Philippine Supreme Court Jurisprudence > Year 1935 > March 1935 Decisions > G.R. No. 41200 March 26, 1935 - PEOPLE OF THE PHIL. v. MARIANO CU UNJIENG

061 Phil 236:

This case was brought to this court by virtue of the appeal taken by Mariano Cu Unjieng from the Judgment rendered therein by the lower court which sentenced him to an indeterminate penalty of from four years and two months of prision correctional to eight years of prision mayor, reserving to the Hongkong and Shanghai Banking Corporation, which was said to have been damaged in the sum of P1,411,312.80, the right to institute the proper separate civil action for the recovery of damages, with costs.

The crime with which said appellant was charged jointly with John Doe, whose identity, as alleged in the corresponding information, could not be established, and Manuel Carlos, was estafa through falsification of commercial documents, it being alleged in the complaint that during the period between the month of November, 1930 and July 6, 1931, said appellant and his two co-accused, willfully, unlawfully and criminally, after conspiring together with Rafael Fernandez who was accused in a separate case, and aiding one another, forged and falsified, in the City of Manila, 128 warehouse receipts covering a total of 179,572 piculs of sugar, and 50 sugar crop loan contracts involving 140,000 piculs; that they later made it appear, by using said documents, that they had a deposit, to their credit and at their disposal, of 179,572 piculs of sugar in the warehouses of the Pampanga Sugar Development Company, Inc., a corporation engaged in the sugar business and domiciled in the municipality of San Fernando, Province of Pampanga; and that they also had, by virtue of said 50 sugar crop loan contracts, a credit covering 140,000 piculs of sugar, knowing positively that they had neither deposit of sugar in said warehouse of the Pampanga Sugar Development Company, Inc., in the amounts set forth in the 128 forged and falsified warehouse receipts, nor any credit by reason of the sugar crop loan contracts, of the amount and importance alleged in said contracts; that by means of this artifice and forgery, they induced the manager of the Hongkong and Shanghai Banking Corporation to believe that they really had said goods, credit and imaginary transactions, and to grant them, because they so requested, an overdraft or disposable credit in the amount of P1,411,312.80, in excess of the money they had in said bank, under the security of the forged and falsified documents above stated; and after they had obtained said credit in the aforementioned deceitful manner, they began withdrawing from said bank, by means of checks, various sums in the total amount of P1,411,312.80, to the damage of the bank in question, as it did not recover any part of said amount.

The trial proceeded only with respect to the appellant because his co-accused Manuel Carlos was discharged in order to be used as witness for the Government and because the third accused, named John Doe, was not found nor could his identity be established before the trial.

So extraordinarily voluminous is the record of the case and so numerous are the documents introduced in evidence during the trial both by the prosecution and the defense, particularly by the latter, that it would be a difficult and unnecessarily tedious, not to say impossible, task to consider and analyze one by one even the most insignificant facts and details mentioned and discussed in the three volumes of which the brief for the defense consists. This is the longest case known in the annals of the judicial history of this country and the one that has taken the longest time to try. The brief for the appellant alone contains nearly two thousand pages, excluding the appendices thereof consisting of two volumes, and that for the appellee consists of a volume of 1,339 pages. The transcript of the stenographic notes is composed of 22,996 pages and the documentary evidence or exhibits, some of which contain many pages, amount to more than 46,000.

It being unnecessary, we shall not touch or mention in this decision those facts which, far from helping to clarify the points in controversy, rather serve to confuse them and to befog that which is in itself clear and which we so believe, after a conscientious study of the case.

The entire evidence shows that Rafael Fernandez, who was charged in criminal case No. 42244 of the Court of First Instance of Manila, with a crime of the same nature as that with which the appellant Mariano Cu Unjieng and his two co-accused are charged in this case (estafa of P1,411,312.80 through falsification of several sugar ware-house receipts and stock certificates of the Pampanga Sugar Development Company Inc., wherein the alleged injured party is also the Hongkong and Shanghai Banking Corporation), and with whom, according to the information, the three conspired in order to commit the complex crime of estafa and falsification described therein, had had long before June 16, 1931, several sugar transactions with Smith, Bell & Co., Ltd., a corporation doing business in this city. Five days prior to said date, Rafael Fernandez approached the manager of said corporation to ask him whether they could sell in the United States the sugar which Fernandez then had here and whether they could further advance him funds to assist him in the sugar business in which amongst others, he was engaged. He was told that Smith, Bell & Co., Ltd., could take charge of selling his sugar provided he gave satisfactory securities, that he would faithfully comply with the contract which said company might enter into in his name; but at the same time he was told that the company was unable to advance him any money for his said business. It was suggested to him, however, that he might perhaps obtain the money from the Hongkong and Shanghai Banking Corporation of this city.

Rafael Fernandez accepted the suggestion and went with the manager of Smith, Bell & Co., Ltd., to said bank to explain his wishes. As a result he was allowed by said bank to open an account known as Account No. 1, and later on he opened another account designated as Account No. 2. The conditions for the opening of said two accounts were that the credit which was to be granted him, as over-draft, would be for an amount equivalent to the price of the sugar which he bound himself to sell in the United States, at the rate of P6 a picul. In view of this understanding, Smith, Bell & Co., Ltd., who from that time had the assurance that the Hongkong and Shanghai Banking Corporation would advance money to Rafael Fernandez at the stipulated rate, and as said Fernandez, on the other hand, had obligated himself to pay said company a commission and to defray all the shipping, freight and insurance expenses, accepted Fernandez’s proposal to sell his sugar in the United States and, without losing time, sent cablegram Exhibit 836 to Henry W. Peabody & Co. of Boston, requesting said company to offer for sale four thousand tons of centrifugal sugar which was precisely what Fernandez wanted to sell.

It was on June 16, 1931, when Rafael Fernandez’s No. 1 Account in the Hongkong and Shanghai Banking Corporation was opened. He gave as security for the payment of the credit of P359,700 granted to him on said date, the warehouse receipts Exhibits A, A-1 to A-63 which called for a total of 63,967 piculs of sugar. Three days later, or on June 19, 1931, at his request he was granted another credit of P302,614 on his said No. 1 Account, and on this occasion he gave the warehouse receipts Exhibits B, B-1 to B-26 which called for a total of 53,780 piculs of sugar, as security for the payment thereof; and a few days later, that is on June 24, of said year, he again asked for and was granted another credit of P350,468 on his same No. 1 Account, to secure the payment of which he gave the warehouse receipts referred to in this case as Exhibits C, C-1 to C-36 which called for a total of 61,726 piculs of sugar. (Exhibit V.)

In the following month, and to be more accurate, on July 6, 1931, Rafael Fernandez opened another account in the same bank "The Hongkong and Shanghai Banking Corporation", which account was designated as Account No. 2. In this account Rafael Fernandez obtained a new credit of P464,750 (Exhibit V-2), and to secure the payment of said credit he assigned to said bank his rights as creditor stated in the 22 sugar crop loan contracts for the 1932 milling season which were issued in his name and apparently approved by the sugar central of the Pampanga Sugar Development Company, Inc., and in 28 other contracts of the same nature which were also issued in his name but guaranteed by said central, according to a footnote thereon. (Exhibits D, D-1 to D-49.) All said documents call for a total of 140,000 piculs of sugar subject to the conditions therein stated.

The understanding and conditions for the opening of said Account No. 2 for Rafael Fernandez were that the credit or overdraft to be granted him should not exceed 50 per cent of the value of the 1932 sugar crop loan contracts approved by the Pampanga Sugar Development Company, Inc., nor be more than 80 per cent of the value of the loans of the same nature, the payment of which was guaranteed by said central. In this manner was said account, in fact, opened, inasmuch as the amount of P464,750 in question represents 50 per cent of the value of the approved loans (Exhibits D, D-1 to D-15) and 80 per cent of the value of the guaranteed loans (Exhibits D-16 to D-49).

The total amount withdrawn by Rafael Fernandez from his said two accounts Nos. 1 and 2 from the opening thereof until shortly before the filing of this case was P1,749,263.47.

The lower court declared it established, and the evidence supports its conclusion, that Rafael Fernandez disposed of the money which he had withdrawn from time to time from his said two accounts Nos. 1 and 2 in the Hongkong and Shanghai Banking Corporation, as follows:chanrob1es virtual 1aw library

He gave to GUILLERMO A. CU UNJIENG

(Exhibits W-39, W-34, W-31 and W-29 P325.000.00

Id. to GUILLERMO A. CU UNJIENG through THE

NATIONAL CITY BANK OF NEW YORK

(Exhibits W-33, W-21 and W-6) P350,000.00

Id. to MARIANO CU UNJIENG (Exhibit W-41) 10,000.00

Id. to THE YEK TONG LIN FIRE AND MARINE

INSURANCE CO., LTD (Exhibit W-32) 1,457.47

Id. to Cu UNJIENG & FERNANDEZ INVESTMENT CO.

(Exhibits W-37 and W-7) 11.000.00

Id. to EASTERN THEATRICAL ENTERPRISES

(Exhibit W-13) 6,000.00

Id. to THE NATIONAL CITY BANK OF NEW YORK

(Exhibits W-36, W-26, W-22, W-17 and W-3) 480,000.00

Id. to PEOPLES BANK AND TRUST COMPANY

(Exhibits W-40, W-38, W-30, W-20, W-19, W-5 and W-4) 227,882.30

Id. to PHILIPPINE NATIONAL BANK

(Exhibits W-23, W-11 and W) 70,687.70

Id. to CHINA BANKING CORPORATION

(Exhibit W-1) 150,000.00

Id. to PHILIPPINE TRUST COMPANY

(Exhibits W-16 and W-2) 90,000.00

Id. to NUEVA ECIJA SUGAR MILLS (Exhibit W-35) 5,000.00

Id. to MARIA LOPEZ MENA (Exhibit W-28) 708.33

Id to MARCELINA JOVEN (Exhibit W-18) 500.00

Id to CRISANTO ELIZALDE (Exhibit W-8) 1,896.72

Id. to JOAQUIN GONZALEZ (Exhibit W_25) 4,200.00

Id. to ESTEBAN MEDINA (Exhibit W-24) 1,625.00

Id to SMITH, BELL & CO., LTD. (Exhibit W-16) 83.50

Id. to JOSE SYQUIA (Exhibit W-14) 5,000 00

Id. to E. PENAFIEL (Exhibit W-12) 1,713.32

Id. to ROBERTO LAPERAL (Exhibit W-10) 2,000.00

Id. to RAFAEL MORALES (Exhibit W-9) 2,000.00

and he paid for interest and two check books

(Exhibits V, V-1 and W-27) 2,509.13

—————

Total 1,749.263.47

It appears from the evidence, however, that on different dates Rafael Fernandez made certain deposits amounting to P337,950.67 on his Account No. 2, and consequently it is just that he be credited with said amount.

It likewise appears from the evidence that the money which the Hongkong and Shanghai Banking Corporation failed to recover from the loans and advances granted by it to Rafael Fernandez in the manner indicated, for the reason that not only the warehouse receipts but also the sugar crop loan contracts which had been given to it as security for the payment of said loans and advances, were false, amounts to the large sum of P1,411,312.80 and said sum exactly represents the amount of damages sustained by said corporation.

Exhibits A, A-1 to A-63, B, B-1 to B-26 and C, C-1 to C-36 which apparently are warehouse receipts of the Pampanga Sugar Development Company, Inc., calling for a total of 179,473 piculs of sugar supposed to be deposited in the warehouses of said central, and Exhibits D, D-1 to D-49 which also apparently are sugar crop loan contracts entered into between various persons and Rafael Fernandez, the latter as creditor of the former, are not what they convey or purport to be on their face, the first being mere imitations and forgeries of the genuine warehouse receipts of said Pampanga Sugar Development Company, Inc., and the last simulations of sugar crop loan contracts. The appellant does not question this fact and it may be said that he impliedly admitted it at the trial.

It was Manuel Carlos who forged said documents imitating, with rare ability, the signatures of the manager and accountant of the sugar central in question, simulating their intervention in the execution of the said documents and making it appear in the sugar crop loan contracts Exhibits D, D-1 to D-49, facts and acts which have never taken place or are not true. If the testimony of this witness is to be given-credit, he committed said forgeries and simulations for the sum of P6,000 (t. s. n., p. 5391), at the instance and under instructions of the appellant Mariano Cu Unjieng, who, according to the theory of the prosecution, conspired with this witness and Rafael Fernandez.

The lower court in mentioning in its decision the case with which said Manuel Carlos imitates signatures, states the fact that at the trial said witness dexterously and easily imitated, one after another, the signatures of the manager and accountant of the Pampanga Sugar Development Company, Inc., named W. Trinidad and F. Cayetano, respectively; that of Sabina Sioco Viuda de Escaler, mother-in-law of Rafael Fernandez; and those of Jose L. de Leon and Augusto Gonzalez, president and secretary-treasurer, respectively, of said sugar central.

Therefore the conclusion of said court with respect to the nature of said documents Exhibits A, A-1 to A-63, B, B-1 to B-26, C, C-1 to C-36, and D, D-1 to D-49, and that it was Manuel Carlos who forged them, are conclusively supported by the evidence and are completely in accordance with the facts.

Manuel Carlos also forged the documents referred to in the case as Exhibits CC-1 and CC-2; DD-l to DD-44; EE-1 to EE-45; FF-1 to FF-40; GG-1 to GG-16; HH-1 to HH-68; II-1 to II-24; LL-1 to LL-61; MM-1 to MM-128; NN-1 to NN-112; OO-1 to OO-45; XX-4 to XX-8; XX-20 to XX-23; XX-47 to XX-64; XX-81 to XX-104; and ZZ, ZZ-1 and ZZ-2 which are supposed to be quedans of sugar deposited in the warehouses of the Pampanga Sugar Development Company, Inc.; Exhibits QQ-1 to QQ-7; XX-13 to XX-19; AA-1, AA-2 and AA-3; ZZ-5 to ZZ-11; 1, 2, 3 and 4 which are supposed to be stock certificates of said sugar central; Exhibits G, H, K, R-1, S-1, T-1 and U-1 which are supposed to be letters or answers of the manager of said central to certain letters addressed to him by the Malabon Sugar Company, Smith, Bell & Co., Ltd., and the Hongkong & Shanghai Banking Corporation; Exhibits 588; ZZ-35-1 and ZZ-35-A-1, and others which shall be discussed later.

