VOL.

137, JULY 18, 1985 597

Guingona, Jr. vs. City Fiscal of Manila

*
No. L-60033. July 18, 1985.

TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and

TERESITA SANTOS, petitioners, vs. THE CITY FISCAL
OF MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY
FISCAL FELIZARDO N. LOTA and CLEMENT DAVID,
respondents.

Criminal Procedure; Prohibition; The Fiscal cannot be

prohibited from conducting and finishing with its preliminary
investigation.—With the foregoing background, the prohibition
petition should be dismissed. The petitioners have no cause of
action for prohibition because the City Fiscal has jurisdiction to
conduct the preliminary investigation. It has not been finished.
The filing of this petition is premature. The case does not fall
within any of the exceptions when prohibition lies to stop the
preliminary investigation (Hernandez vs. Albano, 125 Phil. 513).

Same; Same; Same.—“As a general rule, an injunction will

not be granted to restrain a criminal prosecution” (People vs.
Mencias, 124 Phil. 1436, 1441). With more reason will injunction
not lie when the case is still at the preliminary investigation
stage. This Court should not usurp the primary function of the
City Fiscal to conduct the preliminary investigation of the estafa
charge and of the petitioners’ countercharge for perjury, which
was consolidated with the estafa charge. The City Fiscal’s office
should be allowed to finish its investigation and make its factual
findings. This Court should not conduct the preliminary
investigation. It is not a trier of facts.

Same; Same; Motion; Estoppel; Failure of Solicitor General to

file motion for reconsideration of Supreme Court decision does not
estop private complainant from continuing with the prosecution of
the case at the Fiscal’s Office.—The instant case is primarily a
litigation between David and the petitioners. The fact that the
Solicitor General, as counsel of the public respondents, did not file
a motion for reconsideration does not estop David from continuing
with the prosecution of the petitioners. In the present posture of
the case, the City Fiscal occupies the analogous position of judge.
He has to mainain an attitude of neutrality, not that of partiality.

________________

* EN BANC.

598

598 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

Judgments; Supreme Court hereby reconsiders its decision.—

In view of the foregoing considerations, the decision is
reconsidered, the petition is dismissed and the City Fiscal of
Manila is directed to finish the preliminary investigation.

CONCEPCION, J., Separate Vote and Statement:

Criminal Procedure; Prohibition; Prohibition does not lie to

stop a preliminary investigation.—In the case before Us,
prohibition does not lie to stop the preliminary investigation being
conducted by the City Fiscal To hold otherwise, would be to usurp
the duties and functions of the City Fiscal and the power to
review the resolution of the City Fiscal by the Ministry of Justice.

RELOVA, J., concurring:

Criminal Procedure; Prohibition; Requisites for issuance of

writ of prohibition.—To justify the issuance of the writ the
following requisites are necessary, to wit: (1) it must be directed
against the tribunal, corporation, board, or person exercising
functions judicial or ministerial; (2) the tribunal, corporation,
board or person has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion; and, (3) there is no
appeal or any other plain, speedy and adequate remedy in the
ordinary course of the law. In the case at bar, it cannot be said
that respondent City Fiscal did act without or in excess of his
jurisdiction, or with grave abuse of discretion. On the contrary, he
has jurisdiction over the case and should have been allowed to
terminate the preliminary investigation and to render his
resolution thereon. Thereafter, the aggrieved party may appeal to
the Minister of Justice.

Same; Judgment; The failure of the Solicitor General to ask

for reconsideration of the Court’s decision must have been because
it was incumbent upon the private respondent to do so.—The rule
is clear that when a petition for prohibition is filed, the petitioner
shall join as parties defendant the person or persons interested in
sustaining the proceedings in the court; and it should be the duty
of such person or persons to appear and defend, both in his or
their own behalf and in behalf of the court or judge affected by the
proceedings in the court. It must be for this reason that the
Solicitor General did not file a motion for reconsideration on the
resolution of this Court granting the petition because it was
incumbent upon the private respondent to appear and defend the
act of the respondent City Fiscal.

599

VOL. 137, JULY 18, 1985 599

Guingona, Jr. vs. City Fiscal of Manila

TEEHANKEE, J., dissenting:

Criminal Procedure; Judgments; The decision of this Court

has already become final and can no longer be reconsidered.—The
original decision of April 4, 1984 became final and executory upon
the expiration on April 21, 1984 of the 15-day reglementary period
from receipt thereof by the Solicitor General on April 6, 1984
without his having filed a motion for reconsideration, and entry of
judgment should therefore have been made on April 23, 1984
(April 22nd being a Sunday). Private respondent Clement David
and his sister Denise Kuhne who is supposed to be co-owner of the
money placements but has not even come to the Philippines nor
filed any complaint, have no legal personality nor standing in a
criminal case and cannot adopt a stand inconsistent with or
contrary to that of the Solicitor General who has supervision and
control over all criminal cases. David’s filing of a separate motion
for reconsideration did not toll the period for finality of the
original judgment nor prevent its having become final and
executory on April 23, 1984 as expressly admitted by the Solicitor
General in his manifestation dated August 23, 1984 and filed on
August 28, 1984.

Same; If the dispute between the parties is primarily between

David and petitioner, there the litigation is civil in nature, not
criminal.—Any continuation of the fiscal’s preliminary
investigation has been rendered moot and academic by this
Court’s judgment of lack of any criminal liability which became
final and executory on April 23, 1984 with the acceptance thereof
by public respondents headed by the Solicitor General. If “the
instant case is primarily a litigation between David and the
petitioners,” as stated in the Resolution (at page 6), such litigation
is purely civil in nature and has to be pursued and settled in the
various pending civil cases of the parties as a private matter
between them.

Same; Prohibition; Writ of prohibition or injunction may be

resorted to in equity to stop a preliminary investigation.—The
original decision correctly applied here the saving clause to the
general rule against enjoining or aborting criminal prosecution,
viz, that the extraordinary and equitable writ of injunction may
be resorted to and issued “for the orderly administration of
justice, to prevent the use of the strong arm of the law in an
oppressive and vindictive manner, to avoid multiplicity of actions
and to afford adequate protection to constitutional rights—”.

600

600 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

MAKASIAR, J., dissenting:

Judgments; Criminal Procedure; Court’s decision having

become final cannot be reconsidered anymore, the case involved
being a criminal action this Court’s final decision is binding on the
Solicitor General and the private respondent.—Since the Solicitor
General has supervision and control over a criminal action (in this
case, herein petitioners were charged with estafa and violation of
Section 3 of Central Bank Circular No. 364 and Nos. 343 and 865
on foreign exchange; par. 1 of Section 4, Rule 110, Revised Rules
of Court of 1964), the aforesaid decision of April 4, 1984 shall
likewise be considered as final and executory with respect to
herein private respondent Clement David who cannot adopt a
stand inconsistent with that of the Fiscal.

Same; Same; A criminal prosecution is under the Fiscal’s

control and only his appeal or motion for reconsideration could
interrupt the period for appeal.—Again, in the case of Cabral vs.
Puno (70 SCRA 606-610 [1976]), citing several cases, We ruled
that: “While it is true that the offended party, Silvino San Diego,
through the private prosecutor, filed a motion for reconsideration
within the reglementary fifteen-day period, such move did not stop
the running of the period for appeal. He did not have the legal
personality to appeal or to file a motion for reconsideration on his
behalf. The prosecution in a criminal case through the private
prosecutor is under the direction and control of the Fiscal, and
only the motion for reconsideration or appeal filed by the Fiscal
could have interrupted a period for appeal”. Same; Same; The
compromise agreement between the private parties converted their
relationship to that of creditor and debtor.—And because of the
compromise agreement entered into prior to the filing of the
criminal information in court, the said compromise agreement or
novation converted the original relationship between the parties
into ordinary creditor-debtor situation. Such novation or
compromise prevents the institution of a criminal prosecution
(Ong vs. CA, et al., 124 SCRA 578, 580-81 [1983] penned by
Justice Relova, concurred in by Justices Melencio-Herrera, Plana,
Vasquez and Gutierrez).

