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    Chee Kiong Yam v. Malik

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    AweRice
    This case involves a petition challenging the charges of estafa or fraud against the petitioners. The petitioners had received money from private respondents in the nature of simple loans, not commodatum loans. In simple loans under Philippine law, ownership of the money passes to the borrower, who can then dispose of it as owner. Therefore, the petitioners' refusal to pay back the debts or denial of the debts does not constitute estafa or misappropriation. The court ruled in favor of the petitioners, finding that the respondent judge failed to properly understand the distinction between simple loans and commodatum loans under the Civil Code. The criminal complaints were declared null and void.

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    Chee Kiong Yam v. Malik

    Uploaded by

    AweRice
    53 views2 pages
    This case involves a petition challenging the charges of estafa or fraud against the petitioners. The petitioners had received money from private respondents in the nature of simple loans, not commodatum loans. In simple loans under Philippine law, ownership of the money passes to the borrower, who can then dispose of it as owner. Therefore, the petitioners' refusal to pay back the debts or denial of the debts does not constitute estafa or misappropriation. The court ruled in favor of the petitioners, finding that the respondent judge failed to properly understand the distinction between simple loans and commodatum loans under the Civil Code. The criminal complaints were declared null and void.

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    This case involves a petition challenging the charges of estafa or fraud against the petitioners. The petitioners had received money from private respondents in the nature of simple loans, not commodatum loans. In simple loans under Philippine law, ownership of the money passes to the borrower, who can then dispose of it as owner. Therefore, the petitioners' refusal to pay back the debts or denial of the debts does not constitute estafa or misappropriation. The court ruled in favor of the petitioners, finding that the respondent judge failed to properly understand the distinction between simple loans and commodatum loans under the Civil Code. The criminal complaints were declared null and void.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    53 views2 pages

    Chee Kiong Yam v. Malik

    Uploaded by

    AweRice
    This case involves a petition challenging the charges of estafa or fraud against the petitioners. The petitioners had received money from private respondents in the nature of simple loans, not commodatum loans. In simple loans under Philippine law, ownership of the money passes to the borrower, who can then dispose of it as owner. Therefore, the petitioners' refusal to pay back the debts or denial of the debts does not constitute estafa or misappropriation. The court ruled in favor of the petitioners, finding that the respondent judge failed to properly understand the distinction between simple loans and commodatum loans under the Civil Code. The criminal complaints were declared null and void.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Chee Kiong Yam vs.

    Malik,
    G.R. Nos. L-50550-52, October 31, 1979

    NO ESTAFA IS COMMITTED BY A PERSON WHO REFUSES TO PAY HIS DEBT OR DENIES ITS
    EXISTENCE ON SIMPLE LOAN OR MUTUUM
    > The borrower acquires ownership
    > Being the owner, the borrower can dispose of the thing
    borrowed and his act will not be considered as appropriation thereof

    FACTS:

    This is a petition for certiorari, prohibition, and mandamus with preliminary


    injunction. Petitioners alleged 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. M111, M-
    183 and M-208. In the three criminal cases the respondents charges the petitioner with
    estafa through misappropriation, however in the face of the documents it state that the
    amount received was in the nature of a simple loan.

    ISSUE:

    Whether or not the petitioners in this case can be charged of estafa when the
    obligation is said to be that of simple loan?

    HELD:

    No. The Court agrees with the petitioners that the facts alleged in the three criminal
    complaints do not constitute estafa through misappropriation. In order that a person can
    be convicted of estafa, 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 nay 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.

    Thus 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.

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