G.R. No.

L-62339 October 27, 1983 In view of the foregoing, the motion for reconsideration filed by the defendants, of
the order of September 2. 1982, denying their motion to dismiss, is hereby denied.
[Annex 'G', p. 36, Rollo].
SPOUSES MARIA LUISA P. MORATA AND JULIUS MORATA, petitioners,
vs.
SPOUSES VICTOR GO and FLORA C. GO and HON. VALERIANO P. TOMOL, JR., Judge, Court From this order, petitioners came to Us thru this petition. In a resolution dated December 2, 1982,
of First Instance of Cebu, Branch XI, respondents. We required respondents to file an answer, and likewise granted a temporary restraining order
enjoining respondent judge from requiring petitioners to file their answer and enter into trial in Civil
Case No. R-22154.
Amado G. Olis for petitioners.

We find the petition impressed with merit. Section 6 of P.D. 1508 reads as follows:
Paul G. Gorres for private respondents.

SECTION 6. Conciliation pre-condition to filing of complaint.— No complaint,

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

On September 2, 1982, respondent judge issued an order denying the motion to dismiss.
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
Petitioners filed a motion for reconsideration, but the same was denied in an order dated October 3, or municipality for amicable settlement of all disputes except:
1982, as follows:
[1] Where one party is the government ,or any subdivision or instrumentality
Considering the specific reference to City or Municipal Courts in the provisions of thereof;
Sections 11 and 12 of P.D. No. 1508, as the Courts to which the dispute settled or
arbitrated by the Lupon Chairman or the Pangkat, shall be elevated for nullification
[2] Where one party is a public officer or employee, and the dispute relates to the
of the award or for execution of the same, and considering that from the provision
performance of his official functions;
of Section 14 of the same law, the pre- condition to the filing of a complaint as
provided for in Section 6 thereof, is specifically referred to, it is the considered
opinion of this Court that the provision of Section 6 of the law applies only to cases [3] Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding
cognizable by the inferior courts mentioned in Sections 11 and 12 of the law. P200.00;

[4] Offenses where there is no private offended party;

