Contrariety rule in obligations

While there is really no hard and fast rule to determine what might constitute to be a sufficient change that can bring about an implied novation, the touchstone for contrariety, however, would be an irreconcilable incompatibility between the old and the new obligations.[1]There is incompatibility when the two obligations cannot stand together, each one having its independent existence. If the two obligations cannot stand together, the latter obligation novates the first. Changes that breed incompatibility must be essential in nature and not merely accidental. The incompatibility must affect any of the essential elements of the obligation, such as its object, cause or principal conditions thereof; otherwise, the change is merely modificatory in nature and insufficient to extinguish the original obligation.[2]

There is no implied novation of the contract. In the case of Perez v. Jardine Davies (G.R. No. 190031, January 22, 2018), the two obligations, namely Smart's obligation to JDI and Perez's assumption of Smart's obligation to JDI, are not incompatible on every point. On the contrary, one can stand independent of the other. Furthermore, the mere fact that Perez bound himself to answer for Smart's obligation is insufficient to extinguish the original obligation.[3] The net effect of Perez's assumption is to merely make him an additional debtor.

In S.C. Megaworld Construction and Development Corporation v. Parada,[4] the Supreme Court held:

In order for a new agreement to supersede the old one, the parties to a contract must expressly agree that they are abrogating their old contract in favor of a new one. Thus, the mere substitution of debtors will not result in novation, and the fact that the creditor accepts payments from a third person, who has assumed the obligation, will result merely in the addition of debtors and not novation, and the creditor may enforce the obligation against both debtors. If there is no agreement as to solidarity, the first and new debtors are considered obligated jointly, x x x[5] (Emphasis and underscoring supplied; citations omitted.)

[1] California Bus Lines, Inc. v. State Investment House, Inc., G.R. No. 147950, December 11, 2003, 418 SCRA 297, 310.

[2] Id. See also Valenzuela v. Kalayacm Development & Industrial Corporation, G.R. No. 163244, June 22, 2009, 590 SCRA 380, 391 and Transpacific Battery Corporation v. Security Bank & Trust Co., G.R. No. 173565, May 8, 2009, 587 SCRA 536, 546.

[3] See Ajax Marketing & Development Corporation v. Court of Appeals, G.R. No. 118585, September 14, 1995, 248 SCRA 222.

[4] G.R. No. 183804, September 11, 2013, 705 SCRA 584. 

[5] Id. at 602.

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