G.R. No. L-15961-62 - People vs. Sagayno

In 1943, appellant Jose Grijaldo obtained five crop loans from the Bank of Taiwan, Ltd. branch in Bacolod City totalling ₱1,281.97, at 6% interest per annum compounded quarterly.
Promissory notes were dated June 1 (₱600.00), June 3 (₱159.11), June 18 (₱22.86), August 9 (₱300.00), and August 13 (₱200.00), all due one year after incurrence; secured by a chattel mortgage on standing crops at Hacienda Cambugsa, Lot No. 1494, Hinigaran, Negros Occidental.

Under U.S. Vesting Order No. P-4 (Jan. 21, 1946) and the Trading with the Enemy Act, the Bank’s Philippine assets vested in the U.S. Government; by Transfer Agreement (July 20, 1954) these assets passed to the Republic of the Philippines and were administered by the Board of Liquidators.
On September 29, 1954, the Republic (through the Board’s Chairman) made a written extrajudicial demand for payment, which appellant received but did not satisfy.

Principal recalculated by the Ballantyne scale (as of June 1943) yielded ₱889.64; interest at 6% per annum compounded quarterly to December 31, 1959 amounted to ₱1,457.39; total ₱2,377.23.
On January 17, 1961, the Republic sued in the Justice of the Peace Court of Hinigaran; the court dismissed for prescription. The Republic appealed to the Court of First Instance of Negros Occidental, which on March 26, 1962 ordered payment of ₱2,377.23 (as of December 31, 1959), plus interest at 6% quarterly from complaint filing, attorney’s fees (10% of amount due), and costs. Appellant appealed to the Supreme Court; upon his death, his heirs were substituted.

Whether the Republic has cause of action (privity) to enforce the obligation.
Whether the action is barred by prescription.
Whether the lower court erred in computing the amount due (application of Ballantyne scale).