By means of the warehouse receipts Exhibits CC-1 and CC-2, DD-1 to DD-44, EE-1 to EE-45, FF-1 to FF-40, GG-1 to GG-16, HH-1 to HH-68 and II-1 to II-24, the appellant, on November 19, 1930 (t. s. n., p. 300), acting as attorney in fact of his father, G. A. Cu Unjieng, succeeded in having the latter’s No. 2 Account in the National City Bank of New York opened (Exhibit CC). The condition imposed upon him for granting him the credit applied for was that the securities to be given by him, — and this is precisely what he himself had proposed — would consist of stock certificates of the Pampanga Sugar Development Company, Inc., and quedans of sugar already sold (t.s.n., pp. 289 to 300); and it was due to this means that he was able to withdraw or obtain from said bank the sums stated in said account, which reached the total amount of P822,035.58 (t. s. n., p. 300; Exhibit JJ). It must be noted that these transactions took place during the period between November 19, 1930, and April 23, 1931, which coincides with the period within which, according to the allegations of the information, the criminal acts therein imputed to the appellant were committed.

An important fact related to these transactions is that when Shaw, manager of the National City Bank of New York, asked the appellant, in the course of the latter’s negotiations with the former prior to the opening of the account in question, to produce the documents which the appellant was to pledge to the bank, he excused himself saying that he could not show them because they were contracts of a confidential nature. This means that the lower court was right in stating in its decision as follows:jgc:chanrobles.com.ph

"It will be noted that the defendant did not find it necessary to consult with Fernandez before refusing to exhibit the sales contracts. The natural thing for him to have done when Mr. Shaw asked to see the sales contracts, if he had really told Mr. Shaw that the quedans belonged to Fernandez and were merely held by his father in pledge, was to have replied that he would have to see Mr. Fernandez about the matter. Indeed, if the quedans were really held in pledge by his father, even though he had not told Mr. Shaw that this was the case, it would have been natural for him to refer the question to Fernandez before refusing to exhibit them to Mr. Shaw. The facts, therefore, that he refused to exhibit these contracts without referring the question to Fernandez in any way persuade the court beyond any doubt that he knew at the time that he negotiated with Mr. Shaw for the opening of this account that the Pampanga Sugar Development Company’s quedans which were to be pledged to secure the account were to be forged and spurious; that there were no sales contracts covering the same; and that there was no sugar behind those quedans." (Printed decision, pages 82, 83.)

In addition to that stated by the lower court these other facts may be mentioned:chanrob1es virtual 1aw library

The appellant, in order to obtain from the National City Bank of New York, on January 27, 1931, the loan of P22,700 (Exhibits II and II-24), upon the security of quedans of the Pampanga Sugar Development Company, Inc., which according to him, formed part of the quedans (some of them genuine and the others forged) with which Rafael Fernandez guaranteed to him the loan referred to in Exhibit 586, which is dated one day earlier (January 26, 1931), pledged precisely the forged quedans, so that it may be truthfully said that he knowingly selected them for that purpose; and it is very strange, comparing the forged quedans of the Pampanga Sugar Development Company, Inc., which were accepted by the appellant from said Rafael Fernandez as security for the alleged loans which he had been making to him from November 25, 1930, to February 10, 1931 (Exhibits 581, 581-A; 582, 582-A, 582-B; 583, 583-A; 584, 584-A, 584-B; 585, 586, 586-A, 586-B, 586-C, 586-D; 587, 587-A, 587-B, and 587-C), with the other genuine quedans of the other centrals which he received at the same time for the same purpose, that the piculs of sugar stated in the former are in round numbers, particularly those for large quantities as 1,000, 2,000, 3,000, 4,000, 5,000 and 6,000, and the piculs of sugar in the genuine quedans are stated in numbers ending in a unit and sometimes in a fraction of a unit. Furthermore in practically all the genuine quedans the lien to which the sugar referred to therein is subject, appears, while not the least mention of said lien is made in the forged quedans. Further still, all the forged quedans show on their face that the sugar covered thereby would be withdrawn from the warehouses of the Pampanga Sugar Development Company, Inc., on or before May 1, 1931, and not later. The appellant, however, withdrew none, either before, after or at any time, in spite of the fact that Rafael Fernandez failed to pay his accounts in connection with which the quedans in question had been pledged to him. If the appellant did not know the nature of the forged quedans, the facts just mentioned would have been more than sufficient to put him on his guard and refuse to accept them, much less pledge them himself on the same date on which he received them.

Prior to the opening to G. A. Cu Unjieng of his No. 2 Account in the National City Bank of New York, the appellant, as the former’s attorney in fact, assured the manager of said bank that the securities that he would give them would consist of quedans of the Pampanga Sugar Development Company, Inc., covering sugar already sold and ready for delivery in May, 1931; and it was for this reason that the manager of said bank, Shaw, in his cablegram of November 10, 1930, to his bank’s central office in New York, asking for authority to grant the credit applied for, stated as follows;

"May we advance up to P500,000 to G. A. Cu Unjieng against sugar quedans Pampanga Sugar Development Company on basis 75 per cent market value. We are assured only sold sugar will be pledged. Advance will be fluctuating but entirely liquidated by end of May." (Exhibit 32.)

Furthermore, in Mariano Cu Unjieng’s letter of January 8, 1931, to the Hongkong and Shanghai Banking Corporation where he also succeeded in opening an account which was designated as No. 3 Account of G. A. Cu Unjieng, of whom he was the attorney in fact (,Exhibit L), the appellant, referring to the check Exhibit L-I, for the sum of P193,500 which he had drawn against said bank, and to the quedans therein pledged by him which, as the quedans Exhibits A, A-1 to A-63, turned out to be forged, used the phrase "my sugar quedans." Said letter literally reads as follows:jgc:chanrobles.com.ph

"I have the pleasure to confirm, hereby, that I have today issued a check against you for the amount of P193,500 under my account No. 3, being the equivalent of 75 per cent of the market value at P7 per picul of my sugar quedans amounting to 34,888.58 piculs delivered to your good selves.

"Yours truly,

"G. A. CU UNJIENG

"By (Sgd.) MARIANO CU UNJIENG’’

This coupled with the fact that the appellant acquired 245 shares of the Central Azucarera de Ilocos in 1930, and the Central de Bataan in May, 1931, as will later be stated more in detail, not only refutes his contention that neither he nor his father was interested in the sugar business but also supports the testimony of Rafael Fernandez that he and the two Cu Unjiengs (the appellant and his father) had in fact been associated in the sugar business, the elder Cu Unjieng binding himself to be the capitalist partner and he and the appellant as industrial partners; proving at the same time, in connection with the other facts also to be mentioned later, that the understanding among the three was that the profits derived from the business would be distributed as follows: One-half to G. A. Cu Unjieng, and the other half to the appellant and Rafael Fernandez, in equal shares. This association in the sugar business between the two Cu Unjiengs (the appellant and his father) on the one hand, and Rafael Fernandez, on the other, began with the 1929-1930 milling season. At the beginning it was composed of the appellant and Rafael Fernandez but in order to give it greater impulse and the appellant’s father seeing that by associating with the two he would find a means of increasing the capital invested by him in the exchange business in which he was then actively engaged, he joined them at the invitation of the appellant, about January 20, 1930 (Trans., p. 15,773; Exhibit 1436 — Schedule 2), with the understanding that inasmuch as he was to supply all the necessary capital, the profits would be distributed in the manner already indicated.

Furthermore, we are led to the conclusion that such association among the three really existed under the above stated conditions by the following facts and evidence, to wit:chanrob1es virtual 1aw library

(a) Exhibits YY-67, YY-68, 1114, 1115, 1485, 1486, 105, 1061 147, 149, 148, 150, 124, 125, 173, 174, 190, 191, 204, 205, 2234, 2235, 2236, 2237, 2242 and 2243 which are checks issued by Fernandez in favor of G. A. Cu Unjieng and the appellant show that he in fact gave them their respective shares of some of the profits obtained and that when he gave the former a check for a certain amount, he also gave the latter another check for one-half of said amount, which discloses that the distribution among the three of the profits obtained, was made in said cases on the basis of 50 per cent for G. A. Cu Unjieng and 25 per cent for the appellant. Fernandez’s share does not appear in said documents, nor is there any other documentary evidence thereof because it is natural that he did not have to issue checks to himself for his share, having the funds in his possession. On this point the lower court very correctly said in its decision as follows:jgc:chanrobles.com.ph

"The theory of the defense that the sugar business belonged to Fernandez alone and that he convinced them that he was willing to tie up large amounts of capital in sugar for indefinite periods, in order to enable himself to get equal or less amounts of capital does not bear analysis, in view of the fact that no advantage would accrue to Fernandez from such an operation, but on the other hand, many disadvantages would result therefrom. Thus, he would be subjected to the interest charges on the transaction, the storage and insurance charges on the sugar thus tied up, and such deterioration as the sugar might suffer when in storage. In addition, he would be subjected to the dangers arising from the fluctuation of the market. It is not believed that the Cu Unjiengs, shrewd businessmen as they were, could be fooled by any such representation on the part of Fernandez." (Printed decision, p.31.)

(b) The appellant’s letter of February 1, 1930 (Exhibit ZZ-435-2), addressed to Albino Sy Cip, through whom said appellant succeeded in contacting the Shanghai Commercial & Savings Bank, Ltd., of Shanghai, to obtain the four loans of G$50,000 each, alluded to therein, has the same effect; and it should be well noted that in said letter the appellant speaks in plural, and in order to persuade said bank to grant them the subsequent G$100,000 of said four loans, he tells Sy Cip that the arrangement be conditioned on an option on their part to take or not to take the loans, agreeing, in the latter case to give the necessary notice two days in advance, and the reason given by him therefor is as follows:jgc:chanrobles.com.ph

"The sugar market is getting firmer and naturally there are few sellers for the time being," thereby making it understood that he and his associates were truly engaged in the sugar business and that they would use the money to be supplied to them in said business. It should be stated, in passing, because it does not fail to exert some influence on the decision of this case, that Exhibits 1287-10-A to 1287-10-E; ZZ-435-7, ZZ-435-8-A; ZZ-436-4, ZZ-436-5; ZZ-437-2, ZZ-437-4 and ZZ-437-5-A which are cablegrams, contracts, promissory notes, and other documents related to said loan, show that all the money obtained as loans from the Shanghai Commercial & Savings Bank, Ltd., of Shanghai, went into the possession of Mariano Cu Unjieng who transferred it to Cu Unjieng e Hijos, and this company, in turn, deposited the money to its account in the International Banking Corporation (now National City Bank of New York) and the Mercantile Bank of China (Exhibits 1287; ZZ-329-217-A; ZZ-329-291-A; ZZ-329-303-A; ZZ-329-p. 8; ZZ-329-p. 10; ZZ-329-p. 11); and it should be borne in mind that this last fact necessarily disproves the appellant’s contention that neither he nor his father may be considered co-owners of the sugar covered by the quedans mentioned by him in his letters Exhibits ZZ-135-8-B, ZZ-436-6, ZZ-437-4-A and ZZ-437-5-B, because it is clearly stated therein that he told Albino Sy Cip that the loans were not for him but for Rafael Fernandez exclusively. This is all the more certain because the appellant’s explanation of his intervention in the obtainment of said loans from the Shanghai Commercial & Savings Bank, Ltd., that he merely acted as guarantor of Rafael Fernandez is not satisfactory nor may it be seriously taken into consideration because it may be inferred from Exhibits ZZ-435-8-A, ZZ-436-5, ZZ-437-4 and ZZ-437-5 that it was not Rafael Fernandez alone who signed the promissory notes relative to said loans but also the appellant who signed not as a mere guarantor but as a solidary debtor.

If we are to believe the other reason given by the appellant that in order to obtain said loans he merely negotiated the same quedans which Fernandez had pledged to them as security for the payment of the pending obligations or accounts which Fernandez then had with them (the Cu Unjiengs) by also pledging the quedans, therefore the true debtor or person primarily liable in said transactions with the Shanghai Commercial & Savings Bank, Ltd., would be the appellant or his father of whom he is the attorney in fact, not Rafael Fernandez. It is absurd to believe that Fernandez obligated himself or agreed to obligate himself for the same debt, that is, the debt which the appellant imputes to him and for which he pledged said quedans to the Cu Unjiengs — assuming for the moment that such imputation is founded — and that created by the loans granted by the Shanghai Commercial & Savings Bank, Ltd., relative to which the same quedans were again pledged to said bank. Therefore the testimony of Fernandez should be given credit when, in reply to a question asked him whether or not he knew that Albino Sy Cip whom the appellant had approached as a means to contact the Shanghai Commercial & Savings Bank, Ltd., for the purpose of obtaining a loan, had suggested that the loan be applied for and granted to him, not to Cu Unjieng, he said as follows:jgc:chanrobles.com.ph

"A. — I had no knowledge of that fact; all I know was that Mr. Cu Unjieng approached me one day and told me that he was going to borrow from the Shanghai Commercial & Savings Bank several gold credits and told me that I would sign the promissory notes because the gold credits were needed by his father for his exchange transactions so his father would not need to sign the promissory notes, and as Mr. Sy Cip and the Shanghai Commercial & Savings Bank required that the gold credits be extended only for genuine commercial purposes (obviously they wanted to prevent, or appear to prevent, the lending of money for the purpose of speculating in exchange) he resorted to discounting the quedans that were bought by him through me, and making me sign the notes and he receiving the proceeds of the notes; he made me sign the notes but he received the proceeds of the notes, because he said the Shanghai Commercial & Savings Bank would not grant them facilities unless those facilities were used for genuine commercial transactions, and one of those genuine transactions was the purchase of sugar and as Mr. Sy Cip knew very well I was the one buying sugar in the market so perhaps he required my signature." (Trans., p. 20,653.)

