Rizal Commercial Banking Corporation v. Marcopper Mining Corporation
REITERATIONFacts
The Antecedents: Marcopper Mining Corporation (Marcopper) obtained a loan from Rizal Commercial Banking Corporation (RCBC) for US$13.7 Million to finance the acquisition of heavy equipment. As security, Marcopper executed a Deed of Chattel Mortgage over the equipment and a Deed of Pledge over shares in various clubs. Due to its inability to pay, Marcopper proposed a restructuring of the loan, offering to assign a Forbes Park property as partial payment and to pay the balance over two years. RCBC agreed to the assignment of the property and the execution of promissory notes for the remaining balance, but insisted that the mortgage on the equipment and the pledge on the shares would only be released upon full payment of the restructured loan. Procedural History: Marcopper filed a complaint against RCBC for Specific Performance with Damages, alleging that RCBC failed to release the mortgaged assets and pledged shares as agreed upon after the assignment of the Forbes Park property. The Regional Trial Court (RTC) ruled in favor of Marcopper. The Court of Appeals affirmed the RTC's decision with modifications. RCBC then filed a petition for review on certiorari with the Supreme Court. The Supreme Court granted the petition, reversing the decisions of the lower courts and ordering Marcopper to pay RCBC the amounts due under the promissory notes, including interest and penalties. Marcopper subsequently filed a Motion for Reconsideration, which the Supreme Court denied. The Petition: This resolution addresses Marcopper's Motion for Reconsideration seeking to overturn the Supreme Court's decision that favored RCBC. Marcopper argued that the Court's decision was based on a falsified deed of pledge and that the chattel mortgage was for a different, unmaterialized transaction. The Supreme Court found that Marcopper's arguments raised new issues not previously presented and that its claims were contradicted by its own prior admissions and judicial admissions in the pleadings. The Court reiterated that there was no written agreement for RCBC to execute a partial release of the mortgage and pledge upon the assignment of the Forbes Park property, and the testimonies of Marcopper's witnesses were insufficient to prove such a commitment. Therefore, the motion for reconsideration was denied.
Issue(s)
Whether the Court erred in reversing the factual findings of the trial court and appellate court, particularly concerning the alleged falsity of a Deed of Pledge dated September 9, 1997. Whether the Deed of Chattel Mortgage was executed for a different transaction that did not materialize. Whether the July 1, 1997 letter and July 8, 1997 agreement involved the restructuring of the original bridge loan, leading to the tender of the Forbes Park property.
Ruling
The Supreme Court denied Marcopper's Motion for Reconsideration. The Court reiterated its Decision dated September 12, 2008, which granted RCBC's petition, reversed the Court of Appeals' decision, and directed Marcopper to pay RCBC the amounts due under the Promissory Notes, including interest and penalty, and attorney's fees. RCBC's claims for moral and exemplary damages were denied, but it was allowed to foreclose on the properties.
Ratio Decidendi
On the alleged falsity of the Deed of Pledge dated September 9, 1997: The Court found that Marcopper's claim of falsity was raised for the first time in its motion for reconsideration and contradicted its own judicial admission in its Memorandum, where it clearly admitted the execution of the Deed of Pledge. An admission in a pleading cannot be controverted by the party making it. Therefore, Marcopper was bound by its previous admission as to the due execution of the deed of pledge. On the nature of the Deed of Chattel Mortgage: The Court held that Marcopper was attempting to change its theory of the case by now asserting that the chattel mortgage was for a different transaction that did not materialize. This was a change from its previous stance where it did not question the validity of the chattel mortgage. The Court reiterated the rule that a party is not allowed to change its theory of the case on appeal, as it is offensive to basic rules of justice and fair play. On the July 1, 1997 letter and July 8, 1997 agreement: The Court found no written agreement for RCBC to execute a partial release of mortgage and pledge upon the assignment of the Forbes Park property. The July 1, 1997 letter was a proposal, and the July 8, 1997 letter modified the terms of payment under the second option. The Court noted that Marcopper's own letters and testimonies did not consistently mention the release of pledges of club shares, and the first mention of such release was in a letter dated November 24, 1997, after the assignment. The testimonies of Marcopper's officers were unconvincing as they admitted not being present when the alleged commitment was made and that the agreement was not in writing. The Court emphasized that for an offer to be binding, acceptance must be absolute; a qualified acceptance is a counter-offer. Absent clear evidence of RCBC's accession to a partial release of mortgage and pledge, Marcopper's action must fail.
Main Doctrine
A party is bound by its judicial admissions made in pleadings and cannot contradict them on appeal or in a motion for reconsideration. Furthermore, a party is not allowed to change its theory of the case on appeal.