G.R. No.

L-62339 October 27, 1983 filing of a complaint as provided for in Section 6 thereof, is
specifically referred to, it is the considered opinion of this Court
that the provision of Section 6 of the law applies only to cases
SPOUSES MARIA LUISA P. MORATA AND JULIUS MORATA, petitioners,
cognizable by the inferior courts mentioned in Sections 11 and 12
vs.
of the law.
SPOUSES VICTOR GO and FLORA C. GO and HON. VALERIANO P. TOMOL,
JR., Judge, Court of First Instance of Cebu, Branch XI, respondents.
In view of the foregoing, the motion for reconsideration filed by
the defendants, of the order of September 2. 1982, denying their
Amado G. Olis for petitioners.
motion to dismiss, is hereby denied. [Annex 'G', p. 36, Rollo].

Paul G. Gorres for private respondents.

From this order, petitioners came to Us thru this petition. In a resolution dated
December 2, 1982, We required respondents to file an answer, and likewise granted
a temporary restraining order enjoining respondent judge from requiring petitioners
ESCOLIN., J.: to file their answer and enter into trial in Civil Case No. R-22154.

In this petition for certiorari and prohibition with prayer for writ of preliminary We find the petition impressed with merit. Section 6 of P.D. 1508 reads as follows:
injunction, the Court is called upon to determine the classes of actions which fall
within the coverage of Presidential Decree No. 1508, 1 otherwise known as
SECTION 6. Conciliation pre-condition to filing of complaint.— No
Katarungang Pambarangay Law. This law requires the compulsory process of
complaint, petition, action for proceeding involving any matter
arbitration at the Barangay level as a pre-condition for filing a complaint in court,
within the authority of the Lupon as provided in Section 2 hereof
Petitioners contend that said legislation is so broad and all-embracing as to apply to
shall be filed or instituted in court or any other government office
actions cognizable not only by the city and municipal courts, now known as the
for adjudication unless there has been a confrontation of the
metropolitan trial courts and municipal trial courts, but also by the courts of first
parties before the Lupon Chairman or the Pangkat and no
instance, now the regional trial courts. Upon the other hand, respondents would
conciliation or settlement has been reached as certified by the
limit its coverage only to those cases falling within the exclusive jurisdiction of the
Lupon Secretary or the Pangkat Secretary attested by the Lupon
metropolitan trial courts and municipal trial courts.
or Pangkat Chairman, or unless the settlement has been
repudiated. However, the parties may go directly to court in the
The antecedent facts are not disputed. On August 5, 1982, respondents Victor Go following cases:
and Flora D. Go filed in the defunct Court of First Instance of Cebu, presided by
respondent Judge Valeriano P. Tomol, Jr., a complaint against petitioners Julius
[1] Where the accused is under detention;
Morata and Ma. Luisa Morata for recovery of a sum of money plus damages
amounting to P49,400.00. The case was docketed as Civil Case No. R-22154.
[2] Where a person has otherwise been deprived
of personal liberty calling for habeas corpus
On the basis of the allegation in the complaint that the parties-litigants are all
proceedings;
residents of Cebu City, petitioners filed a motion to dismiss, citing as grounds
therefor, the failure of the complaint to allege prior availment by the plaintiffs of the
barangay conciliation process required by P.D. 1508, as well as the absence of a [3] Actions coupled with provisional remedies
certification by the Lupon or Pangkat Secretary that no conciliation or settlement such as preliminary injunction, attachment,
had been reached by the parties. The motion was opposed by private respondents. delivery of personal property and support
pendente lite; and
On September 2, 1982, respondent judge issued an order denying the motion to
dismiss. [4] Where the action may otherwise be barred
by the Statute of Limitations
Petitioners filed a motion for reconsideration, but the same was denied in an order
dated October 3, 1982, as follows: Section 2 of the law defines the scope of authority of the Lupon thus:

Considering the specific reference to City or Municipal Courts in
the provisions of Sections 11 and 12 of P.D. No. 1508, as the
Courts to which the dispute settled or arbitrated by the Lupon
Chairman or the Pangkat, shall be elevated for nullification of the
award or for execution of the same, and considering that from the
provision of Section 14 of the same law, the pre- condition to the
SECTION 2. Subject matters for amicable settlement.—The Lupon
of each barangay shall have authority to bring together the parties
actually residing in the same city or municipality for amicable
settlement of all disputes except:
 [1] Where one party is the government ,or any subdivision or
instrumentality thereof;
[2] Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
[3] Offenses punishable by imprisonment exceeding 30 days, or a
fine exceeding P200.00;
[4] Offenses where there is no private offended party;
[5] Such other classes of disputes which the Prime Minister may in
the interest of justice determine upon recommendation of the
Minister of Justice and the Minister of Local Government.
Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon
has the authority to settle amicably all types of disputes involving parties who
actually reside in the same city or municipality. The law, as written, makes no
distinction whatsoever with respect to the classes of civil disputes that should be
compromised at the barangay level, in contradistinction to the limitation imposed
upon the Lupon by paragraph (3), section 2 thereof as regards its authority over
criminal cases. In fact, in defining the Lupon's authority, Section 2 of said law
employed the universal and comprehensive term "all", to which usage We should
neither add nor subtract in consonance with the rudimentary precept in statutory
construction that "where the law does not distinguish, We should not
distinguish. 2 By compelling the disputants to settle their differences through the
intervention of the barangay leader and other respected members of the barangay,
the animosity generated by protracted court litigations between members of the
same political unit, a disruptive factor toward unity and cooperation, is avoided. It
must be borne in mind that the conciliation process at the barangay level is likewise
designed to discourage indiscriminate filing of cases in court in order to decongest
its clogged dockets and, in the process, enhance the quality of justice dispensed by
it. Thus, to say that the authority of the Lupon is limited to cases exclusively
cognizable by the inferior courts is to lose sight of this objective. Worse, it would
make the law a self-defeating one. For what would stop a party, say in an action for
a sum of money or damages, as in the instant case, from bloating up his claim in
order to place his case beyond the jurisdiction of the inferior court and thereby
avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law
seek to ease the congestion of dockets only in inferior courts and not in the regional
trial courts where the log-jam of cases is much more serious? Indeed, the
lawmakers could not have intended such half-measure and self-defeating
legislation.
The objectives of the law are set forth in its preamble thus:
WHEREAS, the perpetuation and official recognition of the time-
honored tradition of amicably settling disputes among family and
barangay level without judicial resources would promote the
speedy administration of justice and implement the constitutional
mandate to preserve and develop Filipino culture and to
strengthen the family as a basic social institution;
WHEREAS, the indiscriminate filing of cases in the courts of justice
contributes heavily and unjustifiably to the congestion of court
dockets, thus causing a deterioration in the quality of justice;
WHEREAS, in order to help relieve the courts of such docket
congestion and thereby enhance the quality of justice dispensed
by the courts, it is deemed desirable to formally organize and
institutionalize a system of amicably settling disputes at the
barangay level.
There can be no question that when the law conferred upon the Lupon "the
authority to bring together the parties actually residing in the same city or
municipality for amicable settlement of all disputes, ... ," its obvious intendment
was to grant to the Lupon as broad and comprehensive an authority as possible as
would bring about the optimum realization of the aforesaid objectives. These
objectives would only be half-met and easily thwarted if the Lupon's authority is
exercised only in cases falling within the exclusive jurisdiction of inferior courts.
Moreover, if it is the intention of the law to restrict its coverage only to cases
cognizable by the inferior courts, then it would not have provided in Section 3
thereof the following rule on Venue, to wit:
Section 3. Venue. ... However, all disputes which involve real
property or any interest therein shall be brought in the Barangay
where the real property or and part thereof is situated.
for it should be noted that, traditionally and historically, jurisdiction over cases
involving real property or any interest therein, except forcible entry and detainer
cases, has always been vested in the courts of first instance [now regional trial
court].
But it is pointed out by the respondent judge that Sections 11, 3 12, 4 and 14, 5 of
the law speak of the city and/or municipal courts as the forum for the nullification or
execution of the settlement or arbitration award issued by the Lupon. We hold that
this circumstance cannot be construed as a limitation of the scope of authority of
the Lupon. As heretofore stated, the authority of the Lupon is clearly established in
Section 2 of the law; whereas Sections 11, 12 and 14, relied upon by respondent
judge, deal with the nullification or execution of the settlement or arbitration awards
obtained at the barangay level. These sections conferred upon the city and
municipal courts the jurisdiction to pass upon and resolve petitions or actions for
nullification or enforcement of settlement/arbitration awards issued by the Lupon,
regardless of the amount involved or the nature of the original dispute. But there is
nothing in the context of said sections to justify the thesis that the mandated
conciliation process in other types of cases applies exclusively to said inferior courts.
Any doubt on the issue before Us should be dispelled by Circular No. 22 issued by
Chief Justice Enrique M. Fernando, 6 the full text of which is quoted as follows:
TO: ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT
CRIMINAL COURTS, JUVENILE AND DOMESTIC RELATIONS
COURTS, COURTS OF AGRARIAN RELATIONS, CITY COURTS,
MUNICIPAL COURTS AND THEIR CLERKS OF COURT
 SUBJECT: Implementation of the Katarungang Pambarangay Law.
Effective upon your receipt of the certification by the Minister of
Local Government and Community Development that all the
barangays within your respective jurisdictions have organized
their Lupons provided for in Presidential Decree No. 1508,
otherwise known as the Katarungang Pambarangay Law, in
implementation of the barangay system of settlement of disputes,
you are hereby directed to desist from receiving complaints,
petitions, actions or proceedings in cases falling within the
authority of said Lupons.
Circular No. 12 dated October 20, 1978, issued by the late Chief
Justice Fred Ruiz Castro is to that extent modified.
This Circular takes effect immediately.
It is significant that the above-quoted circular embodying the directive "to desist
from receiving complaints, petitions, actions and proceedings in cases falling within
the authority of said Lupons," has been addressed not only to judges of city and
municipal courts, but also to all the judges of the courts of first instance, circuit
criminal courts, juvenile and domestic courts and courts of agrarian relations, now
known as regional trial courts under B.P. No. 129. The said circular was noted by
president Ferdinand E. Marcos in a Letter of Implementation, dated November 12,
1979, the first paragraph of which reads as follows: "with the view to easing up the
log-jam of cases and solving the backlogs in the case of dockets of all government
offices involved in the investigation, trial and adjudication of cases, it is hereby
ordered that immediate implementation be made by all government officials and
offices concerned of the system of amicably settling disputes at the barangay level
as provided for in the Katarungang Pambarangay Law [Presidential Decree No.
1508]."
Therefore, for the guidance of the bench and the bar, We now declare that the
conciliation process at the barangay level, prescribed by P.D. 1508 as a pre-
condition for filing a complaint in court, is compulsory not only for cases falling
under the exclusive competence of the metropolitan and municipal trial courts, but
for actions cognizable by the regional trial courts as well.
ACCORDINGLY, the petition is granted, and the order of respondent judge denying
petitioners' motion to dismiss is hereby set aside. Respondent judge is restrained
from conducting further proceedings in Civil Case No. R-22154, except to dismiss
the case. No costs.
SO ORDERED.
Fernando, CJ Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana,
Relova and Gutierrez, Jr., JJ concur.
Makasiar and Teehankee, JJ., reserves his vote.
De Castro, J., is on leave.
Separate Opinions
AQUINO, J.: concurring:
I concur. The case filed by the Go spouses in the Court of First Instance of Cebu for
the collection of P49,400 from the Morata spouses, Civil Case No. R-22154, is
covered by the Katarungang Pambarangay Law, Presidential Decree No. 1508. The
impression that the law applies only to cases filed in inferior courts does not seem
to be correct. Of course, the law applies only to disputes between or among persons
actually residing in the same barangay or to those involving actual residents of
different barangays within the same city or municipality (Sec. 3).
Cases between or among those persons should undergo the conciliation process,
whatever may be the amount involved or the nature of the issue involved as long as
they do not belong to the following cases:
(a) Where the parties involved reside in barangays of different
cities or municipalities unless such barangays adjoin each other;
(b) Where the dispute involves real property located in different
cities or municipalities;
(c) Where one party is the government or any sub-division or
instrumentality thereof;
(d) Where one party is a public officer or employee and the
dispute relates to the performance of his official functions;
(e) Where the dispute involves an offense punishable by
imprisonment exceeding thirty (30) days or a fine exceeding two
hundred pesos (P200.00). Thus, physical injuries requiring
medical attendance for not exceeding nine (9) days, slight
slander, light threats, unjust vexation, would be appropriate
subject matters for settlement;
(f) Offenses where there is no private offended party, for example,
littering, gambling, jaywalking, public scandal, vagrancy and
prostitution; and,
(g) Such other classes of disputes which the Prime Minister may,
in the interest of justice, determine upon recommendation of the
Minister of Justice and the Minister of Local Government and
Community Development. (Sec. 2, Rule VI, Katarungan
Pambarangay Rules).
The parties may go directly to court in the four cases specified in section 6 of the
law.
Chief Justice Fernando in his Circular No. 22 dated November 9, 1979 has enjoined
all Judges of the Courts of First Instance, Circuit Criminal Courts, Juvenile and
Domestic Relations Courts, Agrarian Courts, city courts, municipal courts and their
clerks of court to desist from receiving complaints, petitions, actions or proceedings
in cases falling within the authority of the barangay Lupons effective upon
their receipt of the certification of the Minister of Local Government and Community
Development that all the barangays within their respective jurisdictions have
organized their Lupons as contemplated in the Katarungang Pambarangay Law.

The Minister of Justice has assumed that the Katarungang Pambarangay Law applies
to the cases in Regional Trial Courts or Courts of First Instance. Thus, he ruled that
a complaint for damages in the sum of P100,000 is a matter falling within the
authority of the Lupon under section 2 of Presidential Decree No. 1508 (Opinion No.
81, Series of 1981; Katarungang Pambarangay Opinion No. 10 Series of 198 1).

The reference in the law to proper city or municipal court contemplates situations
for the enforcement or nullification of settlement or arbitration award. If there is no
award, the city or municipal court will have no occasion to intervene.