Same; Same; Private respondent cannot now intervene in the

criminal action having waived his right to the civil action therein.
—Moreover, private respondent cannot now intervene in the
prosecution of the criminal offense because he has waived his
right to

601

VOL. 137, JULY 18, 1985 601

Guingona, Jr. vs. City Fiscal of Manila

the civil action when he filed his answer with counter-claim in

Civil Case No. Q-33865 in then Court of First Instance, now
Regional Trial Court in Quezon City.

Same; Same; Same.—Thus, it has been ruled that “an

offended party loses his right to intervene in the prosecution of a
criminal case not only when he has waived the civil action or
expressly reserved his right to institute it, but also when he has
actually instituted the civil action even if he has not made the
waiver or reservation adverted to” (Gorospe and Gorospe vs.
Gatmaitan, et al., 98 Phil. 600, 603 [1956]).

Same; Same; Appeal; Investments made by private

respondents at the Nation Savings Bank are loans. Private
respondents cannot now change their theory that they did not
invest the money in the NSB but with petitioners as private
individuals.—Furthermore, private respondent cannot be
permitted, at this stage of the proceedings, to adopt a theory
which is different from that which he sustained in the City
Fiscal’s Office, especially after We ruled in Our main decision
sought to be reconsidered that bank deposits are in the nature of
simple loans, and the failure of the bank to return the deposits
will not constitute estafa through misappropriation, but it will
only give rise to civil liability. It is improper to change theory on
appeal and more so in a motion for reconsideration. It would be
unfair and unjust to the other party litigant as it violates
petitioners’ constitutional right to due process. It could also
unduly prolong litigations because a party can always change
postures to suit his own advantage.

Same; Same; Constitutional Law; Criminal prosecution of

petitioners would violate their right against ex post facto
legislation.—Insistence on the criminal prosecution of herein
petitioners, who already acquired vested right in the aforesaid
defenses against such prosecution, would therefore be clearly ex
post facto. To continue with the prosecution of herein petitioners,
in spite of the foregoing legal constitutional defenses, would
subvert the orderly administration of justice, deny them their
constitutional rights, expose the petitioners to undue and
oppressive harassment and aggravate their anguish and
expenses, in much the same way that such unnecessary
prosecution exposes the State to useless and expensive trials
(Trocio vs. Manta, 118 SCRA 241 [1982]; Hashim vs. Boncan, 71
Phil. 216 [1941]; see also Mercado vs. Court, etc., 116 SCRA 93
[1982]).

602

602 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

PETITION to review the decision of the City Fiscal of

Manila.

The facts are stated in the resolution of the Court.

     Lorenzo Tañada, Teofisto Guingona and Feliciano C.
Tumale for petitioners.
     Vicente V. Asuncion, Jr. for private respondent.

RESOLUTION

AQUINO, J.:

Respondent Clement David filed a motion for the

reconsideration of this Court’s decision dated April 4, 1984,
128 SCRA 577. He contends that this Court failed to
consider that the petitioners entered in the records and
books of the Nation Savings and Loan Association only
P305,821.92 out of his deposits in the amounts of
P1,145,546.20, P15,531.94 and $75,000 and that they
admitted that they did not deliver the difference when they
assumed in their personal capacities the obligation to pay
him. He argues that the petitioners committed estafa
through misappropriation.
On the other hand, the petitioners contend that the
decision had already become final because the Solicitor
General did not file any motion for reconsideration; that
David cannot adopt a theory which is inconsistent with his
original theory; that his claim is clearly civil, not criminal;
that his claim has been novated, and that prohibition is
proper to stop a void proceeding, to prevent the unlawful
and oppressive exercise of lawful authority and to provide a
just and orderly administration of justice.
The petitioners filed this prohibition action because
theft obligation is allegedly civil in character and because
of the adverse publicity supposedly instigated by David.
The factual background may be restated as follows:
1. Clement David and his sister Denise Kuhne during
the period from March 20, 1979 to March, 1981 made
placements with the Nation Savings and Loan Association,
Inc. in the total sum of P1,145,546.20 as evidenced by
seven bankers acceptances and five certificates of time
deposits.
603

VOL. 137, JULY 18, 1985 603

Guingona, Jr. vs. City Fiscal of Manila

He and his sister Denise also had savings deposits in the

Nation Savings in the sum of P13,531.94 as shown in
Passbooks Nos. 6-632 and 29-740.
They also invested in Nation Savings US$75,000 in 1980
as evidenced by receipts, of which $50,000 was deposited in
the account of Teofisto Guingona, Jr. with the Security
Bank and Trust Company.
Aggregate investments of David and Kuhne in Nation
Savings: P1,159,078.14 in local currency and 75,000 in U.S.
dollars, Nation Savings allegedly paid David from 1979 to
the early part of 1981 interests of P240,000 a year (p. 193,
Rollo).
At the time the deposits were made, Antonio I. Martin
was the president of Nation Savings, Teresita G. Santos
was its general manager, and Guingona was a director.

2. On March 21, 1981, Nation Savings was placed

under receivership by the Central Bank because of
 serious fraud and irregularities committed by its
key officers (Annex 12).
3. On June 17, 1981, Guingona and Martin executed a
promissory note acknowledging a debt of
P1,336,614.02 and $75,000 to be paid in
installments within 180 days from said date with
interest at 16% per annum from July 1, 1981 until
fully paid.
4. The promissory note was novated by another note,
antedated June 17, 1981, whereby Guingona
acknowledged one-half of the obligation as his debt
or the sums of P668,307.01 and $37,500 and
secured the same by second mortgages on his
Quezon City properties (Annex D). Guingona paid
P200,000 on that note.
5. Martin assumed the other half of the total debt. He
secured it with the pledge of a ring valued
according to him at P560,000 but appraised by a
jewel appraiser at P280,000. Martin is also
indebted to David in the sum of P60,000 which
David paid to Monte de Piedad to redeem the ring.
6. On July 22, 1981, David received a report from the
Central Bank that only P305,821.92 of the
placements made by him and his sister were
entered in the NSLA records (Annex 4, p. 218,
Rollo). The director of the CB Department of Rural
Banks and Savings and Loan Associations in a
report dated

604

604 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

June 23, 1981 recommended that the irregularities

be brought to the attention of the CB consultant on
criminal cases for appropriate investigation of
Nation Savings’ officials (p. 240, Rollo).
7. In view of the promissory note and the mortgages,
David, on July 22, 1981, executed an affidavit
wherein he bound himself to desist from any
prosecution of Guingona without prejudice to the
balance of his claim against Nation Savings (Annex
M, p. 46, Rollo).
8. On November 19, 1981, Guingona filed against
David Civil Case No. Q-33865 in the Quezon City
 Court of First Instance. He prayed for damages of
P785,000 against David for his failure to accept
payment of a cashier’s check for P300,000 (in
addition to the P200,000) and to release one of the
mortgaged properties (Annex K, p. 37, Rollo).
9. On December 22, 1981, David filed with the City
Fiscal’s Office, Manila I.S. No. 81-31938, a
complaint for estafa and violation of CB Circular
No. 364 and related regulations. He claimed that
the difference between his placements of
P1,159,078.14 and $75,000, on one hand, and the
sum of P305,821.92, the amount entered in Nation
Savings’ books, on the other hand, constitutes the
defraudation against him.
10. He filed the complaint against Guingona, as board
chairman, director and principal stockholder of
Nation Savings; Martin, as vice-president, director
and shareholder, and Santos, as general manager.
David dealt directly with Guingona, Martin and
Santos in his transactions with Nation Savings.
The three filed a counter-charge of perjury against
David and his lawyers (p. 59, Rollo).
11. On January 20, 1982, David sought to foreclose
extrajudicially the two mortgages (p. 58, Rollo). The
foreclosure was restrained by the Quezon City
Court of First Instance.
12. On March 15, 1982, the Solicitor General, in behalf
of the Central Bank, filed a petition in the Court of
First Instance of Manila for assistance in the
liquidation of Nation Savings as an insolvent firm
(Spec. Proc. No. 82-7552, p. 111, Rollo). The
receivership was challenged by Nation Savings
stockholders in Special Proceedings No. 82-1655 (p.
125, Rollo). The Solicitor