 [5] Such other classes of disputes which the Prime Minister may in the interest of
justice determine upon recommendation of the Minister of Justice and the Minister
of Local Government.
Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon has the authority
to settle amicably all types of disputes involving parties who actually reside in the same city or
municipality. The law, as written, makes no distinction whatsoever with respect to the classes of civil
disputes that should be compromised at the barangay level, in contradistinction to the limitation
imposed upon the Lupon by paragraph (3), section 2 thereof as regards its authority over criminal
cases. In fact, in defining the Lupon's authority, Section 2 of said law employed the universal and
comprehensive term "all", to which usage We should neither add nor subtract in consonance with the
rudimentary precept in statutory construction that "where the law does not distinguish, We should not
distinguish. 2 By compelling the disputants to settle their differences through the intervention of the
barangay leader and other respected members of the barangay, the animosity generated by
protracted court litigations between members of the same political unit, a disruptive factor toward
unity and cooperation, is avoided. It must be borne in mind that the conciliation process at the
barangay level is likewise designed to discourage indiscriminate filing of cases in court in order to
decongest its clogged dockets and, in the process, enhance the quality of justice dispensed by it.
Thus, to say that the authority of the Lupon is limited to cases exclusively cognizable by the inferior
courts is to lose sight of this objective. Worse, it would make the law a self-defeating one. For what
would stop a party, say in an action for a sum of money or damages, as in the instant case, from
bloating up his claim in order to place his case beyond the jurisdiction of the inferior court and
thereby avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law seek to
ease the congestion of dockets only in inferior courts and not in the regional trial courts where the
log-jam of cases is much more serious? Indeed, the lawmakers could not have intended such half-
measure and self-defeating legislation.
The objectives of the law are set forth in its preamble thus:
WHEREAS, the perpetuation and official recognition of the time-honored tradition of
amicably settling disputes among family and barangay level without judicial
resources would promote the speedy administration of justice and implement the
constitutional mandate to preserve and develop Filipino culture and to strengthen
the family as a basic social institution;
WHEREAS, the indiscriminate filing of cases in the courts of justice contributes
heavily and unjustifiably to the congestion of court dockets, thus causing a
deterioration in the quality of justice;
WHEREAS, in order to help relieve the courts of such docket congestion and thereby
enhance the quality of justice dispensed by the courts, it is deemed desirable to
formally organize and institutionalize a system of amicably settling disputes at the
barangay level.
There can be no question that when the law conferred upon the Lupon "the authority to bring
together the parties actually residing in the same city or municipality for amicable settlement of all
disputes, ... ," its obvious intendment was to grant to the Lupon as broad and comprehensive an
authority as possible as would bring about the optimum realization of the aforesaid objectives. These
objectives would only be half-met and easily thwarted if the Lupon's authority is exercised only in
cases falling within the exclusive jurisdiction of inferior courts.
Moreover, if it is the intention of the law to restrict its coverage only to cases cognizable by the
inferior courts, then it would not have provided in Section 3 thereof the following rule on Venue, to
wit:
Section 3. Venue. ... However, all disputes which involve real property or any
interest therein shall be brought in the Barangay where the real property or and
part thereof is situated.
for it should be noted that, traditionally and historically, jurisdiction over cases involving real property
or any interest therein, except forcible entry and detainer cases, has always been vested in the courts
of first instance [now regional trial court].
But it is pointed out by the respondent judge that Sections 11, 3 12, 4 and 14, 5 of the law speak of
the city and/or municipal courts as the forum for the nullification or execution of the settlement or
arbitration award issued by the Lupon. We hold that this circumstance cannot be construed as a
limitation of the scope of authority of the Lupon. As heretofore stated, the authority of the Lupon is
clearly established in Section 2 of the law; whereas Sections 11, 12 and 14, relied upon by
respondent judge, deal with the nullification or execution of the settlement or arbitration awards
obtained at the barangay level. These sections conferred upon the city and municipal courts the
jurisdiction to pass upon and resolve petitions or actions for nullification or enforcement of
settlement/arbitration awards issued by the Lupon, regardless of the amount involved or the nature of
the original dispute. But there is nothing in the context of said sections to justify the thesis that the
mandated conciliation process in other types of cases applies exclusively to said inferior courts.
Any doubt on the issue before Us should be dispelled by Circular No. 22 issued by Chief Justice
Enrique M. Fernando, 6 the full text of which is quoted as follows:
TO: ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL
COURTS, JUVENILE AND DOMESTIC RELATIONS COURTS, COURTS OF AGRARIAN
RELATIONS, CITY COURTS, MUNICIPAL COURTS AND THEIR CLERKS OF COURT
SUBJECT: Implementation of the Katarungang Pambarangay Law.
Effective upon your receipt of the certification by the Minister of Local Government
and Community Development that all the barangays within your respective
jurisdictions have organized their Lupons provided for in Presidential Decree No.
1508, otherwise known as the Katarungang Pambarangay Law, in implementation of
the barangay system of settlement of disputes, you are hereby directed to desist
from receiving complaints, petitions, actions or proceedings in cases falling within
the authority of said Lupons.
Circular No. 12 dated October 20, 1978, issued by the late Chief Justice Fred Ruiz
Castro is to that extent modified.
This Circular takes effect immediately.
It is significant that the above-quoted circular embodying the directive "to desist from receiving
complaints, petitions, actions and proceedings in cases falling within the authority of said Lupons,"
has been addressed not only to judges of city and municipal courts, but also to all the judges of the
courts of first instance, circuit criminal courts, juvenile and domestic courts and courts of agrarian
relations, now known as regional trial courts under B.P. No. 129. The said circular was noted by
president Ferdinand E. Marcos in a Letter of Implementation, dated November 12, 1979, the first
paragraph of which reads as follows: "with the view to easing up the log-jam of cases and solving the
backlogs in the case of dockets of all government offices involved in the investigation, trial and
adjudication of cases, it is hereby ordered that immediate implementation be made by all government
officials and offices concerned of the system of amicably settling disputes at the barangay level as
provided for in the Katarungang Pambarangay Law [Presidential Decree No. 1508]."
Therefore, for the guidance of the bench and the bar, We now declare that the conciliation process at
the barangay level, prescribed by P.D. 1508 as a pre-condition for filing a complaint in court, is
compulsory not only for cases falling under the exclusive competence of the metropolitan and
municipal trial courts, but for actions cognizable by the regional trial courts as well.
ACCORDINGLY, the petition is granted, and the order of respondent judge denying petitioners' motion
to dismiss is hereby set aside. Respondent judge is restrained from conducting further proceedings in
Civil Case No. R-22154, except to dismiss the case. No costs.
SO ORDERED.
Fernando, CJ Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana, Relova and Gutierrez,
Jr., JJ concur.
Makasiar and Teehankee, JJ., reserves his vote.
De Castro, J., is on leave.
Separate Opinions
AQUINO, J.: concurring:
I concur. The case filed by the Go spouses in the Court of First Instance of Cebu for the collection of
P49,400 from the Morata spouses, Civil Case No. R-22154, is covered by the Katarungang
Pambarangay Law, Presidential Decree No. 1508. The impression that the law applies only to cases
filed in inferior courts does not seem to be correct. Of course, the law applies only to disputes
between or among persons actually residing in the same barangay or to those involving actual
residents of different barangays within the same city or municipality (Sec. 3).
Cases between or among those persons should undergo the conciliation process, whatever may be the
amount involved or the nature of the issue involved as long as they do not belong to the following
cases:
(a) Where the parties involved reside in barangays of different cities or
municipalities unless such barangays adjoin each other;
(b) Where the dispute involves real property located in different cities or
municipalities;
(c) Where one party is the government or any sub-division or instrumentality
thereof;
(d) Where one party is a public officer or employee and the dispute relates to the
performance of his official functions;
(e) Where the dispute involves an offense punishable by imprisonment exceeding
thirty (30) days or a fine exceeding two hundred pesos (P200.00). Thus, physical
injuries requiring medical attendance for not exceeding nine (9) days, slight slander,
light threats, unjust vexation, would be appropriate subject matters for settlement;
(f) Offenses where there is no private offended party, for example, littering,
gambling, jaywalking, public scandal, vagrancy and prostitution; and,
(g) Such other classes of disputes which the Prime Minister may, in the interest of
justice, determine upon recommendation of the Minister of Justice and the Minister
of Local Government and Community Development. (Sec. 2, Rule VI, Katarungan
Pambarangay Rules).
The parties may go directly to court in the four cases specified in section 6 of the law.
Chief Justice Fernando in his Circular No. 22 dated November 9, 1979 has enjoined all Judges of the
Courts of First Instance, Circuit Criminal Courts, Juvenile and Domestic Relations Courts, Agrarian
Courts, city courts, municipal courts and their clerks of court to desist from receiving complaints,
petitions, actions or proceedings in cases falling within the authority of the barangay Lupons effective
upon their receipt of the certification of the Minister of Local Government and Community
Development that all the barangays within their respective jurisdictions have organized
their Lupons as contemplated in the Katarungang Pambarangay Law.
The Minister of Justice has assumed that the Katarungang Pambarangay Law applies to the cases in
Regional Trial Courts or Courts of First Instance. Thus, he ruled that a complaint for damages in the
sum of P100,000 is a matter falling within the authority of the Lupon under section 2 of Presidential
Decree No. 1508 (Opinion No. 81, Series of 1981; Katarungang Pambarangay Opinion No. 10 Series
of 198 1).
The reference in the law to proper city or municipal court contemplates situations for the enforcement
or nullification of settlement or arbitration award. If there is no award, the city or municipal court will
have no occasion to intervene.
Whether the Lupons, will be equal to the task imposed upon them and should receive commensurate
remuneration for their work is another question.
 In compliance with the MCTC Order, the Lupon rendered an Arbitration Award on 10 May
ROSARIA LUPITAN PANG-ET, G.R. No. 167261
1995 ordering herein petitioner to retrieve the land upon payment to the spouses Manacnes of the
Petitioner,
amount of P8,000.00 for the improvements on the
Present:
land. Aggrieved, Leoncios 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
YNARES-SANTIAGO, J.,
Arbitration Award.
- versus - Chairperson,
AUSTRIA-MARTINEZ,
On 1 June 1995, herein petitioner filed with the Lupon a Motion for Execution of the
CALLEJO, SR.,*
Arbitration Award. On the other hand, Florentina Manacnes filed a Motion with the MCTC for the
CHICO-NAZARIO, and
resumption of the proceedings in the original case for recovery of possession and praying that the
CATHERINE MANACNES-DAO-AS, Heir of NACHURA, JJ.
MCTC consider her repudiation of the Arbitration Award issued by the Lupon.
LEONCIO MANACNES and FLORENTINA
MANACNES, Promulgated:
Subsequently, the MCTC heard the Motion of Florentina Manacnes notwithstanding the
Respondent.
latters failure to appear before the court despite notice. The MCTC denied Florentina Manacnes Motion
March 2, 2007
to repudiate the Arbitration Award elucidating that since the movant failed to take any action within
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
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
DECISION
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
CHICO-NAZARIO, J.:
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
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure,
Arbitration not having been personally signed by the spouses Manacnes, and the Arbitration Award
assailing the Decision[1] of the Court of Appeals in CA-G.R. SP No. 78019, dated 9 February
having been written in English a language not understood by the parties.
2005, which reversed and set aside the Judgment[2] of the Regional Trial Court (RTC), Branch
36, Bontoc, Mountain Province, and reinstated the Resolution[3] of the Municipal Circuit Trial Court
In its Resolution dated 20 August 2002, the MCTC dismissed the Petition for Enforcement of
(MCTC) of Besao-Sagada, Mountain Province dismissing herein petitioners action for Enforcement of
