G.R. No. L-7593; March 27, 1913
The United States vs. Jose M. Igpuara

FACTS

The defendant, Jose M. Igpuara, was charged with estafa for swindling Juana Montilla and Eugenio Veraguth out of P2,498. Igpuara, acting for Ramirez and Co., issued a document dated June 26, 1911, stating: “We hold at the disposal of Eugenio Veraguth the sum of two thousand four hundred and ninety-eight pesos (P2,498), the balance from Juana Montilla’s sugar.” This sum represented the balance from a sales commission transaction. On August 23, 1911, Veraguth demanded restitution of the amount through a notarial instrument, but Igpuara failed to return it. The Court of First Instance of Iloilo convicted Igpuara of estafa.

ISSUE

Whether the defendant’s act of failing to return the money received under the document, which constituted a deposit, and his appropriation or diversion of it, constitutes the crime of estafa.

RULING

Yes. The Supreme Court affirmed the conviction. The document executed by Igpuara was a certificate of deposit, not a negotiable instrument or a loan. A deposit is constituted when a person receives a thing belonging to another with the obligation to keep and return it. Igpuara received the P2,498 with the obligation to hold it at Veraguth’s disposal. By willfully and wrongfully disposing of the money and failing to return it upon demand, to the detriment of Montilla and Veraguth, Igpuara appropriated the deposited funds. This act falls under Article 535, No. 5 of the Penal Code (now Article 315, par. 1(b) of the Revised Penal Code), which punishes as estafa the appropriation or diversion of money or goods received on deposit. The court rejected Igpuara’s arguments that the document was a negotiable instrument or that the transaction constituted a loan, noting the absence of consent from the depositor to convert the deposit into a loan. The penalty imposed by the lower court was affirmed.