G.R. No.

202947, December 09, 2015

ASB REALTY CORPORATION, Petitioner, v. ORTIGAS & COMPANY LIMITED PARTNERSHIP, Respondent.

NOVATION

On June 29, 1994, respondent Ortigas & Company Limited Partnership (Ortigas) entered into a Deed of
Sale with Amethyst Pearl Corporation (Amethyst) involving the parcel of land with an area of 1,012
square meters situated in Barrio Oranbo, Pasig City for the consideration of P2,024,000.00. On
December 28, 1996, Amethyst assigned the subject property to its sole stockholder, petitioner ASB
Realty Corporation (the petitioner), under a so-called Deed of Assignment in Liquidation in consideration
of 10,000 shares of the petitioner's outstanding capital stock. Ortigas filed its complaint for specific
performance against the petitioner for not following its covenants on building restrictions and time limit
for passing the plans and building construction. RTC ruled in favor of ASB for Ortigas was estopped by
laches in filing this case. CA ruled in favor of ASB initialy and later in favor of of Ortigas.

Issue

W/N there is a novation of obligation?

Held

No for in the case at hand though their act of transferring the property may seem to transfer the deed of
sale by novation to ASB from Amethyst but they lack an indispensable requirement of novation which is
to attain the consent of the active party (Creditor) in such transfer.

Art. 1293. Novation which consists in substituting a new debtor in the place of the original one, may be
made even without the knowledge or against the will of the latter, but not without the consent of the
creditor. Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237.

Here they did not attain the consent of Ortigas for the transfer of the deed of sale thus the obligation of
Amethyst to Ortigas just included ASB in their transfer and since Ortigas’s claim has not yet prescribed it
has a right to go after them.