Arbitration Award in this wise:
Arbitration Award and Damages.
x x x Are defendants estopped from questioning the proceedings before the Lupon
The instant petition draws its origin from an Action[4] for recovery of possession of real
Tagapamayapa concerned?
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
The defendants having put in issue the validity of the proceedings before
spouses Leoncio and Florentina Manacnes, the predecessors-in-interest of herein respondent.
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
On 23 February 1995, during the course of the pre-trial, the parties, through their respective
action or defense based upon it is imprescriptible.
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 second issue: Is the agreement to Arbitrate null and void? Let us
the proceedings before the MCTC were suspended, and the case was remanded to the Lupon for
peruse the pertinent law dealing on this matter which is Section 413 of the Local
resolution.[6]
Government Code of 1991 (RA 7160), to wit:
Thereafter, the Lupon issued a Certification to File Action on 26 February 1995 due to the
Section 413 (a) The parties may, at any stage of the proceedings,
refusal of the Manacnes spouses to enter into an Agreement for Arbitration and their insistence that
agree in writing that they shall abide by the arbitration award of
the case should go to court. On 8 March 1995, the Certification, as well as the records of the case,
the lupon chairman or thepangkat. x x x
were forwarded to the MCTC.
The foregoing should be taken together with Section 415 of the same code which
An Order was issued by the MCTC on 7 April 1995, once more remanding the matter for
provides:
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
Section 415. Appearance of parties in person. In
parties concerned; however, the Lupon failed to issue an Arbitration Award as provided under
all katarungang pambarangay proceedings, the parties must
the Katarungang Pambarangay Law, so that, the case must be returned to the Lupon until an
appear in person without the assistance of counsel or
Arbitration Award is rendered.
 representative, except for minors and incompetents who may be
assisted by their next-of-kin who are not lawyers.
It is very clear from the foregoing that personal appearance of the parties
in conciliation proceedings before a Lupon Tagapamayapa is mandatory. Likewise,
the execution of the agreement to arbitrate must be done personally by the parties
themselves so that they themselves are mandated to sign the agreement.
Unfortunately, in this case, it was not respondents-spouses [Manacnis] who
signed the agreement to arbitrate as plaintiff herself admitted but another
person. Thus, it is very clear that the mandatory provisos of Section 413 and 415 of
RA 7160 are violated. Granting arguendo that it was Catherine who signed the
agreement per instruction of her parents, will it cure the violation? The answer must
still be in the negative. As provided for by the cited provisos of RA 7160, if ever a
party is entitled to an assistance, it shall be done only when the party concerned is
a minor or incompetent. Here, there is no showing that the spouses [Manacnis]
were incompetent. Perhaps very old but not incompetent.Likewise, what the law
provides is assistance, not signing of agreements or settlements.
Just suppose the spouses [Manacnis] executed a special power of attorney
in favor of their daughter Catherine to attend the proceedings and to sign the
agreement to arbitrate? The more that it is proscribed by
the Katarungang Pambarangay Law specifically Section 415 of RA 7160 which
mandates the personal appearance of the parties before the lupon and likewise
prohibits the appearance of representatives.
In view of the foregoing, it could now be safely concluded that the
questioned agreement to arbitrate is inefficacious for being violative of the
mandatory provisions of RA 7160 particularly sections 413 and 415 thereof as it was
not the respondents-spouses [Manacnis] who signed it.
The third issue: Is the Arbitration Award now sought to be enforced
effective? Much to be desired, the natural flow of events must follow as a
consequence. Considering that the agreement to arbitrate is inefficacious as earlier
declared, it follows that the arbitration award which emanated from it is also
inefficacious. Further, the Arbitration Award by itself, granting arguendo that the
agreement to arbitrate is valid, will readily show that it does not also conform with
the mandate of the Katarungang Pambarangay Law particularly Section 411 thereto
which provides:
Sec. 411. Form of Settlement All amicable settlements shall be in
writing in a language or dialect known to the parties x x x. When
the parties to the dispute do not use the same language or dialect,
the settlement shall be written in the language known to them.
Likewise, the implementing rules thereof, particularly Section 13 provides:
Sec. 13 Form of Settlement and Award. All settlements, whether
by mediation, conciliation or arbitration, shall be in writing, in a
language or dialect known to the parties. x x x
It is of no dispute that the parties concerned belong to and are natives of
the scenic and serene community of Sagada, Mt. Province who speak
the Kankanaey language.Thus, the Arbitration Award should have been written in
the Kankanaey language. However, as shown by the Arbitration Award, it is written
in English language which the parties do not speak and therefore a further violation
of the Katarungang Pambarangay Law.
IN THE LIGHT of all the foregoing considerations, the above-entitled case is
hereby dismissed.[9]
Petitioner Pang-ets Motion for Reconsideration having been denied, she filed an Appeal
before the RTC which reversed and set aside the Resolution of the MCTC and remanded the case to
the MCTC for further proceedings. According to the RTC:
As it appears on its face, the Agreement for Arbitration in point found on
page 51 of the expediente, dated Feb. 6, 1995, and attested by
the Pangkat Chairman of the Office of the Barangay Lupon of Dagdag, Sagada was
signed by the respondents/defendants spouses Manacnis. The representative of
the Appellee in the instant case assails such Agreement claiming that the signatures
of her aforesaid predecessors-in-interest therein were not personally affixed by the
latter or are falsified-which in effect is an attack on the validity of the document on
the ground that the consent of the defendants spouses Manacnis is vitiated by
fraud. Indulging the Appellee Heirs of Manacnis its contention that such indeed is
the truth of the matter, the fact still remains as borne out by the circumstances,
that neither did said original defendants nor did any of such heirs effectively
repudiate the Agreement in question in accordance with the procedure outlined by
the law, within five (5) days from Feb. 6, 1995, on the ground as above-stated
(Secs. 413 (a), 418, RA 7160;Secs. 7, 13, KP Law; Sec. 12, Rule IV, KP Rules). As
mandated, such failure is deemed a waiver on the part of the defendants
spouses Manacnis to challenge the Agreement for Arbitration on the ground that
their consent thereto is obtained and vitiated by fraud (Sec. 12, Par. 3, KP
Rules). Corollarily, the Appellee Heirs being privy to the now deceased original
defendants should have not been permitted by the court a quo under the equitable
principle of estoppel, to raise the matter in issue for the first time in the present
case (Lopez vs. Ochoa, 103 Phil. 94).
The Arbitration Award relative to Civil Case 83 (B.C. No. 07) dated May 10,
1995, written in English, attested by the Punong Barangay of Dagdag and found on
page 4 of the record is likewise assailed by the Appellee as void on the ground that
the English language is not known by the defendants spouses Manacnis who
are Igorots. Said Appelleecontends that the document should have been written
in Kankana-ey, the dialect known to the party (Sec. 413 (b), RA 7160; Sec. 7, Par.
2, KP law, Sec. 11, KP Rules). On this score, the court a quo presumptuously
concluded on the basis of the self-serving mere say-so of the representative of
the Appellee that her predecessors did not speak or understand English. As a matter
of judicial notice, American Episcopalian Missionaries had been
in Sagada, Mountain Province as early as 1902 and continuously stayed in the place
by turns, co-mingling with the indigenous people thereat, instructing and educating
them, and converting most to the Christian faith, among other things, until the
former left about twenty years ago. By constant association with the white folks, the
natives too old to go to school somehow learned the Kings English by ear and can
effectively speak and communicate in that language. Any which way, even
granting arguendo that the defendants spouses Manacnis were the exceptions and
indeed totally ignorant of English, no petition to nullify the Arbitration award in issue
on such ground as advanced was filed by the party or any of the Appellee Heirs with
the MCTC of Besao-Sagada, within ten (10) days from May 10, 1995, the date of the
document. Thus, upon the expiration thereof, the Arbitration Award acquired the
force and effect of a final judgment of a court (Sec. 416, RA 7160; Sec. 11, KP Law;
 Sec. 13, KP Rules); conclusive upon the original defendants in Civil Case 83 (B.C.
No. 07) and the Appellee Heirs herein privy to said defendants.
In the light thereof, the collateral attack of the Appellee on the Agreement
for Arbitration and Arbitration Award re Civil Case 83 (B.C. No. 07) should not have
in the first place been given due course by the court a quo. In which case, it would
not have in the logical flow of things declared both documents inefficacious; without
which pronouncements, said court would not have dismissed the case at bar.
Wherefore, Judgment is hereby rendered Reversing and Setting Aside the
Resolution appealed from, and ordering the record of the case subject thereof
remanded to the court of origin for further proceedings.[10]
Aggrieved by the reversal of the RTC, herein respondent filed a petition before the Court of
Appeals seeking to set aside the RTC Judgment. On 9 February 2005, the appellate court rendered
the herein assailed Decision, to wit:
After thoroughly reviewing through the record, We find nothing that would
show that the spouses Manacnes were ever amenable to any compromise with
respondent Pang-et. Thus, We are at a loss as to the basis of the Arbitration Award
sought to be enforced by respondent Pang-ets subsequent action before the MCTC.
There is no dispute that the proceeding in Civil Case No. 83 was suspended
and the same remanded to the Lupon on account of the Agreement to Arbitrate
which was allegedly not signed by the parties but agreed upon by their respective
counsels during the pre-trial conference. In the meeting before the Lupon, it would
seem that the agreement to arbitrate was not signed by the
spouses Manacnes. More importantly, when the pangkat chairman asked the
spouses Manacnes to sign or affix their thumbmarks in the agreement, they refused
and insisted that the case should instead go to court. Thus, the Lupon had no other
recourse but to issue a certificate to file action. Unfortunately, the case was again
remanded to the Lupon to render an arbitration award. This time, the Lupon heard
the voice tape of the late Beket Padonay affirming respondent Pang-ets right to the
disputed property. While Pang-et offered to pay P8,000.00 for the improvements
made by the spouses Manacnes, the latter refused to accept the same and insisted
on their right to the subject property. Despite this, the Lupon on May 10,
1995 issued an Arbitration award which favored respondent Pang-et.
From the time the case was first referred to the Lupon to the time the
same was again remanded to it, the Spouses Manacnes remained firm in not
entering into any compromise with respondent Pang-et. This was made clear in both
the minutes of the Arbitration Hearing on 26 February 1995 and on 9 April
1995. With the foregoing, We find it evident that the spouses Manacnes never
intended to submit the case for arbitration.
Moreover, the award itself is riddled with flaws. First of all there is no
showing that the Pangkat ng Tagapagkasundo was duly constituted in accordance
with Rule V of the Katarungan Pambarangay Rules. And after constituting of
the Pangkat, Rule VI, thereof the Punong Barangay and the Pangkat must proceed
to hear the case. However, according to the minutes of the hearing before
the lupon on 9 April 1995, the pangkat Chairman and another pangkat member
were absent for the hearing.
Finally, Section 13 of the same Rule requires that 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
ofBarangay 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 spousesManacnes declined to sign the
Agreement for Arbitration and were adamant that the proceedings before the MCTC in Civil Case No.
83 must continue. As reflected in the Minutes[12] 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 ngTagapagkasundo 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 PambarangayLaw 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]
Tagapamayapa for conciliation proceedings and not the actual amicable settlement of the case. As
stated earlier, the parties may only be compelled to appear before the Lupon ng Tagapamayapa for
the necessary confrontation, but not to enter into any amicable settlement, or in the case at bar, to
sign the Agreement for Arbitration. Thus, when the Manacnesspouses personally appeared during the
initial hearing before the Lupon ng Tagapamayapa, they had already complied with the agreement
during the pre-trial to submit the case for conciliation proceedings. Their presence during said hearing
is already their acquiescence to the order of the MCTC remanding the case to theLupon for
conciliation proceedings, as there has been an actual confrontation between the parties despite the
fact that no amicable settlement was reached due to the spouses Manacnes refusal to sign the
Agreement for Arbitration.

