Topic: Novation Fua v Yap 74 Phil.

287 (1943) Nature of action: mandamus and certiorari Facts: Plaintiff-appellee Fua was the judgment creditor of the appellants, the Yaps. They were sentenced to pay Fua P1, 539.04 with legal interest and costs. By virtue of a writ of execution, a parcel of land belonging to the appellants was levied and was scheduled to be sold at a public auction. The appellants then executed a mortgage in favor of appellee where it was stipulated that the appellants obligation was reduced to P1, 200 payable on four installments, to secure payment of the P1, 200, a camarin belonging to the appellants was mortgaged to the appellee, that in case appellant default in payment, they would pay 10% of the unpaid balance as attorneys fees, plus the costs of the action to be brought by appellee by reason of such default, and the amount of P338 representing the discount conceded to the appellants. But pursuant to an alias writ of execution, the land was eventually sold at a public auction with appellee as highest bidder. Appellants refused to vacate said parcel so an action was instituted by Fua. Appellants relied on the legal defenses, among others, that their obligation under the judgment in the civil case was novated by the mortgage executed by them in favor of the appellee. The lower court ruled in favor of appellee and declared him to be the owner of the land ordering appellant to deliver the same to appellee. Issue: Whether the liability under the judgment in the civil case had been extinguished by the settlement evidenced by the mortgage executed by them in favor of the appellee Ruling: YES. Appellants liability under the judgment in the civil case had been extinguished by the statement evidenced by the mortga ge executed by them in favor of appellee. Although said mortgage did not expressly cancel the old obligation, this was impliedly novated by reason of the incompatibility resulting from the fact that, whereas the judgment was for P1, 538.04 payable at one time, did not provid e for attorneys fees, and was not secured, the new obligation is for P1, 200 payable in installments, stipulates for attorneys fee, and is secured by a mortgage. The later agreement did not merely extend the time to pay the judgment, because it was therein recited that appellant promised to pay P1, 200 to appellee as a settlement of said judgment. Said judgment cannot be said to have been settled, unless it was extinguished.