PHILIPPINE JURISPRUDENCE – FULL TEXT
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G.R. No. xgrno September xdate, 2008
xcite

Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

RIZAL COMMERCIAL BANKING CORPORATION,

Petitioner,

- versus -

MARCOPPER MINING CORPORATION,

Respondent.

G.R. No. 170738

Present:

Quisumbing, J., Chairperson,

Carpio Morales,

Tinga,

VELASCO, JR., and

BRION, JJ.

Promulgated:

September 12, 2008

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or irrelevant evidence.[22]

On the other hand, Marcopper counters that there was an agreement between the parties for RCBC to release the mortgage as proven by the testimonies of its witnesses which were found to be credible. Marcopper argues that such evidence constitutes findings of fact of the trial court and Court of Appeals and that when supported by substantial evidence, findings of fact of the trial court as affirmed by the Court of Appeals are conclusive and binding on the Supreme Court.[23]

The petition is impressed with merit.

As a rule, only questions of law are entertained by this Court in petitions for review on certiorari under Rule 45. It is not our function to analyze or weigh all over again the evidence presented. It is a settled doctrine that in a civil case, final and conclusive are the factual findings of the trial court, but only if supported by clear and convincing evidence on record.[24]

Both the RTC and the Court of Appeals gave credence to the testimonies of Marcopper President Atty. Teodulo C. Gabor, Jr. and Mr. Teodoro G. Bernardino, a member of the Board of Directors of Marcopper. True, findings by the trial court as to the credibility of witnesses are accorded the greatest respect, and even finality by the appellate courts, since the former is in a better position to observe their demeanor as well as their deportment and manner of testifying during the trial.[25] However, in this case, not only was there inadequate evidence to prove Marcopper’s assertions, the lower courts also overlooked certain significant facts which contradict the assertions of Marcopper’s witnesses.

A review of the written exchanges between the parties shows no written agreement was ever executed by RCBC and Marcopper for RCBC to execute a partial release of mortgage and pledge upon assignment to it of the Forbes Park property. The July 1, 1997 letter from Marcopper Treasurer Nicanor L. Escalante to RCBC merely listed two options of payment of Marcopper’s loan to RCBC while the July 8, 1997 letter from Marcopper to RCBC modified the terms of payment as to the second option listed in the July 1, 1997 letter. The next written communication between the parties was the July 31, 1997 where Marcopper forwarded the Deed of Release of Mortgage which it requested RCBC to sign.

Even the letter[26] dated November 24, 1997 from Marcopper Chairperson of the Board Joost Pekelharing to RCBC makes no allusion to a written contract. The letter merely stated MR Holdings agreed to release the Forbes Park property upon Marcopper’s assurance that RCBC will release from mortgage six units Rig Haul Trucks and one unit Demag Hydraulic Excavator Shovel.

The existence of the alleged condition asserted by Marcopper was therefore to be gleaned primarily from the testimonies of its witnesses who asserted that Marcopper and RCBC had agreed on July 3, 1997 to the release of the mortgage and pledge as a condition to the assignment of the Forbes Park property and ultimately the payment of the promissory notes. However, we note that the first time that Marcopper ever mentioned the release of the pledges of club shares was in its letter dated November 24, 1997. Before that, Marcopper requested the release of the mortgage on the Rig Haul Trucks and one unit Demag Hydraulic Excavator Shovel only. Marcopper’s letter to RCBC dated July 8, 1997, which confirmed the agreements between the parties during their July 3, 1997 meeting, did not state that RCBC committed to release the mortgage and pledge, a condition which Marcopper alleged to be a material condition and which would ordinarily be included in the written confirmation had it been agreed upon. Also, on September 9, 1997, Marcopper executed a deed of pledge of one additional share of stock of the Philippine Columbian Association. If it were true, as asserted by Marcopper’s witnesses, that RCBC had committed to release the mortgage and pledge during the July 3, 1997 meeting, Marcopper would not have delivered the additional pledge after the Forbes Park property had been assigned to RCBC. That it did so proves that the assignment of the Forbes Park property was not made on the condition Marcopper claims.

Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage, and law.[27] Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.[28]

In general, contracts undergo three distinct stages, to wit: negotiation; perfection or birth; and consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof.[29]

Based on the records, RCBC agreed to a partial release of the mortgaged properties only in its letters dated December 15, 1997[30] and December 17, 1997[31] but it was clearly on the condition that Marcopper first pay the first amortization which fell due on November 24, 1997.

Marcopper cannot renege on its obligation to pay the promissory notes under the pretext that there was a previous agreement between the parties for RCBC to effect a partial release of mortgage and pledge upon assignment to it of the Forbes Park property.

