NILO B. DIONGZON, petitioner, vs.

COURT OF APPEALS and

PEOPLE OF THE PHILIPPINES, respondents.

criminal liability which he might have had under the former

obligation was thereby avoided.

Facts:

Nilo was charged for violation of BP 22 by Filipro, now Nestle.

According to the complainants, due to abnormally high
orders, the company decided to check the veracity of three
customers. Nilo presented to the company representatives
three checks purportedly for payment of the goods ordered
by the clients. When presented for payment, the checks
bounced. The first two checks were dishonoured because of
significant differences with the signature on file with the
bank, while the third check was dishonoured for insufficiency
of funds. When the company representative confronted the
clients, the latter denied receiving the goods nor issuing the
checks. Nilo then admitted issuing the checks from his bank
account. According to him, he resorted to credit riding in
order to meet the sales targets. During trial, Nilo first denied
that the signatures on the checks were his, then admitted
that the third check was issued as replacement for the first
two which bounced. The RTC convicted him, affirmed by the
Court of Appeals. The CA however did not impose on him
subsidiary imprisonment because according to the CA, BP 22
is a special law which provides no subsidiary imprisonment.
In his appeal to the Supreme Court, Nilo interposed the
defense of novation, a completely different defense from the
one he used in the lower courts. According to him, because
of the incompatibility between the last check and the partial
payment and written undertaking he executed, there was a
novation of his original obligation so that any incipient

Issuse:
WON there was novation
Ruling:

The Supreme Court held that there was no novation in this

case because a change in the mode of paying the obligation
was not a change in any of the objects or principal conditions
of the contract. Novation cannot be presumed but must be
expressly intended by the parties.
It is well-settled that the following requisites must be
present for novation to take place: (1) a previous valid
obligation; (2) agreement of all the parties to the new
contract; (3) extinguishment of the old contract; and (4)
validity of the new one.
These requisites, particularly the third, were not proven in
this case. As the Court of Appeals held, the transaction
became a personal undertaking of the petitioner when he
received the goods for delivery but made no delivery thereof
either to the credited dealer or to the credit rider. Petitioner
had an existing obligation to pay she value of the goods for
which the check was issued. This obligation was not
extinguished when the check was dishonored and a new
agreement was reached by the two parties to pay in cash its
value. The change in the mode of paying the obligation was

not a change in any of the objects or principal conditions of

the contract.
If there was a novation, petitioner's liability under B.P. Blg. 22
was not thereby extinguished because the gravamen of the
offense is the issuance of worthless checks. Novation is not a
mode of extinguishing criminal liability.

Sandico vs. Piguing

Reduction of the amount of money to be paid does not

amount to novation. The payment by the respondent of the
lesser amount of P4,000, accepted by the petitioners without
any protest or objection and acknowledged by them as "in
full satisfaction of the money judgment", completely
extinguished the judgment debt and released the respondent
from
his
pecuniary
liability.

In the case at hand, we fail to see what new or modified

obligation arose out of the payment by the respondent of the
reduced amount of P4,000 and substitute the monetary
liability for P6,000 of the said respondent under the appellate
court's judgment. Additionally, to sustain novation
necessitates that the same be so declared in unequivocal
terms clearly and unmistakably shown by the express
agreement of the parties or by acts of equivalent import or
that there is complete and substantial incompatibility
between the two obligations.

Facts:
The appellate court's judgment obliges the respondent to do two
things: (1) to recognize the easement, and (2) to pay the petitioners
the sums of P5,000 actual and P500 exemplary damages and P500
attorney's fees, or a total of P6,000. The full satisfaction of the said
judgment requires specific performance and payment of a sum of
money by the respondent. The parties entered into an agreement
reducing the payment to P4000, and was subsequently paid by
respondent.
Issue:
Was there a novation?
Held:

PEOPLE'S BANK AND TRUST COMPANY, plaintiff-appellee, vs.

SYVEL'S INCORPORATED, ANTONIO Y. SYYAP and ANGEL Y
SYYAP, defendants-appellants.
Facts:

"This is an action for foreclosure of chattel mortgage

executed in favor of the plaintiff by the defendant Syvel's
Incorporated on its stocks of goods, personal properties and
other materials owned by it and located at its stores or
warehouses.

The chattel mortgage was in connection with a credit

commercial line in the amount of P900,000.00 granted to the
said defendant corporation.
Defendants executed an undertaking in favor of the plaintiff
whereby they both agreed to guarantee absolutely and
unconditionally and without the benefit of excussion the full
and prompt payment of any indebtedness to be incurred on
account of the said credit line.
In view of the failure of the defendant corporation to make
payment in accordance with the terms and conditions agreed
upon in the Commercial Credit Agreement the plaintiff
started to foreclose extrajudicially the chattel mortgage.
Mr. Syyap requested that the plaintiff dismiss this case
because he did not want to have the goodwill of Syvel's
Incorporated impaired, and offered to execute a real estate
mortgage on his real property.
Defendants did not agree with plaintiff's motion to dismiss
which included the dismissal of their counterclaim and filed
instead their own motion to dismiss on the ground that by
the execution of said real estate mortgage, the obligation
secured by the chattel mortgage subject of this case was
novated, and therefore, appellee's cause of action thereon
was extinguished.

