LIM VS.

PEOPLE Article 1197

133 SCRA 333

FACTS:

On January 10, 1966, appellant Lourdes Valerion Lim who is a businesswoman went to the
house of Maria Ayroso and proposed to sell Ayrosos tobacco consisting of 615 kilos at P1.30 a
kilo which Ayroso agreed.
It was also agreed that the proceeds in the amount of P799.50 will be given to Ayroso as soon
as it was sold.
However, of the total value of P799.50, the appellant had paid to Ayroso only P240.00 and this
was paid on three different times.
As no further amount was paid, complainant Ayroso filed a complaint against appellant Lim for
estafa. Judgment was rendered against appellant.
In this petition for review on certiorari, appellant claimed that the obligation does not fix a
period and that the court should fix the duration thereof pursuant to Article 1197 of the Civil
Code.

ISSUE:Is appellants contention, saying that Article 1197 applies, correct?

RULING: No. It is clear in the agreement that the proceeds of the sale of the tobacco should be
turned over to the complainant as soon as the same was sold, or, that the obligation was immediately
demandable as soon as the tobacco was disposed of. The agreement constituted her as an agent
with the obligation to return the tobacco if the same was not sold. The fact that appellant received the
tobacco and the proceeds to be given to complainant as soon as it was sold, strongly negates
transfer of ownership of the goods to the appellant. Furthermore, where a person obliged himself to
pay to another the proceeds of the latters tobacco as soon as they are disposed of, a period exists
for payment of the obligation and, therefore, Article 1197 does not apply. The receipt, therefore,
should be considered as a contract of agency to sell the subject tobacco between the appellant and
complainant.
RONQUILLO VS. COURT OF APPEALS Solidary Obligations(1207&1208)
G.R. No. L-55138

FACTS:Petitioner Ernesto V. Ronquillo was one of four (4) defendants for the collection of the sum of
P117,498.98 plus attorney's fees and costs. The other defendants were Offshore Catertrade, Inc.,
Johnny Tan and Pilar Tan.On December 13, 1979, the lower court renderedits Decision based on the
compromise agreement, which stipulates, among others, that the Plaintiff agrees to reduce its total
claim of P117,498.95 to only P110,000.00 and defendants agree to acknowledge the validity of such
claim and further bind themselves to initially pay out of the total indebtedness of P110,000.00 the
amount of P55,000.00 on or before December 24, 1979, the balance of P55,000.00, defendants
individually and jointly agree to pay within a period of six months from January 1980, or before June
30, 1980.

Upon the defendants default, herein privaterespondent (then plaintiff) filed a Motion for Execution.
Ronquillo and another defendant Pilar Tan offered to pay their shares of the 55,000 already due.

But on January 22, 1980, private respondentAntonio So moved for the reconsideration and/or
modification of the aforesaid Order of execution and prayed instead for the "execution of the decision
in its entirety against all defendants, jointly and severally.

Petitioner opposed the said motion arguing thatunder the decision of the lower court being executed
which has already become final, the liability of the four (4) defendants was not expressly declared to
be solidary, consequently each defendant is obliged to pay only his own pro-rata or 1/4 of the amount
due and payable.

ISSUE:What is the nature of the liability of the defendants (including petitioner), was it merely joint, or
was it several or solidary?

RULING: SOLIDARY.

In this regard, Article 1207 and 1208 of the Civil Code provides -"Art. 1207. The concurrence of two or
more debtors in one and the same obligation does not imply that each one of the former has a right to
demand, or that each one of the latter is bound to render, entire compliance with the prestation. There
is a solidary liability only when the obligation expressly so states, or when the law or the nature of the
obligation requires solidarity.

Art. 1208. If from the law, or the nature or thewording of the obligation to which the preceding article
refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many
equal shares as there are creditors and debtors, the credits or debts being considered distinct from
one another, subject to the Rules of Court governing the multiplicity of suits."

Clearly then, by the express term of the compromise agreement, the defendants obligated
themselves to pay their obligation "individually and jointly."

The term "individually" has the same meaning as "collectively", "separately", "distinctively",
respectively or "severally". An agreement to be "individually liable" undoubtedly creates a several
obligation, and a "several obligation" is one by which one individual binds himself to perform the
whole obligation.

