Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-22474-77 November 17, 1924
THE PEOPLE OF THE PHILIPPINE ISLN!S, plaintiff-appellee,
vs.
C. N. HO!GES, defendant-appellant.
Gibbs & McDonough for appellant.
Attorney-General Villa-Real for appellee.

OSTRN!, J.:
The defendant is charged in four separate cases ith violations of section ! of the "sur# $a %Act
No. !&''( in certain )one# lending transactions had ith the prosecuting itness $eopoldo *rti+.
,n case R. -. No. !!.' it is alleged that the defendant received the su) of P/,011 fro) *rti+ as
interest on a loan of P2,!'1 for the ter) of one #ear. ,n case R. -. No. !!.33 he is charged ith
having received the su) of P3,2.. as interest for one #ear on a loan of P/2,0'&. ,n case R. -. No.
!!.3& it is alleged that the defendant received P2,40..'' as interest for one #ear on a loan of
P/',3/2.&2, and in case R. -. No. !!.3. the defendant is charged ith receiving P211 as interest
for three )onths on a loan of P!,111.
The trial court found the defendant guilt# in all four cases and sentenced hi) to suffer to )onths5
i)prison)ent in each case and to pa# the costs. ,n case R. -. No. !!.33 the court further ordered
the defendant to return to $eopoldo *rti+ the su) of P',.11 and in case R. -. No. !!.3. to return
the su) of P211, ith subsidiar# i)prison)ent in case of insolvenc#. 6ro) these 7udg)ents the
defendant appeals.
Three of the cases, na)el#, Nos. !!.3', !!.3& and !!.3, ere consolidated and tried together and
the fourth case, No. !!.3. as tried i))ediatel# afterards. The evidence for the prosecution is the
sa)e in all four cases and as the# have been argued and considered together in this court all of
the) ill be disposed of in the present decision.
At the trial of the cases a nu)ber of itnesses ere called b# the prosecution to testif# in regard to
the character and reputation of the defendant and their testi)on# as ad)itted over the ob7ection
and e8ception of his counsel notithstanding the fact that his character had not been put in issue b#
the defense. ,n this the court belo erred. ,t is an ele)entar# rule of cri)inal procedure that the
prosecution is not per)itted to touch upon the character of the accused in the original case and that
it is onl# after the defendant has elected to put his character in issue b# calling itnesses and
adducing evidence in support that the prosecution is per)itted to follo and disprove the evidence
so offered. %, 9ones Co))entar# on Evidence, 3''-3'&.(
,n the present cases the trial court, notithstanding the fact that )ost of the character testi)on#
evidentl# related to facts ante-dating the "sur# Act, appears to have based its appreciation of the
evidence largel# thereon.
Ruling out this testi)on#, as e )ust, there is practicall# no evidence against the accused e8cept
the testi)on# of the prosecuting itness, hich, as e shall presentl# see, is of a )ost
unsatisfactor# character.
Case R. -. No. !!.3' relates to the first transaction beteen the defendant his alleged victi) and
for)s the cornerstone of the edifice erected b# the prosecution, so )uch so that the other cases
)ust stand fall ith it. ,n that case the prosecution contends that on April 21, /4/4, the prosecution
itness, $eopoldo *rti+, borroed the su) of P2,!11 fro) the defendant for hich he gave a
pro)issor# note for P',1'1 due one #ear fro) date and bearing interest at the rate of /! per cent
per annu): that the difference beteen the a)ount na)ed in the note and that actuall# received b#
*rti+ consisted in additional interest to the a)ount of P/,011, together ith P'1 attorne#5s fees.
The defendant ad)its that *rti+ gave hi) a note for P',1'1, but insists that onl# the interest stated
in the note as charged: that he gave *rti+ a chec; for P.,441... hich he, *rti+, cashed at the
ban;, retaining the hole a)ount: and that the difference of P'4.'1 beteen the a)ount of the note
and that of the chec; represented la#er5s fees and e8pense of preparation of docu)ents.
The onl# evidence for the prosecution bearing directl# upon the transaction is the testi)on# of *rti+
hi)self. <e stated that being in urgent need of the su) of P2,!11 and not being a resident of ,loilo,
or being ell ac=uainted there, he as;ed a friend here he )ight obtain the )one#: that this friend
advised hi) to see the defendant ho as a )an of )one#: that he then as;ed here the defendant
as to be found, and as infor)ed that he )ight be found at his office: that he called upon the
defendant, stated his needs and as infor)ed that he could get the )one# provided he as illing
to agree to the ter)s proposed b# the defendant, hich ere that the loan should be for one #ear,
that a charge of P'1 ould be )ade for the preparation of the docu)ents and that the su) of
P/,011 ould be charged as interest for one #ear and ould be included in the note as part of the
capital: that he found these conditions harsh but that due to his urgent need, he accepted the ter)s
in the hope that he )ight be able to pa# the loan off ithin to or three )onths, and e8ecuted a note
for the su) of P',1'1, but that he received onl# the su) of P2,!11 fro) the defendant.
