G.R. No. L-5100
THE UNITED STATES, plaintiff-appellee, vs. EMILIO BEDOYA, defendant-appellant.
November 3, 1909

FACTS: Emilio Bedoya was charged with estafa for allegedly receiving various articles worth P1,312.40 on commission from The Schweiger Import and Export Company on May 18, 1908. He was supposed to account for these goods within thirty days but neither returned nor paid for them.

As evidence of his modus operandi, the prosecution presented testimonies from two other firms: Guamis & Co. (who stated Bedoya took goods, sold them at a lower price to a Chinaman, and the goods had to be recovered from various locations) and Sprungli & Co. (who stated Bedoya took goods on commission but provided conflicting information about his intentions and later denied their clerk access).

The direct proof for the Schweiger case included an invoice showing Bedoya received goods worth P1,812.40, paid P500, leaving a balance of P1,312.40, and personally wrote “Received on commission P1,312.40.” An employee, Hector Faini, confirmed the 30-day term for sale or return. Bedoya admitted receiving the goods but claimed they were on credit, not commission.

To settle his account, Bedoya later presented a bill of exchange for P1,807, dated June 10, 1908, drawn by M. M. Gallegos on Vicente Foz, payable to Bedoya, and accepted by Foz on June 15, 1908, due on July 5. Bedoya indorsed this draft to The Schweiger Import and Export Co. Faini and Bedoya confirmed Foz’s acceptance. However, Faini, lacking confidence, asked for a commercial firm’s guarantee, which Foz did not provide. Faini then indorsed the draft back to Bedoya “in order that he might collect the same” but gave Bedoya a receipt indicating Schweiger would deliver P494.60 to Bedoya after collecting the P1,807 from Foz, implying Schweiger retained the draft with the intent to collect.

Crucially, the bill of exchange was never protested for non-payment when Foz failed to pay on its due date. Despite subsequent dealings and attempts by Schweiger to demand payment from Foz, no formal protest was made. Schweiger even re-indorsed the draft to Bedoya imperfectly (without a date) and then demanded its return, indicating they maintained ownership and possession.

ISSUE: Did the creditor’s (The Schweiger Import and Export Company) failure to protest the bill of exchange, which it accepted from Bedoya as a form of payment, have the effect of payment, thereby precluding a charge of estafa against Bedoya?

RULING: The Supreme Court reversed the judgment of conviction.

The Court held that the delivery of a bill of exchange only produces the effects of payment when collected, or when, by the fault of the creditor, its value has been affected (Article 1170 of the Civil Code).

In this case, the value of the draft was adversely affected by the creditor’s fault because it failed to protest the bill on the day following its non-payment by the drawee, Foz. Under Article 483 of the Code of Commerce, if the holder of a bill of exchange does not present it for collection on the due date, or, in the absence of payment, does not have it protested the following day, they lose their right to be reimbursed by the indorsers.

The complaining firm, as the possessor and holder of the draft, was obligated to protest it upon non-payment. Their failure to do so, despite their suspicions about the solvency of the parties involved, resulted in the draft’s value being adversely affected through their own fault.

Therefore, the Court concluded that the delivery of the draft by Bedoya to Schweiger had the effects of payment. Since the civil obligation was deemed settled due to the creditor’s fault, the courts could not hold that Bedoya had not made payment, and consequently, he could not be held criminally liable for estafa. The estafa charge had no legal foundation.