Whether the Lupons, will be equal to the task imposed upon them and should
receive commensurate remuneration for their work is another question.
 however, the Lupon failed to issue an Arbitration Award as provided under
the Katarungang Pambarangay Law, so that, the case must be returned to
the Lupon until an Arbitration Award is rendered.
ROSARIA LUPITAN PANG-ET, G.R. No. 167261
Petitioner,
Present:
In compliance with the MCTC Order, the Lupon rendered an Arbitration
Award on 10 May 1995 ordering herein petitioner to retrieve the land upon payment
YNARES-SANTIAGO, J.,
to the spouses Manacnes of the amount of P8,000.00 for the improvements on the
- versus - Chairperson,
land. Aggrieved, Leoncios widow,[7] Florentina Manacnes, repudiated the Arbitration
AUSTRIA-MARTINEZ,
Award but her repudiation was rejected by the Lupon. Thereafter, the MCTC was
CALLEJO, SR.,*
furnished with copies of the Arbitration Award.
CHICO-NAZARIO, and
CATHERINE MANACNES-DAO-AS, Heir of NACHURA, JJ.
On 1 June 1995, herein petitioner filed with the Lupon a Motion for
LEONCIO MANACNES and FLORENTINA
Execution of the Arbitration Award. On the other hand, Florentina Manacnes filed a
MANACNES, Promulgated:
Motion with the MCTC for the resumption of the proceedings in the original case for
Respondent.
recovery of possession and praying that the MCTC consider her repudiation of the
March 2, 2007
Arbitration Award issued by the Lupon.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
Subsequently, the MCTC heard the Motion
of Florentina Manacnes notwithstanding the latters failure to appear before the
DECISION
court despite notice. The MCTC denied Florentina Manacnes Motion to repudiate the
Arbitration Award elucidating that since the movant failed to take any action within
the 10-day reglementary period provided for under
the Katarungang Pambarangay Law, the arbitration award has become final
CHICO-NAZARIO, J.:
and executory. Furthermore, upon motion of herein petitioner Pang-et, the MCTC
issued an Order remanding the records of the case to the Lupon for the execution of
the Arbitration Award. On 31 August 1995, the then
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules
incumbent Punong Barangay of Dagdag issued a Notice of Execution of the Award.
of Civil Procedure, assailing the Decision[1] of the Court of Appeals in CA-G.R. SP
No. 78019, dated 9 February 2005, which reversed and set aside the Judgment[2] of
Said Notice of Execution was never implemented. Thus, on 16 October
the Regional Trial Court (RTC), Branch 36, Bontoc, Mountain Province, and
2001, herein petitioner Pang-et filed with the MCTC an action for enforcement of
reinstated the Resolution[3] of the Municipal Circuit Trial Court (MCTC) of Besao-
the Arbitration Award which was sought to be dismissed by the heir of
Sagada, Mountain Province dismissing herein petitioners action for Enforcement of
the Manacnes spouses.[8] The heir of the Manacnes spouses argues that the
Arbitration Award and Damages.
Agreement for Arbitration and the Arbitration Award are void, the Agreement for
Arbitration not having been personally signed by the spouses Manacnes, and the
The instant petition draws its origin from an Action[4] for recovery of
Arbitration Award having been written in English a language not understood by the
possession of real property situated in Sitio Abatan, Barrio Dagdag, Sagada filed by
parties.
herein petitioner before the MCTC of Besao-Sagada, Mountain Province on 9
November 1994, against the spouses Leoncio and Florentina Manacnes, the
In its Resolution dated 20 August 2002, the MCTC dismissed the Petition
predecessors-in-interest of herein respondent.
for Enforcement of Arbitration Award in this wise:
On 23 February 1995, during the course of the pre-trial, the parties,
x x x Are defendants estopped from questioning the proceedings
through their respective counsels, agreed to refer the matter to the Barangay Lupon
before the Lupon Tagapamayapa concerned?
(Lupon) of Dagdag, Sagada for arbitration in accordance with the provisions of
the Katarungang Pambarangay Law.[5] Consequently, the proceedings before the
The defendants having put in issue the validity of the
MCTC were suspended, and the case was remanded to the Lupon for resolution.[6]
proceedings before the lupon concerned and the products thereof,
they are not estopped. It is a hornbook rule that a null and void
Thereafter, the Lupon issued a Certification to File Action on 26 February
act could always be questioned at any time as the action or
1995 due to the refusal of the Manacnes spouses to enter into an Agreement for
defense based upon it is imprescriptible.
Arbitration and their insistence that the case should go to court. On 8 March 1995,
the Certification, as well as the records of the case, were forwarded to the MCTC.
The second issue: Is the agreement to Arbitrate null and
void? Let us peruse the pertinent law dealing on this matter which
An Order was issued by the MCTC on 7 April 1995, once more remanding
is Section 413 of the Local Government Code of 1991 (RA 7160),
the matter for conciliation by the Lupon and ordering the Lupon to render an
to wit:
Arbitration Award thereon. According to the MCTC, based on the records of the
case, an Agreement for Arbitration was executed by the parties concerned;
 Section 413 (a) The parties may, at any stage of
the proceedings, agree in writing that they shall
abide by the arbitration award of
the lupon chairman or thepangkat. x x x
The foregoing should be taken together with Section 415 of the
same code which provides:
Section 415. Appearance of parties in person. In
all katarungang pambarangay proceedings, the
parties must appear in person without the
assistance of counsel or representative, except
for minors and incompetents who may be
assisted by their next-of-kin who are not
lawyers.
It is very clear from the foregoing that personal
appearance of the parties in conciliation proceedings before a
Lupon Tagapamayapa is mandatory. Likewise, the execution of the
agreement to arbitrate must be done personally by the parties
themselves so that they themselves are mandated to sign the
agreement.
Unfortunately, in this case, it was not respondents-
spouses [Manacnis] who signed the agreement to arbitrate as
plaintiff herself admitted but another person. Thus, it is very clear
that the mandatory provisos of Section 413 and 415 of RA 7160
are violated. Granting arguendo that it was Catherine who signed
the agreement per instruction of her parents, will it cure the
violation? The answer must still be in the negative. As provided for
by the cited provisos of RA 7160, if ever a party is entitled to an
assistance, it shall be done only when the party concerned is a
minor or incompetent. Here, there is no showing that the spouses
[Manacnis] were incompetent. Perhaps very old but not
incompetent.Likewise, what the law provides is assistance, not
signing of agreements or settlements.
Just suppose the spouses [Manacnis] executed a special
power of attorney in favor of their daughter Catherine to attend
the proceedings and to sign the agreement to arbitrate? The more
that it is proscribed by the Katarungang Pambarangay Law
specifically Section 415 of RA 7160 which mandates the personal
appearance of the parties before the lupon and likewise prohibits
the appearance of representatives.
In view of the foregoing, it could now be safely concluded
that the questioned agreement to arbitrate is inefficacious for
being violative of the mandatory provisions of RA 7160 particularly
sections 413 and 415 thereof as it was not the respondents-
spouses [Manacnis] who signed it.
The third issue: Is the Arbitration Award now sought to
be enforced effective? Much to be desired, the natural flow of
events must follow as a consequence. Considering that the
agreement to arbitrate is inefficacious as earlier declared, it
follows that the arbitration award which emanated from it is also
inefficacious. Further, the Arbitration Award by itself,
granting arguendo that the agreement to arbitrate is valid, will
readily show that it does not also conform with the mandate of
the Katarungang Pambarangay Law particularly Section 411
thereto which provides:
Sec. 411. Form of Settlement All amicable
settlements shall be in writing in a language or
dialect known to the parties x x x. When the
parties to the dispute do not use the same
language or dialect, the settlement shall be
written in the language known to them.
Likewise, the implementing rules thereof, particularly Section 13
provides:
Sec. 13 Form of Settlement and Award. All
settlements, whether by mediation, conciliation
or arbitration, shall be in writing, in a language
or dialect known to the parties. x x x
It is of no dispute that the parties concerned belong to
and are natives of the scenic and serene community
of Sagada, Mt. Province who speak the Kankanaey language.Thus,
the Arbitration Award should have been written in
the Kankanaey language. However, as shown by the Arbitration
Award, it is written in English language which the parties do not
speak and therefore a further violation of
the Katarungang Pambarangay Law.
IN THE LIGHT of all the foregoing considerations, the
above-entitled case is hereby dismissed.[9]
Petitioner Pang-ets Motion for Reconsideration having been denied, she
filed an Appeal before the RTC which reversed and set aside the Resolution of the
MCTC and remanded the case to the MCTC for further proceedings. According to the
RTC:
As it appears on its face, the Agreement for Arbitration in
point found on page 51 of the expediente, dated Feb. 6, 1995, and
attested by the Pangkat Chairman of the Office of
the Barangay Lupon of Dagdag, Sagada was signed by the
respondents/defendants spouses Manacnis. The representative of
the Appellee in the instant case assails such Agreement claiming
that the signatures of her aforesaid predecessors-in-interest
therein were not personally affixed by the latter or are falsified-
which in effect is an attack on the validity of the document on the
ground that the consent of the defendants spouses Manacnis is
vitiated by fraud. Indulging the Appellee Heirs of Manacnis its
contention that such indeed is the truth of the matter, the fact still
remains as borne out by the circumstances, that neither did said
original defendants nor did any of such heirs effectively repudiate
the Agreement in question in accordance with the procedure
outlined by the law, within five (5) days from Feb. 6, 1995, on the
ground as above-stated (Secs. 413 (a), 418, RA 7160;Secs. 7, 13,
KP Law; Sec. 12, Rule IV, KP Rules). As mandated, such failure is
deemed a waiver on the part of the defendants
spouses Manacnis to challenge the Agreement for Arbitration on
the ground that their consent thereto is obtained and vitiated by
fraud (Sec. 12, Par. 3, KP Rules). Corollarily, the Appellee Heirs
being privy to the now deceased original defendants should have
not been permitted by the court a quo under the equitable
principle of estoppel, to raise the matter in issue for the first time
in the present case (Lopez vs. Ochoa, 103 Phil. 94).
The Arbitration Award relative to Civil Case 83 (B.C. No.
07) dated May 10, 1995, written in English, attested by
the Punong Barangay of Dagdag and found on page 4 of the
record is likewise assailed by the Appellee as void on the ground
that the English language is not known by the defendants
spouses Manacnis who are Igorots. Said Appelleecontends that the
document should have been written in Kankana-ey, the dialect
known to the party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP law,
Sec. 11, KP Rules). On this score, the court a quo presumptuously
concluded on the basis of the self-serving mere say-so of the
representative of the Appellee that her predecessors did not speak
or understand English. As a matter of judicial notice, American
Episcopalian Missionaries had been
in Sagada, Mountain Province as early as 1902 and continuously
stayed in the place by turns, co-mingling with the indigenous
people thereat, instructing and educating them, and converting
most to the Christian faith, among other things, until the former
left about twenty years ago. By constant association with the
white folks, the natives too old to go to school somehow learned
the Kings English by ear and can effectively speak and
communicate in that language. Any which way, even
granting arguendo that the defendants spouses Manacnis were the
exceptions and indeed totally ignorant of English, no petition to
nullify the Arbitration award in issue on such ground as advanced
was filed by the party or any of the Appellee Heirs with the MCTC
of Besao-Sagada, within ten (10) days from May 10, 1995, the
date of the document. Thus, upon the expiration thereof, the
Arbitration Award acquired the force and effect of a final judgment
of a court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP
Rules); conclusive upon the original defendants in Civil Case 83
(B.C. No. 07) and the Appellee Heirs herein privy to said
defendants.
In the light thereof, the collateral attack of
the Appellee on the Agreement for Arbitration and Arbitration
Award re Civil Case 83 (B.C. No. 07) should not have in the first
place been given due course by the court a quo. In which case, it
would not have in the logical flow of things declared both
documents inefficacious; without which pronouncements, said
court would not have dismissed the case at bar.
Wherefore, Judgment is hereby rendered Reversing and
Setting Aside the Resolution appealed from, and ordering the
record of the case subject thereof remanded to the court of origin
for further proceedings.[10]
Aggrieved by the reversal of the RTC, herein respondent filed a petition
before the Court of Appeals seeking to set aside the RTC Judgment. On 9 February
2005, the appellate court rendered the herein assailed Decision, to wit:
After thoroughly reviewing through the record, We find
nothing that would show that the spouses Manacnes were ever
amenable to any compromise with respondent Pang-et. Thus, We
are at a loss as to the basis of the Arbitration Award sought to be
enforced by respondent Pang-ets subsequent action before the
MCTC.
There is no dispute that the proceeding in Civil Case No.
83 was suspended and the same remanded to the Lupon on
account of the Agreement to Arbitrate which was allegedly not
signed by the parties but agreed upon by their respective counsels
during the pre-trial conference. In the meeting before the Lupon,
it would seem that the agreement to arbitrate was not signed by
the spouses Manacnes. More importantly, when
the pangkat chairman asked the spouses Manacnes to sign or affix
their thumbmarks in the agreement, they refused and insisted
that the case should instead go to court. Thus, the Lupon had no
other recourse but to issue a certificate to file
action. Unfortunately, the case was again remanded to the Lupon
to render an arbitration award. This time, the Lupon heard the
voice tape of the late Beket Padonay affirming respondent Pang-
ets right to the disputed property. While Pang-et offered to
pay P8,000.00 for the improvements made by the
spouses Manacnes, the latter refused to accept the same and
insisted on their right to the subject property. Despite this, the
Lupon on May 10, 1995 issued an Arbitration award which favored
respondent Pang-et.
From the time the case was first referred to the Lupon to
the time the same was again remanded to it, the
Spouses Manacnes remained firm in not entering into any
compromise with respondent Pang-et. This was made clear in both
the minutes of the Arbitration Hearing on 26 February 1995 and
on 9 April 1995. With the foregoing, We find it evident that the
spouses Manacnes never intended to submit the case for
arbitration.
Moreover, the award itself is riddled with flaws. First of all
there is no showing that the Pangkat ng Tagapagkasundo was
duly constituted in accordance with Rule V of
the Katarungan Pambarangay Rules. And after constituting of
the Pangkat, Rule VI, thereof the Punong Barangay and
the Pangkat must proceed to hear the case. However, according to
the minutes of the hearing before the lupon on 9 April 1995,
the pangkat Chairman and another pangkat member were absent
for the hearing.
 Finally, Section 13 of the same Rule requires that must signify their intention in the Agreement for Arbitration form. However, as
the Punong Barangay or the Pangkat Chairman should attest that stated earlier, the Manacnes spouses did not want to sign such agreement and
parties freely and voluntarily agreed to the settlement arrived instead insisted that the case go to court.
at. But how can this be possible when the minutes of the two
hearings show that the spouses Manacnes neither freely nor Consequently, the Lupon issued a Certification to File Action on 26
voluntarily agreed to anything. February 1995 due to the refusal of the Manacnes spouses. Indicated in said
Certification are the following: 1) that there was personal confrontation between the
While RA 7160 and the Katarungan Pambarangay rules parties before the Punong Barangay but conciliation failed and 2) that
provide for a period to repudiate the Arbitration Award, the same the Pangkat ngTagapagkasundo was constituted but the personal
is neither applicable nor necessary since the Agreement to confrontation before the Pangkat failed likewise because respondents do
Arbitrate or the Arbitration Award were never freely nor not want to submit this case for arbitration and insist that said case will go
voluntarily entered into by one of the parties to the dispute. In to court.[13] Nevertheless, upon receipt of said certification and the records of the
short, there is no agreement validly concluded that needs to be case, the MCTC ordered that the case be remanded to the Lupon ng
repudiated. Tagapamayapa and for the latter to render an arbitration award, explaining that:

With all the foregoing, estoppel may not be applied Going over the documents submitted to the court by the
against petitioners for an action or defense against a null and void office of the Lupon Tagapamayapa
act does not prescribe. With this, We cannot but agree with the of Dagdag, Sagada, Mountain Province, the court observed that an
MCTC that the very agreement to arbitrate is null and Agreement for Arbitration was executed by the parties anent the
void. Similarly, the arbitration award which was but the off shoot above-entitled case. However, said Lupon did not make any
of the agreement is also void. arbitration award as mandated by
the Katarungang PambarangayLaw but instead made a finding
WHEREFORE, the RTC judgment of 2 June 2003 is that the case may now be brought to the court. This is violative of
REVERSED and SET ASIDE, the MCTC Resolution DISMISSING the the KP Law, which cannot be sanctioned by the court.[14]
Civil Case No. 118 for enforcement of Arbitration Award is
REINSTATED.[11]
At this juncture, it must be stressed that the object of
the Katarungang Pambarangay Law is the amicable settlement of disputes through
Vehemently disagreeing with the Decision of the Court of Appeals, conciliation proceedings voluntarily and freely entered into by the
petitioner Pang-et filed the instant petition. Petitioner maintains that the appellate parties.[15] Through this mechanism, the parties are encouraged to settle their
court overlooked material facts that resulted in reversible errors in the assailed disputes without enduring the rigors of court litigation. Nonetheless, the disputing
Decision. According to petitioner, the Court of Appeals overlooked the fact that the parties are not compelled to settle their controversy during
original parties, as represented by their respective counsels in Civil Case No. 83, the barangay proceedings before the Lupon or thePangkat, as they are free to
mutually agreed to submit the case for arbitration by the Lupon ng Tagapamayapa instead find recourse in the courts[16] in the event that no true compromise is
ofBarangay Dagdag. Petitioner insists that the parties must be bound by the initial reached.
agreement by their counsels during pre-trial to an amicable settlement as any
representation made by the lawyers are deemed made with the conformity of their The key in achieving the objectives of an effective amicable settlement
clients. Furthermore, petitioner maintains that if indeed the spouses Manacnes did under the Katarungang Pambarangay Law is the free and voluntary agreement of
not want to enter into an amicable settlement, then they should have raised their the parties to submit the dispute for adjudication either by the Lupon or
opposition at the first instance, which was at the pre-trial on Civil Case No. 83 when the Pangkat, whose award or decision shall be binding upon them with the force
the MCTC ordered that the case be remanded to the Lupon ng Tagapamayapa for and effect of a final judgment of a court.[17] Absent this voluntary submission by the
arbitration. parties to submit their dispute to arbitration under
the Katarungang Pambarangay Law, there cannot be a binding settlement arrived at
We do not agree with the petitioner. effectively resolving the case. Hence, we fail to see why the MCTC further remanded
the case to the Lupon ng Tagapamayapa and insisted that the arbitration
First and foremost, in order to resolve the case before us, it is pivotal to proceedings continue, despite the clear showing that the spouses Manacnes refused
stress that, during the initial hearing before the Lupon ng Tagapamayapa, the to submit the controversy for arbitration.
spousesManacnes declined to sign the Agreement for Arbitration and were adamant
that the proceedings before the MCTC in Civil Case No. 83 must continue. As It would seem from the Order of the MCTC, which again remanded the
reflected in the Minutes[12] of the Arbitration Hearing held on 26 February 1995, the case for arbitration to the Lupon ng Tagapamayapa, that it is compulsory on the
legality of the signature of Catherine Manacnes, daughter of the Manacnes spouses, part of the parties to submit the case for arbitration until an arbitration award is
who signed the Agreement for Arbitration on behalf of her parents, was assailed on rendered by the Lupon. This, to our minds, is contrary to the very nature of the
the ground that it should be the spouses Manacnes themselves who should have proceedings under the Katarungang Pambarangay Law which espouses the principle
signed such agreement. To resolve the issue, the Pangkat Chairman then asked the of voluntary acquiescence of the disputing parties to amicable settlement.
spouses Manacnes that if they wanted the arbitration proceedings to continue, they
 What is compulsory under the Katarungang Pambarangay Law is that there WHEREFORE, premises considered, the instant petition is
be a confrontation between the parties before the Lupon Chairman or hereby DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 78019 is
the Pangkatand that a certification be issued that no conciliation or settlement has herebyAFFIRMED. The Municipal Circuit Trial Court of Besao-
been reached, as attested to by the Lupon or Pangkat Chairman, before a case Sagada, Mountain Province, is hereby ORDERED to proceed with the trial of Civil
falling within the authority of the Lupon may be instituted in court or any other Case No. 83 for Recovery of Possession of Real Property, and the immediate
government office for adjudication. [18] In other words, the only necessary pre- resolution of the same with deliberate dispatch. No costs.
condition before any case falling within the authority of the Lupon or
the Pangkat may be filed before a court is that there has been personal SO ORDERED.
confrontation between the parties but despite earnest efforts to conciliate, there
was a failure to amicably settle the dispute. It should be emphasized that while the
spouses Manacnes appeared before the Lupon during the initial hearing for the
conciliation proceedings, they refused to sign the Agreement for Arbitration form,
which would have signified their consent to submit the case for
arbitration. Therefore, upon certification by the Lupon ng
Tagapamayapa that the confrontation before the Pangkat failed because
the spouses Manacnes refused to submit the case for arbitration and
insisted that the case should go to court, the MCTC should have continued
with the proceedings in the case for recovery of possession which it
suspended in order to give way for the possible amicable resolution of the
case through arbitration before the Lupon ng Tagapamayapa.

Petitioners assertion that the parties must be bound by their respective

counsels agreement to submit the case for arbitration and thereafter enter into an
amicable settlement is imprecise. What was agreed to by the parties respective
counsels was the remand of the case to the Lupon ng Tagapamayapa for
conciliation proceedings and not the actual amicable settlement of the case. As
stated earlier, the parties may only be compelled to appear before the Lupon ng
Tagapamayapa for the necessary confrontation, but not to enter into any amicable
settlement, or in the case at bar, to sign the Agreement for Arbitration. Thus, when
the Manacnesspouses personally appeared during the initial hearing before
the Lupon ng Tagapamayapa, they had already complied with the agreement during
the pre-trial to submit the case for conciliation proceedings. Their presence during
said hearing is already their acquiescence to the order of the MCTC remanding the
case to theLupon for conciliation proceedings, as there has been an actual
confrontation between the parties despite the fact that no amicable settlement was
reached due to the spouses Manacnes refusal to sign the Agreement for Arbitration.

Furthermore, the MCTC should not have persisted in ordering the Lupon ng
Tagapamayapa to render an arbitration award upon the refusal of the
spousesManacnes to submit the case for arbitration since such arbitration award will
not bind the spouses. As reflected in Section 413 of the
Revised KatarungangPambarangay Law, in order that a party may be bound by an
arbitration award, said party must have agreed in writing that they shall abide by
the arbitration award of the Lupon or the Pangkat. Like in any other contract,
parties who have not signed an agreement to arbitrate will not be bound by said
agreement since it is axiomatic that a contract cannot be binding upon and cannot
be enforced against one who is not a party to it.[19] In view of the fact that upon
verification by thePangkat Chairman, in order to settle the issue of whether or not
they intend to submit the matter for arbitration, the spouses Manacnes refused to
affix their signature or thumb mark on the Agreement for Arbitration Form,
the Manacnes spouses cannot be bound by the Agreement for Arbitration and the
ensuing arbitration award since they never became privy to any agreement
submitting the case for arbitration by the Pangkat.
 Annulment of Transfer Certificate of Title No. T-271657 of Isabela and Deed of
Absolute Sale of Registered Land and/or Reconveyance with Damages.[2]
DANTE M. PASCUAL, represented by G.R. No. 157830
To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion
REYMEL R. SAGARIO,
to Dismiss[3] on two grounds one of which was non-compliance with the requirement
Petitioner, Present:
under Section 412 of the Local Government Code,[4] she contending that there is no
showing that the dispute was referred to the barangay court before the case was
PANGANIBAN, Chairman,
filed in court.
SANDOVAL- GUTIERREZ,*
-versus- CORONA,
By the assailed Order of February 10, 2003,[5] Branch 23 of the Isabela RTC at
CARPIO MORALES, and
Roxas granted respondents Motion to Dismiss in this wise:
GARCIA, JJ.
. . . RA 7160 repealing P.D. 1508 otherwise known as the Revised
MARILOU M. PASCUAL, Promulgated:
Katarungang Pambarangay provides under Section 409 All
Respondent.
disputes involving real property or any interest therein shall be
November 17, 2005
brought in the barangay where the real property or the larger
portion thereof is situated. Hence, the reliance of the plaintiff on
x----------------------------------------------------
Section 408 of R.A. 7160 is incorrect. When real property or any
-------------x
interest therein is involved, the dispute shall be filed before the
barangay where the property is located, regardless of the
DECISION
residence of the parties. Besides, it is incorrect to say that the
parties are not residents of the same place, Vira, Roxas,
CARPIO MORALES, J.:
Isabela. The Attorney-in-fact of the plaintiff in the person of
Reymel R. Sagario is a resident of Vira, Roxas, Isabela, and
he substitute (sic) Dante Pascual by virtue of said Special
On challenge via Petition for Review on Certiorari is the February 10, 2003 Order of
Power of Attorney. Hence, said Attorney-in-fact should have
the Regional Trial Court (RTC) of Isabela, Branch 23 at Roxas dismissing, on motion
brought the dispute before barangay Vira, Roxas, Isabela, where
of herein respondent Marilou M. Pascual, the complaint filed against her by her
the property is located. In the case of Royales vs. Intermediate
brother-herein petitioner Dante M. Pascual, represented by his attorney-in-fact
Appellate Court 127 SCRA 470, Ordinarily, non-compliance with
Reymel R. Sagario (Sagario), for non-compliance with the conciliation provision-pre
the condition precedent prescribed by P.D. 1508 could affect the
condition to filing of complaint in court under R.A. 7160 (the Local Government
sufficiency of the plaintiffs cause of action and make his complaint
Code).
vulnerable to dismissal on ground of lack of cause of action or
prematurity.[6] (Emphasis and underscoring supplied)
Petitioner, a permanent resident of the United States of America, appointed Sagario
as his attorney-in-fact by a Special Power of Attorney (SPA) dated April 10, 2002:
Petitioners Motion for Reconsideration[7] of the above-said order was denied by
1. To file a case for the cancellation of Transfer Certificate of Title
Order of March 24, 2003:[8]
No. T-271656 issued in the name of Marilou M. Pascual as well as
the Deed of Sale of Registered Land (Dec. No. 639; Page No. 52;
xxx
Book No. XXI; Series of 1994) and/or Reconveyance at the
appropriate court;
Consequently, the Court is [of] the opinion that the
said Attorney-in-fact shall be deemed to be the real party in
2. To collect the monthly rentals from the tenant;
interest, reading from the tenor of the provisions of the Special
Power of Attorney. Being a real party in interest, the Attorney-in-
3. To enter into amicable settlement with Marilou M. Pascual or
fact is therefore obliged to bring this case first before the
any other mode of payment/and/or dispute resolution;
Barangay Court. Sec. 3, Rule 3 of the Rules of Court provides that
Where the action is allowed to be prosecuted or defended by a
4. To execute and sign any and all papers, contracts/documents
representative or someone acting in a fiduciary capacity, the
which may be necessary relative to the above acts.
beneficiary shall be included in the title of the case and shall be
deemed to be the real party in interest.
x x x[1]
xxx
Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at
Being the real party in interest, the Attorney-in-fact may therefore
Roxas a complaint entitled Dante M. Pascual, plaintiff v. Marilou M. Pascual and
bring the necessary complaint before the Lupon Tagapayapa
Register of Deeds, Defendants, docketed as Civil Case No. Br. 23-713-02, for
 and appear in person as if he is the owner of the
land.[9] (Emphasis and underscoring supplied)
Hence, the present petition questioning the palpable legal errors of the RTC.
Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in
interest, and since he actually resides abroad, the lupon would have no jurisdiction
to pass upon the dispute involving real property, he citing Agbayani v. Belen.[10]
Respondent submits, on the other hand, that Section 408, paragraph (f), of the
Local Government Code, is qualified by paragraph (c) of Section 409 of the same
Code the latter of which provides that [a]ll disputes involving real property or any
interest therein shall be brought in the barangay where the real property is located,
hence, the use of the word shall makes it mandatory for the bringing of the dispute
before the lupon.
That attorney-in-fact Sagario is a resident of the same barangay as that of hers,
respondent argues in any event, brings the matter under the jurisdiction of
the lupon, for Sagario, following Section 3 of Rule 3 of the 1997 Rules of Civil
Procedure which provides:
Sec. 3. Representative as parties. - Where the action is allowed to
be prosecuted or defended by a representative or someone acting
in a fiduciary capacity, the beneficiary shall be included in the title
of the case and shall be deemed to be the real party in interest. A
representative may be a trustee of an express trust, a guardian,
an executor or administrator, or a party authorized by law or these
Rules. An agent acting in his own name for the benefit of an
undisclosed principal may sue or be sued without joining the
principal except when the contract involves things belonging to the
principal,
being a substitute, becomes the real party-in-interest.
Respondents submissions do not lie.
The pertinent provisions of the Local Government Code read:
SEC. 408. Subject Matter for Amicable Settlement; Exception
Thereto. The lupon of each barangay shall have authority to bring
together the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year
or a fine exceeding Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different
cities or municipalities unless the parties thereto agree to submit
their differences to amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of
different cities or municipalities, except where such barangay units
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon; and
(g) Such other classes of disputes which the President may
determine in the interest of justice or upon the recommendation of
the Secretary of Justice.
The court in which non-criminal cases not falling within the
authority of the lupon under this Code are filed may, at any time
before trial, motu proprio refer the case to the lupon concerned for
amicable settlement. (Emphasis supplied)
SEC. 409. Venue. (a) Disputes between persons actually
residing in the same barangay shall be brought for amicable
settlement before the lupon of said barangay .
(b) Those involving actual residents of different barangays within
the same city or municipality shall be brought in the barangay
where the respondent or any of the respondents actually resides,
at the election of the complainant.
(c) All disputes involving real property or any interest therein shall
be brought in the barangay where the real property or the larger
portion thereof is situated.
(d) Those arising at the workplace where the contending parties
are employed or at the institution where such parties are enrolled
for study shall be brought in the barangay where such workplace
or institution is located.
Objections to venue shall be raised in the mediation proceedings
before the punong barangay; otherwise, the same shall be
deemed waived. Any legal question which may confront the
punong barangay in resolving objections to venue herein referred
to may be submitted to the Secretary of Justice or his duly
designated representative whose ruling thereon shall be binding.
(Emphasis supplied)
In the 1982 case of Tavora v. Veloso,[11] this Court held that where the parties are
not actual residents in the same city or municipality or adjoining barangays, there
is no requirement for them to submit their dispute to the lupon as provided for in
Section 6 vis a vis Sections 2 and 3 of P.D. 1508 (Katarungang Pambarangay Law).
[B]y express statutory inclusion and exclusion, the Lupon shall
have no jurisdiction over disputes where the parties are
not actual residents of the same city or municipality, except where
the barangays in which they actually reside adjoin each other.
(Underscoring supplied)
In the 2000 case of Vercide v. Hernandez,[12] this Court, noting that
the Tavora ruling, reiterated in other cases including the 1996 case
of Agbayani[13] cited by petitioner, was decided under the provisions of P.D. No.
1508 (Katarungang Pambarangay) Law which were, except for some modifications,
echoed in Sections 408-409 of the Local Government Code which took effect on
January 1, 1992, held that the Tavora ruling remained.

To construe the express statutory requirement of actual residency as applicable to

the attorney-in-fact of the party-plaintiff, as contended by respondent, would
abrogate the meaning of a real party in interest as defined in Section 2 of Rule
3[14] of the 1997 Rules of Court vis a vis Section 3 of the same Rule which was
earlier quoted but misread and misunderstood by respondent.

In fine, since the plaintiff-herein petitioner, the real party in interest, is not an
actual resident of the barangay where the defendant-herein respondent resides, the
local lupon has no jurisdiction over their dispute, hence, prior referral to it for
conciliation is not a pre-condition to its filing in court.

The RTC thus erred in dismissing petitioners complaint.

WHEREFORE, the petition is granted. The assailed February 10, 2003 Order, as
well as the March 24, 2003 Order denying reconsideration of the first, of Branch 23
of the Regional Trial Court of Isabela at Roxas is SET ASIDE. Said court is
accordingly directed to reinstate Civil Case No. 23-713-02 to its docket and take
appropriate action thereon with dispatch.