(c) The securities Exhibits 1377, 1378 and 1379 which are supposed to be promissory notes executed by Fernandez and which prevailed, among other things, that Fernandez was to deliver to Cu Unjieng e Hijos sugar of the kind and in the quantities stated therein, prove the same fact, that is, that the appellant and his father were engaged in the sugar business. Said documents appear to have been executed in the month of April, 1930.

(d) Exhibit 585 which, as Exhibits 581, 582, 583, 584, 586, 587, 1734, 1735 and 1736, purports to be a promissory note executed by Rafael Fernandez on January 17, 1931, and secured by forged quedans of the Pampanga Sugar Development Company, Inc., proves exactly the same thing. Therefore, the appellant’s excuse that neither he nor his father was ever engaged in the sugar business is unfounded.

It cannot be doubted that the forged quedans Exhibits A, A-1 to A-63 came from the appellant because aside from the testimony of Perfecto Padilla to this effect, which is corroborated by the check for P705 (Exhibit 351) which bears the same date on which said quedans were negotiated by Rafael Fernandez in the Hongkong and Shanghai Banking Corporation, June 16, 1931, and by A. C. Hall said Rafael Fernandez assured that he received them from the appellant through said witness Perfecto Padilla. This shows that even disregarding the testimony of Manuel Carlos, who stated that he had forged said quedans under instructions of the appellant, the latter was not ignorant of the nature of said documents nor of the others as Exhibits B, B-1 to B-26, C, C-1 to C-36, D, D-1 to D-49, CC-1, CC-2, DD-1 to DD-44, EE-1 to EE-45 etc., as being forged and spurious for the reasons already set forth and for the other reasons which will hereafter be stated.

The appellant’s contention that before he obtained the four loans of G$50,000 each from the Shanghai Commercial & Savings Bank, Ltd., Rafael Fernandez already owed him, his father, and Cu Unjieng e Hijos various sums, is not supported by the evidence if certain checks enumerated in Exhibit 1436, Schedule 2, which they had been issuing to Fernandez are excluded. Fernandez executed no promissory note or document for any of these alleged obligations imputed to him by the appellant to show that he ever acknowledged them. Neither does it conclusively appear that he had pledged to the appellant the quedans which the latter gave as security for the payment of said four loans obtained from the Shanghai Commercial & Savings Bank, Ltd., of Shanghai. On the contrary, the evidence shows that on the occasions when G. A. Cu Unjieng, Cu Unjieng e Hijos or the appellant, through the latter, loaned money to Fernandez, as claimed by them, they required him to execute in their favor promissory notes with clauses setting forth in detail the securities given by him and the obligations he assumed for the payment thereof; and this is shown by the promissory notes Exhibits 581, 582, 584, 585, 586, 1374, 1375, 1376, 1377, 1378 and others, which we shall not enumerate in order to avoid being tedious, dated in and after April, 1930, which discloses to us the singular fact that instead of the relations between the appellant and Rafael Fernandez becoming closer and instead of more mutual confidence existing between them with the passing of the time, in view of the many transactions which the two formerly had, what took place is precisely all to the contrary. It seems as if the appellant had confidence in Fernandez in some cases, and in others no. Hence his attitude of being on guard, requiring Fernandez to give him and his father securities and collaterals.

It cannot be said that the appellant, his father or Cu Unjieng e Hijos returned to Fernandez the promissory notes which the appellant claims Fernandez had issued in their favor and in connection with which the latter had given him as security the quedans which he (the appellant) later pledged to the Shanghai Commercial & Savings Bank, Ltd., in order to obtain the aforesaid loans from the bank in question, after said loans had been obtained, because it would have been stupid and imprudent of them to do so, and it cannot be assumed that they had committed such imprudence because judging from their books, they were overcautious and full of foresight. It did not suit them to return the promissory notes to Fernandez because the appellant had signed them as evidencing said loans together with Fernandez, having bound himself as no less than a joint and solidary debtor. Prudence, and above all his experience as a business man, should have counselled him to keep said promissory notes because if Fernandez failed to pay said loans, inasmuch as he had to pay them and in fact he did pay them in the end, he would not lack tangible evidence on which to base an action against Fernandez for the recovery of the latter’s old obligation.

In addition to the foregoing, there is another consideration to be made on the same point. The loans granted to the appellant by the Shanghai Commercial & Savings Bank, Ltd., were not paid by Fernandez but by Cu Unjieng e Hijos of which the appellant was the attorney in fact and manager, this fact being evidenced particularly by Exhibit ZZ-435-13 wherein it appears that the appellant had shown Albino Sy Cip the necessary document to prove that he had paid one of said loans to the Shanghai Commercial & Savings Bank, Ltd., of Shanghai, and that the payment thereof, as well as that of the other three, was made with gold purchased by him from the Insular Treasury. (Exhibits ZZ-341, ZZ-342, ZZ-329-291-B and ZZ-329-30-B.)

The appellant’s explanation that upon receipt of the loans of G$50,000 each from the Shanghai Commercial & Savings Bank, Ltd., he credited Rafael Fernandez’s account with the amount represented thereby, deducting the same from the obligations of Fernandez which were still pending payment (Exhibit 1436, Schedule 2), far from finding support in the evidence, is disproved thereby, because it appears from said Exhibits ZZ-341, ZZ-342, ZZ-329-291-B and ZZ-329-30-B which are precisely the checks with the proceeds of which the appellant bought gold from the Insular Treasury, as stated, for the purpose of sending it abroad in payment of said loans, that it was the Cu Unjiengs who paid them, not Fernandez. If the appellant’s action, as he contends, was a mere innocent discounting operation on quedans pledged to him by Fernandez, — which cannot be believed because the quedans of the Mabalacat Sugar Central, Nos. 121, 138 and 156 (Exhibits ZZ-436-6 and ZZ-436-12-A) which formed part of those pledged appeared to have been issued in favor of said central by Rafael Fernandez, as judicial receiver (Exhibits ZZ-393, ZZ-394-90 and ZZ-394-91), and he should have known that Fernandez could not pledge them without the authority of the court inasmuch as it was through his efforts that Fernandez was appointed as such receiver by the Court of First Instance of Pampanga — there was no necessity of debiting Fernandez with the amount paid by the Cu Unjiengs for said loans. (Exhibit 1436, Schedule 2.) If they did so without Fernandez having received the benefit or proceeds of said loans, it means that they, or at least the appellant, as manager and attorney in fact of the Cu Unjiengs merely used him as a conscious and voluntary tool in order to obtain the loans in question by means of his name and of the alleged securities which, according to said appellant, Fernandez had given them; and it should be noted that in order to give the entries in his books regarding Fernandez’s alleged sugar accounts the semblance of truth, the appellant was not contented with merely debiting him the original amount of said four loans but also had the sum of P954.11 charged against him for each of said loans.

The fraud under consideration was discovered by the officials of the Hongkong and Shanghai Banking Corporation about July 9, or 10, 1931. The discovery thereof was brought about by Fernandez’s inquiries about sugar purchaser in Hawaii, a thing altogether incomprehensible to them, and the rumor that something anomalous had happened in the National City Bank of New York. After a conference between the managers of said two banks, the manager of the former sent one of its officials to the Pampanga Sugar Development Company, Inc., to verify the genuineness of the documents pledged to them by Fernandez as security for the credits which had been granted him with the result that all of them were found to be forged. Prior to this, other frauds had been perpetrated against the Peoples Bank and Trust Company and the National City Bank of New York and the discovery thereof took place about May 27th and July 7th of said year, respectively. The appellant and his father G. A. Cu Unjieng had timely and full knowledge of said discovery, particularly that of the fraud committed against the former, because Rafael Fernandez informed them thereof as soon as Douglas of said bank told him that the quedans which Fernandez had pledged to said bank as security for the overdrafts and loan granted to him and Guillermo A. Cu Unjieng, through the appellant, with the help of Fernandez, were forged and spurious. (Exhibits XX, XX-1, XX-3, 4, 5 to XX-10; Trans., pp. 828 et seq. and 6875 et seq.) Instead of being on their guard, inasmuch as the Cu Unjiengs then had various business ventures and transactions in common with Rafael Fernandez and the appellant could have reasonably said to himself that perhaps Fernandez had treated them in the same manner, the appellant, although feigning no knowledge of any of the frauds in question, with the cooperation of his father, extended to Fernandez, but in a reserved way, all the help possible, trying, of course, to place themselves in a safe position, the appellant having gone even to the extent of engaging the services of an attorney for that purpose in order to save some of Fernandez’s property, and of inducing the latter to sign, as he in fact signed, deeds of transfer, cancellation of liens, affidavits, antedated promissory notes or undertakings of payment, and some documents in blank; and the appellant encouraged Fernandez telling him not to worry because he and his father would fix everything. (Trans., pp. 2001, 2004, 6875 to 6880.)

The appellant attempted to prove that he and his father were as innocent victims of Rafael Fernandez as the other creditors of the latter, and that the sugar transactions which they had with Fernandez were only these of mere lenders who supplied him with money for said transactions. However, his behaviour, as already stated, and his passive attitude at several meetings which the creditors of said Fernandez held after the discovery of the frauds for the purpose of finding means to safeguard their respective rights, and the steps taken by him as soon as he learned what had been agreed upon at said creditors’ meetings, are highly incompatible with his claim that he was a total stranger to said frauds. (Trans., pp. 1999 et seq.)

What has been stated, that is that the appellant advised and helped Rafael Fernandez to save many of his properties, is proven by Exhibit A, Exhibits B and C which are attached as appendices to Exhibit ZZ-33, and Exhibits ZZ-34 ZZ-35-1, ZZ-35-A-1, ZZ-36, ZZ-37, ZZ-38, ZZ-39, ZZ-40, ZZ-41 and ZZ-42 which falsely state that Rafael Fernandez had transferred for a consideration certain rights which he had in the properties described in said documents to the persons whose names appear therein, who, in turn, after a few days, assigned and transferred them, directly in some cases and indirectly in others, to the Cu Unjiengs, also without consideration; and that Fernandez’s mother-in-law Sabina Sioco Viuda de Escaler, his sister-in-law Carolina Escaler, and his wife Josefa Escaler de Fernandez had received from Guillermo A. Cu Unjieng, on July 11, 1931, a loan in the sum of P500,000 with the obligation to pay the latter in the City of Manila, on demand, the sum in question, with interest at 12 per cent per annum, and an additional sum equivalent to 10 per cent thereof in case of litigation. (Trans., p. 6888.)

The appellant’s behavior is still more incompatible with his said contention if we bear in mind the established fact that when the Peoples Bank and Trust Company did not honor Fernandez’s check for P75,000 which the latter had drawn on his account in said bank in favor of Guillermo A. Cu Unjieng, the appellant’s father, and Guillermo A. Cu Unjieng negotiated it with the China Banking Corporation because the drawer did not have sufficient funds to meet the amount of the check, the appellant instead of being alarmed or taking some action against Fernandez, which was the most natural thing for any other person to do, knowing as he then knew the circumstances in which Fernandez was found for he was already aware that Fernandez had been discovered pledging forged quedans, on the contrary instructed his brother Cu Chen Yan, who was employed under him in the firms Cu Unjieng e Hijos and G. A. Cu Unjieng, to retain said check (Exhibit TT-21: Trans., p. 12,314), and in the meantime he and his father, through him, gave Fernandez the sum of P350,000 the appellant testifying at the trial that it was a loan (Exhibit 9G for P200,000; Exhibit 576 for P50,000; and Exhibit 460 for P100,000; Trans., p. 3597); and Fernandez, upon instructions of the appellant, deposited said sum in his current account in the China Banking Corporation on May 27, 1931, and immediately thereafter withdrew P 300,000 and P32,000 on the following day to pay something on account to the Peoples Bank and Trust Company in order to be able to withdraw, as he in fact withdrew from said bank, several of the forged documents which he had pledged thereto. (Trans., p. 1077; Exhibits YY-2594 and YY-2393.) This, which is evidently contrary to prudence and good judgment, qualities which the appellant is supposed to possess to a high degree, being then no less than the general manager and vice-president of the Yek Tong Lin Fire & Marine Insurance Co., Ltd., and the Yek Tong Lin Loan Company, Ltd., which are two corporations with a corporate capital of P500,000 each, and attorney in fact and manager of Cu Unjieng e Hijos, a company with a capital of P1,000,000, and also attorney in fact of G. A. Cu Unjieng, seems to prove necessarily that the appellant was not only aware of but was in no way a stranger to the frauds committed by Rafael Fernandez who obtained money here and there under the security of quedans and other documents which, while they apparently represented great value in sugar and stock of the Pampanga Sugar Development Company, Inc., were in fact absolutely valueless because they were forged, simulated and spurious. If the appellant was not in such a situation, he would have been very careful not to give Fernandez not only the large amounts in question but even one centavo, which was the most that he could have done for Fernandez inasmuch as he had refrained from taking any steps to the latter’s prejudice.

