G.R. No. 101328. April 7, 1993.
the latter's Record of Marriage and the
EMILIANA CANDIDO AND FRANCISCA
CANDIDO, petitioners,
vs.
HONORABLE DEMETRIO MACAPAGAL,
PRESIDING JUDGE, BRANCH 18,
REGIONAL TRIAL COURT OF BULACAN AND
MILA CONTRERAS, respondents.
SYLLABUS
1. REMEDIAL LAW; KATARUNGANG
PAMBARANGAY (P.D. NO. 1508); SCOPE OF
POWER; RULE. — From the provisions of P.D.
No. 1508, it is clear that the barangay court or
Lupon has jurisdiction over disputes between
parties who are actual residents of barangays
located in the same city or municipality or
adjoining barangays of different cities or
municipalities. The Lupon of the barangay
ordinarily has the authority to settle amicably all
types of disputes involving parties who actually
reside in the same municipality, city or province.
Where the complaint does not state that it is one
of the excepted cases, or it does not allege prior
availment of said conciliation process, or it does
not have a certification that no conciliation or
settlement had been reached by the parties, the
case could be dismissed on motion. In the
instant case, the fact that petitioners and private
respondent, reside in the same municipality of
Obando, Bulacan does not justify compulsory
conciliation under P.D. No. 1508 where the other
co-defendants reside in barangays of different
municipalities, cities and provinces.
DECISION
NOCON, J p:
This is a petition for certiorari to annul and set
aside the Orders 1 dated July 10, 1991 and
August 9, 1991 of the trial court dismissing the
complaint of petitioners Emiliana and Francisca
Candido against private respondent Mila
Contreras on the ground of lack of jurisdiction for
petitioners' failure to comply with the mandatory
barangay conciliation process required by
Presidential Decree No. 1508, otherwise known
as the Katarungang Pambarangay Law.
It appears on record that petitioners Emiliana
and Francisca Candido are the only legitimate
children of spouses Agapito Candido and
Florencia Santos as shown by the certificates 2 of
petitioners' Record of Birth.
However, petitioners' father eventually left his
legitimate family and lived with Sagraria Lozada
until his death on May 6, 1987.
On May 11, 1990, Sagraria Lozada, Jorge
Candido, Virginia Candido, Maximina Candido
and Eduardo Candido who represented
themselves to be the sole heirs of the late
Agapito Candido executed a Deed of Extra-
judicial Settlement of Estate with Sale 3 covering
parcels of land owned by the latter and sold to
private respondent Mila Contreras in whose
name said properties are now registered under
TCT No. T-120656-M.
On November 6, 1990, petitioners instituted an
action with the Regional Trial Court of Bulacan,
Branch 18 in Civil Case No. 697-M-90 against
Sagraria Lozada, Gorge Candido, Virginia
Candido, Maximina Candido, Eduardo Candido,
Register of Deeds of Bulacan and private
respondent Mila Contreras to annul the Deed of
Extra-judicial Settlement of Estate with Sale, to
cancel TCT No. 120656-M issued in the name of
private respondent and to reinstate TCT No.
223602 in the name of Agapito Candido married
to Sagraria Lozada.
On December 5, 1990, private respondent filed a
Motion to Dismiss 4 on the ground that
petitioners failed to comply with the mandatory
conciliation process required under P.D. No. 1508
as she resides in the same municipality with the
petitioners.
On July 10, 1991, the trial court issued an Order,
the dispositive portion of which reads, as follows:
"WHEREFORE, as prayed for, let this case be, as
it is hereby DISMISSED in so far as defendant
Mila Contreras is concerned for lack of prior
referral of the dispute before the Katarungang
Pambarangay, without prejudice." 5
Thereafter, petitioners filed a Motion for
Reconsideration 6 which was denied in an Order
7 dated August 9, 1991.
Hence, this petition alleging grave abuse of
discretion on the part of the respondent judge
dismissing private respondent in the complaint
instituted by the petitioners notwithstanding the
fact that the other defendants in Civil Case No.
697-M-90 reside in different municipalities and
cities.
The petition is impressed with merit.
Section 2 of P.D. No. 1508 provides:
"SEC. 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."
Further, section 3 of the same law provides:
"SEC. 3. Venue. — Disputes between or among
persons actually residing in the same barangay
shall be brought for amicable settlement before
the Lupon of said barangay. 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. However, all disputes which
involve real property or any interest therein shall
be brought in the barangay where the real
property or any part thereof is situated.
"The Lupon shall have no authority over
disputes:
(1) involving parties who actually reside in
barangays of different cities or municipalities,
except where such barangays adjoin each other;
. . ."
From the foregoing provisions of P.D. No. 1508,
it is clear that the barangay court or Lupon has
jurisdiction over disputes between parties who
are actual residents of barangays located in the
same city or municipality or adjoining barangays
of different cities or municipalities.
In the instant case, petitioners alleged in their
complaint that they are residents of Barrio
Paliwas, Municipality of Obando, Bulacan while
defendants' residences are as follows: Sagraria
Lozada and Jorge Candido at Javier Compound,
Bo. Sto. Niño, Taytay, Rizal; Virginia and
Maximina Candido at Road 2, Doña Faustina
Village, San Bartolome, Novaliches, Quezon City;
Eduardo Candido at 388 Barrio Paliwas,
Municipality of Obando, Bulacan; Mila Contreras
at San Pascual, Municipality of Obando, Bulacan;
and the Registrar of Deeds of Bulacan at his
official address in Bulacan.
The Lupon of the barangay ordinarily has the
authority to settle amicably all types of disputes
involving parties who actually reside in the same
municipality, city or province. Where the
complaint does not state that it is one of the
excepted cases, or it does not allege prior
availment of said conciliation process, or it does
not have a certification that no conciliation or
settlement had been reached by the parties, the
case could be dismissed on motion. 8 In the
instant case, the fact that petitioners and private
respondent, reside in the same municipality of
Obando, Bulacan does not justify compulsory
conciliation under P.D. No. 1508 where the other
co-defendants reside in barangays of different
municipalities, cities and provinces.
Petitioners can immediately file the case in court.
It would not serve the purpose of the law in
discouraging litigation among members of the
same barangay through conciliation where the
other parties reside in barangays other than the
one where the Lupon is located and where the
dispute arose.
WHEREFORE, the petition is GRANTED and the
appealed Orders of the trial court dated July 10,
1991 and August 9, 1991 dismissing Civil Case
No. 697-M-90 in so far as defendant Mila
Contreras is concerned are hereby annulled and
set aside. The case is remanded to the Regional
Trial Court of Bulacan for further proceedings
and to REINSTATE private respondent Mila
Contreras as defendant in Civil Case No. 697-M-
90. No costs.
SO ORDERED.
G.R. No. L-l0874 January 28, 1958
RUFINO D. ANDRES, plaintiff-appellant,
vs.
THE CROWN LIFE INSURANCE
COMPANY, defendant-appellee.
REYES, J.B.L., J.:
On April 20, 1952, Rufino D. Andres filed a
complaint in the Court of First Instance of Ilocos
Norte against the Crown Life Insurance Company
for the recovery of the amount of P5,000, as the
face value of a joint 20-year endowment insurance
policy issued in favor of the plaintiff Rufino D.
Andres and his wife Severa G. Andres on the 13th
of February, 1950, by said insurance company. On
Jun 7, 1951, Rufino Andres presented his death
claim as survivor-beneficiary of the deceased
Severa G. Andres, who died May 3, 1951. Payment
having been denied by the insurance company on
April 20, 1952, this case was instituted.
Defendant Company filed its answer in due time
disclaiming liability and setting forth the special
defense that the aforementioned policy had already
lapsed. Later, on March 25, 1954, the parties
submitted the case for decision by the lower court
upon a stipulation of facts, fully quoted hereunder:
1. That on October 20, 1949, plaintiff and Severa
G. Andres filed an application for insurance No.
536,423, which are marked as common Exhibits "1"
and "l-A", respectively;
2. That on February 13, 1950, defendant isssued
Crown Life Policy No. 536,423 for the sum of
P5,000, in the name of Rufino D. Andres, plaintiff,
and Severa G. Andres, which is hereto marked as
common Exhibit "2";
3. That the premiums are to be paid as called for in
the policy Exhibit '2", semi-annually, and the
amount of P165.15 for the first semester beginning
November 25, 1949 to May 25, 1950 was paid on
November 25, 1949, which is hereby marked as
common Exhibit "3", and the premium likewise in
the sum of P165.15 for the second semester
beginning May 25, 1950 to November 25, 1950,
was paid on June 24, 1950, as evidenced by
common Exhibit "3-A"; and the premium for the
third semester beginning November 25, 1950 to
May 25, 1951 was not paid;
4. That on January 6, 1951,the defendant, thru Mr.
I.B. Melendres, wrote to Mr. and Mrs. Rufino D.
Andres advising them that the said Policy No.
536,423 lapsed on December 25, 1950 and the
amount overdue was P165.15, giving them a period
of sixty (60) days from the date of lapse to file an
application for reinstatement, which letter is made
as common Exhibit "4";
5. That on February 12, 1951, the said Mr. I.B.
Melendres, branch secretary of the defendant,
wrote Mr. and Mrs. Rufino D. Andres, telling the
latter that Policy No. 536,423 was no longer in
force and it lapsed on December 25, 1950, which
letter is herewith made as common Exhibit "5";
6. That in the month of February, 1951, plaintiff
executed a Statement of Health which is at the
same time an Application for Reinstatement of the
aforesaid policy, which application is herewith
made as common Exhibit "6" (Note: Exhibit "6" is
the reverse side of Exhibit "4"). and Severa G.
Andres also executed in the month of February,
1951, an Application for Reinstatement, which
Application for Reinstatement is made as common
Exhibit "7";
7. That on February 20, 1951, plaintiff wrote a
letter to the defendant and enclosed therewith a
money order for P100, which letter was received by
the defendant on February 26, 1951, wherein it is
stated that the balance unpaid is the sum of
P65.15, which letter is hereby made as common
Exhibit "8";
8. That on April 14, 1951, the said Mr. I.B.
Melendres, as branch secretary for the defendant;
wrote plaintiff advising him that the Home Office
has approved the reinstatement of the lapsed
policy, subject to the payment of P65.15 due on
November, 1950 premium, a duplicate original copy
of the said letter is hereby made as common
Exhibit "9";
9. That on April 27, 1951, said Mr. I.B. Melendres,
branch secretary, again wrote the plaintiff
requesting the remittance of the balance of P65.15
due on the semi-annual premium for November,
195O, and upon receipt of the said amount, there
will be sent to him the Certificate of Reinstatement
of the policy, a duplicate original copy of the said
letter is hereto made as common Exhibit "10";
10. That on May 5, 1951, plaintiff sent a letter to
the defendant and enclosed therewith a Money
Order in the amount of P65.00 for the balance due
on the Crown Life Policy No. 536,423, which letter
has been received in the office of the defendant on
May 11, 1951, which letter is herewith made as
common Exhibit "11";
11. That on May 15, 1951, said Mr. I.B. Melendres
wrote a letter to Mr. and Mrs. Rufino D. Andres,
enclosing an Official Receipt for the receipt of
P165.15, which Official Receipt is hereby made as
common Exhibit "12", and also enclosed therewith
a Certificate of Reinstatement dated April 2, 1951,
which is herewith made as common Exhibit "13"
and the duplicate original copy of the aforesaid
letter dated May 15, 1951 is herewith made as
common Exhibit "14", and premium notice
addressed to Mr. and Mrs. Rufino D. Andres,
wherein it is shown that the semi-annual premium
in the sum of P165.15 on the said policy would be
due on May 15, 1951, which premium notice is
herwith made as common Exhibit "14-A";
12. That on June 7, 1951, plaintiff presented his
Death Claim as survivor-beneficiary of the
deceased Severa G. Andres which has been
received in the office of the defendant on June 11,
1951, which letter is herewith made as common
Exhibit "15", and there were therein enclosed in the
said letter an affidavit dated June 6, 1951 of the
plaintiff, which is herewith made as common
Exhibit "15-A", and a Certificate of Death dated
May 29, 1951, issued by the Local Civil Registrar of
the municipality of Sarrat, wherein it is shown that
Mrs. Severa G. Andres died on May 3, 1951 of
dystocia, second degree, contracted pelvis, which
Certificate of Death is herewith made as common
Exhibit "15-B", and a medical certificate of Dr. R.
de la Cuesta, senior resident physician of the Ilocos
Norte Provincial Hospital, dated May 20, 1951,
showing the cause of death of the said deceased,
Mrs. Severa G. Andres, which medical certificate is
herewith made as common Exhibit "15-C";
13. That on June 30, 1951, Mr. I.B. Melendres
wrote to plaintiff stating defendant's reasons for its
refusal to pay the death claim of the plaintiff which
letter is herewith made as common Exhibit "16", in
which there was therein enclosed a Death Claim
Discharge to be signed by the plaintiff but the
plaintiff refused to sign, which Death Claim
Discharge is herewith made as common Exhibit
"16-A";
14. That on November 23, 1951, the said Mr. I.B.
Melendres wrote plaintiff enclosing therewith a
National City Bank of New York Check No. D-
115356 for P165.00 payable to plaintiff, dated June
21, 1951, an original duplicate copy of which is
herewith made as common Exhibit "17";
15. That on December 1, 1951, the plaintiff wrote
defendant company and enclosed therewith the
aforesaid National City Bank of New York Check No.
D-115356 dated June 21, 1951, which letter is
herewith made as Common Exhibit "18", and the
check returned to the defendant company as
Exhibit "18-A";
16. That with the approval of this stipulation of
facts, the parties hereby submit the same and do
hereby request the Honorable Court to give them
twenty (20) days within which to file
simultaneously their corresponding memoranda
and another fifteen (15) days for a reply
memorandum." (Rec. App., pp. 17-22).
On August 5, 1954, Judge Julio Villamor rendered
decision absolving the defendant from any liability
on the ground that the policy having lapsed, it was
not reinstated at the time the plaintiff's wife died.
Not satisfied with the decision, plaintiff appealed to
the Court of Appeals, but the appeal was later
certified to this Court, for there is no question of
fact involved therein.
As has been correctly stated by the lower court, the
resolution of the issues in this case centers on
whether or not policy No. 536423 (Exhibit "2")
which has been in a state of lapse before May 3,
1951, has been validly and completely reinstated
after said date. In other words, was there a
perfected contract of reinstatement after the policy
lapsed due to non-payment of premiums?
The stipulation of facts and accompanying exhibits
render it undisputable that the original policy No.
536423 lapsed for non-payment of premiums on
December 26, 1950, upon expiration of the
customary 31-day period of grace. The subsequent
reinstatement of the policy was provided for in the
contract itself in the following terms:
If this policy lapses, it may be reinstated upon
application made within three years from the date
of lapse, and upon production of evidence of the
good health of the injured (and also of the
Beneficiary, if the rate of premium depends upon
the age of the Beneficiary), and such other
evidence of insurability at the date of application
for reinstatement as would then satisfy the
Company to issue a new Policy on the same terms
as this Policy, and upon payment of all overdue
premiums and other indebtedness in respect of this
Policy, together with interest at six per cent,
compounded annually, and provided also that no
change has taken place in such good health and
insurability subsequent to the date of such
application and before this Policy is reinstated.
As stated by the lower court, the conditions set
forth in the policy for reinstatement are the
following: (a) application shall be made within
three years from the date of lapse; (b) there should
be a production of evidence of the good health of
the insured: (c) if the rate of premium depends
upon the age of the Beneficiary, there should
likewise be a production of evidence of his or her
good health; (d) there should be presented such
other evidence of insurability at the date of
application for reinstatement; (e) there should be
no change which has taken place in such good
health and insurability subsequent to the date of
such application and before the policy is reinstated;
and (f) all overdue premiums and other
indebtedness in respect of the policy, together with
interest at six per cent, compounded annually,
should first be paid.
The plaintiff-appellant did not comply with the last
condition; for he only paid P100 (on account of the
over due semi-annual premium of P165.15) on
February 20, 1951, before his wife's death
(Stipulation, par. 7) ; and, despite the Company's
reminders on April 14 and 27, he remitted the
balance of P65 on May 5, 1951 (received by the
Company's agency on May 11), two days after his
wife died. On the face of such facts, the Company
had the right to treat the contract as lapsed and
refuse payment of the policy.
Appellant, however, contends that the condition
regarding payment of the premium was waived by
the insurance Company by its letters (signed by I.
B. Melendres, cashier) Exhibits 4 and 5 wherein the
Company manifested to appellant:
If you can not pay the full amount immediately,
send as large an amount as possible and advise us
how soon you expect to be able to pay the balance.
Every consideration will be given to your request
consistent with the company's regulations (Exhibit
4).
If you are unable to cover this amount in full, send
us as big an amount as you are able and we will
work out an adjustment most beneficial to you.
(Exhibit 5)
We see nothing in these expressions that would
indicate an intention on the insurer's part to waive
the full payment of the overdue premium as
prerequisite to the reinstatement of the lapsed
policy, considering the well settled rule that a
waiver must be clear and positive, and intent to
waive shown clearly and convincingly (Fernandez
vs. Sebido, 70 Phil. 151, 159; Lang vs. Sheriff* 49
Off. Gaz. 3323, 3329; Jocson vs. Capitol
Subdivision, Inc. G.R. L-6573, February 28, 1955).
The promise to give plaintiff's case every
consideration does not import any decision to
renounce the insurer's rights; and as to the
"working out of an adjustment most beneficial" to
the insured, the proposal is obviously so vague and
indefinite as to require further negotiations
between the parties, for their criteria might differ
as to what would be the most beneficial
arrangement.
Upon the other hand, the subsequent letters of the
insurance Company (Exhibits 9 and 10) patently
indicated that the Company insisted on the full
payment of the premium before the policy was
reinstated.
We take this opportunity of advising you that our
Home Office has approved the reinstatement of
your lapsel policy subject to the payment of the
balance of P65.15 due on your November 1950
premium. Kindly remitthis amount in order that you
may once more enjoy the benefits of insurance
protection" (Exibit 9, April 14, 1951).
We may now reinstate your policy if you will kindly
remit to us the balance of P65.15 due on your
semi-annual premium for November, 1950. Please
send us this amount by return mail and upon its
receipt we will in turn send the Certificate of
Reinstatement of your policy, thus rendering it
once again in full force and effect, (Exhibit 10, April
21, 1951) (Emphasis supplied).
Clearly the Company did not consider the partial
payment as sufficient consideration for the
reinstatement. Appellant's failure to remit the
balance before the death of his wife operated to
deprive him of any right to waive the policy and
recover the face value thereof.
This Court, in the case of James McGuire vs. The
Manufacturer's Life Insurance Co. (87 Phil,. 370, 48
Off. Gaz. [1], 114), said.
The stipulation in a life insurance policy giving the
insured the privilege to reinstate it upon written
application does not give the insured absolute right
to such reinstatement by the mere filing of an
application. The Company has the right to deny the
reinstatement if it is not satisfied as to the
insurability of the insured and if the latter does no
pay all overdue premium and all other
indebtedness to the Company. After the death of
the insured the insurance Company cannot be
compelled to entertain an application for
reinstatement of the policy because the conditions
precedent to reinstatement can no longer be
determined and satisfied.
Wherefore, finding no error in the judgment
appealed from, we hereby affirm the same, with
costs against appellant.
So ordered.
G.R. No. 70261 February 28, 1990
MAURO BLARDONY, JR., petitioner,
vs.
HON. JOSE L. COSCOLLUELA, JR., as
Presiding Judge of Branch CXLVI,
REGIONAL TRIAL COURT NATIONAL
CAPITAL REGION, MAKATI, METRO
MANILA and MA. ROSARIO ARANETA
BLARDONY, respondents.
GRIÑO-AQUINO, J.:
The petitioner seeks a review of the orders
dated August 9, 1983, and February 20, 1985,
of respondent Judge Jose Coscolluela, Jr., of
the Regional Trial Court of Makati, Branch
CXLVI, amending the order of his predecessor,
Judge Segundo Soza, (which dismissed private
respondent's petition for dissolution of the
conjugal partnership and partition of conjugal
properties) by requiring petitioner to submit an
accounting of his salaries, allowances, bonuses
and commissions.
The petitioner and the private respondent are
spouses. They were married on April 30, 1975.
During their marriage, they begot one child
named Patricia Araneta Blardony, who was
born on November 10, 1975. Due to
irreconcilable differences, petitioner and
private respondent separated in March, 1981.
On different dates, the spouses executed the
following agreements:
(a) Memorandum of Agreement dated July
1981 for the support of their child, Patricia;
(b) Receipt dated January 11, 1982, evidencing
the Compromise of Settlement of Advances
claimed by private respondent from petitioner;
(c) The Deed of Conveyance of a property
situated in Alabang, Muntinlupa; and
(d) The Confirmation of the waiver by private
respondent in favor of petitioner over a
property situated in Calatagan, Batangas. (p.
25, Rollo.)
On May 3, 1982, the wife filed a Petition for
Dissolution of Conjugal Partnership and
Partition of Conjugal Partnership Properties in
the Court of First Instance of Rizal, Branch
XXXVI, in Makati, where it was docketed as Sp.
No. 9711.
The husband, in his answer, admitted that he
had abandoned the conjugal home since March
1981; that before the filing of the petition, he
and his wife, assisted by their respective
counsel, tried to file a joint petition for the
dissolution of their conjugal partnership but
their attempt failed due to their inability to
agree upon the equitable partition of their
conjugal partnership properties and he prayed
the court to order "a fair and equitable
dissolution of their conjugal partnership in
accordance with law." (p. 74, Rollo.)
On October 8, 1982, the husband filed a
motion to dismiss the petition on jurisdictional
grounds, claiming that it should have been
filed first in the Lupon Tagapamayapa as
provided in P.D. 1508, because both are
residents of the same Municipality of Makati.
Mrs. Blardony opposed the motion to dismiss.
Nevertheless, Judge Segundo Soza dismissed
her petition on October 8, 1982 for her failure,
as plaintiff, to comply with Section 6 of P.D.
1508.
Mrs. Blardony filed a motion for
reconsideration. In the meantime, the courts
were reorganized and the case was transferred
to Branch CXLVI (146) of the Regional Trial
Court of Makati, presided over by Judge Jose
Coscolluela, Jr.
On August 9, 1983, Judge Coscolluela set aside
Judge Soza's order of dismissal and required
the defendant to submit an accounting of his
salaries, allowances, bonuses, and
commissions. The latter's motion for
reconsideration of that order was denied by
the court on February 20, 1985. Hence, this
petition for certiorari under Rule 65 of the
Rules of Court with a prayer for a writ of
preliminary injunction on the grounds that
respondent Judge exceeded his jurisdiction:
1. in assuming jurisdiction over the case
without prior referral to the Lupon
Tagapamayapa as required by P.D. 1508; and
2. in declaring that the issues of support
pendente lite and delivery of personal property
belonging to the conjugal partnership of the been reached as certified by the Lupon
parties are essentially involved in the petition, Secretary or the Pangkat Secretary, attested by
hence, the parties could go directly to court the Lupon or Pangkat Chairman, or unless the
without passing through the Lupon settlement has been repudiated. However, the
Tagapamayapa, as provided in Section 6 of parties may go directly to court in the following
P.D. 1508. cases:

The petition has no merit. Our jurisprudence is xxx xxx xxx

replete with decisions of this Court to the
effect that while the referral of a case to the
Lupon Tagapayapa is a condition precedent for
filing a complaint in court, it is not a
jurisdictional requirement, "its non-compliance
cannot affect the jurisdiction which the court
has already acquired over the subject matter
or over the person of the defendant."
(Fernandez vs. Militante, May 31, 1988;
Gonzales vs. Court of Appeals, 151 SCRA 287;
Royales vs. Intermediate Appellate Court, 127
SCRA 470). Petitioner waived the pre-litigation
conciliation procedure prescribed in P.D. No.
1508 when he did not file a motion to dismiss
the complaint on that score, but filed his
answer thereto wherein he prayed the court to
make an equitable partition of the conjugal
properties.
While petitioners could have prevented the trial
court from exercising jurisdiction over the case
by seasonably taking exception thereto, they
instead invoked the very same jurisdiction by
filing an answer and seeking affirmative relief
from it. ... . Upon this premise, petitioners
cannot be allowed belatedly to adopt an
inconsistent posture by attacking the
jurisdiction of the court to which they had
submitted themselves voluntarily. (Royales vs.
Intermediate Appellate Court, 127 SCRA 470.)
(3) Actions coupled with provisional remedies
such as preliminary injunction,
attachment,delivery of personal
properly and support pendente lite; and
xxx xxx xxx
(Emphasis supplied.)
Respondent Judge correctly observed that:
... the issues of support pendente lite and
delivery of personal properties belonging to the
conjugal partnership, although not coupled in
the strict sense of the word with the instant
petition, are essentially involved in this petition
because of the minority of the daughter,
Patricia Araneta Blardony who, as of this date,
is not yet 8 years old, and because the
resolution or decision of this court on the
pending petition would be incomplete without
a clear cut disposition on the partition of the
personal and real properties of the conjugal
partnership and consequent delivery thereof to
the proper parties. (p. 20, Rollo.)
WHEREFORE, finding no reversible error in the
orders complained of, the petition for certiorari
is denied for lack of merit. Costs against the
petitioner. This decision is immediately
executory.

Furthermore, under Section 6 of P.D. 1508, the SO ORDERED.

complaint may be filed directly in a competent
court without passing the
Lupon Tagapayapa in the following cases:

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
G.R. No. L-60367 September 30, 1982
ATTY. VENUSTIANO T.
TAVORA, petitioner,
vs.
HON. ROSARIO R. VELOSO, in her
capacity as the Presiding Judge of Branch
III of the City Court of Manila, and
JULIETA CAPATI, respondents.
PLANA, J.:
Venustiano T. Tavora, a resident of Marikina,
Metro Manila, owns an apartment in Quiapo,
Manila which he has leased to Julieta Capati, a
resident of Quiapo. On account of alleged
violations of the lease agreement by the lessee
(unauthorized subleasing and failure to pay
rent), the lessor filed on January 12, 1981 an
ejectment suit (Civil Case No. 060828) in the
City Court of Manila. The defendant filed a
motion t/ dismiss on the sole ground of lack of
jurisdiction for failure of the plaintiff to bring
the dispute first to the barangay court for
possible amicable settlement under PD 1508.
Parenthetically, there is no question that there
has been no attempt to amicably settle the
dispute between Tavora and Capati at the
barangay level.
After denying the motion to dismiss as well as
a subsequent motion for reconsideration, the
municipal court reversed itself and dismissed
the ejectment case.
Alleging grave abuse of discretion amounting
to lack of jurisdiction, petitioner Tavora has
come to this Court on certiorari and mandamus
praying that the order of dismissal be set aside
and that respondent judge be ordered to hear
and decide the case.
The sole issue raised is one of law: Under the
given facts, is the respondent judge barred
from taking cognizance of the ejectment case
pursuant to Sec-6 of PD 1508 establishing a
system of amicably settling disputes at the
barangay level? The section reads:
SECTION 6. Conciliation, precondition 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 Pangkat Chairman, or unless the
settlement has been repudiated ... (Emphasis
supplied.)
For the above provision to be operative, the
controversy must be within the jurisdiction of
the Lupong Tagapayapa (Lupon or Barangay
court). On this point, the relevant provisions of
PD 1508 are:
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.
SECTION 3. Venue. — Disputes between
or among persons actually residing in the same
barangay shall be brought for amicable
settlement before the Lupon of said barangay.
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. However, all disputes which
involve real property or any interest therein
shall be brought in the barangay where the
real property or any part thereof is situated.
The Lupon shall have no authority over
disputes:
(1) involving parties who actually reside in
barangays of different cities or
municipalities, except where such barangays
adjoin each other; and
(2) involving real property located in different
municipalities. (Emphasis supplied.)
The foregoing provisions are quite clear.
Section 2 specifies the conditions under which
the Lupon of a barangay "shall have authority"
to bring together the disputants for amicable
settlement of their dispute: The parties must
be "actually residing in the same city or
municipality." At the same time, Section 3 —
while reiterating that the disputants must be
"actually residing in the same barangay" or in
"different barangays within the same city or
municipality — unequivocably declares that the
Lupon shall have "no authority" over disputes
"involving parties who actually reside in
barangays of different cities or municipalities,"
except where such barangays adjoin each
other.
Thus, by 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,
It is true that immediately after specifying the
barangay whose Lupon shall take cognizance
of a given dispute, Sec. 3 of PD 1508 adds:
However, all disputes which involve real
property or any interest therein shall be
brought in the barangay where the real
property or any part thereof is situated.
The natural and appropriate office of a proviso
is . . . to except something from the enacting
clause; to limit, restrict, or qualify the statute
in whole or in part; or to exclude from the
scope of the statute that which otherwise
would be within its terms. (73 Am Jur 2d 467.)
Therefore, the quoted proviso should simply be
deemed to restrict or vary the rule on
venue prescribed in the principal clauses of the
first paragraph of Section 3, thus: Although
venue is generally determined by the residence
of the parties, disputes involving real property
shall be brought in the barangay where the
real property or any part thereof is situated,
notwithstanding that the parties reside
elsewhere within the same city/municipality.
In the instant case, the plaintiff in the
ejectment case (petitioner herein) is a resident
of Marikina, while the defendant (private
respondent) is a resident of Quiapo. No Lupon
therefore is authorized to take cognizance of
their dispute.
Finding the petition to be meritorious, the
dismissal of Civil Case No. 060828 (ejectment)
by the respondent Judge being predicated
upon a misconstruction of PD 1508, the same
should be granted. (Co Tiamco vs. Diaz, 75
Phil. 672.)
Accordingly, the assailed order of dismissal
dated February 22, 1982 as well as the order
dated March 23, 1982 denying reconsideration
thereof are hereby set aside; and the
respondent Judge is directed to hear and
decide the aforesaid ejectment case on its
merits. Costs against private respondents.
SO ORDERED.

