. so the herein plaintiff and overpaid the sum of P810 to the defendant.00 a month. The building was partly destroyed by fire and. Guerrero. Guerrero. vs. Macke vs. defendant took the present appeal. 1952. thus considering the agreement of December 18. Palacio and Leuterio. or nineteen days after receiving the notice of hearing. No. was unable to wind up his private cases or make any preparation at all. (See Tell vs.000. 70. said counsel showed interest in the early disposal of this case by moving the court to have it set for trial. Pursuant to their agreement.000. Moreta.. .. 1954. And on January 4. The first date set was April 7. On April 7. 1954 escaped his memory. Leon Ma. — it is intimated. Atty. (2) the defendant be ordered to credit to the plaintiff with the necessary amount from the sum received by the defendant from the Associated Insurance & Surety Co. 38 Phil. due to mistake or excusable negligence.000 subject to the following conditions: (a) that plaintiff shall pay to defendant an interest in the amount of P250 a month. judgment is hereby rendered declaring the transaction had between plaintiff and defendant. Sigabu. and the revision of the trade agreement with the United States." These reasons. for the sum of P15. on the basis of P250.) In denying the motion for reopening the trial court said: "After going over the same arguments.107 collected by said defendant from . defendant-appellant.250. Because of all these unavoidable confusion that followed in the wake of Atty. and the document executed covering the transaction as one of equitable mortgage to secure the payment of said loan. and this motion having been denied. 1953. having in view the evidence presented.000 loaned by the defendant to plaintiff.00 as stated in the complaint. we are persuaded to conclude that the trial court did not abuse its discretion in refusing to reconsider its decision. 1951. Inc. neither the defendant nor her counsel appeared. 821." Considering the stature. the trial had to be moved to December 15. the trial of this case scheduled for January 18.250. ordering the defendant to credit the sum of P13.107. L-7667 November 28. To secure the payment of the aforesaid loan. the insurance policy having been issued in the name of defendant.**G. On this date. that. defendant was unable to present her evidence and the decision was contrary to law. the case was set for trial on the merits. defendant collected from the insurance company an indemnity of P13. and because Atty. There was an immediate need for clearing the backlog of official business. Guerrero was appointed Undersecretary of Foreign Affairs. Phil. the court. 25. It is a well-settled rule that the granting of a motion to set aside a judgment or order on the ground of mistake or excusable negligence is addressed to the sound discretion of the court (see Coombs vs. as shown in Exhibit A. to the payment of plaintiff's obligation in the sum of P12. On February 2. 1953. plus the balance of P1. Recto for appellant. Guerrero had to work as much as fourteen hours daily . The important issue to be determined in this appeal is whether the lower court committed a grave abuse of discretion in not reopening the case to give defendant an opportunity to present her evidence considering that the failure of her original counsel to appear was due to mistake or execusable negligence which ordinary prudence could not have guarded against. 185. plaintiff-appellee. which is more than the maximum interest authorized by law. a two-story building of strong materials belonging to plaintiff. Jr. including the reorganization of the Department of Foreign Affairs and our Foreign Service.00. 48 Phil.. Inc. ability and experience of counsel Leon Ma. 1954. the same has to be set anew for trial on January 12. On January 18. and (c) that after making the above deductions. 1954. 1951.. This document did not express the true intention of the parties which was merely to place said property as security for the payment of the loan.. defendant required plaintiff to sign a document known as "Conditional Sale of Residential Building".. 1954 should not be disturbed. after proper demand.. — constitute excusable negligence which ordinary prudence could not have guarded against and should have been considered by the trial court as sufficient justification to grant the petition of defendant for a rehearing. defendant insured the building against fire with the Associated Insurance & Surety Co.107 from the insurance company abovementioned to which the herein plaintiff is entitled to receive. 203.000 and the sum of P13. he had to assist the Secretary of Foreign Affairs in negotiations of national importance like the Japanese reparations.107 from the insurance collected by defendant.: Plaintiff filed a complaint against defendant in the Court of First Instance of Manila praying that (1) the transaction entered into between them on December 18.107 representing the difference of the loan of P12. Atty. The question that now arises is: Is the trial court justified in considering the obligation of plaintiff fully compensated by the insurance amount and in ordering defendant to refund to plaintiff the sum of P1. and so holds that the decision of this Court of January 18. plaintiff paid to defendant as interest on the loan a total of P2. and to apply the same to the payment of plaintiff's obligation thus considering it as fully paid. plaintiff obtained from defendant a loan in the sum of P12. 4 Phil. Tell.900. 5 Phil. Calvo vs.550. Manzanares vs. 1954. 1951 be declared as one of loan.. It is now contended that the appointment was so sudden and unexpected that Atty. but no hearing was had on that date because plaintiff had moved to postpone it. 446.