The appellant contends that as G. A. Cu Unjieng’s attorney in fact he gave the sum in question to Rafael Fernandez because the latter, in addition to having executed in his favor, as such attorney in fact, the promissory note Exhibit 588, which is false as will be shown later, gave securities by pledging to him the stock certificates of the Pampanga Sugar Development Company, Inc., specified therein, which are Exhibits 688-A to 588-I, the first six of them being the same as Exhibits QQ-1 to QQ-6 which are as spurious as the former, which Rafael Fernandez had pledged to the National City Bank of New York on April 5, 1931, and the appellant believed that said documents were good. This, apparently, is a good argument but it is destroyed by the following facts:chanrob1es virtual 1aw library

According to the appellant’s evidence, Exhibit 1437, Schedule 1, which is accountant Hwang’s report on the status of accounts Nos. 1, 2 and 3 of Rafael Fernandez with G. A. Cu Unjieng as of May 27, 1931, the former owed P1,174,789.35 to the latter who virtually had in his possession securities given by said Fernandez consisting of quedans calling for a total of 152,841.679 piculs of sugar valued at approximately P1,222,733.43, at the rate of P8 a picul, which value as may be seen, exceeded Fernandez’s indebtedness by P107,944.08 (Exhibits CC, DD to II inclusive). It will be remembered that when the appellant negotiated with the National City Bank of New York the opening of his father’s No. 2 Account in connection with which he pledged some of the quedans which, he claims, had been previously pledged to him by Rafael Fernandez, he assured that said quedans represented sugar already sold and ready for delivery in the month of May, 1931. On said date, May 27, 1931, G. A. Cu Unjieng’s No. 2 Account in said bank showed a balance against him in the amount of P790,801.88 (Exhibit JJ) and several demands had already been made upon him to liquidate the same. (Trans., pp. 428, 429.) If this is the case, we ask: Why did the appellant, as G. A. Cu Unjieng’s attorney in fact, instead of giving Rafael Fernandez P350.000, not pay said amount, or at least P262,500 to the National City Bank of New York where he had said account the payment of which had been demanded, in order to pay something on account and redeem some of Fernandez’s quedans the value of which did not exceed P350,000, and deliver them to Fernandez for him to withdraw the sugar covered thereby and thus save P87,500 which his father needed very badly in his exchange business? And granting that it did not occur to him to withdraw any of the quedans in question, why did he not deduct from the amount of P350,000 wanted by Fernandez the sum of P75,000 represented by the check which the latter had drawn in his favor (Exhibit TT-21) the previous day, and which was dishonored by the Peoples Bank and Trust Company, for lack of funds? And why did he retain in his possession during the months of June and July, 1931, Fernandez’s quedans, granting, for the moment, that they were given to him as security for previous obligation, without withdrawing the sugar covered thereby, knowing that said sugar was already sold and ready for delivery since May of said year? And, lastly, why did he not produce the contracts of which he spoke to Shaw of the National City Bank of New York, when he negotiated therein the opening of his father’s No. 2 Account, if it is true that his transactions with Rafael Fernandez were legitimate? The answer to these questions must necessarily be adverse to the appellant because everything indicates that he was aware of the nature of said documents, that is that they were absolutely worthless because they were spurious. The circumstances placed him in such a position that he had to give money to Fernandez in order to enable the latter to withdraw from the Peoples Bank and Trust Company the forged quedans which might incriminate both of them; and in order to give such disbursement the semblance of a loan, he conceived Exhibit 588 and the pledging of the stock certificates therein enumerated It is useless to say that had the appellant been aware of the spurious nature of said documents he would not have accepted them as security nor would he have given Fernandez any money, because if they were worthless to him, they were worth, at least, enough to enable him to secure money from the banks by pledging them thereto.

Furthermore, when on July 8, 1931, the frauds against the National City Bank of New York were discovered by its manager, Shaw, and the latter, upon insistent requests of Rafael Fernandez that the appellant be called to inform him thereof, called the appellant and informed him upon his arrival of what had occurred, that is, that the quedans and other documents which Fernandez had pledged to secure the payment of the credits which had been granted him as well as those that had been pledged as security for the payment of the loan granted to the appellant’s father were forged, the appellant merely feigned surprise saying that he could not understand how it all had happened. However, when he was no longer within view of Shaw but still in the latter’s office, he told Fernandez not to worry because he would fix everything; and on the following and subsequent days, in order to make good and comply with his promise, he had the transfers, cancellation of liens, promissory notes or obligations of payment and documents in blank above stated prepared. Conduct of this nature surely is not indicative of innocence on his part but, on the contrary, complicity; and more than complicity, it reveals cunning and craft because he thereby wished to conceal his complicity and because such act discloses his desire to be in a position where, in addition to being able to free himself from all liability, it would be possible for him, in case of necessity, to keep the property alleged to have been transferred to him and his father of whom he was the attorney in fact, by means of the simulated documents above stated, with absolutely no consideration. And there is nothing strange in his having so acted, with foresight, because, as the lower court, which had ample opportunity to observe him closely, stated, he is a man "of surpassing intelligence and as hard and shrewd a man as this court has ever had occasion to observe." It was upon the appellant’s instructions and suggestion that Fernandez decided to obtain credits by way of overdrafts from the Hongkong and Shanghai Banking Corporation, and Fernandez did so thus making himself the appellant’s tool, in order to provide the latter, himself and G. A. Cu Unjieng who was then feverishly engaged in the exchange business, with funds necessary for the operation of their respective business, and at the same time pay the most pressing obligations which they had with other banks, secured by forged and spurious sugar quedans and stock certificates of the Pampanga Sugar Development Company, Inc. This is clearly shown by the fact that from the funds withdrawn by Rafael Fernandez from his Nos. 1 and 2 accounts with the Hongkong and Shanghai Banking Corporation, P703,457.47 went, has already stated, into the possession of the appellant, his father and principal G. A. Cu Unjieng, and into the business in which they were interested, or at least, it was they who were most benefited by said sum because P325,000 thereof were paid to the appellant, as attorney in fact of his father G. A. Cu Unjieng (Exhibits W-39, W-34, W-31 and W-29); P350,000 were applied to the payment of the balance of said Guillermo A. Cu Unjieng’s No. 2 Account in the National City Bank of New York, an account which could be opened only through the appellant’s efforts (Exhibits W-33, W-21 and W-6; Trans., pp. 289, 299, 302 and 304); P10,000 went to the appellant (Exhibit W-11); and the sums of P11,000, P6,000 and P1,457.47 went into the companies stated in Exhibits W-37 and W-7, W-13 and W-32 all of which are associations or companies managed, directed and maintained with the Cu Unjiengs’ money, without excluding the Appellant.

It should be stated at this time that said No. 2 Account of G. A. Cu Unjieng in the National City Bank of New York was secured by the appellant with quedans and stock certificates of the Pampanga Sugar Development Company Inc., and said quedans and stock certificates which are exactly of the same manufacture, source and nature as the forged quedans Exhibits A, A-1 to A-63, B, B-1 to B-26, C, C-1 to C-36, etc., are likewise forged and spurious. They are the aforesaid Exhibits CC-1 and CC-2 DD-1 to DD-44, EE-1 to EE-45, FF-1 to FF-40, GG-1 to GG-16, HH-1 to HH-68, II-1 to II-24 and AA-1 to AA-3, the same documents which the appellant, without disclosing his identity at the beginning, tried to recover from the National City Bank of New York, but failed, by reason of circumstances independent of his will. The reason for this is that the fraud perpetrated against said bank and that perpetrated against the Hongkong and Shanghai Banking Corporation from which the money for the redemption of the documents in question was to be obtained, had already been discovered, and furthermore said documents were delivered to the city fiscal’s office upon demand of said office. In connection with this incident, the fact is worth mentioning that when the appellant, who had gone to settle his father’s account with the National City Bank of New York and at the same time to express to the manager thereof his desire to withdraw the documents in question, was informed that said documents had been delivered to the city fiscal’s office, he was greatly alarmed and could not repress nor even dissemble his excitement (Trans., pp. 743 and 744), and the reason is not hard to guess; he did not have a clear conscience. The appellant’s testimony that he informed the manager of the National City Bank of New York (Shaw) that the quedans with which he was to secure his father’s No. 2 Account would belong to Fernandez, cannot be given credit because said manager categorically denied it. Shaw’s testimony deserves more credit from the court because it is supported by the evidence. It will be remembered that, as stated on page 14 of this decision [original], when the appellant approached Shaw to ask for the opening of his father G. A. Cu Unjieng’s No. 2 Account, Shaw immediately sent the cablegram which is quoted on said page. Now then, in said cablegram Shaw did not tell to his bank’s central office in New York that the quedans with which G. A. Cu Unjieng was to secure his loan by way of overdraft would belong to Rafael Fernandez or to another, not to him. We entirely concur in the lower court’s reasoning that "if Mr. Shaw had been advised that G. A. Cu Unjieng’s interest therein (referring to the quedans) was merely that of pledge, he would have notified his head office to that effect because of its bearing upon the soundness of the security offered." (Printed decisions, p. 81.) The loan or overdraft involved was not for a negligible sum but for half a million pesos which, after it had been granted, amounted to P822,035.58 in April, 1931 (Exhibit JJ).

The first time mention was made to said witness (Shaw) that the quedans which were to be pledged as security belonged to Fernandez and that the latter had pledged them to G. A. Cu Unjieng, was after May 31, 1931. Shaw’s testimony on this point was as follows:jgc:chanrobles.com.ph

"The name of Rafael Fernandez was never mentioned to me in connection with this account. After May 31, when I began to press Mariano Cu Unjieng for the payment of this account was when he mentioned that Rafael Fernandez had any connection therewith." (Trans., p. 312.)

The appellant’s conduct may well be explained by the fact that a few days before, or on May 27, 1931, he already knew that the fraud perpetrated in the Peoples Bank and Trust Company had been discovered.

The appellant’s contention that the promissory notes Exhibits ZZ-35-1 and ZZ-35-A-1 of which Exhibits ZZ-35 and ZZ-35-A are mere photographs, for P250,000 each, are authentic and were executed for cause by Sabina Sioco and the other persons who signed them, is untenable, not only for the reasons already stated, that is, that they are spurious, but also because the obligation, the payment of which it was desired to secure by said promissory notes, was of the nature stated in Exhibit 588; and it so happens that this document, Exhibit 588, as said Exhibits ZZ-35-1 and ZZ-35-A-1, is forged and spurious, and that it was prepared at the suggestion and upon instructions of the appellant after having had an understanding with Rafael Fernandez. The name of Sabina Sioco Viuda de Escaler appearing in said document was placed there by Manuel Carlos (Trans., p. 5381), and said document was delivered by the appellant to Manuel Carlos for him to fill in with the widow’s name. Exequiel Floro affixed his signature to said document in the presence of the appellant and Rafael Fernandez and, according to said witness, neither the alleged signature of Sabina Sioco Viuda de Escaler nor that of Rafael Fernandez was there at that time (Trans. pp. 3535 and 3536). Professor Beyer, who testified as a handwriting expert, assured that the alleged signature of Sabina Sioco Viuda de Escaler above stated is not the same as said woman’s authentic signatures, or in other words the samples of her authentic signatures given him for purposes of comparison, are written by a hand other than that which wrote the signature appearing in the exhibit in question.

There can not be the least doubt that Exhibit 588, which is a promissory note claimed by the appellant to have been given to him by Fernandez as evidence that Fernandez had received from the appellant the P350,000 which he deposited in the China Banking Corporation on May 27, 1931, is forged, for the following reasons:chanrob1es virtual 1aw library

(1) If it is true that Rafael Fernandez was given the P350,000 by means of the three checks: Exhibit 460, dated May 27, 1931, for P100,000 drawn against the Bank of the Philippine Islands by G. A. Cu Unjieng through the appellant as his attorney in fact, and deposited by the same drawee in the China Banking Corporation on the same date; Exhibit 96 for P200,000 drawn against the China Banking Corporation on the same date of May 27, 1931, and collected by Rafael Fernandez; and Exhibit 576 for P50,000 drawn also on the same date against the International Banking Corporation and in favor of Rafael Fernandez, it is also true that he did not use the money in question for himself alone because, acting under the appellant’s instructions, he used said money to pay the pending obligations which he and G. A. Cu Unjieng, through said appellant, had in the Peoples Bank and Trust Company, after it had been discovered that the quedans which Fernandez and the appellant had pledged therein were forged. On this point the appellant contends that inasmuch as he had absolutely no knowledge of the fact that Rafael Fernandez, in order to succeed in making the Peoples Bank and Trust Company grant to G. A. Cu Unjieng, of whom he was the attorney in fact, the loan of P150,000 for which Fernandez had applied in the name of G. A. Cu Unjieng about the beginning of November, 1930 (Exhibit XX), was to give on his own account security consisting of forged quedans, as Fernandez, according to the appellant, approached the latter upon knowing that he was in need of money to tell him that Fernandez could help him obtain said loan and that it would be easy for said Fernandez to obtain it because he was a stockholder of said bank and was, furthermore, a friend of Mullen’s, the manager thereof, the discovery by said bank that the said quedans were really forged could not have exerted any influence on his mind. This argument of the appellant has little weight because knowing, as he in fact knew, that the first half of the loan — for he requested that the same be given him in two parts — or the sum of P75,000 was secured exclusively by the 15000 shares of the Yek Tong Lin Fire & Marine Insurance Co., Ltd., and by the other 1,000 shares of the Yek Tong Lin Loan Company, Ltd., stated in Exhibit XX-2, he must have necessarily known that the other half, which was given to him later, was also secured by other securities necessarily distinct from the said shares of the two Yek Tong Lin companies; and it is incredible that he could have even supposed that no other securities were required of him or that none was given, because it was clear to him that his shares in the Yek Tong Lin companies enumerated in said Exhibit XX-2 served only and exclusively to secure the first half of the loan. No other conclusion can be inferred from the unequivocal terms of the letter of the appellant’s father (Exhibit XX-121), dated November 12, 1930, addressed to the Peoples Bank and Trust Company, which reads as follows:jgc:chanrobles.com.ph

"I wish to confirm the action of my son, Mr. Mariano Cu Unjieng, in signing as my attorney in fact a collateral note for P75,000 dated November 12, 1930 payable in 90 days, with interest at 9 per cent payable monthly, secured by 1,000 shares of Yek Tong Lin Fire & Marine Insurance Co.; Ltd., and 1,000 shares of Yek Tong Lin Loan Company Ltd., as I have given him full power to borrow money for me and to pledge, mortgage and hypothecate my property, real or personal, in accordance with the attached copy of power of attorney executed by me in his favor on June 23, 1926. I also confirm his action in signing powers of attorney in favor of the Peoples Bank and Trust Company to sell, assign, transfer and make over my Stock Certificates Nos. 102, 103, 127, 95, 96, 97, 98, 99, 100 and 101 of Yek Tong Lin Fire and Marine Insurance Co., Ltd., and Stock Certificates Nos. 100, 101, 102, 103, 128, 95, 96, 97, 98 and 99 of Yek Tong Lin Loan Company, Ltd.