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 thePangkat, as they are
free to instead find recourse in the courts[16] 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.
Furthermore, the MCTC should not have persisted in ordering the Lupon ng
Tagapamayapa to render an arbitration award upon the refusal of the spousesManacnes to submit the
case for arbitration since such arbitration award will not bind the spouses. As reflected in Section 413
of the Revised KatarungangPambarangay Law, in order that a party may be bound by an arbitration
award, said party must have agreed in writing that they shall abide by the arbitration award of
the Lupon or the Pangkat. Like in any other contract, parties who have not signed an agreement to
arbitrate will not be bound by said agreement since it is axiomatic that a contract cannot be binding
upon and cannot be enforced against one who is not a party to it.[19] In view of the fact that upon
verification by thePangkat Chairman, in order to settle the issue of whether or not they intend to
submit the matter for arbitration, the spouses Manacnes refused to affix their signature or thumb
mark on the Agreement for Arbitration Form, the Manacnes spouses cannot be bound by the
Agreement for Arbitration and the ensuing arbitration award since they never became privy to any
agreement submitting the case for arbitration by the Pangkat.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of
the Court of Appeals in CA-G.R. SP No. 78019 is herebyAFFIRMED. 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.

What is compulsory under the Katarungang Pambarangay Law is that there be a

confrontation between the parties before the Lupon Chairman or the Pangkatand 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.