605

VOL. 137, JULY 18, 1985 605

Guingona, Jr. vs. City Fiscal of Manila

General answered that petition by alleging that Nation

Savings was plagued with irregularities (p. 225, Rollo).
With the foregoing background, the prohibition petition
should be dismissed. The petitioners have no cause of
action for prohibition because the City Fiscal has
jurisdiction to conduct the preliminary investigation. It has
not been finished. The filing of this petition is premature.
The case does not fall within any of the exceptions when
prohibition lies to stop the preliminary investigation
(Hernandez vs. Albano, 125 Phil. 513).
“As a general rule, an injunction will not be granted to
restrain a criminal prosecution” (People vs. Mencias, 124
Phil. 1436, 1441). With more reason will injunction not lie
when the case is still at the preliminary investigation
stage. This Court should not usurp the primary function of
the City Fiscal to conduct the preliminary investigation of
the estafa charge and of the petitioners’ countercharge for
perjury, which was consolidated with the estafa charge (p.
59, Rollo).
The City Fiscal’s office should be allowed to finish its
investigation and make its factual findings. This Court
should not conduct
**
the preliminary investigation. It is not a
trier of facts.

________________

** “SEC. 4. Duty of investigating fiscal.—If the investigating fiscal finds

cause to hold the respondent for trial, he shall prepare the resolution and
corresponding information. He shall certify under oath that he has
examined the complainant and his witnesses, that there is reasonable
ground to believe that a crime has been committed and that the accused is
probably guilty thereof, that the accused was informed of the complaint
and of the evidence submitted against him and that he was given an
opportunity to submit controverting evidence. Otherwise, he shall
recommend dismissal of the complaint.
“In either case, he shall forward the records of the case to the provincial
or city fiscal or chief state prosecutor within five (5) days from his
resolution. The latter shall take appropriate action thereon within ten (10)
days from receipt thereof, immediately informing the parties of said
action.
“No complaint or information may be filed or dismissed by an
investigating fiscal without the prior written authority or approval

606

606 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

The instant case is primarily a litigation between David

and the petitioners. The fact that the Solicitor General, as
counsel of the public respondents, did not file a motion for
reconsideration does not estop David from continuing with
the prosecution of the petitioners. In the present posture of
the case, the City Fiscal occupies the analogous position of
judge. He has to maintain an attitude of neutrality, not
that of partiality.
In view of the foregoing considerations, the decision is
reconsidered, the petition is dismissed and the City Fiscal
of Manila is directed to finish the preliminary
investigation. No costs.
SO ORDERED.

          Escolin, Gutierrez, Jr., De la Fuente and Cuevas,

JJ., concur.
     Fernando, C.J., took no part.
     Teehankee, J., dissents in a separate opinion.
     Makasiar, J., see dissent.
     Concepcion, Jr., J., I concur. (See separate opinion)
          Abad Santos, J., I vote to deny the motion for
reconsideration.
     Melencio-Herrera, J., I concur with this Resolution
and with the Concurring Opinion of Justice Relova.
     Plana, J., no part.

________________

of the provincial or city fiscal or chief state prosecutor.

“Where the investigating fiscal recommends the dismissal of the case
but his findings are reversed by the provincial or city fiscal or chief state
prosecutor on the ground that a probable cause exists, the latter may, by
himself, file the corresponding information against the respondent or
direct any other assistant fiscal or state prosecutor to do so, without
conducting another preliminary investigation.
“If upon petition by a proper party, the Minister of Justice reverses
the resolution of the provincial or city fiscal or chief state prosecutor, he
shall direct the fiscal concerned to file the corresponding information
without conducting another preliminary investigation or to dismiss or
move for dismissal of the complaint or information. (5a)” (Rule 112 of the
1985 Rules of Criminal Procedure).

607

VOL. 137, JULY 18, 1985 607

Guingona, Jr. vs. City Fiscal of Manila

     Relova, J., see attached concurrence.

          Alampay, J., I share the same view expressed by
Justice Relova in this case.

CONCEPCION, JR., J., Separate Vote and Statement:

On December 23, 1981, private respondent Clement David,
an Australian citizen, filed I.S. No. 81-31938 in the Office
of the City Fiscal of Manila charging petitioners and one,
Robert Marshall, together with eight others who were
directors of the Nation Savings and Loan Association, with
estafa and violation of Central Bank Circular No. 364 and
related Central Bank circulars and regulations on foreign
exchange transactions.
Briefly, David alleges that he delivered to petitioners
P1,145,546.20, P15,531.94, and U.S. $75,000 to be
deposited as time deposits or savings account with Nation
Savings and Loan Association. Of these amounts only
P305,821.92 were entered in the records and books of the
said Association.
At the start of the investigation, petitioners moved to
dismiss the case “for lack of jurisdiction because the claims
alleged in the charge compromise a purely civil obligation
which has been novated,” which motion was promptly
denied.
The first witness of private respondent David was the
Deputy Receiver of the Central Bank, Mrs. Yu Donato.
After her testimony, petitioners again moved to dismiss the
case on the same ground. This was also denied. Hence this
petition.
The issue before Us is: Can We or should We stop the
City Fiscal from completing his preliminary investigation
on the ground that the charges are civil in nature?
I hold We cannot and We should not.
In the complaint before the City Fiscal’s Office, there are
some other respondents aside from petitioners. In addition
to estafa, there are charges of violation of Central Bank
circulars. To determine who are liable, if any, and for what
charges requires that the presentation of evidence be
completed.
The procedure laid down by law is for the City Fiscal to
complete his investigation and thereafter to make a
resolution.
608

608 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

Whatever be the resolution is subject to review by the

Ministry of Justice.
In the case before Us, prohibition does not lie to stop the
preliminary investigation being conducted by the City
Fiscal.
 To hold otherwise, would be to usurp the duties and
functions of the City Fiscal and the power to review the
resolution of the City Fiscal by the Ministry of Justice.
The Solicitor General is only a nominal party at most.
The People of the Philippines is not a party to the entire
proceedings, and as provided for by law the actuations of
the City Fiscal have been defended by respondent David.

RELOVA, J., Concurring:

I vote to grant the motion for reconsideration and to

dismiss the petition for prohibition. To justify the issuance
of the writ the following requisites are necessary, to wit: (1)
it must be directed against the tribunal, corporation, board,
or person exercising functions judicial or ministerial; (2)
the tribunal, corporation, board or person has acted
without or in excess of its or his jurisdiction, or with grave
abuse of discretion; and, (3) there is no appeal or any other
plain, speedy and adequate remedy in the ordinary course
of the law. In the case at bar, it cannot be said that
respondent City Fiscal did act without or in excess of his
jurisdiction, or with grave abuse of discretion. On the
contrary, he has jurisdiction over the case and should have
been allowed to terminate the preliminary investigation
and to render his resolution thereon. Thereafter, the
aggrieved party may appeal to the Minister of Justice.
The contention of petitioner that the resolution of the
Court granting the petition for prohibition has become final
because the Solicitor General, representing the City Fiscal,
did not file a motion for reconsideration, is without merit.
The rule is clear that when a petition for prohibition is
filed, the petitioner shall join as parties defendant the
person or persons interested in sustaining the proceedings
in the court; and it should be the duty of such person or
persons to appear and defend, both in his or their own
behalf and in behalf of the court or judge affected by the
proceedings in the court. It must be for this
609

VOL. 137, JULY 18, 1985 609

Quesada vs. Court of Appeals

reason that the Solicitor General did not file a motion for
reconsideration on the resolution of this Court granting the
petition because it was incumbent upon the private
respondent to appear and defend the act of the respondent
City Fiscal.
TEEHANKEE, J., Dissenting:

I concur with the extended dissenting opinion of Mr.