And so petitioner Cosio filed his answer. he is entitled to the insurance proceeds in case of loss. On the same day. furthermore. The mortgagee. The dispositive portion of its decision reads: G. the parties entered into an agreement whereby respondent Palileo remained in possession of the house as tenant. in the light of the majority rule we have above enunciated. however. The court denied the motion to dismiss. but it passes by subrogation to the insurer. the mortgagor has no interest in the policy.107.R. F. Co. Bengzon and Zarraga for respondent. Washington Mills Emery Mfg.. CHERIE PALILEO. that the insurer is thereupon subrogated to the rights of the mortgagee under the mortgage. 123. new series.. On October 25. The house in this case. 6181. and the amount due under the mortgage debt remains unchanged. Pasay City. L-18452 May 31. however. stated in another way.. . but the case was again dismissed. It was filed following our decision in Palileo v. however. On October 4. Co. Meanwhile the ejectment suit was dismissed by the Municipal Court. respondent Palileo received from petitioner Beatriz Cosio de Rama the sum of P12. No pronouncement as to costs. Equitable Mut. de Barza. vs. for. Ins. On this date. and that. J. therefore. At the instance of his sister.. The rule is that "where a mortgagee. 1951 before the house could be sold at public auction. we therefore modify the judgment of the lower court as follows:(1) the transaction had between the plaintiff and defendant as shown in Exhibit A is merely an equitable mortgage intended to secure the payment of the loan of P12. It was found that the amount of P12. paying petitioner Cosio de Rama a monthly rental of P250. Respondent Palileo appealed to the Court of First Instance of Pasig. Thereafter. See also Loomis vs. 396.. the pacto de retro sale between the parties being in reality a loan with an equitable mortgage. it was alleged. insures the mortgaged property in his own name and for his own interest. 79). vs. No. Inc. but in such case.C. 2 Gray 216." (King vs. 3rd ed.." purporting to convey to petitioner Cosio de Rama the house in question. Under this document. As earlier stated. upon the destruction of the property the insurance money paid to the mortgagee will not inure to the benefit of the mortgagor. respondent Palileo filed another action in the Municipal Court of Pasay City.(2) that the proceeds of the insurance amounting to P13." (Jones on Mortgages. 772-773) This is the same rule upheld by this Court in a case that arose in this jurisdiction.000. the mortgagee "has still a right to recover his whole debt of the mortgagor. It was originally brought against petitioner Cosio who asked that the action be dismissed on the ground that it was barred by the judgment of the Municipal Court which dismissed the ejectment case against him. (3) that the collection of said insurance proceeds shall not be deemed to have compensated the obligation of the plaintiff to the defendant. the other petitioner Augusto Cosio entered the premises and began the repair of the house. Just the same. Cosio. It is located at 25 (formerly 6) Antipolo Street. (San Miguel Brewery vs. Accordingly. Vol. petitioner Cosio de Rama. independently of the mortgagor. petitioner Cosio de Rama was paid P13. repair work went on and although at times interrupted it was finally completed in 1953 at a cost of P12. This is put upon the analogy of the situation of the insurer to that of a surety. pp. respondent Palileo was successful. Eagle Life & Health Ins. Recto Law Office for petitioners. because of which the mortgage was foreclosed and the house was advertised for sale. 654)Or. this Court directed petitioner Cosio de Rama to return to respondent Palileo the sum of P810 which she had collected as interest in excess of that allowed by law. this Court held that the mortgagee.. was in fact a loan. this time for failure of respondent Palileo to prosecute. 671-672. this suit was instituted to recover the possession of the house as a consequence of our decision that it had not really been sold but had merely been given as security for a loan. 405). 1950.) It is true that there are authorities which hold that "If a mortgagee procures insurance on his separate interest at his own expense and for his own benefit. this house and the leasehold right to the lot were bought by respondent Cherie Palileo who paid part of the purchase price and mortgaged the house to secure the payment of the balance. It was declared that the mortgaged had no right of action against the mortgagee on the policy. Co. it would appear that the lower court erred in declaring that the proceeds of the insurance taken out by the defendant on the property mortgaged inured to the benefit of the plaintiff and in ordering said defendant to deliver to the plaintiff the difference between her indebtedness and the amount of insurance received by the defendant. was formerly owned by Felicisima Vda.00 representing the overpayment made by plaintiff by way of interest on the loan. In a sense. 