G.R. No. L-8920; March 29, 1913
THE UNITED STATES, plaintiff-appellee, vs. C.J. KOSEL, defendant-appellant.

FACTS

Paul M. Filmer, before leaving the Philippines for the United States, executed an agreement (Exhibit A) on April 10, 1911, authorizing the Dunn Mercantile Agency (managed by defendant C.J. Kosel) to receive monthly remittances from him to pay his local creditors, who were owed various amounts. Filmer sent money to Kosel for this purpose. Kosel, however, did not pay Filmer’s creditors. Instead, he applied the remittances to two promissory notes: one (Exhibit B) allegedly executed by Filmer in Kosel’s favor for P225, and another (Exhibit G) in favor of P.I. Kidd, on which Filmer was a co-signer. Kosel claimed Filmer had authorized these payments through a later endorsement on Exhibit A and through correspondence, but he failed to produce such correspondence or a deposition from Filmer that would support his claims. The creditors testified that Kosel had acknowledged receiving money from Filmer but gave excuses for not paying them, prioritizing the payment of the notes instead.

ISSUE

Whether the defendant C.J. Kosel is guilty of the crime of estafa under Article 535, subdivision 5, of the Penal Code for misappropriating or converting funds received in agency for a specific purpose.

RULING

Yes, the defendant is guilty of estafa. The Supreme Court affirmed the judgment of the Court of First Instance convicting Kosel. The Court found that the endorsement on Exhibit A and the Kosel note (Exhibit B) were not genuine and had no existence when Filmer departed. Kosel failed to account for the remittances to Filmer or to the intended creditors, concealed the existence of the Kidd note, and applied the funds to purposes not authorized by the agency agreement. His failure to produce Filmer’s deposition, which could have clarified the matter, warranted an inference that its contents would be unfavorable to him. Thus, Kosel misappropriated the funds received in trust for specific creditors, violating his obligation under the agency and constituting estafa. The penalty of five months of arresto mayor was affirmed, with the additional sentence to indemnify Paul M. Filmer in the sum of P330, with subsidiary imprisonment in case of insolvency, and the accessory penalties.