8/14/2019 Digest Oblicon
1/2
Sandico vs. Piguing (novation)
Facts: The appellate court's judgment obliges the respondent to
do two things: (1) to recognize theeasement, and (2) to pay the
petitioners the sums of P5,000 actual and P500 exemplary damagesand
P500 attorney's fees, or a total of P6,000. The full satisfaction
of the said judgment requiresspecific performance and payment of a
sum of money by the respondent. The parties entered into
anagreement reducing the payment to P4000, and were 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 bythe respondent of the lesser
amount of P4, 000, accepted by the petitioners without any protest
orobjection and acknowledged by them as "in full satisfaction of
the money judgment", completelyextinguished 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 therespondent 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 necessitatesthat the same be so
declared in unequivocal terms clearly and unmistakably shown by the
expressagreement of the parties or by acts of equivalent import or
that there is complete and substantialincompatibility between the
two obligations.
G.R. No. L-29280 August 11, 1988PEOPLE'S BANK AND TRUST COMPANY,
plaintiff-appellee, vs.SYVEL'S INCORPORATED,ANTONIO Y. SYYAP and
ANGEL Y SYYAP, defendants-appellants.
This is an action for foreclosure of chattel mortgage executed
in favour of the plaintiff by the defendantSyvel's Incorporated on
its stocks of goods, personal properties and other materials owned
by it andlocated at its stores orwarehouses The chattel mortgage
was inconnection with a credit commercial linein the amount of
P900, 000.00 granted the said defendant corporation, the expiry
date of which wasMay 20, 1966. On May 20, 1965, defendants Antonio
V. Syyap and Angel Y. Syyap executed an
undertaking in favour of the plaintiff whereby they both agreed
to guarantee absolutely andunconditionally and without the benefit
of excussion(A seizing by law; in civil law , the act of
exhaustinglegal proceedings against a debtor or his property,
before proceeding against the property of a personsecondarily
liable for the debt) the full and prompt payment of any
indebtedness to be incurredon account of the said credit line.
Against the credit line granted the defendant Syvel'sIncorporated
the latter drew advances in the form of promissory notes. In view
of the failure of thedefendant corporation to make payment in
accordance with the terms and conditions agreed upon in
the Commercial Credit Agreement the plaintiff started to
foreclose extra judicially the chattel mortgage.After the filing of
this case and during itspendency, Syyap proposed to have the case
settled. Mr. Syyapoffered to execute a real estate mortgage on his
real property located in Bacoor, Cavite. Mr. De las Alasconsented,
and so the Real Estate Mortgage was executed by the defendant
Antonio V. Syyap and his
8/14/2019 Digest Oblicon
2/2
wife Margarita Bengco Syyap on June 22, 1967. In that deed of
mortgage, defendant Syyap admittedthat as of June 16, 1967, the
indebtedness of Syvel's Incorporated was P601, 633.01. No part of
theamount has been paid by either of the defendants. Hence their
liabilities cannot be questioned.
ISSUE: WON the obligation secured by the Chattel Mortgage sought
to be foreclosed was novated by
the subsequent execution by Syyap of a real estate mortgage as
additional collateral to the obligationsecured by said chattel
mortgage.
HELD: Novation takes place when the object or principal
condition of an obligation is changed or altered.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. In the case at bar, there isnothing in the Real Estate
Mortgage which supports appellants' submission. The contract on its
facedoes not show the existence of an explicit novation nor
incompatibility on every point between the "oldand the "new"
agreements as the second contract evidently indicates that the same
was executed asnew additional security to the chattel mortgage
previously entered into by the parties. Moreover,appellants agreed
that the chattel mortgage "shall remain in full force and shall not
be impaired by this(real estate) mortgage."It is clear, therefore,
that a novation was not intended. The real estate mortgage
was evidently taken as additional security for the performance
of the contract
