CHEE KIONG YAM, AMPANG MAH, ANITA YAM JOSE Y. C. YAM AND RICHARD YAM, PETITIONERS, VS. HON. NABDAR J. MALIK, MUNICIPAL JUDGE OF JOLO, SULU (BRANCH I), THE PEOPLE OF THE PHILIPPI…

This is a petition for certiorari, prohibition, and mandamus
with preliminary injunction.  Petitioners
allege that respondent Municipal Judge Nabdar J. Malik of Jolo, Sulu, acted without jurisdiction, 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, Tan Chu Kao and Augusto Sajor against petitioners that there was a prima facie
case against the latter;

(b)   he issued warrants
of arrest against petitioners after making the above determination; and

(c)   he undertook to
conduct trial on the merits of the charges which were docketed in his court as
Criminal Cases No. M-111, M-183 and M-208.

Respondent judge is said to have acted without jurisdiction, in
excess of jurisdiction and with grave abuse of discretion because the facts
recited in the complaints did not constitute the crime of estafa,
and assuming they did, they were not within the jurisdiction of the respondent
judge.

In a resolution dated May
23, 1979, we required respondents to comment on the petition and
issued a temporary restraining order against the respondent judge from further
proceeding with Criminal Cases Nos. M-111, M-183 and M-208 or from enforcing
the warrants of arrest he had issued in connection with said cases.

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, except the damages.  We considered the comments as answers and
gave due course to the petition.

The position of the Solicitor General is well taken.  We have to grant the petition in order to prevent
manifest injustice and the exercise of palpable excess of authority.

In Criminal Case No. M-111, respondent
Rosalinda M. Amin charges petitioners Yam Chee Kiong and Yam Yap Kieng with estafa through
misappropriation of the amount of P50,000.00. 
But the complaint states on its face that said petitioners received the
amount from respondent Rosalinda M. Amin “as a
loan.” Moreover, the complaint in Civil Case No.
N-5, an independent action for the collection of the same amount filed by
respondent Rosalinda M. Amin with the Court of First
Instance of Sulu on September 11, 1975, likewise states that the P50,000.00 was a “simple business loan” which earned
interest and was originally demandable six (6) months from July 12, 1973. 
(Annex E of the petition.)

In Criminal Case No. M-183, respondent
Tan Chu Kao charges petitioners Yam Chee Kiong, Jose Y.C. Yam, Ampang Mah, and Anita Yam, alias
Yong Tay, with estafa
through mis­appropriation of the amount of P30,000.00.  Likewise, the complaint states on its face that
the P30,000.00 was “a simple loan.” So does
the complaint in Civil Case No. N-8 filed by respondent Tan Chu
Kao on April 6, 1976 with the Court of First Instance of Sulu
for the collection of the same amount. 
(Annex D of the petition.)

In Criminal Case No. M-208, respondent Augusto Sajor charges petitioners
Jose Y. C. Yam, Anita Yam alias Yong Tai Mah, Chee Kiong Yam and Richard Yam,
with estafa through misappropriation of the amount of
P20,000.00.  Unlike the complaints in the
other two cases, the complaint in Criminal Case No. M-208 does not state that
the amount was received as loan. 
However, in a sworn statement dated September 29, 1976, submitted to respondent judge to
support the complaint, respondent Augusto Sajor states that the amount was a “loan.” (Annex
G of the petition.)

We agree with the petitioners that the facts alleged in the three
criminal complaints do not constitute estafa through
misappropriation.

Estafa through misappropriation is
committed according to Article 315, paragraph 1, subparagraph (b), of the
Revised Penal Code as follows:

“Art. 315.  Swindling (Estafa). – Any person who shall defraud another by any of
the means mentioned herein below shall be punished by:

xxx         
xxx         
xxx

“1.  With unfaithfulness or abuse of confidence,
namely:

xxx         
xxx         
xxx

“b)  By misappropriating or converting, to the
prejudice of another, money, goods, or any other personal property received by
the offender in trust or on commission, or for administration, or under any
other obligation involving the duty to make delivery of or to return the same,
even though such obligation be totally or partially guaranteed by a bond; or by
denying having received such money, goods, or other property.”

In order that a person can be convicted under the above-quoted
provision, it must be proven that he has the obligation to deliver or return
the same money, goods or personal property that he received.  Petitioners had no such obligation to return
the same money, i.e., the bills or coins, which they received from private
respondents.  This is so because as
clearly stated in criminal complaints, the related civil complaints and the
supporting sworn statements, the sums of money that petitioners received were
loans.

The nature of simple loan is defined in Articles 1933 and 1953 of
the Civil Code.

“Art. 1933.  – By the
contract of loan, one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return
it, in which case the contract is called a commodatum;
or money or other consumable thing, upon the condition that the same amount of
the same kind and quality shall be paid, in which case the contract is simply
called a loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay
interest.

In commodatum the bailor
retains the ownership of the thing loaned, while in simple loan, ownership
passes to the borrower.”

“Art. 1953.  – A person
who receives a loan of money or any other fungible thing acquires the ownership
thereof, and is bound to pay to the creditor an equal amount of the same kind
and quality.”

It can be readily noted from the above-quoted provisions that in
simple loan (mutuum), as contrasted to commodatum, the borrower acquires ownership of the money,
goods or personal property borrowed. 
Being the owner, the borrower can dispose of the thing borrowed (Article
248, Civil Code) and his act will not be considered misappropriation thereof.

In U.S.
vs. Ibañez, 19 Phil. 559, 560 (1911), this Court held
that it is not estafa for a person to refuse to pay
his debt or to deny its existence.

“We are of the opinion
and so decide that when the relation is purely that of debtor and creditor, the
debtor can not be held liable for the crime of estafa,
under said article, by merely refusing to pay or by denying the indebtedness.

It appears that respondent judge failed to appreciate the
distinction between the two types of loan, mutuum and
commodatum, when he performed the questioned
acts.  He mistook the transaction between
petitioners and respondents Rosalinda Amin, 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.

Under Sec. 87 of the Judiciary Act, the municipal court of a
provincial capital, which the Municipal Court of Jolo
is, has
jurisdiction over criminal cases where the penalty provided by law does not
exceed prision correctional or imprisonment for not
more than six (6) years, or fine not exceeding P6,000.00 or both.  The amounts allegedly misappropriated by
petitioners range from P20,000.00 to P50,000.00.  The penalty for misappropriation of this
magnitude exceeds prision correccional
or 6-year imprisonment.  (Article 315,
Revised Penal Code).  Assuming then that
the acts recited in the complaints constitute the crime of estafa,
the Municipal Court of Jolo has no juris­diction to
try them on the merits.  The alleged
offenses are under the jurisdiction of the Court of First Instance.

Respondents People of the Philippines
being the sovereign authority can not be sued for damages.  They are immune from such type of suit.

With respect to the other respondents, this Court is not the proper
forum for the consideration of the claim for damages against them.

WHEREFORE, the petition is hereby granted; the temporary
restraining order previously issued is hereby made permanent; the criminal
complaints against petitioners are hereby declared null and void; respondent
judge is hereby ordered to dismiss said criminal cases and to recall the
warrants of arrest he had issued in connection therewith.  Moreover, respondent judge is hereby rebuked
for manifest ignorance of elementary law. 
Let a copy of this decision be included in his personal file.  Costs against private
respondents.

SO ORDERED.

Barredo, (Chairman), Antonio, and Santos,
JJ., concur.

Concepcion, Jr., is on official leave.

Aquino, J., concur.  The claim for damages in this certiorari, mandamus and
prohibition case is not warranted under section 3, Rule 65 of the Rules of
Court.