1952. it being stipulated that the proceeds would be paid to him only and when the case came up for decision.. This case was filed in the Court of First Instance of Rizal on December 4.000. 51 O. he is not allowed to retain his claim against the mortgagor. 40 Phil. to the extent of the insurance money paid.but is passed by subrogation to the insurer to the extent of the money paid. that the amount of P250 paid every month as rent was in reality interest.) But these authorities merely represent the minority view (See case note. Co. this case is a sequel to Palileo v. "the mortgagee may insure his interest in the property independently of the mortgagor.000 in consideration of which she signed a document entitled "Conditional Sale of Residential Building.00 was properly collected by defendant who is not required to account for it to the plaintiff. 7 Cush. 3 Lawyers' Report Annotated. but bars the latter from claiming its payment from the former. Co. respondent. the correct solution should be that the proceeds of the insurance should be delivered to the defendant but that her claim against the plaintiff should be considered assigned to the insurance company who is deemed subrogated to the rights of the defendant to the extent of the money paid as indemnity. and that the house allegedly sold was intended to be a security for the loan. 2d ed. 135 Mass.L. In that event. "The general rule and the weight of authority is. may only recover upon the policy to the extent of his credit at the time of the loss. F. 6 Gray. an insurance contract was taken out by the mortgagee upon his own interest.000. Co. Boyden 9 Allen. REGALA.107 by the insurance company. Villegas. Law Union.the insurance company notwithstanding the fact that it was not proven that the insurance was taken for the benefit of the mortgagor? Is is our opinion that on this score the court is in error for its ruling runs counter to the rule governing an insurance taken by a mortgagee independently of the mortgagor. 1965 AUGUSTO COSIO and BEATRIZ COSIO DE RAMA. F." (Vance on Insurance. on a lot belonging to the Hospicio de San Juan de Dios. The parties are here this time to litigate on the issue of possession and its effects. It appears that respondent Palileo defaulted in her obligation. petitioners. Ins.) Considering the foregoing rules. One week after (December 11). p. He was later joined by petitioner Cosio de Rama who was allowed to intervene in the action. in case of loss. Mut. pp. I. had entered and occupied the house without the knowledge and consent of respondent Palileo. p. 506. and (4) defendant shall pay to the plaintiff the sum of P810. Fortunately for her. p. In the case mentioned. Both the lower court and this Court declared the transaction of the parties to be a loan with an equitable mortgage and not a conditional sale. Ins.G. which purported to be the price. 1952. Soon after an action was filed by respondent Palileo against Cosio de Rama for the reformation of the deed of pacto de retro sale into a loan with an equitable mortgage. is not allowed to retain his claim against the mortgagor. fire broke out in the house and partly destroyed the same. State Mut. 1. Petitioner Cosio de Rama subsequently insured the house against fire with the Associated Insurance & Surety Co. Ins.. and is not entitled to have the insurance proceeds applied in reduction of the mortgage debt" (19 R. Suffolk F. in which We ruled that the house in question had not been sold out but had merely been given as security for a debt. this time seeking the ejectment of petitioner Cosio who. vs. without any agreement with the mortgagor with respect thereto. Bengzon. Consistent with the foregoing pronouncement." (Vance on Insurance. Cosio." In the other case. 674. respondent Palileo was able to raise money on December 18. the lower court rendered judgment finding petitioner Cosio de Rama to be a possessor in good faith with a right to retain possession until reimbursed for her expenses in repairing the house. Weymouth & B. Foster vs. For the loss. This Court likewise ruled that petitioner Cosio de Rama could keep the proceeds of the fire insurance but that her claim against respondent Palileo under the loan was to be deemed assigned to the insurance company. The dismissal of the case was subsequently made "without prejudice. a two-story building. the right to repurchase the house within one year was reserved to respondent Palileo.: This is an action to recover the possession of a house.