Petitioners assertion that the parties must be bound by their respective counsels agreement
to submit the case for arbitration and thereafter enter into an amicable settlement is imprecise. What
was agreed to by the parties respective counsels was the remand of the case to the Lupon ng
 To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion to Dismiss[3] on
two grounds one of which was non-compliance with the requirement under Section 412 of the Local
Government Code,[4] she contending that there is no showing that the dispute was referred to the
DANTE M. PASCUAL, represented by G.R. No. 157830
barangay court before the case was filed in court.
REYMEL R. SAGARIO,
Petitioner, Present:
By the assailed Order of February 10, 2003,[5] Branch 23 of the Isabela RTC at Roxas granted
respondents Motion to Dismiss in this wise:
PANGANIBAN, Chairman,
SANDOVAL- GUTIERREZ,*
. . . RA 7160 repealing P.D. 1508 otherwise known as the Revised Katarungang
-versus- CORONA,
Pambarangay provides under Section 409 All disputes involving real property or any
CARPIO MORALES, and
interest therein shall be brought in the barangay where the real property or the
GARCIA, JJ.
larger portion thereof is situated. Hence, the reliance of the plaintiff on Section 408
of R.A. 7160 is incorrect. When real property or any interest therein is involved, the
MARILOU M. PASCUAL, Promulgated:
dispute shall be filed before the barangay where the property is located, regardless
Respondent.
of the residence of the parties. Besides, it is incorrect to say that the parties are
November 17, 2005
not residents of the same place, Vira, Roxas, Isabela. The Attorney-in-fact of the
plaintiff in the person of Reymel R. Sagario is a resident of Vira, Roxas,
x---------------------------------------------------------------
Isabela, and he substitute (sic) Dante Pascual by virtue of said Special
--x
Power of Attorney. Hence, said Attorney-in-fact should have brought the dispute
before barangay Vira, Roxas, Isabela, where the property is located. In the case of
DECISION
Royales vs. Intermediate Appellate Court 127 SCRA 470, Ordinarily, non-compliance
with the condition precedent prescribed by P.D. 1508 could affect the sufficiency of
CARPIO MORALES, J.:
the plaintiffs cause of action and make his complaint vulnerable to dismissal on
ground of lack of cause of action or prematurity.[6] (Emphasis and underscoring
supplied)
On challenge via Petition for Review on Certiorari is the February 10, 2003 Order of the Regional Trial
Court (RTC) of Isabela, Branch 23 at Roxas dismissing, on motion of herein respondent Marilou M.
Petitioners Motion for Reconsideration[7] of the above-said order was denied by Order of March 24,
Pascual, the complaint filed against her by her brother-herein petitioner Dante M. Pascual,
2003:[8]
represented by his attorney-in-fact Reymel R. Sagario (Sagario), for non-compliance with the
conciliation provision-pre condition to filing of complaint in court under R.A. 7160 (the Local
xxx
Government Code).
Consequently, the Court is [of] the opinion that the said Attorney-in-fact shall be
Petitioner, a permanent resident of the United States of America, appointed Sagario as his attorney-
deemed to be the real party in interest, reading from the tenor of the provisions
in-fact by a Special Power of Attorney (SPA) dated April 10, 2002:
of the Special Power of Attorney. Being a real party in interest, the Attorney-in-fact
1. To file a case for the cancellation of Transfer Certificate of Title No. T-271656
is therefore obliged to bring this case first before the Barangay Court. Sec. 3, Rule 3
issued in the name of Marilou M. Pascual as well as the Deed of Sale of Registered
of the Rules of Court provides that Where the action is allowed to be prosecuted or
Land (Dec. No. 639; Page No. 52; Book No. XXI; Series of 1994) and/or
defended by a representative or someone acting in a fiduciary capacity, the
Reconveyance at the appropriate court;
beneficiary shall be included in the title of the case and shall be deemed to be the
real party in interest.
2. To collect the monthly rentals from the tenant;
xxx
3. To enter into amicable settlement with Marilou M. Pascual or any other mode of
payment/and/or dispute resolution;
Being the real party in interest, the Attorney-in-fact may therefore bring the
necessary complaint before the Lupon Tagapayapa and appear in person as if he
4. To execute and sign any and all papers, contracts/documents which may be
is the owner of the land.[9] (Emphasis and underscoring supplied)
necessary relative to the above acts.
Hence, the present petition questioning the palpable legal errors of the RTC.
x x x[1]
Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in interest, and since
he actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving
Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at Roxas a complaint
real property, he citing Agbayani v. Belen.[10]
entitled Dante M. Pascual, plaintiff v. Marilou M. Pascual and Register of Deeds, Defendants, docketed
as Civil Case No. Br. 23-713-02, for Annulment of Transfer Certificate of Title No. T-271657 of Isabela
Respondent submits, on the other hand, that Section 408, paragraph (f), of the Local Government
and Deed of Absolute Sale of Registered Land and/or Reconveyance with Damages.[2]
Code, is qualified by paragraph (c) of Section 409 of the same Code the latter of which provides that
[a]ll disputes involving real property or any interest therein shall be brought in the barangay where
the real property is located, hence, the use of the word shall makes it mandatory for the bringing of
the dispute before the lupon.
That attorney-in-fact Sagario is a resident of the same barangay as that of hers, respondent argues in
any event, brings the matter under the jurisdiction of the lupon, for Sagario, following Section 3 of
Rule 3 of the 1997 Rules of Civil Procedure which provides:
Sec. 3. Representative as parties. - Where the action is allowed to be prosecuted or
defended by a representative or someone acting in a fiduciary capacity, the
beneficiary shall be included in the title of the case and shall be deemed to be the
real party in interest. A representative may be a trustee of an express trust, a
guardian, an executor or administrator, or a party authorized by law or these Rules.
An agent acting in his own name for the benefit of an undisclosed principal may sue
or be sued without joining the principal except when the contract involves things
belonging to the principal,
being a substitute, becomes the real party-in-interest.
Respondents submissions do not lie.
The pertinent provisions of the Local Government Code read:
SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of
each barangay shall have authority to bring together the parties actually
residing in the same city or municipality for amicable settlement of all disputes
except:
(a) Where one party is the government or any subdivision or instrumentality
thereof;
(b) Where one party is a public officer or employee, and the dispute relates to the
performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding
Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different cities or
municipalities unless the parties thereto agree to submit their differences to
amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of different cities or
municipalities, except where such barangay units adjoin each other and the parties
thereto agree to submit their differences to amicable settlement by an appropriate
lupon; and
(g) Such other classes of disputes which the President may determine in the interest
of justice or upon the recommendation of the Secretary of Justice.
The court in which non-criminal cases not falling within the authority of the lupon
under this Code are filed may, at any time before trial, motu proprio refer the case
to the lupon concerned for amicable settlement. (Emphasis supplied)
SEC. 409. Venue. (a) Disputes between persons actually residing in the same
barangay shall be brought for amicable settlement before the lupon of said barangay
.
(b) Those involving actual residents of different barangays within the same city or
municipality shall be brought in the barangay where the respondent or any of the
respondents actually resides, at the election of the complainant.
(c) All disputes involving real property or any interest therein shall be brought in the
barangay where the real property or the larger portion thereof is situated.
(d) Those arising at the workplace where the contending parties are employed or at
the institution where such parties are enrolled for study shall be brought in the
barangay where such workplace or institution is located.
Objections to venue shall be raised in the mediation proceedings before the punong
barangay; otherwise, the same shall be deemed waived. Any legal question which
may confront the punong barangay in resolving objections to venue herein referred
to may be submitted to the Secretary of Justice or his duly designated
representative whose ruling thereon shall be binding. (Emphasis supplied)
In the 1982 case of Tavora v. Veloso,[11] this Court held that where the parties are not actual
residents in the same city or municipality or adjoining barangays, there is no requirement for them
to submit their dispute to the lupon as provided for in Section 6 vis a vis Sections 2 and 3 of P.D.
1508 (Katarungang Pambarangay Law).
[B]y express statutory inclusion and exclusion, the Lupon shall have no jurisdiction
over disputes where the parties are not actual residents of the same city or
municipality, except where the barangays in which they actually reside adjoin each
other. (Underscoring supplied)
In the 2000 case of Vercide v. Hernandez,[12] this Court, noting that the Tavora ruling, reiterated in
other cases including the 1996 case of Agbayani[13] cited by petitioner, was decided under the
provisions of P.D. No. 1508 (Katarungang Pambarangay) Law which were, except for some
modifications, echoed in Sections 408-409 of the Local Government Code which took effect on
January 1, 1992, held that the Tavora ruling remained.
To construe the express statutory requirement of actual residency as applicable to the attorney-in-
fact of the party-plaintiff, as contended by respondent, would abrogate the meaning of a real party in
interest as defined in Section 2 of Rule 3[14] of the 1997 Rules of Court vis a vis Section 3 of the same
Rule which was earlier quoted but misread and misunderstood by respondent.
In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual resident of
the barangay where the defendant-herein respondent resides, the local lupon has no jurisdiction over
their dispute, hence, prior referral to it for conciliation is not a pre-condition to its filing in court.
The RTC thus erred in dismissing petitioners complaint.
WHEREFORE, the petition is granted. The assailed February 10, 2003 Order, as well as the March 24,
2003 Order denying reconsideration of the first, of Branch 23 of the Regional Trial Court of Isabela at
Roxas is SET ASIDE. Said court is accordingly directed to reinstate Civil Case No. 23-713-02 to its
docket and take appropriate action thereon with dispatch.
SO ORDERED.
ATTY. EVELYN J. MAGNO, A.C. No. 6296
Complainant,
Present:
PANGANIBAN, J., Chairman
- versus - SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES and
GARCIA, JJ.
ATTY. OLIVIA VELASCO-JACOBA, Promulgated:
Respondent. November 22, 2005
x----------------------------------------x
RESOLUTION
GARCIA, J.:
In her sworn complaint, as endorsed by the President of the Integrated Bar of the Philippines
(IBP), Nueva Ecija Chapter, Atty. Evelyn J. Magno charged Atty. Olivia Velasco-Jacoba, a member of
the same IBP provincial chapter, with willful violation of (a) Section 415 of the Local Government
Code (LGC) of 1991 and (b) Canon 4 of the Code of Professional Responsibility.
This disciplinary case arose out of a disagreement that complainant had with her uncle, Lorenzo
Inos, over a landscaping contract they had entered into. In a bid to have the stand-off between them
settled, complainant addressed a letter, styled Sumbong,[1] to Bonifacio Alcantara, barangay captain
of Brgy. San Pascual, Talavera, Nueva Ecija. At the barangay conciliation/confrontation proceedings
conducted on January 5, 2003, respondent, on the strength of a Special Power of Attorney signed by
Lorenzo Inos, appeared for the latter, accompanied by his son, Lorenzito. Complainants objection to
respondents appearance elicited the response that Lorenzo Inos is entitled to be represented by a
lawyer inasmuch as complainant is herself a lawyer. And as to complainants retort that her being a
lawyer is merely coincidental, respondent countered that she is appearing as an attorney-in-fact, not
as counsel, of Lorenzo Inos.
Complainant enumerated specific instances, with supporting documentation, tending to prove
that respondent had, in the course of the conciliation proceedings before the Punong Barangay, acted
as Inos Lorenzos counsel instead of as his attorney-in-fact. This is what complainant said in her
complaint: [2]
5. xxx Atty. Olivia Jacoba asked for an ocular inspection of the subject matter
of the complaint. A heated argument took place because Lorencito Inos said that
[complainants brother] Melencio Magno, Jr. made alterations in the lagoon .
Afterwards Atty. Olivia Jacoba . . . returned to the barangay hall to have the
incident recorded in the barangay blotter.... attached as Annex A
6. That on January 12, 2003, Lorenzo Inos appeared before the hearing
also with the assistance of [respondent]. When the minutes of the proceeding (sic)
was read, [respondent] averred that the minutes is partial in favor of the
complainant because only her statements were recorded for which reason, marginal
insertions were made to include what [respondent] wanted to be put on record. She
also signed as saksi in the minutes .
7. xxx In a letter (answer to the "sumbong) sent to the Punong Barangay
dated December 22, 2002, she signed representing herself as Family Legal Counsel
of Inos Family, a copy of the letter is attached as Annex C . . . . (Words in bracket
added.)
In an Order dated February 17, 2003, Atty. Victor C. Fernandez, IBP Director for Bar Discipline,
directed the respondent to submit, within fifteen (15) days from notice, her answer to the complaint,
otherwise she will be considered as in default.[3]
The case, docketed as CBD No. 03-1061, was assigned to Commissioner Rebecca Villanueva-
Maala, who admitted respondents answer notwithstanding her earlier order of July 15, 2003,
declaring respondent in default for failure to file an answer in due time.[4]
In her Answer, respondent alleged that the administrative complaint was filed with the Office of
the Punong Barangay, instead of before theLupong Tagapamayapa, and heard by Punong
Barangay Bonifacio Alcantara alone, instead of the collegial Lupon or a conciliation panel known
aspangkat. Prescinding from this premise, respondent submits that the prohibition against a lawyer
appearing to assist a client in katarungan pambarangay proceedings does not apply. Further, she
argued that her appearance was not as a lawyer, but only as an attorney-in-fact.
In her report dated October 6, 2003,[5] Commissioner Maala stated that the charge of
complainant has been established by clear preponderance of evidence and, on that basis,
recommended that respondent be suspended from the practice of her profession for a period of six
(6) months. On the other hand, the Board of Governors, IBP Commission on Bar Discipline, while
agreeing with the inculpatory finding of the investigating commissioner, recommended in its
Resolution No. XVI-2003-235,[6] a lighter penalty, to wit:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and
APPROVED, the Report and Recommendation of the Investigating Commissioner of
the above-entitled case, herein made part of this Resolution/Decision as Annex "A";
and, finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, with modification, and considering respondent's
actuations was in violation of Section 415 which expressly prohibits the presence
and representation by lawyers in the Katarungan Pambarangay, Atty. Olivia
Velasco-Jacoba is hereby ADMONISHED.
This resolution is now before us for confirmation.
Section 415 of the LGC of 1991[7], on the subject Katarungang Pambarangay, provides:
Section 415. Appearance of Parties in Person. - In all katarungang
pambarangay proceedings, the parties must appear in person without the assistance
of the counsel or representative, except for minors and incompetents who may be
assisted by their next of kin who are not lawyers.
The above-quoted provision clearly requires the personal appearance of the parties
in katarungan pambarangay conciliation proceedings, unassisted by counsel or representative. The
rationale behind the personal appearance requirement is to enable the lupon to secure first hand and
direct information about the facts and issues,[8] the exception being in cases where minors or
incompetents are parties. There can be no quibbling that laymen of goodwill can easily agree to
conciliate and settle their disputes between themselves without what sometimes is the unsettling
assistance of lawyers whose presence could sometimes obfuscate and confuse issues.[9] Worse still,
the participation of lawyers with their penchant to use their analytical skills and legal knowledge tend
to prolong instead of expedite settlement of the case.

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

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

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

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

WHEREFORE, Atty. Olivia Velasco-Jacoba is hereby FINED in the amount of Five Thousand
Pesos (P5,000.00) for willful violation of Section 415 of the Local Government Code of 1991
with WARNING that commission of similar acts of impropriety on her part in the future will be dealt
with more severely.

SO ORDERED.