Justice Felix V. Makasiar, whose original ponencia in the
Court’s
1
(Second Division’s) original decision of April 4,
1984 (with the concurrence of Messrs. Justices Concepcion,
2
Jr., Guerrero, Abad Santos, de Castro and Escolin, with
Mr. Justice Aquino taking no part) would now be
overturned by the Resolution at bar.
The original decision of April 4, 1984 granted the
petition for prohibition and injunction and made
permanent the temporary restraining order issued on
March 31, 1982 ordering the respondents, their officers,
agents, representatives and/or person or persons acting
upon their (respondents’) orders or in their place or stead to
refrain from proceeding with the preliminary investigation
in Case No. 81-31938 of the Office of the City Fiscal of
Manila. Said investigation was being conducted as a result
of charges for alleged estafa and violation of Central Bank
Circular No. 364 and related regulations regarding foreign
exchange transactions filed by private respondent Clement
David, an Australian national. The Resolution at bar would
set aside the decision on the ground of prematurity of the
filing of the petition and directs the respondent city fiscal
“to finish the preliminary investigation.”
Stripped down to essentials, I vote to deny the motion
for reconsideration for the following reasons:

1. The original decision of April 4, 1984 became final

and executory upon the expiration on April 21, 1984
of the 15-day reglementary period from receipt
thereof by the Solicitor General on April 6, 1984
without his having filed a motion for

________________

1 Reported in 128 SCRA 577.

2 Justices Juvenal K. Guerrero and Pacifico de Castro have since
returned from the Court.

610

610 SUPREME COURT REPORTS ANNOTATED

Quesada vs. Court of Appeals

reconsideration, and entry of judgment should

therefore have been made on April 23, 1984 (April
22nd being a Sunday). Private respondent Clement
 David and his sister Denise Kuhne who is supposed
to be co-owner of the money placements but has not
even come to the Philippines nor filed any
complaint, have no legal personality nor standing in
a criminal case and cannot adopt a stand
inconsistent with or contrary to that of the Solicitor
General who has supervision and control over all
criminal cases. David’s filing of a separate motion
for reconsideration did not toll the period for
finality of the original judgment nor prevent its
having become final and executory on April 23,
1984 as expressly admitted by the Solicitor General
in his manifestation dated3 August 23, 1984 and
filed on August 28, 1984. (Cabral vs. Puno, 70
SCRA 606.)
2. The record and the Resolution at bar itself as well
as the original decision of April 4, 1984 of Mr.
Justice Makasiar and his present dissenting
opinion show beyond peradventure that any
obligation or liability incurred by petitioners as to
David’s and his sister’s funds is purely civil in
character. Paragraphs 3 to 5 of the Resolution show
the respective civil obligations of the petitioners as
per their promissory notes as subsequently novated,
with mortgages and collaterals placed by them.
David had executed an affidavit of desistance on his
own behalf and that of his sister, and therefore they
have no standing or personality whatever to file the
criminal charge in the fiscal’s office. Petitioners’
good faith and lack of criminal intent are self-
evident in the aforecited pronouncements and acts.
3. It cannot be overemphasized that the issues in this
case were joined between petitioners and public and
private respondents, and were resolved in the
original decision of April 4, 1984 on the question of
whether there existed any criminal liability on the
part of petitioners that would warrant the
continuation of the fiscal’s preliminary
investigation. This issue of lack of criminal liability
was fully discussed by all parties at the hearing and
in their extensive memoranda. The Solicitor
General accepted the finality on April 23, 1984 of
the Court’s negative verdict of April 4, 1984. The
city fiscal’s office re-

________________

3 Record, at page 418.

 611

VOL. 137, JULY 18, 1985 611

Guingona, Jr. vs. City Fiscal of Manila

mains permanently enjoined by this Court’s final

judgment, and such finality which is now res judicata
cannot be set aside under the guise of acting on David’s
motion for reconsideration which should be regarded as a
mere scrap of paper because of his lack of legal personality
and standing. Any continuation of the fiscal’s preliminary
investigation has been rendered moot and academic by this
Court’s judgment of lack of any criminal liability which
became final and executory on April 23, 1984 with the
acceptance thereof by public respondents headed by the
Solicitor General. If “the instant case is primarily a
litigation between David and the petitioners”, as stated in
the Resolution (at page 6), such litigation is purely civil in
nature and has to be pursued and settled in the various
pending civil cases of the parties as a private matter
between them.
4. The original decision correctly applied here the saving
clause to the general rule against enjoining or aborting
criminal prosecution, viz, that the extraordinary and
equitable writ of injunction may be resorted to and issued
“for the orderly administration of justice, to prevent the use
of the strong arm of the law in an oppressive and vindictive
manner, to avoid multiplicity of actions and to afford
adequate protection to constitutional rights—” The
injunction proceedings here which have brought out the
pertinent facts, have served the purpose of a continuation
of the preliminary investigation, “to secure the innocent
against hasty, malicious and oppressive prosecution, and to
protect him from an open and public accusation of crime,
from the trouble, expense and anxiety of a public trial, and
also to protect the state from useless and expensive trials.
(Trocio v. Manta,
4
118 SCRA 241; citing Hashim v. Boncan,
71 Phil. 216).” “With all due deference, nothing would be
gained nor achieved by still directing the fiscal “to finish
the preliminary investigation,” when the issue of criminal
liability or not has been submitted to and resolved by this
Court. In no way is the question of jurisdiction of the city
fiscal to conduct the preliminary investigation derogated or
impaired, as is the thrust of the Resolution and Mr. Justice
Relova’s separate opinion—particularly, since the majority
in adopting the Resolution made it clear in the
deliberations that
________________

4 Salonga vs. Paño. G.R. No. 59524, February 18, 1985.

612

612 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

it was in no way passing judgment upon the existence or

nonexistence of criminal liability—as resolved and
determined negatively in the original judgment of April 4,
1984—but was only directing the fiscal to continue with
and terminate the investigation on the premise that “the
filing of this petition is premature.” (at page 5) The only
point is that the said judgment has long become final and
executory on April 23, 1984 and the permanent injunction
issued therein against further continuation of the
investigation can no longer be set aside.
5. This is in accord with the general policy that the
fiscal’s office should not be used or abused as a collection
agency. We have here the case of a non-resident alien,
respondent Clement David, who came here for special
treatment for his “investments” as special accounts “and
only a portion of which was to be reported because he did
not want the Australian government to 5tax his total
earnings, nor to know his total investments.” When things
went awry, he made sure that he was fully covered with
collaterals by petitioners, who executed them in all good
faith and he in turn executed an affidavit of desistance. He
cannot and should not be allowed to misuse our
prosecutorial agencies for collection or enforcement of a
purely civil liability.

DISSENTING OPINION

MAKASIAR, J.:

On April 30, 1984, private respondent Clement David, thru

counsel Atty. Norberto Quisumbing, filed a motion dated
April 28, 1984 for the reconsideration of the decision
promulgated on April 4, 1984 granting the petition of
herein petitioners and making permanent the temporary
restraining order previously issued with costs against
private respondent.