Actually, however, this added sentence is just

an ordinary proviso and should operate as
such. The operation of a proviso, as a rule,
should be limited to its normal function, which
is to restrict or vary the operation of the
principal clause, rather than expand its scope,
in the absence of a clear indication to the
contrary.
G.R. No. 76836 June 23, 1988
TRIUMFO GARCES, petitioner,
vs.
HON. COURT OF APPEALS and DAISY
ESCALANTE, respondents.
FELICIANO, J.:
Petitioner Triumfo Garces (plaintiff below) is owner
of an apartment building located at No. 1603
Indiana Street, now General Malvar Street, Malate,
Metropolitan Manila. On 14 August 1984, he filed
with Branch 13 of the Metropolitan Trial Court of
Manila a Complaint for ejectment 1 (docketed as
Civil Case No. 102100-CV) against respondent
Daisy Escalante (defendant below), the lessee of
Room B in that apartment building. Petitioner
Garces claimed in his complaint that the verbal
contract of lease with respondent Escalante, being
on a month-to-month basis, had already expired,
but that the latter had unreasonably refused to
vacate the leased premises despite oral and written
demands. In an Amended Complaint dated 15
October 1984 2 it was further alleged, as an
additional ground for eviction, that respondent
Escalante had converted the leased premises into a
boarding house without the prior consent or
approval of petitioner Garces, in violation of the
terms and conditions of their verbal lease
agreement.
On 30 August 1985, the Metropolitan Trial Court, in
accordance with the Rule on Summary Procedure,
rendered a Decision 3 the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is
hereby rendered in favor of the plaintiff [Garces]
and against the defendant [Escalante], ordering the
latter:
(a) and as others claiming rights or title under her
to vacate the premises known as Room B of a
residential house designated as No. 1603 Indiana
Street, Malate, Manila;
(b) to pay the plaintiff the sum of P3,000.00 as and
for attorney's fees; and
(c) to pay the costs of suit.
For utter lack of merit, defendant's answer with
counterclaim is hereby dismissed.
SO ORDERED.
Respondent Escalante subsequently interposed an
appeal (docketed as Civil Case No. 85-33232) with
Branch 13 of the Regional Trial Court of Manila
which, in a Decision dated 28 January
1986 4 reversed the decision of the Metropolitan
Trial Court in the following manner:
PREMISES CONSIDERED, the judgment appealed
from as well as the writ of execution issued
pursuant thereto, are hereby set aside for failure of
the complaint to state a cause of action and/or
want of jurisdiction on the part of the court a
quo to take cognizance of the instant case by
reason thereof.
The regional trial judge, noting that both parties
were then residents of Manila, based his decision
on the finding that there had been a failure on the
part of plaintiff to comply with the requirements of
Section 6 of Presidential Decree No. 1508 — i.e.,
the controversy had not been submitted for
conciliation before the barangay Lupong
Tagapayapa or Pangkat ng Tagapagkasundo, and
no Certification to File Action had been issued by
the appropriate barangay official, prior to the
institution of ejectment proceedings in court.
On 22 September 1986, upon Petition for Review
filed by plaintiff Garces (docketed as CA-G.R. SP
No. 08386), the Court of Appeals (Tenth Division)
affirmed in toto the decision of the Regional Trial
Court. 5 Petitioner's Motion for Reconsideration was
subsequently denied for having been filed late. 6
The present Petition for Review was filed on 14
January 1987. After a Comment thereon and a
Reply to the comment had been submitted by
respondent Escalante and petitioner Garces,
respectively, the Court, in a Resolution dated 22
July 1987, gave due course to the Petition. The
parties have since then filed their respective
memoranda.
After careful consideration of the record, we find,
however, that the Petition must fail.
In paragraph 1 of both the Complainant and the
Amended Complaint filed with the Metropolitan
Trial Court, it was alleged that "plaintiff [i.e.,
petitioner Garces] is a Filipino of legal age,
and residing at 2363 Jacobo Street, Singalong,
Manila, while defendant [i.e., respondent
Escalante] is, likewise, of legal age, Filipino and
residing at 1603 Indiana, Malate, Manila, where she
may be served with summons and other court
processes. 7 A similar allegation appeared in the
Petition for Review filed by plaintiff Garces with the
Court of Appeals. 8 Furthermore, the record of this
case indicates that no Certificate to File Action was
issued by the barangay official concerned prior to
the initial filing by petitioner Garces of his
complaint in court. Clearly, therefore, dismissal of
the ejectment suit — ordered initially by the
Regional Trial Court and later affirmed by the Court
of Appeals was not improper, especially considering
that, per allegations of complainant himself in his
pleadings, both parties were then in fact residents
of barangays situated "in the same city or
municipality." 9
Petitioner Garces, however, in order to justify non-
application in this case of P.D. 1508, would now
urge the Court to reverse the dismissal of his
complaint on the assertion that the leased
apartment unit in Malate "is only the place where
(respondent stays) during workdays as respondent
Daisy Escalante is working in Manila" — i.e.,
"(respondent's) intention to establish residence is in
Cavite where she has her house." 10 The argument
is not persuasive. Section 3 of P.D. 1508
specifically provides that the Decree shall be
applicable to disputes "between or among
persons actually residing in the same barangay"
and to disputes "involving actual residents of
different barangays within the same city or
municipality." We think it clear, and so hold, that
P.D. 1508 does not refer here to one's legal
residence or domicile which, for differing purposes
may differ from the actual or physical habitation of
a litigant. The policy of the law is evidently to
promote dispute settlement through non-litigious,
compulsory conciliation procedures and disputes
arise where people actually or physically reside.
The fact that respondent Escalante stays in the
apartment unit in Malate five (5) days a week,
every week, is more than adequate proof that,
within the meaning of the Decree, respondent
"actually resides" in Manila.
In fine, we have held in the past that prior recourse
to the conciliation procedure required under P.D.
1508 is not a jurisdictional requirement, non-
compliance with which would deprive a court of its
jurisdiction either over the subject matter or over
the person of the defendant. 11 Where, however,
the fact of non-compliance with and non-
observance of such procedure has been seasonably
raised as an issue before the court first taking
cognizance of the complaint, dismissal of the action
is proper. 12 We note from the record that
respondent Escalante had filed with the
Metropolitan Trial Court a total of four (4)
pleadings — an Answer, a Motion for Opposition of
Plaintiffs Motion for Leave to Amend Complaint, an
Amended Answer, and a Position Paper — before a
decision was rendered in this case. In those four
pleadings, respondent, then defendant argued,
among other things, that the procedural
requirement under Section 6 of P.D. 1508 had been
improperly by passed by the plaintiff Garces. It
should also be borne in mind that this case was,
before the Metropolitan Trial Court, governed by
the Rule on Summary Procedure and that under
Section 15 (a) and (g) of that Rule, no motion to
dismiss and no petition for certiorari or prohibition
against any interlocutory order issued by the trial
court, is possible. Thus, respondent Escalante could
not have moved to dismiss, in the Metropolitan
Trial Court, upon the ground of failure to comply
with the requirements of P.D. 1508. Neither could
respondent Escalante have gone on certiorari
before the Regional Trial Court at anytime before
rendition by the Metropolitan Trial Court of its
decision. We conclude that respondent Escalante
(contrary to the suggestion of petitioner) had not
waived expressly or impliedly the procedural
requirement under P.D. 1508 and that, since the
Decree is applicable in the present case, petitioner
Garces' complaint should have been dismissed
outright.
The precise technical effect of failure to comply
with the requirement of P.D. 1508 where applicable
is much the same effect produced by non-
exhaustion of administrative remedies: the
complaint becomes afflicted with the vice of pre-
maturity; the controversy there alleged is not ripe
for judicial determination. 13 The complaint
becomes vulnerable to a motion to dismiss. 14
It is not without reluctance that we reach the
conclusion set forth above which would require
petitioner to start again from the beginning,
considering that the Metropolitan Trial Court had
rendered a decision on the merits of the case. The
facts of the present case, however, do not leave us
any choice. To grant the Petition for Review under
these circumstances would amount to refusal to
give effect to P.D. 1508 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.
WHEREFORE, the Petition for Review is DENIED.
The Decision of the Metropolitan Trial Court of
Manila dated 30 August 1985 is SET ASIDE and the
Complaint in Civil Case No. 102100-CV is hereby
DISMISSED, without prejudice. Costs against the
petitioner.
SO ORDERED.
G.R. No. 153567 February 18, 2008
LIBRADA M. AQUINO, petitioner,
vs.
ERNEST S. AURE1, respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review
on Certiorari2 under Rule 45 of the Revised Rules of
Court filed by petitioner Librada M. Aquino (Aquino),
seeking the reversal and the setting aside of the
Decision3 dated 17 October 2001 and the
Resolution4 dated 8 May 2002 of the Court of Appeals
in CA-G.R. SP No. 63733. The appellate court, in its
assailed Decision and Resolution, reversed the
Decision5 of the Regional Trial Court (RTC) of Quezon
City, Branch 88, affirming the Decision6 of the
Metropolitan Trial Court (MeTC) of Quezon City,
Branch 32, which dismissed respondent Ernesto
Aure’s (Aure) complaint for ejectment on the
ground, inter alia, of failure to comply with barangay
conciliation proceedings.
The subject of the present controversy is a parcel of
land situated in Roxas District, Quezon City, with an
area of 449 square meters and covered by Transfer
Certificate of Title (TCT) No. 205447 registered with
the Registry of Deeds of Quezon City (subject
property).7
Aure and E.S. Aure Lending Investors, Inc. (Aure
Lending) filed a Complaint for ejectment against
Aquino before the MeTC docketed as Civil Case No.
17450. In their Complaint, Aure and Aure Lending
alleged that they acquired the subject property from
Aquino and her husband Manuel (spouses Aquino) by
virtue of a Deed of Sale8 executed on 4 June 1996.
Aure claimed that after the spouses Aquino received
substantial consideration for the sale of the subject
property, they refused to vacate the same.9
In her Answer,10 Aquino countered that the Complaint
in Civil Case No. 17450 lacks cause of action for Aure
and Aure Lending do not have any legal right over the
subject property. Aquino admitted that there was a
sale but such was governed by the Memorandum of
Agreement11 (MOA) signed by Aure. As stated in the
MOA, Aure shall secure a loan from a bank or
financial institution in his own name using the subject
property as collateral and turn over the proceeds
thereof to the spouses Aquino. However, even after
Aure successfully secured a loan, the spouses Aquino
did not receive the proceeds thereon or benefited
therefrom.
On 20 April 1999, the MeTC rendered a Decision in
Civil Case No. 17450 in favor of Aquino and dismissed
the Complaint for ejectment of Aure and Aure Lending
for non-compliance with the barangay conciliation
process, among other grounds. The MeTC observed
that Aure and Aquino are residents of the
same barangay but there is no showing that any
attempt has been made to settle the case amicably at
the barangay level. The MeTC further observed that
Aure Lending was improperly included as plaintiff in
Civil Case No. 17450 for it did not stand to be injured
or benefited by the suit. Finally, the MeTC ruled that
since the question of ownership was put in issue, the
action was converted from a mere detainer suit to
one "incapable of pecuniary estimation" which
properly rests within the original exclusive jurisdiction
of the RTC. The dispositive portion of the MeTC
Decision reads:
WHEREFORE, premises considered, let this case be,
as it is, hereby ordered DISMISSED. [Aquino’s]
counterclaim is likewise dismissed.12
On appeal, the RTC affirmed the dismissal of the
Complaint on the same ground that the dispute was
not brought before the Barangay Council for
conciliation before it was filed in court. In a Decision
dated 14 December 2000, the RTC stressed that
the barangay conciliation process is a conditio sine
qua non for the filing of an ejectment complaint
involving residents of the same barangay, and failure
to comply therewith constitutes sufficient cause for
the dismissal of the action. The RTC likewise validated
the ruling of the MeTC that the main issue involved in
Civil Case No. 17450 is incapable of pecuniary
estimation and cognizable by the RTC. Hence, the
RTC ruled:
WHEREFORE, finding no reversible error in the
appealed judgment, it is hereby affirmed in its
entirety.13
Aure’s Motion for Reconsideration was denied by the
RTC in an Order14 dated 27 February 2001.
Undaunted, Aure appealed the adverse RTC Decision
with the Court of Appeals arguing that the lower court
erred in dismissing his Complaint for lack of cause of
action. Aure asserted that misjoinder of parties was
not a proper ground for dismissal of his Complaint
and that the MeTC should have only ordered the
exclusion of Aure Lending as plaintiff without
prejudice to the continuation of the proceedings in
Civil Case No. 17450 until the final determination
thereof. Aure further asseverated that mere allegation
of ownership should not divest the MeTC of
jurisdiction over the ejectment suit since jurisdiction
over the subject matter is conferred by law and
should not depend on the defenses and objections
raised by the parties. Finally, Aure contended that the
MeTC erred in dismissing his Complaint with prejudice
on the ground of non-compliance with barangay
conciliation process. He was not given the opportunity
to rectify the procedural defect by going through
the barangay mediation proceedings and, thereafter,
refile the Complaint.15
On 17 October 2001, the Court of Appeals rendered a
Decision, reversing the MeTC and RTC Decisions and
remanding the case to the MeTC for further
proceedings and final determination of the
substantive rights of the parties. The appellate court
declared that the failure of Aure to subject the matter
to barangay conciliation is not a jurisdictional flaw and
it will not affect the sufficiency of Aure’s Complaint
since Aquino failed to seasonably raise such issue in
her Answer. The Court of Appeals further ruled that
mere allegation of ownership does not deprive the
MeTC of jurisdiction over the ejectment case for
jurisdiction over the subject matter is conferred by
law and is determined by the allegations advanced by
the plaintiff in his complaint. Hence, mere assertion of
ownership by the defendant in an ejectment case will
not oust the MeTC of its summary jurisdiction over
the same. The decretal part of the Court of Appeals
Decision reads:
WHEREFORE, premises considered, the petition is
hereby GRANTED - and the decisions of the trial
courts below REVERSED and SET ASIDE. Let the
records be remanded back to the court a quo for
further proceedings – for an eventual decision of the
substantive rights of the disputants.16
In a Resolution dated 8 May 2002, the Court of
Appeals denied the Motion for Reconsideration
interposed by Aquino for it was merely a rehash of
the arguments set forth in her previous pleadings
which were already considered and passed upon by
the appellate court in its assailed Decision.
Aquino is now before this Court via the Petition at bar
raising the following issues:
I.
WHETHER OR NOT NON-COMPLIANCE WITH THE
BARANGAY CONCILIATION PROCEEDINGS IS A
JURISDICTIONAL DEFECT THAT WARRANTS THE
DISMISSAL OF THE COMPLAINT.
II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP
OUSTS THE MeTC OF ITS JURISDICTION OVER AN
EJECTMENT CASE.
The barangay justice system was established
primarily as a means of easing up the congestion of
cases in the judicial courts. This could be
accomplished through a proceeding before
the barangay courts which, according to the
conceptor of the system, the late Chief Justice Fred
Ruiz Castro, is essentially arbitration in character, and
to make it truly effective, it should also be
compulsory. With this primary objective of
the barangay justice system in mind, it would be
wholly in keeping with the underlying philosophy of
Presidential Decree No. 1508, otherwise known as the
Katarungang Pambarangay Law, and the policy
behind it would be better served if an out-of-court
settlement of the case is reached voluntarily by the
parties.17
The primordial objective of Presidential Decree No.
1508 is to reduce the number of court litigations and
prevent the deterioration of the quality of justice
which has been brought by the indiscriminate filing of
cases in the courts.18 To ensure this objective, Section
6 of Presidential Decree No. 150819 requires the
parties to undergo a conciliation process before
the Lupon Chairman or the Pangkat ng
Tagapagkasundo as a precondition to filing a
complaint in court subject to certain
exceptions20 which are inapplicable to this case. The
said section has been declared compulsory in
nature.21
Presidential Decree No. 1508 is now incorporated in
Republic Act No. 7160, otherwise known as The Local
Government Code, which took effect on 1 January
1992.
The pertinent provisions of the Local Government
Code making conciliation a precondition to filing of
complaints in court, read:
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 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 secretary or pangkat
secretary as attested to by the lupon chairman or
pangkat 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.
SEC. 408. Subject Matter for Amicable Settlement;
Exception Therein. – 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.
There is no dispute herein that the present case was
never referred to the Barangay Lupon for conciliation
before Aure and Aure Lending instituted Civil Case
No. 17450. In fact, no allegation of
such barangay conciliation proceedings was made in
Aure and Aure Lending’s Complaint before the MeTC.
The only issue to be resolved is whether non-recourse
to the barangay conciliation process is a jurisdictional
flaw that warrants the dismissal of the ejectment suit
filed with the MeTC.
Aquino posits that failure to resort
to barangay conciliation makes the action for
ejectment premature and, hence, dismissible. She
likewise avers that this objection was timely raised
during the pre-trial and even subsequently in her
Position Paper submitted to the MeTC.
We do not agree.
It is true that the precise technical effect of failure to
comply with the requirement of Section 412 of the
Local Government Code on barangay conciliation
(previously contained in Section 5 of Presidential
Decree No. 1508) is much the same effect produced
by non-exhaustion of administrative remedies -- the
complaint becomes afflicted with the vice of pre-
maturity; and the controversy there alleged is not ripe
for judicial determination. The complaint becomes
vulnerable to a motion to
dismiss.22 Nevertheless, the conciliation process
is not a jurisdictional requirement, so that non-
compliance therewith cannot affect the
jurisdiction which the court has otherwise
acquired over the subject matter or over the
person of the defendant.23
As enunciated in the landmark case of Royales v.
Intermediate Appellate Court24:
Ordinarily, non-compliance with the condition
precedent prescribed by P.D. 1508 could affect the
sufficiency of the plaintiff's cause of action and make
his complaint vulnerable to dismissal on ground of
lack of cause of action or prematurity; but the same
would not prevent a court of competent
jurisdiction from exercising its power of
adjudication over the case before it, where the
defendants, as in this case, failed to object to
such exercise of jurisdiction in their answer
and even during the entire proceedings a quo.
While petitioners could have prevented the trial court
from exercising jurisdiction over the case by
seasonably taking exception thereto, they instead
invoked the very same jurisdiction by filing an answer
and seeking affirmative relief from it. What is more,
they participated in the trial of the case by cross-
examining respondent Planas. Upon this premise,
petitioners cannot now be allowed belatedly to
adopt an inconsistent posture by attacking the
jurisdiction of the court to which they had
submitted themselves voluntarily.x x x
(Emphasis supplied.)
In the case at bar, we similarly find that Aquino
cannot be allowed to attack the jurisdiction of the
MeTC over Civil Case No. 17450 after having
submitted herself voluntarily thereto. We have
scrupulously examined Aquino’s Answer before the
MeTC in Civil Case No. 17450 and there is utter lack
of any objection on her part to any deficiency in the
complaint which could oust the MeTC of its
jurisdcition.
We thus quote with approval the disquisition of the
Court of Appeals:
Moreover, the Court takes note that the defendant
[Aquino] herself did not raise in defense the aforesaid
lack of conciliation proceedings in her answer, which
raises the exclusive affirmative defense of simulation.
By this acquiescence, defendant [Aquino] is deemed
to have waived such objection. As held in a case of
similar circumstances, the failure of a defendant
[Aquino] in an ejectment suit to specifically allege the
fact that there was no compliance with the barangay
conciliation procedure constitutes a waiver of that
defense. x x x.25
By Aquino’s failure to seasonably object to the
deficiency in the Complaint, she is deemed to have
already acquiesced or waived any defect attendant
thereto. Consequently, Aquino cannot thereafter
move for the dismissal of the ejectment suit for Aure
and Aure Lending’s failure to resort to
the barangay conciliation process, since she is already
precluded from doing so. The fact that Aquino raised
such objection during the pre-trial and in her Position
Paper is of no moment, for the issue of non-recourse
to barangay mediation proceedings should be
impleaded in her Answer.
As provided under Section 1, Rule 9 of the 1997 Rules
of Civil Procedure:
Sec. 1. Defenses and objections not pleaded. –
Defenses and objections not pleaded either in
a motion to dismiss or in the answer are
deemed waived. However, when it appears from
the pleadings or the evidence on record that the court
has no jurisdiction over the subject matter, that there
is another action pending between the same parties
for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court
shall dismiss the claim. (Emphasis supplied.)
While the aforequoted provision applies to a pleading
(specifically, an Answer) or a motion to dismiss, a
similar or identical rule is provided for all other
motions in Section 8 of Rule 15 of the same Rule
which states:
Sec. 8. Omnibus Motion. - Subject to the provisions of
Section 1 of Rule 9, a motion attacking a pleading,
order, judgment, or proceeding shall include all
objections then available, and all objections not so
included shall be deemed waived.
The spirit that surrounds the foregoing statutory norm
is to require the party filing a pleading or motion to
raise all available exceptions for relief during the
single opportunity so that single or multiple objections
may be avoided.26 It is clear and categorical in
Section 1, Rule 9 of the Revised Rules of Court that
failure to raise defenses and objections in a motion to
dismiss or in an answer is deemed a waiver thereof;
and basic is the rule in statutory construction that
when the law is clear and free from any doubt or
ambiguity, there is no room for construction or
interpretation.27 As has been our consistent ruling,
where the law speaks in clear and categorical
language, there is no occasion for interpretation;
there is only room for application.28 Thus, although
Aquino’s defense of non-compliance with Presidential
Decree No. 1508 is meritorious, procedurally, such
defense is no longer available for failure to plead the
same in the Answer as required by
the omnibus motion rule.
Neither could the MeTC dismiss Civil Case No.
17450 motu proprio. The 1997 Rules of Civil
Procedure provide only three instances when the
court may motu proprio dismiss the claim, and that is
when the pleadings or evidence on the record show
that (1) the court has no jurisdiction over the subject
matter; (2) there is another cause of action pending
between the same parties for the same cause; or (3)
where the action is barred by a prior judgment or by
a statute of limitations. Thus, it is clear that a court
may not motu proprio dismiss a case on the ground
of failure to comply with the requirement
for barangay conciliation, this ground not being
among those mentioned for the dismissal by the trial
court of a case on its own initiative.
Aquino further argues that the issue of possession in
the instant case cannot be resolved by the MeTC
without first adjudicating the question of ownership,
since the Deed of Sale vesting Aure with the legal
right over the subject property is simulated.
Again, we do not agree. Jurisdiction in ejectment
cases is determined by the allegations pleaded in the
complaint. As long as these allegations demonstrate a
cause of action either for forcible entry or for unlawful
detainer, the court acquires jurisdiction over the
subject matter. This principle holds, even if the facts
proved during the trial do not support the cause of
action thus alleged, in which instance the court --
after acquiring jurisdiction -- may resolve to dismiss
the action for insufficiency of evidence.
The necessary allegations in a Complaint for
ejectment are set forth in Section 1, Rule 70 of the
Rules of Court, which reads:
SECTION 1. Who may institute proceedings, and
when. – Subject to the provisions of the next
succeeding section, a person deprived of the
possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor,
vendor, vendee, or other person against whom the
possession of any land or building is unlawfully
withheld after the expiration or termination of the
right to hold possession, by virtue of any contract,
express or implied, or the legal representatives or
assigns of any such lessor, vendor, vendee, or other
person may at any time within one (1) year after such
unlawful deprivation or withholding of possession,
bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding
or depriving of possession, or any person or persons
claiming under them, for the restitution of such
possession, together with damages and costs.
In the case at bar, the Complaint filed by Aure and
Aure Lending on 2 April 1997, alleged as follows:
2. [Aure and Aure Lending] became the owners of a
house and lot located at No. 37 Salazar Street corner
Encarnacion Street, B.F. Homes, Quezon City by
virtue of a deed of absolute sale executed by [the
spouses Aquino] in favor of [Aure and Aure Lending]
although registered in the name of x x x Ernesto S.
Aure; title to the said property had already been
issued in the name of [Aure] as shown by a transfer
Certificate of Title , a copy of which is hereto attached
and made an integral part hereof as Annex A;
3. However, despite the sale thus transferring
ownership of the subject premises to [Aure and Aure
Lending] as above-stated and consequently
terminating [Aquino’s] right of possession over the
subject property, [Aquino] together with her family, is
continuously occupying the subject premises
notwithstanding several demands made by [Aure and
Aure Lending] against [Aquino] and all persons
claiming right under her to vacate the subject
premises and surrender possession thereof to [Aure
and Aure Lending] causing damage and prejudice to
[Aure and Aure Lending] and making [Aquino’s]
occupancy together with those actually occupying the
subject premises claiming right under her, illegal.29
It can be inferred from the foregoing that Aure,
together with Aure Lending, sought the possession of
the subject property which was never surrendered by
Aquino after the perfection of the Deed of Sale, which
gives rise to a cause of action for an ejectment suit
cognizable by the MeTC. Aure’s assertion of
possession over the subject property is based on his
ownership thereof as evidenced by TCT No. 156802
bearing his name. That Aquino impugned the validity
of Aure’s title over the subject property and claimed
that the Deed of Sale was simulated should not divest
the MeTC of jurisdiction over the ejectment case.30
As extensively discussed by the eminent jurist Florenz
D. Regalado in Refugia v. Court of Appeals31:
As the law on forcible entry and unlawful detainer
cases now stands, even where the defendant raises
the question of ownership in his pleadings and the
question of possession cannot be resolved without
deciding the issue of ownership, the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts nevertheless have the undoubted
competence to resolve the issue of ownership albeit
only to determine the issue of possession.
x x x. The law, as revised, now provides instead
that when the question of possession cannot
be resolved without deciding the issue of
ownership, the issue of ownership shall be
resolved only to determine the issue of
possession. On its face, the new Rule on Summary
Procedure was extended to include within the
jurisdiction of the inferior courts ejectment cases
which likewise involve the issue of ownership. This
does not mean, however, that blanket authority to
adjudicate the issue of ownership in ejectment suits
has been thus conferred on the inferior courts.
At the outset, it must here be stressed that the
resolution of this particular issue concerns and applies
only to forcible entry and unlawful detainer cases
where the issue of possession is intimately
intertwined with the issue of ownership. It finds no
proper application where it is otherwise, that is,
where ownership is not in issue, or where the
principal and main issue raised in the allegations of
the complaint as well as the relief prayed for make
out not a case for ejectment but one for recovery of
ownership.
Apropos thereto, this Court ruled in Hilario v. Court of
Appeals32:
Thus, an adjudication made therein regarding the
issue of ownership should be regarded as merely
provisional and, therefore, would not bar or prejudice
an action between the same parties involving title to
the land. The foregoing doctrine is a necessary
consequence of the nature of forcible entry and
unlawful detainer cases where the only issue to be
settled is the physical or material possession over the
real property, that is, possession de facto and not
possession de jure."
In other words, inferior courts are now "conditionally
vested with adjudicatory power over the issue of title
or ownership raised by the parties in an ejectment
suit." These courts shall resolve the question of
ownership raised as an incident in an ejectment case
where a determination thereof is necessary for a
proper and complete adjudication of the issue of
possession.33
WHEREFORE, premises considered, the instant
Petition is DENIED. The Court of Appeals Decision
dated 17 October 2001 and its Resolution dated 8
May 2002 in CA-G.R. SP No. 63733 are
hereby AFFIRMED.
Costs against the petitioner.
G.R. No. 132624 March 13, 2000
FIDEL M. BAÑARES II, LILIA C. VALERIANO, EDGAR
M. BAÑARES, EMILIA GATCHALIAN and FIDEL
BESARINO, petitioners,
vs.
ELIZABETH BALISING, ROGER ALGER, MERLINDA
CAPARIC, EUSTAQUIO R. TEJONES, ANDREA SAYAM,
JENNY ISLA, WILMA ROGATERO, PABLITO ALEGRIA,
ROLANDO CANON, EDITHA ESTORES, EDMUNDO
DOROYA, TERESITA GUION, DANNY ANDARAYAN,
LOURDES CADAY, ROGELIO MANO, EVANGELINE
CABILTES AND PUBLIC PROSECUTOR OF RIZAL,
Antipolo, Rizal, respondents.
KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45 of
the Decision of the Regional Trial Court of Antipolo, Rizal,
Branch 71 dated August 26, 1997. 1
The antecedent facts are as follows:
Petitioners Fidel M. Bañares II, Lilia C. Valeriano, Edgar M.
Bañares, Emilia Gatchialian and Fidel Besarino were the
accused in sixteen criminal cases for estafa2 filed by the
private respondents. The cases were assigned to the
Municipal Trial Court of Antipolo, Rizal, Branch II.
After the petitioners were arraigned and entered their plea
of not guilty,3 they filed a Motion to Dismiss the
aforementioned cases on the ground that the filing of the
same was premature, in view of the failure of the parties to
undergo conciliation proceedings before the Lupong
Tagapamayapa of Barangay Dalig, Antipolo,
Rizal.4 Petitioners averred that since they lived in the same
barangay as private respondents, and the amount involved
in each of the cases did not exceed Two Hundred Pesos
(P200.00), the said cases were required under Section 412
in relation to Section 408 of the Local Government Code of
19915 and Section 18 of the 1991 Revised Rule on
Summary Procedure6 to be referred to the Lupong
Tagapamayapa or Pangkat ng Tagapagkasundo of the
barangay concerned for conciliation proceedings before
being filed in court.7
The municipal trial court issued an Order, dated July 17,
19958 denying petitioners' motion to dismiss on the ground
that they failed to seasonably invoke the non-referral of the
cases to the Lupong Tagapamayapa or Pangkat ng
Tagapagkasundo. It added that such failure to invoke non-
referral of the case to the Lupon amounted to a waiver by
petitioners of the right to use the said ground as basis for
dismissing the cases.9
Petitioners filed a motion for reconsideration of the
aforementioned Order, claiming that nowhere in the
Revised Rules of Court is it stated that the ground of
prematurity shall be deemed waived if not raised
seasonably in a motion to dismiss. 10
On November 13, 1995, the municipal trial court issued an
Order dismissing the sixteen criminal cases against
petitioners without prejudice, pursuant to Section 18 of the
1991 Revised Rule on Summary Procedure. 11
More than two months later, on February 26, 1996, private
respondents through counsel, filed a motion to revive the
abovementioned criminal cases against petitioners, stating
that the requirement of referral to the Lupon for
conciliation had already been complied with. 12 Attached to
the motion was a Certification, dated February 13, 1996
from the Lupong Tagapamayapa of Barangay Dalig,
Antipolo, Rizal 13 stating that the parties appeared before
said body regarding the charges of estafa filed by private
respondents against petitioners but they failed to reach an
amicable settlement with respect thereto. Petitioners filed a
comment and opposition to motion to revive claiming that
the Order of the municipal trial court, dated November 13,
1995 dismissing the cases had long become final and
executory; hence, private respondents should have re-filed
the cases instead of filing a motion to revive 14 .
On March 18, 1996, the municipal trial court issued an
Order 15 granting private respondents' motion to revive.
Petitioners filed a motion for reconsideration 16 of the
aforementioned Order which was denied by the municipal
trial court. 17
Petitioners thereafter filed with the Regional Trial Court of
Antipolo, Rizal, a petition for certiorari, injunction and
prohibition assailing the Order, dated March 18, 1996 of the
municipal trial court. They claimed that the said Order,
dated November 13, 1995 dismissing the criminal cases
against them had long become final and executory
considering that the prosecution did not file any motion for
reconsideration of said Order. 18 In response thereto,
private respondents filed their Comment, 19 arguing that the
motion to revive the said cases was in accordance with law,
particularly Section 18 of the Revised Rule on Summary
Procedure. 20
After the parties submitted additional pleadings to support
their respective contentions 21 , the regional trial court
rendered the assailed decision denying the petition
for certiorari, injunction and prohibition, stating as follows:
Evaluating the allegations contained in the petition and
respondents' comment thereto, the Court regrets that it
cannot agree with the petitioner (sic). As shown by the
records the 16 criminal cases were dismissed without
prejudice at the instance of the petitioners for failure of the
private respondent to comply with the mandatory
requirement of PD 1508. Since the dismissal of said cases
was without prejudice, the Court honestly believes that the
questioned order has not attained finality at all.
WHEREFORE, premises considered, the petition is hereby
DENIED for lack of merit.
SO ORDERED. 22
The regional trial court, likewise, denied petitioners' motion
for reconsideration 23 of the aforementioned decision for
lack of merit. 24
Hence, this petition.
Petitioners raise the following questions of law:
1. Whether or not an order dismissing a case or action
without prejudice may attain finality if not appealed within
the reglementary period, as in the present case;
2. Whether or not the action or case that had been
dismissed without prejudice may be revived by motion after
the order of dismissal had become final and executory; and
3. Whether or not the court that had originally acquired
jurisdiction of the case that was dismissed without
prejudice still have jurisdiction to act on the motion to
revive after the order of dismissal has become final and
executory. 25
Petitioners contend that an order dismissing a case or
action without prejudice may attain finality if not appealed
within the reglementary period. Hence, if no motion to
revive the case is filed within the reglementary fifteen-day
period within which to appeal or to file a motion for
reconsideration of the court's order, the order of dismissal
becomes final and the case may only be revived by the
filing of a new complaint or information. 26 Petitioners
further argue that after the order of dismissal of a case
attains finality, the court which issued the same loses
jurisdiction thereon and, thus, does not have the authority
to act on any motion of the parties with respect to said
case. 27
On the other hand, private respondents submit that cases
covered by the 1991 Revised Rule on Summary Procedure
such as the criminal cases against petitioners are not
covered by the rule regarding finality of decisions and
orders under the Revised Rules of Court. They insist that
cases dismissed without prejudice for non-compliance with
the requirement of conciliation before the Lupong
Tagapamayapa or Pangkat ng Tagapagkasundo of the
barangay concerned may be revived summarily by the filing
of a motion to revive regardless of the number of days
which has lapsed after the dismissal of the case. 28
Petitioners' contentions are meritorious.
A "final order" issued by a court has been defined as one
which disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving
nothing else to be done but to enforce by execution what
has been determined by the court. 29 As distinguished
therefrom, an "interlocutory order" is one which does not
dispose of a case completely, but leaves something more to
be adjudicated upon. 30
This Court has previously held that an order dismissing a
case without prejudice is a final order 31 if no motion for
reconsideration or appeal therefrom is timely filed.
In Olympia International vs. Court of Appeals, 32
we stated,
thus:
The dismissal without prejudice of a complaint does not
however mean that said dismissal order was any less final.
Such Order of dismissal is complete in all details, and
though without prejudice, nonetheless finally disposed of
the matter. It was not merely an interlocutory order but a
final disposition of the complaint.
The law grants an aggrieved party a period of fifteen (15)
days from his receipt of the court's decision or order
disposing of the action or proceeding to appeal or move to
reconsider the same. 33
After the lapse of the fifteen-day period, an order becomes
final and executory and is beyond the power or jurisdiction
of the court which rendered it to further amend or
revoke. 34 A final judgment or order cannot be modified in
any respect, even if the modification sought is for the
purpose of correcting an erroneous conclusion by the court
which rendered the same. 35
After the order of dismissal of a case without prejudice has
become final, and therefore becomes outside the court's
power to amend and modify, a party who wishes to
reinstate the case has no other remedy but to file a new
complaint.
This was explained in Ortigas & Company Limited
Partnership vs. Velasco, 36
where we ruled thus:
The dismissal of the case, and the lapse of the
reglementary period to reconsider or set aside the
dismissal, effectively operated to remove the case from the
Court's docket. Even assuming the dismissal to be without
prejudice, the case could no longer be reinstated or
"revived" by mere motion in the original docketed action,
but only by the filing of another complaint accompanied, of
course, by the payment of the corresponding filing fees
prescribed by law.
xxx xxx xxx
[S]ince theoretically every final disposition of an action
does not attain finality until after fifteen (15) days
therefrom, and consequently within that time the action still
remains within the control of the Court, the plaintiff may
move and set aside his notice of dismissal and revive his
action before that period lapses. But after dismissal has
become final after the lapse of the fifteen-day reglementary
period, the only way by which the action may be
resuscitated or "revived" is by the institution of a
subsequent action through the filing of another
complaint and the payment of fees prescribed by law. This
is so because upon attainment of finality of the dismissal
through the lapse of said reglementary period, the Court
loses jurisdiction and control over it and can no longer
make a disposition in respect thereof inconsistent with such
dismissal. 37 (Emphasis supplied.)
Contrary to private respondents' claim, the foregoing rule
applies not only to civil cases but to criminal cases as well.
In Jaca vs. Blanco, 38 the Court defined a provisional
dismissal of a criminal case as a dismissal without prejudice
to the reinstatement thereof before the order of dismissal
becomes final or to the subsequent filing of a new
information for the offense. 39
Thus, the regional trial court erred when it denied the
petition for certiorari, injunction and prohibition and ruled
that the order of the municipal trial court, dated November
13, 1995 dismissing without prejudice the criminal cases
against petitioners had not attained finality and hence,
could be reinstated by the mere filing of a motion to revive.
Equally erroneous is private respondents' contention that
the rules regarding finality of judgments under the Revised
Rules of Court 40 do not apply to cases covered by the 1991
Revised Rule on Summary Procedure. Private respondents
claim that Section 18 of the 1991 Revised Rule on
Summary Procedure allows the revival of cases which were
dismissed for failure to submit the same to conciliation at
the barangay level, as required under Section 412 in
relation to Section 408 of the Local Government Code. The
said provision states:
Referral to Lupon. — Cases requiring referral to the Lupon
for conciliation under the provisions of Presidential Decree
No. 1508 41 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. 42
There is nothing in the aforecited provision which supports
private respondents' view. Section 18 merely states that
when a case covered by the 1991 Revised Rule on
Summary Procedure is dismissed without prejudice for non-
referral of the issues to the Lupon, the same may be
revived only after the dispute subject of the dismissed case
is submitted to barangay conciliation as required under the
Local Government Code. There is no declaration to the
effect that said case may be revived by mere motion even
after the fifteen-day period within which to appeal or to file
a motion for reconsideration has lapsed.
Moreover, the 1991 Revised Rule on Summary Procedure
expressly provides that the Rules of Court applies
suppletorily to cases covered by the former:
Sec. 22. Applicability of the regular rules. — The regular
procedure prescribed in the Rules of Court shall apply to
the special cases herein provided for in a suppletory
capacity insofar as they are not inconsistent therewith. 43
A careful examination of Section 18 in relation to Section 22
of the 1991 Revised Rule of Summary Procedure and Rule
40, Section 2 in relation to Rule 13, Sections 9 and
10, 44 and Rule 36, Section 2 45 of the 1997 Rules of Civil
Procedure, as amended, leads to no other conclusion than
that the rules regarding finality of judgments also apply to
cases covered by the rules on summary procedure. Nothing
in Section 18 of the 1991 Revised Rule on Summary
Procedure conflicts with the prevailing rule that a judgment
or order which is not appealed or made subject of a motion
for reconsideration within the prescribed fifteen-day period
attains finality. 46 Hence, the principle expressed in
the maxim interpretare et concordare legibus est optimus
interpretandi, or that every statute must be so construed
and harmonized with other statutes as to form a uniform
system of jurisprudence 47 applies in interpreting both sets
of Rules.
The rationale behind the doctrine of finality of judgments
and orders, likewise, supports our conclusion that said
doctrine applies to cases covered by the 1991 Revised Rule
on Summary Procedure:
The doctrine of finality of judgments is grounded on
fundamental considerations of public policy and sound
practice that at the risk of occasional error, the judgments
of the courts must become final at some definite date set
by law. 48
It is but logical to infer that the foregoing principle also
applies to cases subject to summary procedure especially
since the objective of the Rule governing the same is
precisely to settle these cases expeditiously. 49 To construe
Section 18 thereof as allowing the revival of dismissed
cases by mere motion even after the lapse of the period for
appealing the same would prevent the courts from settling
justiciable controversies with finality, 50 thereby
undermining the stability of our judicial system.
The Court also finds it necessary to correct the mistaken
impression of petitioners and the municipal trial court that
the non-referral of a case for barangay conciliation as
required under the Local Government Code of 1991 51 may
be raised in a motion to dismiss even after the accused has
been arraigned.1âwphi1
It is well-settled that the non-referral of a case for
barangay conciliation when so required under the law 52 is
not jurisdictional in nature 53 and may therefore be deemed
waived if not raised seasonably in a motion to
dismiss. 54The Court notes that although petitioners could
have invoked the ground of prematurity of the causes of
action against them due to the failure to submit the dispute
to Lupon prior to the filing of the cases as soon as they
received the complaints against them, petitioners raised the
said ground only after their arraignment.
However, while the trial court committed an error in
dismissing the criminal cases against petitioners on the
ground that the same were not referred to the Lupon prior
to the filing thereof in court although said ground was
raised by them belatedly, the said order may no longer be
revoked at present considering that the same had already
become final and executory, and as earlier stated, may no
longer be annulled 55 by the Municipal Trial Court, nor by
the Regional Trial Court or this Court. 56
WHEREFORE, the petition is hereby GRANTED. The
Decision of the Regional Trial Court of Antipolo, Rizal,
Branch II dated August 26, 1997 and its Order dated
January 29, 1998 in SCA Case No. 96-4092 are hereby SET
ASIDE and Criminal Cases Nos. 94-0829, 94-0830, 94-0831,
94-0832, 94-0833, 94-0836, 94-0838, 94-0839, 94-0841,
94-0843, 94-0847, 94-0848, 94-0850, 94-0854 and 94-
0058 of the Municipal Trial Court of Antipolo are ordered
DISMISSED, without prejudice, pursuant to Sec. 18 of the
1991 Revised Rule on Summary Procedure.
SO ORDERED.
G.R. No. 167261 March 2, 2007
ROSARIA LUPITAN PANG-ET, Petitioner,
vs.
CATHERINE MANACNES-DAO-AS, Heir of
LEONCIO MANACNES and FLORENTINA
MANACNES,Respondent.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under
Rule 45 of the Rules of Civil Procedure, assailing the
Decision1 of the Court of Appeals in CA-G.R. SP No.
78019, dated 9 February 2005, which reversed and set
aside the Judgment2 of the Regional Trial Court (RTC),
Branch 36, Bontoc, Mountain Province, and reinstated
the Resolution3 of the Municipal Circuit Trial Court
(MCTC) of Besao-Sagada, Mountain Province dismissing
herein petitioner’s action for Enforcement of Arbitration
Award and Damages.
The instant petition draws its origin from an Action4 for
recovery of possession of real property situated in Sitio
Abatan, Barrio Dagdag, Sagada filed by herein petitioner
before the MCTC of Besao-Sagada, Mountain Province
on 9 November 1994, against the spouses Leoncio and
Florentina Manacnes, the predecessors-in-interest of
herein respondent.
On 23 February 1995, during the course of the pre-trial,
the parties, through their respective counsels, agreed to
refer the matter to the Barangay Lupon (Lupon) of
Dagdag, Sagada for arbitration in accordance with the
provisions of the Katarungang Pambarangay
Law.5 Consequently, the proceedings before the MCTC
were suspended, and the case was remanded to the
Lupon for resolution.6
Thereafter, the Lupon issued a Certification to File Action
on 26 February 1995 due to the refusal of the Manacnes
spouses to enter into an Agreement for 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.
An Order was issued by the MCTC on 7 April 1995, once
more remanding the matter for conciliation by the Lupon
and ordering the Lupon to render an Arbitration Award
thereon. According to the MCTC, based on the records
of the case, an Agreement for Arbitration was executed
by the parties concerned; 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.
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 to the
spouses Manacnes of the amount of ₱8,000.00 for the
improvements on the land. Aggrieved, Leoncio’s
widow,7 Florentina Manacnes, repudiated the Arbitration
Award but her repudiation was rejected by the Lupon.
Thereafter, the MCTC was furnished with copies of the
Arbitration Award.
On 1 June 1995, herein petitioner filed with the Lupon a
Motion for Execution of the Arbitration Award. On the
other hand, Florentina Manacnes filed a Motion with the
MCTC for the resumption of the proceedings in the
original case for recovery of possession and praying that
the MCTC consider her repudiation of the Arbitration
Award issued by the Lupon.
Subsequently, the MCTC heard the Motion of Florentina
Manacnes notwithstanding the latter’s failure to appear
before the 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 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 incumbent Punong
Barangay of Dagdag issued a Notice of Execution of the
Award.
Said Notice of Execution was never implemented. Thus,
on 16 October 2001, herein petitioner Pang-et filed with
the MCTC an action for enforcement of the Arbitration
Award which was sought to be dismissed by the heir of
the Manacnes spouses.8 The heir of the Manacnes
spouses argues that the Agreement for Arbitration and
the Arbitration Award are void, the Agreement for
Arbitration not having been personally signed by the
spouses Manacnes, and the Arbitration Award having
been written in English – a language not understood by
the parties.
In its Resolution dated 20 August 2002, the MCTC
dismissed the Petition for Enforcement of Arbitration
Award in this wise:
x x x Are defendants estopped from questioning the
proceedings before the Lupon Tagapamayapa
concerned?
The defendants having put in issue the validity of the
proceedings before the lupon concerned and the
products thereof, they are not estopped. It is a
hornbook rule that a null and void act could always be
questioned at any time as the action or defense based
upon it is imprescriptible.
The second issue: Is the agreement to Arbitrate null and
void? Let us peruse the pertinent law dealing on this
matter which is Section 413 of the Local Government
Code of 1991 (RA 7160), to wit:
"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 the
pangkat. 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-et’s 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
Appellee contends 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
King’s 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-et’s 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-et’s right
to the disputed property. While Pang-et offered to pay
₱8,000.00 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 the
Punong Barangay or the Pangkat Chairman should attest
that parties freely and voluntarily agreed to the
settlement arrived at. But how can this be possible when
the minutes of the two hearings show that the spouses
Manacnes neither freely nor voluntarily agreed to
anything.
While RA 7160 and the Katarungan Pambarangay rules
provide for a period to repudiate the Arbitration Award,
the same is neither applicable nor necessary since the
Agreement to Arbitrate or the Arbitration Award were
never freely nor voluntarily entered into by one of the
parties to the dispute. In short, there is no agreement
validly concluded that needs to be repudiated.
With all the foregoing, estoppel may not be applied
against petitioners for an action or defense against a null
and void act does not prescribe. With this, We cannot
but agree with the MCTC that the very agreement to
arbitrate is null and void. Similarly, the arbitration award
which was but the off shoot of the agreement is also
void.
WHEREFORE, the RTC judgment of 2 June 2003 is
REVERSED and SET ASIDE, the MCTC Resolution
DISMISSING the Civil Case No. 118 for enforcement of
Arbitration Award is REINSTATED.11
Vehemently disagreeing with the Decision of the Court
of Appeals, petitioner Pang-et filed the instant petition.
Petitioner maintains that the appellate court overlooked
material facts that resulted in reversible errors in the
assailed Decision. According to petitioner, the Court of
Appeals overlooked the fact that the original parties, as
represented by their respective counsels in Civil Case
No. 83, mutually agreed to submit the case for
arbitration by the Lupon ng Tagapamayapa of Barangay
Dagdag. Petitioner insists that the parties must be
bound by the initial 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 clients. Furthermore, petitioner
maintains that if indeed the spouses Manacnes did not
want to enter into an amicable settlement, then they
should have raised their opposition at the first instance,
which was at the pre-trial on Civil Case No. 83 when the
MCTC ordered that the case be remanded to the Lupon
ng Tagapamayapa for arbitration.
We do not agree with the petitioner.
First and foremost, in order to resolve the case before
us, it is pivotal to stress that, during the initial hearing
before the Lupon ng Tagapamayapa, the spouses
Manacnes declined to sign the Agreement for Arbitration
and were adamant that the proceedings before the
MCTC in Civil Case No. 83 must continue. As reflected in
the Minutes12 of the Arbitration Hearing held on 26
February 1995, the legality of the signature of Catherine
Manacnes, daughter of the Manacnes spouses, who
signed the Agreement for Arbitration on behalf of her
parents, was assailed on the ground that it should be
the spouses Manacnes themselves who should have
signed such agreement. To resolve the issue, the
Pangkat Chairman then asked the spouses Manacnes
that if they wanted the arbitration proceedings to
continue, they must signify their intention in the
Agreement for Arbitration form. However, as stated
earlier, the Manacnes spouses did not want to sign such
agreement and instead insisted that the case go to
court.
Consequently, the Lupon issued a Certification to File
Action on 26 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 parties before the Punong Barangay but
conciliation failed and 2) that the Pangkat ng
Tagapagkasundo was constituted but the personal
confrontation before the Pangkat failed likewise because
respondents do not want to submit this case for
arbitration and insist that said case will go to
court.13 Nevertheless, upon receipt of said certification
and the records of the case, the MCTC ordered that the
case be remanded to the Lupon ng Tagapamayapa and
for the latter to render an arbitration award, explaining
that:
Going over the documents submitted to the court by the
office of the Lupon Tagapamayapa of Dagdag, Sagada,
Mountain Province, the court observed that an
"Agreement for Arbitration" was executed by the parties
anent the above-entitled case. However, said Lupon did
not make any arbitration award as mandated by the
Katarungang Pambarangay Law but instead made a
finding that the case may now be brought to the court.
This is violative of the KP Law, which cannot be
sanctioned by the court.14
At this juncture, it must be stressed that the object of
the Katarungang Pambarangay Law is the amicable
settlement of disputes through conciliation proceedings
voluntarily and freely entered into by the
parties.15 Through this mechanism, the parties are
encouraged to settle their disputes without enduring the
rigors of court litigation. Nonetheless, the disputing
parties are not compelled to settle their controversy
during the barangay proceedings before the Lupon or
the Pangkat, as they are free to instead find recourse in
the courts16 in the event that no true compromise is
reached.
The key in achieving the objectives of an effective
amicable settlement under the Katarungang
Pambarangay Law is the free and voluntary agreement
of the parties to submit the dispute for adjudication
either by the Lupon or the Pangkat, whose award or
decision shall be binding upon them with the force and
effect of a final judgment of a court.17 Absent this
voluntary submission by the parties to submit their
dispute to arbitration under the Katarungang
Pambarangay Law, there cannot be a binding settlement
arrived at 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 proceedings continue, despite the clear
showing that the spouses Manacnes refused to submit
the controversy for arbitration.
It would seem from the Order of the MCTC, which again
remanded the case for arbitration to the Lupon ng
Tagapamayapa, that it is compulsory on the part of the
parties to submit the case for arbitration until an
arbitration award is rendered by the Lupon. This, to our
minds, is contrary to the very nature of the proceedings
under the Katarungang Pambarangay Law which
espouses the principle of voluntary acquiescence of the
disputing parties to amicable settlement.
What is compulsory under the Katarungang
Pambarangay Law is that there be a confrontation
between the parties before the Lupon Chairman or the
Pangkat and that a certification be issued that no
conciliation or settlement has been reached, as attested
to by the Lupon or Pangkat Chairman, before a case
falling within the authority of the Lupon may be
instituted in court or any other government office for
adjudication. 18 In other words, the only necessary pre-
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 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.
that upon verification by the Pangkat 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.
WHEREFORE, premises considered, the instant petition
is hereby DENIED. The Decision of the Court of Appeals
in CA-G.R. SP No. 78019 is hereby AFFIRMED. The
Municipal Circuit Trial Court of Besao-Sagada, Mountain
Province, is hereby ORDERED to proceed with the trial of
Civil Case No. 83 for Recovery of Possession of Real
Property, and the immediate resolution of the same with
deliberate dispatch. No costs.
SO ORDERED.

