ELSA B. REYES, petitioner, vs. COURT OF APPEALS, Secretary of Justice, AFP w/c were dishonored.
w/c were dishonored. Eurotrust made a partial payment of
AFP-Mutual Benefit Association, Inc. (AFP-MBAI) and Graciela Eleazar,
respondents [1996]
⇒ Reyes is the president of Eurotrust Capital Corp., a domestic corp. engaged
in credit financing while Eleazar is the president of BE Ritz Mansion
International Corp. (BERMIC), a domestic enterprise engaged in real estate
development. AFP-MBAI is the welfare-services provider of the AFP.
⇒ Reyes’ affidavit: Eurotrust extended to BERMIC P216,053,126.80 to finance
its construction of the latter’s Ritz Cond. & Gold Business Park. Loan was
w/o collateral but w/higher interest rates than those allowed by banks.
BERMIC issued 21 postdated checks to cover the payment of the loan.
However, said checks were dishonored by drawee bank, RCBC due to
Eleazar’s stop payment order. Despite demands, she still failed to make
good the dishonored checks. Thus, Reyes filed complaints for violation of
BP 22 & estafa under Art. 315, par. 2(d).
⇒ Eleazar’s counter-aff: loan amounted to P190,336,388.86. Bermic issued
several postdated checks to cover payments of principal & interest.
⇒ Reyes was investigated by the Senate Blue Ribbon Committee re her
involvement in a large scale scam amounting to millions of pesos belonging
to Instructional Material Corp (IMC), an agency under DECS.
⇒ AFP-MBAI, w/c invested funds w/Eurotrust by buying from it government
securities, likewise conducted an investigation after learning that Reyes
borrowed the gov’t securities AFP purchased from Eurotrust but she failed
to return them and that the amounts paid by AFP to Eurotrust for those
securities were lent by Reyes to Bermic & others.
⇒ Upon learning that the money loaned to her company belonged to AFP-
MBAI, Eleazar met w/Eurotrust representatives. They agreed that she will
directly settle her obligations w/the real owners of the fund, AFP & DECS.
This was formalized into 2 letters. Bermic made payments to AFP & DECS.
Bermic paid AFP P31,711.11 and a check of P1M. Eleazar learned that
despite their agreement w/Eurtotrust, Reyes still continued to collect on the
postdated checks issued by Bermic. Thus, Eleazar had the payment
stopped w/c resulted to the dishonor of the checks issued by Bermic.
⇒ Sec. Of Justice affirmed the decision of the Office of the Provincial
Prosecutor of Rizal w/c dismissed the cases filed by Reyes against Eleazar.
Ratio: when Eleazar assumed Reyes’ obligation to AFP-MBAI, it constituted
a novation, extinguishing any criminal liability on the part of Eleazar. It had
the effect of canceling the checks & rendering w/o effect the subsequent
dishonor of the already cancelled checks.
⇒ AFP-MBAI filed a separate complaint for estafa & BP 22 against Reyes.
AFP purchased securities from Eurotrust amounting to P120M. Latter
delivered to the former treasury notes amounting to P73M. However, latter
fraudulently borrowed the treasury notes for purposes of verification w/the
Central Bank and despite former’s demands, latter still failed to return the
treasury notes. Instead, Eurotrust delivered 21 postdated checks in favor of
P35,151,637.72. However, balance still remains unpaid.
⇒ Reyes’ defense: novation since there was a substitution of debtor (Eleazar
substituted her as the debtor). She claims that the unreturned treasury
notes amounting to P73M was satisfied upon her payment of P30M. The
remaining P43M was paid when Eurotrust assigned its participation
certificates to AFP-MBAI.
⇒ DOJ & CA: contract of loan between Reyes & Eleazar was novated when
latter agreed to settle Bermic’s obligations directly w/AFP & DECS. In effect,
there was a substitution of creditor.
Issues & Ratio:
1. WON there was novation (WRT Eleazar & Reyes’ agreement). – NO.
⇒ Among the 4 requisites for novation, only a is present.
a. previous valid obligation
b. agreement of the parties concerned to a new contract
c. extinguishments of the old contract
d. validity of the new contract
⇒ Rule: Novation by substitution of creditor requires an agreement among the
3 parties concerned – the original creditor, the debtor & the new creditor.
CC Art. 1301 provides that conventional subrogation of the a 3rd person
requires the consent of the original parties & of the 3rd person. Thus, there
is no novation if no new contract was executed by the parties.
⇒ In this case, the letters w/c formalized Eleazar & Reyes’ agreement that the
former will settle her obligations directly w/DECS & AFP did not show that
AFP agreed/consented to substitute for the petitioner as the new creditor of
Eleazar in the contract of loan. It merely gave Eleazar the authority to
directly settle her obligations w/the 2 creditors.
⇒ Novation is never presumed. There must be an express intention to novate
(animus novandi). CC Art. 1300 provides that the conventional subrogation
must be clearly established in order that it may take effect. In this case, the
fact that AFP received Eleazar’s payments does not ipso facto result in
novation.
2. WON there was novation (WRT AFP & Reyes regarding the unreturned
treasury notes) – NO.
⇒ CC Art. 1293: Novation w/c substitutes debtor may be done w/o or against
the will of the original debtor but not w/o the consent of the creditor. In this
case, there was no proof that AFP intended to release Reyes from her
obligation to pay under the contract of sale of securities. The consent of the
creditor to a novation by change of debtor is indispensable to a valid
novation and such is absent in this case. AFP’s receipt of Eleazar’s
payments did not constitute novation, at most it only created a juridical
relation of co-debtorship/suretyship. It is necessary that the old debtor be
released expressly from the old obligation & the 3rd person/new debtor
assumes his place.
⇒ Some principles:
a. novatio: to make new
b. novatio non praesumitur – novation is never presumed
c. debitum pro debito – extinguishing the old obligation for the new one