Facts:

This case involves the petitioner Land Bank of the Philippines and the respondents Monet's Export and Manufacturing Corporation, Vicente V. Tagle, Sr., and Ma. Consuelo G. Tagle. The dispute arose from a loan agreement made on June 25, 1981, whereby Land Bank provided Monet a credit line of P250,000.00 that was backed by export letters of credit, promissory notes, a continuing guaranty from the Tagles, and a mortgage from Pepita C. Mendigoria. Over time, this agreement was amended, increasing the credit limit to P5 million. As of August 31, 1992, Land Bank claimed that Monet's total obligation ballooned to P11,464,246.19, due to the failure to pay despite repeated demands. Consequently, Land Bank initiated a collection suit against Monet and the Tagles in the Regional Trial Court (RTC) of Manila.

In their defense, Monet and the Tagles asserted that Land Bank had mismanaged their accounts by not collecting a receivable of US$33,434.00 from Wishbone Trading Company while i

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Facts:

Background of the Loan Agreement

• On June 25, 1981, Land Bank of the Philippines (Land Bank) and Monet’s Export and Manufacturing Corporation (Monet) executed an Export Packing Credit Line Agreement.
• The agreement initially provided Monet a credit line of P250,000.00, secured by:
• Proceeds of export letters of credit,
• Promissory notes,
• A continuing guaranty executed by respondent spouses Vicente V. Tagle, Sr. and Ma. Consuelo G. Tagle (the Tagles), and
• A third-party mortgage executed by Pepita C. Mendigoria.
• The credit line was renewed and amended several times until the ceiling was increased to P5 million.

Loan Availments, Promissory Notes, and Evidence Presented

• Monet availed itself of the credit line by executing several promissory notes in varying amounts.
• Land Bank submitted multiple pieces of documentary evidence, including:
• Exhibit “39” – The Summary of Availment and Schedule of Amortization from the Loans and Discount Department, which detailed a debt of P2.5 million under Promissory Note P-981.
• A Consolidated Statement of Account dated August 31, 1992, supporting its claim of an overall indebtedness of P11,464,246.19.
• A Summary of Availments and Payments from 1981 to 1989, showing the series of transactions and payments made by Monet.
• Respondents (Monet and the Tagles) argued that Land Bank mishandled their accounts. They claimed:
• The bank refused to collect a US$33,434.00 receivable on an export letter of credit,
• The bank made an unauthorized payment of US$38,768.40 on an import letter of credit, negatively affecting Monet’s business liquidity.

Procedural History and Court Decisions

• Trial Court Proceedings
• The Regional Trial Court (RTC) of Manila, Branch 49, rendered a decision on July 15, 1997, finding the respondents liable based on Exhibit “39”, without imposing any penalty.
• The RTC’s decision was later reaffirmed on October 30, 2006, during a hearing where Land Bank’s counsel stated that no additional documentary evidence was available for presentation.
• The RTC maintained that the obligation owed was based solely on the schedule in Exhibit “39” (P2.5 million), notwithstanding the higher consolidated claim of P11,464,246.19.
• Appellate and Supreme Court Actions
• On October 9, 2003, the Court of Appeals (CA) affirmed the RTC decision.
• Land Bank filed a petition for review with the Supreme Court, and on March 10, 2005, the Supreme Court remanded the case back to the RTC for the reception of additional evidence to properly determine Monet’s actual indebtedness.
• The remand was based on the inadequacy of Exhibit “39” in representing the entire debt, given that Monet executed several promissory notes beyond the one covered in Exhibit “39”.

ii. The Supreme Court emphasized the need to reconcile all of Monet’s loan accounts.

Evidentiary Issues on the Presentation of Loan Records

• Land Bank’s position:
• The bank contended that a properly authenticated bank statement (i.e., the Consolidated Billing Statement) should be admissible as evidence of the status of loan accounts.
• Under Section 43, Rule 130 of the Rules of Court, such entries, prepared in the regular course of business, are prima facie evidence of the truth of the records.
• Respondents’ position:
• Monet and the Tagles challenged the bank’s detailed billing records, arguing that they overstated the amount due and that the defendants had made greater payments than recorded.
• They stressed that the evidence provided by the bank, particularly Exhibit “39”, did not encompass the multiplicity of loans and transactions between the parties.

Issue:

Whether the RTC and the CA acted correctly in denying Land Bank’s motion to reopen the hearing to present its updated Consolidated Billing Statement as of October 31, 2006.

• Did the evidence previously presented (notably Exhibit “39”) sufficiently prove the total indebtedness of Monet and the Tagles to Land Bank?
• Was it necessary, as per the Supreme Court’s directive in G.R. 161865, for additional evidence to be received in order to reconcile and establish the full extent of the bank’s claim?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)