SO ORDERED.
ATTY. EVELYN J. MAGNO, A.C. No. 6296
Complainant,
Present:
PANGANIBAN, J., Chairman
- versus - SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES and
GARCIA, JJ.
ATTY. OLIVIA VELASCO-JACOBA, Promulgated:
Respondent. November 22, 2005
x----------------------------------------x
RESOLUTION
GARCIA, J.:
In her sworn complaint, as endorsed by the President of the Integrated Bar of
the Philippines (IBP), Nueva Ecija Chapter, Atty. Evelyn J. Magno charged Atty.
Olivia Velasco-Jacoba, a member of the same IBP provincial chapter, with willful
violation of (a) Section 415 of the Local Government Code (LGC) of 1991 and (b)
Canon 4 of the Code of Professional Responsibility.
This disciplinary case arose out of a disagreement that complainant had with
her uncle, Lorenzo Inos, over a landscaping contract they had entered into. In a bid
to have the stand-off between them settled, complainant addressed a letter,
styled Sumbong,[1] to Bonifacio Alcantara, barangay captain of Brgy. San Pascual,
Talavera, Nueva Ecija. At the barangay conciliation/confrontation proceedings
conducted on January 5, 2003, respondent, on the strength of a Special Power of
Attorney signed by Lorenzo Inos, appeared for the latter, accompanied by his son,
Lorenzito. Complainants objection to respondents appearance elicited the response
that Lorenzo Inos is entitled to be represented by a lawyer inasmuch as complainant
is herself a lawyer. And as to complainants retort that her being a lawyer is merely
coincidental, respondent countered that she is appearing as an attorney-in-fact, not
as counsel, of Lorenzo Inos.
Complainant enumerated specific instances, with supporting documentation,
tending to prove that respondent had, in the course of the conciliation proceedings
before the Punong Barangay, acted as Inos Lorenzos counsel instead of as his
attorney-in-fact. This is what complainant said in her complaint: [2]
5. xxx Atty. Olivia Jacoba asked for an ocular inspection of
the subject matter of the complaint. A heated argument took
place because Lorencito Inos said that [complainants brother]
Melencio Magno, Jr. made alterations in the lagoon . Afterwards
Atty. Olivia Jacoba . . . returned to the barangay hall to have the
incident recorded in the barangay blotter.... attached as Annex A
6. That on January 12, 2003, Lorenzo Inos appeared
before the hearing also with the assistance of [respondent]. When
the minutes of the proceeding (sic) was read, [respondent]
averred that the minutes is partial in favor of the complainant
because only her statements were recorded for which reason,
marginal insertions were made to include what [respondent]
wanted to be put on record. She also signed as saksi in the
minutes .
7. xxx In a letter (answer to the "sumbong) sent to the
Punong Barangay dated December 22, 2002, she signed
representing herself as Family Legal Counsel of Inos Family, a
copy of the letter is attached as Annex C . . . . (Words in bracket
added.)
In an Order dated February 17, 2003, Atty. Victor C. Fernandez, IBP Director
for Bar Discipline, directed the respondent to submit, within fifteen (15) days from
notice, her answer to the complaint, otherwise she will be considered as in
default.[3]
The case, docketed as CBD No. 03-1061, was assigned to Commissioner
Rebecca Villanueva-Maala, who admitted respondents answer notwithstanding her
earlier order of July 15, 2003, declaring respondent in default for failure to file an
answer in due time.[4]
In her Answer, respondent alleged that the administrative complaint was filed
with the Office of the Punong Barangay, instead of before theLupong
Tagapamayapa, and heard by Punong Barangay Bonifacio Alcantara alone, instead
of the collegial Lupon or a conciliation panel known aspangkat. Prescinding from this
premise, respondent submits that the prohibition against a lawyer appearing to
assist a client in katarungan pambarangay proceedings does not apply. Further, she
argued that her appearance was not as a lawyer, but only as an attorney-in-fact.
In her report dated October 6, 2003,[5] Commissioner Maala stated that the
charge of complainant has been established by clear preponderance of evidence
and, on that basis, recommended that respondent be suspended from the practice
of her profession for a period of six (6) months. On the other hand, the Board of
Governors, IBP Commission on Bar Discipline, while agreeing with the inculpatory
finding of the investigating commissioner, recommended in its Resolution No. XVI-
2003-235,[6] a lighter penalty, to wit:
RESOLVED to ADOPT and APPROVE, as it is hereby
ADOPTED and APPROVED, the Report and Recommendation of the
Investigating Commissioner of the above-entitled case, herein
made part of this Resolution/Decision as Annex "A"; and, finding
the recommendation fully supported by the evidence on record
and the applicable laws and rules, with modification, and
considering respondent's actuations was in violation of Section
415 which expressly prohibits the presence and representation by
lawyers in the Katarungan Pambarangay, Atty. Olivia Velasco-
Jacoba is hereby ADMONISHED.
This resolution is now before us for confirmation.
 Section 415 of the LGC of 1991[7], on the subject Katarungang Pambarangay,
provides:

Section 415. Appearance of Parties in Person. - In all

katarungang pambarangay proceedings, the parties must appear
in person without the assistance of the counsel or representative,
except for minors and incompetents who may be assisted by their
next of kin who are not lawyers.

The above-quoted provision clearly requires the personal appearance of the

parties in katarungan pambarangay conciliation proceedings, unassisted by counsel
or representative. The rationale behind the personal appearance requirement is to
enable the lupon to secure first hand and direct information about the facts and
issues,[8] the exception being in cases where minors or incompetents are parties.
There can be no quibbling that laymen of goodwill can easily agree to conciliate
and settle their disputes between themselves without what sometimes is the
unsettling assistance of lawyers whose presence could sometimes obfuscate and
confuse issues.[9] Worse still, the participation of lawyers with their penchant to use
their analytical skills and legal knowledge tend to prolong instead of expedite
settlement of the case.

The prohibition against the presence of a lawyer in a barangay conciliation

proceedings was not, to be sure, lost on respondent. Her defense that the
aforequoted Section 415 of the LGC does not apply since complainant addressed
her Sumbong to the barangay captain of Brgy. San Pascual who thereafter
proceeded to hear the same is specious at best. In this regard, suffice it to state
that complainant wrote her Sumbong with the end in view of availing herself of the
benefits of barangay justice. That she addressed her Sumbong to the barangay
captain is really of little moment since the latter chairs the Lupong
Tagapamayapa.[10]

Lest it be overlooked, the prohibition in question applies to all katarungan

barangay proceedings. Section 412(a)[11] the LGC of 1991 clearly provides that, as
a precondition to filing a complaint in court, the parties shall go through the
conciliation process either before the lupon chairman or the lupon or pangkat. As
what happened in this case, the punong barangay, as chairman of the Lupon
Tagapamayapa, conducted the conciliation proceedings to resolve the disputes
between the two parties.

Given the above perspective, we join the IBP Commission on Bar Discipline in
its determination that respondent transgressed the prohibition prescribed in Section
415 of the LGC. However, its recommended penalty of mere admonition must have
to be modified. Doubtless, respondents conduct tended to undermine the laudable
purpose of the katarungan pambarangay system. What compounded matters was
when respondent repeatedly ignored complainants protestation against her
continued appearance in the barangay conciliation proceedings.

WHEREFORE, Atty. Olivia Velasco-Jacoba is hereby FINED in the amount of

Five Thousand Pesos (P5,000.00) for willful violation of Section 415 of the Local
Government Code of 1991 with WARNING that commission of similar acts of
impropriety on her part in the future will be dealt with more severely.

SO ORDERED.

[G.R. No. 146195. November 18, 2004]
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL, TERESA
ZAMORA-UMALI, CLARENCE UMALI, ROBERTO ZAMORA, ROLANDO
ZAMORA, MARY ANN ZAMORA, MICHELLE ZAMORA and RODRIGO
ZAMORA, petitioners, vs. HEIRS of CARMEN IZQUIERDO,
represented by their attorney-in-fact, ANITA F.
PUNZALAN, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari[1] assailing the Decision[2] of the
Court of Appeals dated September 12, 2000 and its Resolution dated December 1,
2000 in CA-G.R. SP No. 54541, entitled Avelina Zamora, et al., petitioners, versus
Heirs of Carmen Izquierdo, represented by the executrix, Anita F. Punzalan,
respondents.
The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora
entered into a verbal stipulation whereby the former leased to the latter one of her
apartment units located at 117-B General Luna Street, Caloocan City. They agreed
on the following: the rental is P3,000.00 per month; the leased premises is only for
residence; and only a single family is allowed to occupy it.
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita
Punzalan, representing the heirs, herein respondents, prepared a new contract of
lease wherein the rental was increased from P3,000.00 to P3,600.00 per
month.[3] However, petitioners refused to sign it.
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their
children (two of whom have their own families), herein petitioners, continued to
reside in the apartment unit. However, they refused to pay the increased rental and
persisted in operating a photocopying business in the same apartment.
Meanwhile, petitioner Avelina Zamora applied with the Metropolitan
Waterworks & Sewerage System (MWSS) for a water line installation in the
premises. Since a written consent from the owner is required for such installation,
she requested respondents attorney-in-fact to issue it. However, the latter declined
because petitioners refused to pay the new rental rate and violated the restrictions
on the use of the premises by using a portion thereof for photocopying business and
allowing three families to reside therein.
This prompted petitioner Avelina Zamora to file with the Office of the Punong
Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a complaint
against Anita Punzalan (respondents attorney-in-fact), docketed as Usaping Bgy.
Blg. 1-27-97, Ukol sa: Hindi Pagbibigay ng Pahintulot sa Pagpapakabit ng Tubig.
On August 24, 1997, during the barangay conciliation proceedings, petitioner
Avelina Zamora declared that she refused to sign the new lease contract because
she is not agreeable with the conditions specified therein.
The following day, Anita Punzalan sent Avelina a letter[4] informing her that the
lease is being terminated and demanding that petitioners vacate the premises within
30 days from notice.
Despite several barangay conciliation sessions, the parties failed to settle their
dispute amicably. Hence, the Barangay Chairman issued a Certification to File Action
dated September 14, 1997.[5]
Consequently, on October 2, 1997, respondents, represented by Anita
Punzalan, filed with the Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a
complaint for unlawful detainer and damages against petitioners, docketed as Civil
Case No. 23702.[6] Forthwith, petitioners filed a motion to dismiss[7] the complaint
on the ground that the controversy was not referred to the barangay for
conciliation. First, they alleged that the barangay Certification to File Action is
fatally defective because it pertains to another dispute, i.e., the refusal by
respondents attorney-in-fact to give her written consent to petitioners request for
installation of water facilities in the premises. And, second, when the parties failed
to reach an amicable settlement before the Lupong Tagapamayapa, the Punong
Barangay (as Lupon Chairman), did not constitute the Pangkat ng
Tagapagkasundo before whom mediation or arbitration proceedings should have
been conducted, in violation of Section 410(b), Chapter 7 (Katarungang
Pambarangay), Title One, Book III of Republic Act No. 7160[8] (otherwise known as
the Local Government Code of 1991), which reads:
SECTION 410. Procedure for Amicable Settlement.
(a) x x x
(b) Mediation by lupon chairman Upon receipt of the complaint,
the lupon chairman[9] shall, within the next working day, summon the
respondent(s), with notice to the complainant(s) for them and their witnesses to
appear before him for a mediation of their conflicting interests. If he fails in his
mediation effort within fifteen (15) days from the first meeting of the parties
before him, he shall forthwith set a date for the constitution of
the pangkat in accordance with the provisions of this Chapter. (Underscoring
supplied)
Respondents opposed the motion to dismiss,[10] the same being prohibited
under Section 19 of the 1991 Revised Rule on Summary Procedure. They prayed
that judgment be rendered as may be warranted by the facts alleged in the
complaint, pursuant to Section 6[11] of the same Rule.
On July 9, 1998, the MTC issued an Order[12] denying petitioners motion to
dismiss and considering the case submitted for decision in view of their failure to file
their answer to the complaint.
Petitioners filed a motion for reconsideration,[13] contending that a motion to
dismiss the complaint on the ground of failure to refer the complaint to
the Lupon for conciliation is allowed under Section 19 of the 1991 Revised Rule on
Summary Procedure, which partly provides:
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or
petitions shall not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or
information except on the ground of lack of jurisdiction over the subject matter,
or failure to comply with the preceding section [referring to Section 18 on
referral of the complaint to the Lupon for conciliation];
x x x.
On August 26, 1998, the MTC rendered a Judgment[14] in favor of respondents
and against petitioners, the dispositive portion of which reads:
WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and against the
defendants, ordering defendants and all persons claiming right under them:
1) To vacate the leased premises located at No. 117-B General
Luna Street, Caloocan City and to surrender possession thereof
to the plaintiff;
2) To pay the amount of three thousand six hundred
(P3,600.00) pesos per month starting January, 1997 until the
premises being occupied by them is finally vacated and
possession thereof is restored to the plaintiff;
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos
as and for attorneys fees; and
4) To pay the costs of this suit.
SO ORDERED.
On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City,
rendered its Decision[15] dated February 15, 1999 affirming the MTC Judgment.
Subsequently, it denied petitioners motion for reconsideration.[16]
Petitioners then filed with the Court of Appeals a petition for review, docketed
as CA-G.R. SP No. 54541. On September 12, 2000, it rendered a
Decision[17] affirming the RTC Decision.
Thereafter, petitioners filed a motion for reconsideration but was denied by the
Appellate Court in its Resolution dated December 1, 2000.[18]
Hence, the instant petition.
I
The primordial objective of Presidential Decree No. 1508 (the Katarungang
Pambarangay Law), now included under R.A. No. 7160 (the Local Government Code
of 1991), is to reduce the number of court litigations and prevent the deterioration
of the quality of justice which has been brought about by the indiscriminate filing of
cases in the courts.[19] To attain this objective, Section 412(a) of R.A. No. 7160
requires the parties to undergo a conciliation process before the Lupon Chairman or
the Pangkat as a precondition to filing a complaint in court, thus:
SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No
complaint, petition, action, or proceeding involving any matter within the authority
of the lupon shall be filed or instituted directly in court or any other government
office for adjudication, unless there has been a confrontation between the parties
before the lupon chairman or the pangkat, and that no conciliation or settlement
has been reached as certified by the lupon or pangkat secretary and attested to
by the lupon or pangkat chairman x x x. (Underscoring supplied)
In the case at bar, the Punong Barangay, as Chairman of the Lupong
Tagapamayapa, conducted conciliation proceedings to resolve the dispute between
the parties herein. Contrary to petitioners contention, the complaint does not only
allege, as a cause of action, the refusal of respondents attorney-in-fact to give her
consent to the installation of water facilities in the premises, but also petitioners
violation of the terms of the lease, specifically their use of a portion therein for their
photocopying business and their failure to pay the increased rental. As correctly
found by the RTC:
The records show that confrontations before the barangay chairman were held on
January 26, 1997, February 9, 1997, February 23, 1997, February 28, 1997, July
27, 1997, August 3, 1997, August 10, 1997, August 17, 1997 and August 24, 1997
wherein not only the issue of water installation was discussed but also the terms of
the lease and the proposed execution of a written contract relative thereto. It
appears, however, that no settlement was reached despite a total of nine meetings
at the barangay level.
It is of no moment that the complaint was initially made by defendant-appellant
Avelina Zamora because herein plaintiff-appellee was given by the Sangguniang
Barangay the authority to bring her grievance to the Court for resolution. While it is
true that the Sertifikasyon dated September 14, 1997 is entitled Ukol Sa Hindi
Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig, this title must not prevail over
the actual issues discussed in the proceedings.
Hence, to require another confrontation at the barangay level as a sine qua non for
the filing of the instant case would not serve any useful purpose anymore since no
new issues would be raised therein and the parties have proven so many times in
the past that they cannot get to settle their differences amicably.[20]
We cannot sustain petitioners contention that the Lupon conciliation alone,
without the proceeding before the Pangkat ng Tagapagkasundo, contravenes the
law onKatarungang Pambarangay. Section 412(a) of R.A. No. 7160, quoted earlier,
clearly provides that, as a precondition to filing a complaint in court, the parties
shall go through the conciliation process either before the Lupon Chairman (as
what happened in the present case), or the Pangkat.
Moreover, in Diu vs. Court of Appeals,[21] we held that notwithstanding the
mandate in Section 410(b) of R.A. No. 7160 that the Barangay Chairman shall
constitute aPangkat if he fails in his mediation efforts, the same Section 410(b)
should be construed together with Section 412(a) of the same law (quoted earlier),
as well as the circumstances obtaining in and peculiar to the case. Here, while
the Pangkat was not constituted, however, the parties met nine (9) times at the
Office of the BarangayChairman for conciliation wherein not only the issue of water
installation was discussed but also petitioners violation of the lease contract. It is
thus manifest that there was substantial compliance with the law which does not
require strict adherence thereto.[22]

II

We hold that petitioners motion to dismiss the complaint for unlawful detainer
is proscribed by Section 19(a) of the 1991 Revised Rule on Summary Procedure,
quoted earlier. Section 19(a) permits the filing of such pleading only when the
ground for dismissal of the complaint is anchored on lack of jurisdiction over the
subject matter, or failure by the complainant to refer the subject matter of
his/her complaint to the Lupon for conciliation prior to its filing with the court.
This is clear from the provisions of Section 18 of the same Rule, which reads:

SEC. 18. Referral to Lupon. Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No. 1508 where there is
no showing of compliance with such requirement, shall be dismissed
without prejudice, and may be revived only after such requirement shall have
been complied with. This provision shall not apply to criminal cases where the
accused was arrested without a warrant. (Underscoring supplied)

As discussed earlier, the case was referred to the Lupon Chairman for
conciliation. Obviously, petitioners motion to dismiss, even if allowed, is bereft of
merit.

