1. REFERENCE
1.1. DOCKET NUMBER
- G.R. No. L-62845-46
1.2. CITATION
- NPC v. Dayrit, G.R. No. L-62845-46, 125 SCRA 849 (November 25, 1983)
1.3. FULL-TEXT SOURCE ONLINE
2. MNEMONIC
2.1. LAW SCHOOL SUBJECT
- OBLICON
2.2. KEYWORDS
- Compromise agreement, security agency contract, novation
2.3. FACT MNEMONIC
- NPC not honoring contract arising from compromise agreement.
2.4. DOCTRINE MNEMONIC
- Novation must be explicit and compatible, never presumed.
2.5. VERBATIM DOCTRINE
- Novation must be explicit and compatible, never presumed.
- 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.
2.6. SHORTHAND DIGEST
- In this petition to the Supreme Court assailing an order on a Motion of Execution for grave of abuse of discretion, wherein respondent sought to execute a compromise agreement included in a contract that petitioner NPC refused to implement, claiming that the compromise agreement was novated because of the contract, the Supreme Court ruled for private respondent. The inclusion of the compromise agreement was stipulated in the contract’s first article; more so, for novation to apply, it must be explicitly stated and be compatible with the old and new obligations, never presumed.
3. PROFILE
3.1. DATE OF PROMULGATION
- November 25, 1983
3.2. DECIDING COURT
- Supreme Court of the Philippines
3.3. DIVISION
- En Banc
3.4. PONENTE
- Abad Santos
3.5.1. CONCURRING
- Fernando
- Teehankee
- Makasiar
- Concepcion Jr.
- Guerrero
- De Castro
- Melencio-Herrera
- Plana
- Escolin
- Relova
- Gutierrez
3.5.2. DISSENTING
- None
3.5.3. ABSENT/OTHERS
- Aquino (took no part)
- None
3.7.1. PETITIONER
- National Power Corporation
3.7.2. RESPONDENTS
- Hon. Abelardo M. Dayrit
- CFI Manila, Branch 39
- Daniel R. Roxas
- doing business as United Veterans Security Agency and Foreign Boats Watchmen
3.8.1. PETITIONER
- The Solicitor General
3.8.2. RESPONDENTS
- William C. Arceno
3.9. NATURE OF ACTION
- Petition to set aside CFI order on the premise of grave abuse of discretion
3.10. LAWS AND PROVISIONS CITED
- Civil Code, Article 1292
3.11. CASES CITED
- None
4. CONTENTS
4.1. FACTS
- CFI Manila
- Private respondent Roxas, doing business as a security agency, sued petitioner NPC and two of its officers in Iligan City for the purpose of compelling petitioner to restore contract of security services which petitioner terminated.
- 1981, October 14
- Litigants entered into a compromise agreeement. Item 3 of said agreementr states: 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;
- 1981, October 30
- Said compromise agreement was approved. Judgment was not implemented, for reasons not relevant to the case.
- 1982, May 14
- NPC executed another contract for security services with a Josette L. Roxas, whose relationship to private respondent is not shown. At any rate private respondent has owned the contract.
- NPC refused to implement the new contract.
4.2. PROCEDURAL HISTORY
- Private respondent filed a Motion for execution for the compromise agreement.
- Respondent judge issued an order to enforce the compromise agreement.
- Petitioner files petition to set aside CFI order on the premise of grave abuse of discretion, under the claim that the contract had been novated by May 14, 1982
- Private respondent claimed that the contract was executed to implement the compromise agreement for which reason there was no novation.
4.3. ISSUES
- Whether the contract was novated by reason of compromise agreement?
4.4. HELD
- Whether the contract was novated by reason of compromise agreement?
- No. As Article I of the May 14, 1982 contract states:
- The letter proposal dated September 5, 1981; CORPORATION’S counter-proposal dated September 11, 1981; Board Resolution No. 81-244 dated September 28, 1981; the Compromise Agreement and Court Decision dated October 30, 1981 in Civil Case No. 133528 CFI-Manila. other subsequent letters and the performance bond of AGENCY to be filed in favor of CORPORATION in the manner hereinafter provided, are hereby expressly made integral parts of this contract by reference.
- 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.
- No. As Article I of the May 14, 1982 contract states:
4.5. DISPOSITION
- Petitioner is denied for lack of merit with costs against petitioner.
