G.R. Nos. 19403, 19404, 19405. January 30, 1923.
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. ISIDORO LERMA, defendant-appellant.

FACTS

Three separate criminal cases were filed against Isidoro Lerma, chief of the foreign department of the Philippine National Bank, for manipulating bank funds through the purchase and sale of German marks.
In G.R. No. 19403 , Lerma was charged with estafa. He purchased marks for the bank, sold them to various clients at a profit, but credited to the bank only the original purchase price. He created a fictitious purchaser, Nicanor Carag, to account for the transactions and misappropriated the profit difference of P37,573.90.
In G.R. No. 19404 , Lerma was charged with estafa through falsification of private documents. He again used the fictitious Carag as purchaser of marks bought by the bank. He recorded sales to real clients as sales to Carag at a lower price, credited the lower amount to the bank, and deposited the profit difference into accounts under fictitious names (C. Reyes and P. Rivera), which were later withdrawn by his daughter. He misappropriated P27,251.
In G.R. No. 19405 , Lerma was similarly charged with estafa through falsification. He recorded the sale of bank-purchased marks to a fictitious C. Reyes at a lower price, while actually selling them to real persons at higher prices, misappropriating the difference of P14,274.
Lerma was convicted in all three cases after separate trials. He appealed, claiming his actions were merely unethical business practices or mistakes, and that the documents falsified were not mercantile documents.

ISSUE

1. In G.R. No. 19403 : Whether Lerma is guilty of estafa under Article 535, paragraph 5, in relation to Article 534, paragraph 3 of the Penal Code.
2. In G.R. Nos. 19404 and 19405: Whether Lerma is guilty of the complex crime of estafa committed by means of falsification of private (mercantile) documents under Article 301 of the Penal Code, as amended, in relation to other articles.
3. Whether the “surety account” book (Exhibit LL) is a mercantile document subject to falsification.
4. Whether the penalties and indemnities imposed by the trial court are correct.

RULING

1. Yes. In G.R. No. 19403 , the Court affirmed Lerma’s conviction for estafa. The evidence disproved his defense of a legitimate transaction with Carag. He abused his position to create fictitious transactions and misappropriate bank funds. The penalty imposed by the trial court was affirmed, but the indemnity was modified to P37,573.90 as alleged in the information.
2. Yes. In G.R. Nos. 19404 and 19405, the Court affirmed Lerma’s conviction for the complex crime of estafa through falsification. His defense that the fictitious persons were real was untenable as they were not presented as witnesses. The falsified entries were made in bank records to conceal the estafa.
3. Yes. The Court held that the surety account book (Exhibit LL) is a mercantile document, as it is a commercial record similar to journal books and ledgers.
4. Partly. The Court affirmed the judgments with modifications: In G.R. No. 19403 , the indemnity was corrected to P37,573.90. In G.R. Nos. 19404 and 19405, the fines were increased to P200 each (from 250 pesetas) to comply with the law, and in G.R. No. 19405 , the indemnity was corrected to P14,274. The appealed judgments were affirmed with these modifications.