Modified condition

This is another case between siblings, Pablo and Remy, who entered into a contract with each other. The case involved an eight-door apartment belonging to their parents which was donated to Remy on the condition that her parents shall retain control of the property during their lifetime and that Remy will only act as the administrator thereof.

In order to renovate the apartments particularly the unit she was occupying as her home, Remy tried to obtain a loan from PAG-IBIG but failed. Hence Pablo offered to extend her a credit line on the conditions that she shall: (1) keep a record of all the advances; (2) start paying the loan upon completion of the renovation; (3) thereafter sign a loan agreement and mortgage in Pablo’s favor containing the same easy terms and conditions of the PAG-IBIG loan which she failed to obtain.

Remy accepted these conditions, so renovation started. However, when renovations of six units were completed and the renovation of the next unit was starting, Pablo and Remy had some misunderstanding. The dispute however was resolved in a family meeting wherein brother and sister agreed that Remy would already start making monthly payments on the advances she obtained from Pablo as contained in the records of the cash advances that she should turn over to Pablo upon demand. Based on said records, Remy started monthly payments of P18,700.

But five months later, when Remy had already paid a total of P93,500, another quarrel ensued between siblings which even reach the Barangay where Pablo reminded Remy of her monthly payments. Resenting such reminder, Remy blurted out: “kalimutan mo na ang pera mo, wala akong pinirmahan. Hindi ako natatakot sa iyo.” Thereafter, Remy left and could no longer be located. Hence, further renovations and monthly payments were discontinued, forcing Pablo to sue Remy for recovery of the balance of his advances totaling P3,989,802.25 plus 12% interest.

For her defense, Remy contended that the loan is not yet due and demandable because the renovation of the apartment units has not yet been completed Was Remy correct?

No. Evidently after the renovation of the seven out of the eight units Pablo and Remy entered into another agreement wherein Remy shall already start making monthly payments on the advances even if renovation on the two units was still pending. Indeed Remy already started making payments for five months totaling P93,500. Hence by virtue of the subsequent agreement, the parties mutually dispensed with the condition that Remy shall only begin paying upon completion of all renovations. There was in effect a partial novation of Remy’s obligation by a change of the principal condition.

Novation is merely partial where the change brought about by any subsequent agreement is merely incidental to the main obligation (e.g., a change in the interest rates or an extension of time to pay). In this instance, the new agreement will not have the effect of extinguishing the first but would merely supplement it or supplant some but not all of its provisions.

Remy’s partial performance of her obligation by beginning monthly payments is an unmistakable proof that indeed the original agreement between her and Pablo had been novated by the deletion of the condition that payment shall be made only after completion of the renovation. Hence there can be no other conclusion except that Remy’s obligation is already due and demandable. Thus she has to pay the sum of P3,909,302.25 plus legal rate of interest of 12% per annum (Tomimbang vs. Tomimbang, G.R. 165116, August 4, 2009).

*  *  *

E-mail:[email protected]