[G.R. No. 146195. November 18, 2004]
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL, TERESA ZAMORA-UMALI,
CLARENCE UMALI, ROBERTO ZAMORA, ROLANDO ZAMORA, MARY ANN ZAMORA,
MICHELLE ZAMORA and RODRIGO ZAMORA, petitioners, vs. HEIRS of CARMEN
IZQUIERDO, represented by their attorney-in-fact, ANITA F.
PUNZALAN, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari[1] assailing the Decision[2] of the Court of Appeals
dated September 12, 2000 and its Resolution dated December 1, 2000 in CA-G.R. SP No. 54541,
entitled Avelina Zamora, et al., petitioners, versus Heirs of Carmen Izquierdo, represented by the
executrix, Anita F. Punzalan, respondents.
The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora entered into a
verbal stipulation whereby the former leased to the latter one of her apartment units located at 117-B
General Luna Street, Caloocan City. They agreed on the following: the rental is P3,000.00 per month;
the leased premises is only for residence; and only a single family is allowed to occupy it.
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita Punzalan, representing the
heirs, herein respondents, prepared a new contract of lease wherein the rental was increased
from P3,000.00 to P3,600.00 per month.[3] However, petitioners refused to sign it.
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their children (two of whom
have their own families), herein petitioners, continued to reside in the apartment unit. However, they
refused to pay the increased rental and persisted in operating a photocopying business in the same
apartment.
Meanwhile, petitioner Avelina Zamora applied with the Metropolitan Waterworks & Sewerage
System (MWSS) for a water line installation in the premises. Since a written consent from the owner
is required for such installation, she requested respondents attorney-in-fact to issue it. However, the
latter declined because petitioners refused to pay the new rental rate and violated the restrictions on
the use of the premises by using a portion thereof for photocopying business and allowing three
families to reside therein.
This prompted petitioner Avelina Zamora to file with the Office of the Punong
Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a complaint against Anita
Punzalan (respondents attorney-in-fact), docketed as Usaping Bgy. Blg. 1-27-97, Ukol sa: Hindi
Pagbibigay ng Pahintulot sa Pagpapakabit ng Tubig.
On August 24, 1997, during the barangay conciliation proceedings, petitioner Avelina Zamora
declared that she refused to sign the new lease contract because she is not agreeable with the
conditions specified therein.
The following day, Anita Punzalan sent Avelina a letter[4] informing her that the lease is being
terminated and demanding that petitioners vacate the premises within 30 days from notice.
Despite several barangay conciliation sessions, the parties failed to settle their dispute amicably.
Hence, the Barangay Chairman issued a Certification to File Action dated September 14, 1997.[5]
Consequently, on October 2, 1997, respondents, represented by Anita Punzalan, filed with the
Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a complaint for unlawful detainer and
damages against petitioners, docketed as Civil Case No. 23702.[6] Forthwith, petitioners filed a motion
to dismiss[7] the complaint on the ground that the controversy was not referred to the barangay for
conciliation. First, they alleged that the barangay Certification to File Action is fatally defective
because it pertains to another dispute, i.e., the refusal by respondents attorney-in-fact to give her
written consent to petitioners request for installation of water facilities in the premises. And, second,
when the parties failed to reach an amicable settlement before the Lupong
Tagapamayapa, the Punong Barangay (as Lupon Chairman), did not constitute the Pangkat ng
Tagapagkasundo before whom mediation or arbitration proceedings should have been conducted, in
violation of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title One, Book III of Republic
Act No. 7160[8] (otherwise known as the Local Government Code of 1991), which reads:
SECTION 410. Procedure for Amicable Settlement.
(a) x x x
(b) Mediation by lupon chairman Upon receipt of the complaint, the lupon chairman[9] shall,
within the next working day, summon the respondent(s), with notice to the complainant(s) for them
and their witnesses to appear before him for a mediation of their conflicting interests. If he fails in
his mediation effort within fifteen (15) days from the first meeting of the parties before him, he
shall forthwith set a date for the constitution of the pangkat in accordance with the provisions
of this Chapter. (Underscoring supplied)
Respondents opposed the motion to dismiss,[10] the same being prohibited under Section 19 of
the 1991 Revised Rule on Summary Procedure. They prayed that judgment be rendered as may be
warranted by the facts alleged in the complaint, pursuant to Section 6[11] of the same Rule.
On July 9, 1998, the MTC issued an Order[12] denying petitioners motion to dismiss and
considering the case submitted for decision in view of their failure to file their answer to the
complaint.
Petitioners filed a motion for reconsideration,[13] contending that a motion to dismiss the
complaint on the ground of failure to refer the complaint to the Lupon for conciliation is allowed under
Section 19 of the 1991 Revised Rule on Summary Procedure, which partly provides:
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or petitions shall
not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or information except on the
ground of lack of jurisdiction over the subject matter, or failure to comply with the preceding
section [referring to Section 18 on referral of the complaint to the Lupon for conciliation];
x x x.
On August 26, 1998, the MTC rendered a Judgment[14] in favor of respondents and against
petitioners, the dispositive portion of which reads:
WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and against the defendants,
ordering defendants and all persons claiming right under them:
1) To vacate the leased premises located at No. 117-B General Luna Street,
Caloocan City and to surrender possession thereof to the plaintiff;
2) To pay the amount of three thousand six hundred (P3,600.00) pesos per month
starting January, 1997 until the premises being occupied by them is finally
vacated and possession thereof is restored to the plaintiff;
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and for
attorneys fees; and
4) To pay the costs of this suit.
SO ORDERED.
On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City, rendered its
Decision[15] dated February 15, 1999 affirming the MTC Judgment. Subsequently, it denied petitioners
motion for reconsideration.[16]
Petitioners then filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No.
54541. On September 12, 2000, it rendered a Decision[17] affirming the RTC Decision.
Thereafter, petitioners filed a motion for reconsideration but was denied by the Appellate Court
in its Resolution dated December 1, 2000.[18]
Hence, the instant petition.
I
The primordial objective of Presidential Decree No. 1508 (the Katarungang Pambarangay Law),
now included under R.A. No. 7160 (the Local Government Code of 1991), is to reduce the number of
court litigations and prevent the deterioration of the quality of justice which has been brought about
by the indiscriminate filing of cases in the courts.[19] To attain this objective, Section 412(a) of R.A.
No. 7160 requires the parties to undergo a conciliation process before the Lupon Chairman or
the Pangkat as a precondition to filing a complaint in court, thus:
SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No complaint, petition,
action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted
directly in court or any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the lupon or pangkat secretary and
attested to by the lupon or pangkat chairman x x x. (Underscoring supplied)
In the case at bar, the Punong Barangay, as Chairman of the Lupong Tagapamayapa, conducted
conciliation proceedings to resolve the dispute between the parties herein. Contrary to petitioners
contention, the complaint does not only allege, as a cause of action, the refusal of respondents
attorney-in-fact to give her consent to the installation of water facilities in the premises, but also
petitioners violation of the terms of the lease, specifically their use of a portion therein for their
photocopying business and their failure to pay the increased rental. As correctly found by the RTC:
The records show that confrontations before the barangay chairman were held on January 26, 1997,
February 9, 1997, February 23, 1997, February 28, 1997, July 27, 1997, August 3, 1997, August 10,
1997, August 17, 1997 and August 24, 1997 wherein not only the issue of water installation was
discussed but also the terms of the lease and the proposed execution of a written contract relative
thereto. It appears, however, that no settlement was reached despite a total of nine meetings at the
barangay level.
It is of no moment that the complaint was initially made by defendant-appellant Avelina Zamora
because herein plaintiff-appellee was given by the Sangguniang Barangay the authority to bring her
grievance to the Court for resolution. While it is true that the Sertifikasyon dated September 14, 1997
is entitled Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig, this title must not
prevail over the actual issues discussed in the proceedings.
Hence, to require another confrontation at the barangay level as a sine qua non for the filing of the
instant case would not serve any useful purpose anymore since no new issues would be raised therein
and the parties have proven so many times in the past that they cannot get to settle their differences
amicably.[20]
We cannot sustain petitioners contention that the Lupon conciliation alone, without the
proceeding before the Pangkat ng Tagapagkasundo, contravenes the law onKatarungang
Pambarangay. Section 412(a) of R.A. No. 7160, quoted earlier, clearly provides that, as a
precondition to filing a complaint in court, the parties shall go through the conciliation
process either before the Lupon Chairman (as what happened in the present case), or the Pangkat.
Moreover, in Diu vs. Court of Appeals,[21] we held that notwithstanding the mandate in Section
410(b) of R.A. No. 7160 that the Barangay Chairman shall constitute aPangkat if he fails in his
mediation efforts, the same Section 410(b) should be construed together with Section 412(a) of the
same law (quoted earlier), as well as the circumstances obtaining in and peculiar to the case. Here,
while the Pangkat was not constituted, however, the parties met nine (9) times at the Office of
the BarangayChairman for conciliation wherein not only the issue of water installation was discussed
but also petitioners violation of the lease contract. It is thus manifest that there was substantial
compliance with the law which does not require strict adherence thereto.[22]
II
We hold that petitioners motion to dismiss the complaint for unlawful detainer is proscribed by
Section 19(a) of the 1991 Revised Rule on Summary Procedure, quoted earlier. Section 19(a) permits
the filing of such pleading only when the ground for dismissal of the complaint is anchored on lack of
jurisdiction over the subject matter, or failure by the complainant to refer the subject matter of
his/her complaint to the Lupon for conciliation prior to its filing with the court. This is clear from
the provisions of Section 18 of the same Rule, which reads:
SEC. 18. Referral to Lupon. Cases requiring referral to the Lupon for conciliation under the
provisions of Presidential Decree No. 1508 where there is no showing of compliance with such
requirement, shall be dismissed without prejudice, and may be revived only after such
requirement shall have been complied with. This provision shall not apply to criminal cases where the
accused was arrested without a warrant. (Underscoring supplied)
As discussed earlier, the case was referred to the Lupon Chairman for conciliation. Obviously,
petitioners motion to dismiss, even if allowed, is bereft of merit.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 54541 sustaining the Decision of the RTC which upheld the MTC Judgment
is AFFIRMED.
 [G.R. No. L-63277. November 29, 1983.]
PETRA VDA. DE BORROMEO, Petitioner, v. HON. JULIAN B. POGOY, Municipality/City Trial
Court of Cebu City, and ATTY. RICARDO REYES, Respondents.
Antonio T. Uy for Petitioner.
Numeriano G. Estenzo for Respondents.
SYLLABUS
1. CIVIL LAW; ACTIONS FOR FORCIBLE ENTRY AND DETAINER; PRESCRIPTIVE PERIOD; ACTION NOT
BARRED IN THE CASE AT BAR. — Under Article 1147 of the Civil Code, the period for filing actions for
forcible entry and detainer is one year, and this period is counted from demand to vacate the
premises. (Desbarat v. Vda. de Laureano, 18 SCRA 116, Calubayan v. Pascual, 21 SCRA 146,
Development Bank of the Philippines v. Canonoy, 35 SCRA 197) In the case at bar, the letter-demand
was dated August 28, 1982, while the complaint for ejectment was filed in court on September 16,
1982. Between these two dates, less than a month had elapsed, thereby leaving at least eleven (11)
full months of the prescriptive period provided for in Article 1147 of the Civil Code. Under the
procedure outlined in Section 4 of PD 1508, the time needed for the conciliation proceeding before the
Barangay Chairman and the Pangkat should take no more than 60 days. Giving private respondent
nine (9) months-ample time indeed- within which to bring his case before the proper court should
conciliation efforts fail. Thus, it cannot be truthfully asserted, as private respondent would want Us to
believe, that his case would be barred by the Statute of Limitations if he had to course his action to
the Barangay Lupon.
2. REMEDIAL LAW; SECTION 4 (A) OF P.D. No. 1508; CONSTRUED. — Under Section 4(a) of PD 1508,
referral of a dispute to the Barangay Lupon is required only where the parties thereto are
"individuals." An "individual" means "a single human being as contrasted with a social group or
institution." Obviously, the law applies only to cases involving natural persons, and not where any of
the parties is a juridical person such as a corporation, partnership, corporation sole, testate or
intestate, estate, etc.
3. ID.; JURIDICAL PERSON; REAL PARTY IN INTEREST; REFERRAL TO BARANGAY LUPON, NOT
REQUIRED. — In Civil Case No. R-239l5, plaintiff Ricardo Reyes is a mere nominal party who is suing
in behalf of the Intestate Estate of Vito Borromeo. while it is true that Section 3, Rule 3 of the Rules of
Court allows the administrator of an estate to sue or be sued without joining the party for whose
benefit the action is presented or defended, it is indisputable that the real party in interest in Civil
Case No. R-23915 is the intestate estate under administration. Since the said estate is a juridical
person (Limjoco v. Intestate of Fragante, 80 Phil. 776) plaintiff administrator may file the complaint
directly in court, without the same being coursed to the Barangay Lupon for arbitration.
DECISION
ESCOLIN, J.:
Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal Trial Court of Cebu
City from taking cognizance of an ejectment suit for failure of the plaintiff to refer the dispute to the
Barangay Lupon for conciliation.
The intestate estate of the late Vito Borromeo is the owner of a building bearing the deceased’s name,
located at F. Ramos St., Cebu City. Said building has been leased and occupied by petitioner Petra
Vda. de Borromeo at a monthly rental of P500.00 payable in advance within the first five days of the
month.
On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the estate and a
resident of Cebu City, served upon petitioner a letter demanding that she pay the overdue rentals
corresponding to the period from March to September 1982, and thereafter to vacate the premises.
As petitioner failed to do so, Atty. Reyes instituted on September 16, 1982 an ejectment case against
the former in the Municipal Trial Court of Cebu City. The complaint was docketed as Civil Case No. R-
23915 and assigned to the sala of respondent judge.
On November 12, 1982, petitioner moved to dismiss the case, advancing, among others, the want of
jurisdiction of the trial court. Pointing out that the parties are residents of the same city, as alleged in
the complaint, petitioner contended that the court could not exercise jurisdiction over the case for
failure of respondent Atty. Reyes to refer the dispute to the Barangay Court, as required by PD No.
1508, otherwise known as Katarungang Pambarangay Law.chanroblesvirtualawlibrary
Respondent judge denied the motion to dismiss. He justified the order in this
wise:jgc:chanrobles.com.ph
"The Clerk of Court when this case was filed accepted for filing same. That from the acceptance from
(sic) filing, with the plaintiff having paid the docket fee to show that the case was docketed in the civil
division of this court could be considered as meeting the requirement or precondition for were it not
so, the Clerk of Court would not have accepted the filing of the case especially that there is a standing
circular from the Chief Justice of the Supreme Court without even mentioning the Letter of Instruction
of the President of the Philippines that civil cases and criminal cases with certain exceptions must not
be filed without passing the barangay court." (Order dated December 14, 1982, Annex "c", P. 13,
Rollo).
Unable to secure a reconsideration of said order, petitioner came to this Court through this petition
forcertiorari. In both his comment and memorandum, private respondent admitted not having availed
himself of the barangay conciliation process, but justified such omission by citing paragraph 4, section
6 of PD 1508 which allows the direct filing of an action in court where the same may otherwise be
barred by the Statute of Limitations, as applying to the case at bar.
The excuse advanced by private respondent is unsatisfactory. Under Article 1147 of the Civil Code,
the period for filing actions for forcible entry and detainer is one year, 1 and this period is counted
from demand to vacate the premises. 2
In the case at bar, the letter-demand was dated August 28, 1982, while the complaint for ejectment
was filed in court on September 16, 1982. Between these two dates, less than a month had elapsed,
thereby leaving at least eleven (11) full months of the prescriptive period provided for in Article 1147
of the Civil Code. Under the procedure outlined in Section 4 of PD 1508, 3 the time needed for the
conciliation proceeding before the Barangay Chairman and the Pangkat should take no more than 60
days. Giving private respondent nine (9) months — ample time indeed — within which to bring his
case before the proper court should conciliation efforts fail. Thus, it cannot be truthfully asserted, as
private respondent would want Us to believe, that his case would be barred by the Statute of
Limitations if he had to course his action to the Barangay Lupon.
With certain exceptions, PD 1508 makes the conciliation process at the Barangay level a condition
precedent for filing of actions in those instances where said law applies. For this reason, Circular No.
22 addressed to "ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT CRIMINAL COURTS,
JUVENILE AND DOMESTIC RELATIONS COURT, COURTS OF AGRARIAN RELATIONS, CITY COURTS,
MUNICIPAL COURTS AND THEIR CLERKS OF COURT" was issued by Chief Justice Enrique M. Fernando
on November 9, 1979. Said Circular reads:chanrobles.com:cralaw:red