I
The Solicitor General, as counsel for public respondent, did
not file within the reglementary period any motion for
recon-

________________

5 Justice Makasiar’s dissent, citing p. 21, rec.

613

VOL. 137, JULY 18, 1985 613

Guingona, Jr. vs. City Fiscal of Manila

sideration of the aforesaid decision of April 4, 1984, which

the Solicitor General received on April 6, 1984. Hence, the
aforesaid decision, as expressly admitted by the Solicitor
General, became final and executory on April 22, 1984 with
respect to public respondents.
As expressly stated by the Solicitor General in his
manifestation dated August 23, 1984 and filed on August
28, 1984, “x x x 2. the office of the Solicitor General
received the copy of the aforesaid decision on April 6, 1984,
and did not file a motion for reconsideration, hence, the
Decision became executory as to the public respondent on
April 22, 1984” (p. 418, rec.).
WE ruled in Singh vs. Liberty Insurance Corp. (8 SCRA
517, 520 [1963]) that: “as against other parties adversely
affected by the decision who did not appeal the decision
must be deemed to have become final and executory. A
contrary view would lead to indefeasible results.”
Since the Solicitor General has supervision and control
over a criminal action (in this case, herein petitioners were
charged with estafa and violation of Section 3 of Central
Bank Circular No. 364 and Nos. 343 and 865 on foreign
exchange; par. 1 of Section 4, Rule 110, Revised Rules of
Court of 1964), the aforesaid decision of April 4, 1984 shall
likewise be considered as final and executory with respect
to herein private respondent Clement David who cannot
adopt a stand inconsistent with that of the Fiscal.
WE held in Tan Jr. vs. Gallardo (73 SCRA 306, 311-314
[1976]):

“And in any event, whether an offended party intervenes in the

prosecution of a criminal action, his intervention must always be
subject to the direction and control of the prosecuting official. As
explained in Herrero vs. Diaz, supra, the ‘intervention of the
offended party or his attorney is authorized by section 15 of Rule
106 of the Rules of Court (now section 15, Rule 110), subject to the
provisions of section 4 of the same Rule that all criminal actions
either commenced by complaint or by information shall be
prosecuted under the direction and control of the Fiscal.’
“Therefore, although the private prosecutors may be permitted
to intervene, they are not in control of the case, and their interests
are

614

614 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

subordinate to those of the People of the Philippines represented by

the fiscal. The right which the procedural law reserves to the
injured party is that of intervening in the prosecution for the sole
purpose of enforcing the civil liability for the criminal action and
not of demanding punishment of the accused. As explained in
People vs. Orais:

“ ‘The position occupied by the offended party is subordinate to that of the

promoter fiscal because as the promoter fiscal alone is authorized to
represent the public prosecution, or the People of the Philippine Islands,
in the prosecution of offenders, and to control the proceeding, and as it is
discretionary with him to institute and prosecute a criminal proceeding,
being at liberty to commence it or not to refrain from prosecuting it or
not, depending upon whether or not there is, in his opinion, sufficient
evidence to establish the guilt of the accused beyond a reasonable doubt,
except when the case is pending in the Court of First Instance, the
continuation of the offended party’s intervention depends upon the
continuation of the proceeding. Consequently, if the promoter fiscal
desists from pressing the charge or asks the competent Court of First
Instance in which the case is pending for the dismissal thereof, and said
court grants the petition, the intervention of the person injured by the
commission of the offense ceases by virtue of the principle that the
accessory follows the principal. Consequently, as the offended party is not
entitled to represent the People of the Philippine Islands in the prosecution
of a public offense, or to control the proceeding once it is commenced, and
as his right to intervene therein is subject to the promoter fiscal’s right of
control, it cannot (sic) be stated that an order of dismissal decreed upon
petition of the promoter fiscal himself deprives the offended party of his
right to appeal from an order overruling a complaint or information,
which right belongs exclusively to the promoter fiscal by virtue of the
provisions of section 44 of General Order No. 58. To permit a person
injured by the commission of an offense to appeal from an order
dismissing a criminal case issued by a Court of First Instance upon
petition of the promoter fiscal, would be tantamount to giving said
offended party of the direction and control of a criminal proceeding in
violation of the provisions of the above-cited section 107 of General Order
No. 58.’
xx      xx      xx

“It is evident, therefore, that since the Solicitor General alone is

authorized to represent the State or the People of the Philippines,
the

615

VOL. 137, JULY 18, 1985 615

Guingona, Jr. vs. City Fiscal of Manila

interest of the private prosecutors is subordinate to that of the

State and they cannot be allowed to take a stand inconsistent with
that of the Solicitor General, for that would be tantamount to
giving the latter the direction and control of the criminal
proceedings, contrary to the provisions of law and the settled rules
on the matter” (pp. 311-314; italics supplied).

Again, in the case of Cabral vs. Puno (70 SCRA 606-610

[1976]), citing several cases, We ruled that: “While it is true
that the offended party, Silvino San Diego, through the
private prosecutor, filed a motion for reconsideration within
the reglementary fifteen-day period, such move did not stop
the running of the period for appeal. He did not have the
legal personality to appeal or to file a motion for
reconsideration on his behalf. The prosecution in a criminal
case through the private prosecutor is under the direction
and control of the Fiscal, and only the motion for
reconsideration or appeal filed by the Fiscal could have
interrupted a period for appeal” (italics supplied).
This fact alone by itself suffices to warrant the denial of
the motion for reconsideration filed by private respondent
Clement David as complainant.

II

And because of the compromise agreement entered into

prior to the filing of the criminal information in court, the
said compromise agreement or novation converted the
original relationship between the parties into ordinary
creditor-debtor situation. Such novation or compromise
prevents the institution of a criminal prosecution (Ong vs.
CA, et al., 124 SCRA 578, 580-81 [1983] penned by Justice
Relova, concurred in by Justices Melencio-Herrera, Plana,
Vasquez and Gutierrez). In said Ong case, Mr. Justice
Relova quoted Mr. Justice J.B.L. Reyes in People vs. Nery
(10 SCRA 244), thus:

“The novation theory may perhaps apply to the filing of the

criminal information in court by the state prosecutors because up
to that time the original trust relation may be converted by the
parties into an ordinary creditor-debtor situation, thereby placing
the com-

616

616 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

plainant in estoppel to insist on the original trust. But after the

justice authorities have taken cognizance of the crime and
instituted action in court, the offended party may no longer divest
the prosecution of its power to exact the criminal liability, as
distinguished from the civil. The crime being an offense against
the state, only the latter can renounce it (People vs. Gervacio, 54
Off. Gaz. 2898; People vs. Velasco, 42 Phil. 76; U.S. vs. Montañes,
8 Phil. 620)” (124 SCRA 578, 580-581).

Also, in the case of Gonzales vs. Manila City Fiscal Eulogio

Serrano (25 SCRA 64, Sept. 23, 1968), Mr. Chief Justice
Roberto Concepcion, with the concurrence of Associate
Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar,
Sanchez, Castro, Angeles and Fernando, ruled that:

“As pointed out in People vs. Nery, novation prior to the filing of
the criminal information—as in the case at bar—may convert the
relation between the parties into an ordinary creditor-debtor
relation, and place the complainant in estoppel to insist on the
original transaction or ‘cast doubt on the true nature’ thereof” (25
SCRA 69).

In the oft-cited case of People vs. Nery (10 SCRA 244, Feb.
5, 1964), Mr. Justice J.B.L. Reyes, spoke for the Court, with
the full concurrence of Chief Justice Cesar Bengzon,
Justices Padilla, Bautista Angelo, Labrador, Concepcion,
Barrera, Paredes, Dizon, Regala and Makalintal.

