G.R. No. 6467 , September 16, 1911
THE UNITED STATES vs. SECUNDINO MENDENOZA (alias S. MENDEZONA)

FACTS

On December 10, 1909, Secundino Mendenoza received ₱2,500 from Compañia General de Tabacos de Filipinas as an advance partial payment for 600 piculs of copra at ₱10.75 per picul. The company’s agent testified that Mendenoza represented having the copra in Mindanao and having sent a boat to transport it to Cebu. However, Mendenoza failed to deliver the copra. The prosecution charged him with estafa under Article 535 in relation to Article 534 of the Penal Code, alleging fraudulent misrepresentation regarding his possession of the copra. The trial court convicted him, sentencing him to imprisonment and ordering indemnification. Mendenoza appealed, arguing that the transaction was purely civil and that no criminal misrepresentation was proven.

ISSUE

Whether Mendenoza’s failure to deliver the copra after receiving an advance payment constitutes the crime of estafa, or whether it is merely a breach of contract giving rise only to civil liability.

RULING

The Supreme Court REVERSED the conviction and DISMISSED the criminal case. The Court held that the evidence failed to establish the element of fraud or false pretense required for estafa. The record showed that Mendenoza and the company had a history of similar advance-payment transactions for copra, which were treated as ordinary contractual dealings in their current accounts. There was no proof that Mendenoza’s representation about having copra in Mindanao was false at the time it was made. His failure to deliver may constitute a breach of contract, but without evidence of deceit or fraudulent intent, it does not rise to the level of a criminal offense. The Court emphasized that not every breach of contract is criminal; to constitute estafa, there must be fraudulent misrepresentation at the inception of the transaction. Accordingly, Mendenoza was ordered released from custody.