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of

the Court of Appeals in CA-G.R. SP No. 54541 sustaining the Decision of the RTC
which upheld the MTC Judgment is AFFIRMED.
 [G.R. No. L-63277. November 29, 1983.]
PETRA VDA. DE BORROMEO, Petitioner, v. HON. JULIAN B. POGOY,
Municipality/City Trial Court of Cebu City, and ATTY. RICARDO
REYES, Respondents.
Antonio T. Uy for Petitioner.
Numeriano G. Estenzo for Respondents.
SYLLABUS
1. CIVIL LAW; ACTIONS FOR FORCIBLE ENTRY AND DETAINER; PRESCRIPTIVE
PERIOD; ACTION NOT BARRED IN THE CASE AT BAR. — Under Article 1147 of the
Civil Code, the period for filing actions for forcible entry and detainer is one year,
and this period is counted from demand to vacate the premises. (Desbarat v. Vda.
de Laureano, 18 SCRA 116, Calubayan v. Pascual, 21 SCRA 146, Development Bank
of the Philippines v. Canonoy, 35 SCRA 197) In the case at bar, the letter-demand
was dated August 28, 1982, while the complaint for ejectment was filed in court on
September 16, 1982. Between these two dates, less than a month had elapsed,
thereby leaving at least eleven (11) full months of the prescriptive period provided
for in Article 1147 of the Civil Code. Under the procedure outlined in Section 4 of PD
1508, the time needed for the conciliation proceeding before the Barangay
Chairman and the Pangkat should take no more than 60 days. Giving private
respondent nine (9) months-ample time indeed- within which to bring his case
before the proper court should conciliation efforts fail. Thus, it cannot be truthfully
asserted, as private respondent would want Us to believe, that his case would be
barred by the Statute of Limitations if he had to course his action to the Barangay
Lupon.
2. REMEDIAL LAW; SECTION 4 (A) OF P.D. No. 1508; CONSTRUED. — Under
Section 4(a) of PD 1508, referral of a dispute to the Barangay Lupon is required
only where the parties thereto are "individuals." An "individual" means "a single
human being as contrasted with a social group or institution." Obviously, the law
applies only to cases involving natural persons, and not where any of the parties is
a juridical person such as a corporation, partnership, corporation sole, testate or
intestate, estate, etc.
3. ID.; JURIDICAL PERSON; REAL PARTY IN INTEREST; REFERRAL TO BARANGAY
LUPON, NOT REQUIRED. — In Civil Case No. R-239l5, plaintiff Ricardo Reyes is a
mere nominal party who is suing in behalf of the Intestate Estate of Vito Borromeo.
while it is true that Section 3, Rule 3 of the Rules of Court allows the administrator
of an estate to sue or be sued without joining the party for whose benefit the action
is presented or defended, it is indisputable that the real party in interest in Civil
Case No. R-23915 is the intestate estate under administration. Since the said estate
is a juridical person (Limjoco v. Intestate of Fragante, 80 Phil. 776) plaintiff
administrator may file the complaint directly in court, without the same being
coursed to the Barangay Lupon for arbitration.
DECISION
ESCOLIN, J.:
Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal
Trial Court of Cebu City from taking cognizance of an ejectment suit for failure of
the plaintiff to refer the dispute to the Barangay Lupon for conciliation.
The intestate estate of the late Vito Borromeo is the owner of a building bearing the
deceased’s name, located at F. Ramos St., Cebu City. Said building has been leased
and occupied by petitioner Petra Vda. de Borromeo at a monthly rental of P500.00
payable in advance within the first five days of the month.
On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the
estate and a resident of Cebu City, served upon petitioner a letter demanding that
she pay the overdue rentals corresponding to the period from March to September
1982, and thereafter to vacate the premises. As petitioner failed to do so, Atty.
Reyes instituted on September 16, 1982 an ejectment case against the former in
the Municipal Trial Court of Cebu City. The complaint was docketed as Civil Case No.
R-23915 and assigned to the sala of respondent judge.
On November 12, 1982, petitioner moved to dismiss the case, advancing, among
others, the want of jurisdiction of the trial court. Pointing out that the parties are
residents of the same city, as alleged in the complaint, petitioner contended that the
court could not exercise jurisdiction over the case for failure of respondent Atty.
Reyes to refer the dispute to the Barangay Court, as required by PD No. 1508,
otherwise known as Katarungang Pambarangay Law.chanroblesvirtualawlibrary
Respondent judge denied the motion to dismiss. He justified the order in this
wise:jgc:chanrobles.com.ph
"The Clerk of Court when this case was filed accepted for filing same. That from the
acceptance from (sic) filing, with the plaintiff having paid the docket fee to show
that the case was docketed in the civil division of this court could be considered as
meeting the requirement or precondition for were it not so, the Clerk of Court would
not have accepted the filing of the case especially that there is a standing circular
from the Chief Justice of the Supreme Court without even mentioning the Letter of
Instruction of the President of the Philippines that civil cases and criminal cases with
certain exceptions must not be filed without passing the barangay court." (Order
dated December 14, 1982, Annex "c", P. 13, Rollo).
Unable to secure a reconsideration of said order, petitioner came to this Court
through this petition forcertiorari. In both his comment and memorandum, private
respondent admitted not having availed himself of the barangay conciliation
process, but justified such omission by citing paragraph 4, section 6 of PD 1508
which allows the direct filing of an action in court where the same may otherwise be
barred by the Statute of Limitations, as applying to the case at bar.
The excuse advanced by private respondent is unsatisfactory. Under Article 1147 of
the Civil Code, the period for filing actions for forcible entry and detainer is one
year, 1 and this period is counted from demand to vacate the premises. 2
In the case at bar, the letter-demand was dated August 28, 1982, while the
complaint for ejectment was filed in court on September 16, 1982. Between these
two dates, less than a month had elapsed, thereby leaving at least eleven (11) full
months of the prescriptive period provided for in Article 1147 of the Civil Code.
Under the procedure outlined in Section 4 of PD 1508, 3 the time needed for the
conciliation proceeding before the Barangay Chairman and the Pangkat should take
no more than 60 days. Giving private respondent nine (9) months — ample time
indeed — within which to bring his case before the proper court should conciliation
efforts fail. Thus, it cannot be truthfully asserted, as private respondent would want
Us to believe, that his case would be barred by the Statute of Limitations if he had
to course his action to the Barangay Lupon.

With certain exceptions, PD 1508 makes the conciliation process at the Barangay
level a condition precedent for filing of actions in those instances where said law
applies. For this reason, Circular No. 22 addressed to "ALL JUDGES OF THE COURTS
OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS, JUVENILE AND DOMESTIC
RELATIONS COURT, COURTS OF AGRARIAN RELATIONS, CITY COURTS, MUNICIPAL
COURTS AND THEIR CLERKS OF COURT" was issued by Chief Justice Enrique M.
Fernando on November 9, 1979. Said Circular reads:chanrobles.com:cralaw:red

"Effective upon your receipt of the certification by the Minister of Local Government
and Community Development that all the barangays within your respective
jurisdictions have organized their Lupons provided for in Presidential Decree No.
1508, otherwise known as the Katarungang Pambarangay Law, in implementation of
the barangay system of settlement of disputes, you are hereby directed to desist
from receiving complaints, petitions, actions or proceedings in cases falling within
the authority of said Lupons."cralaw virtua1aw library

While respondent acknowledged said Circular in his order of December 14, 1982, he
nevertheless chose to overlook the failure of the complaint in Civil Case No. R-
23915 to allege compliance with the requirement of PD 1508. Neither did he cite
any circumstance as would place the suit outside the operation of said law. Instead,
he insisted on relying upon the pro tanto presumption of regularity in the
performance by the clerk of court of his official duty, which to Our mind has been
sufficiently overcome by the disclosure by the Clerk of Court that there was no
certification to file action from the Lupon or Pangkat secretary attached to the
complaint. 4

Be that as it may, the instant petition should be dismissed. Under Section 4(a) of PD
No. 1508, referral of a dispute to the Barangay Lupon is required only where the
parties thereto are "individuals." An "individual" means "a single human being as
contrasted with a social group or institution." 5 Obviously, the law applies only to
cases involving natural persons, and not where any of the parties is a juridical
person such as a corporation, partnership, corporation sole, testate or intestate,
estate, etc.

In Civil Case No. R-23915, plaintiff Ricardo Reyes is a mere nominal party who is
suing in behalf of the Intestate Estate of Vito Borromeo. While it is true that Section
3, Rule 3 of the Rules of Court allows the administrator of an estate to sue or be
sued without joining the party for whose benefit the action is presented or
defended, it is indisputable that the real party in interest in Civil Case No. R-23915
is the intestate estate under administration. Since the said estate is a juridical
person 6 plaintiff administrator may file the complaint directly in court, without the
same being coursed to the Barangay Lupon for arbitration.

ACCORDINGLY, the petition is hereby dismissed. Respondent judge is ordered to try

and decide Civil Case No. R-23915 without unnecessary delay. No costs.

