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GR No. 180144

2014-09-24

LEONARDO BOGNOT v. RRI LENDING CORPORATION

BRION, J.

Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[36]

GR No. 183804

2013-09-11

S.C. MEGAWORLD CONSTRUCTION v. ENGR. LUIS U. PARADA

REYES, J.

Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[27] It is "the substitution of a new contract, debt, or obligation for an existing one between the same or different parties."[28] Article 1293 of the Civil Code defines novation as follows:Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him rights mentioned in Articles 1236 and 1237.

GR No. 185945

2012-12-05

FIDELIZA J. AGLIBOT v. INGERSOL L. SANTIA

REYES, J.

The relation between an accommodation party and the party accommodated is, in effect, one of principal and surety the accommodation party being the surety. It is a settled rule that a surety is bound equally and absolutely with the principal and is deemed an original promisor and debtor from the beginning. The liability is immediate and direct.[26] It is not a valid defense that the accommodation party did not receive any valuable consideration when he executed the instrument; nor is it correct to say that the holder for value is not a holder in due course merely because at the time he acquired the instrument, he knew that the indorser was only an accommodation party.[27]

GR No. 159709

2012-06-27

HEIRS OF SERVANDO FRANCO v. SPS. VERONICA AND DANILO GONZALES

BERSAMIN, J.

Worth noting is that Servando's liability was joint and solidary with his co-debtors. In a solidary obligation, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously.[27] The choice to determine against whom the collection is enforced belongs to the creditor until the obligation is fully satisfied.[28] Thus, the obligation was being enforced against Servando, who, in order to escape liability, should have presented evidence to prove that his obligation had already been cancelled by the new obligation or that another debtor had assumed his place. In case of change in the person of the debtor, the substitution must be clear and express,[29] and made with the consent of the creditor.[30] Yet, these circumstances did not obtain herein, proving precisely that Servando remained a solidary debtor against whom the entire or part of the obligation might be enforced.

GR No. 173565

2009-05-08

TRANSPACIFIC BATTERY v. SECURITY BANK

TINGA, J.

Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[26] Article 1292 of the Civil Code expressly provides:Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and new obligations be in every point incompatible with each other. In order for novation to take place, the concurrence of the following requisites are indispensable:

GR No. 170141

2008-04-22

JAPAN AIRLINES v. JESUS SIMANGAN

REYES, R.T., J.

Considering that respondent was forced to get out of the plane and left behind against his will, he could not have freely consented to be rebooked the next day. In short, he did not agree to the alleged novation. Since novation implies a waiver of the right the creditor had before the novation, such waiver must be express.[58] It cannot be supposed, without clear proof, that respondent had willingly done away with his right to fly on July 29, 1992.

GR No. 146511

2007-09-05

TOMAS ANG v. ASSOCIATED BANK

AZCUNA, J.

As petitioner acknowledged it to be, the relation between an accommodation party and the accommodated party is one of principal and surety the accommodation party being the surety.[62] As such, he is deemed an original promisor and debtor from the beginning;[63] he is considered in law as the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter since their liabilities are interwoven as to be inseparable.[64] Although a contract of suretyship is in essence accessory or collateral to a valid principal obligation, the surety's liability to the creditor is immediate, primary and absolute; he is directly and equally bound with the principal.[65] As an equivalent of a regular party to the undertaking, a surety becomes liable to the debt and duty of the principal obligor even without possessing a direct or personal interest in the obligations nor does he receive any benefit therefrom.[66]

GR NO. 166704

2006-12-20

AGRIFINA AQUINTEY v. SPS. FELICIDAD AND RICO TIBONG

CALLEJO, SR., J.