Marcopper has failed to establish a cause of action, defined as an act or omission by which a party violates a right of another.[32]

In Jison v. Court of Appeals,[33] this Court outlined the quantum of evidence required in order to sufficiently assert one’s claim in civil cases, thus:

The foregoing discussion, however, must be situated within the general rules on evidence, in light of the burden of proof in civil cases, i.e., preponderance of evidence, and the shifting of the burden of evidence in such cases. Simply put, he who alleges the affirmative of the issue has the burden of proof, and upon the plaintiff in a civil case, the burden of proof never parts. However, in the course of trial in a civil case, once plaintiff makes out a prima facie case in his favor, the duty or the burden of evidence shifts to defendant to controvert plaintiff's prima facie case, otherwise, a verdict must be returned in favor of plaintiff. Moreover, in civil cases, the party having the burden of proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendant’s. The concept of "preponderance of evidence" refers to evidence which is of greater weight, or more convincing, that which is offered in opposition to it; at bottom, it means probability of truth.

In a civil case, the burden of proof is on the plaintiff to establish his case through a preponderance of evidence. If he claims a right granted or created by law, he must prove his claim by competent evidence.[34]

Given the existence of facts clearly militating against Marcopper’s claim and the absence of any written agreement between the parties, the testimonies of witnesses who happen to be officers of Marcopper and whose testimonies should naturally favor Marcopper are insufficient to establish its cause of action. Marcopper’s complaint should have been dismissed by the trial court.

WHEREFORE, the petition is GRANTED. The assailed Decision dated June 6, 2005 and the Resolution dated December 8, 2005 of the Court of Appeals in CA-G.R. CV No. 77594 are REVERSED and SET ASIDE. Marcopper is directed to pay RCBC the following amounts expressly stipulated in the Non-Negotiable Promissory Note Nos. 21-3697 and 21-3797:

1. US$5,425,485.00 as the total principal amount due under Non-Negotiable Promissory Note Nos. 21-3697 and 21-3797, including the interest due on US$2,698,845.00 under Non-Negotiable Promissory Note No. 21-3697 at the rate of 9% per annum until fully paid.

2. Penalty equivalent to 36% per annum of the amount due and unpaid under Non-Negotiable Promissory Note Nos. 21-3697 and 21-3797 until fully paid; and

3. Attorney’s fees equivalent to 20% of the total amount due.

RCBC’s claims for moral and exemplary damages are denied. It may, however, exercise its rights, in accordance with law, to foreclose on the properties covered. No pronouncement as to costs.

SO ORDERED.

LEONARDO A. QUISUMBING

Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice

DANTE O. TINGA

Associate Justice

PRESBITERO J. VELASCO, JR.

Associate Justice

ARTURO D. BRION

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBING

Associate Justice

Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

¹ Rollo, pp. 53-71. Penned by Associate Justice Arcangelita M. Romilla-Lontok, with Associate Justices Rodrigo V. Cosico and Danilo B. Pine concurring.

² Id. at 73-74.

³ Id. at 75-98. Penned by Judge Reinato G. Quilala.

⁴ Records, pp. 178-181.

⁵ Id. at 184-185.

⁶ Id. at 182-183.

⁷ Id. at 72-75.

⁸ Rollo, p. 75.

⁹ Records, pp. 73-74.

¹⁰ Id. at 76.

¹¹ Id. at 76-77.

¹² Id. at 14.

¹³ Id. at 79.

¹⁴ Id. at 83.

¹⁵ Id. at 197-198.

¹⁶ Id. at 199.

¹⁷ Id. at 200.

¹⁸ Id. at 1-9.

¹⁹ Rollo, pp. 97-98.

²⁰ Id. at 69-70.

²¹ Id. at 22-24.

²² Id. at 25.

²³ Id. at 178-179.

²⁴ Vibram Manufacturing Corporation v. Manila Electric Company, G.R. No. 149052, August 9, 2005, 466 SCRA 178, 183.

²⁵ Domingo v. Domingo, G.R. No. 150897, April 11, 2005, 455 SCRA 230, 238.

²⁶ Records, pp.197-198.

²⁷ Civil Code of the Philippines, Article 1315.

²⁸ Id., Article 1159.

²⁹ Swedish Match, AB v. CA, G.R. No. 128120, October 20, 2004, 441 SCRA 1, 18.

³⁰ Records, p. 86.

³¹ Id. at 87.

³² 1997 Rules of Court, Rule 2, Section 2.

³³ G.R. No. 124853, February 24, 1998, 286 SCRA 495, 532.

³⁴ Social Security System v. Chaves, G.R. No. 151259, October 13, 2004, 440 SCRA 269, 277.

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