The obligation in the case at bar being described as"individually and jointly", the same is therefore
enforceable against one of the numerous obligors.
Fua vs. Yap Novation
GR No. 48797

Facts:

By virtue of a judgment for P1,538.04 which Fua obtained against Yap, a writ of execution was
issued in pursuance of which a parcel of land belonging to Yap was levied upon and its sale at
public auction duly advertised.
The sale was, however, suspended as a result of an agreement between the parties.
Appellants executed a mortgage in favor of appellee, wherein it was stipulated that their
obligation under the judgment in civil case No. 42125 was reduced to P1,200, which was made
payable in four installments of P300; that to secure the payment the said P1,200, a camarin
belonging to appellants was mortgaged to appellee; that in case appellants defaulted in the
payment of any of the installments, they would pay ten per cent of the unpaid balance as
attorney's fees, plus the costs of the action to be brought by appellee by reason of such
default, and the further amount of P338, representing the discount conceded to appellants.
Appellants failed to comply with the terms of the settlement, whereupon, appellee sought the
execution of the judgment, and by virtue of an alias writ of execution, the land was sold at
public auction to appellee and a final deed was executed in his favor.
Appellants refused, however, to vacate the land and to recognize appellee's title thereto;
hence, the latter instituted the present action for recovery.

ISSUE: WON Appellants' liability under the judgment in civil case No. 42125 had been extinguished?

Held: Appellants' liability under the judgment in civil case No. 42125 had been extinguished by the
statement evidenced by the mortgage executed by them in favor of appellee. Although said mortgage
did not expressly cancel the old obligation, this was impliedly novated by reason of incompatibility
resulting from the fact that, whereas the judgment was for P1,538.04 payable at one time, did not
provide for attorney's fees, and was not secured, the new obligation is for P1,200 payable in
installments, stipulates for attorney's fees, and is secured by a mortgage. The later agreement did not
merely extend the time to pay the judgment, because it was therein recited that appellants promised
to pay P1,200 to appellee as a settlement of the said judgment. Said judgment cannot be said to have
been settled, unless it was extinguished.
NATIONAL POWER CORPORATION VS DAYRIT Novation
125 SCRA 849

Facts: Daniel Roxas sued NPC to compel the NPC to restore the contract of Roxas for security
services which the former had terminated. However, they reached a compromise agreement, and the
court approved it. One of the stipulations of the agreement was that the parties shall continue with the
contract of security services under the same terms and conditions as the previous contract effective
upon the signing thereof. Parties entered into another contract for security services but NPC refused
to implement the new contract for which Daniel filed a Motion for Execution. The NPC assails the
Order on the ground that it directs execution of a contract which had been novated by that of the new
contracts. NPC contends there was novation because they executed the second contract with
Josefina Roxas; therefore there was a change of party. Upon the other hand, Roxas claims that said
contract was executed precisely to implement the compromise agreement for which reason there was
no novation.

ISSUE:Had the contract been novated upon the issuance of the Order?

Held: 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 the case at bar there is nothing in the May 14, 1982, agreement which supports the petitioner's
contention. There is neither explicit novation nor incompatibility on every point between the "old" and
the "new" agreements.
Millar vs. CA Novation
GR NO.L-29981

Facts: Millar obtained a favorable condemning Antonio P. Gabriel to pay him the sum of P1,746.98
with interest at 12% per annum from the date of the filing of the complaint, the sum of P400 as
attorney's fees, and the costs of suit. The lower court issued the writ of execution on the basis of
which the sheriff seized the respondent's Willy's Ford jeep. The respondent, however, pleaded with
the petitioner to release the jeep under an arrangement whereby the respondent, to secure the
payment of the judgment debt, agreed to mortgage the vehicle in favor of the petitioner. The petitioner
agreed to the arrangement; thus, the parties executed a chattel mortgage on the jeep. Resolution of
the controversy posed by the petition at bar hinges entirely on a determination of

ISSUE: whether or not the subsequent agreement of the parties as embodied in the deed of chattel
mortgage impliedly novated the judgment obligation.

Held: No substantial incompatibility between the mortgage obligation and the judgment liability of the
respondent sufficient to justify a conclusion of implied novation. The stipulation for the payment of the
obligation under the terms of the deed of chattel mortgage serves only to provide an express and
specific method for its extinguishment payment in two equal installments. The chattel mortgage
simply gave the respondent a method and more time to enable him to fully satisfy the judgment
indebtedness. The chattel mortgage agreement in no manner introduced any substantial modification
or alteration of the judgment. Instead of extinguishing the obligation of the respondent arising from the
judgment, the deed of chattel mortgage expressly ratified and confirmed the existence of the same,
amplifying only the mode and period for compliance by the respondent.

The defense of implied novation requires clear and convincing proof of complete incompatibility
between the two obligations. The law requires no specific form for an effective novation by
implication. The test is whether the two obligations can stand together. If they cannot, incompatibility
arises, and the second obligation novates the first. If they can stand together, no incompatibility
results and novation does not take place.
Sandico vs. Piguing
Novation
GR NO. L-26115

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. 5