"I furthermore wish to confirm that in the future and until further advice from me Mr. Mariano Cu Unjieng has my authority to borrow money in my name and to sign corresponding promissory notes, mortgages, pledges or other documents."cralaw virtua1aw library

(2) Exhibits 590, 589 and 589-A considered together, show that the first does not state the facts as they really occurred. On the contrary, they prove that the appellant who, as was seen, excels Rafael Fernandez, to a great extent as to foresight and craft, although the latter was his teacher for sometime while he was studying in the Jose Rizal College, made Fernandez prepare said document in his own handwriting for the purposes which said appellant already had in mind, this fact being evident from the circumstance that the check for P300,000 to which said documents Exhibits 589 and 589-A refer, was not drawn on the date appearing on its face, June 15, 1931, but several days earlier, notwithstanding the fact that it bears said date. The document in question, Exhibit 590, shows from the date it bears that it was prepared on June 10, 1931, and it should be noted that in its last paragraph Rafael appears as saying that he was paying G. A. Cu Unjieng with a check for P300,000, referring undoubtedly to the check dated June 15, 1931, which is the same check referred to in Exhibits 589 and 589-A. With respect to this fact, Fernandez testified that on May 27, 1931, after the appellant, as attorney in fact of G. A. Cu Unjieng, had given him the sum of P350,000 for the purpose of settling the anomaly discovered in the Peoples Bank and trust Company, said appellant requested him to draw in his favor a check for P300,000 and it was then agreed between them that said check should not be negotiated until money had been obtained from the Hongkong and Shanghai Banking Corporation, but that as said check had been prematurely presented for payment by one of the appellant’s employees because he was not given the necessary instructions as to how and when to negotiate it, the same was dishonored by the bank for lack of funds.

(3) The checks Exhibits W-39 and W-34 for P200,000 and P100,000, respectively, with which Rafael Fernandez substituted the check for P300,000 (Exhibits 589 and 689-A) which was rejected or dishonored for lack of funds and with which the appellant now shields himself, has no connection whatsoever with Exhibit 588 because the latter attributes an obligation of P350,000 to Rafael Fernandez and those who signed said document with him, while the former checks are only for the sum of P300,000; and just as the appellant could ask Fernandez to draw a check for P300,000 in his favor, so also could he have asked Fernandez to draw in his favor a check for a larger sum: as P350,000 for instance, instead of only P300,000, because the obligation referred to in Exhibit 588 amounted to P350,000. If the appellant did not do so, it was for the reason that it was never thought of that said Exhibits W-39 and W-34 would be in payment of the credit expressed in said promissory note Exhibit 588. On the other hand, the appellant testified that the understanding between him, on the one hand, and the signers of Exhibit 588, on the other, was that payment was to be made ten days after the execution thereof (Trans., p. 16,640). The Exhibit in question, however, does not say so; the condition therein stated is "On demand", that is, with no fixed date. What has been stated is supported by the fact that Exhibit 588 was not cancelled, nor were the stock certificates alleged to have been given as security for the payment of said sum of P350,000 returned to Fernandez.

(4) When the appellant requested Fernandez to draw in his favor the check which proved useless because it was dishonored for lack of funds, he did not tell Fernandez that it was in payment of the obligation stated in Exhibit 588.

(5) When said postdated check of Rafael Fernandez (Exhibits 589 and 589-A) was dishonored by the bank on which it was drawn for the reason already indicated, the appellant should not have granted Fernandez further credit, because any other person in his place would have so acted under the circumstances; but the evidence shows that the appellant granted him further credit without the least hesitation or reservation, giving him P30,000 without any security (trans., p. 16,675); and

(6) If there was really no understanding between Rafael Fernandez and the appellant, or if the sugar business of one was not also the other’s, it would be inexplicable why after the check for P300,000 had been dishonored and after the appellant’s experience with Exhibit TT-21, which is Rafael Fernandez’s check for P75,000 which was likewise dishonored for lack of funds on May 26, 1931, said appellant did not take any action against him, or did not learn lesson at least, but on the contrary gave him disinterestedly and with no security another loan of P30,000, knowing that Fernandez was still in default in the payment of the balance of P50,000 which he owed, because, assuming that the P300,000 referred to in Exhibits W-39 and W-34 were in payment on account of the P350,000 referred to in the alleged promissory note Exhibit 588, Fernandez would naturally be still indebted in the said sum of P50,000.

If the appellant considered himself innocent of the crime with which he is charged in the information, it is inexplicable why he has gone to the extent of resorting to falsification. If he did so, it was because he wanted, as Rafael Fernandez, and undoubtedly with more determination than the latter, to erase that which did not suit him and mislead everybody; and this act of his excludes the idea that he did not cooperate in the perpetration of the forgeries and frauds charged. It is true that the rule is well settled and it has repeatedly been reiterated in this jurisdiction that the testimony of an accomplice or of one who admits having taken part in the commission of a crime should be accepted with the greatest care and caution, in view of the polluted source thereof, in order to be used in evidence against an accused; but this does not mean that said evidence should necessarily be rejected for not being the best evidence. The more reasonable and better rule is that when two coprincipals or coparticipants in the commission of a crime agree in their narration to explain what they and others or a third person did to commit the said crime, and their testimony is reasonably true and is furthermore corroborated by other evidence, such narration is in itself a competent and admissible evidence. (U. S. v. Bagsic, 35 Phil., 327; People v. Giray and Ananias, G. R. No. 35834, 56 Phil. . 847; U. S. v. Remigio, 37 Phil., 599; U. S. v. Ambrosio and Falsario, 17 Phil., 295.) The testimony of Rafael Fernandez and Manuel Carlos is precisely of this nature and is supported by the documents above stated.

The fact that the appellant conceived the preparation of said Exhibits 588, ZZ-35-1 and ZZ-35-A-1 cannot but be considered foresight and craft because he must have then thought that if the latter two documents did not produce the desired results by reason of the circumstance that they were prepared after the discovery of the frauds committed against said three banks, Peoples Bank and Trust Company, the National City Bank of New York and the Hongkong and Shanghai Banking Corporation (July 11, 1931), the former which is dated May 27, 1931, would, and the appellant would then have something tangible to shield himself.

The appellant, his father and Rafael Fernandez had many things in common, and, notwithstanding the appellant’s testimony to the contrary, the three were interested in each other’s business although some to a greater extent than the others. The appellant and Rafael Fernandez were doubly godfathers (compadres) because each was sponsor in the baptism of the other’s son. The two were inseparable friends; they were associated in their work as well as in their diversions, and, according to the appellant’s own admission, were very intimate.

In the two corporations the Yek Tong Lin Fire & Marine Insurance Co., Ltd., and the Yek Tong Lin Loan Company, Ltd., the majority shares of which was, and still are in the hands of the Cu Unjiengs, Rafael Fernandez was one of the important stockholders, and in Rafael Fernandez’s business known as Micpi, the appellant was a very powerful stockholder because his will could have prevailed over that of any other stockholder in view of the fact that he had acquired 1,300 shares thereof in addition to the 30 shares which he formerly had (Exhibit 622) and the properties of the business described in the deeds of transfer (Exhibits 605 and 606). It is true that the appellant disclaimed all knowledge of said transfers prior to the trial, having testified thereat that Fernandez made said transfer behind his back in order to save his property upon discovery of his fraudulent acts; but it is no less true that the documents in question were delivered to him after they had been duly executed, by the notary public before whom they were ratified, nor is it less true that the appellant gave instructions to said notary to prepare the necessary documents. (Exhibit 622; Trans., p. 6,434; Exhibit 1587; Trans., p. 21,769.) The notary public in question so testified (Trans., p. 21,754), and there is no reason for doubting his testimony because there is nothing of record showing partiality on his part in favor of Fernandez or against the appellant. If the appellant’s allegation that Rafael Fernandez owed them many hundreds of thousands of pesos is true — and it should be borne in mind that all his efforts were directed to prove this fact — then his excuse proves childish and absurd, because Fernandez, in order to save his properties, would not have placed them in the name of the Cu Unjiengs, they being his biggest creditors, but in that of another, as for example a relative or a friend. From all the foregoing, the conclusion is inevitable that the appellant had full knowledge of the transfers in question.

It is timely to state at this juncture, because it has relation to one of the appellant’s points of defense by contradicting it, that by reason of said transfers the appellant credited nothing to Rafael Fernandez in connection with the latter’s alleged accounts with the Cu Unjiengs.

When G. A. Cu Unjieng, through the appellant, desired to foreclose his mortgage on the Mabalacat Sugar Central about the first semester of the year 1929 (Trans., p. 17,187), said appellant recommended to the Court of First Instance of Pampanga where the action to that effect was instituted, that Rafael Fernandez be appointed receiver, as he was in fact until shortly after June 9, 1931. (Exhibit ZZ-174.)

The two, the appellant and Rafael Fernandez, were interested to the same extent in two concessions of the Carnival Association in the years 1930 and 1931, and they obtained very substantial profits from said enterprise. (Trans., pp. 16,879, 21,183 and 6,181.)

They were also interested in the acquisition of shares of the Central Azucarera de Ilocos about the latter part of the year 1930, and, as a matter of fact they later managed said central, the appellant acting as president thereof with 245 shares (Exhibits 1576, 157-A to 1576-D); Rafael Fernandez as manager with 531 shares; and Leopoldo Cu Unjieng (the appellant’s brother) and Castor P. Cruz, as directors, with 5 shares each. (Exhibit ZZ-320.) All the expenses incurred in the acquisition of said 786 shares were defrayed with money obtained from the credits granted to Rafael Fernandez in the Peoples Bank and Trust Company. (Exhibits YY-3906, YY-1181, YY-541, YY-4272, YY-3854, YY-3867, YY-3910, YY-3957, YY-3961, YY-3960, YY-3912, YY-3959, YY-3913, YY-3911, YY-3956, YY-3907, YY-3958, YY-3909, YY-3914, YY-3908, YY-3962, YY-3963.) Although it may seem a digression, it is not out of place to state herein, inasmuch as mention has been made of the Central Azucarera de Ilocos, that the following considerations of the lower court appearing in its appealed decision are very well founded, to wit:jgc:chanrobles.com.ph

"In addition to this financing through the bank accounts in Fernandez’s name, the central secured a loan from the China Bank in the sum of twenty thousand pesos (P20,000) and overdraft facilities with the Peoples Bank in the same amount. Both of these accounts were guaranteed by the Yek Tong Lin Company. (Exhibits 1225, 1225-A, ZZ-313, ZZ-314, and ZZ-315.) These guarantees were signed by the defendant in behalf of the Yek Tong Lin Company The proceeds of the loan from the China Bank were deposited in the overdraft account in the Peoples Bank.

"After the discovery of the fraud, the Peoples Bank called the overdraft and the defendant assumed joint and several liability with the Yek Tong Lin Company for the account, in consideration of an extension, the account then amounting, with interest, to twenty-one thousand five hundred eighty-one pesos and seventy-four centavos (P21,581.74). (Pages 9561, 9562; Exhibit ZZ-312.) The account was paid on July 24, 1931, by the Yek Tong Lin Company and this latter company thereupon took judgment against the Ilocos Central without including Mariano Cu Unjieng, its manager and co-guarantor, as a defendant, on November 23, 1931, while this case was being tried. (Page 9566, Trans.) Through this judgment, naturally, the Cu Unjiengs have acquired complete control of the central and do not need to assert their share control for such purpose.

"It is very significant in connection with the story of this central that, notwithstanding the fact that the shares were held in the name of Mariano Cu Unjieng and Fernandez, the central was financed so heavily by means of the overdraft account standing in Fernandez’s name in the Peoples Bank and Trust Company. If Fernandez’s story is accepted, all the shares purchased in his name were transferred to Mariano Cu Unjieng. Cu Unjieng himself admits that he was the owner of two hundred forty-five (245) shares thereof. As president of the company, he must have known the extent to which Fernandez was financing the company from the overdraft account in the Peoples Bank." (Printed decision, pages 43, 44.)

It should be borne in mind that the credit which Fernandez had in the Peoples Bank and Trust Company in those days was obtained by means of pledging forged quedans.

On March 16, 1931, the appellant and Rafael Fernandez organized the partnership known as C. & F. Investment Company, that means Cu Unjieng and Fernandez Investment Company, which began functioning with a capital of P244,763.20 owned by both of them in equal parts, according to the provisions of the partnership agreement thereof, Exhibit XX-120. It is likewise timely to state at this juncture, in connection with said partnership C. & F. Investment Company because it proves that after the discovery of the frauds, the appellant induced Rafael Fernandez to transfer his properties without any consideration in order to prepare his defense, that the books and documents of said partnership contain data to the effect that all the contributions given to the partnership by Fernandez amounted to P254,063.69. (Exhibits YY-3690, YY-4277, YY-1220, YY-4243, YY-3288, YY-3361, YY-3804, YY-3057, YY-3394, YY-4118, YY-3803, YY-1129, YY-2333, 1245, YY-3526,YY-3073,YY-3074,YY-3794,YY-3833,YY-4104,YY-4132,YY-4220, YY-4231, YY-1977, YY-376, YY-224, YY-266, YY-621, YY-656, YY-871, YY-884, YY-1829, YY-910, YY-924, YY-941, YY-2174, YY-232, YY-538, 388, YY-955, YY-1024, YY-60, YY-91, YY-956, YY-918, YY-138, W-37, W-7, 1585, YY-2117, and YY-1180; testimony of Fernandez, trans., pp. 5974 to 6355, 6390 to 6450, 8371 to 8395; and of the appellant himself, trans., pp. 16940 et seq., and 19,501 et seq.) According to the appellant’s evidence, however, Rafael Fernandez parted with all his rights and interests in the C. & F. Investment Company in favor of the Cu Unjiengs for the sum of only P140,000. (Exhibit ZZ-36 dated July 1, 1931.) This cannot but arouse suspicion on the veracity of said evidence and the following excerpt from the appealed decision does not fail to give additional reason for not taking it into consideration:jgc:chanrobles.com.ph

"There is a conflict in the testimony as to the real date of the execution of this document. Cu Unjieng testified that it was executed on the date it bears. Fernandez, on the other hand, testified that it was not executed until July 10 (page 6080, Trans.) . In this he is corroborated by the admitted fact that no effort was made to register it until after the discovery of the fraud." (Printed decision, pp. 51, 52.)

