Indeed, the long-standing general rule is that criminal liability for Estafa is not affected by payment, indemnification, reimbursement of or compromise as to the amounts misappropriated, or by the novation of the contract. This is because Estafa is a public offense which must be prosecuted and punished by the State on its own motion even though complete reparation should have been made of the damage suffered by the offended party. Since it is committed against the State, the private offended party may not waive or extinguish the criminal liability that the law imposes for the commission of the crime.
Nevertheless, in cases involving the type of Estafa under Article 315, paragraph 1 (b), where there is an underlying contractual relationship or bilateral agreement between the parties which they can modify or alter, the Court has consistently acknowledged at the same time the possible effects of novation. The Court held that in these cases, novation may serve to either prevent the rise of criminal liability, or to cast doubt on the true nature of the original basic transaction, whether or not it was such that the breach of the obligation would not give rise to penal responsibility, as when money loaned is made to appear as a deposit, or other similar disguise is resorted to. The prevention of the rise of criminal liability happens when there is novation before an Information is filed in court. As the Court first held in People v. Nery (Nery):
The novation theory may perhaps apply prior to the filing of the criminal information in court by the state prosecutors because up to that time the original trust relation may be converted by the parties into an ordinary creditor-debtor situation, thereby placing the complainant in estoppel to insist on the original trust. But after the justice authorities have taken cognizance of the crime and instituted action in court, the offended party may no longer divest the prosecution of its power to exact the criminal liability, as distinguished from the civil. The crime being an offense against the state, only the latter can renounce it.
⚖️REX SORONGON, vs. PP, G.R. No. 230669, June 16, 2021
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