To sho the character of the itness5 testi)on# on cross-e8a)ination, e =uote the folloing
portions of the transcript>
?. @here did #ou ta;e the data #ou are using as )e)orandu)A B A. 6ro) )# )e)or#. ,
did not ta;e the) fro) an# place.
?. @hen #ou tried to )a;e collection fro) Mr. <odges or to borro fro) hi) he P2,!11, did
#ou have an# connection ith Mr. <odgesA B A. , )a# have had.
?. Cid #ou ;no hi) ellA B A. Ma# be. Des, sir. , don5t have a good )e)or#. A long ti)e
has elapsed. , )a# have had other relations.
?. Can #ou sa# hether on that occasion #ou had another transaction ith Mr. <odges,
besides the one stated in E8hibit A, the noteA B A. , )a# have had.
?. Con5t #ou re)e)berA B A. , do not re)e)ber ver# ell. ,t )a# be.
?. <oever, #ou re)e)ber, don5t #ou, up to the last cent that Mr. <odges has charged
against #ouA B A. That is )athe)aticall# e8act. The figures spea;: the docu)ents don5t.
?. Dou did not testif#, did #ou, in the 7ustice of the peace court in the investigation of this
caseA B A. , did.
?. ,s it not true that during the investigation #ou testified that as #ou ere in urgent need of
)one# on that occasion, that is to sa#, April 21, /4/4 and as #ou did not ;no Mr. <odges
personall#, #ou loo;ed for a friend to introduce #ou to Mr. <odgesA B A. Des, sir: , re)e)ber
that.
?. And that testi)on# as then true, as it notA B A. *n that occasion , did not re)e)ber it.
Dou ;no that an# )an has at ti)es good )e)or# and so)eti)es he has not.
?. Please anser hether it is true or not. B A. @hatA
?. That #ou . . . . B A. , cannot tell #ou.
?. About April 21, /4/4, did #ou ;no Mr. <odges, personall# or did #ou have an# relation
ith hi)A B A. , believe , did: , believe , did.
8 8 8 8 8 8 8 8 8
Mr. BAMBER-ER. %To the itness.( *utside of the transaction represented b# this note
E8hibit A on or about April 21thA B A. Des: , had other transaction before that date.
?. No. sir. %To the stenographer.( Please repeat the =uestion. %The stenographer does so.( B
A. , do not re)e)ber ver# ell, but , believe that , have had transactions hich have
ter)inated. That is to sa#, , a) not ver# sure, , do not re)e)ber ver# ell.
?. ,t )a# be that on April 21, /4/4, #ou did not receive the P2,!11, is that itA B A. , did
receive.
8 8 8 8 8 8 8 8 8
9"C-E. @hen #ou sa# E, do not re)e)ber,E #ou ad)it that there )a# have been another
transaction on a date different fro) the one appearing on the note for five thousand . . .A B
A. , do not re)e)ber.
Mr. BAMBER-ER. Being in need or )one# on April 21, /4/4, h# is it that #ou ent to Mr.
<odges, as;ing hi) onl# for P2,!11, if there ere other needs on that occasionA B A.
Because , did not need an# )ore than that.
?. Then #ou can positivel# sa# that on that occasion #ou did not borro an# other su) than
the one represented b# this transaction, is that itA B A. , do not ;no.
?. , e8hibit to #ou a docu)ent )ar;ed E8hibit ,, or hich , as; be )ar;ed E8hibit , for
identification.
9"C-E. $et it be )ar;ed. %The cler; does so.(
Mr. BAMBER-ER. %Proceeding.( , as; #ou hether #ou ;no the signature appearing on the
bac; of the sa)e, the na)e $. *rti+A B A. 6or hat a)ount is thatA
9"C-E. The =uestion is hether #ou ;no the signature B A. Des, sir: )# signature
appears here.
As ill be seen, the evasiveness and uncertaint# of the ansers of the itness in the portion of his
testi)on# =uoted is =uite stri;ing and the sa)e )a# be said of the rest of his testi)on# covering
over si8t# pages of the record.