Petitioner’s 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 Manacnes spouses 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 the Lupon 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 spouses
Manacnes to submit the case for arbitration since such
arbitration award will not bind the spouses. As reflected
in Section 413 of the Revised Katarungang Pambarangay
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
G.R. No. 162084 June 28, 2005
APRIL MARTINEZ, FRITZ DANIEL MARTINEZ and
MARIA OLIVIA MARTINEZ, petitioners,
vs.
RODOLFO G. MARTINEZ, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari of the
Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
59420 setting aside and reversing the decision of the
Regional Trial Court (RTC) of Manila, Branch 30, in Civil
Case No. 00-96962 affirming, on appeal, the decision of
the Metropolitan Trial Court (MTC) of Manila in Civil Case
No. 164761 (CV) for ejectment.
The Antecedents
The spouses Daniel P. Martinez, Sr. and Natividad de
Guzman-Martinez were the owners of a parcel of land
identified as Lot 18-B-2 covered by Transfer Certificate
of Title (TCT) No. 54334, as well as the house
constructed thereon.2 On March 6, 1993, Daniel, Sr.
executed a Last Will and Testament 3 directing the
subdivision of the property into three lots, namely, Lots
18-B-2-A, 18-B-2-B and 18-B-2-C. He then bequeathed
the three lots to each of his sons, namely, Rodolfo,
Manolo and Daniel, Jr.; Manolo was designated as the
administrator of the estate.
In May 1995, Daniel, Sr. suffered a stroke which
resulted in the paralysis of the right side of his body.
Natividad died on October 26, 1996.4 Daniel, Sr. passed
away on October 6, 1997.5
On September 16, 1998, Rodolfo found a deed of sale
purportedly signed by his father on September 15, 1996,
where the latter appears to have sold Lot 18-B-2 to
Manolo and his wife Lucila.6 He also discovered that TCT
No. 237936 was issued to the vendees based on the said
deed of sale.7
Rodolfo filed a complaint8 for annulment of deed of sale
and cancellation of TCT No. 237936 against his brother
Manolo and his sister-in-law Lucila before the RTC. He
also filed a criminal complaint for estafa through
falsification of a public document in the Office of the City
Prosecutor against Manolo, which was elevated to the
Department of Justice.9
On motion of the defendants, the RTC issued an
Order10 on March 29, 1999, dismissing the complaint for
annulment of deed of sale on the ground that the trial
court had no jurisdiction over the action since there was
no allegation in the complaint that the last will of Daniel
Martinez, Sr. had been admitted to probate. Rodolfo
appealed the order to the CA.11
On October 4, 1999, Rodolfo filed a Petition with the
RTC of Manila for the probate of the last will of the
deceased Daniel Martinez, Sr.12
In the meantime, the spouses Manolo and Lucila
Martinez wrote Rodolfo, demanding that he vacate the
property. Rodolfo ignored the letter and refused to do
so. This prompted the said spouses to file a complaint
for unlawful detainer against Rodolfo in the MTC of
Manila. They alleged that they were the owners of the
property covered by TCT No. 237936, and that pursuant
to Presidential Decree (P.D.) No. 1508, the matter was
referred to the barangayfor conciliation and settlement,
but none was reached. They appended the certification
to file action executed by the barangay chairman to the
complaint.
In his Answer13 to the complaint filed on October 11,
1999, Rodolfo alleged, inter alia, that the complaint
failed to state a condition precedent, namely, that
earnest efforts for an amicable settlement of the matter
between the parties had been exerted, but that none
was reached. He also pointed out that the dispute had
not been referred to the barangay before the complaint
was filed.
On October 20, 1999, the spouses Martinez filed an
Amended Complaint in which they alleged that earnest
efforts toward a settlement had been made, but that the
same proved futile. Rodolfo filed his opposition thereto,
on the ground that there was no motion for the
admission of the amended complaint. The trial court
failed to act on the matter.
The spouses Martinez alleged in their position paper that
earnest efforts toward a compromise had been made
and/or exerted by them, but that the same proved
futile.14 No amicable settlement was, likewise, reached
by the parties during the preliminary conference because
of irreconcilable differences. The MTC was, thus,
impelled to terminate the conference. 15
On February 21, 2000, the trial court rendered judgment
in favor of the spouses Martinez. The fallo of the
decision reads:
WHEREFORE, premises considered, judgment is
rendered in favor of plaintiff. The defendant, including
any person claiming right under him, is ordered:
1) To vacate the subject premises;
2) To pay plaintiff the sum of ₱10,000.00 a month
starting July 17, 1999, the date of last demand until he
vacates the same;
3) To pay the sum of ₱10,000.00 as and for attorney’s
fees; and
4) Costs of suit.
SO ORDERED.16
The trial court declared that the spouses Martinez had
substantially complied with Article 151 of the Family
Code of the Philippines17 based on the allegations of the
complaint and the appended certification to file action
issued by the barangay captain.
Rodolfo appealed the decision to the RTC. On May 31,
2000, the RTC rendered judgment affirming the
appealed decision. He then filed a petition for review of
the decision with the CA, alleging that:
1. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND WITHOUT MERIT THE
DEFENSE OF PETITIONER THAT THERE IS NO
ALLEGATION IN THE COMPLAINT THAT PETITIONER
HAS UNLAWFULLY WITHHELD POSSESSION OF THE
PROPERTY FROM RESPONDENTS – A REQUIREMENT IN
[AN] UNLAWFUL DETAINER SUIT.
2. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND THAT PETITIONER’S
POSSESSION OF THE PROPERTY IS BY MERE
TOLERANCE OF RESPONDENTS.
3. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND THAT THE RESPONDENTS
HAVE A CAUSE OF ACTION.
4. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH DID NOT RESOLVE THE SIXTH ISSUE,
TO WIT, "Whether or not this Court has jurisdiction over
this case considering that the allegations in the
complaint makes out a case of accion publiciana."
5. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH HAS NO JURISDICTION OVER THE
CASE.
6. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND THAT THE MANDATORY
REQUIREMENT OF CONCILIATION HAS BEEN COMPLIED
WITH.
7. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND THAT THERE WAS
SUBSTANTIAL COMPLIANCE WITH THE KATARUNGANG
PAMBARANGAY LAW.
8. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH FOUND THAT THE PENDENCY OF
CIVIL CASE NO. 98-91147 AND SPECIAL PROCEEDINGS
NO. 99-95281, INVOLVING THE PETITIONER AND
RESPONDENTS AND INVOLVING THE SAME PROPERTY
DID NOT DIVEST THE MTC OF AUTHORITY TO DECIDE
THE CASE.
9. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC WHICH GRANTED THE RELIEF PRAYED FOR
BY THE RESPONDENTS.
10. THE RTC ERRED IN AFFIRMING THE DECISION OF
THE MTC.18
On November 27, 2003, the CA rendered judgment
granting the petition and reversing the decision of the
RTC. The appellate court ruled that the spouses Martinez
had failed to comply with Article 151 of the Family code.
The CA also held that the defect in their complaint
before the MTC was not cured by the filing of an
amended complaint because the latter pleading was not
admitted by the trial court.
Upon the denial of their motion for reconsideration of
the said decision, the spouses Martinez filed the present
petition for review on certiorari, in which they raise the
following issues:
I.
WHETHER OR NOT THE CERTIFICATION TO FILE
ACTION AND THE ALLEGATIONS IN THE COMPLAINT
THAT THE CASE PASSED [THROUGH] THE BARANGAY
BUT NO SETTLEMENT WAS REACHED, ARE SUFFICIENT
COMPLIANCE TO PROVE THAT, INDEED, EARNEST
EFFORTS WERE, IN FACT, MADE BUT THE SAME HAVE
FAILED PRIOR TO THE FILING OF THE COMPLAINT.
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY
AND SERIOUSLY ERRED IN FINDING THAT THERE WAS
NON-COMPLIANCE WITH THE REQUIREMENT
PROVIDED FOR UNDER ARTICLE 151 OF THE FAMILY
CODE, CONSIDERING THAT ONE OF THE PARTIES TO A
SUIT IN THIS CASE IS NOT A MEMBER OF THE SAME
FAMILY.19
The petitioners alleged that they substantially complied
with Article 151 of the Family Code, since they alleged
the following in their original complaint:
2. In compliance with P.D. 1508, otherwise known as
the "Katarungang Pambarangay," this case passed
[through] the Barangay and no settlement was forged
between plaintiffs and defendant as a result of which
Certification to File Action was issued by Barangay 97,
Zone 8, District I, Tondo, Manila. xxx" (Underscoring
supplied)20
Further, the petitioners averred, they alleged in their
position paper that they had exerted earnest efforts
towards a compromise which proved futile. They also
point out that the MTC resolved to terminate the
preliminary conference due to irreconcilable difference
between the parties. Besides, even before they filed
their original complaint, animosity already existed
between them and the respondent due to the latter’s
filing of civil and criminal cases against them; hence, the
objective of an amicable settlement could not have been
attained. Moreover, under Article 150 of the Family
Code, petitioner Lucila Martinez had no familial relations
with the respondent, being a mere sister-in-law. She
was a stranger to the respondent; hence, there was no
need for the petitioners21 to comply with Article 151 of
the Family Code.
The petition is meritorious.
Article 151 of the Family Code provides:
Art. 151. 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.
The phrase "members of the family" must be construed
in relation to Article 150 of the Family Code, to wit:
Art. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or
half-blood.
Article 151 of the Family code must be construed strictly,
it being an exception to the general rule. Hence, a
sister-in-law or brother-in-law is not included in the
enumeration.22
As pointed out by the Code Commission, it is difficult to
imagine a sadder and more tragic spectacle than a
litigation between members of the same family. It is
necessary that every effort should be made toward a
compromise before a litigation is allowed to breed hate
and passion in the family and it is known that a lawsuit
between close relatives generates deeper bitterness
than between strangers.23
Thus, a party’s failure to comply with Article 151 of the
Family Code before filing a complaint against a family
member would render such complaint premature.
(3) Among other ascendants and their descendants;
(4) Among brothers and sisters."
Mrs. Gayon is plaintiff’s sister-in-law, whereas her
children are his nephews and/or nieces. Inasmuch as
none of them is included in the enumeration contained
in said Art. 217 – which should be construed strictly, it
being an exception to the general rule – and Silvestre
Gayon must necessarily be excluded as party in the case
at bar, it follows that the same does not come within the
purview of Art. 222, and plaintiff’s failure to seek a
compromise before filing the complaint does not bar the
same.24
Second. The petitioners were able to comply with the
requirements of Article 151 of the Family Code because
they alleged in their complaint that they had initiated a
proceeding against the respondent for unlawful detainer
in the Katarungang Pambarangay, in compliance with
P.D. No. 1508; and that, after due proceedings, no
amicable settlement was arrived at, resulting in
the barangay chairman’s issuance of a certificate to file
action.25 The Court rules that such allegation in the
complaint, as well as the certification to file action by
the barangay chairman, is sufficient compliance with
article 151 of the Family Code. It bears stressing that
under Section 412(a) of Republic Act No. 7160, no
complaint involving any matter within the authority of
the Lupon shall be instituted or filed directly in court for
adjudication unless there has been a confrontation
between the parties and no settlement was reached.26

In this case, the decision of the CA that the petitioners
were mandated to comply with Article 151 of the Family
code and that they failed to do so is erroneous.
First. Petitioner Lucila Martinez, the respondent’s sister-
in-law, was one of the plaintiffs in the MTC. The
petitioner is not a member of the same family as that of
her deceased husband and the respondent:
As regards plaintiff’s failure to seek a compromise, as an
alleged obstacle to the present case, Art. 222 of our Civil
Code provides:
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The Decision of the Court of Appeals in CA-
G.R. SP No. 59420 is REVERSED AND SET ASIDE. The
Decision of the Metropolitan Trial Court of Manila, as
affirmed on appeal by the Regional Trial Court of Manila,
Branch 30, in Civil Case No. 164761(CV) is REINSTATED.
No costs.
SO ORDERED.

"No suit shall be filed or maintained between members

of the same family unless it should appear that earnest
efforts toward a compromise have been made, but that
the same have failed, subject to the limitations in Article
2035."

It is noteworthy that the impediment arising from this

provision applies to suits "filed or maintained
between members of the same family." This phrase,
"members of the same family," should, however, be
construed in the light of Art. 217 of the same Code,
pursuant to which:

"Family relations shall include those:

(1) Between husband and wife;

(2) Between parent and child;

G.R. No. 155713 May 5, 2006
MILAGROS G. LUMBUAN,* Petitioner,
vs.
ALFREDO A. RONQUILLO, Respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse
and set aside the Decision1 dated April 12, 2002, of the
Court of Appeals in CA-G.R. SP No. 52436 and its
Resolution2 dated October 14, 2002, denying the
petitioner’s motion for reconsideration.
The salient facts, as found by the Court of Appeals, 3 are
as follows:
Petitioner Milagros G. Lumbuan is the registered owner
of Lot 19-A, Block 2844 with Transfer Certificate of Title
No. 193264, located in Gagalangin, Tondo, Manila. On
February 20, 1995, she leased it to respondent Alfredo
A. Ronquillo for a period of three years with a monthly
rental of P5,000. The parties also agreed that there will
be a 10% annual increase in rent for the succeeding two
years, i.e., 1996 and 1997,4 and the leased premises will
be used exclusively for the respondent’s fastfood
business, unless any other use is given, with the
petitioner’s prior written consent.5
While the respondent at the start operated a fastfood
business, he later used the premises as residence
without the petitioner’s prior written consent. He also
failed to pay the 10% annual increase in rent
of P500/month starting 1996 and P1,000/month in 1997
to the present. Despite repeated verbal and written
demands, the respondent refused to pay the arrears and
vacate the leased premises.
On November 15, 1997, the petitioner referred the
matter to the Barangay Chairman’s office but the parties
failed to arrive at a settlement. The Barangay Chairman
then issued a Certificate to File Action.6
On December 8, 1997, the petitioner filed against the
respondent an action for Unlawful Detainer, docketed as
Civil Case No. 157922-CV. It was raffled to the
Metropolitan Trial Court (MeTC) of Manila, Branch 6. On
December 15, 1997, the respondent received the
summons and copy of the complaint. On December 24,
1997, he filed his Answer by mail. Before the MeTC
could receive the respondent’s Answer, the petitioner
filed a Motion for Summary Judgment dated January 7,
1998.7 Acting upon this motion, the MeTC rendered a
decision8 on January 15, 1998, ordering the respondent
to vacate and surrender possession of the leased
premises; to pay the petitioner the amount of P46,000
as unpaid rentals with legal interest until fully paid; and
to pay the petitioner P5,000 as attorney’s fees plus cost
of the suit.
The respondent then filed a Manifestation calling the
attention of the MeTC to the fact that his Answer was
filed on time and praying that the decision be set aside.
The MeTC denied the prayer, ruling that the
Manifestation was in the nature of a motion for
reconsideration which is a prohibited pleading under the
Rules on Summary Procedure.
Upon appeal, the case was raffled to the Regional Trial
Court (RTC) of Manila, Branch 38, and docketed as Civil
Case No. 98-87311. On July 8, 1998, the RTC rendered
its decision9 setting aside the MeTC decision. The RTC
directed the parties to go back to the Lupon Chairman or
Punong Barangay for further proceedings and to comply
strictly with the condition that should the parties fail to
reach an amicable settlement, the entire records of the
case will be remanded to MeTC of Manila, Branch 6, for
it to decide the case anew.
The respondent sought reconsideration but the RTC
denied the motion in an Order dated March 15, 1999.
Thus, he sought relief from the Court of Appeals through
a petition for review.10 On April 12, 2002, the appellate
court promulgated a decision, reversing the decision of
the RTC and ordering the dismissal of the ejectment
case. The appellate court ruled that when a complaint is
prematurely instituted, as when the mandatory
mediation and conciliation in the barangay level had not
been complied with, the court should dismiss the case
and not just remand the records to the court of origin so
that the parties may go through the prerequisite
proceedings.
The petitioner filed a motion for reconsideration, which
was denied by the appellate court. Hence, this present
petition.
In the meantime, while this petition was pending before
this Court, the parties went through barangay
conciliation proceedings as directed by the RTC of
Manila, Branch 38. Again, they failed to arrive at an
amicable settlement prompting the RTC to issue an
Order11 remanding the case to the MeTC of Manila,
Branch 6, where the proceedings took place anew. On
April 25, 2000, the MeTC rendered a second decision,
the dispositive portion of which reads:
WHEREFORE, premises considered, judgment on the
merits is hereby rendered for the plaintiff as follows:
1. Ordering defendant and all persons claiming right of
possession under him to voluntarily vacate the property
located at Lot 19-A Block 2844, Gagalangin, Tondo,
Manila and surrender possession thereof to the plaintiff;
2. Ordering defendant to pay to plaintiff the amount of
P387,512.00 as actual damages in the form of unpaid
rentals and its agreed increase up to January 2000 and
to pay the amount of P6,500.00 a month thereafter until
the same is actually vacated;
3. Ordering the defendant to pay to plaintiff the sum of
P10,000.00 as and for attorney’s fees plus cost of the
suit.
SO ORDERED.12
The respondent appealed the foregoing compliance with the precondition for filing the case in
decision.1avvphil.net The case was raffled to RTC of court.17 This is true notwithstanding the mandate of
Manila, Branch 22, and docketed as Civil Case No. 00- Section 410(b) of the same law that the Barangay
98173. The RTC ruled in favor of the petitioner and Chairman shall constitute a pangkat if he fails in his
dismissed the appeal. The respondent elevated the case mediation efforts. Section 410(b) should be construed
to the Court of Appeals, where it is now pending. together with Section 412, as well as the circumstances
obtaining in and peculiar to the case. On this score, it is
The sole issue for our resolution is: significant that the Barangay Chairman
or Punong Barangay is herself the Chairman of the
[WHETHER] THE COURT OF APPEALS GRAVELY ERRED
Lupon under the Local Government Code.18
IN DISMISSING THE COMPLAINT FOR THE ALLEGED
FAILURE OF THE PARTIES TO COMPLY WITH THE Finally, this Court is aware that the resolution of the
MANDATORY MEDIATION AND CONCILIATION substantial issues in this case is pending with the Court
PROCEEDINGS IN THE BARANGAY LEVEL.13 of Appeals. While ordinarily, we would have determined
the validity of the parties’ substantial claims since to
With the parties’ subsequent meeting with the Lupon
await the appellate court’s decision will only frustrate
Chairman or Punong Barangay for further conciliation
speedy justice and, in any event, would be a futile
proceedings, the procedural defect was cured.
exercise, as in all probability the case would end up with
Nevertheless, if only to clear any lingering doubt why
this Court, we find that we cannot do so in the instant
the Court of Appeals erred in dismissing the complaint,
case.
we shall delve on the issue.
It must be underscored that supervening events have
The petitioner alleges that the parties have gone
taken place before the lower courts where the parties
through barangay conciliation proceedings to settle their
have been adequately heard, and all the issues have
dispute as shown by the Certificate to File Action issued
been ventilated. Since the records of those proceedings
by the Lupon/Pangkat Secretary and attested by the
are with the Court of Appeals, it is in a better position to
Lupon/Pangkat Chairman. The respondent, on the other
fully adjudicate the rights of the parties. To rely on the
hand, contends that whether there was defective
records before this Court would prevent us from
compliance or no compliance at all with the required
rendering a sound judgment in this case. Thus, we are
conciliation, the case should have been dismissed.
left with no alternative but to leave the matter of ruling
The primordial objective of the Katarungang on the merits to the appellate court.
Pambarangay Rules,14 is to reduce the number of court
WHEREFORE, the petition is GRANTED. The decision
litigations and prevent the deterioration of the quality of
and resolution of the Court of Appeals in CA-G.R. SP No.
justice which has been brought about by the
52436 are REVERSED and SET ASIDE, and the
indiscriminate filing of cases in the courts. To attain this
decision of the Regional Trial Court of Manila, Branch 38,
objective, Section 412(a) of Republic Act No.
in Civil Case No. 98-87311 is AFFIRMED.
716015 requires the parties to undergo a conciliation
process before the Lupon Chairman or the Pangkat as a The Court of Appeals is ordered to proceed with the
precondition to filing a complaint in court,16thus: appeal in CA – G.R. No. 73453 and decide the case with
dispatch.
SECTION 412. Conciliation. – (a) Pre-condition to Filing
of Complaint in Court. – No complaint, petition, action, SO ORDERED.
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 secretary or pangkat secretary as attested
to by the lupon or pangkat chairman….