such as is contemplated in cases of accession continua of which article 449 is a rule. 6181 at 6184) If that was the intention of the parties (to conform to which their written instrument was reformed) then petitioner Cosio de Rama knew from the beginning that she was not entitled to the possession of the house because she was a mere mortgagee. They contend that they were not only possessors in good faith from the beginning but that they continue to be such even after this Court's declaration that their transaction was a loan with a mortgage and not a sale with a right of repurchase.. and appellee (Augusto Cosio) and intervenor-appellee (Cosio de Rama) are hereby ordered to pay appellant a monthly rental of P300 during the time they actually occupied the house just mentioned as possessors in bad faith. It is said that although that ejectment was vacated when it was appealed to the Court of First Instance. to repeat. Eastern Trading Co. this Court said: "This document did not express the true intention of the parties which was merely to place said property (the house) as security for the payment of the loan. petitioner Cosio de Rama spent P12. Hence. Phil. As possessors in bad faith. Although petitioners were appellees in the Court of Appeals. 52 Off. we believe that this action is not barred by the prior judgment in the ejectment case. That judgment.000 allegedly spent for the reconstruction of the same. 13591369 and the Report of the Code Commission. petitioner Cosio de Rama did so with this knowledge. to enter the premises and make repairs and in later occupying the house herself. This case comes under article 546 which. As already stated. Pasay City. plants or sows in bad faith on the land of another loses what is built. said appellee and intervenorappellee's title to the house suffered from a flaw. Arts. if an action is filed in an inferior court. For what petitioners did in this case was not to build a new house on the land of another. and the action when duly docketed in the Court of First Instance. De la Cruz. respondent Palileo appealed to the Court of Appeals and succeeded in having the lower court decision modified. when the latter had just started to reconstruct the house. (Art. Petitioners likewise aver that neither can the ejectment suit be considered to be notice of any defect or flaw in their mode of acquisition because that case after all was dismissed. 54 Phil. and entitled to the possession thereof." But article 449 is a rule of accession and we are not here concerned with accession. 25 Antipolo Street. the decision appealed from is hereby affirmed in all other respects. Rather. p. Arts. If the appeal is withdrawn.1äwphï1." And now we come to the last point in petitioners' assignment of errors.. Petitioners did not have such a right at any time and they knew this. Lopez.00) PESOS with interest at the legal rate from December 22. petitioners are jointly liable for the payment of rental. See Lerma v. though raised in the Court of First Instance. as a matter of fact. planted or sown without right to indemnity. are to be refunded even to possessors in bad faith.ñët Petitioners Cosio and Cosio de Rama have appealed to this Court by certiorari. the reasonable value of which. They merely inquire into the intention of the parties and. when appellant instituted the ejectment case against appellee (Augusto Cosio) and intervenor-appellee (Cosio de Rama) as early as December 1952. dismissed the ejectment case against petitioner Cosio. Rules of Court. 581) This finding is supported by the evidence and we find no reason to disturb it. provides for the refund of necessary expenses "to every possessor. the Court hereby renders judgment declaring plaintiff Palileo as the lawful owner of the house No. From that time both appellee and intervenorappellee ceased to be considered possessors in good faith. (Rule 40. Thus in describing petitioners as "builders in bad faith" and. 1452) And if they chose to continue reconstructing the house even after they were appraised of a flaw on their title they did so as builders in bad faith. In reforming instruments. 25 Antipolo Street." Thus. 1365 and 1602). 9. the judgment shall be deemed revived and shall forthwith be remanded to the justice of the peace or municipal court for execution. — A perfected appeal shall operate to vacate the judgment of the justice of the peace or the municipal court. reform the written instrument (not the contract) in order that it may express the real intention of the parties (See Id. Gaz. in bidding her brother. under Article 546.000. Pasay City and entitled to the possession thereof upon her paying to intervenor defendant Beatriz Cosio de Rama the sum of TWELVE THOUSAND (P12. they should have assigned this alleged error if only to maintain the decision of the lower court. she is not a builder in bad faith. was not properly assigned as error in the Court of Appeals. We note that this point. He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing. The pertinent provisions of the Rules of Court state: Effect of appeals. the court obviously applied Article 449 which states that "he who builds. the subsequent dismissal of the case was equivalent to the withdrawal of the appeal and therefore to a revival of the judgment of the Municipal Court.IN VIEW OF THE FOREGOING. Without any pronouncement as to costs. 