SSS vs. DOJ

SSS vs. DOJ: NOVATION FACTS: Respondent Martels are directors of Systems and Encoding Corporation. SENCOR is covered under RA 1161, thus, employers therein are required to remit monthly contributions to SSS. In 1998, SSS filed a complaint against for SENCOR’s non-payment of contributions amounting to P6,936,435.80. To pay this amount, SENCOR offered to assign to SSS a parcel of land in Tagaytay City. Accordingly, SSS accepted the offer "subject to the condition that respondent Martels will settle their obligation either by way of (1) dacion en pago or (2) through cash settlement within a reasonable time." Thus, petitioner withdrew its complaint but reserved its right to revive the same "in the event that no settlement is arrived at." In 2001, respondents Martel offered to SSS, in lieu of the said property, computer-related services. Nevertheless, petitioner filed another complaint against respondent Martels for SENCOR’s non-remittance of contributions amounting to P21,148,258.30. Respondent Martels alleged that SSS is estopped from holding them criminally liable since SSS had accepted their first offer as payment of SENCOR’s liability. Thus, the relationship between SENCOR and SSS was "converted" into an ordinary debtor-creditor relationship through novation. The Pasay City Prosecutor’s Office filed Information against respondent Martels. On appeal, DOJ ruled in favour of the respondents. Hence, this petition for certiorari. ISSUE: Whether or not the concept of novation serves to abate the prosecution of respondent Martels. HELD: Although novation is not one of the means recognized by the Revised Penal Code to extinguish criminal liability, it may "prevent the rise of criminal liability or to cast doubt on the true nature of the original basic transaction," provided the novation takes place before the filing of the Information with the trial court. However, the concept of novation is inapplicable in this case. In the first place, there is, between SENCOR and SSS, no original contract for novation to take place. Moreover, SSS’ acceptance of respondent Martels’ offer was subject to a suspensive condition. But such condition was not met because three years after respondent Martels’ offer, petitioner did not receive any payment. In fact, respondent Jose Martel, at that point, changed the terms of the supposed settlement by offering computer-related services instead of assigning the Tagaytay City realty. Hence, the petition was granted.