SO ORDERED.
G.R. No. 83907. September 13, 1989.*
NAPOLEON GEGARE, petitioner
vs.
HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE
ELMA, respondents.
Camilo Cariño Dionio, Jr. for petitioner.
Cedo, Ferrer & Associates Law Offices for private respondent.
GANCAYCO, J.:
The familiar story in the Old Testament is of how King Solomon settled the dispute
between two women over a child by deciding that the child be cut into two for them
to share. The real mother full of love implored that the King not kill the child and
give the child to the other woman. The latter asked the King not to give it to either
of them and to go on, cut the child into two.
This case involves a small piece of land. The decision was to cut it into two between
the parties. But the parallel ends there. The petitioner wants the whole lot. Private
respondent is happy with his half. This is the impasse that must be resolved.
The center of controversy is Lot 5989, Ts-217 with an area of about 270 square
meters situated at Dadiangas, General Santos City. This lot was titled in the name
of Paulino Elma under Original Certificate of Title No. (P-29947) (P-11503) P-1987
issued by the Office of the Register of Deeds of General Santos City and
Miscellaneous Sales Patent No. V-635. A reversion case was filed by the Republic of
the Philippines against Paulino Elma in the Court of First Instance of South Cotabato
docketed as Civil Case No. 950, wherein in due course a decision was rendered on
January 29, 1973 declaring the title of Paulino Elma null and void and the same was
ordered cancelled. The lot was reverted to the mass of public domain subject to
disposition and giving preferential right to its actual occupant, Napoleon Gegare.
This decision was affirmed by this Court when We dismissed the petition for review
on certiorari filed by the heirs of Elma on March 13, 1974 in G.R. No. L-38069.
Thereafter, the writ of execution was issued and the title of Elma to the property
was cancelled.
Both petitioner and private respondent filed an application for this lot in the Board of
Liquidators (Board for short) in 1975. On June 15, 1976, Resolution No. 606, Series
of 1976 was passed by the Board disposing of the lot in favor of petitioner by way of
a negotiated sale in conformity with the decision in Civil Case No. 950. Private
respondent protested against the application of petitioner and on August 8, 1978,
the Board adopted Resolution No. 611, Series of 1978 denying private respondent's
protest for the same reason. A request for reconsideration of private respondent
was referred by the Board to Mr. Artemio Garlit, liquidator-designee, General Santos
Branch, for verification and investigation. After hearings, Mr. Garlit submitted a
report to the Manila office recommending division of the lot to the parties.
Nevertheless, on March 13, 1981, the Board denied the protest because the case
had already been decided by the court.
However, a motion for reconsideration filed by private respondent was favorably
considered by the Board in Resolution No. 233, Series of 1981 dated July 8, 1981.
Thus, the Board directed the chief of LASEDECO to investigate the occupancy and
area of the lot. In this investigation, it was found that only private respondent was
the actual occupant so the LASEDECO chief recommended the division of the
property between petitioner and private respondent.
On August 14, 1981, the Board passed Resolution No. 272, Series of 1981
approving said recommendation by dividing the lot equally between the parties at
135.5 square meters each to be disposed to them by negotiated sale.
Both parties appealed to the Office of the President but in a decision dated March
25, 1984, both appeals were dismissed. A motion for reconsideration filed by
petitioner was denied on May 29,1984.
Private respondent paid for the value of 1/2 of the lot and applied for the issuance
of a patent. In Resolution No. 185, Series of 1985 adopted on October 7, 1985, the
Board gave due course to the application of private respondent and for the issuance
of a patent to 1/2 portion of the lot. Petitioner was also advised to file his
application and pay for his portion. Thus, Miscellaneous Sales Patent No. 4261 and
Original Certificate of Title No. P-5139 were issued to private respondent.
On November 27, 1985, petitioner filed an action for "Annulment and Cancellation of
Partition of Lot 5989, Ts-217, situated at Dadiangas, General Santos City and
Annulment of Resolutions No. 272 and 185 and/or to Declare them Null and Void"
against private respondent and the Board. The suit was docketed as Civil Case No.
3270 in the Regional Trial Court of General Santos City.
On February 11, 1985, private respondent filed a motion to dismiss the complaint
on the following grounds: (1) lack of jurisdiction over the subject matter; (2)
petitioner has no capacity to sue; (3) petitioner is not a real party-in-interest; and
(4) the action is barred by prior judgment. Private respondent added another
ground (5) lack of conciliation efforts pursuant to Section 6 of Presidential Decree
No. 1508. The motion was granted in an order dated March 18, 1986.
On April 3, 1986, petitioner moved for a reconsideration thereof to which an
opposition was filed by private respondent. The motion for reconsideration was
granted in an order of April 21, 1986 and private respondent was required to file his
responsive pleading. Private respondent filed his answer. On July 10, 1986, private
respondent asked for a preliminary hearing of the grounds for the motion to dismiss
in his affirmative defenses. This was denied on July 24, 1986.
Hence, private respondent filed a petition for certiorari and prohibition in the Court
of Appeals questioning the said orders of the trial court dated April 21, 1986 and
July 24, 1986. In due course, a decision was rendered by the appellate court on
March 16, 1988 granting the petition, declaring the questioned orders null and void,
and directing the trial court to dismiss the civil case for lack of jurisdiction, without
pronouncement as to costs. An urgent motion for reconsideration filed by petitioner
was denied in a resolution dated May 31, 1988. 1
Thus, the herein petition wherein petitioner raises the following issues---
FIRST ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN DECIDING
CA-G.R. SP NO. 12183 WITHOUTFIRST SERVING
SUMMONS AND A COPY OF THE PETITION TO
THE PRIVATE RESPONDENT IN THE SAID CASE
(NOW PETITIONER IN THE INSTANT CASE),
THUS, DEPRIVING HIM OF
HIS CONSTITUTIONAL RIGHT TO DUE PROCESS
OF LAW.
SECOND ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN GIVING
DUE COURSE TO THE PETITION OF ARMIE ELMA
IN CA-G.R. SP NO. 12183 IN SPITE OF THE
FACT THAT THE TWO (2) ORDERS SUBJECT
MATTER OF THE PETITION ARE INTERLOCUTORY
IN NATURE.
THIRD ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN HOLDING
THAT THE TRIAL COURT HAS NO JURISDICTION
OVER CIVIL CASE NO. 3270.
FOURTH ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN HOLDING
THAT THE TRIAL COURT SHOULD HAVE
DISMISSED CIVIL CASE NO. 3270 FOR FAILURE
OF THE PLAINTIFF TO COMPLY WITH THE
PROVISIONS OF P.D. NO. 1508 BEFORE FILING
HIS COMPLAINT IN COURT. 2
The petition is devoid of any merit.
Under the first assigned error, petitioner alleges that he was not served summons
and a copy of the petition so that he was deprived of due process and the
respondent court did not acquire jurisdiction over his person.
Private respondent disputes this claim by showing that it was at the address of
petitioner appearing in the petition at Liwayway Disco Restaurant and Disco Pub,
Ilang-Ilang Street, General Santos City, where petitioner was served a copy of
private respondent's "Manifestation and Motion for Early Resolution. 3 Petitioner's
counsel was also served a copy of the resolution dated June 28, 1987, 4 "Motion for
Restraining Order" dated July 28, 1987 and Manifestation dated December 1,
1987. 5 Indeed, petitioner's counsel filed a motion dated April 4, 1988 seeking a
reconsideration of the decision of respondent court 6 which was denied on May 31,
1988. Obviously, petitioner voluntarily submitted to the jurisdiction of the
respondent court and was never deprived of due process. 7
Under the second and third assigned errors, petitioner contends that the appellate
court erred in giving due course to the petition that assailed the two orders of the
court a quo which are interlocutory in character and in holding that the trial court
has no jurisdiction over Civil Case No. 3270.
It is precisely to correct the lower court when in the course of proceedings it acts
without jurisdiction or in excess thereof or if the trial court judge otherwise acted
with grave abuse of discretion that the extraordinary writ of certiorari or prohibition
is afforded to parties as a relief. Such writ is available even in respect to
interlocutory orders.8
The appellate court correctly ruled that courts of justice will not interfere with purely
administrative matters rendered by administrative bodies or officials acting within
the scope of their power and authority. The discretionary power vested in the proper
executive official in the absence of arbitrariness or grave abuse so as to go beyond
the statutory authority, is not subject to the contrary judgment or control of the
courts and is treated with finality. 9
When Board Resolution No. 272 was passed in 1981, petitioner appealed to the
Office of the President. After his appeal was denied on March 26, 1984, he did not
file a petition for review in this court. Thus, the said decision became final and it
was duly implemented. We agree that when petitioner filed Civil Case No. 3270, the
trial court should have refrained from interfering with said administrative disposition
of the chief executive absent any showing of lack or excess of jurisdiction or grave
abuse of discretion.
Moreover, petitioner had no capacity to file the questioned suit in the lower court.
The real party-in-interest who can seek the nullification of the land grant is the
government or the state. 10
Under the fourth and last assigned error, petitioner argues that it was erroneous for
the appellate court to hold that the case should be dismissed by the lower court for
failure to comply with a provision of Presidential Decree No. 1508 before filing the
complaint. He alleges that this rule is not applicable in said case for one of the
parties therein is the government or any subdivision or instrumentality thereof
which is excepted from this requirement under Section 2 of said law.
True it is that the Board is a government instrumentality but the petitioner and
private respondent who are also contending parties in the case are residents of the
same barangay so Section 6 of Presidential Decree No. 1508 should apply to them
as it provides---
Section 6. Conciliation, pre-condition to filing of complaint. No
complaint, petition, action or proceeding involving any matter
 within the authority of the Lupon as provided in Section 2 hereof
shall be filed or instituted in court or any other government office
for adjudication unless there has been a confrontation of the
parties before the Lupon Chairman or the Pangkat and no
conciliation or settlement has been reached as certified by
the Lupon Secretary or the Pangkat Secretary attested by
the Lupon or PangkatChairman, or unless the settlement has been
repudiated.

The purpose of this confrontation is to enable the parties to settle their differences
amicably. If the other only contending party is the government or its instrumentality
or subdivision the case falls within the exception but when it is only one of the
contending parties, a confrontation should still be undertaken among the other
parties.

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.
 [G.R. No. 137359. September 13, 2004]
EDWIN N. TRIBIANA, petitioner, vs. LOURDES M. TRIBIANA, respondent.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari[1] seeks to reverse the Court of Appeals
Resolutions[2] dated 2 July 1998 and 18 January 1999 in CA-G.R. SP No. 48049. The
Court of Appeals affirmed the Order[3] of the Regional Trial Court, Branch 19,
Bacoor, Cavite (RTC), denying petitioner Edwin N. Tribianas (Edwin) motion to
dismiss the petition forhabeas corpus filed against him by respondent Lourdes
Tribiana (Lourdes).
Antecedent Facts
Edwin and Lourdes are husband and wife who have lived together since 1996
but formalized their union only on 28 October 1997. On 30 April 1998, Lourdes filed
a petition for habeas corpus before the RTC claiming that Edwin left their conjugal
home with their daughter, Khriza Mae Tribiana (Khriza). Edwin has since deprived
Lourdes of lawful custody of Khriza who was then only one (1) year and four (4)
months of age. Later, it turned out that Khriza was being held by Edwins mother,
Rosalina Tribiana (Rosalina). Edwin moved to dismiss Lourdes petition on the
ground that the petition failed to allege that earnest efforts at a compromise were
made before its filing as required by Article 151 of the Family Code.
On 20 May 1998, Lourdes filed her opposition to Edwins motion to dismiss
claiming that there were prior efforts at a compromise, which failed. Lourdes
attached to her opposition a copy of the Certification to File Action from their
Barangay dated 1 May 1998.
On 18 May 1998, the RTC denied Edwins motion to dismiss and reiterated a
previous order requiring Edwin and his mother, Rosalina to bring Khriza before the
RTC. Upon denial of his motion for reconsideration, Edwin filed with the Court of
Appeals a petition for prohibition and certiorari under Rule 65 of the Rules of Civil
Procedure. The appellate court denied Edwins petition on 2 July 1998. The appellate
court also denied Edwins motion for reconsideration.
Hence, this petition.
The Rulings of the RTC and the Court of Appeals
The RTC denied Edwins motion to dismiss on the ground that the Certification
to File Action attached by Lourdes to her opposition clearly indicates that the parties
attempted to reach a compromise but failed.
The Court of Appeals upheld the ruling of the RTC and added that under
Section 412 (b) (2) of the Local Government Code, conciliation proceedings before
the barangay are not required in petitions for habeas corpus.
The Issue
Edwin seeks a reversal and raises the following issue for resolution:
WHETHER THE TRIAL AND APPELLATE COURTS SHOULD HAVE
DISMISSED THE PETITION FOR HABEAS CORPUS ON THE GROUND OF
FAILURE TO COMPLY WITH THE CONDITION PRECEDENT UNDER
ARTICLE 151 OF THE FAMILY CODE.
The Ruling of the Court
The petition lacks merit.
Edwin argues that Lourdes failure to indicate in her petition for habeas
corpus that the parties exerted prior efforts to reach a compromise and that such
efforts failed is a ground for the petitions dismissal under Section 1(j), Rule 16 of
the 1997 Rules of Civil Procedure.[4] Edwin maintains that under Article 151 of the
Family Code, an earnest effort to reach a compromise is an indispensable condition
precedent. Article 151 provides:
No suit between members of the same family shall prosper unless it should appear
from the verified complaint or petition that earnest efforts toward a compromise
have been made, but that the same have failed. If it is shown that no such efforts
were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject of compromise
under the Civil Code.
Edwins arguments do not persuade us.
It is true that the petition for habeas corpus filed by Lourdes failed to allege
that she resorted to compromise proceedings before filing the petition. However, in
her opposition to Edwins motion to dismiss, Lourdes attached a Barangay
Certification to File Action dated 1 May 1998. Edwin does not dispute the
authenticity of the Barangay Certification and its contents. This effectively
established that the parties tried to compromise but were unsuccessful in their
efforts. However, Edwin would have the petition dismissed despite the existence of
the Barangay Certification, which he does not even dispute.
Evidently, Lourdes has complied with the condition precedent under Article 151
of the Family Code. A dismissal under Section 1(j) of Rule 16 is warranted only if
there is afailure to comply with a condition precedent. Given that the alleged defect
is a mere failure to allege compliance with a condition precedent, the proper
solution is not an outright dismissal of the action, but an amendment under Section
1 of Rule 10 of the 1997 Rules of Civil Procedure.[5] It would have been a different
matter if Edwin had asserted that no efforts to arrive at a compromise have been
made at all.
In addition, the failure of a party to comply with a condition precedent is not a
jurisdictional defect.[6] Such defect does not place the controversy beyond the courts
power to resolve. If a party fails to raise such defect in a motion to dismiss, such
defect is deemed waived.[7] Such defect is curable by amendment as a matter of
right without leave of court, if made before the filing of a responsive pleading.[8] A
motion to dismiss is not a responsive pleading.[9] More importantly, an amendment
alleging compliance with a condition precedent is not a jurisdictional matter. Neither
does it alter the cause of action of a petition for habeas corpus. We have held that
in cases where the defect consists of the failure to state compliance with a condition
precedent, the trial court should order the amendment of the complaint.[10] Courts
should be liberal in allowing amendments to pleadings to avoid multiplicity of suits
and to present the real controversies between the parties.[11]
Moreover, in a habeas corpus proceeding involving the welfare and custody of
a child of tender age, the paramount concern is to resolve immediately the issue of
who has legal custody of the child. Technicalities should not stand in the way of
giving such child of tender age full protection.[12] This rule has sound statutory basis
in Article 213 of the Family Code, which states, No child under seven years of age
shall be separated from the mother unless the court finds compelling reasons to
order otherwise. In this case, the child (Khriza) was only one year and four months
when taken away from the mother.
The Court of Appeals dismissed Edwins contentions by citing as an additional
ground the exception in Section 412 (b) (2) of the Local Government Code (LGC) on
barangay conciliation, which states:
(b) Where the parties may go directly to court. the parties may go directly to court
in the following instances:
xxx
2) Where a person has otherwise been deprived of personal liberty
calling for habeas corpus proceedings;
xxx.
Under Rule 102 of the 1997 Rules of Civil Procedure, a party may resort to a habeas
corpus proceeding in two instances. The first is when any person is deprived of
liberty either through illegal confinement or through detention. The second instance
is when custody of any person is withheld from the person entitled to such custody.
The most common case falling under the second instance involves children who are
taken away from a parent by another parent or by a relative. The case filed by
Lourdes falls under this category.
The barangay conciliation requirement in Section 412 of the LGC does not
apply to habeas corpus proceedings where a person is deprived of personal liberty.
In such a case, Section 412 expressly authorizes the parties to go directly to court
without need of any conciliation proceedings. There is deprivation of personal liberty
warranting a petition for habeas corpus where the rightful custody of any person is
withheld from the person entitled thereto.[13] Thus, the Court of Appeals did not err
when it dismissed Edwins contentions on the additional ground that Section 412
exempts petitions for habeas corpus from the barangay conciliation requirement.
The petition for certiorari filed by Edwin questioning the RTCs denial of his
motion to dismiss merely states a blanket allegation of grave abuse of discretion. An
order denying a motion to dismiss is interlocutory and is not a proper subject of a
petition for certiorari.[14] Even in the face of an error of judgment on the part of a
judge denying the motion to dismiss, certiorari will not lie. Certiorari is not a
remedy to correct errors of procedure.[15] The proper remedy against an order
denying a motion to dismiss is to file an answer and interpose as affirmative
defenses the objections raised in the motion to dismiss. It is only in the presence of
extraordinary circumstances evincing a patent disregard of justice and fair play
where resort to a petition for certiorari is proper.[16]
The litigation of substantive issues must not rest on a prolonged contest on
technicalities. This is precisely what has happened in this case. The circumstances
are devoid of any hint of the slightest abuse of discretion by the RTC or the Court of
Appeals. A party must not be allowed to delay litigation by the sheer expediency of
filing a petition for certiorari under Rule 65 based on scant allegations of grave
abuse. More importantly, any matter involving the custody of a child of tender age
deserves immediate resolution to protect the childs welfare.
WHEREFORE, we DISMISS the instant petition for lack of merit. We AFFIRM
the Resolutions of the Court of Appeals dated 2 July 1998 and 18 January 1999 in
CA-G.R. SP No. 48049. The Regional Trial Court, Branch 19, Bacoor, Cavite is
ordered to act with dispatch in resolving the petition for habeas corpus pending
before it. This decision is IMMEDIATELY EXECUTORY.
SO ORDERED.
ESTELA L. BERBA, G.R. No. 160032
Petitioner,
Present:
PUNO, J., Chairman,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO,* JJ.
JOSEPHINE PABLO and THE Promulgated:
HEIRS OF CARLOS PALANCA,
Respondents. November 11, 2005
x--------------------------------------------------x
DECISION
CALLEJO, SR., J.:
Assailed before the Court on a petition for review on certiorari is the Decision[1] of
the Court of Appeals (CA) in CA-G.R. SP No. 73531, affirming the Decision[2]of the
Regional Trial Court (RTC) of Manila in Civil Case No. 170639.
Estela L. Berba, a resident of 978 Maligaya Street, Malate, Manila, was the owner of
a parcel of land located at No. 2338 M. Roxas Street, Sta. Ana, Manila covered by
Transfer Certificate of Title (TCT) No. 63726. A house was constructed on the lot,
which she leased to Josephine Pablo* and the Heirs of Carlos Palanca sometime in
1976. The lease was covered by a lease contract. Upon its expiration, the lessees
continued leasing the house on a month-to-month basis.
By 1999, the monthly rental on the property was P3,450.00. The lessees
failed to pay the rentals due, and by May 1999, their arrears amounted
to P81,818.00. Berba then filed a complaint for eviction and collection of unpaid
rentals only against Pablo in the Office of the Punong Barangay. On June 5, 1999,
Berba and Pablo executed an Agreement approved by the pangkat, as follows:
Ako si Josephine Pablo, naninirahan sa 2338 M. Roxas St., Sta.
Ana, Manila, na nasasakop ng Barangay 873, Zone 96, ay
nangangako kay GG Robert Berba na nagmamay-ari ng aking
tinitirahan ay maghuhulog ng halagang Tatlong Libong
Piso P3,000.00 kada ika-sampu ng buwan bilang hulog sa aking
pagkakautang kay GG Berba na umaabot sa halagang P81,818.00
na ang nasabing halagang ito ay aking huhulugan hanggang aking
mabayaran ng buo ang aking pagkakautang. Ako rin, si Josephine
Pablo, ay nangangako na ang hindi ko pagsunod o pagbayad ng
buwanang hulog, ako ay kusang aalis sa aking tinitirahan. Bukod
pa sa hulog sa aking pagkakautang, ako rin ay magbabayad ng
halagang P3,450.00 bilang aking upa sa aking tinitirahan.[3]
By May 2000, Pablo and the lessees still had a balance of P71,716.00. As of May 1,
2001, the total arrearages of the lessees amounted to P135,115.63.[4] On May 2,
2001, Berba, through counsel, wrote the lessees, demanding payment of the said
amount and to vacate the house within 30 days from notice, otherwise she will sue
them.[5] The lessees ignored the demand. On June 21, 2001, Berba filed a
complaint[6] against Josephine Pablo and the Heirs of Carlos Palanca in the
Metropolitan Trial Court (MTC) of Manila for unlawful detainer. She prayed that,
after due proceedings, judgment be rendered in her favor:
WHEREFORE, it is most respectfully prayed for that
judgment be rendered in favor of plaintiff ordering defendant (sic)
a) to vacate the premises situated at 2338 M.
Roxas Street, Sta. Ana, City of Manila;
b) to pay plaintiff the sum of One Hundred
Thirty-Five Thousand One Hundred Fifteen
and 63/100 Pesos (P135,115.63)
representing monthly rentals in arrears to
the present;
c) to pay plaintiff the amount of Four Thousand
Five Hundred Sixty-Two and 63/100 Pesos
(P4,562.63) per month representing
monthly rent on the premises for the year
2001 until finality of the judgment;
d) to pay plaintiff the sum of Twenty Thousand
Pesos (P20,000.00) by way of attorneys
fees;
e) to reimburse plaintiff all expenses for
litigation estimated in the amount of Ten
Thousand Pesos;
f) to pay costs of suit.
Other reliefs just and equitable are, likewise, prayed for under the
premises.[7]
Berba, however, failed to append to her complaint a certification from the Lupon ng
Tagapamayapa that no conciliation or settlement had been reached.
In their answer to the complaint, the defendants admitted to have stopped
paying rentals because of financial distress. They also alleged that they were not
certain if the plaintiff was the owner of the property. By way of special and
affirmative defenses, they averred that the plaintiff had no cause of action against
them as she failed to secure a Certificate to File Action from the Lupon.[8]
During the pre-trial conference, the parties manifested to the court that,
despite earnest efforts, no amicable settlement was reached. They defined the main
issue as whether or not the plaintiff had a valid cause of action for unlawful detainer
against the defendants.[9]
In her position paper, Berba appended an Agreement dated June 5, 1999 between
her and Pablo, which appeared to have been approved by Punong
BarangayCayetano L. Gonzales of Barangay 873, as well as other members of
the Lupon,[10] duly approved by the Pangkat. She also appended a Statement of
Account indicating that the defendants back rentals amounted to P135,115.63.[11]
In their position paper, the defendants insisted that the dispute did not go
through the Lupon ng Tagapamayapa prior to the filing of the complaint; hence,
Berbas complaint was premature. They also averred that the increase in the rental
rates imposed by the plaintiff was unjustified and illegal.