549. new Civil Code. 56). There is no judgment for costs. The appellate court ruled that — by virtue of the pacto de retro sale intervenor-appellee (Beatriz Cosio de Rama) became the temporary owner of the house and as such she was entitled to the possession thereof from the date of such conditional sale although appellant (Cherie Palileo) was its actually occupant as intervenor appellee's tenant. may the plaintiff file another complaint for the same cause? The Supreme . without reimbursing intervenor-appellee (Beatriz Cosio de Rama) the sum of P12. this Court did not invalidate. 51 O. that land being the property of the Hospicio de San Juan de Dios. as we have already indicated. The error of the appellate court lies in its failure to appreciate the distinction that while petitioner Cosio de Rama is a possessor in bad faith. Tacas v. the supposed deed of sale. citing Article 526 of the Civil Code which states as follows: He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. she could not have been mistaken as to the true nature of their agreement. but merely reformed. Accordingly. and the plaintiff fails to appear and the case is dismissed. v. because." (Palileo v. Mistake upon a doubtful or difficult question of law may be the basis of good faith. We believe that both the petitioners and the Court of Appeals are in error in saying that the former had a right to the possession of the house under the deed of pacto de retro sale. 1946 which is the date of the filing of intervenor-defendant's counterclaim until paid. Lozada.) The following comment answers squarely petitioners' arguments: The case shall stand in the Court of First Instance as though the same "had been originally there commenced. Cosio. with the modification that appellant (Cherie Palileo) is hereby declared the lawful owner of the house known as No.000 for the repair work. 1952. In holding that the document entitled "Conditional Sale of Residential Building" was in fact a mortgage. petitioner Cosio. It is contended that the present action is barred by the judgment of the Municipal Court which dismissed the ejectment case filed by respondent Palileo against petitioner Cosio.. It was there taken up only in the "preliminary remarks" in the brief. This is what was done in the earlier case between the parties. to have the deed of pacto de retro sale declared as one of loan with equitable mortgage. consequently. However. shall stand for trial de novo upon its merits in accordance with the regular procedure in that court. Apart from this consideration. having found it. what they did was merely to make repairs on a house that had been partly destroyed by fire and we are asked whether they have a right to be refunded for what they spent in repairs. because such expenses are necessary (Angeles v. 528. Inc. Tobon 53 Phil. or dismissed for failure to prosecute. as found by the appellate court is P300 a month. For the same reason. in holding that they have no right to be reimbursed.. But even as we hold petitioner Cosio de Rama to be a possessor in bad faith we nevertheless believe that she is entitled to be reimbursed for her expenses in restoring the house to its original condition after it had been partly damaged by fire. The land on which the house is built is not even owned by respondent Palileo.G. Inc. 7 Phil. it rendered judgment as follows: WHEREFORE. (Art. . 184) and. There is here no reason for the application of the principle accesio cedit principali. as though the same had never been tried before and had been originally there commenced. courts do not make another contract for the parties (See Civil Code. 356.. Not satisfied. and she likewise commenced the action against intervenor-appellee in the same month of December. see.
is affected to a certain extent by Rule 17. therefore. (Marco v. cost. Comments on the Rules of Court. of cases coming within the original jurisdiction of the Court of First Instance. 344-345 [1963 ed.000 by respondent Palileo. the conclusion is that plaintiff may file a new complaint for the same cause. was in the Court of First Instance as if the same "had been originally there commenced" and since dismissals. however. which provides that the dismissal of a case on the ground of plaintiff's failure to appear at the trial.Court held that. when dismissed." (2 Moran. with the modification that petitioner Cosio de Rama should be reimbursed her necessary expenses in the amount of P12. therefore. is a final adjudication upon the merits unless the court otherwise provides.]) Here the dismissal of the ejectment case for failure of respondent Palileo to prosecute was expressly made to bewithout prejudice. WHEREFORE. That judgment. section 3. the judgment of the Court of Appeals is affirmed in all other respects. without pronouncements as to. since the appeal had the effect of vacating the judgment of the inferior court and. are without prejudice. the case. on the ground aforementioned. Hashim 40 Phil. cannot be a bar to the filing of another action like the present. 592) This ruling. .