Here, the Lupon/Pangkat Chairman and Lupon/Pangkat

Secretary signed the Certificate to File Action stating
that no settlement was reached by the parties. While
admittedly no pangkat was constituted, it was not
denied that the parties met at the office of the Barangay
Chairman for possible settlement. The efforts of the
Barangay Chairman, however, proved futile as no
agreement was reached. Although no pangkat was
formed, in our mind, there was substantial compliance
with the law. It is noteworthy that under the
aforequoted provision, the confrontation before
the Lupon Chairman or the pangkat is sufficient
A.M. No. MTJ-00-1308 December 16, 2002
BONIFACIO LAW OFFICE
Represented by Atty. RICARDO M. SALOMON
JR. complainant,
vs.
Judge REYNALDO B. BELLOSILLO,
Metropolitan Trial Court, Branch 34, Quezon
City, respondent.
DECISION
PANGANIBAN, J.:
Under the Rules of Court, delay in the rendition of
judgments is administratively sanctionable with
suspension or fine. When judges cannot for good reason
comply with legal deadlines for rendering orders and
decisions, they should file with this Court a timely
request for extension, if they want to avoid
administrative penalties.
The Case and the Facts
In a letter-complaint dated August 28, 1997, Atty.
Ricardo M. Salomon Jr. of the Bonifacio Law Office
charged then acting Judge Reynaldo B. Bellosillo of the
Metropolitan Trial Court of Quezon City, Branch 34, with
ignorance of the law, grave abuse of discretion, and
obvious partiality. The Office of the Court Administrator
(OCA) summarized the factual antecedents as follows:
"1. VERIFIED LETTER-COMPLAINT of Atty. Ricardo M.
Salomon of the Bonifacio Law Office charging Judge
Reynaldo B. Bellosillo, MeTC, Branch 34, Quezon City
with Ignorance of the Law, Grave Abuse of Discretion
and Partiality in connection with Civil Case No. 14913 for
ejectment entitled ‘Ricardo M. Salomon, Jr. vs. Spouses
Severino Fulgencio.’
"Complainant assails the Order dated April 2, 1996
referring the said ejectment case back to the barangay
for conciliation proceedings despite the fact that it was
alleged in the verified complaint, that the matter had
already been referred to the barangay and that a copy
of the Certification to File Motion was attached [to] the
verified complaint as ANNEX E thereof. Bewildered with
such Order, he tried to talk with respondent judge but
was prevented to do so because of the strict and
extremely tight ‘cordon sanitaire’ of the latter. He then
inquired from the respondent’s branch clerk of court the
reason behind such order and he was advised that
perhaps he should submit the minutes of the hearings
held in the barangay. Following said advice, he filed a
compliance with respondent’s court attaching therewith
a copy of his complaint filed before the barangay and
the minutes of the proceedings held thereat.
"After the filing of said compliance, no action was taken
by the court despite the fact that the case falls under
the Rule on Summary Procedure and respondent judge
has still to come up with a determination as to whether
summons should be issued or not. He then inquired
personally with the court about the status of the case
and he was told that no action could be taken unless the
Order of April 2, 1996 had been complied with.
Dismayed by the Court’s insistence of referring the case
to the barangay though it had already gone through all
the requisite proceedings thereat, he decided not to
pursue the case and filed a notice to withdraw complaint
dated August 20, 1996. Said withdrawal however was
denied by respondent on the basis of the action already
taken thereon as contained in the questioned Order
dated April 2, 1996. He then filed a Notice of Dismissal
but the same was still unacted upon by respondent.
"It was only after a year from the time the complaint
was filed that respondent ordered that summons be
served on defendants. When defendants failed to file an
Answer, he (complainant) filed a Motion to Render
Judgment in accordance with the provisions of Sec.5 of
the Rule on Summary Procedure. However, instead of
rendering judgment, respondent merely required
defendants to comment on the motion to render
judgment. After defendants filed their comment,
respondent still did not act on the said motion.
"The inordinate delay of respondent on acting upon said
case has caused him so much suffering as his family is
forced to rent a house to live in at a monthly rental rate
of P19,000.00.
"2. ANSWER of respondent judge denying the charges
leveled against him and alleging the following
arguments:
"a. In all cases where there is failure of settlement of
mediation proceedings before the Barangay Chairman, it
is necessary that the Pangkat be constituted by the
parties from the Lupon members in order that they may
have a second opportunity to amicably settle their
dispute. It is a mandatory duty of the Barangay
Chairman to set the meeting of the parties for the
constitution of the Pangkat upon failure of parties to
amicably settle otherwise there is no compliance with
the requirements of P.D. 1508, now Sec. 412, 1991
Local Government Code. In the case of complainant, it
appears from the records thereof that there was
premature issuance of the Certificate to File Action
considering that there is no proof to show that the
Pangkat was duly constituted before the said certificate
was issued. Moreover, the belated submission by
complainant of the Minutes of Proceedings before the
Barangay Chairman, which was inaccurate and difficult
to decipher glaringly reveals the non-compliance of
complainant with the requirement of the aforecited law.
"As to the charge that there was inaction on his part on
several motions filed by complainant, he claim[s] that
the same is untrue and alleged the following:
"RE: NOTICE TO WITHDRAW COMPLAINT
"The same was noted without action as mediation
process was still on going at the barangay level.
"RE: NOTICE OF DISMISSAL
"Before he could act on the same, complainant filed a
manifestation praying that said notice be disregarded,
rendering the issue thereon as moot and academic.
"RE: MOTION TO RENDER JUDGMENT
"The said motion was resolved by him in an Order dated
August 18, 1997 granting the same and submitting the
case for decision. However, considering that there was
no proof yet that the said order was received by
defendants the decision in said case was held in
abeyance as the latter upon receipt hereof may yet avail
of the right to appeal therefrom.
"Respondent likewise avers that complainant should
have taken a more appropriate legal remedy than filing
this instant administrative complaint which has deprived
him of his precious time that could have been devoted
to court hearing."1
Evaluation and Recommendation of the OCA
The OCA found respondent either ignorant or negligent
in referring the case back to the barangay despite the
presence of what it considered to be a valid Certification
to File Action. It also faulted him for disregarding the
Rules on Summary Procedure by (1) calling for a
preliminary conference, (2) directing the defendants to
submit their Comment to complainant’s Motion to
Render Judgment, and (3) failing to render judgment
within the reglementary period.2
Finding merit in the charges, the OCA recommended
"that the respondent Judge be FINED in the amount of
Ten Thousand Pesos (P10,000.00) with the STERN
WARNING that a repetition of the same will be dealt
with more severely."3
This Court’s Ruling
We agree with the findings of the OCA regarding the
rules on summary procedure, but disagree with those
relating to the barangay proceedings.
Administrative Liability
Complainant contends that he has complied with the
mandatory barangay conciliation proceedings as
evidenced by the Certification to File Action attached to
the Complaint for ejectment.
The records, however, reveal that such Certification was
improperly and prematurely issued. In what appears to
be a pre-printed standard form thereof,4 the "x" before
the second enumerated statement clearly shows that no
personal confrontation before a duly constituted Pangkat
ng Tagapagkasundo took place. Respondent’s position
that the Pangkat was not constituted, and that no face
to face conciliation of the parties had taken place before
it is substantiated by the Minutes5 submitted by
complainant. Evidently, complainant failed to complete
the barangay conciliation proceedings.
We also note that the Complaint before the barangay
6 Barangay conciliation which is a pre-condition for formal
was dated February 16, 1996. Records show that the
hearing was scheduled for February 26, 1996 and was
reset for February 29, 1996.7 And yet, the Certification
to File Action8was issued on March 1, 1996, less than
fifteen days after the first scheduled hearing before the
barangay chairman.
Section 410 (b) of the Local Government Code is quoted
hereunder:
"Mediation by lupon chairman. – Upon receipt of the
complaint, the lupon chairman 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."
Furthermore, Administrative Circular No. 14-93 provides:
"x x x x x x x x x
"In order that the laudable purpose of the law may not
be subverted and its effectiveness undermined by
indiscriminate, improper and/or premature issuance of
certifications to file actions in court by the Lupon or
Pangkat Secretaries, attested by the Lupon/Pangkat
Chairmen, respectively, the following guidelines are
hereby issued for the information of trial court judges in
cases brought before them coming from the Barangays:
xxxxxxxxx
"[II] 4. If mediation or conciliation efforts before the
Punong Barangay proved unsuccessful, there having
been no agreement to arbitrate (Sec. 410-{b}, Revised
Rule Katarungang Pambarangay Law; Sec. 1,c,[1], Rule
III, Katarungang Pambarangay Rules), or where the
respondent fails to appear at the mediation proceeding
before the Punong Barangay (3rd par. Sec. 8,a, Rule VI,
Katarungang Pambarangay Rules), the Punong Barangay
shall not cause the issuance of this stage of a
certification to file action, because it is now mandatory
for him to constitute the Pangkat before whom
mediation, conciliation, or arbitration proceedings shall
be held.
"III. All complaints and/or informations filed or raffled to
your sala/branch of the Regional Trial Court,
Metropolitan Trial Court or Municipal Trial Court shall be
carefully read and scrutinized to determine if there has
been compliance with prior Barangay conciliation
procedure under the Revised Katarungang Pambarangay
Law and its Implementing Rules and Regulations, as a
pre-condition to judicial action, particularly whether the
certification to file action attached to the records of the
case comply with the requirements hereinabove
enumerated in part II; (Emphasis and italics supplied)
"IV. A case filed in court without compliance with prior
adjudication x x x may be dismissed upon motion of the
defendant/s x x x or the court may suspend proceedings
upon petition of any party x x x and refer the case motu
proprio to the appropriate Barangay authority. x x x."
Evidently, the barangay failed to exert enough effort
required by law to conciliate between the parties and to
settle the case before it. Hence, respondent judge was
not incorrect in remanding the case to it for completion
of the mandated proceedings. We cannot fault him for
seeking to promote the objectives of barangay
conciliation and for taking to heart the provisions of
Supreme Court Circular No. 14-93. His referral of the
case back to the barangay cannot be equated with gross
ignorance of the law. Neither does it constitute grave
abuse of discretion or obvious partiality.
Thereafter, complainant filed a Motion 9 praying that the
proceedings already held before the barangay be
considered as substantial compliance with the
requirements of the law. Acting on the Motion,
respondent judge issued the summons and opted to
continue with the court proceedings without insisting on
strict compliance with the mandated barangay
proceedings. He did so after noting that complainant
was apparently not making any move to complete the
barangay proceedings after the case had been
remanded to the barangay, and that the case fell under
the Rules on Summary Procedure.
Section 18 of the Rules on Summary Procedure,
however, provides that such cases may be revived only
after the requirement for conciliation has been complied
with. Nevertheless, respondent judge’s error is judicial in
nature and cannot be corrected in administrative
proceedings. At any rate, because he chose to continue
with the proceedings of the case, and because
respondents failed to answer the ejectment Complaint
on time, he should have rendered judgment within thirty
(30) days from the expiration of the period to file an
answer. This action is required under the Rules on
Summary Proceedings, which state:
"Sec. 6. Effect of failure to answer. - Should the
defendant fail to answer the complaint within the period
above provided, the court, motu proprio, or on motion of
the plaintiff, shall render judgment as may be warranted
by the facts alleged in the complaint and limited to what
is prayed for therein x x x.
"x x x x x x x x x
"Sec. 10. Rendition of judgment. – Within thirty (30)
days after receipt of the last affidavits and position
papers, or the expiration of the period for filing the
same, the court shall render judgment."
Complainant filed a Motion to Render Judgment 10 dated
March 25, 1997. Refusing to heed the Motion,
respondent instead called a preliminary conference and
directed the defendants to submit their Comment. The
OCA correctly arrived at the following findings:
"x x x [T]he Judge’s resolution [to] the complainant’s
Motion to Render Judgement casts serious doubt on his
understanding of the law. The express language of the
law states that when an Answer has not been filed
within the reglementary period, the judge, motu proprio,
or on motion, ‘shall render judgment as may be
warranted by the facts alleged in the complaint’ (Section
6, Revised Rule on Summary Procedure). This provision
cannot, by any stretch of the imagination, be construed
to mean anything other than what the words themselves
communicate: that the rendition of judgment is
mandatory, and that the judgment should be based only
on what is contained within the four walls of the
complaint.
"By calling for a preliminary conference and directing the
defendants to submit their Comment to the
complainant’s Motion, the Judge went beyond the
bounds set by the law x x x. Moreover, when he finally
resolved the motion – after the defendants had
submitted their Comment – he merely ordered that the
case be ‘deemed submitted for decision.’ Needless to
say, ‘submission for decision’ is a far cry from ‘rendition
of judgment,’ the character of immediacy implicit in the
latter does not exist in the former. And in this case,
supposedly to be resolved under the Summary Rule,
immediacy is the defining characteristic. x x x."11
Respondent rendered judgment on the case only on
January 7, 1998,12 almost a year from the time the case
had been deemed submitted for resolution.
Unacceptable is his explanation that he waited for the
defendants to avail themselves of their right to appeal
the Order deeming the case submitted for resolution. He
has no duty to wait, because the law mandates him to
act and decide the case promptly. Delay in the
disposition of cases undermines the people’s faith and
confidence in the judiciary. Hence, judges are enjoined
to decide cases with dispatch. Their failure to do so
constitutes gross inefficiency and warrants the
imposition of administrative sanctions on them.13
Undue delay in rendering a decision constitutes a less
serious charge under Section 9, Rule 140 of the Rules of
Court; and a finding of guilt results in either suspension
from the office without salary and other benefits for not
less than one (1) month or more than three (3) months,
or a fine of more than P10,000 but not
exceeding P20,000.14
In determining the sanction to be imposed, we note that
there was no showing of malice, corrupt motive or
improper consideration on the part of respondent judge.
We also take into consideration the fact that he has
already resigned from the service effective March 27,
2002.
WHEREFORE, Judge Reynaldo B. Bellosillo is hereby
found GUILTY of undue delay in rendering a decision
and is ordered to pay a fine of P11,000 to be taken from
the retirement benefits heretofore withheld from him.
SO ORDERED.
A.M. No. MTJ-00-1265 April 6, 2000
VALENCIDES VERCIDE, complainant,
vs.
JUDGE PRISCILLA T. HERNANDEZ, Fifth Municipal
Circuit Trial Court, Clarin and Tudela, Misamis
Occidental, respondent.
DECISION
MENDOZA, J.:
This is a complaint filed against Judge Priscilla T.
Hernandez of the Fifth Municipal Circuit Trial Court,
Clarin and Tudela, Misamis Occidental, charging her with
grave abuse of authority and ignorance of the law for
her dismissal of a case which complainant Valencides
Vercide and his wife had filed against Daria Lagas
Galleros for recovery of possession of a piece of land.
The land is located in Upper Centro, Tudela, Misamis
Occidental. Defendant Galleros is a resident of the same
municipality, while complainant and his wife are
residents of Dipolog City. Because of this fact, the case
was filed in court without prior referral to the Lupong
Tagapamayapa.
However, this matter was raised by defendant in her
answer as an affirmative defense, and respondent, in
her order of July 15, 1997, ordered the dismissal of the
case without prejudice to the prosecution of the
counterclaim pleaded by the defendant in her answer. In
support of her order, respondent cited P.D. No. 1508, §3
of which provides:
Venue. - Disputes between or among persons actually
residing in the same barangay shall be brought for
amicable settlement before the Lupon of said barangay.
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. However, all disputes which involve real
property or any interest therein shall be brought in the
barangay where the real property or any part thereof is
situated. (Emphasis added)
Complainant and his wife moved for a reconsideration,
citing the following provisions of R.A. 7160, "The Local
Government Code of 1991":
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 of 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 property 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
recommendation of the Secretary of Justice. marie
The court in which the 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.
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 of 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.
They argued that under §408(f), in relation to §409(c),
where the parties to a dispute involving real property or
any interest therein are not actual residents of the same
city or municipality or of adjoining barangays, prior
resort to barangay conciliation is not required.
However, respondent denied the motion. In her order
dated September 9, 1997, respondent stated:
The Court after taking into consideration the Motion for
Reconsideration and the ground relied upon by the
counsel finds that counsel for the plaintiffs failed to
correlate Sections 408 and 409 of Republic Act No. 7160
and to consider Rule VIII, paragraph (a) of
the Katarungang Pambarangay Rules, the rules and
regulations [of] which were promulgated to implement
Sections 399 to 422, Chapter 7, Title One Book III and
Section 515, Book IV of R.A. No. 7160, otherwise known
as the Katarungang Pambarangay Law, to wit:
"RULE VIII - PRE-CONDITION FOR FORMAL
ADJUDICATION
Conciliation, pre-condition for filing of complaint in court
or government office. novero
(a) No individual may go directly to court or to any
government office for adjudication of his dispute with
another individual upon any matter falling within the
authority of the Punong Barangay or Pangkat ng
Tagapagkasundo to settle under these Rules, unless,
after personal confrontation of the parties before them
earnest efforts to conciliate have failed to result in a
settlement or such settlement has been effectively
repudiated."
and also Rule VI, Section 3 paragraph (c) of the same
Katarungang Pambarangay Rules which provides:
"Rule VI - Amicable Settlement of Disputes
Section 3. Venue. The place of settlement shall be
subject to the following rules:
....
(c) Dispute involving real property shall be brought for
settlement in the Barangay where the real property or
larger portion thereof is situated.
From the provisions of the above-cited Rules it was very
clear that parties whose disputes involved real property
should first br[ing] the said dispute before the barangay
where the property was located, and that [because of]
failure to bring the dispute before the Barangay for
conciliation no action may be filed in court for final
adjudication of the said dispute.
That parties should first comply with the provisions of
the Katarungang Pambarangay Law before the Court
can acquire jurisdiction over the complaint. That non-
compliance of the plaintiff to the requirement of the
Katarungang Pambarangay Law was admitted by her in
paragraph 3 of the complaint. Her allegation of non-
compliance with the mandatory requirement of Lupon
Conciliation before the filing of the complaint, in a way
divest[s] the Court of its jurisdiction over the case. In
the 1997 Rules of Civil Procedure, Rule 16, Section 1,
paragraph (j) provides:
"That a condition precedent for filing the claim has not
been complied with"
WHEREFORE, in view of the foregoing, the Motion for
Reconsideration is hereby denied.
Complainant alleges that in dismissing Civil Case No.
295, respondent judge committed "(a) Grave abuse of
authority by knowingly rendering an unjust and unlawful
order; (b) Ignorance of the law in its highest order, she
being a judge; (c) Grave disobedience to the
jurisprudence laid down by the Supreme Court of the
Philippines on the matter of exemption of lupon
conciliation of contending parties who are not
residen[ts] of the same city or municipality." He states
that respondent "practically threw several decisions of
the Supreme Court on the matter out of the window and
obviously followed hook, line and sinker the arguments
of the [defendant] Daria Galleros."
In answer, respondent judge claims that she merely
followed the law in dismissing the case. She prays that
the complaint against her be dismissed and that
complainant be ordered to stop harassing her just
because he had not been able to obtain the relief he
wanted in Civil Case No. 295. nigel
In its memorandum dated February 29, 2000, the Office
of the Court Administrator recommends the dismissal of
this case on the ground that the "issue [raised] is purely
judicial and is best resolved by a court of competent
jurisdiction" and that, even if respondent had erred, she
should not be held administratively liable since there is
no allegation that she acted in bad faith or knowingly
rendered an unjust judgment.
In Tavora v. Veloso,1 this Court already ruled that where
parties do not reside in the same city or municipality or
in adjoining barangays, there is no requirement for them
to submit their dispute involving real property to the
Lupong Tagapamayapa. As explained in that case:
The sole issue raised is one of law: Under the given
facts, is the respondent judge barred from taking
cognizance of the ejectment case pursuant to Sec. 6 of
PD 1508 establishing a system of amicably settling
disputes at the barangay level? The section reads:
"SECTION. 6. Conciliation, precondition 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 Pangkat Chairman, or unless
the settlement has been repudiated. . . ." (Italics
supplied)
For the above provision to be operative, the controversy
must be within the jurisdiction of the Lupong
Tagapayapa (Lupon or Barangay court). On this point,
the relevant provisions of PD 1508 are:
"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 were 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. ella
"SECTION 3. Venue. — Disputes between or among
persons actually residing in the same barangay shall be
brought for amicable settlement before the Lupon of
said barangay. 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. However, all disputes
which involve real property or any interest therein shall
be brought in the barangay where the real property or
any part thereof is situated.
"The Lupon shall have no authority over disputes:
(1) involving parties who actually reside in barangays of
different cities or municipalities, except where such
barangays adjoin each other; and
(2) involving real property located in different
municipalities." (Italics supplied)
The foregoing provisions are quite clear. Section 2
specifies the conditions under which the Lupon of a
barangay "shall have authority" to bring together the
disputants for amicable settlement of their dispute: The
parties must be "actually residing in the same city or
municipality." At the same time, Section 3 — while
reiterating that the disputants must be "actually residing
in the same barangay" or in "different barangays
within the same city or municipality" — unequivocably
declares that the Lupon shall have "no authority" over
disputes "involving parties who actually reside in
barangays of different cities or municipalities," except
where such barangays adjoin each other.
Thus, by 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.
It is true that immediately after specifying the barangay
whose Lupon shall take cognizance of a given dispute,
Sec. 3 of PD 1508 adds:
"However, all disputes which involve real property or any
interest therein shall be brought in the barangay where
the real property or any part thereof is situated."
Actually, however, this added sentence is just an
ordinary proviso and should operate as such. marinella
The operation of a proviso, as a rule, should be limited
to its normal function, which is to restrict or vary the
operation of the principal clause, rather than expand its
scope, in the absence of a clear indication to the
contrary.2
To be sure, the Court was interpreting in that case the
provisions of P.D. No. 1508 which, except for some
modifications, are applicable to the case before
respondent judge because they are now found in §§408-
409 of R.A. No. 7160 which took effect on January 1,
1992. The ruling in Tavora v. Veloso, reiterated in other
cases,3 should be familiar to the bench and the bar. As
we have held in Espiritu v. Jovellanos,4 the phrase
"Ignorance of the law excuses no one" has a special
application to judges who, under the injunction of Canon
1.01 of the Code of Judicial Conduct, "should be the
embodiment of competence, integrity, and
independence." In Bacar v. De Guzman , it was held that
5
when the law violated is basic, the failure to observe it
constitutes gross ignorance. Reiterating this ruling, it
was emphasized in Almeron v. Sardido6 that the
disregard of an established rule of law amounts to gross
ignorance of the law and makes the judge subject to
disciplinary action.
In the case at bar, respondent showed patent ignorance
¾ if not disregard ¾ of this Court’s rulings on the
jurisdiction of the Lupong Tagapamayapa by her
erroneous quotations of the provisions of the
Katarungang Pambarangay Rules implementing R.A. No.
7160. While a judge may not be held administratively
accountable for every erroneous order or decision he
renders, his error may be so gross or patent that he
should be administratively disciplined for gross ignorance
of the law and incompetence.
In this case, respondent at first cited P.D. No. 1508, §3
as basis of her action. When her attention was called to
the fact that this had been repealed by §409(c) of R.A.
No. 7160, respondent, who obviously was more intent in
justifying her previous order than correcting her error,
quoted out of context the provisions of the Katarungang
Pambarangay Rules implementing the Katarungang
Pambarangay provisions of R.A. No. 7160. She thus
violated Canon 3 of the Code of Judicial Conduct which
provides that "In every case, a judge shall endeavor
diligently to ascertain the facts and the applicable law
unswayed by partisan interest, public opinion or fear of
criticism."
Contrary to respondent’s interpretation, it is clear even
from the Katarungang Pambarangay Rules that recourse
to barangay conciliation proceedings is not necessary
where the parties do not reside in the same municipality
or city or in adjoining barangays. Rule VI of the same
states in pertinent part:
SECTION 2. Subject matters for settlement. - All
disputes may be the subject of proceedings for amicable
settlement under these rules except the following
enumerated cases:
(a) Where one party is the government, or any
subdivision or instrumentality thereof; alonzo
(f) 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. brando
(Emphasis added)

(b) Where one party is a public officer or employee, and
the dispute relates to the performance of his official
functions;
(c) Offenses for which the law prescribes a maximum
penalty of 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 to 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.
Indeed, these provisions, which are also found in P.D.
No. 1508, have already been authoritatively interpreted
by this Court, and the duty of respondent judge was to
follow the rulings of this Court. Her insistence on her
own interpretation of the law can only be due either to
an ignorance of this Court’s ruling or to an utter
disregard thereof. We choose to believe that her failure
to apply our rulings to the case before her was simply
due to gross ignorance which, nevertheless, is
inexcusable. In accordance with the ruling in Ting v.
Atal,7 in which a judge who was similarly found guilty of
gross ignorance of the law was fined P2,000.00,
respondent judge should likewise be fined the same
amount.
WHEREFORE, respondent is hereby found guilty of
gross ignorance of the law and is hereby ordered to pay
a FINE of TWO THOUSAND (P2,000.00) PESOS with a
WARNING that repetition of the same or similar acts will
be dealt with more severely.
SO ORDERED.

The foregoing exceptions notwithstanding, the court in

which non-criminal cases not falling within the authority
of the lupon under these Katarungang Pambarangay
Law and Rules are filed may, at any time before trial,
motu proprio refer the case to the lupon concerned for
amicable settlement.

SECTION 3. Venue. The place of settlement shall be

subject to the following rules:

(a) Where the parties reside in the same barangay, the

dispute shall be brought for settlement in said barangay;

(b) Where the parties reside in different barangays in

the same city or municipality, the dispute shall be settled
in the barangay where the respondent or any one of the
respondents actually resides, at the choice of the
complainant;

(c) Dispute involving real property shall be brought for

settlement in the barangay where the real property or
larger portion thereof is situated;

(d) Disputes 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;