We fully agree with the lower court and we are of the opinion that the exhibit in question is but one of the several documents prepared at the suggestion of the appellant after the discovery of the frauds, in order to help Fernandez to save some of his properties, to protect the appellant himself, and erase all traces of his complicity with said accused and witness Rafael Fernandez.

About the month of July, 1930, the appellant employed Rafael Fernandez general manager of the Yek Tong Lin Fire & Marine Insurance Co., Ltd., in this company’s fire insurance activities. The appellant was then at the head of said company and as the lower court correctly said in its decision:jgc:chanrobles.com.ph

"Prior to that time they had had separate offices. Upon receiving this appointment, Fernandez took offices on the second floor of the Yek Tong Lin Building at 320 Dasmariñas, on the ground floor of which Mariano Cu Unjieng had his offices. These offices were arranged in such a way that Fernandez had to pass through Cu Unjieng’s offices to go upstairs to his own offices. This brought them into daily contact with each other. (Exhibits 504, 504-A, 506, and pages 2056 and 2059, Trans.) ." (Printed decision, p. 40.)

About the month of May, 1931, the two embarked in another sugar business by acquiring the sugar central known as Bataan Central with money from the credit which Fernandez had opened in the National City Bank of New York by pledging forged quedans therein. As in the case of the Central Azucarera de Ilocos the appellant was made president of the company and Fernandez its manager. The following excerpt from the appealed decision is fully supported. by the evidence:jgc:chanrobles.com.ph

"The shares were purchased for five hundred pesos (P500) each, which was their par value, and of the two hundred sixty-six (266) shares purchased two hundred sixty-four (264) were put in the name of Exequiel Floro on the instructions of Mariano Cu Unjieng (page 8040, Trans.) . Exhibit 588-J is the share certificate for these shares. This certificate was produced by the defense at the trial (page 3278, Trans.) . The evidence is contradictory as to how it came to be in the possession of the defendant at that time. Fernandez testified that on the instructions of Mariano Cu Unjieng the share certificate was put in the name of Floro when purchased, and was thereupon immediately indorsed in blank and given to him (pages 6421, 8038 and 8040). Floro testified that he knew nothing about these shares when they were purchased; that he had never had the certificate therefor in his possession; that he first learned of the fact that those shares had been purchased in his name when he received a notice of a stockholders’ meeting; and that he thought that that certificate was among the documents he endorsed after the discovery of the fraud. (Pages 3536-3538, Trans.) On the other hand, the Cu Unjiengs testified that this share certificate was being held by them as a counter-guarantee for the Yek Tong Lin Fire & Marine Insurance Company at the time of the discovery of the fraud. (Page 16,672, Trans.) In any case, it is certain that this share certificate, the money for the purchase of which, or one hundred thirty-two thousand pesos (P132,000), was obtained by Fernandez as a result of a fraud upon the National City Bank, similar to the fraud perpetrated upon the Hongkong Bank v which forms the subject matter of this case, turned up in the hands of the Cu Unjiengs after the discovery of the fraud.

"The purchase of these two small centrals was associated by Fernandez with the pending foreclosure proceedings against the Mabalacat Sugar Central. He explained that the Cu Unjiengs knew that they were going to get three or four other small centrals for the purpose of putting them under one management and giving them the benefit of one good technical man, thus spreading the resulting overhead. (Pages 6125 and 8028, Trans.)

"These investments demonstrate that the defendant had a far deeper interest in the sugar business than that of a mere lender of money upon sugar quedans as security." (Printed decision, pp. 45, 46.)

In June, 1930, they also organized the corporation known as the Eastern Theatrical Enterprises. The appellant was the president of the corporation and Rafael Fernandez its treasurer. The facts relative to this enterprise and the conclusion arrived at by the lower court with respect to the part taken by each of them therein, which facts and conclusion are supported by the evidence, have been set forth in the appealed decision as follows:jgc:chanrobles.com.ph

"The first installment on the subscriptions for these two share certificates at the rate of six thousand two hundred twenty-five pesos (P6,225) each, or twelve thousand four hundred fifty pesos (P12,450) in all, was paid by the check. Exhibit YY-3404, drawn by Fernandez on the Peoples Bank & Trust Co. in favor of the Eastern Theatrical Enterprises (Exhibit YY-3404 and pages 6303, 6587, 16907 and 19357. Trans.) . Mariano Cu Unjieng never drew any check to reimburse this payment. Fernandez drew various checks, Exhibits 849-866, as treasurer of this concern, and deposited the same in various accounts standing in his name in the local banks. Most of these checks were prepared by Leopoldo Cu Unjieng, the brother of Mariano Cu Unjieng, who was himself the cashier of the Eastern Theatrical Enterprises (pages 4161, 4162 and 19,424-19,426, Trans.) . While the defendant denied any knowledge that this was being done (pages 17,151, 17,155, Trans.) , Fernandez testified that he signed none of these checks or any other check in behalf of the Eastern Theatrical Enterprises without the prior approval of the defendant, as the president of the corporation. (Page 4161, Trans.) In view of the fact that the defendant’s brother prepared most of these check for Fernandez’s signature, the court finds that the Fernandez’s version of these transactions is undoubtedly the true one." (Printed decision, p. 47.)

The appellant and Rafael Fernandez likewise embarked in another business which was originally known as the Manila Motor Works and later as the Eastern Motor and Iron Works for the manufacture and sale of what came to be known as "gas-saving manifold" and automobile repair work. Fernandez testified that he organized it in partnership with the appellant and his testimony deserves credit because it is corroborated, in the first place, by that of the witness William S. Irey, inventor of the gas-saving manifold (trans., pp. 3459, 3473); and, in the second place, by Exhibit 604, which is a deed of transfer of said business, executed by Rafael Fernandez in favor of the appellant. The evidence supports the following statement of facts and considerations made by the lower court in its appealed decision in connection with the said business:jgc:chanrobles.com.ph

"The disbursements from the bank accounts in Fernandez’s name for the purpose of establishing and operating this business amounted to seventy-seven thousand two hundred eleven pesos and seventy-six centavos (P77,211.76). In view of the fact that the checks are numerous, the court is attaching a list of the same to this decision as Annex B. Receipts from this business, or checks payable thereto and indorsed to and deposited by Fernandez, aggregated one thousand six hundred and two pesos and thirty-two centavos (P1,602.32). (Pages 6819-6821, 6834-6837, 6678, Trans.) The result is that this business, which either belonged to Cu Unjieng from the beginning or was transferred to him in February, 1930, without any real consideration, cost the bank account standing in the name of Fernandez the net sum of seventy-five thousand six hundred nine pesos and forty-four centavos (P75,609.44)

"On February 14, 1931, Fernandez executed a transfer of all his interest in this business to Mariano Cu Unjieng for a recited consideration of sixty thousand pesos (P60,000). no part of which has ever been paid (Exhibit 604, pages 3327, 6178 and P1,214, Trans.) . As in the case of the Micpi land, Mariano Cu Unjieng disclaimed any knowledge of this transfer which was made about the same time, until the trial of the case. (Pages 17,099-17,104, Trans.) However, Cipriano de los Reyes, who was the lawyer who prepared the original of Exhibit 604 and the notary before whom it was executed and acknowledged, testified positively that he delivered that original to Mariano Cu Unjieng personally upon the execution thereof (pages 21, 752-21,756, Trans.) . The document was executed as a public document and the inherent uselessness of the execution of such a document without the knowledge of the transferee and the delivery thereof to him, is apparent. Furthermore, the testimony of Cipriano de los Reyes was given without hesitation and in such a straightforward way as to convince the court that he was telling the truth. The court finds, therefore, that the original of the document, Exhibit 604, was really delivered to Mariano Cu Unjieng by Cipriano de los Reyes upon the execution thereof and that Mariano Cu Unjieng testified falsely when he denied all knowledge thereof until the trial." (Printed decision, pp. 61, 62.)

In the year 1930, the two bought lottery tickets and speculated in the foreign exchange business at the expense of Guillermo A. Cu Unjieng on at least two occasions in October and December, 1930. On this particular business, the lower court upon the evidence of record makes the following statement and considerations:jgc:chanrobles.com.ph

"The first of these occasions was in connection with a 400,000 Amoy Dollar deal with the defendant’s father, which took place in October, 1930, and the second was a 400,000 Shanghai Taels deal with the defendant’s father, which took place in December of the same year. (Pages 16,777-16,779, inclusive, 16,804, 18,659-18,667, 19,007-19,013 and 20,742-20,745 and Exhibits 578-A and 601.)

"It is noteworthy in its bearing upon the defendant’s character that although he acted as his father’s attorney-in-fact in connection with these exchange transactions, and held his father’s power of attorney, he concealed from his father the fact that he was splitting the profits on those transactions with Fernandez.

"Thus, with reference to the 400,000 Amoy Dollar transaction he testified in response to questions put to him by this court, as follows:jgc:chanrobles.com.ph

"‘Q. Did your father G. A. Cu Unjieng know that you were interested with Fernandez in that deal?

A. I do not believe I told father about it at that time.

"‘Q. He did not know that you made some 8,000 odd pesos on that deal?

A. No sir.

"‘Q. You never did tell him?

A. I believe I told him that after, much after.

"‘Q. After this case began?

A. I believe so, yes, sir.

"‘Mr. DEWITT:jgc:chanrobles.com.ph

"‘Q. After this case started?

A. Yes, sir.’ (Page 16,779, Trans.)

"And with reference to the 400,000 Shanghai Taels transaction, he testified:jgc:chanrobles.com.ph

"‘Q. Before this 400,000 Shanghai Taels proposition about which you have testified, did you talk to your father about it?

A. Naturally.

"‘Q. Did you tell your father that you were going to share in the profits with Fernandez?

A. No, sir.’ (Page 186,659, Trans.)

"These exchange transactions resulted in a profit on the exchange phase of sixteen thousand and fifty-three pesos and twenty centavos (P16,053.20) on the Amoy Dollar transaction (page 19,042), and of forty-four thousand two hundred four pesos and eighty-eight centavos (P44,204.88) on the Shanghai Taels transaction (page 18,663), making a total profit on the two transactions of sixty thousand two hundred fifty-eight pesos and eight centavos (P60,258.08), made by the defendant in secret partnership with Fernandez at the expense of his father. (Page 19,059.)" (Printed decision, pp. 62-64.)

On June 19, 1930, they embarked in another enterprise, buying 100 shares of the Fox Films and 100 shares of Warner Brothers Pictures through the National City Bank of New York. As the lower court very correctly said:jgc:chanrobles.com.ph

"The margin amounted to eleven thousand seven hundred pesos (P11,700), or five thousand eight hundred fifty pesos (P5,850) for each of the two men. Fernandez paid this entire margin by his check Exhibit YY-3430 drawn on the Peoples Bank, in favor of the National City Bank, in that account. There is no check whereby Mariano Cu Unjieng reimbursed this payment. (Exhibits ZZ-271 to ZZ-271-J, inclusive, ZZ-272 to ZZ-272-A, inclusive, pages 7617-7619, 7697-7698, 7703-7715 and 16,906-16,907, Trans.)" (Printed decision, p. 65.)

Everything just stated regarding the business ventures in which the appellant and Rafael Fernandez were equally interested before and during the period stated in the information proves the close and intimate relation that existed between the two. It likewise proves, in addition to the other facts and reasons already stated, that they were absolutely identified with one another in the sugar business in which, for the purpose of obtaining profit, they used forged quedans and stock certificates; and lastly, it proves how groundless and frail is the appellant’s excuse that he and his father intervened in said sugar business only as mere money lenders. Undoubtedly they were not so for the reasons already stated, notwithstanding the appellant’s claim by means of the entries appearing in his books Exhibits 1293 to 1336 of some of which Exhibits 1372, 1373, 1380, 1384, 1388 to 1397 are claimed to be the translations, because said entries do not state that Fernandez has received from the Cu Unjiengs any loan for his sugar business or that he ever paid them anything on account of said loan. What appears in said books as "KEE", a Chinese word which was translated by the witnesses for the defense as signifying "loan to Fernandez", means nothing more than "debit", and what appears therein as "LAI", another Chinese word which, according to the translators for the defense, means "repayment" or "payments on account made by Fernandez", merely signifies "credit." It was so stated by the witnesses for the prosecution and their testimony seems to us more acceptable and more worthy of credit because they are not interested in either of the parties concerned in this case. Considering said entries in the above stated books in accordance with the testimony of said experts, it may be said that far from contradicting Rafael Fernandez they corroborate him, there being, therefore, no reason to doubt that G. A. Cu Unjieng supplied the capital for the business and the appellant and Rafael Fernandez their industry. The amounts entered in the "debit" column in some of said books represent those which Fernandez had received from G. A. Cu Unjieng and the appellant, and those which appear in the "credit" column are the amounts which said Fernandez had delivered to them during their association.

It is not strange that the appellant and his father should have associated with Rafael Fernandez or made use of him for the purpose of obtaining money from the banks in question, in the manner already indicated, said appellant pledging forged quedans in combination with Fernandez, because as G. A. Cu Unjieng was engaged if the exchange business and his obligations with the local banks (Exhibits 1291, 1290, 1289, 1288, 1287, JJ., AA, BB) as well as with the foreign banks as the China Banking Corporation of Amoy (Exhibit ZZ-362), the Shanghai Commercial & Savings Bank, Ltd. (Exhibits 363 and 1456) and the Hongkong Bank, Ltd. (Exhibit ZZ-364) were so enormous that they then amounted to 5,187,974.31 Shanghai taels, 1,208,586.07 Amoy dollars and 1,289,963.32 Philippine pesos, it was necessary for him to have ready money so that he could continue with his exchange business where he pinned his hopes of obtaining large profits in the end. Perhaps everything would have been well with him had not the frauds perpetrated against the National City Bank of New York and the Hongkong and Shanghai Banking Corporation been untimely discovered; but the unexpected happened and his plans miscarried thus frustrating his hopes. The appellant, as a good son and attorney in fact of his father, naturally wanted to help the latter; hence the reason for taking, certainly not a secondary part in said frauds.

