G.R. No. 2052 , April 25, 1905
THE UNITED STATES, complainant-appellee, vs. FRANCISCO LICAS, defendant-appellant.

FACTS:
Francisco Licas, the municipal treasurer of Guinayangan, Tayabas, was charged with the crime of misappropriation of public funds. An official verification on November 11, 1903, revealed a shortage in his accounts amounting to 5,181.76 pesos (Mexican currency) and 178.02 pesos (Philippine currency). The defendant confessed to having taken the money for his personal use, investing it in a lumber business. He claimed he took the funds because he had various businesses and feared that bandits might seize the money. The full amount was reimbursed on November 21, 1903, ten days after the discovery of the shortage. The reimbursement was made by the defendant’s bondsman. A witness for the prosecution stated the bondsman paid because the provincial treasurer required him to do so, while the defendant asserted the payment was made by his order. The complaint was filed on January 7, 1904, after the reimbursement had been completed. The Court of First Instance convicted the defendant under Article 390 of the Penal Code for misappropriation by subtraction, sentencing him to eight years and one day of presidio mayor.

ISSUE:
Whether the defendant’s act constitutes malversation by subtraction under Article 390 or malversation by diversion under Article 392(3) of the Penal Code, considering the reimbursement of the funds before the filing of the complaint and the absence of damage to the public service.

RULING:
The Supreme Court modified the judgment of the lower court. It ruled that the defendant’s acts constituted malversation by diversion under paragraph 3 of Article 392 of the Penal Code, not malversation by subtraction under Article 390. The Court found that the full reimbursement of the amount taken before the filing of the criminal complaint, coupled with the fact that the misappropriation caused no damage or prejudice to the public service, brought the case within the scope of Article 392(3). The Court did not find a contradiction between the prosecution witness’s testimony and the defendant’s claim regarding the order for reimbursement, noting that both could be true and likely influenced the bondsman’s prompt payment. Accordingly, the penalty was reduced. The defendant was sentenced to suspension from the position of municipal treasurer for two years and one day and a fine of 10 percent of the amount diverted. In case of insolvency, he would suffer subsidiary suspension from the same position, not to exceed one-third of the principal penalty. The judgment was affirmed in all other respects.