(e) Any objection relating to venue shall be raised before

the Punong Barangay during the mediation proceedings
before him. Failure to do so shall be deemed a waiver of
such objection;
G.R. No. L-35475. March 16, 1989
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
DELFIN BUSTOS, defendant-appellant.
The Solicitor General for plaintiff-appellee.
GRIÑO-AQUINO, J.:
This crime of passion stemmed from the rivalry between
the appellant and the deceased for the favors of a taxi-
dancer.
Delfin Bustos, his uncle Engracio Bustos alias "Gracing,"
and Pablito Bungay alias "Roger Pogi," were charged with
murder in Criminal Case No. 6498 of the Court of First
Instance of Pampanga in an amended Information dated
June 17, 1969 which alleged:
That on or about the 18th day of September, 1968, at
barrio San Matias, municipality of Sto. Tomas, province of
Pampanga, Philippines, and within the jurisdiction of this
Hon. Court, the above named accused Delfin Bustos,
Pablito Bungay alias "Roger Pogi" and Engracio Bustos alias
"Gracing," with deliberate intent to kill, nighttime purposely
sought to facilitate the commission of the offense,
conspiring together and mutually helping one another, with
treachery, evident premeditation, and with grave abuse of
superior strength, did then and there willfully, unlawfully
and feloniously fire at and shoot Cristorey Lopez with a
firearm, caliber .22, inflicting mortal and fatal injuries upon
the said Cristorey Lopez, the bullet entering the right chest,
lacerating the upper and lower lobes, of the left lungs, and
which injuries caused the death of the said Cristorey Lopez
shortly thereafter. (p. 7, Rollo.)
Upon being arraigned on August 11, 1969, Delfin Bustos
and Engracio Bustos pleaded "not guilty." The third accused
Pablito Bungay, alias "Roger Pogi," has not yet been
apprehended.
On the basis of the evidence presented at the trial, the
court found the following facts to have been established:
Between six and seven o'clock in the evening of September
18, 1968, Cristorey Lopez was shot inside the compound of
the Lopez Apartments owned by his family in Sitio Moras
San Matias, Sto. Tomas, Pampanga.
The incident was witnessed by Rodolfo Ortoleza, a thirteen-
year old boy who lives with his sister Cora in one of the
Lopez apartments, for the compound was well illumined
with electric bulbs. From a distance of about one arm's
length (isang dipa), he watched as "Roger Pogi" bodily
dragged Cristorey Lopez out of the fourth apartment which
was occupied by two taxi-dancers named Tessie and Lita
who were the common law wives of Engracio Bustos and
Delfin Bustos, respectively. Lopez vainly called out for help.
"Roger Pogi" had Lopez' arms pinioned around his waist
while Engracio and Delfin walked on both sides of him.
Lopez struggled to extricate himself but, in an instant, as
soon as they stepped outside the door, Delfin Bustos shot
him on the chest at close range with a .22 caliber revolver.
"Roger Pogi" released his hold on the victim and allowed
him to break away. Running and stumbling toward the gate
of the compound, Lopez met his older brother Jesus who
had just arrived with a companion. Jesus immediately
hailed a jeep to take his wounded brother to the Virgen
delos Remedios Hospital. On the way to the hospital,
Cristorey was gasping for breath. Blood was splattered all
over his chest. He was in a semi-conscious state.
Nevertheless, he indicated to Jesus the exact spot where he
had been shot and told Jesus that it was Delfin Bustos, his
"rival," who shot him and that it was "Gracing" who gave
the gun to Delfin. He expired at 9:00 o'clock that same
night.
The autopsy report indicated that Lopez died of shock and
internal hemorrhage secondary to a gunshot wound at the
sternum of the second rib, fracture commuted at the
posterior left side, 7th rib and laceration of the upper and
lower lobes of the left lung (p. 26, Rollo).
The incident was reported by Gonzalo Pineda to a traffic
policeman, Patrolman Diosdado Canlas, at the San Matias
crossing. Together with Patrolman Quiambao and Sergeant
Daniel Canlas, Patrolman Diosdado Canlas immediately
repaired to the scene of the crime to conduct an
investigation. They interviewed Estelita (Lita) Ramos
Javenir Teresita (Tessie) Gumba Punsones both taxi-
dancers at the Pavillon Night Club in San Fernando,
Pampanga, Jesus Bacud Palma, and Rodolfo Ortoleza,
occupants of various apartments inside the Lopez
compound. They were brought to the municipal building
where their written statements were taken. They told
Patrolman Canlas that they saw Delfin Bustos, Engracio
Bustos, and "Roger Pogi" come out of the taxi-dancers'
apartment and that Cristorey Lopez was shot by Delfin
Bustos. They also showed the policeman the exact spot
where the killing occurred. The girls also gave sworn
statements before the Acting Chief of Police. However, they
and Jesus Palma could not be prevented at the trial
because they moved out of Sto. Tomas to unknown
addresses soon after the commission of the crime.
Felicidad Miranda, rental collector of the Lopez compound,
testified that at around 6:00 o'clock in the afternoon of
September 19, 1968, she was in the Lopez compound to
inspect the apartments and collect the rentals from the
tenants. She saw Cristorey inside the apartment of the taxi-
dancer. She knew that both taxi-dancers were girlfriends of
Delfin and Engracio Bustos. She had earlier advised
Cristorey Lopez "not to be so close to the girls."
Delfin Bustos and his uncle Engracio Bustos admitted
during the trial that they were in Tessie's and Lita's
apartment on September 18, 1968 at six or seven in the
evening. They had gone to the Lopez compound to look for
Agustin Bustos, because they needed a car to bring Delfin's
sister, Pamela, to the Manila International Airport. They
went to Tessie's apartment to look for Agustin. They had a
ten-minute conversation with Tessie. When they stepped
out of the apartment, they allegedly heard a shot. They
saw an injured man about seven (7) meters away kneeling
with head bowed, and being held by somebody whom they
failed to recognize. The two men were grappling with each
other. They were allegedly so terrified that they scaled the
concrete wall of the compound and fled toward the
MacArthur Highway.
Agustin Bustos testified that he had been invited to the
birthday party of a certain Lita in one of the apartments.
From where he sat at Lita's party, he saw Cristorey Lopez
drinking beer with some persons in Tessie's apartment. A
small boy informed him later that Delfin and Engracio were
looking for him, so be got out of Lita's apartment to talk to
them. He heard a shot. Most of the people scampered out
of the front gate. He, Delfin, and Engracio jumped over the
fence and ran toward the MacArthur Highway.
Delfin Bustos admitted on cross-examination, that on
September 20, 1968, or two days after the shooting, his
father Agustin advised him "to hide in the meanwhile as he
(Agustin) would try to fix the case." So, he stopped working
at the La Mallorca and hid in his aunt's house in
Pangasinan. On October 2, 1968, his father and some PC
soldiers arrived and took him to Camp Olivas.
On March 15, 1977, the lower court rendered judgment
finding Delfin Bustos guilty of murder but acquitting
Engracio Bustos. The case against Pablito Bungay, alias
"Roger Pogi" was archived pending his arrest. The
dispositive portion of the decision reads:
WHEREFORE, the Court finds accused DELFIN BUSTOS
guilty beyond reasonable doubt of the crime of MURDER
and imposes upon him the penalty of RECLUSION
PERPETUA, with the accessory penalties incident thereto; to
indemnify the heirs of the victim Cristorey Lopez, the
following- P 12,000.00, as indemnity for the death of said
Cristorey Lopez; P 50,000.00, as indemnity for loss of
earning capacity of the deceased; P 7,560.00, as actual
damages representing hospital, funeral and miscellaneous
expenses; P 10,000.00, as moral damages; P l,000.00, as
attorney's fees, with costs of this suit (Heirs of Raymundo
Castro vs. Bustos, No. L-25913, February 28, 1969). No
subsidiary imprisonment is imposed in case of insolvency
due to the nature of the penalty imposed (Article 39,
R.P.C.).
Accused ENGRACIO BUSTOS, alias "Gracing," is hereby
acquitted on ground of reasonable doubt.
The record of this case is hereby archived insofar as Pablito
Bungay alias Roger Pogi is concerned. (pp. 34-35, Rollo.)
Delfin Bustos appealed to this Court.
Appellant argues that: (1) it was improbable for him to
have shot Lopez because his companion "Roger Pogi" was
directly behind the deceased; (2) that he could not have
fired the gun, as the trajectory of the bullet was downward
on the 2nd rib through the lower part of the 7th rib, and
the deceased was admittedly taller than the appellant; (3)
that the declaration of the deceased to his brother inside
the jeep on the way to the hospital was not a dying
declaration because: (a) the alleged statement came from a
biased source; and (b) there was no evidence that Cristorey
Lopez had abandoned hope of living.
The appeal is devoid of merit.
A review of the records of the case and a careful
consideration of the arguments raised by the accused-
appellant in his brief disclose no reason why we should not
accord the usual respect given in the factual finding of the
trial court that Delfin Bustos was the gunman who killed
Cristorey Lopez. The shooting was witnessed by a 13-year
old boy, Rodolfo Ortoleza. That the shot was fired at close
range was substantiated by the presence of gun powder
burns at the point of entry some 5 cm. at the level of the
victim's second rib. As the appellant fired the gun at the
side of the victim his co-accused "Roger Pogi" was in no
danger of being hit also.
Ortoleza testified in a direct and candid manner, despite
rigorous cross- examination. The minor inconsistencies in
some details of his testimony do not destroy his credibility,
but, on the contrary, are indicative of his truthfulness and
of the fact that he had not been coached or rehearsed. His
identification of the accused was clear and unequivocal.
Mere denials by the accused, who admitted his presence at
the scene of the crime, may not prevail against the
categorical declarations of the prosecution witnesses that it
was he who shot Rey Lopez.
The victim's dying declaration to his brother Jesus, that "his
rival Delfin Bustos" shot him deserves full credit for: (1) it
was made under the consciousness of impending death; (2)
the declaration referred to the cause of the declarant's
injury and impending death; and (3) the declarant was a
competent witness (People vs. Balbas, 122 SCRA 859;
People vs. Sabio, 102 SCRA 219). That the ante
mortem declaration was made by the victim under
consciousness of impending death can hardly be doubted
for, as a matter of fact, he died some two hours later.
The appellant's flight and concealment of himself from the
authorities, as well as the attempts of his family to "settle"
the case with the Lopezes (p. 30, t. s. n. November 22,
1971) constitute an implied admission of his guilt (People
vs. Ornoza 151 SCRA 495; Sec. 24, Rule 130, Rules of
Court).
Treachery in the commission of the crime was sufficiently
proven by the unrebutted testimony of Ortoleza that "Roger
Pogi," Engracio Bustos and Delfin Bustos forcibly dragged
the struggling victim out of Tessie's apartment, that the
victim was unarmed, and that, as soon as they were out of
the door, Delfin shot Lopez at close range, giving the victim
no opportunity to flee or defend himself (pp. 8-19, t.s.n.,
Aug. 12, 1969).
Alevosia is present when the victim is defenseless and killed
in such a manner as to insure the execution of the crime,
or make it impossible or difficult for the victim to retaliate
or at least defend himself (People vs. Gil Jumadaiao, 143
SCRA 371; People vs. Leoncio Yusep, 151 SCRA 248).
In view of all the foregoing, We find no reversible error in
the trial court's finding that the appellant, Delfin Bustos, is
guilty of murder.
WHEREFORE, with the modification that the death
indemnity payable by the appellant Delfin Bustos to the
heirs of Cristorey Lopez is increased to P 30,000.00, the
decision appealed from is affirmed, with costs against the
said appellant.
SO ORDERED.
G.R. No. L-59495-97
GREGORIO GONZALES, petitioner,
vs.
THE HON. COURT OF APPEALS, MAR
EVANGELISTA, LUCIANO and ROSITA SESE and
ESTRELLA BAUTISTA, respondents.
SARMIENTO, J.:
The petition seeks the review of a judgment rendered by
the Court of Appeals, 1 setting aside the decision
rendered by the former City Court of Caloocan City, now
Metropolitan Trial Court, in Civil Cases Nos. 13501,
13502, and 13503 thereof, all actions for unlawful
detainer. The challenged decision dismissed the cases
for failure of the plaintiff, the petitioner herein, to avail
himself of the barangay conciliation process under
Presidential Decree No. 1508, preliminary to judicial
recourse.
There is no controversy as to the facts.
The petitioner is the owner of an apartment located in
Caloocan City. Three doors thereof, Nos. 110-D, 110-B,
and 110-C, were leased to the private respondents for
less than P200.00 a month in rentals. 2
On October 1, 1979, the petitioner filed three separate
complaints for ejectment against the private
respondents in the City Court of Caloocan City.
According to him, he is in need of the premises for the
use of his married children who do not allegedly have
residences of their own, 3 which is a ground for
ejectment under the provisions of Batas Blg. 25. The
private respondents duly filed their answers, after which
the cases were consolidated and then heard.
On January 6, 1981, the said City Court rendered
judgment ejecting the private respondents. 4 They
appealed to the then Court of First Instance of Rizal,
Branch XXXII, now Regional Trial Court, which affirmed
the trial court's decision. 5 Reconsideration having been
denied, 6 the private respondents commenced
proceedings in the respondent Court of Appeals. Among
others, the private respondents alleged that the Court of
First Instance erred in sustaining the jurisdiction of the
City Court "notwithstanding the admitted fact that there
was no compliance in the cases with the mandatory
requirements of P.D. No. 1508. 7
On October 31, 1981, the respondent Court of Appeals
rendered the assailed decision. 8 On January 5, 1982, it
denied the petitioner's motion for reconsideration. 9 As
we noted, the respondent Court dismissed the ejectment
cases on the ground of lack of jurisdiction of the City
Court for failure of the parties to undergo a
confrontation at the barangay level. Hence, this petition.
The issue to be resolved here is not one of jurisdiction,
as erroneously supposed by the respondent Court of
Appeals and by the parties as well. The question, rather,
is simply one of procedure.
In Ebol v. Amin, 10 we held that the conciliation process
under Presidential Decree No. 1508 is not jurisdictional.
Jurisdiction is conferred by Batas Blg. 129 and the
Judiciary Act of 1948. 11
Presidential Decree No. 1508 does not vest jurisdiction
in the lupong tagapayapa. Jurisdiction means the power
to try and decide a case.12 The lupon does not decide
cases. It is vested only with conciliation functions. 13 It is
not a court of law.
While in Royales v. Intermediate Appellate Court, 14 we
ruled that "non-compliance with the condition precedent
prescribed by P.D. 1508 could affect the sufficiency of
the plaintiff's cause of action and make his complaint
vulnerable to dismissal on ground of lack of cause of
action or prematurity, 15 we held in the same case that
"the same would not prevent a court of competent
jurisdiction from exercising its power of adjudication
over the case before it, where the defendants, as in this
case, failed to object to such exercise of jurisdiction in
their answer and even during the entire proceedings a
quo. 16 There is a similar waiver in the cases at bar.
There is no allegation in the private respondents'
answers 17 that the petitioner failed to invoke the
authority of the lupon tagapayapa before going to court.
Moreover, they took part in the trial, argued their case,
and adduced their evidence. These amount to a waiver.
Other than these, we find the decision 18 of the then City
Court of Caloocan, now Metropolitan Trial Court, as
affirmed by the Court of First Instance of Rizal, Branch
XXXII, now Regional Trial Court, in the aforesaid three
cases to be in conformity with the law and evidence.
WHEREFORE, the decision of the Court of Appeals, and
its resolution denying the petitioner's motion for
reconsideration are hereby SET ASIDE. The decision of
the City Court in Civil Cases Nos. 13501, 13502, and
13503, as sustained by the Court of First Instance, is
REINSTATED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 109853 October 11, 2000
PROVINCE OF ZAMBOANGA DEL NORTE,
represented by GOV. ISAGANI S.
AMATONG, petitioner,
vs.
COURT OF APPEALS and ZAMBOANGA DEL
NORTE ELECTRIC COOPERATIVE,
INC., respondents.
DECISION
PARDO, J.:
Which government agency has jurisdiction over a
complaint for illegal collection of power bills by an
electric cooperative? Petitioner submits that
jurisdiction is vested with the Energy Regulatory
Board or the regular trial courts, while respondents
position is that jurisdiction lies with the National
Electrification Administration.
What is before the Court is a petition for review
on certiorari assailing the decision of the Court of
Appeals,1 that reversed the orders of the Regional
Trial Court, Zamboanga del Norte denying
petitioner’s motion for dismissal of the complaint.2
On July 8, 1991, petitioner Province of Zamboanga
del Norte (represented by Gov. Isagani S.
Amatong) filed with the Regional Trial Court,
Zamboanga del Norte a complaint against
Zamboanga del Norte Electric Cooperative
(ZANECO) for "Illegal Collection Of Power Bills And
Preliminary Injunction With Restraining Order."3
Petitioner in its complaint alleged that as per
electric bills issued by ZANECO for the month of
May 1991, respondent increased the Fuel
Compensating Charge (FCC) by P0.29 and Interim
Adjustment by P0.02, or a total of P 0.31. This
amount is added to the basic charge of P 1.90 per
kilowatt.
By June 1991, ZANECO increased the FCC once
more to P1.39 instead of only P0.29. The Interim
Adjustment also increased to P0.06 instead of only
P 0.02.
Petitioner claimed that the increase was arbitrary
and illegal, and that the Energy Regulatory Board
(ERB) did not sanction the collections.
As a result, the electric bills of the consumers
almost doubled in amount.
Further, petitioner alleged that ZANECO cannot
increase the bills since the power rate increase
from the National Power Corporation (NPC) of
P0.17 per kilowatt hour was not implemented yet
due to a restraining order issued by the Supreme
Court.4
On July 22, 1991, ZANECO filed its answer to the
complaint. It assailed the jurisdiction of the trial
court over the subject of the case.5
On July 26, 1991, the trial court issued a writ of
preliminary injunction6 ordering respondent to
desist from imposing, charging, billing and
collecting the FCC and other additional charges
upon its end-users in Zamboanga del Norte and the
cities of Dipolog and Dapitan. The court also
ordered respondent to refrain from cutting off the
electric lines of those who refused to pay the
questioned charges, pending determination of the
litigation.
On October 8, 1991, respondent ZANECO filed with
the trial court a motion requesting the court to set
for hearing the affirmative defenses set in its
answer, asking for the dismissal of the case.
On March 27, 1992, respondent filed with the trial
court a third-party complaint7 against the National
Power Corporation (NPC) praying for the issuance
of a writ of preliminary injunction or a restraining
order. On the same date, the trial court issued an
order restraining respondent to refrain from
disconnecting its electric service on March 28, 1992
or any other date, effective until
recalled.8 Respondent ZANECO alleged that despite
NPC’s knowledge of the restraining order against
the collection of the FCC, which later9 became
known as Incremental Cost Charge (ICC), NPC sent
a demand letter10 with notice of disconnection of
electric service if ZANECO did not pay the FCC/ICC
bills and extra-hydro rates.
On April 14, 1992, the trial court ordered the
issuance of a writ of preliminary injunction against
NPC.11
On March 28, 1992, the trial court denied
respondent ZANECO’s motion to dismiss.12 The
court ruled that (1) the nullity of the charges
imposed are matters not capable of pecuniary
estimation and thus fall within the jurisdiction of
the regional trial court; and (2) it is futile to file a
complaint with the National Electrification
Administration (NEA) or the NPC considering that
charges imposed by respondent emanated from
these agencies.13
On April 18, 1992, respondent ZANECO filed with
the trial court a motion for reconsideration of the
order dated March 28, 1992.14
On October 9, 1992 the trial court denied
ZANECO’s motion for reconsideration.15
On appeal to the Court of Appeals, on November
16, 1992, the Court of Appeals issued a temporary
restraining order, the dispositive portion of which
reads:
"WHEREFORE, let a temporary restraining order be
issued enjoining public respondent, its agents and
representative from proceeding with the case and
from enforcing all the questioned orders until
further notice from this Court.
"In addition, private respondent is hereby given
five (5) days from notice to show cause why no
writ of preliminary injunction should be issued for
the purpose."16
On January 28, 1993, the Court of Appeals
rendered its decision reversing that of the trial
court. The decretal portion reads:
"WHEREFORE, premises considered, the petition is
GRANTED, the order dated March 28, 1992 and
October 9, 1992 are hereby SET ASIDE and the
respondent Court ordered to DISMISS the
complaint.
SO ORDERED."17
Hence, this petition.18
Petitioner assails the imposition of the FCC and
Incremental Costs Charge (ICC) as void, illegal, and
unconstitutional for lack of notice, hearing and
consultation of the parties affected, and without
prior authority from the Energy Regulatory Board.
Petitioner finally prays that the case be remanded
to the trial court for trial on the merits.19
Petitioner rationalized that the Energy Regulatory
Board (ERB) has jurisdiction by virtue of Executive
Order 172, Section 3 (a) in that ERB is empowered
to fix and regulate the prices of petroleum
products. It argued that diesel fuel is embraced
within the term petroleum products. Since the Fuel
Compensation Charge was imposed to compensate
the cost of diesel fuel, then such imposition must
be approved by the ERB.20
We disagree.
The real issue is not the compensation of the cost
of diesel fuel used to feed the generating set in
Mindanao.21Precisely, the complaint was for "Illegal
Collection of Power Bills."22
Since the complaint is one questioning the increase
in the power rates, the proper body to investigate
the case is the NEA.
The regulation and fixing of power rates to be
charged by electric cooperatives remain within the
jurisdiction of the National Electrification
Administration, despite
23
the enactment of
Executive Order No. 172,24 creating the Energy
Regulatory Board.25 The issue raised in the
complaint is the legality of the imposition of the
FCC or ICC. Despite the fact that diesel fuel was
used to run its machinery, the fact is that
respondent charged its consumers to compensate
for the increase in the price of fuel. Petitioner did
not question the price of diesel fuel. Rather, it
questioned the charges passed on to its end users
as a result of increase in the price of fuel. And the
body with the technical expertise to determine
whether or not the charges are legal is the NEA.
Electric cooperatives, such as the respondent, are
vested under Presidential Decree No. 26926 with the
power to fix, maintain, implement and collect rates,
fees, rents, tolls, and other charges and terms and
conditions for service. However, the NEA requires
that such must be in furtherance of the purposes
and in conformity with the provisions of Presidential
Decree No. 269.27
NEA, in the exercise of its power of supervision and
control over electric cooperatives and other
borrowers, supervised or controlled entities, is
empowered to issue orders, rules and regulations.
It may also, motu proprio or upon petition of third
parties, conduct investigations, referenda and other
similar actions in all matters, affecting electric
cooperatives and other borrower, or supervised or
controlled entities.28
Thus, a party questioning the rates imposed by an
electric cooperative may file a complaint with the
NEA as it is empowered to conduct hearings and
investigations and issue such orders on the rates
that may be charged.29Consequently, the case does
not fall within the jurisdiction of the ERB.
In case a party feels aggrieved by any order, ruling
or decision of the NEA, he may file a petition for
review before the Court of Appeals.30
Petitioner next maintains that the case qualifies as
an exception to the rule on exhaustion of
administrative remedies, basing its argument on
the unconstitutionality and arbitrariness of the
imposition of the charges.
We are not persuaded.
The Court in a long line of cases has held that
before a party is allowed to seek the intervention of
the courts, it is a pre-condition that he avail himself
of all administrative processes afforded him. Hence,
if a remedy within the administrative machinery
can be resorted to by giving the administrative
officer every opportunity to decide on a matter that
comes within his jurisdiction, then such remedy
must be exhausted first before the court’s power of
judicial review can be sought. The premature resort
to the court is fatal to one’s cause of
action.31 Accordingly, absent any finding of waiver
or estoppel, the case may be dismissed for lack of
cause of action.32
The doctrine of exhaustion of administrative
remedies is not without its practical and legal
reasons. Indeed, resort to administrative remedies
entails lesser expenses and provides for speedier
disposition of controversies. Our courts of justice
for reason of comity and convenience will shy away
from a dispute until the system of administrative
redress has been completed and complied with so
as to give the administrative agency every
opportunity to correct its error and to dispose of
the case.33
True, the principle of exhaustion of administrative
remedies has certain exceptions as embodied in
various cases. This doctrine is a relative one and is
flexible depending on the peculiarity and
uniqueness of the factual and circumstantial
settings of a case. It is disregarded: (1) when there
is a violation of due process;34 (2) when the issue
involved is purely a legal question;35 (3) when the
administrative action is patently illegal and amounts
to lack or excess of jurisdiction;36 (4) when there is
estoppel on the part of the administrative agency
concerned;37 (5) when there is irreparable
injury;38 (6) when the respondent is a department
secretary whose acts, as an alter ego of the
President, bears the implied and assumed approval
of the latter;39 (7) when to require exhaustion of
administrative remedies would be
unreasonable; (8) when it would amount to a
40
nullification of a claim;41 (9) when the subject
matter is a private land in land case
proceedings;42 (10) when the rule does not provide
a plain, speedy and adequate remedy; (11) when
there are circumstances indicating the urgency of
judicial intervention;43 and unreasonable delay
would greatly prejudice the complainant;44 (12)
when no administrative review is provided by
law;45 (13) where the rule of qualified political
agency applies;46 and (14) when the issue of non-
exhaustion of administrative remedies has been
rendered moot.47
Petitioner fails to show that the instant case falls
under any of the exceptions.1âwphi1 Mere
allegation of arbitrariness will not suffice to vest in
the trial court the power that has been specifically
granted by law to special government agencies.
The doctrine of primary jurisdiction does not
warrant a court to arrogate unto itself the authority
to resolve a controversy the jurisdiction over which
is initially lodged with an administrative body of
special competence.48
We have held that while the administration
grapples with the complex and multifarious
problems caused by unbridled exploitation of our
resources, the judiciary will stand clear. A long line
of cases establishes the basic rule that the court
will not interfere in matters which are addressed to
the sound discretion of government agencies
entrusted with the regulation of activities coming
under the special technical knowledge and training
of such agencies.49
In fact, a party with an administrative remedy must
not merely initiate the prescribed administrative
procedure to obtain relief, but also pursue it to its
appropriate conclusion before seeking judicial
intervention.50 The underlying principle of the rule
on exhaustion of administrative remedies rests on
the presumption that when the administrative
body, or grievance machinery, is afforded a chance
to pass upon the matter, it will decide the same
correctly.51
The premature invocation of the jurisdiction of the
trial court warrants the dismissal of the case.
WHEREFORE, we AFFIRM in toto the decision of
the Court of Appeals in CA-G.R. SP No. 29361,
promulgated on January 28, 1993 setting aside the
trial court’s orders dated March 28, 1992 and
October 9, 1992, in Civil Case No. 4386 and
ordering the trial court to dismiss the complaint.
No costs.
SO ORDERED.
A.C. No. 6296 November 22, 2005
ATTY. EVELYN J. MAGNO, Complainant,
vs.
ATTY. OLIVIA VELASCO-JACOBA, Respondent.
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.
Complainant’s objection to respondent’s
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
complainant’s 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 Lorenzo’s 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 [complainant’s 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 respondent’s 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
the Lupong Tagapamayapa, and heard by Punong
Barangay Bonifacio Alcantara alone, instead of the
collegial Lupon or a conciliation panel known
as pangkat. 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, Commissioner Maala stated that the "charge
5
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 19917, 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
pambarangayconciliation 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. Worse still, the participation of lawyers
9
Section 412(a)11the 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, respondent’s
conduct tended to undermine the laudable purpose
of the katarungan pambarangay system. What
compounded matters was when respondent
repeatedly ignored complainant’s 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 (₱5,000.00) 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.

