[G.R. No. L-60033. July 18, 1985.

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

SANTOS, Petitioners, v. THE CITY FISCAL OF MANILA, HON. JOSE B.
FLAMINIANO, ASST. CITY FISCAL FELIZARDO N. LOTA and CLEMENT
DAVID, Respondents.

Lorenzo Tañada, Teofisto Guingona and Feliciano C. Tumale, for Petitioners.

Vicente V. Asuncion Jr. for Private Respondent.

DECISION

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. chanrobles law library

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 their obligation is allegedly civil in
character and because of the adverse publicity supposedly instigated by David.

The factual background may be restated as follows: chanrob1es virtual 1aw library

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.

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).
chanrobles lawlibrary : rednad

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 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. chanrobles virtual lawlibrary

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 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 v. Albano, 125 Phil.
513).

"As a general rule, an injunction will not be granted to restrain a criminal prosecution"
(People v. 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. *

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.chanrobles law library

SO ORDERED.