An extinctive novation would thus have the twin effects of, first, extinguishing an existing obligation and, second, creating a new one in its stead. This kind of novation presupposes a confluence of four essential requisites: (1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new obligation. Novation is merely modificatory where the change brought about by any subsequent agreement is merely incidental to the main obligation (e.g., a change in interest rates or an extension of time to pay); in this instance, the new agreement will not have the effect of extinguishing the first but would merely supplement it or supplant some but not all of its provisions.[66] (Citations Omitted) Novation which consists in substituting a new debtor (delegado) in the place of the original one (delegante) may be made even without the knowledge or against the will of the latter but not without the consent of the creditor. Substitution of the person of the debtor may be effected by delegacion, meaning, the debtor offers, and the creditor (delegatario), accepts a third person who consents to the substitution and assumes the obligation. Thus, the consent of those three persons is necessary.[67] In this kind of novation, it is not enough to extend the juridical relation to a third person; it is necessary that the old debtor be released from the obligation, and the third person or new debtor take his place in the relation.[68] Without such release, there is no novation; the third person who has assumed the obligation of the debtor merely becomes a co-debtor or a surety. If there is no agreement as to solidarity, the first and the new debtor are considered obligated jointly.[69]

GR NO. 156304

2006-10-23

ANACLETO R. MENESES v. SECRETARY OF AGRARIAN REFORM

AUSTRIA-MARTINEZ, J.

Rule 34, Section 1 of the Rules of Court,[28] provides that a judgment on the pleadings is proper when an answer fails to render an issue or otherwise admits the material allegations of the adverse party's pleading. The essential question is whether there are issues generated by the pleadings. A judgment on the pleadings may be sought only by a claimant, who is the party seeking to recover upon a claim, counterclaim or cross-claim; or to obtain a declaratory relief.[29]

GR NO. 157911

2006-09-19

SPS. MANUEL A. AGUILAR AND YOLANDA C. AGUILAR v. MANILA BANKING CORPORATION

AUSTRIA-MARTINEZ, J.

Moreover, the Court cannot see how novation can take place considering that the surrounding circumstances negate the same. The established rule is that novation is never presumed; it must be clearly and unequivocally shown.[73] Novation will not be allowed unless it is clearly shown by express agreement, or by acts of equal import. Thus, to effect an objective novation it is imperative that the new obligation expressly declares that the old obligation is thereby extinguished or that the new obligation be on every point incompatible with the new one.[74]

GR NO. 145441

2005-04-26

PHILIPPINE SAVINGS BANK v. SPS. RODOLFO C. MAÑALAC

YNARES-SANTIAGO, J.

Neither can Mañalac be deemed substitute debtor within the contemplation of Article 1293 of the Civil Code, which states that: Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237.[28] In order to change the person of the debtor, the old one must be expressly released from the obligation, and the third person or new debtor must assume the former's place in the relation. Novation is never presumed. Consequently, that which arises from a purported change in the person of the debtor must be clear and express. It is thus incumbent on Mañalac to show clearly and unequivocally that novation has indeed taken place.[29] In Magdalena Estates Inc. v. Rodriguez,[30] we held that "the mere fact that the creditor receives a guaranty or accepts payments from a third person who has agreed to assume the obligation, when there is no agreement that the first debtor shall be released from responsibility, does not constitute a novation, and the creditor can still enforce the obligation against the original debtor."

GR NO. 153867

2005-02-17

WOOD TECHNOLOGY CORPORATION v. EQUITABLE BANKING CORPORATION

QUISUMBING, J.

We note now that (1) the RTC knew that the Answer asserted special and affirmative defenses; (2) the Court of Appeals recognized that certain issues were raised, but they were not genuine issues of fact; (3) petitioners insisted that they raised genuine issues; and (4) respondent argued that petitioners' defenses did not tender genuine issues. However, whether or not the issues raised by the Answer are genuine is not the crux of inquiry in a motion for judgment on the pleadings. It is so only in a motion for summary judgment.[14] In a case for judgment on the pleadings, the Answer is such that no issue is raised at all. The essential question in such a case is whether there are issues generated by the pleadings.[15] This is the distinction between a proper case of summary judgment, compared to a proper case for judgment on the pleadings. We have explained this vital distinction in Narra Integrated Corporation v. Court of Appeals,[16] thus,

GR No. 138085

2004-11-11

AZOLLA FARMS v. CA

AUSTRIA-MARTINEZ, J.

Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or, by substituting another in place of the debtor, or by subrogating a third person in the rights of the creditor.[27] In order for novation to take place, the concurrence of the following requisites is indispensable:[28]

	GR No. 180144 2014-09-24	LEONARDO BOGNOT v. RRI LENDING CORPORATION BRION, J.
Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[36]
	GR No. 183804 2013-09-11	S.C. MEGAWORLD CONSTRUCTION v. ENGR. LUIS U. PARADA REYES, J.
Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[27] It is "the substitution of a new contract, debt, or obligation for an existing one between the same or different parties."[28] Article 1293 of the Civil Code defines novation as follows:Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him rights mentioned in Articles 1236 and 1237.
	GR No. 185945 2012-12-05	FIDELIZA J. AGLIBOT v. INGERSOL L. SANTIA REYES, J.
The relation between an accommodation party and the party accommodated is, in effect, one of principal and surety the accommodation party being the surety. It is a settled rule that a surety is bound equally and absolutely with the principal and is deemed an original promisor and debtor from the beginning. The liability is immediate and direct.[26] It is not a valid defense that the accommodation party did not receive any valuable consideration when he executed the instrument; nor is it correct to say that the holder for value is not a holder in due course merely because at the time he acquired the instrument, he knew that the indorser was only an accommodation party.[27]
	GR No. 159709 2012-06-27	HEIRS OF SERVANDO FRANCO v. SPS. VERONICA AND DANILO GONZALES BERSAMIN, J.
Worth noting is that Servando's liability was joint and solidary with his co-debtors. In a solidary obligation, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously.[27] The choice to determine against whom the collection is enforced belongs to the creditor until the obligation is fully satisfied.[28] Thus, the obligation was being enforced against Servando, who, in order to escape liability, should have presented evidence to prove that his obligation had already been cancelled by the new obligation or that another debtor had assumed his place. In case of change in the person of the debtor, the substitution must be clear and express,[29] and made with the consent of the creditor.[30] Yet, these circumstances did not obtain herein, proving precisely that Servando remained a solidary debtor against whom the entire or part of the obligation might be enforced.
	GR No. 173565 2009-05-08	TRANSPACIFIC BATTERY v. SECURITY BANK TINGA, J.
Novation is a mode of extinguishing an obligation by changing its objects or principal obligations, by substituting a new debtor in place of the old one, or by subrogating a third person to the rights of the creditor.[26] Article 1292 of the Civil Code expressly provides:Art. 1292. In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or that the old and new obligations be in every point incompatible with each other. In order for novation to take place, the concurrence of the following requisites are indispensable:
	GR No. 170141 2008-04-22	JAPAN AIRLINES v. JESUS SIMANGAN REYES, R.T., J.
Considering that respondent was forced to get out of the plane and left behind against his will, he could not have freely consented to be rebooked the next day. In short, he did not agree to the alleged novation. Since novation implies a waiver of the right the creditor had before the novation, such waiver must be express.[58] It cannot be supposed, without clear proof, that respondent had willingly done away with his right to fly on July 29, 1992.
	GR No. 146511 2007-09-05	TOMAS ANG v. ASSOCIATED BANK AZCUNA, J.
As petitioner acknowledged it to be, the relation between an accommodation party and the accommodated party is one of principal and surety the accommodation party being the surety.[62] As such, he is deemed an original promisor and debtor from the beginning;[63] he is considered in law as the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter since their liabilities are interwoven as to be inseparable.[64] Although a contract of suretyship is in essence accessory or collateral to a valid principal obligation, the surety's liability to the creditor is immediate, primary and absolute; he is directly and equally bound with the principal.[65] As an equivalent of a regular party to the undertaking, a surety becomes liable to the debt and duty of the principal obligor even without possessing a direct or personal interest in the obligations nor does he receive any benefit therefrom.[66]
	GR NO. 166704 2006-12-20	AGRIFINA AQUINTEY v. SPS. FELICIDAD AND RICO TIBONG CALLEJO, SR., J.
