G.R. No. L-50550-52 October 31, 1979
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 PHILIPPINES, ROSALINDA AMIN, TAN CHU KAO and LT. COL. AGOSTO SAJOR, respondents.

FACTS

Petitioners filed a petition for certiorari, prohibition, and mandamus against respondent Municipal Judge Nabdar J. Malik of Jolo, Sulu. They alleged the judge acted without jurisdiction and with grave abuse of discretion in three estafa cases (Criminal Cases Nos. M-111, M-183, and M-208). The judge found a prima facie case, issued warrants of arrest, and undertook to conduct trial. Petitioners contended the facts in the complaints did not constitute estafa, and even if they did, the cases fell outside the municipal court’s jurisdiction due to the penalty involved.
The complaints, filed by private respondents Rosalinda Amin, Tan Chu Kao, and Augusto Sajor, involved sums of P50,000, P30,000, and P20,000, respectively. Crucially, the complaints themselves and related civil collection suits described these amounts as “simple business loans” or “simple loans.” Respondent Sajor’s supporting sworn statement also described the amount as a “loan.”

ISSUE

Whether respondent judge committed grave abuse of discretion in finding a prima facie case for estafa and assuming jurisdiction over the criminal complaints.

RULING

Yes. The Supreme Court granted the petition. The legal logic is twofold. First, the facts alleged in the complaints do not constitute the crime of estafa through misappropriation under Article 315(1)(b) of the Revised Penal Code. That provision requires the offender to receive money in trust, on commission, for administration, or under any obligation involving the duty to deliver or return the same money or property. Here, the transactions were simple loans or mutuum. Under the Civil Code, a borrower in a simple loan acquires ownership of the money; the obligation is to pay an equivalent amount, not to return the identical cash. A refusal to pay a debt is a civil breach, not criminal misappropriation. The Court cited U.S. vs. Ibañez, which held that a debtor cannot be liable for estafa by merely refusing to pay.
Second, assuming arguendo that estafa was committed, the municipal court still lacked jurisdiction. The amounts involved (P20,000 to P50,000) would prescribe a penalty exceeding prision correccional (6 years), which is beyond the jurisdictional limit of a municipal court under the Judiciary Act. Jurisdiction over such offenses lies with the Court of First Instance (now Regional Trial Court). The judge was rebuked for manifest ignorance of elementary law. The Court made the restraining order permanent, declared the complaints null and void, and ordered their dismissal and the recall of the arrest warrants.