LUCMAN Vs MALAWI

G.R. No.
159794 December 19, 2006
MACLARING M. LUCMAN, in his capacity as the Manager of the LAND BANK OF THE
PHILIPPINES, Marawi City, petitioner,
vs.
ALIMATAR MALAWI, ABDUL-KHAYER PANGCOGA, SALIMATAR SARIP,
LOMALA CADAR, ALIRIBA S. MACARAMBON and ABDUL USMAN, respondents.
FACTS
Prior to the 12 May 1997 barangay elections, respondents were the incumbent barangay
chairmen of their respective barangays, all from the Municipality of Pagayawan, Lanao del Sur.
Due to the failure of the May 12, 1997 barangay elections and the subsequent special elections,
respondents remained in office in a holdover capacity.
Beginning with the second quarter of 1997, LBP was selected as the government depository bank
for the Internal Revenue Allotments of the petitioner’s barangays. As a result, the authorized
public officials had to open new accounts in behalf of their government units with the proper
LBP branch from which they could withdraw the IRAs.
Respondents attempted to open their respective barangays' IRA bank accounts but were refused
by petitioner because respondents were required by a COA circular to show their individual
certifications showing their right to continue serving as Barangay Chairmen and the requisite
Municipal Accountant's Advice giving respondents the authority to withdraw IRA deposits.
Respondents were eventually allowed to open accounts. In any event, all respondents were not
allowed to withdraw the IRA funds from the opened accounts, owing to the absence of the
requisite Accountant's Advice.
Later, 5 other persons presented themselves before petitioner as the newly proclaimed barangay
chairmen of the barangays concerned, each presenting a government certification of his election.
Without verifying the authenticity of the certifications, petitioner proceeded to release the IRA
funds for the 2nd and 3rd quarters of 1997 to them.
Before RTC Lanao del Sur, respondents filed a special civil action for Mandamus with
Application for Preliminary Mandatory Injunction to compel petitioner to allow them to open
and maintain deposit accounts covering the IRAs of their respective barangays and to withdraw
therefrom.
RTC: commanding petitioner to pay respondents, except respondent Alimatar Malawi who failed
to testify, the IRAs of their respective barangays even without the Accountant's Advice
CA: affirmed the RTC's Decision in toto. Hence, this petition.
ISSUE W/N the petition for mandamus is proper

HELD NO
Although the pleading filed before the lower court was denominated as a Petition for Mandamus
With Prayer For Writ of Preliminary Injunction, the allegations thereof indicate that it is an
action for specific performance, particularly to compel petitioner to allow withdrawal of funds
from the accounts of the barangays headed by respondents with the LBP, Marawi Branch.
From the records of the case, it appears that the shares of the barangays in the IRA had already
been remitted by the DBM to the LBP Marawi Branch where they were kept in the accounts
opened in the names of the barangays.
By virtue of the deposits, there exists between the barangays as depositors and LBP a creditor-
debtor relationship. Fixed, savings, and current deposits of money in banks and similar
institutions are governed by the provisions concerning simple loan In other words, the barangays
are the lenders while the bank is the borrower.
Guingona, Jr., et al. v. The City Fiscal of Manila, et al., citing Serrano v. Central Bank of the
Philippines. 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 v. 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 interest 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
depository's failure to return the subject matter of the deposit.
The relationship being contractual in nature, mandamus is therefore not an available remedy
since mandamus does not lie to enforce the performance of contractual obligations.
Without the presence of indispensable parties to the suit, the judgment of the court cannot attain
real finality. Strangers to a case are not bound by the judgment rendered by the court. Clearly,
this case was not initiated by the barangays themselves. Neither did the barangay chairmen file
the suit in representation of their respective barangays.
Even if the barangays themselves had filed the case, still it would not prosper. The case involves
government funds and as such, any release therefrom can only be done in accordance with the
prevailing rules and procedures. The Government Accounting and Auditing Manual (GAAM)
provides that the local treasurers shall maintain the depositary accounts in the name of their
respective local government units with banks.

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G.R. No.

159794 December 19, 2006

CA: affirmed the RTC's Decision in toto. Hence, this petition.

ISSUE W/N the petition for mandamus is proper

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