G.R. No. L-4211
THE UNITED STATES, plaintiff-appellee, vs. SECUNDINO MENDEZONA, defendant-appellant.
November 18, 1908

FACTS:
On February 3, 1905, Secundino Mendezona approached Bruno de Rementeria, who was about to travel to Spain, and asked if Rementeria had money to send to that country. Mendezona claimed he needed P5,000 but settled for P3,000 that Rementeria had. Mendezona assured Rementeria that he possessed funds with his brother-in-law, Luis Alvarez, residing in Guernica, Spain, and that Alvarez would pay the value of a draft at five days’ sight. Believing Mendezona’s representations, Rementeria delivered P3,000 (via a check) to Mendezona. In exchange, Mendezona issued a draft for the equivalent amount (10,489.51 pesetas) on Luis Alvarez, dated February 4, 1905, payable to Rementeria “five days after sight.”

Upon reaching Guernica, Rementeria presented the draft to Alvarez, who refused payment, stating he held no funds of Mendezona, nor had he ever. Subsequent attempts by Rementeria and his indorsees (Florencio De Arana and Banco de Bilbao) to collect were likewise refused by Alvarez, who reiterated that he had no funds and had not received a promised remittance mentioned in Mendezona’s cablegram of March 25, 1905.

Rementeria returned to Manila and repeatedly demanded the P3,000 from Mendezona, who promised payment but failed to deliver. Mendezona admitted using the P3,000 for his own business. Consequently, Rementeria filed a complaint for estafa against Mendezona. The Court of First Instance of Manila convicted Mendezona, sentencing him to six months’ imprisonment with hard labor and to indemnify Rementeria P3,000. Mendezona appealed.

ISSUE:
Whether the act of Secundino Mendezona in obtaining P3,000 from Bruno de Rementeria by issuing a draft on his brother-in-law, Luis Alvarez, with the false assurance that Alvarez held his funds, when in fact no such funds existed, constitutes the crime of estafa under Article 535, paragraph 1 of the Penal Code.

RULING:
Yes. The Supreme Court AFFIRMED the conviction of Secundino Mendezona for estafa, but MODIFIED the penalty.

The Court held that Mendezona committed estafa under Article 535, paragraph 1 of the Penal Code. Mendezona’s actions constituted deceit and fraud by “pretending to possess imaginary property, credit, commission, enterprises, or business or by using any other similar deceit.” He falsely represented to Rementeria that he had funds in Spain held by his brother-in-law, Luis Alvarez, to induce Rementeria to deliver P3,000 in exchange for a draft. Mendezona knew that no such funds existed, and Alvarez consistently denied ever having funds belonging to Mendezona. The Court found it incredible that Rementeria, who needed the money for his trip, would have accepted a draft against mere property administration rather than liquid funds, especially given the “five days’ sight” term.

The Court rejected Mendezona’s argument that the transaction was a mercantile contract governed by the Code of Commerce. It ruled that mercantile acts, when tainted with fraud or deceit and resulting in prejudice, cease to be purely commercial matters and become subject to the Penal Code. The fact that Mendezona never remitted the funds he cabled Alvarez he would send, and his admission of using Rementeria’s P3,000 in his own business, further proved the fraudulent intent and consequent prejudice.

Finding no aggravating or mitigating circumstances, and noting the amount wrongfully taken exceeded 6,250 pesetas, the Court reversed the penalty imposed by the lower court. Secundino Mendezona was sentenced to one year, eight months, and twenty-one days of prision correccional, with accessory penalties, restitution of P3,000 to Bruno Rementeria, and subsidiary imprisonment in case of insolvency.