LCP

SUBJECT: Obligations and Contracts

TOPIC: Novation

NPC v Dayrit
L-62845-46 November 25, 1983

GENERAL RULE OF LAW/DOCTRINE

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.

FACTS
 Private Respondent Daniel Roxas, doing business under the name of United Veterans Security
Agency and Foreign Boats Watchmen, sued the NPC and two of its officers. The purpose of the
suit was to compel the NPC to restore the contract of Roxas for security services which the
former had terminated.

 Litigants entered into a Compromise Agreement and they asked the Court to approve it with the
ff terms:
o defendant National Power Corporation shall pay to plaintiff the sum of P7,277.45
o defendant shall pay plaintiff the value of the line materials
o The parties shall continue with the contract of security services under the same terms
and;
o The parties waive all their respective claims
o The parties agree to faithfully comply with the foregoing agreement.

 NPC executed another contract for security services with Josette Roxas whose relationship to
Daniel is not shown. At any rate Daniel has owned the contract.

 The NPC refused to implement the new contract for which reason Daniel filed a Motion for
Execution --- Respondent judge issued writ of execution.

 NPC assails the Order on the ground that it directs execution of a contract which had been
novated by that of 1982.

 Roxas claims that said contract was executed precisely to implement the compromise agreement
for which reason there was no novation. Hence, this petition.

ISSUES AND RULINGS

WON there was novation? NO

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.

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.

RELEVANT LAWS APPLICABLE

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.

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