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Digest civil

Digest civil

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Published by Adrian Feraren
civil law cases
civil law cases

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Published by: Adrian Feraren on Jun 30, 2013
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UNITED PULP AND PAPER CO., INC
vs.
ACROPOLIS CENTRAL GUARANTY CORPORATIONG.R. No. 171750 January 25, 2012FACTS:
On September 29, 2003, Unibox, Ortega and UPPC executed a compromise agreement,wherein Unibox and Ortega acknowledged their obligation to UPPC in the amount of P35,089,544.00 as of August 31, 2003, inclusive of the principal and the accrued interest,and bound themselves to pay the said amount in accordance with a schedule of payments agreed upon by the parties. Consequently, the RTC promulgated its Judgmentdated October 2, 2003 approving the compromise agreement.For failure of Unibox and Ortega to pay the required amounts for the months of May andJune 2004 despite demand by UPPC, the latter filed its Motion for Execution to satisfythe remaining unpaid balance. In the July 30, 2004 Order, the RTC acted favorably onthe said motion and, on August 4, 2004, it issued the requested Writ of Execution.
ISSUE:
Whether the execution of the compromise agreement between UPPC and Unibox andOrtega was tantamount to a novation, which had the effect of releasing Acropolis from itsobligation under the counter-attachment bond.RULING:The argument of Acropolis that its obligation under the counter-bond was novated by thecompromise agreement is, thus, untenable. In order for novation to extinguish itsobligation, Acropolis must be able to show that there is an incompatibility between thecompromise agreement and the terms of the counter-bond, as required by Article 1292 of the Civil Code, which provides that: Art. 1292. In order that an obligation may be extinguished by another which substitute thesame, it is imperative that it be so declared in unequivocal terms, or that the old and thenew obligations be on every point incompatible with each other.Nothing in the compromise agreement indicates, or even hints at, releasing Acropolisfrom its obligation to pay UPPC after the latter has obtained a favorable judgment.Clearly, there is no incompatibility between the compromise agreement and the counter-bond. Neither can novation be presumed in this case.Novation by presumption has never been favored. To be sustained, it need beestablished that the old and new contracts are incompatible in all points, or that the will tonovate appears by express agreement of the parties or in acts of similar import.
 
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIPMANAGEMENT
vs.
SULPECIO MEDEQUILLO, JR.G.R. No. 177498 January 18, 2012FACTS:
On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the Adjudication Office of the Philippine Overseas Employment Administration (POEA)against the petitioners for illegal dismissal under a first contract and for failure to deployunder a second contract. In his complaint-affidavit, respondent alleged that:1.On 6 November 1991(First Contract), he was hired by Stolt-Nielsen MarineServices, Inc on behalf of its principal Chung-Gai Ship Management of Panamaas Third Assistant Engineer on board the vessel "Stolt Aspiration" for a period of nine (9) months;2.He would be paid with a monthly basic salary of $808.00 and a fixed overtimepay of $404.00 or a total of $1,212.00 per month during the employment periodcommencing on 6 November 1991;3.On 8 November 1991, he joined the vessel MV "Stolt Aspiration";4.On February 1992 or for nearly three (3) months of rendering service and whilethe vessel was at Batangas, he was ordered by the ship’s master to disembarkthe vessel and repatriated back to Manila for no reason or explanation;5.Upon his return to Manila, he immediately proceeded to the petitioner’s officewhere he was transferred employment with another vessel named MV "StoltPride" under the same terms and conditions of the First Contract;6.On 23 April 1992, the Second Contract was noted and approved by the POEA;7.The POEA, without knowledge that he was not deployed with the vessel, certifiedthe Second Employment Contract on 18 September 1992.8.Despite the commencement of the Second Contract on 21 April 1992, petitionersfailed to deploy him with the vessel MV "Stolt Pride";9.He made a follow-up with the petitioner but the same refused to comply with theSecond Employment Contract.10.On 22 December 1994, he demanded for his passport, seaman’s book and other employment documents. However, he was only allowed to claim the saiddocuments in exchange of his signing a document;11.He was constrained to sign the document involuntarily because without thesedocuments, he could not seek employment from other agencies.ISSUE:Whether or not there was a novation of the first contract when the parties enteredinto a second contract.
 
RULING:Novation is the extinguishment of an obligation by the substitution or change of theobligation by a subsequent one which extinguishes or modifies the first, either bychanging the object or principal conditions, or, by substituting another in place of thedebtor, or by subrogating a third person in the rights of the creditor. In order for novationto take place, the concurrence of the following requisites is indispensable:1. There must be a previous valid obligation,2. There must be an agreement of the parties concerned to a new contract,3. There must be the extinguishment of the old contract, and4. There must be the validity of the new contract.We concur with the finding that there was a novation of the first employment contract.

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