- Petitioner
- E. C. Mccullough & Co.
- Respondent
- Mariano Veloso
- Citation
- G.R. No. 21455
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Avanceña, J.
- Decided
- April 5, 1924
Summary
E.C. McCullough & Co., Inc. sold the McCullough Building to Mariano Veloso for P700,000 with mortgage security. Veloso later sold to Joaquin Serna who assumed the mortgage obligations. Both defaulted on payments, leading to a debt of P510,047.34. The Supreme Court rejected Veloso's defense that novation occurred when Serna assumed the debt, holding that novation requires creditor consent under Article 1205 of the Civil Code. The Court affirmed that mortgage obligations follow the property regardless of transfer per Article 1876, keeping Veloso liable. The judgment was affirmed except attorney's fees were increased from P2,000 to P15,000. This case establishes important precedent on mortgage liability and novation requirements in property transfers.