G.R. No.

L-60033 April 4, 1984

TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and TERESITA SANTOS,
vs.
THE CITY FISCAL OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY FISCAL FELIZARDO N. LOTA and
CLEMENT DAVID,
MAKASIAR, Actg. C.J.:

+.wph!1

Facts:
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 receivershipby the Central Bank, so David filed claims for his and
his sisters investments.
On June 1981, Guingona and Martin, upon Davids request, assumed the banks 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:
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)
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.
Issue:
Whether or not the Injunction was correctly issued.
Held:
Yes. 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 ( Primicias vs.
Municipality of Urdaneta, Pangasinan, 93 SCRA 462, 469-470 [1979]; citing Ramos vs. Torres, 25 SCRA 557 [1968];
and Hernandez vs. Albano, 19 SCRA 95, 96 [1967]).

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. NSLAs 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 NSLAs 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 debtorcreditor 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.