Title
Chee Kiong Yam vs. Malik
Case
G.R. No. L-50550-52
Decision Date
Oct 31, 1979
Petitioners challenged a judge's jurisdiction and abuse of discretion in estafa cases involving loans, ruled as simple loans (mutuum), not misappropriation. SC nullified criminal complaints, rebuked judge for ignorance.

Case Summary (G.R. No. L-50550-52)

Procedural History

A temporary restraining order was issued by the Supreme Court (resolution dated May 23, 1979) enjoining the respondent judge from proceeding with the three criminal cases or enforcing the related warrants. The municipal judge and the private complainants opposed the petition; the Solicitor General, representing the People of the Philippines, manifested no objection to granting the requested reliefs except as to damages. The Court treated respondents’ comments as answers, gave due course to the petition, and proceeded to adjudicate the matter.

Legal Issues Presented

(1) Whether the facts alleged in the criminal complaints constituted the crime of estafa by misappropriation under Article 315, paragraph 1(b) of the Revised Penal Code; (2) whether the municipal court of Jolo had jurisdiction to try the alleged offenses on the merits; and (3) whether the respondent judge acted without jurisdiction, in excess of jurisdiction, or with grave abuse of discretion in finding a prima facie case, issuing warrants, and attempting to try the cases.

Facts as Alleged in the Complaints

Criminal Case No. M-111: Rosalinda M. Amin alleged misappropriation of P50,000.00 by petitioners Chee Kiong Yam and Yam Yap Kieng; the complaint expressly stated the amount was received “as a loan.” A civil collection action (Civil Case No. N-5, Court of First Instance of Sulu, filed Sept. 11, 1975) likewise characterized the sum as a “simple business loan” demandable six months from July 12, 1973. Criminal Case No. M-183: Tan Chu Kao alleged misappropriation of P30,000.00 against several petitioners; the complaint described the amount as “a simple loan,” and a corresponding civil action (Civil Case No. N-8, filed Apr. 6, 1976) repeated this characterization. Criminal Case No. M-208: Augusto Sajor charged misappropriation of P20,000.00; the complaint did not expressly state the sum was a loan, but a sworn statement submitted to the respondent judge by Sajor (dated Sept. 29, 1976) declared the amount to be a “loan.”

Law on Estafa by Misappropriation (Article 315[1][b], RPC)

Article 315, paragraph 1, subparagraph (b) of the Revised Penal Code criminalizes misappropriation or conversion “to the prejudice of another” of money or 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.” A conviction under this provision requires proof that the accused was under an obligation to deliver or return the identical money, goods, or property received.

Law on Loan (Mutuum) vs. Commodatum; Relevant Civil Code Provisions and Precedent

Under Civil Code Article 1933, a simple loan (mutuum) is the delivery of money or other consumable thing upon the condition that “the same amount of the same kind and quality shall be paid”; ownership of the money passes to the borrower. Article 1953 reiterates that a borrower of money acquires ownership and is bound only to pay an equal amount of the same kind and quality. By contrast, commodatum (loan for use) involves delivery of a non-consumable and the bailor retains ownership; the borrower must return the identical thing. Article 248 of the Civil Code (as referenced) governs the borrower's power to dispose of owned property. The Court also cited U.S. v. Ibanez (19 Phil. 559, 560 (1911)) for the proposition that a debtor’s mere refusal to pay or denial of indebtedness does not constitute estafa when the relationship is purely that of debtor and creditor.

Application of the Law to the Allegations

The Court found that, as alleged in the criminal complaints, supporting sworn statements, and related civil complaints, the sums involved were loans (mutuum), not commodatum or trust relationships creating an obligation to return the identical bills or coins. Because a mutuum transfers ownership of the money to the borrower, the recipient is not under an obligation to return the same money and therefore cannot be convicted for misappropriation under Article 315(1)(b) for alleged failure to return what was lawfully acquired as owner. The respondent judge misappreciated the legal distinction and treated the transactions as if they imposed a duty to return the identical money (i.e., as commodatum or trust), thereby committing a manifest error of law.

Jurisdictional Analysis

Under Section 87 of the Judiciary Act, the municipal court of a provincial capital (such as the Municipal Court of Jolo) has jurisdiction over criminal cases only when the penal

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