FERNANDO ONG, PETITIONER, VS. THE COURT OF APPEALS AND JUDGE FIDEL P. PURISIMA, RESPONDENTS.

Records show that on January 17, 1979, an information for estafa (Criminal
Case No. 43423), was filed by the Assistant Fiscal before the then Court of
First Instance of Manila alleging that herein petitioner “obtained and
received from the Tramat Mercantile, Inc., x x x several units of machineries for a total value of P133,550.00,
in trust, for the purpose of displaying and selling the machineries for cash,
under the express obligation on the part of said accused (herein petitioner) of
turning over to said Tramat Mercantile,
Inc., the proceeds from the sale thereof, if sold, or of returning to the
latter the said goods, if not sold, within ninety (90) days, or immediately
upon demand x x x. (p. 7, Rollo)
Petitioner allegedly failed to turn over the proceeds of the sale or to return
the goods under the aforementioned covenant.

On April 2, 1979, a few months after the case of estafa was filed
against petitioner, Tramat Mercantile, Inc., filed a complaint against him in
Civil Case No. 122842 for sum of money with the then Court of First Instance of
Manila. The parties entered into a
compromise agreement to settle the claim in said civil case, on the basis of
which the trial court rendered judgment, dated March 27, 1980, approving the
same.

On June 1, 1980, herein petitioner moved for the dismissal of the
criminal charge of estafa (Criminal Case No. 43423) against him on the ground
of novation because of the compromise agreement entered into between him and
the complainant.

On July 17, 1980, the trial court denied the motion to dismiss
the estafa case for lack of merit. Thereafter, petitioner filed a petition for certiorari with the then Court of Appeals which dismissed the
petition on the grounds, among others, that “novation does not extinguish
the criminal liability if the crime of estafa had been completed. (2 REYES 670, 1975 ed., citing People vs. Clemente, CA, 65 O.G. 6892). In
the instant case the crime of estafa had been consummated long before
the compromise settlement was agreed upon. In fact, the criminal case had already been filed in the court. Therefore, the subsequent agreement did not
affect the criminal culpability of the petitioner.” (p. 16, Rollo) Hence,
the filing of the instant petition for certiorari, mandamus,
prohibition and for a writ of preliminary injunction, with prayer that
“the Decision of the respondent Court of Appeals be reversed and set
aside; and that respondent judge of First Instance be prohibited permanently
from further proceeding in said criminal case and to command him to dismiss
said case after due hearing of this petition x x x.” (p. 11, Rollo)

It is the position of herein petitioner that the compromise
agreement in the civil case novated the contract embodied in the trust receipts
on which the information in Criminal Case No. 43423 was based, “inasmuch
as there was a change of object
or principal conditions, under Article 1291 of the Civil Code. There being a
novation, it is respectfully submitted that even if the novation took place
after the filing of the Information in the criminal case, the transaction had
nonetheless been converted from a criminal violation to civil obligation, which
would therefore necessitate the consequent dismissal of the criminal
case.” (p. 8, Rollo).

We are not
persuaded. The Court, speaking through Justice
J. B. L. Reyes, in People vs. Nery, 10 SCRA 244, said that:

“The novation theory may perhaps
apply prior to the filing of the
criminal information in court by
the state prosecutors because up to that time the original trust relation may be converted by the parties
into an ordinary creditor-debtor situation, thereby placing the complainant in estoppel to insist on the original
trust. But after the justice
authorities have taken cognizance of the crime and instituted action in court,
the offended party may no longer divest the prosecution of its power to exact
the criminal liability, as distinguished from the civil. The crime being an offense against the
state, only the latter can renounce it (People vs. Gervacio, 54 Off. Gaz. 2898;
People vs. Velasco, 42 Phil. 76; U.S. vs. Montañes, 8 Phil. 620).

“It may be observed in this regard that novation is not one of
the means recognized by the Penal Code whereby criminal liability can be
extinguished; hence, the role of novation may only be to either prevent the
rise of criminal liability or to cast doubt on the true nature of the original
basic transaction, whether or not it was such that its breach would not give
rise to penal responsibility, as when money loaned is made to appear as a
deposit, or other similar disguise is resorted to (cf. Abeto vs. People, 90 Phil. 581; U.S. vs. Villareal, 27
Phil. 481).”

Thus, it is clear that the respondent Court of Appeals did not
abuse its discretion amounting to lack of jurisdiction in denying petitioner’s
motion to dismiss the criminal case of estafa on the basis of a compromise
agreement made after the filing of the information.

ACCORDINGLY, the petition is DISMISSED for lack of merit.

SO ORDERED.

Melencio-Herrera, Plana, Vasquez, and
Gutierrez, Jr., JJ., concur.

Teehankee, J., (Chairman), files
a brief dissent.