In her reply, the plaintiff alleged that there was no more need for her to
secure a Certificate to File Action because she was a resident of No. 978 Maligaya
Street, Malate, Manila, while the defendants were residing in Barangay 873, Zone 6
in Sta. Ana, Manila.
On March 14, 2002, the MTC rendered judgment in favor of Berba. The fallo of the
decision reads:
WHEREFORE, judgment is rendered in favor of the plaintiff and
ordering the defendants and all persons claiming rights under
them to vacate the premises at 2338 M. Roxas St., Sta. Ana,
Manila and restore possession thereof to the plaintiff. Ordering the
defendant to pay the amount of P135,115.63 representing
monthly rentals since 1999 until December 2000. Ordering the
defendant to pay the plaintiff the sum of P4,562.63 per month
beginning January 2001 and for the succeeding months until
finally vacated. Ordering the defendant to pay the reduced
amount of P10,000.00 as attorneys fees plus the costs of suit.
SO ORDERED.[12]
The defendants appealed the decision to the RTC. On motion of the plaintiff,
the RTC issued an order for the execution of the decision pending appeal.[13] The
defendants filed a motion for the recall of the Order,[14] but before the court could
resolve the motion, the Sheriff turned over the physical possession of the property
to Berba on May 20, 2002.[15]
In their Appeal Memorandum, Pablo and the heirs of Palanca insisted that Berbas
action in the MTC was premature because of the absence of Certificate to File Action
issued by the Lupon. They also claimed that Berba unlawfully increased the rentals
for the house.[16] Berba, on the other hand, averred that there was no need of a
prior referral to the Lupon before filing her complaint. The petitioner cited Section
408(f) of the Local Government Code, pointing out that she resided in aBarangay in
Malate, 8 kilometers away from Barangay 873 in Sta. Ana, where Pablo and the
Palanca heirs resided.[17]
On August 20, 2002, the RTC rendered judgment granting the appeal and setting
aside the appealed decision. The fallo of the decision reads:
WHEREFORE, the decision of the Court a quo is ordered
set aside. The complaint is also ordered DISMISSED WITHOUT
PREJUDICE. The Writ of Execution issued by the Court a
quo pending appeal is also set aside.
SO ORDERED.[18]
The RTC ruled that under Section 408 of the Local Government Code,
parties who reside in the same city or municipality although in
different barangays are mandated to go through conciliation proceedings in
the Lupon.[19] The court cited the rulings of this Court in Morata v. Go,[20] and Vda.
de Borromeo v. Pogoy.[21]
Berba filed a motion for the reconsideration[22] of the decision, which the RTC denied
in its Order[23] dated October 2, 2002. She then elevated the case to the
CAvia petition for review, where she averred:
a) The raising of other affirmative defenses apart from the non-
referral to the Barangay Court by the respondents constitute
a waiver of such requirement; and
b) There was substantial compliance on the part of the petitioner
with respect to referring her complaint before
the Barangay Court.[24]
Citing the ruling of this Court in Diu v. Court of Appeals,[25] Berba claimed that
Section 408 of the Local Government Code should be construed liberally together
with Section 412. She further averred that she had complied substantially with the
requisites of the law, and recalls that conciliation proceedings before
the Luponresulted in the execution of an Agreement on June 5, 1999. Upon failure
to comply with the agreement, all chances of amicable settlement were effectively
foreclosed. Hence, Pablo and the Heirs of Palanca were estopped from claiming that
she failed to comply with the Local Government Codes requirement of prior referral
of their dispute to the Lupon.
After due proceedings, the CA rendered judgment dismissing the petition
and affirming the RTC decision. Berba moved for a reconsideration of the decision,
which proved futile.
In the instant petition for review on certiorari, the petitioner alleges that:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN
IT FAILED TO CONSIDER THE DECISION OF THIS HONORABLE
COURT IN THE CASE OF DIU VS. COURT OF APPEALS (251 SCRA
478) AND IN DECLARING THAT THERE WAS NO SUBSTANTIAL
COMPLIANCE WITH THE MANDATE OF PD 1508 (NOW R.A. 7160)
WITH RESPECT TO PRIOR REFERRAL TO THE BARANGAY COURT,
THEREBY DECIDING THE CASE NOT IN ACCORD WITH LAW AND
APPLICABLE DECISIONS OF THE COURT.[26]
The petitioner avers that she is a sickly widow, in the twilight of her years,
and whose only source of income are the rentals generated from the property,
which she also uses to pay her medical expenses. She avers that the continued
denial of her right to the fruits of the subject property is highly unjust and contrary
to the spirit behind the enactment of Presidential Decree (P.D.) No. 1508.[27]
The petitioner also points out that, for her to pay obeisance to the decision
of the CA, she would have to go through the tedious, not to mention horrendous,
process of going back to square one; that is, referring the dispute to
the barangay which, in all likelihood, would be rendered useless considering that
respondents had already been validly and effectively ejected from the leased
premises. She would then have to go through the rungs of the judicial ladder a
second time to vindicate her trampled rights. She further claims that the CAs
affirmation of the RTC decision is equivalent to sanctioning a legal anomaly. She
points out that the very purpose of barangay conciliation is to abbreviate disputes
between members of the same or adjacent barangays to the end that their disputes
will not reach the doors of the courts. Clearly, it does not contemplate a protracted
process as suggested by the RTC ruling and affirmed by the CA.[28]
 In their comment on the petition, the respondents aver that the petitioner
was estopped from relying on the June 5, 1999 Agreement between her and
respondent Josephine Pablo before the Lupon because the respondent Heirs of
Carlos Palanca were not parties thereto. The respondents maintained that the
petitioner must bear the blame for her failure to comply with the Local Government
Code. At first, she insisted that there was no need for prior referral of the dispute to
theLupon, claiming that she resided in a barangay other than where the
respondents resided. Thereafter, she made a volte face and invoked the June 5,
1999 Agreement between her and respondent Josephine Pablo. Moreover, the
respondents aver, the MTC had no jurisdiction over the petitioners action for
unlawful detainer because it was filed only on June 21, 2001, or more than one year
from June 5, 1999 when the petitioner and respondent Josephine Pablo executed
the agreement. As such, the action should be one for recovery of possession of
property (accion publiciana).
On June 2, 2004, the Court resolved to give due course to the petition and
required the parties to file their respective memoranda.[29] The parties complied.
The Court rules that the CA cannot be faulted for affirming the decision of
the RTC reversing the decision of the MTC and ordering the dismissal of the
complaint for unlawful detainer without prejudice.
The records show that petitioner and respondent Josephine Pablo executed an
Agreement on June 5, 1999, which was approved by the Lupon. Respondent
Josephine Pablo did not repudiate the agreement; hence, such agreement of the
parties settling the case had the force and effect of a final judgment. As the Court
declared inVidal v. Escueta,[30] the settlement of the parties may be enforced by
the Lupon, through the punong barangay, within six months; and if the settlement
is not enforced after the lapse of said period, it may be enforced by an action in the
proper city or municipal court, as provided in Section 417 of the Local Government
Code:
We also agree that the Secretary of the Lupon is
mandated to transmit the settlement to the appropriate city or
municipal court within the time frame under Section 418 of the
LGC and to furnish the parties and the Lupon Chairman with
copies thereof. The amicable settlement which is not repudiated
within the period therefor may be enforced by execution by
the Lupon through the Punong Barangay within a time line of six
months, and if the settlement is not so enforced by
the Lupon after the lapse of said period, it may be enforced only
by an action in the proper city or municipal court as provided for
in Section 417 of the LGC of 1991, as amended, which reads:
SEC. 417. Execution. The amicable settlement
or arbitration award may be enforced by execution by
the Lupon within six (6) months from the date of the
settlement. After the lapse of such time, the settlement
may be enforced by action in the proper city or
municipal court. (Italics supplied).
Section 417 of the Local Government Code provides a
mechanism for the enforcement of a settlement of the parties
before the Lupon. It provides for a two-tiered mode of
enforcement of an amicable settlement executed by the parties
before the Lupon, namely, (a) by execution of the Punong
Barangay which is quasi-judicial and summary in nature on mere
motion of the party/parties entitled thereto; and (b) by an action
in regular form, which remedy is judicial. Under the first remedy,
the proceedings are covered by the LGC and the Katarungang
Pambarangay Implementing Rules and Regulations. The Punong
Barangay is called upon during the hearing to determine solely the
fact of non-compliance of the terms of the settlement and to give
the defaulting party another chance at voluntarily complying with
his obligation under the settlement. Under the second remedy, the
proceedings are governed by the Rules of Court, as amended. The
cause of action is the amicable settlement itself, which, by
operation of law, has the force and effect of a final judgment.
Section 417 of the LGC grants a period of six months to
enforce the amicable settlement by the Lupon through the Punong
Barangay before such party may resort to filing an action with the
MTC to enforce the settlement. The raison detre of the law is to
afford the parties during the six-month time line, a simple, speedy
and less expensive enforcement of their settlement before
the Lupon.[31]
In the present case, respondent Josephine Pablo failed to comply with her obligation
of repaying the back rentals of P81,818.00 and the current rentals for the house.
Hence, the petitioner had the right to enforce the Agreement against her and move
for her eviction from the premises. However, instead of filing a motion before
theLupon for the enforcement of the agreement, or (after six months), an action in
the Metropolitan Trial Court (MTC) for the enforcement of the settlement, the
petitioner filed an action against respondent Josephine Pablo for unlawful detainer
and the collection of unpaid rentals, inclusive of those already due before the June
5, 1999 Agreement was executed. The action of the petitioner against respondent
Pablo was barred by the Agreement of June 5, 1999.
The Court notes that the petitioner even submitted with the MTC a copy of her June
5, 1999 Agreement with respondent Josephine Pablo. Instead of dismissing the
complaint as against such respondent, the MTC rendered judgment against her and
ordered her eviction from the leased premises.
The Court thus rules that the petitioners complaint against respondent
Heirs of Carlos Palanca was premature. It bears stressing that they were not
impleaded by the petitioner as parties-respondents before the Lupon. The petitioner
filed her complaint solely against respondent Josephine Pablo. Moreover, the said
respondent heirs were not privy to the said agreement, and, as such, were not
bound by it. Section 412 of the Local Government Code, sets forth the precondition
to filing of complaints in court, to wit:
SEC. 412 Conciliation.- (a) Pre-condition to filing of
complaint in court. No complaint, petition, action, or proceeding
involving any matter within the authority of thelupon shall be filed
or instituted directly in court or any other government office for
adjudication, unless there has been a confrontation between the
parties before the luponchairman or the pangkat, and that no
conciliation or settlement has been reached as certified by
the lupon secretary or pangkat secretary as attested to by
the lupon chairman orpangkat chairman or unless the settlement
has been repudiated by the parties thereto.

