Millar v.

CA, 38 SCRA 642 (1971)

Facts:

Respondent was directed in civil case 27116 to pay petitioner P1,746.98 plus interest at the rate of 12%
per year from the date of the complaint's filing, P400 in attorney's fees, and the costs of action. The
respondent then pleaded with the petitioner to enter a deed of chattel mortgage under which he agreed
to pay the petitioner P1,700.00 in two payments secured by a mortgage. Respondent, however, failed to
make the installment payments, and the sheriff levied some of his assets for execution sale. The
respondent filed an emergency application to halt the execution sale, and the Trial Court determined
that the parties' subsequent agreement impliedly novated the judgment obligation in civil case 27116.

Issue:

WON the subsequent agreement novated the judgment obligation

Ruling:

No. The argument of implicit novation necessitates strong and persuasive demonstration of the two
responsibilities' total incompatibility. There is no precise form required by law for a successful novation
by implication. The test is whether the two commitments can coexist. If they are unable to do so,
incompatibility occurs, and the second responsibility supersedes the first. If they can stand together,
there is no incompatibility and no novation. The clear contents of the chattel mortgage deed disclose
that the parties purposefully formed the chattel mortgage to insure the payment of the respondent's
then-existing debt emanating from the decision against him in civil case 27116. The chattel mortgage
arrangement had no significant effect on the respondent's obligations as a security for the payment of
the judgment obligation. Where the new duty simply reiterates or ratifies the old obligation, even if the
former results in tiny revisions or slight modifications to the cause, object, or circumstances of the latter,
such changes do not result in any serious incompatibility between the two duties. Only those important
and main changes brought about by the new duty that alter or modify the nature of the previous
obligation result in implicit novation.