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[No. 18056. March 16, 1922]

THE UNITED STATES, plaintiff and appellee, vs. ANGEL R.

SEVILLA, defendant and appellant.

1. CRIMINAL LAW; "ESTAFA."—When an estafa takes the form of

an actual appropriation and conversion of funds committed to the
care of the accused as treasurer of a corporation, the breach of trust
involved in the conversion takes the place of fraudulent intent and
the act is none the less unlawful because of an intention on the part
of the accused to restore the funds.

2. ID. ; ID.—The def endant, the treasurer of a railroad corporation,

took money for his personal use out of the corporate funds
entrusted to him for safe-keeping, substituting therefor his personal
checks and instructing the cashier to retain the checks and not to
present them for payment until a subsequent date. Held; to
constitute estafa under paragraph 5 of article 535 of the Penal
Code.

APPEAL from a judgment of the Court of First Instance of Manila.

Del Rosario, J.
The facts are stated in the opinion of the court.
     Claro M. Recto for appellant,
     Attorney-General Villa-Real for appellee.

OSTRAND, J.:

The defendant is charged with the crime of estafa under paragraph 5

of article 535 of the Penal Code. The Court of First Instance of
Manila found him guilty and sentenced him to presidio correccional
for the term of one year, eight months and twenty-one days, with the
accessory penalties

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United States vs. Sevilla

prescribed by article 58 of the Penal Code and with the costs. The
case is now before this court upon appeal from that sentence.

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Though counsel f for the appellant has made twenty-three

assignments of error and has argued all of them very earnestly and at
great length, the case, from our point of view, yields readily to
analysis and is in reality comparatively simple. The material facts
relevant to the issues are practically undisputed and upon the points
where there is any conflict of testimony, we shall, for the' sake of the
argument, adopt the view most favorable to the appellant. We will
concede that he was a man of good character, reputation, and social
position; that he possessed ample means and that his official record
up to ,the time of the events hereinafter related was unblemished and
exceedingly creditable to him.
The evidence shows that during the month of June, 1921, the
appellant was the treasurer and responsible financial officer of the
Manila Railroad Company. As such, his duties were thus defined in
section 6 of article IV of the By-laws of the corporation:

"SECTION 6. The Treasurer.—The Treasurer shall keep f ull and accurate

accounts of the receipts and disbursements of the Company; shall deposit all
moneys, checks and other obligations to the credit of the company in such
depositories as may be designated by the Board of Directors; shall disburse
the funds of the Company as ordered by the Board of Directors or Executive
Committee, taking proper vouchers for such disbursements; shall render a
statement of his accounts and transactions whenever required by the Board
of Directors or Executive Committee; and generally perform all duties
incident to the position of Treasurer subject to the control of the Board of
Directors."

One of the subordinates of the treasurer was denominated cashier

and was a bonded employee, having charge of the cash and the
disbursements under the immediate direction of the treasurer.

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United States vs. Sevilla

On June 18, 1921, the appellant took, through his subordinate, the
cashier, the sum of P8,330 out of the funds of the Railroad
Company, giving in return therefor his personal check for the same
amount, drawn on the Philippine National Bank; on the 21st of the
same month he cashed a check for P1,670 in the same manner and
on the 29th another check for P2,000. In all instances he directed the
cashier to hold the checks and not to deposit them on the current
bank account of the Railroad Company until the end of the month. It
is admitted that the appellant used the money for his personal or
private purposes, though the exact character of the investments made
has apparently not been truthfully disclosed.

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For the purpose of obtaining data as to the financial condition of

the Railroad Company with a view to a bond issue then in -
contemplation, the Insular Auditor in the morning of July 1st
commenced an examination of its accounts. In counting the cash
preliminary to the examination of the books, the appellant's checks
were discovered and it was found that they were carried in the
accounts as part of the cash on hand. An inquiry at the National
Bank disclosed that the appellant then had only ¥=125.66 to his
credit there. The appellant could not be found until in the afternoon
of the same day when it appeared that he, at 3 o'clock of that
afternoon, had deposited on his current account with the National
Bank the sum of P12,000, the total amount of the checks.
The checks were not presented for payment until July 6. Though
not, as far as we can see, of any special importance, it may be noted
that according to the evidence the money withdrawn by the appellant
would have drawn interest at the rate of, at least, 2 per cent per
annum if it had been deposited in the National Bank on the current
account of the Railroad Company.
The law applicable to this case is found in article 535 of the
Penal Code, the pertinent part of which reads as follows:

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United States vs. Sevilla,

"ART. 535. The penalties prescribed by the next preceding article shall be
imposed upon:

*     *     *     *     *     *     *

"5. Any person who, to the prejudice (perjuicio) of another, shall convert
or misappropriate any money, goods, or other personal property received by
such person for safekeeping, or on commission, or for administration, or
under any other circumstances giving rise to the obligation to make delivery
of or to return the same, or shall deny having received such money, goods,
or other property."