(b) Where parties may go directly to court. The parties
may go directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of
personal liberty calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies
such as preliminary injunction, attachment, delivery of personal
property, and support pendente lite; and
(4) Where the action may otherwise be barred by the
statute of limitations.
(c) Conciliation among members of indigenous cultural
communities. The customs and traditions of indigenous cultural
communities shall be applied in settling disputes between
members of the cultural communities.
Under Sec. 408 of the same Code, parties actually residing in the same city
or municipality are bound to submit their disputes to the Lupon for
conciliation/amicable settlement, unless otherwise provided therein:
SEC. 408. Subject Matter for Amicable Settlement; Exception
Thereto. The lupon of each barangay shall have authority to bring
together the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:
(a) Where one party is the government or any
subdivision or instrumentality thereof;
(b) Where one party is a public officer or employee, and
the dispute relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one
(1) year or a fine exceeding Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto agree to
submit their differences to amicable settlement by an
appropriate lupon;
(f) Disputes involving parties who actually reside
in barangays of different cities or municipalities, except where
such barangay units adjoin each other and the parties thereto
agree to submit their differences to amicable settlement by an
appropriate lupon;
(g) Such other classes of disputes which the President
may determine in the interest of justice or upon the
recommendation of the Secretary of Justice.
The court in which non-criminal cases not falling within
the authority of the lupon under this Code are filed may, at any
time before trial, motu proprio refer the case to
thelupon concerned for amicable settlement.
If the complainant/plaintiff fails to comply with the requirements of the
Local Government Code, such complaint filed with the court may be dismissed for
failure to exhaust all administrative remedies.[32]
The petitioners reliance on the ruling of this Court in Diu v. Court of
Appeals[33] is misplaced. In that case, there was a confrontation by the parties
before theBarangay Chairman and no agreement was reached. Although
no pangkat was formed, the Court held in that instance that there was substantial
compliance with the law. In any event, the issue in that case was whether the
failure to specifically allege that there was no compliance with
the barangay conciliation procedure constitutes a waiver of that defense. Moreover,
no such confrontation before the Lupon occurred with respect to the unlawful
detainer suit against Josephine Pablo before the MTC.[34]
In this case, the petitioner and the respondent Heirs of Carlos Palanca
resided in the City of Manila, albeit in different barangays. The dispute between the
petitioner and the respondent heirs was thus a matter within the authority of
the Lupon. Hence, the petitioners complaint for unlawful detainer and the collection
of back rentals should have been first filed before the Lupon for mandatory
conciliation, to afford the parties an opportunity to settle the case amicably.
However, the petitioner filed her complaint against the respondent Heirs of Carlos
Palanca directly with the MTC. Clearly then, her complaint was premature. The
execution of the June 5, 1999 Agreement between petitioner and respondent
Josephine Pablo does not amount to substantial compliance to the requirements of
the Local Government Code on mandatory barangayconciliation proceedings.
Indeed, considering that the MTC had already rendered a decision on the
merits of the case, it is not without reluctance that the Court reaches this conclusion
which would require the petitioner to start again from the beginning. The facts of
the present case, however, do not leave us any choice. To grant the petition under
these circumstances would amount to refusal to give effect to the Local Government
Code and to wiping it off the statute books insofar as ejectment and other cases
governed by the Rule on Summary Procedure are concerned. This Court has no
authority to do that.[35]
IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED.
SO ORDERED.
 WHEREFORE, premises considered[,] judgment is hereby
CRISANTA ALCARAZ MIGUEL, G.R. No. 191336 rendered ordering defendant Jerry D. Montanez to pay plaintiff
Petitioner, the following:
Present:
1. The amount of [Php147,893.00] representing
CARPIO, J., the obligation with legal rate of interest
- versus - Chairperson, from February 1, 2002 which was the
PEREZ, date of the loan maturity until the account
SERENO, is fully paid;
REYES, and
PERLAS-BERNABE, JJ. * 2. The amount of Php10,000.00 as and by way
of attorneys fees; and the costs.
JERRY D. MONTANEZ, Promulgated:
Respondent. SO ORDERED. [5]
January 25, 2012

x------------------------------------------------------------------------------------x On appeal to the Regional Trial Court (RTC) of Makati City, Branch 146, the
respondent raised the same issues cited in his Answer. In its March 14, 2007
DECISION Decision,[6] the RTC affirmed the MeTC Decision, disposing as follows:

REYES, J.: WHEREFORE, finding no cogent reason to disturb the

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court. Petitioner Crisanta Alcaraz Miguel (Miguel) seeks the reversal and setting
aside of the September 17, 2009 Decision[1] and February 11, 2010 Resolution[2] of
the Court of Appeals (CA) in CA-G.R. SP No. 100544, entitled Jerry D. Montanez v.
Crisanta Alcaraz Miguel.
findings of the court a quo, the appeal is hereby DISMISSED, and
the DECISION appealed from is hereby AFFIRMED in its entirety
for being in accordance with law and evidence.
SO ORDERED.[7]

Antecedent Facts
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One
Hundred Forty-Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00),
payable in one (1) year, or until February 1, 2002, from the petitioner. The
respondent gave as collateral therefor his house and lot located at Block 39 Lot 39
Phase 3, Palmera Spring, Bagumbong, Caloocan City.
Due to the respondents failure to pay the loan, the petitioner filed a
complaint against the respondent before the Lupong
Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into
a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in
installments in the amount of Two Thousand Pesos (P2,000.00) per month, and in
the event the house and lot given as collateral is sold, the respondent would settle
the balance of the loan in full. However, the respondent still failed to pay, and on
December 13, 2004, the Lupong Tagapamayapa issued a certification to file action
in court in favor of the petitioner.
On April 7, 2005, the petitioner filed before the Metropolitan Trial Court
(MeTC) of Makati City, Branch 66, a complaint for Collection of Sum of Money. In his
Answer with Counterclaim,[3] the respondent raised the defense of improper venue
considering that the petitioner was a resident of Bagumbong, Caloocan Citywhile he
lived in San Mateo, Rizal.
After trial, on August 16, 2006, the MeTC rendered a Decision,[4] which
disposes as follows:
Dissatisfied, the respondent appealed to the CA raising two issues, namely,
(1) whether or not venue was improperly laid, and (2) whether or not
theKasunduang Pag-aayos effectively novated the loan agreement. On September
17, 2009, the CA rendered the assailed Decision, disposing as follows:
WHEREFORE, premises considered, the petition is
hereby GRANTED. The appealed Decision dated March 14, 2007
of the Regional Trial Court (RTC) of Makati City, Branch 146,
is REVERSED and SET ASIDE. A new judgment is entered
dismissing respondents complaint for collection of sum of money,
without prejudice to her right to file the necessary action to
enforce the Kasunduang Pag-aayos.
SO ORDERED.[8]
Anent the issue of whether or not there is novation of the loan
contract, the CA ruled in the negative. It ratiocinated as follows:
Judging from the terms of the Kasunduang Pag-aayos, it
is clear that no novation of the old obligation has taken place.
Contrary to petitioners assertion, there was no reduction of the
term or period originally stipulated. The original period in the first
agreement is one (1) year to be counted from February 1, 2001,
or until January 31, 2002. When the complaint was filed before
the barangay on February 2003, the period of the original
agreement had long expired without compliance on the part of
 petitioner. Hence, there was nothing to reduce or extend. There
was only a change in the terms of payment which is not
incompatible with the old agreement. In other words,
the Kasunduang Pag-aayos merely supplemented the old
agreement.[9]
The CA went on saying that since the parties entered into a Kasunduang
Pag-aayos before the Lupon ng Barangay, such settlement has the force and effect
of a court judgment, which may be enforced by execution within six (6) months
from the date of settlement by the Lupon ng Barangay, or by court action after the
lapse of such time.[10] Considering that more than six (6) months had elapsed from
the date of settlement, the CA ruled that the remedy of the petitioner was to file an
action for the execution of the Kasunduang Pag-aayos in court and not for collection
of sum of money.[11] Consequently, the CA deemed it unnecessary to resolve the
issue on venue.[12]
The petitioner now comes to this Court.
Issues
(1) Whether or not a complaint for sum of money is the proper remedy for
the petitioner, notwithstanding the Kasunduang Pag-aayos;[13] and
(2) Whether or not the CA should have decided the case on the merits
rather than remand the case for the enforcement of the Kasunduang Pag-aayos.[14]
Our Ruling
Because the respondent failed to comply with the terms of the Kasunduang
Pag-aayos, said agreement is deemed rescinded pursuant to Article 2041 of
the New Civil Code and the petitioner can insist on his original demand.
Perforce, the complaint for collection of sum of money is the proper
remedy.
The petitioner contends that the CA erred in ruling that she should have
followed the procedure for enforcement of the amicable settlement as provided in
theRevised Katarungang Pambarangay Law, instead of filing a collection case. The
petitioner points out that the cause of action did not arise from the Kasunduang
Pag-aayos but on the respondents breach of the original loan agreement.[15]
This Court agrees with the petitioner.
It is true that an amicable settlement reached at the barangay conciliation
proceedings, like the Kasunduang Pag-aayos in this case, is binding between the
contracting parties and, upon its perfection, is immediately executory insofar as it is
not contrary to law, good morals, good
customs, public order and public policy.[16] This is in accord with the broad precept
of Article 2037 of the Civil Code, viz:
A compromise has upon the parties the effect and
authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.
Being a by-product of mutual concessions and good faith of the parties, an
amicable settlement has the force and effect of res judicata even if not judicially
approved.[17] It transcends being a mere contract binding only upon the parties
thereto, and is akin to a judgment that is subject to execution in accordance with
the Rules.[18] Thus, under Section 417 of the Local Government Code,[19] such
amicable settlement or arbitration award may be enforced by execution by
the Barangay Lupon within six (6) months from the date of settlement, or by filing
an action to enforce such settlement in the appropriate city or municipal court, if
beyond the six-month period.
Under the first remedy, the proceedings are covered by the Local
Government Code and the Katarungang Pambarangay Implementing Rules and
Regulations. The Punong Barangay is called upon during the hearing to determine
solely the fact of non-compliance of the terms of the settlement and to give the
defaulting party another chance at voluntarily complying with his obligation under
the settlement. Under the second remedy, the proceedings are governed by the
Rules of Court, as amended. The cause of action is the amicable settlement itself,
which, by operation of law, has the force and effect of a final judgment.[20]
It must be emphasized, however, that enforcement by execution of the
amicable settlement, either under the first or the second remedy, is only applicable
if the contracting parties have not repudiated such settlement within ten (10) days
from the date thereof in accordance with Section 416 of the Local Government Code.
If the amicable settlement is repudiated by one party, either expressly or impliedly,
the other party has two options, namely, to enforce the compromise in accordance
with the Local Government Code or Rules of Court as the case may be, or to
consider it rescinded and insist upon his original demand. This is in accord with
Article 2041 of the Civil Code, which qualifies the broad application of Article
2037, viz:
If one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise
or regard it as rescinded and insist upon his original demand.
In the case of Leonor v. Sycip,[21] the Supreme Court (SC) had the occasion
to explain this provision of law. It ruled that Article 2041 does not require an action
for rescission, and the aggrieved party, by the breach of compromise agreement,
may just consider it already rescinded, to wit:
It is worthy of notice, in this connection, that, unlike
Article 2039 of the same Code, which speaks of "a cause of
annulment or rescission of the compromise" and provides that
"the compromise may be annulled or rescinded" for the cause
therein specified, thus suggesting an action for annulment or
rescission, said Article 2041 confers upon the party concerned, not
a "cause" for rescission, or the right to "demand" the rescission of
a compromise, but the authority, not only to "regard it as
rescinded", but, also, to "insist upon his original demand". The
language of this Article 2041, particularly when contrasted
with that of Article 2039, denotes that no action for
rescission is required in said Article 2041, and that the
party aggrieved by the breach of a compromise agreement
 may, if he chooses, bring the suit contemplated or involved
in his original demand, as if there had never been any
compromise agreement, without bringing an action for
rescission thereof. He need not seek a judicial declaration
of rescission, for he may "regard" the compromise
agreement already "rescinded".[22] (emphasis supplied)
As so well stated in the case of Chavez v. Court of Appeals,[23] a party's
non-compliance with the amicable settlement paved the way for the application of
Article 2041 under which the other party may either enforce the compromise,
following the procedure laid out in the Revised Katarungang Pambarangay Law, or
consider it as rescinded and insist upon his original demand. To quote:
In the case at bar, the Revised Katarungang
Pambarangay Law provides for a two-tiered mode of enforcement
of an amicable settlement, to wit: (a) by execution by thePunong
Barangay which is quasi-judicial and summary in nature on mere
motion of the party entitled thereto; and (b) an action in regular
form, which remedy is judicial. However, the mode of enforcement
does not rule out the right of rescission under Art. 2041 of
the Civil Code. The availability of the right of rescission is apparent
from the wording of Sec. 417 itself which provides that the
amicable settlement "may" be enforced by execution by
the lupon within six (6) months from its date or by action in the
appropriate city or municipal court, if beyond that period. The use
of the word "may" clearly makes the procedure provided in
the Revised Katarungang Pambarangay Lawdirectory or merely
optional in nature.
Thus, although the "Kasunduan" executed by
petitioner and respondent before the Office of
the Barangay Captain had the force and effect of a final
judgment of a court, petitioner's non-compliance paved the
way for the application of Art. 2041 under which
respondent may either enforce the compromise, following
the procedure laid out in the Revised Katarungang
Pambarangay Law, or regard it as rescinded and insist upon
his original demand. Respondent chose the latter option
when he instituted Civil Case No. 5139-V-97 for recovery of
unrealized profits and reimbursement of advance rentals,
moral and exemplary damages, and attorney's fees.
Respondent was not limited to claiming P150,000.00 because
although he agreed to the amount in the "Kasunduan," it is
axiomatic that a compromise settlement is not an admission of
liability but merely a recognition that there is a dispute and an
impending litigation which the parties hope to prevent by making
reciprocal concessions, adjusting their respective positions in the
hope of gaining balanced by the danger of losing. Under the
"Kasunduan," respondent was only required to execute a waiver of
all possible claims arising from the lease contract if petitioner fully
complies with his obligations thereunder. It is undisputed that
herein petitioner did not.[24] (emphasis supplied and citations
omitted)
In the instant case, the respondent did not comply with the terms and
conditions of the Kasunduang Pag-aayos. Such non-compliance may be construed as
repudiation because it denotes that the respondent did not intend to be bound by
the terms thereof, thereby negating the very purpose for which it was executed.
Perforce, the petitioner has the option either to enforce the Kasunduang Pag-
aayos, or to regard it as rescinded and insist upon his original demand, in
accordance with the provision of Article 2041 of the Civil Code. Having instituted an
action for collection of sum of money, the petitioner obviously chose to rescind
theKasunduang Pag-aayos. As such, it is error on the part of the CA to rule that
enforcement by execution of said agreement is the appropriate remedy under the
circumstances.
Considering that the Kasunduang Pag-aayos is deemed rescinded by the
non-compliance of the respondent of the terms thereof, remanding the case
to the trial court for the enforcement of said agreement is clearly
unwarranted.
The petitioner avers that the CA erred in remanding the case to the
trial court for the enforcement of the Kasunduang Pag-aayos as it prolonged the
process, thereby putting off the case in an indefinite pendency.[25] Thus, the
petitioner insists that she should be allowed to ventilate her rights before this Court
and not to repeat the same proceedings just to comply with the enforcement of
theKasunduang Pag-aayos, in order to finally enforce her right to payment.[26]
The CA took off on the wrong premise that enforcement of the Kasunduang
Pag-aayos is the proper remedy, and therefore erred in its conclusion that the case
should be remanded to the trial court. The fact that the petitioner opted to rescind
the Kasunduang Pag-aayos means that she is insisting upon the undertaking of the
respondent under the original loan contract. Thus, the CA should have decided the
case on the merits, as an appeal before it, and not prolong the determination of the
issues by remanding it to the trial court. Pertinently, evidence abounds that the
respondent has failed to comply with his loan obligation. In fact, the Kasunduang
Pag-aayos is the well nigh incontrovertible proof of the respondents indebtedness
with the petitioner as it was executed precisely to give the respondent a second
chance to make good on his undertaking. And since the respondent still reneged in
paying his indebtedness, justice demands that he must be held answerable therefor.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court
of Appeals is SET ASIDE and the Decision of the Regional Trial Court, Branch
146, Makati City, dated March 14, 2007 is REINSTATED.
SO ORDERED.