NILO B. DIONGZON, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.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 criminal liability which he might have had under the former obligation was thereby avoided.

Issuse:WON there was novationRuling: 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

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: 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.

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, vs. PEOPLE OF THE PHILIPPINES, respondent .

Facts: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.