DIOSA ARRIVAS V MANUELA BACOTOC

GR NO 228704, DECEMBER 2, 2020, FIRST DIVISION

PONENTE: PERRALTA, CJ

NATURE OF THE ACTION:

FACTS:

According to the prosecution, petitioner and respondent executed a trust receipt agreement for
the sale of 1 pc man’s ring with a value of 75k. Petitioner failed to return the ring or the purchase price
in case it was sold. According to petitioner, she paid respondent for the value of the ring.

ISSUE:

WHETHER THE TRUST RECEIPT AGREEMENT HAD ALREADY BEEN NOVATED

RULING:

No, there was no novation in this case. The Court ruled that petitioner is guilty of estafa since all
the elements of the latter are established when petitioner was entrusted with the possession of the ring
for her to sell and deliver the proceeds to respondent; petitioner failed to return the ring or the
proceeds despite demand; and the misappropriation resulted to the prejudice of the respondent.
According to the Court, novation under Article 1292 of the Civil Code is not applicable. The said
provision provides that 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 new and old be on every
point incompatible with each other. In the instant case, the petitioner failed to prove that there is
indeed a novation.