G.R. No. 38329 ; October 10, 1933
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. CO PAO (alias JOSE R. MATEO, alias JOSE CO TINGPO, alias ONG BUN), defendant-appellant.

FACTS

The defendant-appellant, Co Pao, was accused of passing a counterfeit ten-peso bank note (Exhibit A) to Cheng Dy, a store owner, on August 3, 1933, in payment for goods worth P0.30 and receiving P9.70 in lawful change. Two days later, he again used another counterfeit ten-peso note at the same store for a purchase of P0.50 and received P9.50 in change. When the second note was discovered to be counterfeit, Cheng Dy confronted the appellant, who promised to return the first note but failed to do so. The appellant was arrested, and during a search, only legitimate money (Exhibit B) was found on him. At trial, the appellant denied the transactions and claimed the store owner bore a grudge against him due to a prior incident involving police.

ISSUE

Whether the evidence sufficiently proves the appellant’s guilt for the crime of knowingly using counterfeit bank notes in violation of Article 168 of the Revised Penal Code.

RULING

Yes, the Supreme Court affirmed the conviction but modified the penalty. The evidence, including the testimony of the store owner and the appellant’s conduct (using large notes for small purchases, failing to explain possession to police, and having no regular occupation), established his guilt beyond reasonable doubt. The Court held the appellant knowingly used the counterfeit notes as part of a scheme to exchange them for lawful money. Regarding the penalty, the Court clarified the proper application of the “penalty next lower in degree” under Article 168. Instead of imposing prision mayor in its medium period as recommended, the Court sentenced the appellant to eight months and one day of prision mayor, a fine of P10, indemnification of P10 to the offended party, and costs.

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