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.
A.C. No. 000 (Unnumbered CAR Case) December 26,
1974
SERVILLANO EVANGELISTA, petitioner,
vs.
JUDGE JUAN A. BAES, respondent.
CASTRO, J.:pp
Except for the first, each of the above-captioned cases involves
multiple administrative charges filed against Judge Juan A.
Baes of the Court of Agrarian Relations, Branch I, 7th Regional
District.
In the first "case" captioned "Servillano Evangelista vs. Judge
Juan A. Baes" Evangelista, in an unverified letter, requests this
Court "to require the Court of Agrarian Relations ... to decide
the ... case (Servillano Evangelista vs. Josefina Calupitan, CAR
Case No. 1773), within the reglementary period as provided for
in the New Constitution," the same having allegedly pended
decision since 1970.
The letter can by no means be regarded as a complaint as it
does not comply with the requisites of a complaint, as set forth
in Section 1 of Rule 140 of the Rules of Court.
Section 1. Complaint. — All charges against judges of first
instance shall be in writing and shall set out distinctly, clearly,
and concisely the facts complained of as constituting the
alleged serious misconduct or inefficiency of the respondent,
and shall be sworn to and supported by affidavits of persons
who have personal knowledge of the facts therein alleged, and
shall be accompanied with copies of documents which may
substantiate said facts.
This provision equally applies to judges of agrarian relations,
as provided by Section 144 of Republic Act 3844, which reads
in pertinent part as follows:
The judge may be suspended or removed in the same manner
and upon the same grounds as judges of the Court of First
Instance.
Because Evangelista's letter is not sworn to, does not set out
facts constituting any alleged serious misconduct or
inefficiency of the respondent, and merely requests this Court
to order the agrarian court to decide a certain case within a
specified period, the said letter may not properly be treated as
an administrative complaint.
Administrative Case No. 585-CAR
Paciano Basuan vs. Judge Juan A. Baes
Judge Baes is here charged with (1) knowingly rendering an
unjust judgment in violation of art. 204 of the Revised Penal
code, and (2) a violation of the Anti-Graft and Corrupt
Practices Act.
The first charge. Ferardo Baeuan, one of the plaintiffs in CAR
Case No. 1438, failed to appear at the pre-trial, but Paciano
Basuan, his co-plaintiff, appeared. For failure of Ferardo to
appear, Judge Baes ordered the dismissal of the entire case,
thus affecting also Paciano, which should not have been the
case. The order is indeed erroneous, but the motivation for its
issuance excludes malice or a deliberate attempt on the part of
the respondent to cause injustice. The transcript of the
stenographic notes taken at the pre-trial indicates that the
hearing of the case had been postponed several times at the
behest of the plaintiffs; that they were previously warned that
the pre-trial would proceed whether they had a lawyer or not;
that despite this warning, Paciano appeared without counsel.
This Court has had occasion to restate a fundamental rule of
long standing, which is, that a judicial officer, when required to
exercise his judgment or discretion, is not liable criminally for
any error he commits provided he acts in good faith, and that
he may be held liable for knowingly rendering an unjust
judgment only if it is shown beyond cavil that the judgment is
unjust as being contrary to law or as not supported by the
evidence, and the same was rendered with conscious and
deliberate intent to do an injustice.1 There being good faith on
the part of the respondent judge in the issuance of the
questioned order, the charge should be dismissed.
The second charge. The respondent admits having sat and
partly acted in CAR Case No. 1438 wherein his nephew-in-law,
Atty. Manuel M. de Baybay, was the counsel for the defendant
Manuel Solomon. In his answer to the complaint, the
respondent does not controvert the charge that he violated
Section 1 of Rule 137 of the Rules of Court which bars a judge
from sitting in any case in which he is related to any counsel
appearing before him within the fourth degree,2 and in his
"Supplemental Comment" he merely alleges that he
"subsequently disqualified himself from sitting in the case
without hearing even partially a single witness." The
respondent's subsequent inhibition does not extenuate his
culpability. The rule which he violated is intended to free
courts from any suspicion of bias and prejudice. In view of the
undisputed violation, a reprimand on the respondent is in
order.
Administrative Case No. 586-CAR
Silvestre Masa vs. Judge Juan A. Baes
The complaint in this case recites two charges.
The first charge. Judge Baes is charged with knowingly, or by
reason of inexcusable negligence or ignorance, rendering
unjust orders. The orders referred to are: (1) the resolution
dated June 11, 1968, setting aside the resolution dated
February 20, 1964 which was issued by the respondent's
predecessor, Judge Artemio Macalino in CAR Case No. 959;
and (2) the order dated October 8, 1969, directing the
execution of the decision of Judge Macalino's aforesaid
resolution.
In CAR Case No. 959 Judge De Guzman authorized landholder
Jose Tan Kapoe to eject his tenant Silvestre Masa. On May 8,
1963 Masa's counsel moved to reconsider; Judge Macalino,
then the presiding judge, ordered the clerk of court to furnish
a copy of the motion to Tan Kapoe's counsel. As no opposition
to the motion was interposed, Judge Macalino reconsidered
Judge De Guzman's decision, and rendered on February 20,
1964 a decision denying the petition for ejectment of Masa and
adjudging a leasehold system of tenancy between Tan Kapoe
and Masa. Three and a half years later, Judge Macalino, on
petition of Masa, rendered a supplemental decision fixing the
rental on the holding. On April 2, 1968 Tan Kapoe moved for
reconsideration of not only the supplemental decision but also
the decision of February 20, 1964. Judge Baes granted Tan
Kapoe's motion for reconsideration, with the justification that
Judge De Guzman's prior decision had become final and
executory allegedly because the motion for its reconsideration
that was granted by Judge Macalino was fatally defective for
lack of proof of service.
Judge Baes' justification for his orders of June 11, 1968 and
October 8, 1969 was rejected in Masa vs. Baes, et al.,L-29784,
May 21, 1969, 28 SCRA 263, where this Court held, inter alia,
that the alleged non-service upon Tan Kapoe of a copy of
Masa's motion to reconsider Judge De Guzman's decision "is
belied by the record" and that Tan Kapoe was in estoppel to
deny his receipt of a copy of the motion for reconsideration.
While Judge Baes acted in abuse of discretion in issuing the
orders complained of, it does not necessarily follow that he
acted in bad faith or that his abuse of discretion signifies
ignorance of the law in his part. Abuse of discretion signifies
ignorance of the law on his part. Abuse of discretion by a trial
court does not necessarily mean ulterior motive, arbitrary
conduct or willful disregard of a litigant's rights.
The second charge. Judge Baes is here charged with a
violation of the Anti-Graft and Corrupt Practices Act, consisting
of his participation as judge in CAR Case No. 959, despite the
fact that before his appointment to the bench he was the
lawyer of Tan Kapoe in the naturalization proceedings filed by
the latter.
The uncontroverted supporting documents attached to the
complaint show that on November 24, 1947 and January 5,
1948, respectively, Judge Fidel Ibañez of the Court of First
Instance of Laguna granted two requests of Atty. Juan A. Baes
for the postponement of the hearing of Tan Kapoe's petition
for naturalization. On the other hand, Judge Baes attached as
an annex to his comment on the complaint a certification by
the clerk of court that "there appears no pleading or any paper
signed by Atty. Juan A. Baes" in the naturalization case and
that the only lawyers furnished copies of the decision were
Atty. Alfonso Farcon states that he was the one retained as
Tan Kapoe's counsel. The respondent judge claims, and this is
not denied by the complainant Masa, that he merely
accomodated a brother lawyer. From these uncontroverted
allegations and unchallenged documents emerge the findings
that the respondent judge had no lawyer-client relationship
with Tan Kapoe, that his participation in the naturalization case
was minuscule, and that the accomodation was fraternally
rendered. These are sufficiently good grounds to absolve the
respondent from the second charge.
Administrative Case No. 741-CAR
Toribio Lescano vs. Judge Juan A. Baes
The charges in this complaint, namely, issuance of an unjust
interlocutory order, unjust vexation, corrupt practices,
oppression, abuse of discretion and improper use of the
Constabulary are substantially the same questions involved in
the complainant Toribio Lescano's petition for certiorari filed
with this Court and docketed as "L-37477, Toribio Lescano vs.
Hon. Juan A. Baes, etc., et al." Said petition for certiorari is
pending decision and therefore, sub judice; hence, the present
complaint should be dismissed as premature.
Administrative Case No. 1275
Danilo San Gil vs. Judge Juan A. Baes
Danilo San Gil seeks the disbarment of the respondent judge
on three grounds, namely, (1) inefficiency, for allegedly
incurring in delay in resolving two motions in CAR Case No.
2064; (2) extortion, for having allegedly demanded from
Geronimo de los Reyes, the complainant's grandfather, "for
countless times both directly and indirectly ... considerable
amounts of money;" and (3) abuse of authority, for having
ordered the arrest of Geronimo de los Reyes for disobedience
of a court order issued in CAR Case No. 425 "without giving
him a chance to explain and without complying with the
requirements in proceedings for indirect contempt, thereby
depriving him of his constitutional right to due process of law."
The first charge is a reckless accusation. CAR Case No. 2064
was never assigned to Judge Baes; it was tried by
Commissioner Fernando B. Dimaculangan and decided by
Executive Judge Artemio Macalino. The two motions attached
as Annexes "A" and "B" to the administrative complaint and
whose resolution was allegedly delayed were unquestionably
addressed to the commissioner, not to Judge Baes; and the
resolution of the Court of Appeals or September 25, 1973 in its
case G.R. No. SP-02192, "Geronimo de los Reyes vs. Hon.
Artemio C. Macalino," evinces the fact that the agrarian case
was decided, not by Judge Baes, but by Judge Macalino,
otherwise the respondent in the Court of Appeals case would
have been Judge Baes, not Judge Macalino. Fairness and
prudence on the part of the complainant San Gil were clearly
wanting in blaming the respondent for alleged inefficiency in a
case that never reached the threshold of his judicial office.
The charge of extortion deserves no serious consideration.
Sec. 1 of Rule 140 of the Rules of Court requires that charges
shall be supported by affidavits of persons who have personal
knowledge of the facts therein alleged, but Geronimo de los
Reyes, the alleged victim who should have first-hand
knowledge if indeed the respondent demanded money from
him, executed an affidavit, annex "D" to the complaint, which
mentions absolutely nothing about the alleged extortion.
The third charge. Judge Baes issued an order on September
29, 1973 in CAR Case No. 425 requiring Geronimo de los Reyes
to appear in court; the latter failed to appear, thus prompting
Judge Baes to issue an order on October 23, 1973 for de los
Reyes to show cause why he should not be punished for
contempt; on November 27, 1973, the respondent ordered the
arrest of de los Reyes was denied an opportunity to be heard.
The order of arrest was within the judge's authority to issue,
pursuant to Section 3 of Rule 71, of the Rules of Court, and for
good reason: de los Reyes was thwarting the court's efforts to
settle the matter of execution of the unsatisfied judgment
rendered against him.
For the foregoing reasons, and for failure of the complainant
San Gil to file a reply to the respondent's answer and
supplementary answer to the complaint, as required by this
Court in its resolution on February 26, 1974, copy of which
was served upon the said complainant on March 6, 1974, the
complaint should be dismissed.
ACCORDINGLY, for lack of a prima facie showing, all the
charges against the respondent Judge are dismissed, except
the second charge in Administrative Case No. 585-CAR, of
which the respondent is adjudged guilty and for which he is
hereby reprimanded.
G.R. No. 158901 March 9, 2004 as "PAKNAAN" ("Agreement", in Pangasinan dialect),
which reads:
PROCESO QUIROS and LEONARDA
VILLEGAS, petitioners, AGREEMENT
vs.
MARCELO ARJONA, TERESITA BALARBAR, I, MARCELO ARJONA, of legal age, resident of Barangay
JOSEPHINE ARJONA, and CONCHITA Sapang, Buho, Palayan City, Nueva Ecija, have a land
ARJONA, respondents. consisting of more or less one (1) hectare which I gave
to Proceso Quiros and Leonarda Villegas, this land was
DECISION inherited by Doza that is why I am giving the said land
to them for it is in my name, I am affixing my signature
YNARES-SANTIAGO, J.: on this document for this is our agreement besides there
are witnesses on the 5th day (Sunday) of January 1997.
Assailed in this petition for review is the decision of the
Court of Appeals in an action for the Signed in the presence of:
execution/enforcement of amicable settlement between
petitioners Proceso Quiros and Leonarda Villegas and (Sgd) Avelino N. De la Masa, Jr.
respondent Marcelo Arjona. Appellate court reversed the
decision of the Regional Trial Court of Dagupan City- (Sgd) Marcelo Arjona
Branch 44 and reinstated the decision of the Municipal
Witnesses:
Trial Court of San Fabian-San Jacinto, Pangasinan.
1) (Sgd.) Teresita Balarbar
On December 19, 1996, petitioners Proceso Quiros and
Leonarda Villegas filed with the office of the barangay 2) (Sgd.) Josephine Arjona
captain of Labney, San Jacinto, Pangasinan, a complaint
for recovery of ownership and possession of a parcel of 3) (Sgd.) Conchita Arjona
land located at Labney, San Jacinto, Pangasinan.
On the same date, another "PAKNAAN" was executed by
Petitioners sought to recover from their uncle Marcelo
Jose Banda, as follows:
Arjona, one of the respondents herein, their lawful share
of the inheritance from their late grandmother Rosa AGREEMENT
Arjona Quiros alias Doza, the same to be segregated
from the following parcels of land: I, JOSE BANDA, married to Cecilia L. Banda, of legal
age, and resident of Sitio Torrod, Barangay Labney, San
a) A parcel of land (Lot 1, plan Psu-189983, L.R. Case Jacinto, Pangasinan. There is a land in which they
No. D-614, LRC Record No. N- 22630), situated in the entrusted to me and the same land is situated in Sitio
Barrio of Labney, Torud, Municipality of San Jacinto, Torrod, Brgy. Labney, San Jacinto, Pangasinan, land of
Province of Pangasinan x x x Containing an area of Forty Arjona family.
Four Thousand Five Hundred and Twenty (44,520)
square meters, more or less, covered by Tax Decl. No. I am cultivating/tilling this land but if ever Leonarda
607; Villegas and Proceso Quiros would like to get this land, I
will voluntarily surrender it to them.
b) A parcel of Unirrig. riceland situated at Brgy. Labney,
San Jacinto, San Jacinto, Pangasinan with an area of In order to attest to the veracity and truthfulness of this
6450 sq. meters, more or less declared under Tax Decl. agreement, I affixed (sic) my signature voluntarily below
No. 2066 of the land records of San Jacinto, Pangasinan this document this 5th day (Sunday) of January 1997.
assessed at P2390.00 x x x;
(Sgd.) Jose Banda
c) A parcel of Unirrig. riceland situated at Brgy. Labney,
San Jacinto, Pangasinan with an area of 6450 sq. Signed in the presence of:
meters, more or less, declared under Tax Declaration
(Sgd) Avelino N. de la Masa, Sr.
No. 2047 of the land records of San Jacinto, Pangasinan
Barangay Captain
assessed at P1700.00 x x x
Brgy. Labney, San Jacinto
d) A parcel of Unirrig. riceland situated at Brgy. Labney, Pangasinan
San Jacinto, Pangasinan assessed at P5610.00 x x x;
Witnesses:
e) A parcel of Cogon land situated at Brgy. Labney, San
1) Irene Banda
Jacinto, Pangasinan, with an area of 14133 sq. meters,
more or less declared under Tax Declaration No. 14 of (sgd.)
the land records of San Jacinto, Pangasinan assessed at 2) Jose (illegible) x x x
P2830.00 x x x.1
Petitioners filed a complaint with the Municipal Circuit
On January 5, 1997, an amicable settlement was Trial Court with prayer for the issuance of a writ of
reached between the parties. By reason thereof, execution of the compromise agreement which was
respondent Arjona executed a document denominated
denied because the subject property cannot be
determined with certainty.
The Regional Trial Court reversed the decision of the
municipal court on appeal and ordered the issuance of
the writ of execution.
Respondents appealed to the Court of Appeals, which
reversed the decision of the Regional Trial Court and
reinstated the decision of the Municipal Circuit Trial
Court.2
Hence, this petition on the following errors:
I a mechanism for conciliation where party-litigants can
THE PAKNAAN BEING A FINAL AND EXECUTORY
JUDGMENT UNDER THE LAW IS AN IMMUTABLE
JUDGMENT CAN NOT BE ALTERED, MODIFIED OR
CHANGED BY THE COURT INCLUDING THE HIGHEST
COURT; and
II
THE SECOND PAKNAAN ALLEGEDLY EXECUTED IN
CONJUNCTION WITH THE FIRST PAKNAAN WAS NEVER
ADDUCED AS EVIDENCE BY EITHER OF THE PARTIES,
SO IT IS ERROR OF JURISDICTION TO CONSIDER THE
SAME IN THE DECISION MAKING.
The pivotal issue is the validity and enforceability of the
amicable settlement between the parties and corollary to
this, whether a writ of execution may issue on the basis
thereof.
In support of their stance, petitioners rely on Section
416 of the Local Government Code which provides that
an amicable settlement shall have the force and effect of
a final judgment upon the expiration of 10 days from the
date thereof, unless repudiated or nullified by the proper
court. They argue that since no such repudiation or
action to nullify has been initiated, the municipal court
has no discretion but to execute the agreement which
has become final and executory.
Petitioners likewise contend that despite the failure of
the Paknaan to describe with certainty the object of the
contract, the evidence will show that after the execution
of the agreement, respondent Marcelo Arjona
accompanied them to the actual site of the properties at
Sitio Torod, Labney, San Jacinto, Pangasinan and
pointed to them the 1 hectare property referred to in the
said agreement.
In their Comment, respondents insist that respondent
Arjona could not have accompanied petitioners to the
subject land at Torrod, Labney because he was
physically incapacitated and there was no motorized
vehicle to transport him to the said place.
The Civil Code contains salutary provisions that
encourage and favor compromises and do not even
require judicial approval. Thus, under Article 2029 of the
Civil Code, the courts must endeavor to persuade the
litigants in a civil case to agree upon some fair
compromise. Pursuant to Article 2037 of the Civil Code,
a compromise has upon the parties the effect and
authority of res judicata, and this is true even if the
compromise is not judicially approved. Articles 2039 and
2031 thereof also provide for the suspension of pending
actions and mitigation of damages to the losing party
who has shown a sincere desire for a compromise, in
keeping with the Code’s policy of encouraging amicable
settlements.3
Cognizant of the beneficial effects of amicable
settlements, the Katarungang Pambarangay Law (P.D.
1508) and later the Local Government Code provide for
enter into an agreement in the barangay level to reduce
the deterioration of the quality of justice due to
indiscriminate filing of court cases. Thus, under Section
416 of the said Code, an amicable settlement shall have
the force and effect of a final judgment of the court
upon the expiration of 10 days from the date thereof,
unless repudiation of the settlement has been made or a
petition to nullify the award has been filed before the
proper court
Petitioners submit that since the amicable settlement
had not been repudiated or impugned before the court
within the 10-day prescriptive period in accordance with
Section 416 of the Local Government Code, the
enforcement of the same must be done as a matter of
course and a writ of execution must accordingly be
issued by the court.
Generally, the rule is that where no repudiation was
made during the 10-day period, the amicable settlement
attains the status of finality and it becomes the
ministerial duty of the court to implement and enforce it.
However, such rule is not inflexible for it admits of
certain exceptions. In Santos v. Judge Isidro,4 the Court
observed that special and exceptional circumstances, the
imperatives of substantial justice, or facts that may have
transpired after the finality of judgment which would
render its execution unjust, may warrant the suspension
of execution of a decision that has become final and
executory. In the case at bar, the ends of justice would
be frustrated if a writ of execution is issued considering
the uncertainty of the object of the agreement. To do so
would open the possibility of error and future litigations.
The Paknaan executed by respondent Marcelo Arjona
purports to convey a parcel of land consisting of more or
less 1 hectare to petitioners Quiros and Villegas. Another
Paknaan, prepared on the same date, and executed by
one Jose Banda who signified his intention to vacate the
parcel of land he was tilling located at Torrod, Brgy.
Labney, San Jacinto, Pangasinan, for and in behalf of
the Arjona family. On ocular inspection however, the
municipal trial court found that the land referred to in
the second Paknaan was different from the land being
occupied by petitioners. Hence, no writ of execution
could be issued for failure to determine with certainty
what parcel of land respondent intended to convey.
In denying the issuance of the writ of execution, the
appellate court ruled that the contract is null and void
for its failure to describe with certainty the object
thereof. While we agree that no writ of execution may
issue, we take exception to the appellate court’s reason
for its denial.
Since an amicable settlement, which partakes of the
nature of a contract, is subject to the same legal
provisions providing for the validity, enforcement,
rescission or annulment of ordinary contracts, there is a
need to ascertain whether the Paknaan in question has
sufficiently complied with the requisites of validity in
accordance with Article 1318 of the Civil Code.5
There is no question that there was meeting of the
minds between the contracting parties. In executing the
Paknaan, the respondent undertook to convey 1 hectare
of land to petitioners who accepted. It appears that
while the Paknaan was prepared and signed by
respondent Arjona, petitioners acceded to the terms
thereof by not disputing its contents and are in fact now
seeking its enforcement. The object is a 1-hectare parcel
of land representing petitioners’ inheritance from their
deceased grandmother. The cause of the contract is the
delivery of petitioners’ share in the inheritance. The
inability of the municipal court to identify the exact
location of the inherited property did not negate the
principal object of the contract. This is an error
occasioned by the failure of the parties to describe the
subject property, which is correctible by reformation and
does not indicate the absence of the principal object as
to render the contract void. It cannot be disputed that
the object is determinable as to its kind, i.e.1 hectare of
land as inheritance, and can be determined without
need of a new contract or agreement.6 Clearly, the
Paknaan has all the earmarks of a valid contract.
Although both parties agreed to transfer one-hectare
real property, they failed to include in the written
document a sufficient description of the property to
convey. This error is not one for nullification of the
instrument but only for reformation.
Article 1359 of the Civil Code provides:
When, there having been a meeting of the minds of the
parties to a contract, their true intention is not
expressed in the instrument purporting to embody the
agreement by reason of mistake, fraud, inequitable
conduct or accident, one of the parties may ask for the
reformation of the instrument to the end that such true
intention may be expressed.
If mistake, fraud, inequitable conduct, or accident has
prevented a meeting of the minds of the parties, the
proper remedy is not reformation of the instrument but
annulment of the contract.
Reformation is a remedy in equity whereby a written
instrument is made or construed so as to express or
conform to the real intention of the parties where some
error or mistake has been committed. 7 In granting
reformation, the remedy in equity is not making a new
contract for the parties, but establishing and
perpetuating the real contract between the parties
which, under the technical rules of law, could not be
enforced but for such reformation.
In order that an action for reformation of instrument as
provided in Article 1359 of the Civil Code may prosper,
the following requisites must concur: (1) there must
have been a meeting of the minds of the parties to the
contract; (2) the instrument does not express the true
intention of the parties; and (3) the failure of the
instrument to express the true intention of the parties is
due to mistake, fraud, inequitable conduct or accident. 8
When the terms of an agreement have been reduced to
writing, it is considered as containing all the terms
agreed upon and there can be, between the parties and
their successors in interest, no evidence of such terms
other than the contents of the written agreement,
except when it fails to express the true intent and
agreement of the parties thereto, in which case, one of
the parties may bring an action for the reformation of
the instrument to the end that such true intention may
be expressed.9
Both parties acknowledge that petitioners are entitled to
their inheritance, hence, the remedy of nullification,
which invalidates the Paknaan, would prejudice
petitioners and deprive them of their just share of the
inheritance. Respondent can not, as an afterthought, be
allowed to renege on his legal obligation to transfer the
property to its rightful heirs. A refusal to reform the
Paknaan under such circumstances would have the
effect of penalizing one party for negligent conduct, and
at the same time permitting the other party to escape
the consequences of his negligence and profit thereby.
No person shall be unjustly enriched at the expense of
another.
WHEREFORE, in view of the foregoing, the petition is
DENIED. The Decision dated March 21, 2003 of the
Court of Appeals, which reversed the decision of the
Regional Trial Court and reinstated the decision of the
Municipal Trial Court, is AFFIRMED. This is without
prejudice to the filing by either party of an action for
reformation of the Paknaan executed on January 5,
1997.
SO ORDERED.
G.R. No. 130864 October 2, 2007
MARIA L. HAROLD, petitioner,
vs.
AGAPITO T. ALIBA, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated
September 3, 1997 of the Court of Appeals in CA-G.R.
SP No. 40416, affirming the dismissal of petitioner Maria
L. Harold’s complaint before the Municipal Trial Court of
La Trinidad, Benguet.
The pertinent facts are as follows:
Sometime in January 1993, Harold engaged the services
of respondent Agapito T. Aliba, a geodetic engineer, to
conduct a relocation survey and to execute a
consolidation-subdivision of their properties including
that of Harold’s sister, Alice Laruan, located in Pico, La
Trinidad, Benguet. After completing his work, Aliba was
paid P4,050 for his services, but he failed to return the
certificates of title of the said properties for more than
one year, despite repeated demands to return them.
It also appears that sometime in January 1994, Aliba
prevailed upon Harold and her husband to sign a
document which was supposedly needed to facilitate the
consolidation-subdivision and the issuance of separate
transfer certificates of title over the properties. Harold
and her husband signed the document without reading
it.
Thereafter, on April 18, 1994, a truck loaded with G.I.
sheets and construction materials came to the subject
lot2owned by Harold. Upon inquiry, Harold and her
husband were informed that Aliba had sold the lot to a
third person.
On several occasions, Aliba tried to convince Harold to
accept the sum of P400,000 which was later on
increased to P500,000, as purchase price of the said lot.
It was only after such offers were made that Aliba told
Harold that he had indeed sold the lot.
On May 3, 1994, Harold agreed to accept the P500,000
from Aliba but only as partial payment, considering that
the lot has an aggregate value of P1,338,0003 or P6,000
per square meter. On the same date, Harold was made
to sign an acknowledgment receipt and other papers
which were made to appear that Harold accepted the
sum of P480,000 as full and final payment for the lot.
Harold later discovered that Aliba made it appear that
she had sold the lot to him for P80,000 and had her
certificates of title cancelled and transferred to him.
Harold also found out that the alleged deed of sale was
the document that Aliba caused Harold and her husband
to sign in January 1994.
Thinking that she can no longer recover her property,
Harold asked for the payment of the fair market value of
her property but to no avail. The dispute between
Harold and Aliba was referred to Punong
Barangay Limson Ogas and the Lupong Tagapamayapa.
During the June 8, 1994 barangay conciliation
proceedings, the parties herein agreed that Aliba will pay
an additional amount of P75,000 to the initial P500,000
Aliba had already given to Harold. In the same
proceedings, Aliba tendered P70,000, which Harold
accepted.4 The receipt of the amount given was
evidenced by an acknowledgment receipt signed by the
parties herein, attested to by the Lupon chairman, and
witnessed by several barangay officials.5
On June 9, 1994, as agreed upon, Aliba tendered the
remaining P5,000 to Harold to complete their amicable
settlement. Unfortunately, Harold refused to accept the
same, saying that P5,000 is not enough and insisted on
the elevation of the case to the court. 6 Thus, a
certification to file action7 was issued by the Office of
the Lupong Tagapamayapa on June 29, 1994.
Immediately thereafter, Harold filed a
8
Complaint against Aliba before the Municipal Trial Court
(MTC) of La Trinidad, Benguet.
In his Answer,9 Aliba prayed for the dismissal of the
complaint, considering that he had already been
absolutely released from any obligation to Harold and
that what remains to be done is merely the completion
of the amicable settlement of the parties.
On September 4, 1995, the MTC issued an Order
dismissing Harold’s complaint, holding that
xxxx
It is not disputed that on June 8, 1994, both parties met
before Barangay Captain Limson Ogas. After a lengthy
deliberation, towards mediation, it was agreed by both
parties in the presence of Barangay Officials that Mr.
Agapito Aliba will pay an additional amount of
P75,000.00 to settle once and for all the case. Mr. Aliba
at that time has in his possession P70,000.00, because
that was the amount previously agreed upon by both
parties. The amount of P70,000.00 was personally
handed by Mr. Aliba to Mrs. Harold, on that day, the
remaining balance of P5,000.00 to be paid the following
day, June 9, 1994. An Acknowledgment Receipt was
signed by Mrs. Harold and witnessed by the barangay
officials. . . .
The said minutes further states therein, "continued for
the second day", which logically means that the balance
be given the following day.
In the afternoon of June 9, 1994, Mr. Aliba returned
with the remaining balance of P5,000.00. It was at this
time that when Mr. Aliba was supposed to hand the
money Mrs. Harold bluntly told him the amount of
P5,000 is still not enough and instead she started crying
and shouting . . . .
The last paragraph [of the minutes] states "Mr. Aliba
requested then if the paid amount of P70,000.00 be
returned. Mrs. Harold refused and opted that this case
be elevated to the higher court."
Based on the minutes of the mediation proceedings, it is
clear that Barangay Captain Ogas was able to
successfully mediate the case between plaintiff and
defendant. As a matter of fact, Aliba has already
substantially complied. It is not disputed that he gave
plaintiff, on that occasion, P70,000.00, and to give the
balance of P5,000.00, the day after. Thus, there
was meeting of the minds between the parties on a
lawful subject, and there was substantial fulfillment of
the obligation. Regret[t]ably, when the small balance is
to be paid, Mrs. Harold reneged on the agreement,
saying P75,000.0010 is not enough, then insisted that the
case be filed in court, but at the same time refusing to
return the P70,000.00, when defendant tried to collect it
back. Consequently, the issuance of the Certificate to
File Action, is improper because no valid repudiation [of
the amicable settlement] was made.
Obviously, Mrs. Harold wants her cake and eat it too, so
to speak. It is in[i]quitous to allow Mrs. Harold to exact
substantial fulfillment from Aliba then conveniently
change her mind overnight and worse, to refuse to give
back what she already received.
The Court agrees with defendant that there is no clear
repudiation of the agreement. It would have been
different if Mrs. Harold returned the P70,000.00 to the
defendant, after changing her mind. There would have
been a clear repudiation of the amicable settlement. 11
The dispositive portion of the said MTC Order reads:
WHEREFORE, in view of the foregoing findings, the
Motion to Dismiss, incorporated in the Answer is hereby
granted. This case is hereby ordered dismissed.
However, defendant is hereby ordered to tender
payment to plaintiff his balance in the amount of
P5,000.00 when this order becomes final and executory.
SO ORDERED.12
Dissatisfied, Harold filed an appeal before the Regional
Trial Court (RTC), Branch 63, of La Trinidad, Benguet.
In an Order dated February 20, 1996, the RTC affirmed
in toto the assailed Order of the MTC.
Undaunted, Harold further appealed to the Court of
Appeals, which however denied the same. Hence this
petition, on the following grounds:
I.
WHETHER OR NOT THE THREE LOWER COURTS WERE
CORRECT IN DISMISSING HER COMPLAINT ON THE
SOLE GROUND THAT SHE AND RESPONDENT WERE
ABLE TO ARRIVE [AT] A MUTUALLY ACCEPTABLE
AMICABLE SETTLEMENT BEFORE THE BARANGAY
COURT OF THEIR PLACE WHEN CLEARLY ALL
CIRCUMSTANCES SHOW THERE WAS NO MEETING OF
MINDS BETWEEN THEM.
II.
GRANTING, WITHOUT ADMITTING, THERE WAS A
MEETING OF MINDS BETWEEN THE PARTIES AND
THEREFORE, THERE WAS A VALID AMICABLE
SETTLEMENT, WHETHER OR NOT THE
ACKNOWLEDGEMENT RECEIPT SIGNED BY PETITIONER
AND THE MINUTES OF THE PROCEEDINGS IS A
SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT
OF SECTION 411 OF RA 7160, OTHERWISE KNOWN AS
THE LOCAL GOVERNMENT CODE OF 1991 AS
CONCLUDED BY THE MUNICIPAL TRIAL COURT, AND
AFFIRMED BY THE REGIONAL TRIAL COURT AND
COURT OF APPEALS.
III.
GRANTING, WITHOUT ADMITTING, SAID LAW WAS
SUBSTANTIALLY COMPLIED WITH, WHETHER OR NOT
PETITIONER’S ACT OF NOT ACCCEPTING THE
REMAINING BALANCE BEING PROFFERED BY
RESPONDENT AND HER INSISTENCE THAT THE CASE
BE INSTEAD ELEVATED TO THE COURTS DURING THE
SECOND DAY OF HEARING SHOULD NOT ALSO BE
CONSIDERED A REPUDIATION OF SAID AMICABLE
SETTLEMENT OR AT THE VERY LEAST A SUBSTANTIAL
COMPLIANCE THEREOF.13
Essentially, we are asked to resolve whether the Court
of Appeals committed reversible error in affirming the
dismissal of the complaint on the ground that the
dispute between the parties had already been amicably
settled during the barangay conciliation proceedings.
After a careful scrutiny of the records of this case, we
hold that no reason exists to overturn the decision of the
Court of Appeals affirming the dismissal of the subject
complaint.
In this case, Harold’s main contention was hinged on the
alleged non-perfection of the questioned amicable
settlement between her and Aliba because there was
allegedly no meeting of the minds between them
regarding the subject matter and the cause
thereof.14 On the other hand, Aliba’s principal defense is
anchored on the alleged existence and validity of the
said amicable settlement.15
Harold’s submission that there was no meeting of the
minds between the parties herein pertaining to the
subject matter and cause of the questioned amicable
settlement is a clear deviation from the facts on record.
Admittedly, both parties agreed during the June 8, 1994
barangay conciliation proceedings for Aliba to pay an
additional amount of P75,000 (which was the object or
subject matter of the amicable settlement ) to the
initial P500,000 Aliba had given to Harold as purchase
price for the subject lot in order to put an end to their
dispute (which was the cause or reason of the amicable
settlement). Thus, it is evident that the parties herein
entered into an amicable settlement, or more
specifically, a compromise agreement, during the said
barangay conciliation proceedings.
Under Article 2028 of the Civil Code, a compromise
agreement was defined as "a contract whereby the
parties, by making reciprocal concessions, avoid
litigation or put an end to one already commenced." In
Sanchez v. Court of Appeals,16 we held that a
"compromise is a form of amicable settlement that is not
only allowed but also encouraged in civil cases."17
It must also be highlighted that Harold expressly
acknowledged that the offer made by Aliba to pay an
additional P75,000 was made in order for her to desist
from pursuing her case against him. 18 By reason of her
unconditional acceptance of the offer and the P70,000
tendered to her, Harold had already effectively waived
whatever claims she might have against Aliba regarding
the subject lot. Moreover, she is likewise barred from
pursuing her case against Aliba under the principle of
estoppel now._
Under Article 1431 of the Civil Code, through estoppel,
an admission or representation is rendered conclusive
upon the person making it, and cannot be denied or
disproved as against the person relying on it.
Expounding on the principle of estoppel, we held
in Springsun Management Systems Corporation v.
Camerino19 that "where a party, by his deed or conduct,
has induced another to act in a particular manner,
estoppel effectively bars the former from adopting an
inconsistent position, attitude or course of conduct that
causes loss or injury to the latter."20
Furthermore, to rule against the validity of the cited
amicable settlement herein would militate against the
spirit and purpose of the Katarungang
Pambarangay Law,24 which is to encourage the amicable
settlement of disputes at the barangay level as an
alternative to court litigation.
Harold’s refusal to accept the remaining P5,000 that
Aliba had tendered cannot constitute an effective
repudiation of the questioned amicable settlement,
considering that the reason for her refusal to accept the
said amount or alleged repudiation of the assailed
amicable settlement is not one of the grounds for
repudiation clearly specified under Section 41825 of the
LGC. As borne out by the records, her refusal to accept
the same was based on the alleged insufficiency of the
remaining P5,000 as settlement for the lot, without any
reference to vitiation of her consent by any fraud,
violence or intimidation on Aliba’s part.
WHEREFORE, the petition is DENIED for lack of merit.
The assailed Decision dated September 3, 1997 of the
Court of Appeals in CA-G.R. SP No. 40416 is AFFIRMED.
Costs against the petitioner.
SO ORDERED.

The doctrine of estoppel is based upon the grounds of

public policy, fair dealing, good faith and justice, and its
purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to
whom they were directed and who reasonably relied
thereon.21

The issue concerning the alleged non-compliance of the

amicable settlement pursuant to the mandate of Section
41122 of Republic Act No. 7160 or the Local Government
Code (LGC) arose because there was no formal
document denominated as "Amicable Settlement" signed
by the parties. However, we agree with the similar
holdings of the Court of Appeals and the RTC that the
requirements under Section 411 of the LGC had been
substantially complied with. The minutes of the
barangay conciliation proceedings readily disclose the
terms agreed upon by the parties for the settlement of
their dispute, and that the acknowledgment receipt,
which was written in a language known to the parties,
signed by them, attested to by the Lupon Chairman, and
witnessed by several barangay officials, serves as an
indubitable proof of the amicable settlement and of the
substantial compliance of its terms by respondent Aliba.