As will be seen, there are three essential elements in the offense here
defined: (a) Money, goods, or other personal property received for
safe-keeping or on commission or for administration or for any other
purpose giving rise to the obligation to make delivery, or to return,
the same; (&) conversion or diversion of such money or property by
the person who has so received it, or denial on his part of such
receipt; and (c) that such conversion, diversion or denial is to the
injury of another.
Fraudulent intent in committing the conversion or diversion is
very evidently not a necessary element of the form of estafa here
discussed; the breach of confidence involved in the conversion or
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diversion of trust funds takes the place of fraudulent intent and is in

itself sufficient. The reason for this is obvious: Grave as the offense
is, comparatively few men misappropriate trust funds with the
intention of defrauding the owner; in most cases the offender hopes
to be able to restore the funds before the defalcation is discovered.
We may say in passing that the view here expressed is further
.strengthened by the fact that of the nine paragraphs of article 535,
the paragraph here under discussion is the only one in which the
words "fraud" or "defraud" do not occur.
Applying the legal principles here stated to the facts of the case,
we find all of the necessary elements of estafa under paragraph 5,
supra, present. That the money for

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United States vs. Sevilla

which the appellant's checks were substituted was received by him

for safe-keeping or administration, or both, can hardly be disputed.
He was the responsible financial officer of the corporation and as
such had immediate control of the current funds for the purposes of
safe-keeping and was charged with the custody of the same. That he,
in the exercise of such control and custody, was aided by
subordinates cannot alter the case nor can the fact that one of the
subordinates, the cashier, was a bonded employee who, if he had
acted on his own responsibility, might also have misappropriated the
same funds and thus have become guilty of estafa.
Neither can there be any doubt that, in taking money for his
personal use, from the funds entrusted to him for safekeeping and
substituting his personal checks therefor with instructions that the
checks were to be retained by the cashier for a certain period, the
appellant misappropriated and diverted the funds for that period. The
checks did not constitute cash and as long as they were retained by
the appellant or remained under his personal control they were of no
value to the corporation; he might as well have kept them in his
pocket as to deliver them to his subordinate with instructions to
retain them.
This is not a case where money was exchanged for checks drawn
against existing funds and available for immediate presentation to
the bank for payment. In such a case the checks, while not actual
money, would practically be the equivalent thereof and the
momentary diversion of the coin or currency would probably not be
held to constitute estafa.
But it is argued in the present case that it was not the intention of
the accused to permanently misappropriate the funds to himself. As
we have already stated, such intention rarely exists in cases of this
nature and, as we have seen, it is not a necessary element of the
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crime. Though authorities have been cited who, at first sight, appear
to hold that misappropriation of trust funds for

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short periods does not always amount to estafa, we are not disposed
to extend this interpretation of the law to cases where officers of
corporations convert corporate f unds to their own use, especially
where, as in this case, the corporation is of a quasi-public character.
The statute is clear and makes no distinction between permanent
misappropriations and temporary ones. We can see no reason in the
present case why it should not be applied in its literal sense.
The third element of the crime with which the appellant is
charged is injury to another. The appellant's counsel argues that the
only injury in this case is the loss of interest suffered by the Railroad
Company during the period the funds were withheld by the
appellant. It is, however, well settled by former adjudications of this
court that the disturbance in property rights caused by the
misappropriation, though only temporary, is in itself sufficient to
constitute injury within the meaning of paragraph 5, supra. (U. S. vs.
Goyenechea, 8 Phil.,117; U. S. vs. Malong, 36 PhiL, 821.)
The sentence appealed from is in accordance with the law and the
established facts and is hereby affirmed, with costs against the
appellant. So ordered.

          Araullo, C. J., Johnson, Street, Malcolm, Avanceña,

Villamor, Johns, and Romualdez, JJ., concur.

Judgment affirmed

___________

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