The defense, in order to rebut the evidence for the prosecution and show that the appellant had no motive to commit the acts imputed to him, by conspiring with his coaccused and Rafael Fernandez for that purpose, made great efforts to prove, in addition to the facts already stated above, these other facts:chanrob1es virtual 1aw library

1. That about the time of the commission of the forgeries and estafa in question, the appellant had in his own right a fortune of about P600,000 with a monthly income of more than P5,000 excluding his share of the profits from Cu Unjieng e Hijos of which he is a partner; and that he was a man who knew how to save and invest his savings in profitable businesses.

2. That by reason of his marriage in 1928, he had received from his father, G. A. Cu Unjieng, the large sum of 200,000 Shanghai taels as a marriage gift; and

3. That the payments which Rafael Fernandez had been making to him during the years 1929 and 1930 were no other than interest and commission on loans which Fernandez had obtained through the appellant’s intervention, from Cu Unjieng e Hijos, G. A. Cu Unjieng, and the Yek Tong Lin Loan Company, Ltd., secured by the Yek Tong Lin Fire & Marine Insurance Co., Ltd.

None of these facts, however, is true. They are not shown by the evidence. The appellant did not have the fortune and income which he claimed to have, nor did he in fact receive the gift allegedly given to him by his father by reason of his marriage in 1928. His income tax returns for the years 1929, 1930 and 1981 (Exhibits ZZ-491, ZZ-492 and ZZ 493) constitute the strongest refutation of his L allegation that he was in reality worth about P600,000. Exhibit ZZ-491 shows that his income in 1929 was only P18,206.20, or an average of a litle over P1,500 a month Exhibit ZZ-492 shows that his losses in 1930 were P42,534.67, and Exhibit ZZ-493 certainly discloses that he had an income of only P9,711.98 during the year 1931.

During the appellant’s cross-examination before the prosecution made any mention of the latter’s income tax returns for the three years above stated, said appellant emphatically declared over and over that he had entered therein all the payments which Rafael Fernandez had made to him by way of interest and commission. However, when he was confronted with said income tax returns which clearly showed his lack of veracity, he had to content himself with the strange excuse that he made no entries of said payments in said income tax returns to avoid being prosecuted for usury. This, which in itself clearly reveals the ease with which the appellant changes his testimony, shows his lack of scruples and that "he is a man who would not hesitate to sacrifice the truth provided he can protect his interests and conceal any material gain which he obtained for himself, even if the same is unlawful." These are not the only reasons proving his lack of scruples. In civil case No. 39570 of the Court of First Instance of Manila entitled "Manila Export Corporation v. Mariano Cu Unjieng" (Exhibits ZZ-500 and ZZ-500-A), it was conclusively shown, and the lower court as well as this court so held (G. R. No. 38278, 2 Exhibit ZZ-500-A), that the promissory notes with which the appellant sought to support and prove his counterclaims in said case were absolutely forged, spurious and fraudulent. In said case the appellant attempted to counteract the action of the Manila Export Corporation to recover from him the sum of P118,737.85 representing a credit against him which Ty Camco Sobrino had assigned for value to said company (Manila Export Corporation), by filing two counterclaims for the sum of P111,547.02 and a third additional counter claim for P20,000, and making efforts to prove them by means of the same promissory notes which, as already stated, were declared fraudulent, spurious and forged.

The defense contends that the judgment in said case of Manila Export Corporation v. Cu Unjieng should not have been taken into consideration by the lower court, nor can it now be taken into consideration in this instance, and bases his contention on the provisions of section 342 of Act No. 190 which reads as follows:jgc:chanrobles.com.ph

"A witness may be impeached by the party against whom he was called, by contradictory evidence, or by evidence that his general reputation for truth, honesty, or integrity is bad; but not by evidence, of particular wrongful acts, except that it may be shown by the examination of the witness, or the record of the judgment, that he has been convicted of a high crime."cralaw virtua1aw library

When said Exhibits ZZ-500 and ZZ-500-A consisting in the bill of exceptions and the decision in said case were offered in evidence, the only reason given by the appellant for opposing the admission thereof was that they were irrelevant or impertinent because the questions raised therein were different from those raised in this case and furthermore there was not the least relation between the two cases. It happens, however, that while the appellant was testifying on his behalf in this case, he mentioned the real existence and validity of the promissory notes with which he wanted to support his counterclaims in said case against the plaintiff Manila Export Corporation, insisting that said promissory notes formed part of his assets which according to him amounted approximately to P600,000.

Said Exhibits ZZ-500 and ZZ-500-A were undoubtedly admissible in evidence not only for the purpose of disproving the appellant’s claim that they formed part of his assets but also for the purpose of showing the ease with which he distorts the truth and his fondness for doing so, because in all cases of fraud and deceit, as the ones under consideration, when it is necessary to prove that the accused had knowledge of said acts (fraud or deceit), any evidence disclosing other fraudulent acts committed at or near the same time of the commission thereof is competent evidence. It was so stated in the following excerpt from page 746 of volume 22 of the Corpus Juris, citing among other authorities the decisions mentioned in the case of Newton Centre Trust Co. v. Stuart (201 Mass., 288; 87 N. E., 630), and in that of Gurley v. Armentraut (27 Oh. Cir. Ct., 199):jgc:chanrobles.com.ph

"So also the commission of acts similar to that involved may be relevant as bearing on the probability of the act in issue having been committed. In actions based on fraud and deceit, where it i5 necessary to prove scienter, fraudulent acts similar to those charged and done at or near the same time may be shown, . . ."cralaw virtua1aw library

And in the case of Butler v. Watkins (13 Wall., 456;20 Law. ed., 629), the Supreme Court of the United States held:jgc:chanrobles.com.ph

"Actual fraud is always attended by an intent to defraud, and the intent may be shown by any evidence that has a tendency to persuade the mind of its existence. Hence, in actions for fraud, large latitude is always given to the admission of evidence. If a motive exist prompting to a particular line of conduct, and it be shown that in pursuing that line a defendant has deceived and defrauded one person, it may justly be inferred that similar conduct towards another, at about the same time and in relation to a like subject, was actuated by the same spirit."cralaw virtua1aw library

The appellant’s testimony that his father G. A. Cu Unjieng gave him a marriage gift of 200,000 taels while he was in Shanghai on his honeymoon trip, is of no weight, because said gift was merely nominal. The appellant could not dispose of said gift, neither could he have done so however much he would have to, because it was given as a security for a certain obligation which his father had with the China Banking Corporation of Amoy. All that he could do after receiving it was to deposit it in the Shanghai Commercial & Savings Bank, Ltd., in his name it is true, but without withdrawing it therefrom because he could not do so in view of the fact that it was subject to his father’s aforesaid obligation; and in fact it remained therein until the creditor bank took the same in payment of its credit against G. A. Cu Unjieng, the appellant’s father, who was unable to pay it otherwise. (Trans., page 17,208.)

The defense also made efforts to prove, by means of the appellant’s testimony, that when the latter succeeded in obtaining credit for his father in the Hongkong and Shanghai Banking Corporation, and G. A. Cu Unjieng’s No. 3 Account was opened therein during the early part of January, 1931, he made it clear to the manager of said bank, Johnston, and the accountant thereof, Gordon, that the quedans with which he was to secure the payment of said credit were those which Rafael Fernandez had pledged to them. The letters exchanged between the appellant and the bank in question as well as Exhibits M, N, Q, O and Y, omitting the testimony of said manager and accountant, contradicting him, that when the appellant obtained the credit in question he told them that the quedans with which he secured said credit were his, without then mentioning at all the name of Rafael Fernandez, prove that his excuse deserves no credit.

In Exhibit M dated January 8, 1931, which was already quoted in its entirety on page 15 of this decision [original], the appellant appears as saying that the quedans were his, his exact words being: "My sugar quedans."cralaw virtua1aw library

In Exhibit N which is the bank’s letter to G. A. Cu Unjieng on January 27, 1931, in reply to the letter written to the bank by the appellant as G. A. Cu Unjieng’s attorney in fact, it was stated as follows:jgc:chanrobles.com.ph

"We acknowledge receipt of your letter of date enclosing quedans for 20,000 piculs of centrifugal sugar. Your cheque for P120,000 drawn against same has been paid and as the overdraft now amounts to P307,915.29 we shall be obliged if you will settle exchange with us for the documentary bills of exchange to be negotiated through us against the sugar to be exported.

"We also refer to your letter of 30th, January 1930 regarding the overdraft of P66,500 against the security of 332 shares Yek Tong Lin Loan Company, Ltd., and 333 shares Yek Tong Lin Fire & Marine Insurance Co., Ltd. and shall be glad to receive your cheque for P66,500 tomorrow 28th instant in full liquidation of the account as arranged."cralaw virtua1aw library

In Exhibit O which the bank again wrote to G. A. Cu Unjieng on March 19, 1931, in view of the latter’s silence, not having answered the bank’s letter, Exhibit N, he was told as follows:jgc:chanrobles.com.ph

"We note that you have not yet settled exchange for your sugar shipment nor deposited the Letter of Credit covering same which you gave us to understand would be done in March and on which understanding we granted you an overdraft in No. 3 account.

"We shall be glad to hear from you in this matter."cralaw virtua1aw library

Upon receiving this letter, G. A. Cu Unjieng, through the appellant, wrote his answer Exhibit Y which bears the same date and is couched in the following language:jgc:chanrobles.com.ph

"DEAR SIRS:jgc:chanrobles.com.ph

"In reply to your letter of today, I am pleased to advise you that the sugar shipment as well as the exchange will be settled with you within this month, as arranged.

"Yours truly,

"G. A. CU UNJIENG

"By (Sgd.) MARIANO CU UNJIENG"

From all of these letters it cannot be inferred, much as one may so desire, nor is there any word or sign therein which permits such inference, that the quedans in question which proved to be forgeries, belonged to Rafael Fernandez.

As G. A. Cu Unjieng was pressed by said letter Exhibit O to comply with his agreement with the bank prior to the granting of the credit related to his No. 3 Account, the appellant, as his attorney in fact, first sent check No. 530419-(C. B. C.) for the sum of P250,000 as payment on account, together with his letter Exhibit 14 dated March 30, 1931, which reads as follows:jgc:chanrobles.com.ph

"DEAR SIRS:jgc:chanrobles.com.ph

"I have the pleasure to enclose herewith my C. B. C. check No. 530419-GG for P250,000 as partial payment against my Account No. 3, for which please deliver to bearer 40,000 piculs of sugar deposited in your bank as security of said obligation.

"As to the balance of said Account No. 3, please be advised that same will be liquidated tomorrow. The letter of credit will be arranged on April 7th, either by Warner, Rarnes, Manila or Lamborn, New York.

"Yours truly,

"G. A. CU UNJIENG

"By (Sgd.) MARIANO CU UNJIENG"

A few days later, the appellant again sent to said bank his check Exhibit 1291-2395 for the sum of P313,500 for the same purpose, and thus G. A. Cu Unjieng’s Account No. 3 was closed on April 24, 1931, except with respect to an item about interest which was paid on the following day.

In compliance with the request of the appellant, as G. A. Cu Unjieng’s attorney in fact, contained in his said letter Exhibit 14, the quedans with which his credit had been secured were returned to him, having been delivered to Rafael Fernandez who was the bearer referred to in said letter. In connection with this particular incident, the lower court, upon the evidence, correctly stated as follows:jgc:chanrobles.com.ph

"The quedans pledged by Mariano Cu Unjieng to secure No. 3 Account in the Hongkong Bank are undoubtedly the very quedans which were pledged by Fernandez on April 24, the day they were obtained from the Hongkong Bank, and April 29, five days later, as security for the overdraft account in his name in the National City Bank (Exhibits H and I). Fernandez testified that he gave these quedans to Mariano Cu Unjieng when he got them out of the Hongkong Bank and later in the same day he got quedans from Mariano Cu Unjieng and pledged them to the National City Bank and on April 29, he got other quedans from Mariano Cu Unjieng which he also pledged in the National City Bank, all by instruction of Mariano Cu Unjieng (pages 3847, 3848, 3871-3873, 4983, 4984, and 21,058, Trans.) . Mariano Cu Unjieng took the position that he never saw those quedans after he pledged them in the Hongkong Bank and that he permitted Fernandez to keep them, because Fernandez told him he needed them for Warner, Barnes & Company (page 16,624). He was, of course, enabled to take this position by having sent Fernandez to the Hongkong Bank with the check to close the account and get the quedans, not a usual way, to say the least, to close an account such as this.

"In any case, the quedans pledged by Fernandez on April 24, 1931, Exhibits MM-1 to MM-128, inclusive, together with the quedans pledged on April 29, being Exhibits NN-1 to NN-112, inclusive, covered together 54,888.5937 piculs, almost exactly the same number as those pledged by Mariano Cu Unjieng in the Hongkong Bank, as was seen above. There is no doubt, therefore, that these are the very quedans which were pledged by Mariano Cu Unjieng in behalf of his father in the Hongkong Bank. These quedans were forged and spurious (pages 4609-4610 and 5175, Trans.) ." (Printed decision, pp. 95, 96.)

(NOTE. — Exhibits H and I referred to by the lower court are Exhibits MM and NN, respectively. They were marked as Exhibits H and I in the criminal case against Fernandez, No. 42,244, in the same lower court.)

They are in fact the same because the quedans pledged by the appellant as G. A. Cu Unjieng’s attorney in fact for the opening of said No. 3 Account called for a total of 54,888.58 piculs (Exhibits M and N), and those pledged by Rafael Fernandez in the National City Bank of New York from which he obtained the money, after his April, 1931, accounts had been opened therein (Exhibits MM and NN) also called for a total of 54,888.6437 piculs. This is not and cannot be a mere coincidence because, as Fernandez testified, the quedans pledged by him in the National City Bank of New York had been given to him by the appellant, and he had delivered to said appellant the quedans which he had received from the Hongkong and Shanghai Banking Corporation.