III

Moreover, private respondent cannot now intervene in the

prosecution of the criminal offense because he has waived
his right to the civil action when he filed his answer with
counter-claim in Civil Case No. Q-33865 in then Court of
First Instance, now Regional Trial Court in Quezon City.
 It should be recalled that petitioners Teofisto Guingona,
Jr., Antonio I. Martin, and Teresita Santos were
respectively Director, President and General Manager of
the Nation Savings and Loan Association (NSLA) from
March, 1978 until October or November, 1980. From March
20, 1979 to March, 1981, private respondent David, an
Australian citizen, invested with the NSLA—dealing
directly with petitioners Mar-

617

VOL. 137, JULY 18; 1985 617

Guingona, Jr. vs. City Fiscal of Manila

tin and Santos as NSLA President and General Manager—

the sum of P1,145,546.20 on time deposits, P13,531.94 on
savings account deposits (jointly with his sister Denise
Kuhne); US$10,000.00 on time deposits, US$15,000.00
under receipts and guarantee of payment and
US$50,000.00 under a receipt dated June 8, 1980 (all
jointly with Denise Kuhne); that upon private respondent
David’s insistence, the aforesaid investments were treated
as special accounts with interest above the legal rate, and
recorded in separate confidential documents; that only a
portion of said deposits or investments were to be reported
because respondent David did not want the Australian
government to tax his total earnings nor to know his total
investments. All transactions with private respondent
David were recorded except the sum of US$15,000.00
which was a personal loan to Santos.
The check of US$50,000.00 was cleared thru Guingona’s
dollar account with the Security Bank because NSLA did
not have any dollar account.
Thereafter, respondent David, as he himself admitted,
received periodic interests on his deposits averaging
P5,000.00 a week (pp. 397-398, rec.).
When the NSLA was placed under receivership on
March 21, 1981, petitioners Guingona and Martin, upon
request of private respondent David, assumed the
obligation of the Bank to respondent David and executed
on June 17, 1981 a promissory note in favor of David
acknowledging indebtedness of P1,336,614.02 and
US$75,000.00 (p. 80, rec.), which amounts were based on
the statement of account as of June 30, 1981 prepared by
private respondent David himself.
Thereafter, on July 17, 1981, petitioners Guingona and
Martin agreed to divide said indebtedness equally, each
one assuming an indebtedness of P668,507.01 and
US$37,500.00 in favor of private respondent David (Annex
“D”, p. 25, rec.). Guingona executed a new promissory note
for his one-half share of the assumed indebtedness which
was secured by second mortgages of two parcels of land
(Annex “E”, Petition, pp. 26-29, rec.) with stipulation that
the mortgage of one parcel should be cancelled upon
payment of ½ of his one-half share in their obligation to
David. The other half of the indebtedness
618

618 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

assumed by petitioner Martin was secured by a 9½ karat

diamond ring with a net value of P510,000.00.
On September 15, 1981, Guingona paid P200,000.00 to
David who received the same. When he tendered on
October 15, 1981 and on October 21, 1981 another
P300,000.00, respondent David refused to accept,
compelling petitioner Guingona to file Civil Case No. Q-
33865 in the CFI of Quezon City on November 19, 1981 (T.
Guingona Jr. vs. Clement David) for specific performance
with damages, praying among others, for the release of the
mortgage over one of the two parcels of land conveyed to
private respondent David as stipulated in the deed of
second mortgage.
In said Civil Case No. Q-33865 before the Quezon City
RTC, private respondent David filed on December 19, 1981
an answer to the complaint for damages with counter-claim
for the remaining balance of petitioner Guingona’s
indebtedness in the amount of P638,691.36 and
US$49,320.45 plus interests, damages, and attorney’s fees)
pp. 104-105, rec.).
Because of the filing by petitioner Guingona of Civil
Case No. Q-33865, private respondent David filed his
affidavit-complaint dated December 23, 1981 in the Office
of the City Fiscal of Manila against herein petitioners for
estafa and violation of Central Bank Circular No. 364 (Sec.
3) and related regulations on foreign transaction.
It would appear therefore that private respondent David
impliedly waived his right to intervene in this criminal
case because four days before the criminal complaint was
filed with the City Fiscal of Manila, respondent David
already filed an answer with counterclaim in Civil Case No.
Q-33865 filed in the Quezon City RTC by petitioner
Guingona which is akin to an express reservation of his
right to file a separate civil action.
 Thus, it has been ruled that “an offended party loses his
right to intervene in the prosecution of a criminal case not
only when he has waived the civil action or expressly
reserved his right to institute it, but also when he has
actually instituted the civil action even if he has not made
the waiver or reservation adverted to” (Gorospe and Gorospe
vs. Gatmaitan, et al., 98 Phil. 600, 603 [1956]).
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VOL. 137, JULY 18, 1985 619

Guingona, Jr. vs. City Fiscal of Manila

The counterclaim of private respondent David for the

remaining balance of the share in the obligation of
petitioner Guingona included in his answer in the aforesaid
civil case before the Quezon City RTC is in effect a civil
action for the enforcement of the civil liability of herein
petitioner Guingona.
It should be stressed that after receiving the first
payment to him of P200,000.00 from petitioner Guingona,
the latter offered him four personal checks covering the
amount of P300,000.00 which amount was due on October
15, 1981 as stipulated; but private respondent David
requested that the four personal checks be changed to
manager’s check and extended the period of payment to
October 20, 1981. When petitioner Guingona complied with
the request by delivering the cashier’s check covering the
amount of P300,000.00 on October 21, 1981, private
respondent David refused to accept the same claiming that
petitioner Guingona was already in default and that the
entire remaining balance had already become due and
payable (p. 57, rec.).
Likewise, it should be emphasized that private
respondent David executed on July 17, 1981 an affidavit of
desistance wherein he, for himself and in behalf of his
sister Denise Kuhne, agreed to desist from any prosecution
of petitioner Guingona (p. 46, rec.).
His affidavit of desistance states:

“3. That on or about July 17, 1981, Mr. Teofisto

Guingona Jr. executed, in my favor, a Promissory
Note dated June 17, 1981 for the amount of
P668,307.01 and US$37,500 with interest at 16%
per annum from July 1, 1981, of which P50,000.00
has been paid, and two Second Real Estate
Mortgages covering two parcels of land, with
buildings and improvements, situated at Quezon
 City, with Transfer Certificate of Title Nos. 137940
and 137941 of the Registry of Deeds of Quezon City;
“4. That I, therefore, withdraw my claim with the
Central Bank only insofar as Mr. Teofisto Guingona
Jr. is concerned to the extent of the Promissory
Note and the Mortgages in the amounts indicated
in the Promissory Note, and undertake to desist
from any prosecution against him. This is without
prejudice to the balance of my claim against Nation
Savings and Loan Association, Inc. and its other
officers and employees;

620

620 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

“5. That I execute this affidavit not only for myself but also
in behalf of my sister, Denise Kuhne.”

