Tag Archives: obligation

Villaroel v. Estrada, G.R. No. L-47262, 19 December 1940.


FACTS: On May 9, 1912, Alejandro F. Callao, the mother of the defendant Juan F. Villarroel, obtained from the spouses Mariano Estrada and Severina a loan of P1,000 payable after seven years. Alejandra died, leaving as sole heir to the defendant. The spouses Mariano Estrada and Severina also died, leaving as sole heir the plaintiff Bernardino Estrada. On August 9, 1930, the defendant signed a document (Exhibit B) by which it declares the applicant to owe the amount of P1,000, with an interest of 12 percent per year. This action deals with the collection of this amount.

ISSUE: Is the defendant Juan under obligation to pay the loan that already prescribed if he subsequently declared that he owed it to plaintiff Bernardino?


Although the action to recover the original debt has already been prescribed when the claim was filed in this case, the question that arises in this appeal is mainly whether, notwithstanding such a prescription, the action (may be) brought. However, the present action is not based on the original obligation contracted by the defendant’s mother, who has already been prescribed, but in which the defendant contracted on August 9, 1930 upon assuming the fulfillment of that obligation, Already prescribed. Since the defendant is the sole inheritor of the primitive debtor, with the right to succeed in his inheritance, that debt, brought by his mother legally, although it has lost its effectiveness by prescription, is now, however, for a moral obligation, which is consideration Sufficient to create and render effective and enforceable its obligation voluntarily contracted on August 9, 1930 in Exhibit B.

The rule that a new promise to pay a pre-paid debt must be made by the same obligated person or by another legally authorized by it, is not applicable to the present case in which it is not required to fulfill the obligation of the obligee originally, but of which he voluntarily wanted to assume this obligation.


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Love and Obligation

Love is a real obligation.

It is an obligation to give,

Not an obligation to receive.

Not something you can opt,

To do or not to do.


It is a pure obligation,

And not one with a period.

Not a reciprocal obligation,

Whose fulfillment depends,

Simultaneously with others.


Love is unilateral.

It is not consensual.

Love is still love,

Even if the other can not,

Even if the other will not.

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Posted by on February 14, 2016 in Love and Relationships, Personal


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Philippine National Bank v. Court of Appeals [G.R. No. 107508. April 25, 1996]


Petitioner returned the check to PBCom and debited PBCom’s account for the amount covered by the check, the reason being that there was a “material alteration” of the check number.



Whether or not there is “material alteration” on the check.



NO. An alteration is said to be material if it alters the effect of the instrument.  It means an unauthorized change in an instrument that purports to modify in any respect the obligation of a party or an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party. Here, the alteration of check number does not affect its negotiability contemplated in Section 1 of the Negotiable Instruments Law.



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Iloilo Traders Finance. Inc. vs. Heirs of Oscar Soriano, Jr. (404 SCRA 67)


Respondents executed two promissory notes secured by real property mortgages in favor of petitioner. The respondents defaulted and petitioner moved for extra-judicial foreclosure of the mortgages. Respondent filed a complaint against petitioner. The parties later entered into “amicable settlement” and submitted it to the trial court for approval. The trial court required the parties to give some clarifications on several issues that were not complied.  The amicable settlement was disapproved and the court proceeded. Respondents withdrew the case and filed a (new) case for novation and specific performance which was decided favorably for the respondents. The Court of Appeals affirmed the judgment.



Whether or not the amicable settlement entered into between parties has novated the original obligation.



NO. The parties entered into the agreement basically to put an end to Civil Case No. 14007 then pending before the Regional Trial Court.Concededly, the provisions of the settlement were beneficial to the respondent couple. The compromise extended the terms of payment and implicitly deferred the extrajudicial foreclosure of the mortgaged property. It was well to the interest of respondent spouses to ensure its judicial approval; instead, they went to ignore the order of the trial court and virtually failed to make any further appearance in court. This conduct on the part of respondent spouses gave petitioner the correct impression that the Sorianos did not intend to be bound by the compromise settlement, and its non-materialization negated the very purpose for which it was executed.

The decision of the court of the Court of Appeals affirming that of the trial court was reversed and set aside.