E8hibit , referred to in the testi)on# =uoted as being shon to the itness *rti+, is the chec; for
P.,441, hich as given hi) upon the e8ecution of the note for P',1'1. The chec; is dated April 21,
/4/4, but is sta)ped as cashed on Ma# !. Before being shon the chec; *rti+ insisted that he
received onl# P2,!11 fro) the defendant on April 21, though he did not re)e)ber in hat for) the
)one# as paid. But to da#s after the chec; had been shon to hi) he as recalled to the
itness-stand b# the prosecution and then e8plained that he as unable to get the )one# on April
21, /4/4, but had to go to the defendant several ti)es, although he did not re)e)ber the e8cuses
given b# the latter for failing to pa# over the )one#: that on Ma# !, /4/4, he as still unable to get
the )one# but that the accused handed hi) a chec; and told hi) to get it cashed at the ban; and
the return to the defendant all of the a)ount over and above the su) of P2,!11: that to this he had
no ob7ection and as;ed the defendant if he ould ait for hi) in his office and the defendant stated
he ould: that there as so)e dela# at the ban; in getting the chec; cashed as he as not ;non
there and that finall# he as;ed a friend, Teodoro Benedicto, to assist hi): that Benedicto endorsed
the chec; and got it cashed and that he then paid Benedicto P/21 hich he had oed the latter for
long ti)e: that Benedicto thereupon ent aa#, leaving hi) at the ban;, and that hen he turned
around he found the accused i))ediatel# behind hi): that he tendered all of the )one# to the
defendant but as told to retain P2,!11 and to deliver onl# the e8cess over the a)ount to the
defendant. The itness further stated that Ra#)undo Melli+a as present in the ban; at the ti)e
and sa <odges tal;ing to hi).
Benedicto as called b# the prosecution and ad)itted that he had endorsed the chec; for
identification purposes, but said nothing about having seen <odges or Melli+a in the ban;. Melli+a
testified that about three #ears ago %the testi)on# as given in Fepte)ber, /4!2(, he )et *rti+ at
the ban; and sa that he had )one# in his hands and that he also sa the defendant in the ban; at
so)e distance fro) *rti+. <e sa#s nothing about seeing Benedicto there. ,n vie of the fact that the
transaction here in =uestion too; place in April or Ma#, /4/4, and that Melli+a testified to an incident
occurring in /4!1, it is =uite li;el# that his testi)on# had reference to one of the several subse=uent
transaction beteen *rti+ and the defendant during the #ear /4!1.
The rather unusual stor# told b# *rti+ at his second appearance as a itness therefore stands
practicall# uncorroborated and aside fro) its inherent i)probabilit#, it also in direct conflict ith the
testi)on# given b# hi) at the beginning of the trial. Moreover, *rti+ appears to be a )an or
intelligence and education and it see)s highl# i)probable that if the defendant had adopted the
strange procedure above described, the )atter should have escaped his )e)or# so co)pletel# that
he did not recall it until he as confronted ith the cancelled chec;. ,t is also i)probable that a )an
of <odges5 alleged business acu)en and e8perience ould have trusted a co)parative stranger
such as *rti+ ith nearl# P/,011, ithout a scrap of paper to sho that this a)ount as to be
returned to hi).
As against the unsatisfactor# and uncorroborated testi)on# of the prosecuting itness, e have the,
on its face, reasonable testi)on# of the defendant corroborated b# docu)ents and b# the testi)on#
of the itness ,gpuara on )ost of the essential points. The defendant )a# be guilt# but under the
circu)stances as could at )ost render a Fcotch verdict: e cannot convict hi) on )ere suspicion.
The other charges against the defendant are no better supported b# the evidence. The# are lin;s in
a chain of transactions of hich the one e have discussed as the first. Notes fell due and ere
reneed ith interest added: additional a)ounts ere borroed fro) ti)e to ti)e, and the total su)
oed finall# ran up to over tent# thousand pesos.
