A.M. No. RTJ-95-1324 - Manahon vs. Tan

On November 15, 1954, in a market stall in Bacolod City, Soledad Nery received two diamond rings from Federico Matillano to be sold on commission.
The agreed arrangement required the accused to deliver a sum of P230.00 to her principal on the following day, with any excess from the sale to be retained by her as commission.

Soledad Nery failed to appear as agreed the next day, later explaining in a casual encounter with Federico that her prospective buyer had withdrawn, and she was seeking another buyer.
After days, weeks, and months with no successful sale or payment, Federico’s patience wore thin, prompting him to report the matter to Bacolod police on January 5, 1955.

Following his report, police authorities located and brought Soledad Nery to the station where she made a written promise (Exhibit “A”) to either deliver the price of the rings or return the rings on January 25, 1955.
When the accused again failed to meet her promise on the set date, the City Attorney, acting on Federico Matillano’s instigation, filed a complaint with the municipal court on February 12, 1955; a subsequent withdrawal/dismissal of the case occurred after two partial payments of P20.00 each were made by the accused.

With further default in payment by the accused after the initial partial payments, the fiscal filed an information with the Court of First Instance on June 30, 1958.
During the pendency of the case, on October 10, 1958, Soledad Nery, with her counsel Atty. Marcos Gomez, executed a deed committing to pay Federico Matillano a total of P190.00 in installments for November 1958 (P50.00), December 1958 (P40.00), and January 1959 (P100.00). This executed document further evidenced the attempt at a compromise between the parties.

In March 1959, the accused tendered a payment of P50.00, which Federico Matillano accepted; however, the balance for the rings’ price remained unpaid.
Based on the facts, the trial court found the accused guilty beyond reasonable doubt of estafa and imposed:

An indeterminate sentence of arresto mayor (minimum two months and one day up to one year and one day of prision correccional).
An order to indemnify Federico Matillano P140.00 (the unpaid amount), with subsidiary imprisonment in the event of insolvency charged at P2.50 per day (not exceeding a third of the principal penalty).
Payment of court costs.

Whether the original verbal transaction (and its subsequent formalization by a compromise document on January 5, 1955) has been novated by the partial payments (initiated with two P20.00 payments and later complemented by another promissory note) such that the criminal liability for estafa is converted into a mere civil liability.

Whether a novation, purportedly effected after criminal prosecution had commenced, can legally extinguish or mitigate the criminal liability already incurred.
The relevance of the accused’s partial payments and subsequent compromise in altering the nature of her legal responsibility.

Whether, in view of the public nature of the offense (estafa), the consent of the offended party to a compromise or novation can waive the criminal prosecution, or whether prosecution remains exclusively at the State’s discretion.