The appellant lays great stress on the value which he believes Exhibits 595 and 595-A, which are telegrams exchanged between him and Rafael Fernandez, have in favor of his cause. Said telegrams read as follows:jgc:chanrobles.com.ph

"MANILA, June 3rd, 1931

"RAFAEL FERNANDEZ

"Baguio

"Glad to know that comadre is improving may God hear our prayers sorry to bother you but Tiaoqui and Medina demanding payment of obligations due today please arrange immediately stop father reminds you tenth instant pay obligation and take delivery sugar without fail he just remitted one million pesos to Shanghai where conditions not good likewise he requests you pay one hundred twelve thousand advanced to National City since April twenty-third because of another coming remittance please wire Gutierrez David to urge Mabalacats case regards

"MARIANO CU UNJIENG"

"BAGUIO June 4/31

"MR MARIANO CU UNJIENG

"320 Dasmariñas Manila

"Am leaving tonight. Read your telegram will follow fathers wishes please tell Medina and Tiaoqui that their transaction is the thirtieth transaction and only now we have delay because of inevitable circumstances do not pay them tell them to wait till Saturday I will pay for any interest due.

"RAFAEL FERNANDEZ"

We are of the opinion that not much credit can be given to said documents because they bear all the earmarks of having been prepared beforehand, in a more or less disguised form, for the protection of the appellant against whatever suspicion that might be cast upon him, and the reason therefor is given by Fernandez in his testimony appearing on pages 2956, 2961 et. seq. of the transcript of stenographic notes.

The dates of the documents Exhibits 595 and 595-A show that the appellant and Rafael Fernandez sent them to each other a few days after the discovery of the fraud perpetrated upon the Peoples Bank and Trust Company. It should be borne in mind that after the appellant and his father G. A. Cu Unjieng had been informed of said discovery, seeing that things were taking a bad turn, they gave Fernandez the sum of P350,000 (Exhibits 460, 96 and 576), which the latter deposited to his current account in the China Banking Corporation, withdrawing therefrom on the very same day the sums stated in Exhibits YY-2594 and YY-2393 for the purpose of redeeming some of the forged quedans pledged in said bank. After the discovery of the fraud in question, Rafael Fernandez realized clearly that although the appellant had not directly participated therein, appearances pointed at him as the person solely responsible because the documents which he had been executing in favor of said bank so recited, and he naturally thought himself lost. However, as the Cu Unjiengs, who did not consider themselves strangers to the fraud in the presence of Fernandez, kept their promise to give him the necessary help by delivering to him the said sum of P350,000, and furthermore promised him other things, Fernandez, under the circumstances, considered it his duty to answer the telegram Exhibit 595 in the manner expressed in Exhibit 595-A.

According to all indications, the appellant and Rafael Fernandez exchanged the two telegrams in question, both simply guessing the purpose intended by them without being sure thereof, because it was not true that Medina’s promissory note was then due, said document showing on its face that payment thereof would not be due until twenty days after sight (Exhibit 694-F), and at the time the appellant sent Rafael Fernandez his telegram Exhibit 595, no demand had yet been made on Fernandez for the payment thereof. If anything may be inferred from this fact, the inference should be that said telegrams were but a part of a preconceived plan to prepare a defense for the appellant in case he should ever be implicated in the fraud.

The appellant likewise lays great stress on the value which he believes Exhibit 640 also has in favor of his cause. This is a receipt from Fernandez which literally reads as follows:jgc:chanrobles.com.ph

"I received the sum of P91,000 from Mr. G. A. Cu Unjieng to buy 2,000 shares Pasudeco to be delivered to said gentleman as soon as possible within one week.

"Aug. 11, 1930.

"(Sgd.) RAFAEL FERNANDEZ"

The appellant testified that Rafael Fernandez, in pursuance of the obligation contracted by the latter under said receipt, delivered to him among other stock certificates of the Pampanga Sugar Development Company, Inc., which is also known by the abbreviated name Pasudeco, stock certificates Nos. 1480 for 400 shares, 1493 for 347 shares, and 1495 for 392 shares (Exhibits AA-1, AA-2 and AA-3) which proved spurious; that upon receiving them, he believed in good faith that they were genuine and it was in this belief that his father, G. A. Cu Unjieng, through him, happened to pledge them to the National City Bank of New York on November 3, 1930, to secure the payment of the loan which was granted to his father (Exhibit BB).

Rafael Fernandez’s version of this particular transaction is different. He testified that he had never completed the 2,000 shares of the Pampanga Sugar Development Company, Inc., which the Cu Unjiengs wanted, and that he had so told the Appellant.

Fernandez’s version is to us more worthy of credit because if, as the appellant claims, Fernandez in fact had succeeded in completing the number of shares which he was asked to buy for G. A. Cu Unjieng, it certainly cannot be explained why he failed to require from the appellant the return of his receipt Exhibit 640, nor why it was not returned to or cancelled by him. If said exhibit continued to be in the appellant’s possession, it was undoubtedly because it still had some value to him and the Cu Unjiengs and it was his desire to make use thereof as they deemed necessary for the purpose of demanding from Fernandez, in due time compliance with the terms thereof or, at least, the return of a proportional part of their money.

The appellant, to give some explanation why Exhibit 640 remained in his possession and why he had in the meantime pledged the forged share certificates in question (Exhibits AA-1, AA-2 and AA-3), to the National City Bank of New York, testified that it was due to the fact that Fernandez had collected the dividends corresponding to said shares; and to give force and the semblance of truth to his testimony, he presented Fernandez’s letter consisting of two pages, Exhibits 641 and 641-A. Said letter starts right off, without any formality, and with a small letter. It bears neither address nor date, nor does it observe the usual rules of leaving a left-hand margin and beginning the first line with a capital letter, which is how even persons of ordinary learning usually write a letter. The first lines of the letter in question read as follows:jgc:chanrobles.com.ph

"asked him to include those in my dividend check and if I cannot buy those shares, he will think I am a big bluff. I believe in all what you say. I have never doubted that you will give me the shares and dividends but please give me a note where Augusto Gonzales will see that he was justified in believing me. . . ."cralaw virtua1aw library

We know from the evidence that Fernandez is a learned man, having obtained diplomas in the University of the Philippines and the University of Harvard, in the United States, and was instructor of banking in the University of the Philippines and also a professor of economics in the Jose Rizal College. We also know from Exhibits 542, 874, 590 and 640, which are in his own handwriting, that when he writes, he is in the habit of strictly observing the above stated rule relative to a margin. This necessarily means that said letter (Exhibits 641 and 641-A) is mutilated, with the previous page or pages lacking. For this reason we find the following conclusion arrived at by the lower court fully justified, to wit:jgc:chanrobles.com.ph

"The defense maintains that these two exhibits constitute a complete note (page 16,346, Trans.) . The first of these exhibits, Exhibit 641, begins with the word ’asked,’ the ’a’ being a small letter. The court cannot conceive of a complete sentence that could begin with this word. The effort to make the court believe that these two sheets of paper constitute a complete note, is a reflection upon the court’s intelligence and merely serves to persuade the court that a portion of the note is being deliberately suppressed for the reason that it would destroy the story of the defense about these forged shares.

"In any case, that portion of the note marked Exhibit 641-A fails to bear out the contention of the defendant, inasmuch as it shows that Fernandez proposed to keep the dividends on the shares which from the subject matter of the discussion in the note, and not to pay them over to the Cu Unjiengs.

"The defense contends that G. A. Cu Unjieng received two dividends from Fernandez in connection with these forged shares, one being represented by the Peoples Bank check No. E-126103 in the sum of three thousand five hundred seven pesos (P3,507) (this check not having been presented), and the other being represented by the check Exhibit YY-172 dated the 19th of May, 1931, for three thousand four hundred seventeen pesos (P3,417). (Pages 16,355-16,364.) Fernandez testified that he merely drew these checks from the joint fund at the request of Mariano Cu Unjieng, without knowing that it would be claimed that they were dividends on these three share certificates, and without realizing that Exhibit YY-172 would be the exact amount of the dividends thereon, at the rate of ten per cent (105’o) of the par value thereof (page 20,722, Trans.) .

"An examination of these checks drawn by Fernandez on May 19th, 1931, Exhibits YY-171, YY-172, YY-173, YY-174, and YY-175, discloses that three of these checks are in consecutive serial numbers and two of them were in favor of G. A. Cu Unjieng and one in favor of Mariano Cu Unjieng. The court does not believe that if Fernandez had known that this check Exhibit YY-172 was in the exact amount of the dividends on these forged shares, and that the shares were forged, he would fail to incorporate that sum in the other check drawn in favor of G. A. Cu Unjieng on that date, Exhibit YY-173 in the sum of one thousand two hundred seventy-five pesos (P1,275), so as to conceal that fact." (Printed decision, pp. 37, 38.)

In view of the established facts and the foregoing considerations, we are of the opinion and so hold that the conclusion arrived at by the lower court finding that the appellant had conspired with his coaccused and with Rafael Fernandez to commit the crime alleged in the information, on the date, place and circumstances therein stated, and that he is, therefore, guilty of said crime, is very well founded. The fraud perpetrated against the Hongkong and Shanghai Banking Corporation is in fact but the culmination, or rather a continuation of the frauds and forgeries of which the Peoples Bank and Trust Company and the National City Bank of New York were the victims. There is abundant evidence that He appellant in fact conspired with Rafael Fernandez and Manuel Carlos and this is necessarily so if, bearing in mind the facts and reasons already stated, the rules on conspiracy which are summarized in volume 5, page 1088, paragraph 37, of the Ruling Case Law, are also taken into consideration, to wit:jgc:chanrobles.com.ph

"Conspiracies need not be established by direct evidence of the acts charged, but may and generally must be proved by a number of indefinite acts, conditions and circumstances which vary according to the purposes to be accomplished. The very existence of a conspiracy is generally a matter of inference deduced from certain acts of the persons accused, done in pursuance of an apparently criminal or unlawful purpose in common between them. The existence of the agreement or joint assent of the minds need not be proved directly. It may be inferred by the jury from other facts proved. It is not necessary to prove that the defendants came together and actually agreed in terms to have the unlawful purpose, and to pursue it by common means. If it be proved that the defendants pursued by their acts the same object, often by the same means, one performing one part and another another part of the same so as to complete it, with a view to the attainment of the same object, the jury will be justified in the conclusion that they were engaged in a conspiracy to effect that object. If, therefore, one concurs in a conspiracy, no proof of agreement to concur is necessary in order to make him guilty. His participation in the conspiracy may be established without showing his name or giving his description."cralaw virtua1aw library

It having been proven that the appellant conspired with Rafael Fernandez and with Manuel Carlos, he must necessarily answer for the acts of the two as he must answer for his own acts; for, as it was stated in the cases of United States v. Remigio (37 Phil., 599); United States v. Ipil (27 Phil., 530); and People v. Cabrera (43 Phil., 64), the act of a conspirator is imputable to each and every one of his co-conspirators.

The act committed by the appellant undoubtedly constitutes the complex crime of estafa and multiple falsification of mercantile documents. Taking into consideration the fact that the crime in question was committed before the Revised Penal Code went into effect, it becomes imperative that said crime be dealt with in conformity with the provisions of article 89 in connection with articles 301 and 534 of the old Penal Code, the two latter articles as amended by Acts Nos. 2712 and 3244, respectively, in view of the provisions of article 366 of the Revised Penal Code which reads as follows:chanrob1es virtual 1aw library

Without prejudice to the provisions contained in article 22 of this Code, felonies and misdemeanors, committed prior to the date of effectiveness of this Code shall be punished in accordance with the Code or Acts in force at the time of their commission."cralaw virtua1aw library

Of the two crimes of falsification of mercantile documents and estafa, the latter crime is the more serious because under the provisions of article 89, the penalty which should be imposed upon the author thereof, taking into consideration the fact that the amount defrauded was P1,411,312.80, is presidio mayor in its minimum period, that is six years and one day to eight years.

The provisions of said articles 89, 301 and 534 of the old Penal Code are more favorable to the appellant than those of the corresponding articles 48, 172 and 315 of the Revised Penal Code, because the last of the first three articles in question prescribes only the penalty of prision correccional in its maximum degree to prision mayor in its minimum degree for the crime of estafa when the amount defrauded exceeds fifty thousand pesetas; and article 315 of the Revised Penal Code, although it prescribes the same penalty for the same crime when the amount defrauded exceeds twenty-two thousand pesos, provides, however, that the penalty shall be increased by adding one year for every ten thousand pesos in excess of the twenty-two thousand pesos fixed, provided that the total penalty shall not exceed twenty years.

Therefore, the penalty which should be imposed in the case at bar, bearing in mind said provisions of article 89 of the old Penal Code, is from six years, eight months and twenty-one days to eight years of prision mayor, the medium period of which is from seven years, one month and twenty-four days to seven years, six months and twenty-seven days. This medium period of said penalty should be imposed as maximum according to the provisions of the Indeterminate Sentence Law (Act No. 4103), because in the commission of the complex crime charged in the information and established at the trial, no generic circumstance of any kind was present. The minimum of said penalty, under said Act, would be from five years, five months and eleven days of prision correccional to six years, eight months and twenty days of prision mayor, for the reasons stated in the decision and judgment rendered in the case of People v. Gayrama (60 Phil., 796), and in the judgments rendered in the cases therein cited.

Wherefore, following the doctrine laid down in the case of People v. Mallari and Lao Yu (60 Phil., 400), the judgment appealed from is modified by imposing upon the appellant the indeterminate penalty of from five years and six months to seven years, six months and twenty-seven days, affirming the same in all other respects, with costs against the appellant. So ordered.

Avanceña, C.J., Street, Malcolm, Villa-Real, Hull, Imperial and Butte, JJ., concur.

Endnotes:

---

1. Upon resolution of petition for reconsideration, see p. 906, post.

2. 58 Phil. 959.