NATIONAL POWER CORPORATION v JUDGE AELARDO M.

DAYRIT, CFI Manila, and DANIEL ROXAS, doing

business as United Veterans Security Agency and Foreign Boats Watchmen
NATIONAL POWER CORPORATION VS. DAYRIT
G.R. Nos. L-62845-46 / November 25, 1983 / ABAD SANTOS, J.

DOCTRINE: In order that an obligation may be extinguished by another which substitutes the same; it is imperative that it be so
declared in unequivocal terms, or that the old or new obligation be on every point incompatible with each other. 1292

FACTS:
Napocor / NPC Roxas / United Veterans Security Agency
Judge Dayrit
 Respondent Daniel Roxas, doing business under the name of United Veterans Security Agency and Foreign Boats
Watchmen, sued the NPC and two of its officers.
o Purpose of the suit was to compel NPC to restore the contract of Roxas for security services which the former had terminated.

 Both parties entered into a Compromise Agreement, and they asked the Court to approve it with the ff terms:
o NPC shall pay to plaintiff the sum of P7,277.45
o NPC shall pay plaintiff the value of the line materials
o The parties shall continue with the contract of security services under the same terms and;
o The parties waive all their respective claims
o The parties agree to faithfully comply with the foregoing agreement.
 CFI: approved compro agreement, "based on compromise agreement submitted by the parties, the parties shall continue with the
contract of security services under same terms and conditions as the previous contract effective upon the signing."

 May 14, 1982 – NPC executed another contract for security services w/ Josette Roxas whose relationship to Daniel is not shown.
At any rate, Daniel has owned this contract. Roxas asked NPC to execute this new contract.
 NPC refused to do so.
 Roxas then filed a Motion for Execution (that NPC shall continue with contract of Roxas’ Agency as approved by Court)
 CFI/Judge Dayrit: issued WOE, in favour of Roxas
 NPC elevated case with CC thru petition to review order of CFI; assails the WOE on ground that it directs execution of a contract
which had been novated by that contract on May 14, 1982.
 Roxas countered that said contract was executed precisely to implement the compromise agreement for which reason there was no
novation.

ISSUE: WoN there was novation. --NO

RULING:
Roxas averred: There was no novation - said new contract was executed precisely to implement the compromise agreement.
NAPOCOR had obligation to execute (ELAM: Court is correct in issuing WOE)

NAPOCOR averred: There was novation – previous contract (old agreement) was novated by May 14, 1982 agreement (new
agreement) (ELAM: Since there was novation, therefore, Court is wrong to issue WOE on previous agreement, since there is new
agreement???)

Court ruled (wit Roxas): NO novation

 It is elementary that novation is never presumed; it must be explicitly stated or there must be manifest incompatibility between
the old and the new obligations in every aspect. Thus the Civil Code provides:
Art. 1292. In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so
declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other.

 In this case, there is nothing in the May 14, 1982 agreement which supports the NAPOCORs contention that there was novation.
There is neither explicit novation nor incompatibility on every point between the "old" and the "new" agreements.
o In fact, May 14, 1982 agreement stipulates “the Compromise Agreement and previous Court Decision, other subsequent
letters and the performance bond of AGENCY to be filed in favor of CORPORATION in the manner hereinafter provided,
are hereby expressly made integral parts of this contract by reference.” (ELAM: IOW – no novation; previous and new are
compatible, and exist side by side; no incompatibility or implied novation)

DISPOSITION:
WHEREFORE, the petition is denied for lack of merit with costs against the petitioner. SO ORDERED.