ABAD SANTOS, 

J.:

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. M-111, M-183 and M-208.

Respondent judge is said to have acted without jurisdiction, in excess of jurisdiction and with
grave abuse of discretion because the facts recited in the complaints did not constitute the
crime of estafa, and assuming they did, they were not within the jurisdiction of the respondent
judge.

In a resolution dated May 23, 1979, we required respondents to comment in the petition and
issued a temporary restraining order against the respondent judge from further proceeding with
Criminal Cases Nos. M-111, M-183 and M-208 or from enforcing the warrants of arrest he had
issued in connection with said cases.

Comments by the respondent judge and the private respondents pray for the dismissal of the
petition but the Solicitor General has manifested that the People of the Philippines have no
objection to the grant of the reliefs prayed for, except the damages. We considered the
comments as answers and gave due course to the petition.

The position of the Solicitor General is well taken. We have to grant the petition in order to
prevent manifest injustice and the exercise of palpable excess of authority.

In Criminal Case No. M-111, respondent Rosalinda M. Amin charges petitioners Yam Chee
Kiong and Yam Yap Kieng with estafa through misappropriation of the amount of P50,000.00.
But the complaint states on its face that said petitioners received the amount from respondent
Rosalinda M. Amin "as a loan." Moreover, the complaint in Civil Case No. N-5, an independent
action for the collection of the same amount filed by respondent Rosalinda M. Amin with the
Court of First Instance of Sulu on September 11, 1975, likewise states that the P50,000.00 was
a "simple business loan" which earned interest and was originally demandable six (6) months
from July 12, 1973. (Annex E of the petition.)

In Criminal Case No. M-183, respondent Tan Chu Kao charges petitioners Yam Chee Kiong,
Jose Y.C. Yam, Ampang Mah and Anita Yam, alias Yong Tay, with estafa through
misappropriation of the amount of P30,000.00. Likewise, the complaint states on its face that
the P30,000.00 was "a simple loan." So does the complaint in Civil Case No. N-8 filed by
respondent Tan Chu Kao on April 6, 1976 with the Court of First Instance of Sulu for the
collection of the same amount. (Annex D of the petition.).
In Criminal Case No. M-208, respondent Augusto Sajor charges petitioners Jose Y.C. Yam,
Anita Yam alias Yong Tai Mah, Chee Kiong Yam and Richard Yam, with estafa through
misappropriation of the amount of P20,000.00. Unlike the complaints in the other two cases,
the complaint in Criminal Case No. M-208 does not state that the amount was received as
loan. However, in a sworn statement dated September 29, 1976, submitted to respondent
judge to support the complaint, respondent Augusto Sajor states that the amount was a "loan."
(Annex G of the petition.).

We agree with the petitioners that the facts alleged in the three criminal complaints do not
constitute estafa through misappropriation.

Estafa through misappropriation is committed according to Article 315, paragraph 1,

Art. 315. Swindling (Estafa). — Any person who shall defraud another by any of
the means mentioned herein below shall be punished by:

xxx xxx xxx

1. With unfaithfulness or abuse of confidence namely:

xxx xxx xxx

b) By misappropriating or converting, to the prejudice of another, money,

In order that a person can be convicted under the abovequoted provision, 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.

In commodatum the bailor retains the ownership of the thing loaned, while in
simple loam 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.

Under Sec. 87 of the Judiciary Act, the municipal court of a provincial capital, which the
Municipal Court of Jolo is, has jurisdiction over criminal cases where the penalty provided by
law does not exceed prision correccional or imprisonment for not more than six (6) years, or
fine not exceeding P6,000.00 or both, The amounts allegedly misappropriated by petitioners
range from P20,000.00 to P50,000.00. The penalty for misappropriation of this magnitude
exceeds prision correccional or 6 year imprisonment. (Article 315, Revised Penal Code),
Assuming then that the acts recited in the complaints constitute the crime of estafa, the
Municipal Court of Jolo has no jurisdiction to try them on the merits. The alleged offenses are
under the jurisdiction of the Court of First Instance.

Respondents People of the Philippines being the sovereign authority can not be sued for
damages. They are immune from such type of suit.

With respect to the other respondents, this Court is not the proper forum for the consideration
of the claim for damages against them.

WHEREFORE, the petition is hereby granted; the temporary restraining order previously
issued is hereby made permanent; 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. Moreover, respondent
judge is hereby rebuked for manifest ignorance of elementary law. Let a copy of this decision
be included in his personal life. Costs against private respondents.

SO ORDERED.