IV

As We stated in the decision sought to be reconsidered, the

investments or private respondent David in the NSLA by
way of time deposits and savings deposits are loans under
the express provisions of Articles 248, 1933, 1953 and 1980
of the New Civil Code and decisions on the matter.
Thus, in the case of Serrano vs. CB (96 SCRA 96, 102
[Feb. 14, 1980]), Mr. Justice Hermogenes Concepcion Jr.,
speaking for the Second Division, and concurred in by
Justices Barredo, Antonio, Aquino and Abad Santos,
stated:

“Bank deposits are in the nature of irregular deposits. They are

really loans because they earn interest. All kinds of bank deposits,
whether fixed, savings, or current are to be treated as loans and
are to be covered by the law on loans (Art. 1980, Civil Code;
Gullas vs. Phil. National Bank, 62 Phil. 519). Current and savings
deposits are loans to a bank because it can use the same. The
petitioner here in making time deposits that earn interests with
respondent Overseas Bank of Manila was in reality a creditor of
the respondent Bank and not a depositor. The respondent Bank
was in turn a debtor of petitioner. Failure of the respondent Bank
to honor the time deposit is failure to pay its obligation as a
debtor and not a breach of trust arising from a depositary’s failure
to return the subject matter of the deposit” (pp. 102-103).
Again, in the case of CB vs. Morfe (63 SCRA 114) [March
12, 1975]), Justice Ramon C. Aquino, speaking for the
Second Division, with the concurrence of Chief Justice
Makalintal and Justices Fernando, Barredo, and
Fernandez, enunciated that:

“It should be noted that fixed, savings, and current deposits of

money in banks and similar institutions are not true deposits.
They are considered simple loans and, as such, are not preferred
credits (Art. 1980, Civil Code; In re Liquidation of Mercantile
Bank of China; Tan Tiong Tick vs. American Apothecaries Co., 65
Phil. 414; Pacific Coast Biscuit Co. vs. Chinese Grocers
Association, 65 Phil. 375; Fletcher American National Bank vs.
Ang Cheng Lian, 65 Phil. 385; Pacific Commercial Co. vs.
American Apothecaries Co., 65 Phil. 429;

621

VOL. 137, JULY 18, 1985 621

Guingona, Jr. vs. City Fiscal of Manila

Gopoco Grocery vs. Pacific Coast Biscuit Co., 65 Phil. 443)” [p.
119].

In his motion for reconsideration, private respondent

contends that the money, amounting to P1,145,546.20;
P13,531.93 and US$75,000.00, to be deposited as time and
savings deposit with the Nation Savings and Loan
Association, was delivered to petitioners herein in their
personal capacity, who in turn had the obligation to deliver
the same to the bank. Since they did not deliver or deposit
the money with the Nation Savings and Loan Association,
they became liable for estafa by misappropriation as the
Central Bank discovered that only P305,821.92 were
entered in the records of the bank, and that petitioners’
assumption of the obligation of the bank to private
respondent was an admission that they did not deliver the
money to the bank.
But as pointed out by petitioners herein, this constitutes
a complete change of private respondent’s original theory
in the City Fiscal’s Office as shown by his affidavit-
complaint on December 23, 1981, wherein he stated that
from March 20, 1979 to March, 1981, he, together with his
sister, Denise Kuhne, invested with the Nation Savings
and Loan Association the sum of P1,145,546.20 on time
deposits and the sum of P13,531.94 on savings account
deposits or a total of P1,159,078.14 (pp. 15-16, rec.). He
likewise made investments in the aforesaid bank in the
amount of US$75,000.00 (p. 17, rec.). He further stated
that when the bank was placed under receivership by the
Central Bank, he filed his claim for all of his investments
and later received a report from the Central Bank that only
P305,821.92 of his investments with the bank were entered
in its records. So, he filed a complaint for estafa and
violation of Section 3 of Central Bank Circular No. 364 and
related Central Bank regulations regarding foreign
exchange transactions against the Nation Savings and
Loan Association and the entire board of directors
including the petitioners herein.
Private respondent’s new theory in his motion for
reconsideration has no factual basis. The following facts
and circumstances on record indisputably show that
private respon-
622

622 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

dent Clement David invested his money on time and

savings deposits with the Nation Savings and Loan
Association directly and not with herein petitioners as
private individuals:

1. Private respondent himself categorically stated in

his affidavit-complaint that he invested with the
Nation Savings and Loan Association the sum of
P1,145,546.20 on time deposits and the sum of
P13,531.94 on savings account deposits or a total of
P1,159,078.14, as well as the amount of
US$75,000.00 (p. 17, rec.). Mrs. Yu Donato, the
Deputy Receiver of the Central Bank, testified
under oath before the Assistant City Fiscal that one
of the recognized ways of recording transactions is
to keep on file the duplicate original of the
accounting forms used in the transactions (pp. 126,
406, rec.). It appears that the original instruments
of indebtedness were given to private respondent,
while the duplicate original of said instruments
were on file in the Nation Savings and Loan
Association.
2. The promissory notes executed by petitioners
Guingona and Martin wherein they assumed the
 obligation of the Nation Savings and Loan
Association to private respondent, upon the latter’s
request, stated that the same were executed as a
result of deposits made by Clement David and
Denise Kuhne with the Nation Savings and Loan
Association (pp. 25, 80, rec.).
3. Private respondent testified under oath before the
Assistant City Fiscal of Manila that he made the
deposits in the principal office of the Nation
Savings and Loan Association during office hours,
before authorized officers of the bank, and properly
receipted for in bank forms (pp. 397-398, rec.).
4. In his verified answer to the complaint of petitioner
Guingona in Civil Case Q-33865 for specific
performance with damages, private respondent
admitted that he was a depositor of the Nation
Savings and Loan Association (p. 101, rec.).
5. Private respondent further admitted under oath
that he received periodic interests on his deposits at
an average of P5,000.00 a week (pp. 397-398, rec.).
The bank would not have paid him such substantial
interest weekly if he were not a depositor of said
NSLA.
6. The report dated June 23, 1981 of Director
Consolacion

623

VOL. 137, JULY 18, 1985 623

Guingona, Jr. vs. City Fiscal of Manila

Odra of the Central Bank Department for Rural

Banks and Savings and Loan Associations, stated
that private respondent David and Denise Kuhne
could be allowed payment of their recorded deposits
up to P15,000.00 each, or a total of P30,000.00
under the Philippine Deposit Insurance
Corporation Law (p. 240, rec.). It is undisputed that
private respondent had already filed and received
his claim and that of his sister in the total amount
of P30,000.00 from the PDIC. Under the law, only
deposits of distressed banks are entitled to such
payment from the PDIC.
7. Private respondent’s investments were treated as
special accounts with special rates upon his
insistence and because Nation Savings and Loan
 Association was urgently in need of funds. The
investments were recorded in separate confidential
documents, and only a portion of which was to be
reported because he did not want the Australian
government to tax his total earnings, nor to know
his total investments (p. 21, rec.).
8. Private respondent’s pleadings, particularly his
comment dated April 21, 1982 and memorandum
dated December 21, 1982, and documents, such as
the statement of account (re: time and savings
deposits) as of June 30, 1981 prepared by private
respondent and his affidavit of desistance, filed
before this Court show that he deposited his money
with the Nation Savings and Loan Association.

Furthermore, private respondent cannot be permitted, at

this stage of the proceedings, to adopt a theory which is
different from that which he sustained in the City Fiscal’s
Office, especially after We ruled in Our main decision
sought to be reconsidered that bank deposits are in the
nature of simple loans, and the failure of the bank to
return the deposits will not constitute estafa through
misappropriation, but it will only give rise to civil liability.
It is improper to change theory on appeal and more so in a
motion for reconsideration. It would be unfair and unjust to
the other party litigant as it violates peti-tioners’
constitutional right to due process. It could also unduly
prolong litigations because a party can always change
postures to suit his own advantage.

624

624 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

Thus, in People vs. Archilla (1 SCRA 698, 701 [1961], citing

several cases), this Court said:

“It is well-settled that parties to a judicial proceeding may not, on

appeal, adopt a theory inconsistent with that which they
sustained in the lower court. Consequently, appellee is now
estopped from invoking the idea of double jeopardy upon the
theory that she could still be convicted under an information
which she branded to be insufficient in the lower court.”

Again, in the case of Velasco vs. Manila Electric Company

(42 SCRA 556, 560 [1971]), We held that.
“But as pointed out, this issue was not raised, nor was the inverse
condemnation doctrine invoked in the trial court, so that it would
be improper to consider it on appeal, and worse still, on a motion
for reconsideration of the decision on its merits” (italics supplied).

