THE PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. ROSENDO RESUELLO, ET AL., DEFENDANTS, ROSENDO RESUELLO, DEFENDANT-APPELLEE.

Appeal by certiorari, taken by the Government, from an
order of the Court of First Instance of Pampanga,
dated October 10, 1968, dismissing Criminal Case No. 5232 of said court
entitled “The People of the Philippines vs. Rosendo
Resuello, et al.,” with costs de officio, and directing
the cancellation of the bond filed by defendant Rosendo
Resuello for his temporary release.

Together with John Doe, Peter Doe, Edward Doe, Anthony Doe,
Bennie Doe and Charles Doe, respondent Rosendo Resuello is charged, in said case, with estafa.
 The information therein filed, under
date of March 9, 1965, reads
as follows:

“That in or about the month of October, 1962, in the
municipality of Guagua, province of Pampanga, Philippines, and within the jurisdiction of this
Honorable Court, the above named accused ROSENDO RESUELLO, being the president
and general manager of the Security Credit and Acceptance Corporation, JOHN
DOE, PETER DOE, EDWARD DOE, ANTHONY DOE, BENNIE DOE AND CHARLES DOE, all being
officers of the said Security Credit and Acceptance Corporation, representing
themselves to be the president and general manager and other officers and
employees of the said corporation, received for deposit from FLORENTINA G.
LIMPIN the amount of EIGHT HUNDRED (P800.00) PESOS, with the obligation on the
part of the accused to return and deliver the amount so deposited upon demand
the said accused far from complying with the said obligation, conspiring
together and mutually helping and aiding one another, with intent of gain and
to defraud and with grave abuse of confidence and by means of deceit, once in
possession of the said money, did then and there willfully, unlawfully and
feloniously misapply, misappropriate and convert to their own personal use and
benefit the said amount of EIGHT HUNDRED (P800.00) PESOS, and in spite of
repeated and insistent demands made on the said accused to return and deliver
the money, said accused failed and refused and still fail and refuse to return
or deliver the said amount of P800.00, to the damage and prejudice of the said
FLORENTINA G. LIMPIN in the aforesaid amount, Philippine currency.”

Respondent Resuello having moved to
quash the information – upon the ground that “the facts charged do not
constitute an offense” in view of the provisions of Article 1980 the Civil Code
– the Court of First Instance of Pampanga issued its
aforementioned order granting said motion to quash and dismissing the case as
above stated.  The pertinent part of said
order reads:

“In a loan after the delivery of the thing, the debtor has the
title of the thing of which he is enti­tled to appropriate.  On the theory that the
accused resorted to fraud (Art. 315, par. 2, subpar.
(a)) to obtain such deposit of Florentina
G. Limpin, the nature and legal effect of the
transaction that it is still a deposit under Art. 1980, New Civil Code, is not
altered.  The element of fraud being
present gives rise to a civil action, but not a criminal case of estafa.

“In either case, a civil action is proper under the
circumstances and not a criminal case of estafa.  Even granting that the
Security Credit and Acceptance Corporation violated some regula­tions of the
General Banking Act, Republic Act 337, and the Central Bank Act.  Republic Act No. 265, such violation does not
warrant the prosecu­tion of the crime of estafa.  Any violation under said Acts, the accused
may be made liable therefor, but surely not under the
provisions of the Revised Penal Code, for estafa.

“WHEREFORE, the Court hereby dismisses this case with costs
de oficio and orders the cancellation
of the bond filed by the accused for his temporary release.”

In its present appeal, the prosecution maintains that the lower
court erred in considering the transaction in question as a simple loan; in
concluding that the relationship between the accused and the complaining
witness is one of creditor and debtor; in holding that the defendant’s
liability is purely civil in nature; and in dis­missing the case.

Upon the review of the record, We are
fully satisfied that the order appealed from should be reversed.  Indeed, the information alleges that,
representing himself as president and general manager of the Security Credit
and Acceptance Corporation, Resuello (and his
codefendants, who represented themselves as “officers and em­ployees of
the said corporation”) “received, for deposit from FLO­RENTINA
G. LIMPIN, the amount of EIGHT HUNDRED (P800.00) PESOS with the obligation, on
the part of the accused to return and deliver the amount so deposited upon
demand x x x.” Upon
the other hand, the lower court held, in its appealed order, that the transac­tion
referred to in the information constitutes a “simple loan,” for,
pursuant to Article 1980, “(f)ixed,
savings, and current deposits of money in banks and similar institutions
shall be governed by the pro­visions concerning simple loans.” Thus, the
lower court departed from the allegations in the information, the truth
of which are hypo­thetically admitted in the motion to quash, which is
based upon the theory that the facts alleged “do not constitute an
offense.”^[1]

