Narciso Degaños vs People of the Philippines

GR. No. 162826, 14 October 2013

Doctrine: Novation is not a mode of extinguishing criminal liability under the

penal
laws of the country. Only the State may validly waive the criminal
action against an accused. Novation is relevant only to determine if the
parties have meanwhile altered the nature of the obligation prior to the
commencement of the criminal prosecution in order to prevent the
incipient criminal liability of the accused.

Subject: Novation/Agency

Facts: Brigada Luz and Narciso Deganos were charged with estafa after
allegedly receiving gold and jewelries from Spouses Atty. Jose Bordador
and Lydia Bordador and failing to fully pay 2 sets of jewelry (amounting
to P438,702.00) documented by “Katibayan at Kasunduan” receipts
signed by Narciso in the presence of Lydia Bordador. It has been stated
that Narciso Deganos was under express obligation to sell the gold and
jewelries received from complainants and remit the proceeds thereof
or return the same if unsold.

Prior to the instant case, a separate civil action had already been filed
before the RTC for recovery of sum of money to which the court found
both accused liable. CA and SC affirmed the ruling of the lower court
on such civil case.

In the present case, Deganos admitted that he is the only one

indebted.
Out of such, he has already made partial payments amounting to
P53,307.00 through which he claims that there has been novation to
his contract with the private complainants from agency to loan,
thereby supposedly converting his liability from criminal to civil.
Moreover, the accused contended that the transaction was not a
consignment but a sale on credit.

Issue: Whether or not the transaction was a sale on credit and

whether or not the novation compromises the criminal liability.

Held: No. The transaction was in fact an agency based on the express terms
and tenor of the Kasunduan at Katibayan through which, the accused
was held obliged to sell items received on behalf of complainants.
Accused was stipulated to be compensated with the overprice of sale
as his commission. He was also obliged to return unsold items, thereby
making such transaction a consignment. Since there was no transfer of
ownership, the transaction cannot be deemed as a contract of sale
(Art. 1458, Civil Code).

Moreover, novation, as per RPC, is not a ground for the extinguishment

of criminal liability as it is a public offense which must be prosecuted
and punished. Consequently, where a criminal offense committed
against the People, the offended party may not waive or extinguish the
criminal liability imposed by the law.