M-111. AGOSTO SAJOR respondents.) In Criminal Case No. to the prejudice of another. (Annex D of the petition. in excess of jurisdiction and with grave abuse of discretion when: (a) he held in the preliminary investigation of the charges of estafa filed by respondents Rosalinda Amin. as contrasted to commodatum. M-183 and M-208. 1976.000. Estafa through misappropriation is committed according to Article 315. or under any other obligation involving the duty to make delivery of or to return the same. Ampang Mah and Anita Yam. Likewise. the sums of money that petitioners received were loans. In U. We are of the opinion and so decide that when the relation is purely that of debtor and creditor. Art. goods or personal property that he received. M-183 and M-208 or from enforcing the warrants of arrest he had issued in connection with said cases. in excess of jurisdiction and with grave abuse of discretion because the facts recited in the complaints did not constitute the crime of estafa. Tan Chu Kao and Augusto Sajor against petitioners that there was a prima facie case against the latter. and mandamus with preliminary injunction. this Court held that it is not estafa for a person to refuse to nay his debt or to deny its existence. i. subparagraph (b). the borrower acquires ownership of the money. 559. In Criminal Case No. N-5. Amin "as a loan. or any other personal property received by the offender in trust or on commission. money. it must be proven that he has the obligation to deliver or return the same money. 560 (1911). the complaint in Civil Case No. or other property.00 was a "simple business loan" which earned interest and was originally demandable six (6) months from July 12.: This is a petition for certiorari. in a sworn statement dated September 29.C. HON. M-183.. in which case the contract is called a commodatum.C. vs. N-8 filed by respondent Tan Chu Kao on April 6. We have to grant the petition in order to prevent manifest injustice and the exercise of palpable excess of authority." (Annex G of the petition. J. under said article. 1973. . With unfaithfulness or abuse of confidence namely: xxx xxx xxx b) By misappropriating or converting. But the complaint states on its face that said petitioners received the amount from respondent Rosalinda M. an independent action for the collection of the same amount filed by respondent Rosalinda M. 1976 with the Court of First Instance of Sulu for the collection of the same amount. — Any person who shall defraud another by any of the means mentioned herein below shall be punished by: xxx xxx xxx ABAD SANTOS. of the Revised Penal Code as follows: Art. and assuming they did. respondent Augusto Sajor charges petitioners Jose Y. It can be readily noted from the above-quoted provisions that in simple loan (mutuum).000. However.000.000. Comments by the respondent judge and the private respondents pray for the dismissal of the petition but the Solicitor General has manifested that the People of the Philippines have no objection to the grant of the reliefs prayed for. even though such obligation be totally or partially guaranteed by a bond. (b) he issued warrants of arrest against petitioners after making the above determination. TAN CHU KAO and LT. 1979 CHEE KIONG YAM. Sulu (Branch I). Art.C. or for administration.e. 1975. Chee Kiong Yam and Richard Yam. — A person who receives a loan of money or any other fungible thing acquires the ownership thereof. the debtor can not be held liable for the crime of estafa.00. M-111. Tomas P. Respondent judge is said to have acted without jurisdiction. which they received from private respondents. petitioners. goods or personal property borrowed. or money or other consumable thing upon the condition that the same amount of the same kind and quality shall be paid. M-208. L-50550-52 October 31. — By the contract of loan.000. by merely refusing to pay or by denying the indebtedness. In a resolution dated May 23.G. Malik of Jolo.). (Annex E of the petition. goods. the complaint states on its face that the P30. 1953.R. Yam. one of the parties delivers to another. Jose Y. acted without jurisdiction. respondent Rosalinda M. or by denying having received such money. Fernandez for private respondent. paragraph 1. and is bound to pay to the creditor an equal amount of the same kind and quality. submitted to respondent judge to support the complaint. and (c) he undertook to conduct trial on the merits of the charges which were docketed in his court as Criminal Cases No. the borrower can dispose of the thing borrowed (Article 248. goods. Petitioners had no such obligation to return the same money. M-111. Civil Code) and his act will not be considered misappropriation thereof. respondent Augusto Sajor states that the amount was a "loan. 315. 