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

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

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

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

ACCORDINGLY, the petition is hereby dismissed. Respondent judge is ordered to try and decide Civil
Case No. R-23915 without unnecessary delay. No costs.

SO ORDERED.
G.R. No. 83907. September 13, 1989.*
NAPOLEON GEGARE, petitioner
vs.
HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE ELMA, respondents.
Camilo Cariño Dionio, Jr. for petitioner.
Cedo, Ferrer & Associates Law Offices for private respondent.
GANCAYCO, J.:
The familiar story in the Old Testament is of how King Solomon settled the dispute between two
women over a child by deciding that the child be cut into two for them to share. The real mother full
of love implored that the King not kill the child and give the child to the other woman. The latter
asked the King not to give it to either of them and to go on, cut the child into two.
This case involves a small piece of land. The decision was to cut it into two between the parties. But
the parallel ends there. The petitioner wants the whole lot. Private respondent is happy with his half.
This is the impasse that must be resolved.
The center of controversy is Lot 5989, Ts-217 with an area of about 270 square meters situated at
Dadiangas, General Santos City. This lot was titled in the name of Paulino Elma under Original
Certificate of Title No. (P-29947) (P-11503) P-1987 issued by the Office of the Register of Deeds of
General Santos City and Miscellaneous Sales Patent No. V-635. A reversion case was filed by the
Republic of the Philippines against Paulino Elma in the Court of First Instance of South Cotabato
docketed as Civil Case No. 950, wherein in due course a decision was rendered on January 29, 1973
declaring the title of Paulino Elma null and void and the same was ordered cancelled. The lot was
reverted to the mass of public domain subject to disposition and giving preferential right to its actual
occupant, Napoleon Gegare.
This decision was affirmed by this Court when We dismissed the petition for review on certiorari filed
by the heirs of Elma on March 13, 1974 in G.R. No. L-38069. Thereafter, the writ of execution was
issued and the title of Elma to the property was cancelled.
Both petitioner and private respondent filed an application for this lot in the Board of Liquidators
(Board for short) in 1975. On June 15, 1976, Resolution No. 606, Series of 1976 was passed by the
Board disposing of the lot in favor of petitioner by way of a negotiated sale in conformity with the
decision in Civil Case No. 950. Private respondent protested against the application of petitioner and
on August 8, 1978, the Board adopted Resolution No. 611, Series of 1978 denying private
respondent's protest for the same reason. A request for reconsideration of private respondent was
referred by the Board to Mr. Artemio Garlit, liquidator-designee, General Santos Branch, for
verification and investigation. After hearings, Mr. Garlit submitted a report to the Manila office
recommending division of the lot to the parties. Nevertheless, on March 13, 1981, the Board denied
the protest because the case had already been decided by the court.
However, a motion for reconsideration filed by private respondent was favorably considered by the
Board in Resolution No. 233, Series of 1981 dated July 8, 1981. Thus, the Board directed the chief of
LASEDECO to investigate the occupancy and area of the lot. In this investigation, it was found that
only private respondent was the actual occupant so the LASEDECO chief recommended the division of
the property between petitioner and private respondent.
On August 14, 1981, the Board passed Resolution No. 272, Series of 1981 approving said
recommendation by dividing the lot equally between the parties at 135.5 square meters each to be
disposed to them by negotiated sale.
Both parties appealed to the Office of the President but in a decision dated March 25, 1984, both
appeals were dismissed. A motion for reconsideration filed by petitioner was denied on May 29,1984.
Private respondent paid for the value of 1/2 of the lot and applied for the issuance of a patent. In
Resolution No. 185, Series of 1985 adopted on October 7, 1985, the Board gave due course to the
application of private respondent and for the issuance of a patent to 1/2 portion of the lot. Petitioner
was also advised to file his application and pay for his portion. Thus, Miscellaneous Sales Patent No.
4261 and Original Certificate of Title No. P-5139 were issued to private respondent.
On November 27, 1985, petitioner filed an action for "Annulment and Cancellation of Partition of Lot
5989, Ts-217, situated at Dadiangas, General Santos City and Annulment of Resolutions No. 272 and
185 and/or to Declare them Null and Void" against private respondent and the Board. The suit was
docketed as Civil Case No. 3270 in the Regional Trial Court of General Santos City.
On February 11, 1985, private respondent filed a motion to dismiss the complaint on the following
grounds: (1) lack of jurisdiction over the subject matter; (2) petitioner has no capacity to sue; (3)
petitioner is not a real party-in-interest; and (4) the action is barred by prior judgment. Private
respondent added another ground (5) lack of conciliation efforts pursuant to Section 6 of Presidential
Decree No. 1508. The motion was granted in an order dated March 18, 1986.
On April 3, 1986, petitioner moved for a reconsideration thereof to which an opposition was filed by
private respondent. The motion for reconsideration was granted in an order of April 21, 1986 and
private respondent was required to file his responsive pleading. Private respondent filed his answer.
On July 10, 1986, private respondent asked for a preliminary hearing of the grounds for the motion to
dismiss in his affirmative defenses. This was denied on July 24, 1986.
Hence, private respondent filed a petition for certiorari and prohibition in the Court of Appeals
questioning the said orders of the trial court dated April 21, 1986 and July 24, 1986. In due course, a
decision was rendered by the appellate court on March 16, 1988 granting the petition, declaring the
questioned orders null and void, and directing the trial court to dismiss the civil case for lack of
jurisdiction, without pronouncement as to costs. An urgent motion for reconsideration filed by
petitioner was denied in a resolution dated May 31, 1988. 1
Thus, the herein petition wherein petitioner raises the following issues---
FIRST ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN DECIDING CA-G.R. SP NO.
12183 WITHOUTFIRST SERVING SUMMONS AND A COPY OF THE
PETITION TO THE PRIVATE RESPONDENT IN THE SAID CASE
(NOW PETITIONER IN THE INSTANT CASE),
 THUS, DEPRIVING HIM OF HIS CONSTITUTIONAL RIGHT TO DUE
PROCESS OF LAW.
SECOND ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN GIVING DUE COURSE TO
THE PETITION OF ARMIE ELMA IN CA-G.R. SP NO. 12183 IN SPITE
OF THE FACT THAT THE TWO (2) ORDERS SUBJECT MATTER OF
THE PETITION ARE INTERLOCUTORY IN NATURE.
THIRD ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN HOLDING THAT THE TRIAL
COURT HAS NO JURISDICTION OVER CIVIL CASE NO. 3270.
FOURTH ASSIGNMENT OF ERROR
THE RESPONDENT COURT ERRED IN HOLDING THAT THE TRIAL
COURT SHOULD HAVE DISMISSED CIVIL CASE NO. 3270 FOR
FAILURE OF THE PLAINTIFF TO COMPLY WITH THE PROVISIONS
OF P.D. NO. 1508 BEFORE FILING HIS COMPLAINT IN COURT. 2
The petition is devoid of any merit.
Under the first assigned error, petitioner alleges that he was not served summons and a copy of the
petition so that he was deprived of due process and the respondent court did not acquire jurisdiction
over his person.
Private respondent disputes this claim by showing that it was at the address of petitioner appearing in
the petition at Liwayway Disco Restaurant and Disco Pub, Ilang-Ilang Street, General Santos City,
where petitioner was served a copy of private respondent's "Manifestation and Motion for Early
Resolution. 3 Petitioner's counsel was also served a copy of the resolution dated June 28,
1987, 4 "Motion for Restraining Order" dated July 28, 1987 and Manifestation dated December 1,
1987. 5 Indeed, petitioner's counsel filed a motion dated April 4, 1988 seeking a reconsideration of
the decision of respondent court 6 which was denied on May 31, 1988. Obviously, petitioner
voluntarily submitted to the jurisdiction of the respondent court and was never deprived of due
process. 7
Under the second and third assigned errors, petitioner contends that the appellate court erred in
giving due course to the petition that assailed the two orders of the court a quo which are
interlocutory in character and in holding that the trial court has no jurisdiction over Civil Case No.
3270.
It is precisely to correct the lower court when in the course of proceedings it acts without jurisdiction
or in excess thereof or if the trial court judge otherwise acted with grave abuse of discretion that the
extraordinary writ of certiorari or prohibition is afforded to parties as a relief. Such writ is available
even in respect to interlocutory orders.8
The appellate court correctly ruled that courts of justice will not interfere with purely administrative
matters rendered by administrative bodies or officials acting within the scope of their power and
authority. The discretionary power vested in the proper executive official in the absence of
arbitrariness or grave abuse so as to go beyond the statutory authority, is not subject to the contrary
judgment or control of the courts and is treated with finality. 9
When Board Resolution No. 272 was passed in 1981, petitioner appealed to the Office of the
President. After his appeal was denied on March 26, 1984, he did not file a petition for review in this
court. Thus, the said decision became final and it was duly implemented. We agree that when
petitioner filed Civil Case No. 3270, the trial court should have refrained from interfering with said
administrative disposition of the chief executive absent any showing of lack or excess of jurisdiction or
grave abuse of discretion.
Moreover, petitioner had no capacity to file the questioned suit in the lower court. The real party-in-
interest who can seek the nullification of the land grant is the government or the state. 10
Under the fourth and last assigned error, petitioner argues that it was erroneous for the appellate
court to hold that the case should be dismissed by the lower court for failure to comply with a
provision of Presidential Decree No. 1508 before filing the complaint. He alleges that this rule is not
applicable in said case for one of the parties therein is the government or any subdivision or
instrumentality thereof which is excepted from this requirement under Section 2 of said law.
True it is that the Board is a government instrumentality but the petitioner and private respondent
who are also contending parties in the case are residents of the same barangay so Section 6 of
Presidential Decree No. 1508 should apply to them as it provides---
Section 6. Conciliation, pre-condition to filing of complaint. No complaint, petition,
action or proceeding involving any matter within the authority of the Lupon as
provided in Section 2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a confrontation of the
parties before the Lupon Chairman or the Pangkat and no conciliation or settlement
has been reached as certified by the Lupon Secretary or the Pangkat Secretary
attested by the Lupon or PangkatChairman, or unless the settlement has been
repudiated.
The purpose of this confrontation is to enable the parties to settle their differences amicably. If the
other only contending party is the government or its instrumentality or subdivision the case falls
within the exception but when it is only one of the contending parties, a confrontation should still be
undertaken among the other parties.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.

[G.R. No. 137359. September 13, 2004]
EDWIN N. TRIBIANA, petitioner, vs. LOURDES M. TRIBIANA, respondent.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari[1] seeks to reverse the Court of Appeals Resolutions[2] dated
2 July 1998 and 18 January 1999 in CA-G.R. SP No. 48049. The Court of Appeals affirmed the
Order[3] of the Regional Trial Court, Branch 19, Bacoor, Cavite (RTC), denying petitioner Edwin N.
Tribianas (Edwin) motion to dismiss the petition forhabeas corpus filed against him by respondent
Lourdes Tribiana (Lourdes).
Antecedent Facts
Edwin and Lourdes are husband and wife who have lived together since 1996 but formalized
their union only on 28 October 1997. On 30 April 1998, Lourdes filed a petition for habeas
corpus before the RTC claiming that Edwin left their conjugal home with their daughter, Khriza Mae
Tribiana (Khriza). Edwin has since deprived Lourdes of lawful custody of Khriza who was then only
one (1) year and four (4) months of age. Later, it turned out that Khriza was being held by Edwins
mother, Rosalina Tribiana (Rosalina). Edwin moved to dismiss Lourdes petition on the ground that the
petition failed to allege that earnest efforts at a compromise were made before its filing as required
by Article 151 of the Family Code.
On 20 May 1998, Lourdes filed her opposition to Edwins motion to dismiss claiming that there
were prior efforts at a compromise, which failed. Lourdes attached to her opposition a copy of the
Certification to File Action from their Barangay dated 1 May 1998.
On 18 May 1998, the RTC denied Edwins motion to dismiss and reiterated a previous order
requiring Edwin and his mother, Rosalina to bring Khriza before the RTC. Upon denial of his motion for
reconsideration, Edwin filed with the Court of Appeals a petition for prohibition and certiorari under
Rule 65 of the Rules of Civil Procedure. The appellate court denied Edwins petition on 2 July 1998.
The appellate court also denied Edwins motion for reconsideration.
Hence, this petition.
The Rulings of the RTC and the Court of Appeals
The RTC denied Edwins motion to dismiss on the ground that the Certification to File Action
attached by Lourdes to her opposition clearly indicates that the parties attempted to reach a
compromise but failed.
The Court of Appeals upheld the ruling of the RTC and added that under Section 412 (b) (2) of
the Local Government Code, conciliation proceedings before the barangay are not required in petitions
for habeas corpus.
The Issue
Edwin seeks a reversal and raises the following issue for resolution:
WHETHER THE TRIAL AND APPELLATE COURTS SHOULD HAVE DISMISSED THE PETITION
FOR HABEAS CORPUS ON THE GROUND OF FAILURE TO COMPLY WITH THE CONDITION
PRECEDENT UNDER ARTICLE 151 OF THE FAMILY CODE.
The Ruling of the Court
The petition lacks merit.
Edwin argues that Lourdes failure to indicate in her petition for habeas corpus that the parties
exerted prior efforts to reach a compromise and that such efforts failed is a ground for the petitions
dismissal under Section 1(j), Rule 16 of the 1997 Rules of Civil Procedure. [4] Edwin maintains that
under Article 151 of the Family Code, an earnest effort to reach a compromise is an indispensable
condition precedent. Article 151 provides:
No suit between members of the same family shall prosper unless it should appear from the verified
complaint or petition that earnest efforts toward a compromise have been made, but that the same
have failed. If it is shown that no such efforts were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject of compromise under the Civil Code.
Edwins arguments do not persuade us.
It is true that the petition for habeas corpus filed by Lourdes failed to allege that she resorted to
compromise proceedings before filing the petition. However, in her opposition to Edwins motion to
dismiss, Lourdes attached a Barangay Certification to File Action dated 1 May 1998. Edwin does not
dispute the authenticity of the Barangay Certification and its contents. This effectively established that
the parties tried to compromise but were unsuccessful in their efforts. However, Edwin would have the
petition dismissed despite the existence of the Barangay Certification, which he does not even
dispute.
Evidently, Lourdes has complied with the condition precedent under Article 151 of the Family
Code. A dismissal under Section 1(j) of Rule 16 is warranted only if there is afailure to comply with a
condition precedent. Given that the alleged defect is a mere failure to allege compliance with a
condition precedent, the proper solution is not an outright dismissal of the action, but an amendment
under Section 1 of Rule 10 of the 1997 Rules of Civil Procedure.[5] It would have been a different
matter if Edwin had asserted that no efforts to arrive at a compromise have been made at all.
In addition, the failure of a party to comply with a condition precedent is not a jurisdictional
defect.[6] Such defect does not place the controversy beyond the courts power to resolve. If a party
fails to raise such defect in a motion to dismiss, such defect is deemed waived.[7] Such defect is
curable by amendment as a matter of right without leave of court, if made before the filing of a
responsive pleading.[8] A motion to dismiss is not a responsive pleading.[9] More importantly, an
amendment alleging compliance with a condition precedent is not a jurisdictional matter. Neither does
it alter the cause of action of a petition for habeas corpus. We have held that in cases where the
defect consists of the failure to state compliance with a condition precedent, the trial court should
order the amendment of the complaint.[10] Courts should be liberal in allowing amendments to
pleadings to avoid multiplicity of suits and to present the real controversies between the parties. [11]
Moreover, in a habeas corpus proceeding involving the welfare and custody of a child of tender
age, the paramount concern is to resolve immediately the issue of who has legal custody of the child.
Technicalities should not stand in the way of giving such child of tender age full protection.[12] This
rule has sound statutory basis in Article 213 of the Family Code, which states, No child under seven
years of age shall be separated from the mother unless the court finds compelling reasons to order
otherwise. In this case, the child (Khriza) was only one year and four months when taken away from
the mother.
is interlocutory and is not a proper subject of a petition for certiorari.[14] Even in the face of an error of
judgment on the part of a judge denying the motion to dismiss, certiorari will not lie. Certiorari is not
a remedy to correct errors of procedure.[15] The proper remedy against an order denying a motion to
dismiss is to file an answer and interpose as affirmative defenses the objections raised in the motion
to dismiss. It is only in the presence of extraordinary circumstances evincing a patent disregard of
justice and fair play where resort to a petition for certiorari is proper.[16]
The litigation of substantive issues must not rest on a prolonged contest on technicalities. This is
precisely what has happened in this case. The circumstances are devoid of any hint of the slightest
abuse of discretion by the RTC or the Court of Appeals. A party must not be allowed to delay litigation
by the sheer expediency of filing a petition for certiorari under Rule 65 based on scant allegations of
grave abuse. More importantly, any matter involving the custody of a child of tender age deserves
immediate resolution to protect the childs welfare.
WHEREFORE, we DISMISS the instant petition for lack of merit. We AFFIRM the Resolutions of
the Court of Appeals dated 2 July 1998 and 18 January 1999 in CA-G.R. SP No. 48049. The Regional
Trial Court, Branch 19, Bacoor, Cavite is ordered to act with dispatch in resolving the petition
for habeas corpus pending before it. This decision is IMMEDIATELY EXECUTORY.
SO ORDERED.