,t )a# here be observed that interest not actuall# paid but si)pl# added to the capital fro) ti)e to
ti)e and included in ne notes cannot be regarded as Eta;en or receivedE b# the defendant, ithin
the )eaning of section ! of the "sur# Act and cannot serve as a basis for cri)inal prosecution under
section /1 of that Act. %Bron vs. Marion National Ban;, /&4 ". F., ./&: <aseltine vs. Central Ban;
No. !, /02 ". F., /2!: Criesbach vs. Fecond National Ban; of @il;esbarre, /1. ". F., '!.(1awphil .net
The defendant ad)its that he actuall# received the su) of P!,.11 in pa#)ent of interest on the su)
of P!1,&11 for one #ear. As to the other pa#)ents of P2,111 and P211 alleged to have been )ade
for interest in cases R. -. Nos. !!.33 and !!.3., respectivel#, e have onl# *rti+5 testi)on# against
that of the defendant. The for)er5s testi)on# is self-contradictor#, e8hibits the sa)e uncertaint# of
)e)or# hich characteri+ed his testi)on# in regard to case R. -. No. !!.3' and hen anal#+ed
and su))ed up, the figures he gives do not agree ith the ad)itted facts. The defendant5s
testi)on#, on the other hand, is consistent and plausible, figures tall# ith the docu)ents in
evidence, and his state)ents are corroborated b# the itness ,gpuara. <ere again e are
confronted ith the difficult# as the encountered in case No. !!.3': the defendant )a# be guilt#, but
his guilt has not been proven.
The court is an8ious to enforce the provisions of the "sur# $a, but if e ere to convict persons of
violations of the la upon evidence as unreliable as that of the uncorroborated testi)on# of the
co)plaining itness in the present cases, it ould )erel# tend to encourage to repudiation of debts
hether 7ust or un7ust, and serve no useful purpose.
The 7udg)ents appealed fro) are hereb# reversed and the defendant ill stand ac=uitted of the
offenses charged, ith the costs de oficio. Fo ordered.
Avancea! "ohns and Ro#ualde$! "".! concur.
"ohnson! Actg. %.".! too& no part.

Se"#r#$e O"%&%o&s

STREET, J., concurring and dissenting>
The prosecution in this case proceeds in part along erroneous lines, and , concur in the ac=uittal in
so far as relates to the prosecution in -. R. No. !!.3' and in -. R. No. !!.3&: for, although in these
cases the usurious agree)ents ere in )# opinion undoubtedl# )a;e, no usurious interest as
actuall# ta;en or received b# the appellant, a thing hich is ala#s necessar# to sustain a cri)inal
conviction for the unlaful ta;ing of usur#. ,n both of these cases the )one# hich as agreed to be
paid as usur# as not in fact paid but the a)ounts representing said usur# ere accu)ulated
successivel# in the different notes, and the )ere reneal of a usurious contract or the involution of
the usur# in a note of later date does not constitute a violation of the cri)inal provision of the "sur#
$a. *f course the )ere participation of the appellant in the )a;ing of a usurious contract does not
constitute a cri)inal act. ,n case -. R. No. !!.3& the appellant appears to have foreclosed a chattel
)ortgage given to secure a usurious note, and hile this act should doubtless be considered as a
ta;ing of usur# ithin the )eaning of the cri)inal provision nevertheless of infor)ation does not
charge this fact as the basis of prosecution.
6or the rest , a) convinced that e are confronted ith a gross case of usurious practice and the
convictions in cases -. R. Nos. !!.3. and !!.33 are in )# opinion full# sustained b# the evidence.
,t is true that the line action pursued b# the appellant as cunningl# devised for the purpose of
concealing his unlaful practice, but hen the evidence is attentivel# considered the truth can , thin;
be )ade out be#ond a reasonable doubt: and, instead of sa#ing, as is said in the opinion, that Ethe
defendant )a# be guilt#, but his guilt has not been proven,E , do not hesitate to sa# that in )#
opinion his guilt in the to cases )entioned is full# established.
,n brief the testi)on# for the prosecution shos that on or about April 21, /4/4, the appellant let
$eopoldo *rti+ have the su) of P2,!'1, fro) hich *rti+ as re=uired to pa# P'1 for the
docu)entation of the contract. 6or this loan *rti+ e8ecuted a note for P',1'1 for one #ear, secured
b# a )ortgage of real propert#. Practicall# all above the a)ount of P2,!'1 as stipulated interest for
the loan, representing a usurious rate of interest. At the e8piration of the loan *rti+ needed )ore
)one# and instead of pa#ing off the e8isting loan he e8ecuted a ne note for the su) of P!1,&11,
secured b# a )ortgage on real and personal propert#. ,n this loan as included the a)ount of the
prior note %P',1'1( and, in addition, *rti+ as advanced )one# to the a)ount of the P/1,&11. This
note provided for interest at the rate of one per centu) per )onth. The balance represented the
a)ount that the appellant charged for the acco))odation. At the sa)e ti)e the )ortgage securing
the original note for P',1'1 as cancelled. At the end of the #ear specified in this contract *rti+ as
again unable to satisf# the debt, and in order to secure indulgence fro) the appellant and another
#ear of e8tension on the contract he as re=uired to pa# the su) of P!,.11. ,n addition to this the
su) of P2,111 as delivered b# one Gra)er to the appellant on account of *rti+, )a;ing altogether
P',.11, hich as paid b# *rti+ to the appellant for indulgence. The indebtedness no a)ounting
up to over P!2,111, including both loans and usur#, as ne8t split up into to notes, one of hich
as )ade for about P//,111 and the other for about P/!,111. The first of these contracts as
secured b# a )ortgage on herd of ninet#-to carabaos, and the other b# a )ortgage on real
propert#. ,n the independent transaction hich is )ade the sub7ect of prosecution in case -. R. No.
