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Romago, Inc. vs. Associated Bank

ROMAGO, INC. AND FRANCISCO GONZALEZ, PETITIONERS, VS. ASSOCIATED BANK (NOW UNITED OVERSEAS BANK PHILS.) AND METALLOR TRADING CORPORATION, RESPONDENTS.

G.R. No. 223450 | 2023-02-22

D E C I S I O N
 
LEONEN, SAJ.:
 
Novation must be clear and express. While the creditor's consent to a change in debtor may be derived from clear and unequivocal acts of acceptance, such act must be wholly consistent with the release of the original debtor. Thus, acceptance of payment from a third person will not necessarily release the original debtor from their obligation.[1]
 
Moreover, when the contracts are part of a commercial transaction and reduced to writing, novation cannot be implied simply from a creditor's inaction. Silence is, at best, ambiguous in the presumption that both parties are diligent agents in a...