G.R. No. 126712 April 14, 1999
LEONIDA C. QUINTO, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

FACTS

Petitioner Leonida Quinto was charged with estafa under Article 315(1)(b) of the Revised Penal Code. The prosecution established that on March 23, 1977, she received several pieces of jewelry valued at P36,000.00 from Aurelia Cariaga under a receipt stating she would sell them on commission and return the items or the proceeds within five days. After the period lapsed, Quinto failed to return the jewelry or remit any proceeds despite demands. The defense presented a different narrative, alleging a prior business relationship where Quinto sold jewelry for Cariaga to third parties like Mrs. Camacho and Mrs. Ramos. It claimed the obligation was novated when Cariaga allegedly agreed to receive installment payments directly from these buyers, thereby extinguishing Quinto’s original duty to account.
The Regional Trial Court convicted Quinto of estafa, a decision affirmed by the Court of Appeals. She elevated the case to the Supreme Court via a petition for review on certiorari, arguing that novation had occurred.

ISSUE

Whether the subsequent agreements between the complainant and the third-party buyers constituted a novation that extinguished petitioner’s criminal liability for estafa.

RULING

The Supreme Court denied the petition and affirmed the conviction. The Court held that novation does not extinguish criminal liability, especially in estafa cases involving misappropriation or conversion. Criminal liability is a public wrong that affects the social order, and its extinction is governed by the Revised Penal Code, not by the private law on novation of obligations. The essence of the crime of estafa under Article 315(1)(b) is the abuse of confidence and the fraudulent conversion or misappropriation of property received in trust. This criminal act is complete upon the misappropriation, and any subsequent private arrangements, such as a creditor accepting payments from a third party, do not absolve the accused of the already consummated crime.
The Court further explained that for novation to even potentially have any effect in a criminal context (which it generally does not), the intent to novate must be clear and the new obligation must be wholly incompatible with the old. Here, the alleged agreements for direct installment payments from the buyers to Cariaga did not clearly demonstrate an intent to replace Quinto’s primary obligation to account for the specific jewelry received under the trust receipt. Her failure to return the items or their value constituted the felony. Thus, her criminal liability remained.