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Republic vs Grijaldo

Facts:
y
Grijaldo obtained five loans from the Bank of Taiwanin the total sum of P1,281.97 with interest
at therats of 6% per annum compounded quarterly. Thesewere evidenced by five promissory
notes.
y
These loans were crop loans and was considered tobe due one year after they were incurred.
y
A
s a security for the payment of the loans, a chattelmortgage was executed on the standing crops of
hisland.
y
The assets in the Bank of Taiwan were vested in theUS Govt which were subsequently
transferred to theRepublic of the Philippines
y
RP is now demanding the payment of the account.
y
J
ustice of Peace dismisses the case on the ground ofprescription. C
A
rendered a decision ordering theappellant to pay the appellee
D
efendants contentions:
1)
The appellee has no cause of action againstappellant since the transaction was with TaiwanBank.2)
That if the appellee has a cause of action at all, ithad prescribed3)
The lower court erred in ordering the appellant topay P2,377.23
I

ssue:
Can RP still collect from Grijaldo?
Held:
Yes
Ratio:
The obligation of the contract was not to deliver adeterminate thing, it was a generic thing the
amount ofmoney representing the total sum of his loans. Thedestruction of anything of the same
kind does not extinguishthe obligation. The loss of the crops did not extinguish
hisobligation to pay because the account could still be paid fromother sources aside from the
mortgaged crops.
A
lso,prescription does not run against the State.