G.R. No. 192371 - Land Bank of the Philippines vs. Onate

1978–1980: OAate opened seven trust accounts with Land Bank (Nos. 01-014, 01-017, 01-024, 01-075, 01-082, 01-089, 01-125) with initial balances ranging from ₱43.98 to ₱1,312,896.00.
Each account governed by an Investment Management Agreement (IMA) granting Land Bank full discretion to hold, invest, reinvest and charge expenses, with duties to maintain accurate records and send quarterly statements; trustee liability limited to willful default or gross misconduct.

October 8, 1981: Land Bank demanded return of ₱4 million allegedly “miscredited” to Account 01-125 from corporate borrowers’ loan preterminations; OAate refused.
June 21, 1991: Land Bank unilaterally set off all OAate’s trust account balances (₱1,528,583.48) against the alleged miscrediting.

September 7, 1992: Land Bank filed a Complaint for Sum of Money to recover ₱8,222,687.89 plus 12% annual interest.
May 26, 1993: OAate filed Answer with compulsory counterclaim seeking restoration of his account balances (₱220,999,472.36 and US$3,472,683.94) plus interest and damages.
May 1994: RTC appointed a Board of Commissioners to audit the seven trust accounts; Board submitted interim and a consolidated report (August 16, 2004) revealing undocumented withdrawals of ₱60,663,488.11 and US$3,210,222.85, and various negative/over-withdrawals.
Pretrial Stipulations: validity of undocumented withdrawals; whether such amounts should be credited back.

Dismissed Land Bank’s complaint for failure to prove source of the ₱4 million; ordered return of ₱1,471,416.52 to OAate with 12% interest from June 21, 1991.
Denied Land Bank’s negative balance claims and OAate’s broader counterclaim for undocumented withdrawals and dollar balances.

Affirmed RTC’s dismissal of complaint; modified to award OAate additional ₱60,663,488.11 and US$3,210,222.85 for undocumented withdrawals, with 12% annual interest from June 21, 1991.
Denied Land Bank’s motion for reconsideration (May 27, 2010).

Land Bank challenged:

Sufficiency of passbook entries under Sec. 43, R. 130, R. C. Court to prove “miscrediting”
OAate’s entitlement to ₱1,471,416.52 absent counterclaim
OAate’s award of undocumented withdrawals based on 2008 MORB (post-dating transactions)
OAate’s standing to sue undisclosed-principal accounts without joinder
Legality of 12% interest rate and compounding absent stipulation

Whether entries in passbooks under the IMAs suffice, under Sec. 43, R. 130, R. C. Court presumption of regularity, to prove Land Bank miscredited ₱4,086,888.89 to OAate’s account.
Whether OAate is precluded from claiming ₱1,471,416.52 because he did not counterclaim for restoration in his answer.
Whether OAate may recover undocumented withdrawals (₱60,663,488.11; US$3,210,222.85) despite CA’s reliance on the 2008 MORB.
Whether OAate can pursue claims on Accounts 01-014 and 01-017 (opened for an undisclosed principal) without impleading that principal.
Whether the award of 12% per annum interest, compounded annually, violates Article 1959, Civil Code, absent stipulation.