Milla v. People

Cresencio Milla v.
People of the Philippines

G.R. no. 188726, January 25, 2012
Sereno, J.
Facts:
Cresencio Milla sold a real property to Market Pursuits, Inc. (MPI) by
presenting falsified documents thereby causing the latter to believe that the
registered owners of the said lot are actually selling their property. After the sale,
MPI discovered that the CTC given to them by Milla are spurious and the title of the
property was not transferred under its name.
Consequently, MPI demanded the return of the amount it paid to Milla who
then issued 2 checks covering the said amount. However, the checks were
dishonored for having been drawn against insufficient funds. MPI demanded Milla to
make good of his checks but the demand went unheeded which led them to file a
criminal charge of Estafa through Falsification of Public Documents against Milla.
The RTC found Milla guilty beyond reasonable doubt of two counts of estafa
through falsification of public documents. The CA affirmed RTCs decision. In this
Petition, as part of his defense, Milla contended that his issuance of the two checks
before the institution of the criminal complaint against him novated his obligation to
MPI, thereby enabling him to avoid any incipient criminal liability and converting his
obligation into a purely civil one.
Issue:
Whether novation is applicable when the accused issued 2 checks resulting to
the extinguishment of his criminal liability.
Held:
In Quinto v. People, the Court exhaustively explained the concept of novation
in relation to incipient criminal liability, viz:
Novation is never presumed, and the animus novandi, whether totally or

partially, must appear by express agreement of the parties, or by their acts
that are too clear and unequivocal to be mistaken.
The extinguishment of the old obligation by the new one is a necessary

element of novation which may be effected either expressly or impliedly. The
term expressly means that the contracting parties incontrovertibly disclose
that their object in executing the new contract is to extinguish the old one.
Upon the other hand, no specific form is required for an implied novation, and
all that is prescribed by law would be an incompatibility between the two
contracts. While there is really no hard and fast rule to determine what might
constitute to be a sufficient change that can bring about novation, the
touchstone for contrariety, however, would be an irreconcilable
incompatibility between the old and the new obligations.
There are two ways which could indicate, in fine, the presence of novation
and thereby produce the effect of extinguishing an obligation by another
which substitutes the same. The first is when novation has been explicitly
stated and declared in unequivocal terms. The second is when the old and
the new obligations are incompatible on every point. The test of
incompatibility is whether or not the two obligations can stand together, each
one having its independent existence. If they cannot, they are incompatible
and the latter obligation novates the first. Corollarily, changes that breed
incompatibility must be essential in nature and not merely accidental. The
incompatibility must take place in any of the essential elements of the
obligation, such as its object, cause or principal conditions thereof; otherwise,
the change would be merely modificatory in nature and insufficient to
extinguish the original obligation.
The criminal liability for estafa already committed is then not affected by the
subsequent novation of contract, for it is a public offense which must be
prosecuted and punished by the State in its own conation.
In the case at bar, the acceptance by MPI of the Equitable PCI checks
tendered by Milla could not have novated the original transaction, as the checks
were only intended to secure the return of the P2 million the former had already
given him. Even then, these checks bounced and were thus unable to satisfy his
liability. Moreover, the estafa involved here was not for simple misappropriation or
conversion, but was committed through Millas falsification of public documents, the
liability for which cannot be extinguished by mere novation.

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Cresencio Milla v.

People of the Philippines

Novation is never presumed, and the animus novandi, whether totally or

The extinguishment of the old obligation by the new one is a necessary

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