Moreover, Article 1980 refers to the legal relation between
“banks and similar institutions,” on the one hand, and the persons
making therein “(f)ixed,
savings, and current deposits of money,” whereas the information in this
case describes a legal relation bet­ween Florentina
G. Limpin, on the one hand, and Resuello
and his codefendants, not the Security Credit and Acceptance
Corporation, on the other.  This relation
between Limpin and Resuello
is stressed by the fact that the information further avers that the former’s money was received by the latter and his
codefendants “with the obligation, on the part of the accused”
– not the corporation – “to return and deliver the money so
deposited upon demand x x x.”
As if to allay any possible question regarding the nature of the transaction
alluded to in the information, the same, likewise, alleges that “the said ac­cused”
– once again, not the corporation – “far from complying with the
said obligation, conspiring together and mutually helping and aiding one
another, with intent of gain and to defraud and with grave abuse of confidence
and by means of deceit, once in possession of the said money, did then and
there wilfully, unlawfully and feloniously misapply,
misappropriate and convert to their own personal use and benefit the
said amount of EIGHT HUNDRED (800.00) PESOS x x x.”

Thus, the information does not allege that the money had
been deposited with the corporation. 
Indeed, otherwise, the obli­gation to return the money upon demand would
have vested, not in Resuello and his codefendants,
but in the corporation, contrary to the allegations of the information.

In short, it being averred that the accused had received the
money “for deposit,” with the obligation on their part to
return it upon demand, and that, once in possession thereof, they misapplied,
misappropriated and converted said money “to their own personal use
and benefit,” it follows that the information alleges the crime of
swindling (estafa), as provided for in the third
paragraph, in rela­tion to subdivision 1(b) of Article 315 of the Revised Penal
Code and that the lower court has erred in granting the aforesaid motion to
quash.

The reference made in the order appealed from to possible
violations of Republic Acts 265 and 337 requires an explanation.  On January 23, 1967, this Court rendered its
decision in L-20583, entitled “Republic of the Philippines vs. Security
Credit and Acceptance Corporation, Rosendo T. Resuello, et al.” ordering the dissolution of the
aforementioned corporation upon the ground that it had engaged in banking, not
only without the authority necessary therefor, but,
also, despite the fact that, on October 11, 1961, the Legal Counsel of the
Central Bank had rendered an opinion to the effect that the Corporation is a
banking institution; that the Securities and Exchange Commission had, on
December 5, 1961, furnished a copy of said opinion to the corporation and
required the same to comply with the provisions of the General Banking Act,
Republic Act No. 337; and that as early as September 10, 1962, the corporation
had been found to be performing banking functions, without the requisite
certificate of authority from the Monetary Board of the Central Bank.

The appealed order postulates that for transactions of the
corporation violative of Republic Acts Nos. 265 and
337, the ac­cused may be held liable, not for estafa,
but under the provisions of said laws. 
The same merely govern, however, those who engage in lending of funds
obtained from the public through the re­ceipt of deposits or sale of bonds,
securities or obligations of any kind. 
In other words, the receipt of such deposits or the business
of lending the funds thus obtained, without complying with the provisions
of Republic Acts Nos. 265 and 337 are punishable under their provisions.  Private individuals, whether officers or
employees of a bank or not, who misappropriate, for their own use and benefit,
funds entrusted to their custody, with the obligation to return the same, are
subject to the provisions or the Revised Penal Code.

What is more, if knowing, as he did, that the corporation had no
authority to receive current account deposits, defendant Resuello
received the amount stated in the information, for the purpose of opening with
the corporation a current account deposit, his personal obligation to keep said
amount in trust for the depo­sitor is greater than if the corporation had been
duly licensed to engage in banking. 
Hence, misappropriation of said amount by him, for his own
use and personal benefit, in breach of the afore­mentioned obligation
and of the trust reposed upon him, is even more reprehensible and deserving of
penal sanction under the Re­vised Penal Code.

WHEREFORE, the order appealed from is hereby set aside,
and the case remanded to the lower court for further proceedings, not
inconsistent with this decision.  Costs against defendant-appellee, Rosendo Resuello.

IT IS SO ORDERED.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,
Fernando, Teehankee, Barredo, and Villamor, JJ., concur.

Makasiar, J., did not take part.

^[1]
People v. Supnad, L-18747, March 30, 1963.