1933." Moreover. P20. in which case the contract is simply called a loan or mutuum. We considered the comments as answers and gave due course to the petition. In commodatum the bailor retains the ownership of the thing loaned. Amin charges petitioners Yam Chee Kiong and Yam Yap Kieng with estafa through misappropriation of the amount of P50. for petitioners. The nature of simple loan is defined in Articles 1933 and 1953 of the Civil Code. respondent Tan Chu Kao charges petitioners Yam Chee Kiong. In Criminal Case No. ROSALINDA AMIN.00 was "a simple loan. Amin with the Court of First Instance of Sulu on September 11. Unlike the complaints in the other two cases. Swindling (Estafa). This is so because as clearly stated in criminal complaints. prohibition." So does the complaint in Civil Case No. Municipal Judge of Jolo. either something not consumable so that the latter may use the same for a certain time and return it. ANITA YAM JOSE Y. Jose E. YAM AND RICHARD YAM. they were not within the jurisdiction of the respondent judge. Yam. the bills or coins. Jr. Sulu.00. 1979. Commodatum is essentially gratuitous. while in simple loam ownership passes to the borrower. THE PEOPLE OF THE PHILIPPINES.). Petitioners alleged that respondent Municipal Judge Nabdar J. No. vs. Simple loan may be gratuitous or with a stipulation to pay interest. AMPANG MAH. alias Yong Tay.00. NABDAR J. In order that a person can be convicted under the abovequoted provision. we required respondents to comment in the petition and issued a temporary restraining order against the respondent judge from further proceeding with Criminal Cases Nos. Matic.S. Office of the Solicitor General for respondent the People of the Philippines. Anita Yam alias Yong Tai Mah. Ibañez. MALIK. The position of the Solicitor General is well taken. M-208 does not state that the amount was received as loan. likewise states that the P50. with estafa through misappropriation of the amount of P30. We agree with the petitioners that the facts alleged in the three criminal complaints do not constitute estafa through misappropriation. Being the owner. the related civil complaints and the supporting sworn statements. with estafa through misappropriation of the amount of 1. except the damages. the complaint in Criminal Case No. COL. 19 Phil.
87 of the Judiciary Act.000. has jurisdiction over criminal cases where the penalty provided by law does not exceed prision correccional or imprisonment for not more than six (6) years. this Court is not the proper forum for the consideration of the claim for damages against them. They are immune from such type of suit. when he performed the questioned acts.000. the temporary restraining order previously issued is hereby made permanent. the criminal complaints against petitioners are hereby declared null and void. mutuum and commodatum. Assuming then that the acts recited in the complaints constitute the crime of estafa. or fine not exceeding P6. the petition is hereby granted. . The penalty for misappropriation of this magnitude exceeds prision correccional or 6 year imprisonment.00. respondent judge is hereby rebuked for manifest ignorance of elementary law. Let a copy of this decision be included in his personal life. (Article 315. With respect to the other respondents. respondent judge is hereby ordered to dismiss said criminal cases and to recall the warrants of arrest he had issued in connection therewith. Respondents People of the Philippines being the sovereign authority can not be sued for damages. the municipal court of a provincial capital. The amounts allegedly misappropriated by petitioners range from P20. Moreover. the Municipal Court of Jolo has no jurisdiction to try them on the merits. Costs against private respondents. He mistook the transaction between petitioners and respondents Rosalinda Amin.00 to P50.00 or both. WHEREFORE. which the Municipal Court of Jolo is.000. Revised Penal Code). The alleged offenses are under the jurisdiction of the Court of First Instance. Under Sec. Tan Chu Kao and Augusto Sajor to be commodatum wherein the borrower does not acquire ownership over the thing borrowed and has the duty to return the same thing to the lender. SO ORDERED.It appears that respondent judge failed to appreciate the distinction between the two types of loan.
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