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Posted by on January 14, 2013 in Case Digests, Civil Law


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Rodzssen Supply Co. Inc. vs. Far East Bank & Trust Co. (357 SCRA 618)


Petitioner opened with respondent a domestic letter of credit (LOC) in favor of Ekman and Company, Inc. (Ekman) for the purchase of five hydraulic loaders. The first three hydraulic loaders were received by the petitioner before the expiry of LOC and respondent paid Ekman. The remaining two hydraulic loaders were received by the petitioner after the expiry of LOC/contract but respondent still paid Ekman. Petitioner refused to pay respondent. Respondent filed a case. Petitioner answered by way of affirmative defense that respondent had no cause of action being allegedly in bad faith and breach of contract. The trial court and Court of Appeals ruled in favor of respondent to recover from the cost of two hydraulic loaders.



Whether or not the respondent is entitled of reimbursement from petitioner for its payment out of mutual negligence.



YES. Petitioner should pay respondent bank the amount the latter expended for the equipment belatedly delivered by Ekman and voluntarily received and kept by petitioner. Respondent bank’s right to seek recovery from petitioner is anchored, not upon the inefficacious Letter of Credit, but on Article 2142 of the Civil Code which reads: “Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.” When both parties to a transaction are mutually negligent in the performance of their obligations, the fault of one cancels the negligence of the other and, as in this case, their rights and obligations may be determined equitably under the law proscribing unjust enrichment.

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Posted by on January 14, 2013 in Case Digests, Civil Law


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Case Study: Obligation Request (Part 1)

Since the dawn of New Government Accounting System (NGAS) and the emergence of Obligation Request (ObR), there has been a divided interpretation on its use particularly when to issue the said form. Some say it must be issued together with the Purchase Request (PR) before any procurement takes place. Others argue that it is only proper to issue ObR after award has been made. There is only one thing in common and the author believed both ‘sides of the coin’ will have to agree – that an ObR is required prior to accomplishing a Disbursement Voucher (DV).

To understand the nature and purpose of the Obligation Request we have to go back to the roots of government accounting and auditing rules as well as the applicable laws under the Local Government Code (RA 7160). Let us define first some important terms under Section 306 of RA 7160:

(b)”Appropriation” refers to an authorization made by ordinance, directing the payment of goods and services from local government funds under specified conditions or for specific purposes;

(j)”Obligations” refers to an amount committed to be paid by the local government unit for any lawful act made by an accountable officer for and in behalf of the local unit concerned;

The above definitions are important to better understand this discussion, especially in the purview of Local Government units. Now looking on Section 344 of RA 7160:

Section 344. Certification, and Approval of, Vouchers. – No money shall be disbursed unless the local budget officer certifies to the existence of appropriation that has been legally made for the purpose, the local accountant has obligated said appropriation, and the local treasurer certifies to the availability of funds for the purpose. Vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned, as to validity, propriety, and legality of the claim involved. x x x

Being self-explanatory, it appears that there shall at least be three persons issuing a certification prior to any disbursement- the Budget Officer, the Accountant, and the Treasurer. To comply with this, the a Joint Circular was issued by Department of Budget and Management and Commission on Audit in the form of Request for Obligation of Allotment (ROA) immediately after the effectivity of the Local Government Code.  ROA was also made in compliance of Section 360 of RA 7160.

Section 360. Certification by the Local Budget Officer, Accountant, and Treasurer. – Every requisition must be accompanied by a certificate signed by the local budget officer, the local accountant, and the local treasurer showing that an appropriation therefor exists, the estimated amount of such expenditure has been obligated, and the funds are available for the purpose, respectively.

Later, the ROA evolved rapidly into many names and forms. It became Allotment and Obligation Slip (ALOBS) in the advent of NGAS Manual thru COA Circular 2002-003 dated 20 June 2002. On 28 February 2005, COA issued Circular No.2005-001 introducing Obligation Slip (OS) to replace ALOBS. This form was again immediately replaced by the Obligation Request (ObR) that we currently use to date by virtue of COA Circular 2006-002 dated 21 January 2006.

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Posted by on March 8, 2012 in Government Procurement


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