Issue:
Was there novation?
Ruling:

In the case at bar, there is nothing in the Real Estate

Mortgage which supports appellants' submission. The
contract on its face does not show the existence of an explicit
novation nor incompatibility on every point between the "old
and the "new" agreements as the second contract evidently
indicates that the same was executed as new additional
security to the chattel mortgage previously entered into by
the parties.
Moreover, records show that in the real estate mortgage,
appellants agreed that the chattel mortgage "shall remain in
full force and shall not be impaired by this (real estate)
mortgage."

ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ and GERRY E

CRUZ, petitioners, vs. COURT OF APPEALS and SPOUSES
ELISEO and VIRGINIA MALOLOS, respondents.
Facts:
Delfin I. Cruz and Adoracion Cruz were spouses and their children
were Thelma, Nerissa, Arnel and Gerry Cruz. Upon the death of
Delfin I. Cruz, his surviving spouse and children executed a
notarized deed of partial partition (DPP) by virtue of which each one
of them was given a share of several parcels of land all situated in
Taytay, Rizal. A day after the execution of the DPP, the same parties
executed a Memorandum of Agreement (MOA) wherein they
covenanted and agreed among themselves that they shall alike and
receive equal shares from the proceeds of the sale of any of the lot
or lots allotted to and adjudicated in their individual names by

virtue of the DPP. The DPP was subsequently registered and title
were issued in their names. The annotation pertaining to the MOA
was carried in each of the title. The spouses Nerissa Cruz-Tamayo
and Nelson Tamayo were sued by the spouses Eliseo and Virginia
Malolos for a sum of money in the Court of First Instance of Rizal
(Quezon City). The Tamayo spouses, after trial, were condemned by
the trial court to pay a sum of money to the Malolos spouses. After
the finality of the decision, a writ of execution was issued. Enforcing
said writ, the sheriff of the court levied upon the land in question
and thereafter sold the properties in an execution sale to the
highest bidders, the Malolos spouses. Accordingly, the sheriff
executed a certificate of sale. Nerissa Cruz-Tamayo failed to
exercise her right of redemption within the statutory period and so
the final deed of sale was executed by the sheriff conveying the
lands to the Malolos spouses. The Malolos couple asked the Nerissa
Cruz-Tamayo to give them the owners duplicate copy of the seven
(7) titles of the lands in question but she refused. The couple moved
the court to compel her to surrender said titles to the Register of
Deeds of Rizal for cancellation. The motion was granted, but
Nerissa was adamant. She did not comply with the order so the
Malolos couple asked the court to declare said titles null and void.
At this point, petitioners entered the picture by filing in said court a
motion for leave to intervene and oppose the Maloloses' motion.
They alleged that they are co-owners of the lands in question. The
lower court rendered a decision for private respondents from which
the defendants appealed to the Court of Appeals. The appellate
court ruled in favor of herein private respondents, holding that the
DPP was not materially and substantially incompatible with the
MOA. The DPP conferred absolute ownership of the parcels of land
in issue on Nerissa Cruz-Tamayo, while the MOA merely created an

obligation on her part to share with the petitioners the proceeds of

the sale of the said properties. Hence, the present petition.
Issue:
WON DPP was cancelled or novated upon the execution of MOA as
what is the contention of the petitioners?
Ruling:
The Supreme Court found no reversible error committed by the
Court of Appeals. The Court ruled that the MOA does not novate,
much less cancel, the earlier DPP. The MOA falls short of producing
a novation, because it does not express a clear intent to dissolve
the old obligation as a consideration for the emergence of a new
one. Petitioners also failed to show that the DPP and the MOA are
materially and substantially incompatible with each other. The DPP
granted title to the lots in question to the co-owner to whom they
were assigned, and the MOA created an obligation on the part of
such co-owner to share with the others the proceeds of the sale of
such parcels. There is no incompatibility between the two contracts.
The MOA cannot be then construed as a repudiation of the earlier
DPP.

LEONIDA C. QUINTO, petitioner,

PHILIPPINES, respondent .

Facts:

vs.

PEOPLE

OF

THE

Petitioner Quinto took some jewelries from private complainant

Amelia Cariaga for selling purposes. After 6 months, however,
Quinto failed to return the jewelries or pay the value thereof. Hence,
a case of estafa was filed against Quinto as a result of which she
was convicted, affirmed by the Court of Appeals. Quinto admitted
that she took some jewelries from Cariaga but she sold the same to
Mrs. Camacho and Mrs. Ramos. Unfortunately however, both were
unable to pay the whole amount and promised to pay the balance
in installment to Cariaga. Petitioner thus alleged that the
agreement between her and Cariaga was effectively novated when
the latter consented to receive payment on installments directly
from Mrs. Camacho and Mrs. Ramos.
Issue:
WON there was novation hence extinguishing petitioners liability to
complainant?

Ruling:
The changes alluded to by petitioner consists only in the manner of
payment. There was really no substitution of debtors since Cariaga
merely accepted the payment but did not give her consent to enter
into a new contract. Thus, Cariaga's acceptance of Ramos and
Camacho's payment on installment basis cannot be construed as a
case of either expromision or delegacion sufficient to justify the
attendance of extinctive novation. Hence, this does not necessarily
extinguish the liability of the first debtor.

Further the defense of novation cannot avoid the incipient criminal

liability for Estafa to which Quinto was found guilty of. It is a public
offense which must be prosecuted and punished by the State on its
own.