An extinctive novation would thus have the twin effects of, first, extinguishing an existing obligation and, second, creating a new one in its stead. This kind of novation presupposes a confluence of four essential requisites: (1) a previous valid obligation; (2) an agreement of all parties concerned to a new contract; (3) the extinguishment of the old obligation; and (4) the birth of a valid new obligation. Novation is merely modificatory where the change brought about by any subsequent agreement is merely incidental to the main obligation (e.g., a change in interest rates or an extension of time to pay); in this instance, the new agreement will not have the effect of extinguishing the first but would merely supplement it or supplant some but not all of its provisions.[66] (Citations Omitted) Novation which consists in substituting a new debtor (delegado) in the place of the original one (delegante) may be made even without the knowledge or against the will of the latter but not without the consent of the creditor. Substitution of the person of the debtor may be effected by delegacion, meaning, the debtor offers, and the creditor (delegatario), accepts a third person who consents to the substitution and assumes the obligation. Thus, the consent of those three persons is necessary.[67] In this kind of novation, it is not enough to extend the juridical relation to a third person; it is necessary that the old debtor be released from the obligation, and the third person or new debtor take his place in the relation.[68] Without such release, there is no novation; the third person who has assumed the obligation of the debtor merely becomes a co-debtor or a surety. If there is no agreement as to solidarity, the first and the new debtor are considered obligated jointly.[69]
	GR NO. 156304 2006-10-23	ANACLETO R. MENESES v. SECRETARY OF AGRARIAN REFORM AUSTRIA-MARTINEZ, J.
Rule 34, Section 1 of the Rules of Court,[28] provides that a judgment on the pleadings is proper when an answer fails to render an issue or otherwise admits the material allegations of the adverse party's pleading. The essential question is whether there are issues generated by the pleadings. A judgment on the pleadings may be sought only by a claimant, who is the party seeking to recover upon a claim, counterclaim or cross-claim; or to obtain a declaratory relief.[29]
	GR NO. 157911 2006-09-19	SPS. MANUEL A. AGUILAR AND YOLANDA C. AGUILAR v. MANILA BANKING CORPORATION AUSTRIA-MARTINEZ, J.
Moreover, the Court cannot see how novation can take place considering that the surrounding circumstances negate the same. The established rule is that novation is never presumed; it must be clearly and unequivocally shown.[73] Novation will not be allowed unless it is clearly shown by express agreement, or by acts of equal import. Thus, to effect an objective novation it is imperative that the new obligation expressly declares that the old obligation is thereby extinguished or that the new obligation be on every point incompatible with the new one.[74]
	GR NO. 145441 2005-04-26	PHILIPPINE SAVINGS BANK v. SPS. RODOLFO C. MAÑALAC YNARES-SANTIAGO, J.
Neither can Mañalac be deemed substitute debtor within the contemplation of Article 1293 of the Civil Code, which states that: Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be made without the knowledge or against the will of the latter, but not without the consent of the creditor. Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237.[28] In order to change the person of the debtor, the old one must be expressly released from the obligation, and the third person or new debtor must assume the former's place in the relation. Novation is never presumed. Consequently, that which arises from a purported change in the person of the debtor must be clear and express. It is thus incumbent on Mañalac to show clearly and unequivocally that novation has indeed taken place.[29] In Magdalena Estates Inc. v. Rodriguez,[30] we held that "the mere fact that the creditor receives a guaranty or accepts payments from a third person who has agreed to assume the obligation, when there is no agreement that the first debtor shall be released from responsibility, does not constitute a novation, and the creditor can still enforce the obligation against the original debtor."
	GR NO. 153867 2005-02-17	WOOD TECHNOLOGY CORPORATION v. EQUITABLE BANKING CORPORATION QUISUMBING, J.
We note now that (1) the RTC knew that the Answer asserted special and affirmative defenses; (2) the Court of Appeals recognized that certain issues were raised, but they were not genuine issues of fact; (3) petitioners insisted that they raised genuine issues; and (4) respondent argued that petitioners' defenses did not tender genuine issues. However, whether or not the issues raised by the Answer are genuine is not the crux of inquiry in a motion for judgment on the pleadings. It is so only in a motion for summary judgment.[14] In a case for judgment on the pleadings, the Answer is such that no issue is raised at all. The essential question in such a case is whether there are issues generated by the pleadings.[15] This is the distinction between a proper case of summary judgment, compared to a proper case for judgment on the pleadings. We have explained this vital distinction in Narra Integrated Corporation v. Court of Appeals,[16] thus,
	GR No. 138085 2004-11-11	AZOLLA FARMS v. CA AUSTRIA-MARTINEZ, J.
Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or, by substituting another in place of the debtor, or by subrogating a third person in the rights of the creditor.[27] In order for novation to take place, the concurrence of the following requisites is indispensable:[28]

ROMEO C. GARCIA v. DIONISIO V. LLAMAS