Guingona v.

City Fiscal Flaminiano

TEOFISTO GUINGONA, JR., ANTONIO MARTIN, and TERESITA SANTOS v.
CITY FISCAL FLAMINIANO, ASST. CITY FISCAL LOTA and CLEMENT DAVID
1984 / Makasiar

David invested several deposits with the Nation Savings and Loan Association [NSLA]. He said that he was
induced into making said investments by an Australian national who was a close associate of the petitioners [NSLA
officials]. On March 1981, NSLA was placed under receivership by the Central Bank, so David filed claims for
his and his sister’s investments.
On June 1981, Guingona and Martin, upon David’s request, assumed the bank’s obligation to David by
executing a joint promissory note. On July 1981, David received a report that only a portion of his investments
was entered in the NSLA records.
On December 1981, David filed I.S. No. 81-31938 in the Office of the City Fiscal, which case was
assigned to Asst. City Fiscal Lota for preliminary investigation. David charged petitioners with  estafa and violation
of Central Bank Circular No. 364 and related regulations on foreign exchange transactions.
Petitioners moved to dismiss the charges against them for lack of jurisdiction because David's claims
allegedly comprised a purely civil obligation, but the motion was denied. After the presentation of David's
principal witness, petitioners filed this petition for prohibition and injunction because:
a.     The production of various documents showed that the transactions between David and NSLA were simple
loans (civil obligations which were novated when Guingona and Martin assumed them)
b.    David's principal witness testified that the duplicate originals of the instruments of indebtedness were all on file
with NSLA.
A TRO was issued ordering the respondents to refrain from proceeding with the preliminary investigation
in I.S. No. 81-31938.

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

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

EXCEPTIONS
1.     For the orderly administration of justice
2.     To prevent the use of the strong arm of the law in an oppressive and vindictive manner
3.     To avoid multiplicity of actions
4.     To afford adequate protection to constitutional rights
5.     In proper cases, because the statute relied upon is unconstitutional or was held invalid

When David invested his money on time and savings deposits with NSLA, the contract that was perfected was
a contract of simple loan or mutuum and not a contract of deposit. The relationship between David and NSLA is
that of creditor and debtor. While the Bank has the obligation to return the amount deposited, it has no obligation
to return or deliver the same money that was deposited. NSLA’s failure to return the amount deposited will
not constitute estafa through misappropriation, but it will only give rise to civil liability over which the public
respondents have no jurisdiction.
Considering that petitioners’ liability is purely civil in nature and that there is no clear showing that
they engaged in foreign exchange transactions, public respondents acted without jurisdiction when they
investigated the charges against the petitioners. Public respondents should be restrained from further proceeding
with the criminal case for to allow the case to continue would work great injustice to petitioners and would render
meaningless the proper administration of justice.
Even granting that NSLA’s failure to pay the time and savings deposits would constitute a violation of RPC
315, paragraph 1(b), any incipient criminal liability was deemed avoided. When NSLA was placed under
receivership, Guingona and Martin assumed the obligation to David, thereby resulting in the novation of the
original contractual obligation. The original trust relation between NSLA and David was converted into
an ordinary debtor-creditor relation between the petitioners and David. While it is true that novation does not
extinguish criminal liability, it may prevent the rise of criminal liability as long as it occurs prior to the filing of the
criminal information in court.