Tirso Garcia v. Khu Yek Chiong

Summary

The Supreme Court affirmed a judgment requiring payment of bank loans totaling over P134,000 from defendants who claimed novation had released them from liability. Khu Yek Chiong had guaranteed a partnership's credit line and provided stock as security. When the bank sued for recovery, appellant Ang Gioc Chim argued that a 1925 transfer of the partnership to Khu Yek Chiong constituted novation, making him the sole debtor and releasing the original partners. The Court rejected this defense, finding no creditor consent required under Civil Code Article 1205 for valid novation. The correspondence submitted as evidence merely showed Khu Yek Chiong's willingness to assume obligations, which did not alter his existing solidary surety liability or create novation. The Court emphasized that novation requires express declaration or complete incompatibility between obligations, neither of which was proven.