Ong v. Court of Appeals
REITERATIONFacts
1. The Antecedents: An information for estafa was filed against petitioner Fernando Ong, alleging that he obtained machineries valued at P133,550.00 from Tramat Mercantile, Inc. under a trust receipt. The terms stipulated that he was to sell the goods for cash and remit the proceeds, or return the unsold goods within ninety days or upon demand. Petitioner allegedly failed to comply with these obligations. 2. Procedural History: Following the estafa charge, Tramat Mercantile, Inc. filed a civil case for sum of money against petitioner. The parties reached a compromise agreement, which the trial court approved. Petitioner subsequently moved to dismiss the criminal estafa case, arguing that the compromise agreement novated the original contract. The trial court denied this motion. Petitioner then filed a petition for certiorari with the Court of Appeals, which also dismissed the petition, holding that novation does not extinguish criminal liability for estafa once the crime has been consummated and a criminal case has been filed. 3. The Petition: Petitioner seeks a writ of certiorari, mandamus, and prohibition, along with a preliminary injunction, to reverse the Court of Appeals' decision. He argues that the compromise agreement in the civil case novated the trust receipt contract, thereby converting the criminal violation into a civil obligation and necessitating the dismissal of the criminal case. The petition contends that the compromise agreement, by changing the principal conditions of the original contract, constitutes a novation under Article 1291 of the Civil Code.
Issue(s)
Whether the compromise agreement entered into by the parties in the civil case novated the contract embodied in the trust receipts, thereby extinguishing petitioner's criminal liability for estafa. Whether the Court of Appeals committed grave abuse of discretion amounting to lack of jurisdiction in denying petitioner's motion to dismiss the criminal case.
Ruling
The petition is dismissed for lack of merit. The 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.
Ratio Decidendi
On the issue of novation and its effect on criminal liability: The Supreme Court held that novation does not extinguish criminal liability for estafa if the crime has already been consummated and criminal action has been instituted. The Court cited People v. Nery, stating that while novation might apply before criminal action is taken, once the state authorities have taken cognizance of the crime and instituted action, the offended party can no longer divest the prosecution of its power to exact criminal liability. The crime of estafa, being an offense against the state, can only be renounced by the state. The Court further clarified that novation is not a mode recognized by the Penal Code for extinguishing criminal liability; its role is limited to preventing the rise of criminal liability or casting doubt on the true nature of the original transaction. In this case, the estafa was consummated before the compromise agreement, and the criminal case had already been filed, thus the subsequent agreement did not affect the petitioner's criminal culpability. On the alleged grave abuse of discretion by the Court of Appeals: The Supreme Court found that the Court of Appeals did not abuse its discretion amounting to lack of jurisdiction. The appellate court correctly applied the principle that a compromise agreement entered into after the consummation of the crime and the filing of the criminal case does not extinguish the criminal liability. The reasoning of the Court of Appeals, which was affirmed by the Supreme Court, was that the crime of estafa had been consummated long before the compromise settlement, and the criminal case had already been filed. Therefore, the subsequent agreement did not affect the criminal culpability of the petitioner. The Court reiterated that the offense is against the state, and only the state can renounce it, not the offended party through a compromise agreement after criminal proceedings have commenced.
Main Doctrine
Novation does not extinguish criminal liability for estafa if the crime has already been consummated and criminal action has been instituted, as the offense against the state can only be renounced by the state itself.