!!.3. the appellant re=uired *rti+ to pa# the su) of P211, as interest on P!,111 for the period of
three )onths, secured b# a contract of sale of land ith pacto de retro.
The opinion of the court )a;es the case turn upon certain supposed inconsistencies in the testi)on#
of *rti+ and a lac; of credibilit# attributed to his testi)on#. , cannot agree ith this appreciation of the
evidence: and it )a# be orth hile to state the facts as , considered the) established relative to
the first transaction, hich the opinion treats as the ;e#stone of the hole case. *rti+ has clai)ed at
all ti)es that he received a loan of onl# P2,!'1, for hich he as re=uired to give his note for
P',1'1. As it as i)portant for the appellant to cover up his trac;s the folloing device as used>
The appellant issued a crossed chec; on one of the local ban;s for the su) of P.,441... hich
*rti+ as re=uired to cash. *rti+ got a friend %Benedicto( to identif# hi) at the ban;: and Fr. Melli+a,
an elderl# and ell-respected person, a )e)ber of this court under the for)er regi)e, happened to
be in the ban; hen the )one# as dran. Meanhile the appellant, ho had folloed *rti+ to the
ban;, too; over the )one# and retained all but the su) of P2,!11, hich he turned over to the
appellant.
The state)ents of *rti+ as to this transaction are corroborated at )aterial points b# the to
itnesses referred to, and it is i)possible for )e to ithhold credit fro) their testi)on#. ,n addition to
this it is proved b# Gra)er that he paid P2,111 over to the appellant out of the proceeds of a
propert# hich he had purchased fro) *rti+. , sub)it that the appellant5s e8planations of all these
transactions are artificial and unconvincing. @hen his interest in disproving the charge is considered,
in connection ith other )atters affecting his credibilit#, , a) constrained to give credit to the proof
for the prosecution, and , believe that a conviction of the accused in to of the cases )entioned at
the beginning of this opinion as proper.
,n conclusion , ill sa# that , cannot dis)iss as lightl# fro) consideration as does the court the proof
relating to the character of the appellant. ,t is shon b# the record that he as once convicted of the
offense of stealing agon heels fro) the "nited Ftates =uarter)aster, and hile conviction of
cri)e does not render a person inco)petent to testif# in court, it is nevertheless a )atter that affects
his charter for truth and honest# and is ad)issible in evidence against hi). %". F. vs. Mercado, !&
Phil., /!3: secs. !0! and 2.!, Code of Civ. Proc.: sec. '', -. *. No. '0.( ,t is true that this proof as
sub)itted b# the fiscal as part of the original case for the prosecution, and its ad)ission at that stage
of the case as technicall# incorrect: but no error has been assigned to said action of the trial court
in the length# brief filed here, and as this proof ould have been ad)issible at an# rate in rebuttal,
no error as co))itted b# the court in considering it, if it did so consider it, as bearing on the
credibilit# of the appellant as a itness. The proof also shos that the appellant is a notorious
usurer, and a nu)ber of une8ceptionable itnesses ho have suffered at his hands or had direct
;noledge of his usurious practices testified as to this. The introduction of this proof as erroneous,
but no error has been assigned in this court to the action of the trial court in ad)itting it, and its
ad)ission supplies no ground for the reversal of the 7udg)ent: for, ignoring such inad)issible proof,
the case is in )# opinion )ade out be#ond a reasonable doubt.
Villa#or! ".! concurs.
MLCOLM, J., concurring and dissenting>
M# vote is to ac=uit in cases Nos. !!.3' and !!.3& and to affir) in cases Nos. !!.3. and !!.33.
M# vies of the "sur# $a are set out in "nited Ftates vs. Constantino Tan ?uingco Chua %H/4/4I,
24 Phil., ''!(.