And, in the recent case of Dosch vs. National Labor

Relations Commission (123 SCRA 296, 310 [1983]), We
said:

“Realizing that its ‘resignation’ theory was weak and flimsy,

Northwest abandoned it and contended for the first time that
petitioner was guilty of insubordination when he refused to
comply with the transfer order. This change of theory on appeal is
improper; it is offensive to the basic rules of fair play and justice
and violative of petitioner’s constitutional right to due process of
law. Appellate courts may not entertain questions of law or fact not
raised in the lower courts (Sec. 18, Rule 46, Revised Rules of
Court), for that would constitute a change of theory not permissible
on appeal (Toribio vs. Decasa, 55 Phil. 461).

“ ‘It is undoubtedly the law, that, where a cause has been tried upon the
theory that the pleadings are at issue, or that a particular issue is made
by the pleadings, or where an issue is tacitly accepted by all parties as
properly presented for trial and as the only issue, the appellate court will
proceed upon the same theory (Lizarraga Hermanos vs. Yap Tico, 24 Phil.
Rep. 504; Molina vs. Somes, 24 Phil. Rep. 45). It would be unjust and
oppressive for the appellate court to adopt a theory at variance with that
on which the case was presented to and tried by the

625

VOL. 137, JULY 18, 1985 625

Guingona, Jr. vs. City Fiscal of Manila

lower court. It would surprise the parties, to take them

unaware and off their guard, and would in effect, deprive them of
their day in court (Limpangco Sons vs. Yangco Steamship Co., 34
Phil. 597, 605-609)’ ” [Italics supplied].

VI

To deprive petitioners herein of the foregoing defenses that

(1) failure to file a motion for reconsideration of a

decision inevitably renders such decision final and
executory;
(2) a compromise executed before the institution of the
criminal action in court precludes the filing of such
 criminal action;
(3) the filing of a civil action, which includes
interposing a counterclaim in an answer, before the
institution in court of a criminal action estops or
bars the complainant from intervening in the
criminal action;
(4) all bank deposits—whether savings, current or time
deposits—are in the nature of loans, under which
the depositor is the creditor of the bank, which
thereby becomes the debtor of the depositor, and
gives rise only to a civil obligation; and
(5) the extraordinary writs of injunction are available
for the orderly administration of justice, to prevent
the use of the strong arm of the law in an
oppressive and vindictive manner, to avoid
multiplicity of actions and to afford adequate
protection to constitutional rights—

which defenses were already existing long before the filing

on December 23, 1981 by respondent David of his affidavit-
complaint before the City Fiscal would be akin to a
violation of petitioners’ right against ex post facto laws.
As held in the 1970 case of Kay Villegas Kami (35 SCRA
429, 431) citing the case of Mekin vs. Wolfe (2 Phil. 74), one
of the six kinds of ex post facto law is that which “deprives
a person accused of a crime of some lawful protection to
which he has become entitled, such as the protection of a
former conviction or acquittal, or a proclamation of
amnesty.”
The aforecited defenses were already available to herein
petitioners and afford them legal protection already
secured to
626

626 SUPREME COURT REPORTS ANNOTATED

Guingona, Jr. vs. City Fiscal of Manila

them prior to the filing of the complaint with the City

Fiscal—even before any criminal information has been filed
in court.
Additionally, the compromise and affidavit of desistance
have the effect of an amnesty—complete absolution from
any criminal liability.
Decisions of the Supreme Court are part of the law of
the land. Article 8 of the New Civil Code of 1950 directs
that “judicial decisions applying or interpreting the laws or
the Constitution shall form part of the legal system of the
Philippines” (People vs. Licera, 65 SCRA 270 [1975]).
Judicial decisions of the Supreme Court assume the
same authority as the statute itself (Caltex vs. Palomar, 18
SCRA 247; 124 Phil. 763).
Consequently, any modification or revocation of the
previous doctrines aforequoted cannot be given retroactive
effect in the instant criminal prosecution.
Insistence on the criminal prosecution of herein
petitioners, who already acquired vested right in the
aforesaid defenses against such prosecution, would
therefore be clearly ex post facto.
To continue with the prosecution of herein petitioners,
in spite of the foregoing legal constitutional defenses,
would subvert the orderly administration of justice, deny
them their constitutional rights, expose the petitioners to
undue and oppressive harassment and aggravate their
anguish and expenses, in much the same way that such
unnecessary prosecution exposes the State to useless and
expensive trials (Trocio vs. Manta, 118 SCRA 241 [1982];
Hashim vs. Boncan, 71 Phil. 216 [1941]; see also Mercado
vs. Court, etc., 116 SCRA 93 [1982]).

VII

There is no need of prior exhaustion of administrative

remedies; because the instant case is an exception to the
principle of exhaustion as only constitutional and legal
questions are involved herein (Limoico vs. Board, etc., L-
40244, Oct. 31,

627

VOL. 137, JULY 18, 1985 627

Guingona, Jr. vs. City Fiscal of Manila

1984, per Justice Melencio-Herrera; Del Mar vs. PVA, 51

SCRA 340 [1973]; Teoxon vs. Members, etc., 33 SCRA 585
[1970]; Begosa vs. Chairman, etc., 32 SCRA 466 [1970];
Gonzales vs. Hechanova, 9 SCRA 230 [1963]; Tapales vs.
President, etc., et al., L-17523, March 30, 1963, 7 SCRA
553; Pascual vs. Provincial Board, etc., L-11959, Oct. 31,
1959, 106 Phil. 466, 470) and because of the urgency of the
relief demanded by petitioners (Guerrero vs. Carbonell, L-
7180, March 15, 1955, unpublished).
Appealing to the appropriate administrative authorities
concerned from the action of the City Fiscal then to the
Regional Trial Court and finally back to this Supreme
Tribunal, would render the remedy inadequate and not
speedy enough to save herein petitioners from so much
harassment, anguish and expenses or irreparable damage.
Exhaustion of administrative remedies is not required
where the action of the administrative officer is clearly and
obviously devoid of any legality or authority (Mangubat vs.
Osmeña, L-12837, April 30, 1959, 105 Phil. 1308-1309;
Palamine vs. Zagado, L-6901, March 5, 1954; Manuel vs. de
la Fuente, 48 Off. Gaz., 4829; F. Jose vs. Lacson, L-10477,
May 17, 1957; Festijo vs. Mun. Mayor of Nabua, 51 Off.
Gaz. 121; Covacha vs. Amante, L-8358, May 25, 1956;
Carmona vs. Amante, 52 Off. Gaz. 5109; Senarillos vs.
Hermosisima, L-10662, December 14, 1956; and Briones vs.
Osmeña, Jr., L-12536, Sept. 24, 1958), or where the
challenged action will create irreparable damage (De Lara,
et al. vs. Cloribel, et al., L-21653, May 31, 1965, 14 SCRA
269, 272-273).
Hence, the motion for reconsideration of private
respondent should be denied.
Decision reconsidered, petition dismissed.

Notes.—Preliminary investigations may be conducted

ex parte if the respondent cannot be subpoenaed or does
not appear after notice. (Rodriguez vs. Sandiganbayan, 120
SCRA 659.)
The Fiscal has the right to choose whom he should
present as witnesses. (People vs. Campaña, 124 SCRA 271.)

628

628 SUPREME COURT REPORTS ANNOTATED

Eastern Broadcasting Corporation (DYRE) vs. Dans, Jr.

The right to a preliminary investigation is purely statutory;

it is not a fundamental right. (Marinas vs. Siochi, 104
SCRA 423.)
The time of commission of the offense is a material
ingredient of an offense considering the disparity of time
between 1964 and 1969. The prosecution is not allowed to
prove any date remote from the approximate date in the
information as it will surprise and prejudice the accused.
(People vs. Reyes, 108 SCRA 203.)

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