Moreover, even without the minutes of the meeting and

the acknowledgment receipt, the amicable settlement, or
more specifically the compromise agreement, entered
into by the parties is undeniably valid, considering that
"a compromise agreement is a consensual contract, and
as such, it is perfected upon the meeting of' the minds
of the parties to the contract."23
G.R. No. 101619 July 8, 1992
SANYO PHILIPPINES WORKERS UNION-PSSLU
LOCAL CHAPTER NO. 109 AND/OR ANTONIO
DIAZ, PSSLU NATIONAL
PRESIDENT, petitioners,
vs.
HON. POTENCIANO S. CANIZARES, in his
capacity as Labor Arbiter, BERNARDO YAP,
RENATO BAYBON, SALVADOR SOLIBEL, ALLAN
MISTERIO, EDGARDO TANGKAY, LEONARDO
DIONISIO, ARNEL SALVO, REYNALDO
RICOHERMOSO, BENITO VALENCIA, GERARDO
LASALA AND ALEXANDER
ATANASIO, respondents.
MEDIALDEA, J.:
This petition seeks to nullify: 1) the order of
respondent Labor Arbiter Potenciano Cañizares dated
August 6, 1991 deferring the resolution of the motion
to dismiss the complaint of private respondents filed
by petitioner Sanyo Philippines Workers Union-PSSLU
Local Chapter No. 109 (PSSLU, for brevity) on the
ground that the labor arbiter had no jurisdiction over
said complaint and 2) the order of the same
respondent clarifying its previous order and ruling
that it had jurisdiction over the case.
The facts of the case are as follows:
PSSLU had an existing CBA with Sanyo Philippines
Inc. (Sanyo, for short) effective July 1, 1989 to June
30, 1994. The same CBA contained a union security
clause which provided:
Sec. 2. All members of the union covered by this
agreement must retain their membership in good
standing in the union as condition of his/her
continued employment with the company. The union
shall have the right to demand from the company the
dismissal of the members of the union by reason of
their voluntary resignation from membership or willful
refusal to pay the Union Dues or by reasons of their
having formed, organized, joined, affiliated,
supported and/or aided directly or indirectly another
labor organization, and the union thus hereby
guarantees and holds the company free and harmless
from any liability whatsoever that may arise
consequent to the implementation of the provision of
this article. (pp. 5-6, Rollo)
In a letter dated February 7, 1990, PSSLU, through its
national president, informed the management of
Sanyo that the following employees were notified that
their membership with PSSLU were cancelled for anti-
union, activities, economic sabotage, threats, coercion
and intimidation, disloyalty and for joining another
union: Benito Valencia, Bernardo Yap, Arnel Salvo,
Renato Baybon, Eduardo Porlaje, Salvador Solibel,
Conrado Sarol, Angelito Manzano, Allan Misterio,
Reynaldo Ricohermoso, Mario Ensay and Froilan
Plamenco. The same letter informed Sanyo that the
same employees refused to submit themselves to the
union's grievance investigation committee (p.
53, Rollo). It appears that many of these employees
were not members of PSSLU but of another union,
KAMAO.
On February 14, 1990, some officers of KAMAO,
which included Yap, Salvo, Baybon, Solibel, Valencia,
Misterio and Ricohermoso, executed a pledged of
cooperation with PSSLU promising cooperation with
the latter union and among others, respecting,
accepting and honoring the CBA between Sanyo and
specifically:
1. That we shall remain officers and members of
KAMAO until we finally decide to rejoin Sanyo Phil.
Workers Union-PSSLU;
2. That henceforth, we support and cooperate with
the duly elected union officers of Sanyo Phil. Workers
Union-PSSLU in any and all its activities and programs
to insure industrial peace and harmony;
3. That we collectively accept, honor, and respect the
Collective Bargaining Agreement entered into
between Sanyo Phil. Inc. and Sanyo Phil. Workers
Union-PSSLU dated February 7, 1990;
4 That we collectively promise not to engage in any
activities inside company premises contrary to law,
the CBA and existing policies;
5 That we are willing to pay our individual agency fee
in accordance with the provision of the Labor Code,
as amended;
6 That we collectively promise not to violate this
pledge of cooperation. (p. 55, Rollo)
On March 4, 1991, PSSLU through its national and
local presidents, wrote another letter to Sanyo
recommending the dismissal of the following non-
union workers: Bernardo Yap, Arnel Salvo, Renato
Baybon, Reynaldo Ricohermoso, Salvador Solibel,
Benito Valencia, and Allan Misterio, allegedly because:
1) they were engaged and were still engaging in anti-
union activities; 2) they willfully violated the pledge of
cooperation with PSSLU which they signed and
executed on February 14, 1990; and 3) they
threatened and were still threatening with bodily
harm and even death the officers of the union (pp.
37-38, Rollo).
Also recommended for dismissal were the following
union members who allegedly joined, supported and
sympathized with a minority union, KAMAO: Gerardo
Lasala, Legardo Tangkay, Alexander Atanacio, and
Leonardo Dionisio.
The last part of the said letter provided:
The dismissal of the above-named union members is
without prejudice to receive (sic) their termination
pay if management decide (sic) to grant them
benefits in accordance with law. The union hereby
holds the company free and harmless from any
liability that may arise consequent to the
implementation by the company of our
recommendations for the dismissal of the above-
mentioned workers.
It is however suggested that the Grievance Machinery
be convened pursuant to Section 3, Article XV of the
Collective Bargaining Agreement (CBA) before their
actual dismissal from the company. (p. 38, Rollo)
Pursuant to the above letter of the union, the
company sent a memorandum to the same workers
advising them that:
As per the attached letter from the local union
President SPWU and the federation President, PSSLU,
requesting management to put the herein mentioned
employees on preventive suspension, effective
immediately, preliminary to their subsequent
dismissal, please be informed that the following
employees are under preventive suspension effective
March 13, 1991 to wit:
1. Bernardo Yap
2. Renato Baybon
3. Salvador Solibel
4. Allan Misterio
5. Edgardo Tangkay
6. Leonardo Dionisio
7. Arnel Salvo
8. Reynaldo Ricohermoso
9. Benito Valencia
10. Gerardo Lasala
11. Alexander Atanacio
The above listed employees shall not be allowed
within company premises without the permission of
management.
As per request of the union's letter to management,
should the listed employees fail to appeal the decision
of the union for dismissal, then effective March 23,
1991, said listed employees shall be considered
dismissed from the company. (p 39, Rollo)
The company received no information on whether or
not said employees appealed to PSSLU. Hence, it
considered them dismissed as of March 23, 1991 (p.
40, Rollo).
On May 20, 1991, the dismissed employees filed a
complaint (pp. 32-35, Rollo) with the NLRC for illegal
dismissal. Named respondent were PSSLU and Sanyo.
On June 20, 1991, PSSLU filed a motion to dismiss
the complaint alleging that the Labor Arbiter was
without jurisdiction over the case, relying on Article
217 (c) of P.D. 442, as amended by Section 9 of
Republic Act No. 6715 which provides that cases
arising from the interpretation or implementation of
the collective bargaining agreements shall be
disposed of by the labor arbiter by referring the same
to the grievance machinery and voluntary arbitration.
The complainants opposed the motion to dismiss
complaint on these grounds: 1) the series of
conferences before the National Conciliation and
Mediation Board had been terminated; 2) the NLRC
Labor Arbiter had jurisdiction over the case which was
a termination dispute pursuant to Article 217 (2) of
the Labor Code; and 3) there was nothing in the CBA
which needs interpretation or implementation (pp. 44-
46, Rollo).
On August 7, 1991, the respondent Labor Arbiter
issued the first questioned order. It held that:
xxx xxx xxx
While there are seemingly contradictory provisions in
the aforecited article of the Labor Code, the better
interpretation will be to give effect to both, and
termination dispute being clearly spelled as falling
under the jurisdiction of the Labor Arbiter, the same
shall be respected. The jurisdiction of the grievance
machinery and voluntary arbitration shall cover other
controversies.
However, the resolution of the instant issue shall be
suspended until both parties have fully presented
their respective positions and the said issue shall be
included in the final determination of the above-
captioned case.
WHEREFORE, the instant Motions to Dismiss are
hereby held pending.
Consequently, the parties are hereby directed to
submit their position papers and supporting
documents pursuant to Section 2, Rule VII of the
Rules of the Commission on or before the hearing on
the merit of this case scheduled on August 29, 1991
at 11:00 a.m. (p. 23, Rollo)
On August 27, 1991, PSSLU filed another motion to
resolve motion to dismiss complaint with a prayer that
the Labor Arbiter resolve the issue of jurisdiction.
On September 4, 1991, the respondent Labor Arbiter
issued the second questioned order which held that it
was assuming jurisdiction over the complaint of
private respondents, in effect, holding that it had
jurisdiction over the case.
On September 19, 1991, PSSLU filed this petition
alleging that public respondent Labor Arbiter cannot
assume jurisdiction over the complaint of public
respondents because it had no jurisdiction over the
dispute subject of said complaint. It is their
submission that under Article 217 (c) of the Labor
Code, in relation to Article 261 thereof, as well as
Policy Instruction No. 6 of the Secretary of Labor,
respondent Arbiter has no jurisdiction and authority to
take cognizance of the complaint brought by private
respondents which involves the implementation of the
union security clause of the CBA. The function of the
Labor Arbiter under the same law and rule is to refer
this case to the grievance machinery and voluntary
arbitration.
In its comment, private respondents argue that Article
217(a) 2 and 4 of the Labor Code is explicit, to wit:
Art. 217. Jurisdiction of the Labor Arbiters and the
Commission.
a) Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide . . . the following cases
involving all workers, . . . :
xxx xxx xxx
2) Termination disputes,
xxx xxx xxx
4) Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations.
The private respondents also claimed that insofar as
Salvo, Baybon, Ricohermoso, Solibel, Valencia,
Misterio and Lasala were concerned, they joined
another union, KAMAO during the freedom period
which commenced on May 1, 1989 up to June 30,
1989 or before the effectivity of the July 1, 1989 CBA.
Hence, they are not covered by the provisions of the
CBA between Sanyo and PSSLU. Private respondents
Tangkay, Atanacio and Dionisio admit that in
September 1989, they resigned from KAMAO and
rejoined PSSLU (pp.
66(a)-68, Rollo).
For its part, public respondent, through the Office of
the Solicitor General, is of the view that a distinction
should be made between a case involving
"interpretation or implementation of collective
bargaining agreement or "interpretation" or
"enforcement" of company personnel policies, on the
one hand and a case involving termination, on the
other hand. It argued that the case at bar does not
involve an "interpretation or implementation" of a
collective bargaining agreement or "interpretation or
enforcement" of company policies but involves a
"termination." Where the dispute is just in the
interpretation, implementation or enforcement stage,
it may be referred to the grievance machinery set up
in the CBA or by voluntary arbitration. Where there
was already actual termination, i.e., violation of
rights, it is already cognizable by the Labor Arbiter.
Article 217 of the Labor Code defines the jurisdiction
of the Labor Arbiter.
Art. 217. Jurisdiction of Labor Arbiters and the
Commission. a) Except as otherwise provided under
this Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide within thirty
(30) calendar days after the submission of the case
by the parties for decision without extension even in
the absence of stenographic notes, the following
cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of
strikes and lockouts;
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or
implementation of collective bargaining agreements
and those arising from the interpretation or
enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
It is clear from the above article that termination
cases fall under the jurisdiction of the Labor Arbiter.
It should be noted however that said article at the
outset excepted from the said provision cases
otherwise provided for in other provisions of the same
Code, thus the phrase "Except as otherwise provided
under this Code . . . ." Under paragraph (c) of the
same article, it is expressly provided that "cases
arising from the interpretation or implementation of
collective bargaining agreements and those arising
from the interpretation and enforcement of company
personnel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be
provided in said agreements.
It was provided in the CBA executed between PSSLU
and Sanyo that a member's voluntary resignation
from membership, willful refusal to pay union dues
and his/her forming, organizing, joining, supporting,
affiliating or aiding directly or indirectly another labor
union shall be a cause for it to demand his/her
dismissal from the company. The demand for the
dismissal and the actual dismissal by the company on
any of these grounds is an enforcement of the union
security clause in the CBA. This act is authorized by
law provided that enforcement should not be
characterized by arbitrariness (Manila Mandarin
Employee Union v. NLRC, G.R. No. 76989, 29 Sept.
1987, 154 SCRA 368) and always with due process
(Tropical Hut Employees Union v. Tropical Food
Market, Inc., L-43495-99, Jan. 20, 1990).
The reference to a Grievance Machinery and
Voluntary Arbitrators for the adjustment or resolution
of grievances arising from the interpretation or
implementation of their CBA and those arising from
the interpretation or enforcement of company
personnel policies is mandatory. The law grants to
voluntary arbitrators original and exclusive
jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining
Agreement and those arising from the interpretation
or enforcement of company personnel policies (Art.
261, Labor Code).
In its order of September 4, 1991, respondent Labor
Arbiter explained its decision to assume jurisdiction
over the complaint, thus:
The movants failed to show (1) the provisions of the
CBA to be implemented, and (2) the grievance
machinery and voluntary arbitrator already formed
and properly named. What self-respecting judge
would refer a case from his responsibility to a
shadow? To whom really and specifically shall the
case be indorsed or referred? In brief, they could
have shown the (1) existence of the grievance
machinery and (2) its being effective.
Furthermore, the aforecited law merely directs the
"referral" cases. It does not expressly confer
jurisdiction on the grievance machinery or voluntary
arbitration panel, created or to be created. Article 260
of the Labor Code describes the formation of the
grievance and voluntary arbitration. All this of course
shall be on voluntary basis. Is there another meaning
of voluntary arbitration? (The herein complainant
have strongly opposed the motion to dismiss. Would
they go willingly to the grievance machinery and
voluntary arbitration which are installed by their
opponents if directed to do so?) (p. 26, Rollo)
The failure of the parties to the CBA to establish the
grievance machinery and its unavailability is not an
excuse for the Labor Arbiter to assume jurisdiction
over disputes arising from the implementation and
enforcement of a provision in the CBA. In the existing
CBA between PSSLU and Sanyo, the procedure and
mechanics of its establishment had been clearly laid
out as follows:
ARTICLE XV — GRIEVANCE MACHINERY
Sec. 1. Whenever any controversy should arise
between the company and the union as to the
interpretation or application of the provision of this
agreement, or whenever any difference shall exist
between said parties relative to the terms and
conditions of employment, an earnest effort shall be
made to settle such controversy in substantially the
following manner:
First step. (Thru Grievance) The dispute shall initially
be resolved by conference between the management
to be represented by the Management's authorized
representatives on the one hand, and the Union to be
represented by a committee composed of the local
union president and one of the local union officer
appointed by the local union president, on the other
hand within three days from date of concurrence of
grievance action. In the absence of the local union
president, he (shall) appoint another local union
officer to take over in his behalf. Where a controversy
personally affects an employee, he shall not be
allowed to be a member of the committee
represented by the union.
Second step. (Thru Arbitrator mutually chosen)
Should such dispute remain unsettled after twenty
(20) days from the first conference or after such
period as the parties may agree upon in specified
cases, it shall be referred to an arbitrator chosen by
the consent of the company and the union. In the
event of failure to agree on the choice of voluntary
arbitrator, the National Conciliation and Mediation
Board, Department of Labor and Employment shall be
requested to choose an Arbitrator in accordance with
voluntary arbitration procedures.
Sec. 2. The voluntary Arbitrator shall have thirty (30)
days to decide the issue presented to him and his
decision shall be final, binding and executory upon
the parties. He shall have no authority to add or
subtract from and alter any provision of this
agreement. The expenses of voluntary arbitration
including the fee of the arbitrator shall be shared
equally by the company and the union. In the event
the arbitrator chosen either by the mutual agreement
of the company and the union by (the) way of
voluntary arbitration or by the National Conciliation
and Mediation Board (NCMB) failed to assume his
position, died, become disabled or any other manner
failed to function and or reach a decision, the
company and the union shall by mutual agreement
choose another arbitrator; in the event of failure to
agree on the choice of a new voluntary arbitrator, the
matter shall again be referred back to the NCMB who
shall be requested again to choose a new arbitrator
as above provided. Any grievance not elevated or
processed as above provided within the stipulated
period shall be deemed settled and terminated.
Sec. 3. It is hereby agreed that decisions of the union
relative to their members, for implementation by the
COMPANY, should be resolved for review thru the
Grievance Machinery; and management be invited to
participate in the Grievance procedure to be
undertaken by the union relative to (the) case of the
union against members. (pp. 134-135, Rollo)
All that needs to be done to set the machinery into
motion is to call for the convening thereof. If the
parties to the CBA had not designated their
representatives yet, they should be ordered to do so.
The procedure introduced in RA 6715 of referring
certain grievances originally and exclusively to the
grievance machinery and when not settled at this
level, to a panel of voluntary arbitrators outlined in
CBA's does not only include grievances arising from
the interpretation or implementation of the CBA but
applies as well to those arising from the
implementation of company personnel policies. No
other body shall take cognizance of these cases. The
last paragraph of Article 261 enjoins other bodies
from assuming jurisdiction thereof:
The commission, its Regional Offices and the Regional
Directors of the Department of Labor and
Employment shall not entertain disputes, grievances
or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of
voluntary arbitrators and shall immediately dispose
and refer the same to the grievance machinery or
voluntary arbitration provided in the Collective
Bargaining Agreement.
In the instant case, however, We hold that the Labor
Arbiter and not the Grievance Machinery provided for
in the CBA has the jurisdiction to hear and decide the
complaints of the private respondents. While it
appears that the dismissal of the private respondents
was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the
CBA, We are of the opinion that these facts do not
come within the phrase "grievances arising from the
interpretation or implementation of (their) Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel
policies," the jurisdiction of which pertains to the
Grievance Machinery or thereafter, to a voluntary
arbitrator or panel of voluntary arbitrators. Article 260
of the Labor Code on grievance machinery and
voluntary arbitrator states that "(t)he parties to a
Collective Bargaining Agreement shall include therein
provisions that will ensure the mutual observance of
its terms and conditions. They shall establish a
machinery for the adjustment and resolution of
grievances arising from the interpretation or
implementation of their Collective Bargaining
Agreement and those arising from the interpretation
or enforcement of company personnel policies." It is
further provided in said article that the parties to a
CBA shall name or designate their respective
representatives to the grievance machinery and if the
grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators (or
panel of voluntary arbitrators) designated in advance
by the parties. It need not be mentioned that the
parties to a CBA are the union and the company.
Hence, only disputes involving the union and the
company shall be referred to the grievance machinery
or voluntary arbitrators.
In the instant case, both the union and the company
are united or have come to an agreement regarding
the dismissal of private respondents. No grievance
between them exists which could be brought to a
grievance machinery. The problem or dispute in the
present case is between the union and the company
on the one hand and some union and non-union
members who were dismissed, on the other hand.
The dispute has to be settled before an impartial
body. The grievance machinery with members
designated by the union and the company cannot be
expected to be impartial against the dismissed
employees. Due process demands that the dismissed
workers grievances be ventilated before an impartial
body. Since there has already been an actual
termination, the matter falls within the jurisdiction of
the Labor Arbiter.
ACCORDINGLY, the petition is DISMISSED. Public
respondent Labor Arbiter is directed to resolve the
complaints of private respondents immediately.
SO ORDERED.
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK
EMPLOYEES and ATTY. ESTER S. GARCIA in her
capacity as VOLUNTARY ARBITRATOR, respondents.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank
(LDB) and the Association of Luzon Development Bank
Employees (ALDBE) arose an arbitration case to resolve the
following issue:
Whether or not the company has violated the Collective
Bargaining Agreement provision and the Memorandum of
Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their
respective Position Papers on December 1-15, 1994. Atty.
Ester S. Garcia, in her capacity as Voluntary Arbitrator,
received ALDBE's Position Paper on January 18, 1995. LDB, on
the other hand, failed to submit its Position Paper despite a
letter from the Voluntary Arbitrator reminding them to do so.
As of May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not
adhered to the Collective Bargaining Agreement provision nor
the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set
aside the decision of the Voluntary Arbitrator and to prohibit
her from enforcing the same.
In labor law context, arbitration is the reference of a labor
dispute to an impartial third person for determination on the
basis of evidence and arguments presented by such parties
who have bound themselves to accept the decision of the
arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on
which it is based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a
dispute are compelled by the government to forego their right
to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party.1 The essence of
arbitration remains since a resolution of a dispute is arrived at
by resort to a disinterested third party whose decision is final
and binding on the parties, but in compulsory arbitration, such
a third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a
dispute by the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to an impartial
third person for a final and binding resolution.2 Ideally,
arbitration awards are supposed to be complied with by both
parties without delay, such that once an award has been
rendered by an arbitrator, nothing is left to be done by both
parties but to comply with the same. After all, they are
presumed to have freely chosen arbitration as the mode of
settlement for that particular dispute. Pursuant thereto, they
have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to
de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining
Agreement (CBA) are required to include therein provisions for
a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company
personnel policies.3 For this purpose, parties to a CBA shall
name and designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection,
preferably from those accredited by the National Conciliation
and Mediation Board (NCMB). Article 261 of the Labor Code
accordingly provides for exclusive original jurisdiction of such
voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the
interpretation or enforcement of company personnel policies.
Article 262 authorizes them, but only upon agreement of the
parties, to exercise jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the
Labor Code has jurisdiction over the following enumerated
cases:
. . . (a) Except as otherwise provided under this Code the
Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and
lockouts;
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a
voluntary arbitrator or a panel of such arbitrators is quite
limited compared to the original jurisdiction of the labor arbiter
and the appellate jurisdiction of the National Labor Relations
Commission (NLRC) for that matter.4 The state of our present
law relating to voluntary arbitration provides that "(t)he award
or decision of the Voluntary Arbitrator . . . shall be final and
executory after ten (10) calendar days from receipt of the copy
of the award or decision by the parties,"5 while the "(d)ecision,
awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions,
awards, or orders."6 Hence, while there is an express mode of
appeal from the decision of a labor arbiter, Republic Act No.
6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator.
Yet, past practice shows that a decision or award of a
voluntary arbitrator is, more often than not, elevated to the
Supreme Court itself on a petition for certiorari,7 in effect
equating the voluntary arbitrator with the NLRC or the Court of
Appeals. In the view of the Court, this is illogical and imposes
an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled
premise that the judgments of courts and awards of quasi-
judicial agencies must become final at some definite time, this
Court ruled that the awards of voluntary arbitrators determine
the rights of parties; hence, their decisions have the same
legal effect as judgments of a court. In Oceanic Bic Division
(FFW), et al. v. Romero, et al.,9 this Court ruled that "a
voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys
in law the status of a quasi-judicial agency but independent of,
and apart from, the NLRC since his decisions are not
appealable to the latter.10
Section 9 of B.P. Blg. 129, as amended by Republic Act No.
7902, provides that the Court of Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and
the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel
of voluntary arbitrators may not strictly be considered as a
quasi-judicial agency, board or commission, still both he and
the panel are comprehended within the concept of a "quasi-
judicial instrumentality." It may even be stated that it was to
meet the very situation presented by the quasi-judicial
functions of the voluntary arbitrators here, as well as the
subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission,11 that the
broader term "instrumentalities" was purposely included in the
above-quoted provision.
powers are provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that,
although the Employees Compensation Commission is also
provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No.
1-95, laid down the procedure for the appealability of its
decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No.
7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or
panel of arbitrators should likewise be appealable to the Court
of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasi-
judicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the
original purpose of Circular No. 1-91 to provide a uniform
procedure for the appellate review of adjudications of all quasi-
judicial entities18 not expressly excepted from the coverage of
Sec. 9 of B.P. 129 by either the Constitution or another
statute. Nor will it run counter to the legislative intendment
that decisions of the NLRC be reviewable directly by the
Supreme Court since, precisely, the cases within the
adjudicative competence of the voluntary arbitrator are
excluded from the jurisdiction of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22
of Republic Act No. 876, also known as the Arbitration Law,
arbitration is deemed a special proceeding of which the court
specified in the contract or submission, or if none be specified,
the Regional Trial Court for the province or city in which one of
the parties resides or is doing business, or in which the
arbitration is held, shall have jurisdiction. A party to the
controversy may, at any time within one (1) month after an
award is made, apply to the court having jurisdiction for an
order confirming the award and the court must grant such
order unless the award is vacated, modified or corrected.19
In effect, this equates the award or decision of the voluntary
arbitrator with that of the regional trial court. Consequently, in
a petition for certiorari from that award or decision, the Court
of Appeals must be deemed to have concurrent jurisdiction
with the Supreme Court. As a matter of policy, this Court shall
henceforth remand to the Court of Appeals petitions of this
nature for proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the
Court of Appeals.

An "instrumentality" is anything used as a means or SO ORDERED.

agency.12 Thus, the terms governmental "agency" or
"instrumentality" are synonymous in the sense that either of
them is a means by which a government acts, or by which a
certain government act or function is performed.13 The word
"instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for
the performance of a state function.14 An individual person,
like an administrator or executor, is a judicial instrumentality in
the settling of an estate,15 in the same manner that a sub-
agent appointed by a bankruptcy court is an instrumentality of
the court,16and a trustee in bankruptcy of a defunct
corporation is an instrumentality of the state.17

The voluntary arbitrator no less performs a state function

pursuant to a governmental power delegated to him under the
provisions therefor in the Labor Code and he falls, therefore,
within the contemplation of the term "instrumentality" in the
aforequoted Sec. 9 of B.P. 129. The fact that his functions and
G.R. No. 140960 January 20, 2003
LUDO & LUYM CORPORATION, petitioner,
vs.
FERDINAND SAORNIDO as voluntary arbitrator
and LUDO EMPLOYEES UNION (LEU) representing
214 of its officers and members, respondents.
QUISUMBING, J.:
This petition for review on certiorari seeks to annul and
set aside the decision1 of the Court of Appeals
promulgated on July 6, 1999 and its Order denying
petitioner’s motion for reconsideration in CA-G.R. SP No.
44341.
The relevant facts as substantially recited by the Court
of Appeals in its decision are as follows:
Petitioner LUDO & LUYM CORPORATION (LUDO for
brevity) is a domestic corporation engaged in the
manufacture of coconut oil, corn starch, glucose and
related products. It operates a manufacturing plant
located at Tupas Street, Cebu City and a wharf where
raw materials and finished products are shipped out.
In the course of its business operations, LUDO engaged
the arrastre services of Cresencio Lu Arrastre Services
(CLAS) for the loading and unloading of its finished
products at the wharf. Accordingly, several arrastre
workers were deployed by CLAS to perform the services
needed by LUDO.
These arrastre workers were subsequently hired, on
different dates, as regular rank-and-file employees of
LUDO every time the latter needed additional manpower
services. Said employees thereafter joined respondent
union, the LUDO Employees Union (LEU), which acted as
the exclusive bargaining agent of the rank-and-file
employees.
On April 13, 1992, respondent union entered into a
collective bargaining agreement with LUDO which
provides certain benefits to the employees, the amount
of which vary according to the length of service
rendered by the availing employee.
Thereafter, the union requested LUDO to include in its
members’ period of service the time during which they
rendered arrastre services to LUDO through the CLAS so
that they could get higher benefits. LUDO failed to act
on the request. Thus, the matter was submitted for
voluntary arbitration.
The parties accordingly executed a submission
agreement raising the sole issue of the date of
regularization of the workers for resolution by the
Voluntary Arbitrator.
In its decision dated April 18, 1997, the Voluntary
Arbitrator ruled that: (1) the respondent employees
were engaged in activities necessary and desirable to
the business of petitioner, and (2) CLAS is a labor-only
contractor of petitioner.2 It disposed of the case thus:
WHEREFORE, in view of the foregoing, this Voluntary
Arbitrator finds the claims of the complainants
meritorious and so hold that:
a. the 214 complainants, as listed in the Annex A, shall
be considered regular employees of the respondents six
(6) months from the first day of service at CLAS;
b. the said complainants, being entitled to the CBA
benefits during the regular employment, are awarded a)
sick leave, b) vacation leave & c) annual wage and
salary increases during such period in the amount of
FIVE MILLION SEVEN HUNDRED SEVEN THOUSAND
TWO HUNDRED SIXTY ONE PESOS AND SIXTY ONE
CENTAVOS (P5,707,261.61) as computed in "Annex A";
c. the respondents shall pay attorney’s fees of ten (10)
percent of the total award;
d. an interest of twelve (12) percent per annum or one
(1) percent per month shall be imposed to the award
from the date of promulgation until fully paid if only to
speed up the payment of these long over due CBA
benefits deprived of the complaining workers.
Accordingly, all separation and/or retirement benefits
shall be construed from the date of regularization
aforementioned subject only to the appropriate
government laws and other social legislation.
SO ORDERED.3
In due time, LUDO filed a motion for reconsideration,
which was denied. On appeal, the Court of Appeals
affirmed in toto the decision of the Voluntary Arbitrator,
thus:
WHEREFORE, finding no reversible error committed by
respondent voluntary arbitrator, the instant petition is
hereby DISMISSED.
SO ORDERED.4
Hence this petition. Before us, petitioner raises the
following issues:
I
WHETHER OR NOT BENEFITS CONSISTING OF SALARY
INCREASES, VACATION LEAVE AND SICK LEAVE
BENEFITS FOR THE YEARS 1977 TO 1987 ARE ALREADY
BARRED BY PRESCRIPTION WHEN PRIVATE
RESPONDENTS FILED THEIR CASE IN JANUARY 1995;
II
WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN
AWARD BENEFITS NOT CLAIMED IN THE SUBMISSION
AGREEMENT.5
Petitioner contends that the appellate court gravely
erred when it upheld the award of benefits which were
beyond the terms of submission agreement. Petitioner
asserts that the arbitrator must confine its adjudication
to those issues submitted by the parties for arbitration,
which in this case is the sole issue of the date of
regularization of the workers. Hence, the award of
benefits by the arbitrator was done in excess of
jurisdiction.6
Respondents, for their part, aver that the three-year
prescriptive period is reckoned only from the time the
obligor declares his refusal to comply with his obligation
in clear and unequivocal terms. In this case,
respondents maintain that LUDO merely promised to
review the company records in response to respondents’
demand for adjustment in the date of their
regularization without making a categorical statement of
refusal.7 On the matter of the benefits, respondents
argue that the arbitrator is empowered to award the
assailed benefits because notwithstanding the sole issue
of the date of regularization, standard companion issues
on reliefs and remedies are deemed incorporated.
Otherwise, the whole arbitration process would be
rendered purely academic and the law creating it
inutile.8
The jurisdiction of Voluntary Arbitrator or Panel of
Voluntary Arbitrators and Labor Arbiters is clearly
defined and specifically delineated in the Labor Code.
The pertinent provisions of the Labor Code, read:
Art. 217. Jurisdiction of Labor Arbiters and the
Commission. --- (a) Except as otherwise provided under
this Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases:
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wage, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee
relations;
xxx
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators. — The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement
and those arising from the interpretation or enforcement
of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of
a Collective Bargaining Agreement, except those which
are gross in character, shall no longer be treated as
unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions
of such agreement.
The Commission, its Regional Offices and the Regional
Directors of the Department of Labor and Employment
shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided in
the Collective Bargaining Agreement.
Art. 262. Jurisdiction over other labor disputes. — The
Voluntary Arbitrator or panel of Voluntary Arbitrators,
upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor
practices and bargaining deadlocks."
In construing the above provisions, we held in San Jose
vs. NLRC, 9 that the jurisdiction of the Labor Arbiter and
the Voluntary Arbitrator or Panel of Voluntary Arbitrators
over the cases enumerated in the Labor Code, Articles
217, 261 and 262, can possibly include money claims in
one form or another.10 Comparatively, in Reformist
Union of R.B. Liner, Inc. vs. NLRC,11 compulsory
arbitration has been defined both as "the process of
settlement of labor disputes by a government
agency which has the authority to investigate and to
make an award which is binding on all the parties, and
as a mode of arbitration where the parties are compelled
to accept the resolution of their dispute through
arbitration by a third party (emphasis supplied)."12 While
a voluntary arbitrator is not part of the governmental
unit or labor department’s personnel, said arbitrator
renders arbitration services provided for under labor
laws.
Generally, the arbitrator is expected to decide only those
questions expressly delineated by the submission
agreement. Nevertheless, the arbitrator can assume that
he has the necessary power to make a final settlement
since arbitration is the final resort for the adjudication of
disputes.13 The succinct reasoning enunciated by the CA
in support of its holding, that the Voluntary Arbitrator in
a labor controversy has jurisdiction to render the
questioned arbitral awards, deserves our concurrence,
thus:
In general, the arbitrator is expected to decide those
questions expressly stated and limited in the submission
agreement. However, since arbitration is the final resort
for the adjudication of disputes, the arbitrator can
assume that he has the power to make a final
settlement. Thus, assuming that the submission
empowers the arbitrator to decide whether an employee
was discharged for just cause, the arbitrator in this
instance can reasonable assume that his powers
extended beyond giving a yes-or-no answer and
included the power to reinstate him with or without back
pay.
In one case, the Supreme Court stressed that "xxx the [their] right[s], [their] causes of action had not
Voluntary Arbitrator had plenary jurisdiction and accrued…" (Citation omitted.)
authority to interpret the agreement to arbitrate and to
determine the scope of his own authority subject only, in Since the parties had continued their negotiations even
a proper case, to the certiorari jurisdiction of this Court. after the matter was raised before the Grievance
The Arbitrator, as already indicated, viewed his authority Procedure and the voluntary arbitration, the respondents
as embracing not merely the determination of the had not refused to comply with their duty. They just
abstract question of whether or not a performance wanted the complainants to present some proofs. The
bonus was to be granted but also, in the affirmative complainant’s cause of action had not therefore accrued
case, the amount thereof. yet. Besides, in the earlier voluntary arbitration case
aforementioned involving exactly the same issue and
By the same token, the issue of regularization should be employees similarly situated as the complainants’, the
viewed as two-tiered issue. While the submission same defense was raised and dismissed by Honorable
agreement mentioned only the determination of the date Thelma Jordan, Voluntary Arbitrator.
or regularization, law and jurisprudence give the
voluntary arbitrator enough leeway of authority as well In fact, the respondents’ promised to correct their length
as adequate prerogative to accomplish the reason for of service and grant them the back CBA benefits if the
which the law on voluntary arbitration was created – complainants can prove they are entitled rendered the
speedy labor justice. It bears stressing that the former in estoppel, barring them from raising the
underlying reason why this case arose is to settle, once defense of laches or prescription. To hold otherwise
and for all, the ultimate question of whether respondent amounts to rewarding the respondents for their
employees are entitled to higher benefits. To require duplicitous representation and abet them in a dishonest
them to file another action for payment of such benefits scheme against their workers.17
would certainly undermine labor proceedings and
Indeed, as the Court of Appeals concluded, under the
contravene the constitutional mandate providing full
equitable principle of estoppel, it will be the height of
protection to labor.14
injustice if we will brush aside the employees’ claims on
As regards petitioner’s contention that the money claim a mere technicality, especially when it is petitioner’s own
in this case is barred by prescription, we hold that this action that prevented them from interposing the claims
contention is without merit. So is petitioner’s stance that within the prescribed period.
the benefits claimed by the respondents, i.e., sick leave,
WHEREFORE, the petition is denied. The appealed
vacation leave and 13th-month pay, had already
decision of the Court of Appeals in CA-G.R. SP No.
prescribed, considering the three-year period for the
44341 and the resolution denying petitioner’s motion for
institution of monetary claims.15 Such determination is a
reconsideration, are AFFIRMED. Costs against petitioner.
question of fact which must be ascertained based on the
evidence, both oral and documentary, presented by the SO ORDERED.
parties before the Voluntary Arbitrator. In this case, the
Voluntary Arbitrator found that prescription has not as
yet set in to bar the respondents’ claims for the
monetary benefits awarded to them. Basic is the rule
that findings of fact of administrative and quasi-judicial
bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally
accorded not only great respect but even finality.16 Here,
the Voluntary Arbitrator received the evidence of the
parties first-hand. No compelling reason has been shown
for us to diverge from the findings of the Voluntary
Arbitrator, especially since the appellate court affirmed
his findings, that it took some time for respondent
employees to ventilate their claims because of the
repeated assurances made by the petitioner that it
would review the company records and determine
therefrom the validity of the claims, without expressing
a categorical denial of their claims. As elucidated by the
Voluntary Arbitrator:

The respondents had raised prescription as defense. The

controlling law, as ruled by the High Court, is:

"The cause of action accrues until the party obligated

refuses xxx to comply with his duty. Being warded off by
promises, the workers not having decided to assert
R. No. 124823 July 28, 1999
PASVIL/PASCUAL LINER, INC., WORKERS
UNION-NAFLU, and DONATO BUGTONG, PEDRO
FERNANDO, RODANTE AMBAS, RODOLFO
PASCUAL, FELIZARDO GASPAR, CONRADO
CLEMENTE, PONCIANO GABRIEL SR., ROBERTO
ESPEJON, MARCELO MOJAR JR., ARNULFO
GERMAN, JOSE OGAO, ARNEL FORTALEZA,
MERLITO DELA CRUZ, ROMMEL BUENAVENTE,
MANUEL TRINIDAD, JOSELITO MENDIOLA,
PEDRO OCIONES, GUILLERMO NARANJO and
FREDENILL LAZO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
PASVIL/PASCUAL LINER, INC., respondents.
BELLOSILLO, J.:
THE RIGHT TO STRIKE is one of the rights recognized
and guaranteed by the Constitution as an instrument of
labor for its protection against management exploitation.
By virtue of this right the workers are able to press their
demands for better terms and conditions of employment
with more energy and persuasiveness, poising the threat
to strike as their reaction to their employer's
intransigence. The strike is indeed a powerful weapon of
the working class. But precisely, if not because of this, it
must be handled carefully, like a sensitive explosive, lest
it blows up in the workers' own hands. 1 Simply put, a
strike is recognized and protected by our labor laws only
when waged on account of a labor dispute. In the
absence thereof, the employees who engage themselves
in work stoppage commit an illegal strike and should
face the consequences thereof.1âwphi1.nêt
On 3 August 1994 petitioner PASVIL/Pascual Liner, Inc.,
Workers Union — NAFLU (UNION for short) 2 filed a
notice of strike with the National Conciliation and
Mediation Board — National Capital Region (NCMB-NCR
for short) against private respondent PASVIL/Pascual
Liner, Inc., (PASVIL for short) for unfair labor practices
consisting in union busting, discrimination and
discouraging union membership. 3 On 24 January 1995
the NCMB-NCR notified UNION President Donato
Bugtong thus —
During the conciliation meetings conducted by this
Office, it was clearly established that the real issues
raised are the dismissal of the Union President (referring
to Bugtong himself) which is pending adjudication
before Labor Arbiter Melquiades Del Rosario of the
NLRC-NCR, and the certification election case which is
pending resolution before the Office of the Secretary.
The issues raised are therefore not proper subjects of a
Notice of Strike but are appropriate for Preventive
Mediation. 4
A series of conciliation conferences was thereafter
conducted by the NCMB-NCR which failed however to
amicably settle the dispute. As a consequence, on 18
February 1995 petitioner UNION staged a strike. Further
efforts to effect settlement achieved nothing and the
strike continued.
On 21 February 1995, upon petition of private
respondent PASVIL, then Secretary of Labor and
Employment Ma. Nieves R. Confesor, pursuant to Art.
263, par. (g), of the Labor Code, assumed jurisdiction
over the dispute and certified it to public respondent
National Labor Relations Commission (NLRC) for
compulsory arbitration. Secretary Confesor justified her
direct intervention —
The Company is engaged in the transportation business
and has in its employ more or less 900 workers. It
services the needs of thousands of commuters in Metro
Manila mostly students, professionals, government and
private employees as well as traders and merchants. A
prolonged work stoppage, therefore, at the Company
would not only cause unnecessary inconvenience and
adverse effects to the riding public but also to the
livelihood of its direct employees not to mention their
families and those indirectly dependent upon the
continued operation of the Company.
At this critical time when efforts of the present
administration is (sic) seriously focused on sustaining
the economic gains already achieved and putting in
place the much needed social reforms, it is the utmost
concern of this Office to avert unnecessary work
stoppages that might result into untold dire
consequences. 5
Secretary Confesor directed all striking workers to return
to work within twenty-four (24) hours from receipt
thereof and for PASVIL to accept them back under the
same terms and conditions of employment prevailing
before the strike. Furthermore, she directed the parties
to cease and desist from committing acts that would
prejudice the other party or exacerbate the situation.
The directive was published in Daily
Balita and Bulgar.
6 7
Notwithstanding receipt of the aforementioned order,
Secretary Confesor found that petitioner UNION
continued to picket and barricade PASVIL's premises
thereby preventing the workers wanting to report back
to work from entering the premises. On 24 February
1995 she reiterated her directive in the previous return-
to-work order and deputized the Station Commander of
the Novaliches Police Station to assist in the orderly and
peaceful enforcement of her order including the removal
of all forms of obstruction and barricades to ensure free
ingress to or egress from the premises of PASVIL. 8
The conciliation conferences were then scheduled by the
NLRC on 28 March and 19 April 1995 but only
representatives of PASVIL appeared. On this account, an
order was issued on 12 May 1995 directing the parties to
submit their Position Papers. The parties complied.
On 21 August 1995 PASVIL moved for the early
resolution of the case on the ground that the strike was
still ongoing thus causing it vast revenue losses. A
hearing was set for 29 August 1995 to determine
whether a formal hearing on the merits was necessary
or whether PASVIL's motion should be granted.
However, both parties failed to appear so a second
hearing was set on 11 October 1995. On this date, the
parties were asked if they wished to have the case
submitted for resolution. Petitioner UNION, through
Board Member Ponciano Gabriel Sr., requested and was
granted up to 23 October 1995 to notify the NLRC
regarding its intention with respect to the proceedings.
On the deadline, petitioner UNION moved for a formal
trial on the merits. A hearing on the motion was set on 6
November 1995. However, only PASVIL's counsel
attended the hearing and was given until 15 November
1995 to comment on the motion. In the comment
subsequently filed, PASVIL alleged that all questions
raised by petitioner UNION had been traversed by the
documents already submitted in evidence. Another
hearing was scheduled for 7 December 1995. Again,
only PASVIL appeared.
On the belief that petitioner UNION's motion for a formal
trial on the merits was a mere dilatory move and on the
consideration that the evidence on hand would
sufficiently allow it to reach a conclusion, the NLRC
denied the motion for a formal trial and proceeded to
resolve the legality of petitioner UNION's purposes for
staging the strike, i.e., that twenty-four (24)
airconditioned buses were surreptitiously removed from
the company premises to deprive UNION officers and
members of their jobs, and that Bugtong was arbitrarily
dismissed from. employment due to UNION activities.
PASVIL countered that the buses were sold to E & J
Transport and Mayami Transit the proceeds of which
were applied to the payment of interest on its principal
obligations and that Bugtong was dismissed due to gross
and habitual neglect of duty/willful disobedience.
On 15 January 1996 the NLRC declared the still-ongoing
strike illegal and consequently deemed the UNION
officers who acted as leaders thereof, petitioners herein,
to have lost their employment status, namely, President
Donato Bugtong, Vice President Pedro Fernando,
Secretary Rodante Ambas, Treasurer Rodolfo Pascual,
Auditor Felizardo Gaspar, Spokesman Conrado Clemente
and Board Members Ponciano Gabriel Sr., Roberto
Espejon, Marcelo Mojar Jr., Arnulfo German, Jose Ogao,
Arnel Fortaleza, Merlito Dela Cruz, Rommel Buenavente,
Manuel Trinidad, Joselito Mendiola, Pedro Ociones,
Guillermo Naranjo and Fredenill Lazo. However, the
charge of unfair labor practice was dismissed for lack of
merit. 9
In support of its ruling, the NLRC ratiocinated that
although PASVIL did not prove that the sale of the buses
actually materialized there was evidence showing that
even without those buses there was a sufficient number
of buses remaining for the employees to continue
working and that PASVIL even exhorted its drivers and
dispatchers to accept their respective assignments and
operate the buses. 10 Yet petitioners did not explain why
they failed to man the remaining buses. The NLRC also
found that petitioners did not specify the wage benefits
they were entitled to that were not granted by PASVIL
nor did they clarify the particular working conditions
existing at their workplace which they could not tolerate.
At any rate, the NLRC opined that the issue of
underpayment or non-payment of wage benefits should
have been addressed to the Labor Arbiter, whereas that
of poor working conditions should have been brought to
the attention of the Department of Labor and
Employment or, if related to the condition of the buses
themselves, to the Department of Transportation and
Communication which had the authority to suspend or
cancel the franchise of PASVIL.
With regard to the dismissal from employment of
petitioner Bugtong, the NLRC found that as previously
ruled by the NCMB-NCR, a complaint therefor has been
filed before Labor Arbiter Melquiades Sol D. Del Rosario
who on 25 May 1995 held that the totality of infractions
committed by Bugtong justified his dismissal. 11 Still
another rationale for the NLRC's ruling against
petitioners was its finding that the strikers did not
comply with Secretary Confesor's directive for them to
return to work. To sum up, the NLRC ruled that there
was no legitimate reason for petitioners to strike. On 31
January 1996 reconsideration was denied.
Did the NLRC act with grave abuse of discretion in: (a)
ruling on the illegality of the strike thus violating the
doctrine laid down in Philippine Airlines, Inc. v. Secretary
of Labor and Employment 12 that the Labor Secretary's
authority to resolve a labor dispute over which he has
assumed jurisdiction encompasses only the issues
involved therein, not the legality or illegality of the
strike; (b) refusing to hold a formal trial; (c) holding that
PASVIL was not guilty of unfair labor practice; and, (d)
declaring the strike illegal and considering petitioners to
have lost their employment status?
Petitioners allege that on the basis of Art. 217 of the
Labor Code which explicitly provides that Labor Arbiters
shall have original and exclusive jurisdiction to hear and
decide cases involving the legality of strikes and lock-
outs, the NLRC was not clothed with authority to decide
on the legality of the strike. Moreover, they stress that
the dispute did not involve any complaint for illegal
strike but for unfair labor practice such that in Philippine
Airlines involving the same factual milieu this Court held
that the Secretary of Labor and Employment acted
without or in excess of jurisdiction when he ruled on the
legality of the strike.
There is no grave abuse of discretion. Article 217 of the
Labor Code categorically provides that Labor Arbiters
shall have original and exclusive jurisdiction to hear and
decide cases involving the legality of strikes and lock-
outs. But the opening phrase of the law is as categorical
in mentioning an exception thereto. Thus —
Art. 217. Jurisdiction of Labor Arbiters and the
Commission. — (a) Except as otherwise provided under
this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by
the parties for decision without extension, the following
cases involving all workers, whether agricultural or non-
agricultural . . . . 5. Cases arising from any violation of
Article 264 of this Code, including questions on the
legality of strikes and lock-outs . . . . (emphasis
supplied).
An exception to the original and exclusive jurisdiction
lodged in the Labor Arbiters is found in Art. 263, par.
(g), of the same Code —
Art. 263. Strikes, picketing, and lockouts. — . . . . (g)
When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike
or lockout as specified in the assumption or certification
order. If one has already taken place at the time of
assumption or certification, all striking or locked out
employees shall immediately return to work and the
employer shall immediately resume operations and
readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission
may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with
such orders as he may issue to enforce the same . . . .
In 1992 we clarified this point in International
Pharmaceuticals, Inc. v. Secretary of Labor and
Employment 13 thus —
. . . [T]he Secretary was explicitly granted by Article 263
(g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to
the national interest, and decide the same accordingly.
Necessarily, this authority to assume jurisdiction over
the said labor dispute must include and extend to all
questions and controversies arising therefrom, including
cases over which the Labor Arbiter has exclusive
jurisdiction(emphasis supplied).
In the same manner, when the Secretary of Labor and
Employment certifies the labor dispute to the NLRC for
compulsory arbitration the latter is concomitantly
empowered to resolve all questions and controversies
arising therefrom including cases otherwise belonging
originally and exclusively to the Labor Arbiter.
In Philippine Airlines we ruled that the jurisdiction of the
Secretary of Labor and Employment in assumption
and/or certification cases is limited to the issues that are
involved in the disputes or to those submitted to him for
resolution. Since the legality or illegality of the strike
resolution he was thus found to have exceeded his
jurisdiction when he restrained the employer from taking
disciplinary action against the employees who staged an
illegal strike. The Philippine Airlines case finds no
application to the present case because, as distinguished
therefrom and as properly observed by the Office of the
Solicitor General, the certification by Secretary Confesor
to the NLRC of the issues sought to be settled involved
the strike of petitioners. The certification stated —
On 3 August 1994, the PASVIL/Pascual Liner, Inc.
Workers Union — NAFLU, hereinafter referred to as the
Union, filed a Notice of Strike with the National
Conciliation and Mediation Board — National Capital
Region (NCMB-NCR) against PASVIL/Pascual Liner, Inc.,
hereinafter referred to as the Company, on grounds of
unfair labor practices acts. Series of conciliation
conferences conducted by the Board failed to arrive at
an amicable settlement on the alleged specific acts
committed by the Company.
On 18 February 1995, the Union struck. Further efforts
to effect settlement yielded negative results. In the
meantime, the strike continues with no settlement in
sight. 14
Clearly, what was certified to the NLRC was the entire
labor dispute including the strike which was then
ongoing. It was thus necessary for the NLRC to rule on
the matter. In St. Scholastica's College
v. Torres 15 where petitioner questioned the assumption
by the Secretary of Labor and Employment of
jurisdiction to decide on termination disputes, likewise
maintaining that such jurisdiction was vested instead in
the Labor Arbiter pursuant to Art. 217 of the Labor Code
and invoking Philippine Airlines, we emphasized that —
Before the Secretary of Labor and Employment may take
cognizance of an issue which is merely incidental to the
labor dispute, therefore, the same must be involved in
the labor dispute itself, or otherwise submitted to him
for resolution. If it was not, as was the case in PAL
v. Secretary of Labor and Employment, supra, and he
nevertheless acted on it, that assumption of jurisdiction
is tantamount to a grave abuse of discretion. Otherwise,
the ruling in International Pharmaceuticals,
Inc. v. Secretary of Labor and Employment, supra, will
apply.
Petitioners assert that since the NLRC did not act as an
appellate body in resolving the dispute it should have
been guided by Rule V, Sec. 5, par. (b), of its New Rules
of Procedure mandating that —
Sec. 5. Period to Decide Case . . . . (b) If the Labor
Arbiter finds no necessity of further hearing after the
parties have submitted their position papers and
supporting documents, he shall issue an Order to that
effect and shall inform the parties, stating the reasons
therefor . . . .
Petitioners advance that conformably therewith the
NLRC should have issued a separate ruling on their
motion for formal trial, instead of having merely
incorporated its ruling in its assailed decision, so that
they could have supplied or completed whatever
deficiencies there might be in their evidence. They add
that there were factual issues which could not be
resolved by documentary evidence, i.e., blockade of the
free ingress to and egress from the company premises
and non-compliance with the return-to-work order.
We are not persuaded. The purpose of the rule requiring
the issuance of an order submitting the case for decision
is to provide a period from which to reckon the time
frame within which to decide the case. We discern this
purpose from a reading of Rule V, Sec. 5, par. (a), of the
same rules which commands the Labor Arbiter to render
his decision within thirty (30) calendar days, without
extension, after submission of the case for decision. We
find that the NLRC did not commit a serious violation of
its own rules when it incorporated its ruling on
petitioners' motion for formal trial in its decision.
Determining the reckoning period to decide the case was
no longer necessary since, after all, the NLRC had
already prepared a decision. It was enough that it acted
on the motion in its decision stating the following as
reasons for denial —
Considering the fact, however, that the Union's counsel
has not bothered to appear at any of the previous
hearings called by this Office, which number at least
five, We sincerely doubt his sincerity in wanting to
proceed with a formal trial of this case.
Indeed, his (sic) counsel's seeming hide-and-seek
attitude tends to make Us believe this request for a trial
on the merits is merely a dilatory tactic resorted to, to
delay the resolution of this certified case.
Besides, after painstakingly reviewing the documents
and supporting proofs on record, we are convinced that
there is sufficient evidence to allow Us to reach a
conclusion in this case. . . . 16
Petitioners' theory — that had the NLRC issued a
separate ruling on their motion they could have rectified
whatever deficiencies there might have been in their
evidence — is outrightly fallacious. Rule V, Sec. 3, of the
same Rules is specific —
Sec. 3. Submission of Position Paper/Memorandum . — .
. . . These verified position papers shall . . . . be
accompanied by all supporting documents including the
affidavits of their respective witnesses which shall take
the place of the latter's testimony. The parties shall
thereafter not be allowed to allege facts, or present
evidence to prove facts, not referred to and any cause
or causes of action not included in the complaint or
position papers, affidavits and other documents . . . .
(emphasis supplied).
We deduce from petitioners' theory that only upon a
denial of their motion will the occasion arise for them to
augment their evidence. Here lies the fallacy. The
opportune time to do so was when they submitted their
position papers. They should have attached thereto all
the documents that would have proved their
claim. 17 In PMI Colleges v. NLRC 18 we made it clear
that —
. . . . The absence of a formal hearing or trial before the
Labor Arbiter is no cause for petitioner to impute grave
abuse of discretion. Whether to conduct one or not
depends on the sole discretion of the Labor Arbiter,
taking into account the position papers and supporting
documents submitted by the parties on every issue
presented. If the Labor Arbiter, in his judgment, is
confident that he can rely on the documents before him,
he cannot be faulted for not conducting a formal trial
anymore, unless it would appear that, in view of the
particular circumstances of a case, the documents,
without more, are really insufficient.
Applying the ruling to the present case and dwelling on
the more important consideration of the NLRC in not
granting petitioners' motion for a formal trial, i.e., the
existence of sufficient evidence allowing it to reach a
conclusion, we fully agree in the denial of petitioners'
motion. PASVIL's evidence adequately proved that it was
not guilty of unfair labor practice; consequently, there
was no legitimate reason for petitioners to hold a strike
and thereafter defy the return-to-work order of
Secretary Confesor.
Petitioners maintain that PASVIL committed unfair labor
practice when it surreptitiously pulled out twenty-four
(24) buses from its garage, then manned by active
UNION members, thereby substantially affecting their
jobs. In the alternative, they argue that, citing People's
Industrial and Commercial Employees and Workers
Organization (FFW) v. People's Industrial and
Commercial Corporation, a strike may be considered
19
legal where the union believed that the company
committed unfair labor practices and the circumstances
warranted such belief in good faith although
subsequently such allegations are found to be untrue.
They insist also that, as averred in their affidavit, they
wanted to comply with the return-to-work order of
Secretary Confesor but that the bus company refused to
reinstate them.
Factual findings of the NLRC are entitled to respect and
finality in the absence of proof, as herein, that they were
arrived at arbitrarily or
capriciously. Although PASVIL failed to prove that the
20
sale of the buses pushed through, we agree with the
NLRC that there is evidence showing that a sufficient
number of units remained for the employees to continue
working. PASVIL, in its letter of 2 August 1994, exhorted
its drivers and dispatchers individually to accept their
respective assignments and operate the buses
thus —
Ikaw ay sinasabihan na magpa-schedule sa Dispatcher
upang maibiyahe ang bus.
Maraming bus ang kumpanya kaya marami ang
nakahilera lang sa ready line. Wala namang sira ang
mga bus kaya kailangang maibiyahe ang mga ito. 21
Moreover, the NCMB-NCR conducted on 7 September
1994 an ocular inspection of PASVIL's facilities and
determined that there were thirty-seven (37) buses
"ready for trip" but that these remained
unmanned. 22 Petitioners did not bother to explain why
they failed to operate the remaining buses.
Good faith is still a valid defense against the claim of
illegality of a strike. However, petitioners cannot find
refuge in People's Industrial & Commercial Employees
and Workers Organization (FFW) because, on the basis
of PASVIL's letters to its individual employees and the
ocular inspection by the NCMB-NCR, we do not find even
a semblance of good faith on the part of
petitioners. 23 The NLRC was correct in dismissing the
charge of unfair labor practice against PASVIL and in
declaring the strike illegal. Article 264, par. (a), of the
Labor Code provides the sanction of loss of employment
status for any union officer who knowingly participates
in an illegal strike. The NLRC found that petitioners led
the illegal strike against PASVIL. This is not disputed by
petitioners. We thus sustain the NLRC's declaration that
petitioners lost their employment status with PASVIL.
Petitioners lay the blame on PASVIL's alleged refusal to
accept them back to its fold for their failure to comply
with the directive of Secretary Confesor to return to
work. They invite our attention to an averment in their
affidavit —
28. Na ang ilan sa mga manggagawa na gusto sanang
bumalik din at sumunod sa Return to Work Order ngunit
ayaw talagang pabalikin ng manedsment ( sic) at ni ayaw
papasukin sa loob ng garahe ay ang mga sumusunod. . .
. 24
As thus worded, it is unclear as to which orders of
Secretary Confesor petitioners allegedly displayed
willingness to obey. Exploring the other averments in
their affidavit we note that they actually referred the
first order of Secretary Confesor. We took into account
their previous averments —
23. Na nagsimula kaming mag-strike noong Pebrero 18,
1995 ngunit noong Pebrero 21, 1995 ay nagbaba ng
return to work order ang Secretary of Labor no
nagsasaad na ang aming strike ay doon na lang
didinggin sa NLRC para sa Compulsory Arbitration at
inaatasan kaming bumalik sa aming trabaho;
24. Na tumalima naman ang mga miyembro ng unyon
sa Order ng DOLE Secretary at bumalik na nga kami sa
aming mga trabaho ngunit hindi kami lahat ng ( sic)
kanilang tinanggap . . . . 26
Yet it is hard to believe that such was the situation. If
this were so and that they wanted to resume their jobs
but PASVIL did recourse to Secretary Confesor would
not have been undertaken by PASVIL. This second
recourse paved the way for Secretary Confesor to arrive
at the finding that —
Notwithstanding due receipt of the (21 February 1995)
Order, the Union continues picket and barricade the
premises of the Company, thereby preventing those
workers who would want to report back to work from
entering the Company. . . . . 26
Secretary Confesor thus reiterated her previous return-
to-work order. Pitted against the aforementioned
finding, petitioners' averments cannot be sustained.
Unless there are cogent reasons, and we do not find
any, this Court will not alter, modify or reverse the
factual findings of the Secretary of Labor and
Employment because by reason of her official position
she is considered to have acquired expertise as her
jurisdiction is confined to specific matters. 27
A stronger proof that petitioners and other UNION
members defied the return-to-work order of Secretary
Confesor is the letter of petitioner Bugtong himself to
the Social Security System of 3 August 1995 certifying
that "employees of PASVIL/PASCUAL LINER, INC. is (sic)
on strike effective last February 18, 1995 up to the
present." 28 This certification effectively binds petitioners
and relegates to insignificance their pretension to the
contrary.
Under the same Art. 264, par. (a), St. Scholastica's
College expressed in no uncertain terms that from the
moment a worker defies a return-to-work order he is
deemed to have abandoned his job. It is already in itself
knowingly participating in an illegal act. The present
case is one instance when, sadly, the law cannot
interpose its hand to protect the employees from the
consequences of their misbehavior. 29
WHEREFORE, the petition is, DISMISSED. The decision,
of public respondent National Labor Relations
Commission of 15 January 1996 declaring illegal the
strike staged by petitioners PASVIL/Pascual Liner, Inc.,
Workers Union — NAFLU and its officers and members
on 18 February 1995 against respondent PASVIL/Pascual
Liner, Inc.; declaring petitioners Donato Bugtong, Pedro
Fernando, Rodante Ambas, Rodolfo Pascual, Felizardo
Gaspar, Conrado Clemente, Ponciano Gabriel Sr.,
Roberto Espejon, Marcelo Mojar Jr., Arnulfo German,
Jose Agao, Arnel Fortaleza, Merlito dela Cruz, Rommel
Buenavente, Manuel Trinidad, Joselito Mendiola, Pedro
Ociones, Guillermo Naranjo and Fredenill Lazo as having
lost their employment status as a consequence; and,
practice against private respondent company
PASVIL/Pascual Liner, Inc., is AFFIRMED. The resolution
of 30 January 1996 denying reconsideration is likewise
AFFIRMED.1âwphi1.nêt
SO ORDERED.
G.R. No. 127598 February 22, 2000 40 days (typo
Union leave - 30 days
error)
MANILA ELECTRIC COMPANY, petitioner,
vs.
Hon. SECRETARY OF LABOR LEONARDO High - not apply to members
QUISUMBING and MERALCO EMPLOYEES and voltage/pole those who of a team
WORKERS ASSOCIATION are
(MEWA), respondent. not exposed
to the risk
RESOLUTION

YNARES-SANTIAGO, J.: Collectors - no need for

cash bond,
In the Decision promulgated on January 27, 1999, no
the Court disposed of the case as follows: need to
reduce quota
WHEREFORE, the petition is granted and the orders
and MAPL
of public respondent Secretary of Labor dated
August 19, 1996 and December 28, 1996 are set
aside to the extent set forth above. The parties are exclude
directed to execute a Collective Bargaining CBU - confidential include
Agreement incorporating the terms and conditions employees
contained in the unaffected portions of the
Secretary of Labor's orders of August 19, 1996 and maintenance
Union closed
December 28, 1996, and the modifications set forth - of
security shop
above. The retirement fund issue is remanded to membership
the Secretary of Labor for reception of evidence
and determination of the legal personality of the Contracting no need to consult
MERALCO retirement fund.1 -
out consult union first
The modifications of the public respondent's
resolutions include the following: existing
All benefits - terms and all terms
January 27, Secretary's conditions
1999 decision resolution
Dec. 28,
from Dec.
P1,900.00 for Retroactivity - 1996-Dec.
Wages - P2,200.00 1, 1995
1995-96 27, 199(9)

Dissatisfied with the Decision, some alleged

modified to
X'mas bonus - 2 months members of private respondent union (Union for
one month
brevity) filed a motion for intervention and a
motion for reconsideration of the said Decision. A
remanded to separate intervention was likewise made by the
Retirees - granted
the Secretary supervisor's union (FLAMES2) of petitioner
corporation alleging that it has bona fide legal
Loan to interest in the outcome of the case.3 The Court
- denied granted
coops required the "proper parties" to file a comment to
the three motions for reconsideration but the
GHSIP, HMP Solicitor-General asked that he be excused from
and filing the comment because the "petition filed in
Housing granted up to the instant case was granted" by the
loans - P60,000.00 granted Court.4 Consequently, petitioner filed its own
consolidated comment. An "Appeal Seeking
Immediate Reconsideration" was also filed by the
Signing
- denied granted alleged newly elected president of the
bonus
Union.5 Other subsequent pleadings were filed by
the parties and intervenors.
The issues raised in the motions for reconsideration
had already been passed upon by the Court in the
January 27, 1999 decision. No new arguments
were presented for consideration of the Court.
Nonetheless, certain matters will be considered
herein, particularly those involving the amount of
wages and the retroactivity of the Collective
Bargaining Agreement (CBA) arbitral awards.
Petitioner warns that if the wage increase of
P2,200.00 per month as ordered by the Secretary is
allowed, it would simply pass the cost covering
such increase to the consumers through an
increase in the rate of electricity. This is a non
sequitur. The Court cannot be threatened with such
a misleading argument. An increase in the prices of
electric current needs the approval of the
appropriate regulatory government agency and
does not automatically result from a mere increase
in the wages of petitioner's employees. Besides,
this argument presupposes that petitioner is
capable of meeting a wage increase. The All Asia
Capital report upon which the Union relies to
support its position regarding the wage issue
cannot be an accurate basis and conclusive
determinant of the rate of wage increase. Section
45 of Rule 130 Rules of Evidence provides:
Commercial lists and the like. — Evidence of
statements of matters of interest to persons
engaged in an occupation contained in a list,
register, periodical, or other published compilation
is admissible as tending to prove the truth of any
relevant matter so stated if that compilation is
published for use by persons engaged in that
occupation and is generally used and relied upon
by them therein.
Under the afore-quoted rule, statement of matters
contained in a periodical, may be admitted only "if
that compilation is published for use by persons
engaged in that occupation and is generally used
and relied upon by them therein." As correctly held
in our Decision dated January 27, 1999, the cited
report is a mere newspaper account and not even a
commercial list. At most, it is but an analysis or
opinion which carries no persuasive weight for
purposes of this case as no sufficient figures to
support it were presented. Neither did anybody
testify to its accuracy. It cannot be said that
businessmen generally rely on news items such as
this in their occupation. Besides, no evidence was
presented that the publication was regularly
prepared by a person in touch with the market and
that it is generally regarded as trustworthy and
reliable. Absent extrinsic proof of their accuracy,
these reports are not admissible.6 In the same
manner, newspapers containing stock quotations
are not admissible in evidence when the source of
the reports is available.7 With more reason, mere
analyses or projections of such reports cannot be
admitted. In particular, the source of the report in
this case can be easily made available considering
that the same is necessary for compliance with
certain governmental requirements.
Nonetheless, by petitioner's own allegations, its
actual total net income for 1996 was P5.1
billion.8 An estimate by the All Asia financial analyst
stated that petitioner's net operating income for the
same year was about P5.7 billion, a figure which
the Union relies on to support its claim. Assuming
without admitting the truth thereof, the figure is
higher than the P4.171 billion allegedly suggested
by petitioner as its projected net operating income.
The P5.7 billion which was the Secretary's basis for
granting the P2,200.00 is higher than the actual
net income of P5.1 billion admitted by petitioner. It
would be proper then to increase this Court's
award of P1,900.00 to P2,000.00 for the two years
of the CBA award. For 1992, the agreed CBA wage
increase for rank-and-file was P1,400.00 and was
reduced to P1,350.00; for 1993; further reduced to
P1,150.00 for 1994. For supervisory employees, the
agreed wage increase for the years 1992-1994 are
P1,742.50, P1,682.50 and P1,442.50, respectively.
Based on the foregoing figures, the P2,000.00
increase for the two-year period awarded to the
rank-and-file is much higher than the highest
increase granted to supervisory employees.9 As
mentioned in the January 27, 1999 Decision, the
Court does "not seek to enumerate in this decision
the factors that should affect wage determination"
because collective bargaining disputes particularly
those affecting the national interest and public
service "requires due consideration and proper
balancing of the interests of the parties to the
dispute and of those who might be affected by the
dispute."10 The Court takes judicial notice that the
new amounts granted herein are significantly
higher than the weighted average salary currently
enjoyed by other rank-and-file employees within
the community. It should be noted that the
relations between labor and capital is impressed
with public interest which must yield to the
common good.11 Neither party should act
oppressively against the other or impair the interest
or convenience of the public.12Besides, matters of
salary increases are part of management
prerogative.13
On the retroactivity of the CBA arbitral award, it is
well to recall that this petition had its origin in the
renegotiation of the parties' 1992-1997 CBA insofar
as the last two-year period thereof is concerned.
When the Secretary of Labor assumed jurisdiction
and granted the arbitral awards, there was no
question that these arbitral awards were to be
given retroactive effect. However, the parties
dispute the reckoning period when retroaction shall
commence. Petitioner claims that the award should
retroact only from such time that the Secretary of
Labor rendered the award, invoking the 1995
decision in Pier 8 case14 where the Court,
citing Union of Filipino Employees v. NLRC,15 said:
The assailed resolution which incorporated the CBA
to be signed by the parties was promulgated on
June 5, 1989, the expiry date of the past CBA.
Based on the provision of Section 253-A, its
retroactivity should be agreed upon by the parties.
But since no agreement to that effect was made,
public respondent did not abuse its discretion in
giving the said CBA a prospective effect. The action
of the public respondent is within the ambit of its
authority vested by existing law.
On the other hand, the Union argues that the
award should retroact to such time granted by the
Secretary, citing the 1993 decision of St. Luke's.16
Finally, the effectivity of the Order of January 28,
1991, must retroact to the date of the expiration of
the previous CBA, contrary to the position of
petitioner. Under the circumstances of the case,
Article 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in
his assailed Order of April 12, 1991 dismissing
petitioner's Motion for Reconsideration —
Anent the alleged lack of basis for the retroactivity
provisions awarded; we would stress that the
provision of law invoked by the Hospital, Article
253-A of the Labor Code, speaks of agreements by
and between the parties, and not arbitral awards . .
. retroactivity as part of his discretionary powers
Therefore, in the absence of a specific provision of
law prohibiting retroactivity of the effectivity of
arbitral awards issued by the Secretary of Labor
pursuant to Article 263(g) of the Labor Code, such
as herein involved, public respondent is deemed
vested with plenary and discretionary powers to
determine the effectivity thereof.
In the 1997 case of Mindanao Terminal,17 the Court
applied the St. Luke's doctrine and ruled that:
In St. Luke's Medical Center v. Torres, a deadlock
also developed during the CBA negotiations
between management and the union. The
Secretary of Labor assumed jurisdiction and
ordered the retroaction of the CBA to the date of
expiration of the previous CBA. As in this case, it
was alleged that the Secretary of Labor gravely
abused its discretion in making his award
retroactive. In dismissing this contention this Court
held:
Therefore, in the absence of a specific provision of
law prohibiting retroactive of the effectivity of
arbitral awards issued by the Secretary of Labor
pursuant to Article 263(g) of the Labor Code, such
as herein involved, public respondent is deemed
vested with plenary and discretionary powers to
determine the effectivity thereof.
The Court in the January 27, 1999 Decision, stated
that the CBA shall be "effective for a period of 2
years counted from December 28, 1996 up to
December 27, 1999." Parenthetically, this actually
covers a three-year period. Labor laws are silent as
to when an arbitral award in a labor dispute where
the Secretary had assumed jurisdiction by virtue of
Article 263 (g) of the Labor Code shall retroact. In
general, a CBA negotiated within six months after
the expiration of the existing CBA retroacts to the
day immediately following such date and if agreed
thereafter, the effectivity depends on the
agreement of the parties.18 On the other hand, the
law is silent as to the retroactivity of a CBA arbitral
award or that granted not by virtue of the mutual
agreement of the parties but by intervention of the
government. Despite the silence of the law, the
Court rules herein that CBA arbitral awards granted
after six months from the expiration of the last CBA
shall retroact to such time agreed upon by both
employer and the employees or their union. Absent
such an agreement as to retroactivity, the award
shall retroact to the first day after the six-month
period following the expiration of the last day of
the CBA should there be one. In the absence of a
CBA, the Secretary's determination of the date of
over arbitral awards shall control.
It is true that an arbitral award cannot per se be
categorized as an agreement voluntarily entered
into by the parties because it requires the
interference and imposing power of the State thru
the Secretary of Labor when he assumes
jurisdiction. However, the arbitral award can be
considered as an approximation of a collective
bargaining agreement which would otherwise have
been entered into by the parties.19 The terms or
periods set forth in Article 253-A pertains explicitly
to a CBA. But there is nothing that would prevent
its application by analogy to an arbitral award by
the Secretary considering the absence of an
applicable law. Under Article 253-A: "(I)f any such
agreement is entered into beyond six months, the
parties shall agree on the duration of retroactivity
thereof." In other words, the law contemplates
retroactivity whether the agreement be entered
into before or after the said six-month period. The
agreement of the parties need not be categorically
stated for their acts may be considered in
determining the duration of retroactivity. In this
connection, the Court considers the letter of
petitioner's Chairman of the Board and its President
addressed to their stockholders, which states that
the CBA "for the rank-and-file employees covering
the period December 1, 1995 to November 30,
1997 is still with the Supreme Court,"20 as
indicative of petitioner's recognition that the CBA
award covers the said period. Earlier, petitioner's
negotiating panel transmitted to the Union a copy
of its proposed CBA covering the same period
inclusive.21 In addition, petitioner does not dispute
the allegation that in the past CBA arbitral awards,
the Secretary granted retroactivity commencing
from the period immediately following the last day
of the expired CBA. Thus, by petitioner's own
actions, the Court sees no reason to retroact the
subject CBA awards to a different date. The period
is herein set at two (2) years from December 1,
1995 to November 30, 1997.
On the allegation concerning the grant of loan to a
cooperative, there is no merit in the union's claim
that it is no different from housing loans granted by
the employer. The award of loans for housing is
justified because it pertains to a basic necessity of
life. It is part of a privilege recognized by the
employer and allowed by law. In contrast,
providing seed money for the establishment of the
employee's cooperative is a matter in which the
employer has no business interest or legal
obligation. Courts should not be utilized as a tool to
compel any person to grant loans to another nor to
force parties to undertake an obligation without
justification. On the contrary, it is the government
that has the obligation to render financial
assistance to cooperatives and the Cooperative
Code does not make it an obligation of the
employer or any private individual.22
Anent the 40-day union leave, the Court finds that
the same is a typographical error. In order to avoid
any confusion, it is herein declared that the union
leave is only thirty (30) days as granted by the
Secretary of Labor and affirmed in the Decision of
this Court.
The added requirement of consultation imposed by
the Secretary in cases of contracting out for six (6)
months or more has been rejected by the Court.
Suffice it to say that the employer is allowed to
contract out services for six months or more.
However, a line must be drawn between
management prerogatives regarding business
operationsper se and those which affect the rights
of employees, and in treating the latter, the
employer should see to it that its employees are at
least properly informed of its decision or modes of
action in order to attain a harmonious labor-
management relationship and enlighten the
workers concerning their rights.23 Hiring of workers
is within the employer's inherent freedom to
regulate and is a valid exercise of its management
prerogative subject only to special laws and
agreements on the matter and the fair standards of
justice.24 The management cannot be denied the
faculty of promoting efficiency and attaining
economy by a study of what units are essential for
its operation. It has the ultimate determination of
whether services should be performed by its
personnel or contracted to outside agencies. While
there should be mutual consultation, eventually
deference is to be paid to what management
decides.25 Contracting out of services is an exercise
of business judgment or management
prerogative. Absent proof that management acted
26
in a malicious or arbitrary manner, the Court will
not interfere with the exercise of judgment by an
employer.27 As mentioned in the January 27, 1999
Decision, the law already sufficiently regulates this
matter.28 Jurisprudence also provides adequate
limitations, such that the employer must be
motivated by good faith and the contracting out
should not be resorted to circumvent the law or
must not have been the result of malicious or
arbitrary actions.29 These are matters that may be
categorically determined only when an actual suit
on the matter arises.
WHEREFORE, the motion for reconsideration is
PARTIALLY GRANTED and the assailed Decision is
MODIFIED as follows: (1) the arbitral award shall
retroact from December 1, 1995 to November 30,
1997; and (2) the award of wage is increased from
the original amount of One Thousand Nine
Hundred Pesos (P1,900.00) to Two Thousand
Pesos (P2,000.00) for the years 1995 and 1996.
This Resolution is subject to the monetary
advances granted by petitioner to its rank-and-file
employees during the pendency of this case
assuming such advances had actually been
distributed to them. The assailed Decision is
AFFIRMED in all other respects.
SO ORDERED.