The Court of Appeals dismissed Edwins contentions by citing as an additional ground the
exception in Section 412 (b) (2) of the Local Government Code (LGC) on barangay conciliation, which
states:

(b) Where the parties may go directly to court. the parties may go directly to court in the following
instances:

xxx

2) Where a person has otherwise been deprived of personal liberty calling for habeas
corpus proceedings;

xxx.

Under Rule 102 of the 1997 Rules of Civil Procedure, a party may resort to a habeas
corpus proceeding in two instances. The first is when any person is deprived of liberty either through
illegal confinement or through detention. The second instance is when custody of any person is
withheld from the person entitled to such custody. The most common case falling under the second
instance involves children who are taken away from a parent by another parent or by a relative. The
case filed by Lourdes falls under this category.

The barangay conciliation requirement in Section 412 of the LGC does not apply to habeas
corpus proceedings where a person is deprived of personal liberty. In such a case, Section 412
expressly authorizes the parties to go directly to court without need of any conciliation proceedings.
There is deprivation of personal liberty warranting a petition for habeas corpus where the rightful
custody of any person is withheld from the person entitled thereto.[13] Thus, the Court of Appeals did
not err when it dismissed Edwins contentions on the additional ground that Section 412 exempts
petitions for habeas corpus from the barangay conciliation requirement.

The petition for certiorari filed by Edwin questioning the RTCs denial of his motion to dismiss
merely states a blanket allegation of grave abuse of discretion. An order denying a motion to dismiss
ESTELA L. BERBA, G.R. No. 160032
Petitioner,
Present:
PUNO, J., Chairman,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO,* JJ.
JOSEPHINE PABLO and THE Promulgated:
HEIRS OF CARLOS PALANCA,
Respondents. November 11, 2005
x--------------------------------------------------x
DECISION
CALLEJO, SR., J.:
Assailed before the Court on a petition for review on certiorari is the Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 73531, affirming the Decision[2]of the Regional Trial Court (RTC) of
Manila in Civil Case No. 170639.
Estela L. Berba, a resident of 978 Maligaya Street, Malate, Manila, was the owner of a parcel of land
located at No. 2338 M. Roxas Street, Sta. Ana, Manila covered by Transfer Certificate of Title (TCT)
No. 63726. A house was constructed on the lot, which she leased to Josephine Pablo* and the Heirs of
Carlos Palanca sometime in 1976. The lease was covered by a lease contract. Upon its expiration, the
lessees continued leasing the house on a month-to-month basis.
By 1999, the monthly rental on the property was P3,450.00. The lessees failed to pay the
rentals due, and by May 1999, their arrears amounted to P81,818.00. Berba then filed a complaint for
eviction and collection of unpaid rentals only against Pablo in the Office of the Punong Barangay. On
June 5, 1999, Berba and Pablo executed an Agreement approved by the pangkat, as follows:
Ako si Josephine Pablo, naninirahan sa 2338 M. Roxas St., Sta. Ana, Manila, na
nasasakop ng Barangay 873, Zone 96, ay nangangako kay GG Robert Berba na
nagmamay-ari ng aking tinitirahan ay maghuhulog ng halagang Tatlong Libong
Piso P3,000.00 kada ika-sampu ng buwan bilang hulog sa aking pagkakautang kay
GG Berba na umaabot sa halagang P81,818.00 na ang nasabing halagang ito ay
aking huhulugan hanggang aking mabayaran ng buo ang aking pagkakautang. Ako
rin, si Josephine Pablo, ay nangangako na ang hindi ko pagsunod o pagbayad ng
buwanang hulog, ako ay kusang aalis sa aking tinitirahan. Bukod pa sa hulog sa
aking pagkakautang, ako rin ay magbabayad ng halagang P3,450.00 bilang aking
upa sa aking tinitirahan.[3]
By May 2000, Pablo and the lessees still had a balance of P71,716.00. As of May 1, 2001, the total
arrearages of the lessees amounted to P135,115.63.[4] On May 2, 2001, Berba, through counsel,
wrote the lessees, demanding payment of the said amount and to vacate the house within 30 days
from notice, otherwise she will sue them.[5] The lessees ignored the demand. On June 21, 2001,
Berba filed a complaint[6] against Josephine Pablo and the Heirs of Carlos Palanca in the Metropolitan
Trial Court (MTC) of Manila for unlawful detainer. She prayed that, after due proceedings, judgment
be rendered in her favor:
WHEREFORE, it is most respectfully prayed for that judgment be rendered
in favor of plaintiff ordering defendant (sic)
a) to vacate the premises situated at 2338 M. Roxas Street, Sta.
Ana, City of Manila;
b) to pay plaintiff the sum of One Hundred Thirty-Five Thousand
One Hundred Fifteen and 63/100 Pesos (P135,115.63)
representing monthly rentals in arrears to the present;
c) to pay plaintiff the amount of Four Thousand Five Hundred
Sixty-Two and 63/100 Pesos (P4,562.63) per month
representing monthly rent on the premises for the year 2001
until finality of the judgment;
d) to pay plaintiff the sum of Twenty Thousand Pesos
(P20,000.00) by way of attorneys fees;
e) to reimburse plaintiff all expenses for litigation estimated in the
amount of Ten Thousand Pesos;
f) to pay costs of suit.
Other reliefs just and equitable are, likewise, prayed for under the premises.[7]
Berba, however, failed to append to her complaint a certification from the Lupon ng
Tagapamayapa that no conciliation or settlement had been reached.
In their answer to the complaint, the defendants admitted to have stopped paying rentals
because of financial distress. They also alleged that they were not certain if the plaintiff was the
owner of the property. By way of special and affirmative defenses, they averred that the plaintiff had
no cause of action against them as she failed to secure a Certificate to File Action from the Lupon.[8]
During the pre-trial conference, the parties manifested to the court that, despite earnest
efforts, no amicable settlement was reached. They defined the main issue as whether or not the
plaintiff had a valid cause of action for unlawful detainer against the defendants.[9]
In her position paper, Berba appended an Agreement dated June 5, 1999 between her and Pablo,
which appeared to have been approved by Punong BarangayCayetano L. Gonzales of Barangay 873,
as well as other members of the Lupon,[10] duly approved by the Pangkat. She also appended a
Statement of Account indicating that the defendants back rentals amounted to P135,115.63.[11]
In their position paper, the defendants insisted that the dispute did not go through the Lupon
ng Tagapamayapa prior to the filing of the complaint; hence, Berbas complaint was premature. They
also averred that the increase in the rental rates imposed by the plaintiff was unjustified and illegal.
In her reply, the plaintiff alleged that there was no more need for her to secure a Certificate
to File Action because she was a resident of No. 978 Maligaya Street, Malate, Manila, while the
defendants were residing in Barangay 873, Zone 6 in Sta. Ana, Manila.
On March 14, 2002, the MTC rendered judgment in favor of Berba. The fallo of the decision reads:
WHEREFORE, judgment is rendered in favor of the plaintiff and ordering the
defendants and all persons claiming rights under them to vacate the premises at
2338 M. Roxas St., Sta. Ana, Manila and restore possession thereof to the plaintiff.
Ordering the defendant to pay the amount of P135,115.63 representing monthly
rentals since 1999 until December 2000. Ordering the defendant to pay the plaintiff
the sum of P4,562.63 per month beginning January 2001 and for the succeeding
 months until finally vacated. Ordering the defendant to pay the reduced amount
of P10,000.00 as attorneys fees plus the costs of suit.
SO ORDERED.[12]
The defendants appealed the decision to the RTC. On motion of the plaintiff, the RTC issued an order
for the execution of the decision pending appeal.[13] The defendants filed a motion for the recall of the
Order,[14] but before the court could resolve the motion, the Sheriff turned over the physical
possession of the property to Berba on May 20, 2002.[15]
In their Appeal Memorandum, Pablo and the heirs of Palanca insisted that Berbas action in the MTC
was premature because of the absence of Certificate to File Action issued by the Lupon. They also
claimed that Berba unlawfully increased the rentals for the house.[16] Berba, on the other hand,
averred that there was no need of a prior referral to the Lupon before filing her complaint. The
petitioner cited Section 408(f) of the Local Government Code, pointing out that she resided in
aBarangay in Malate, 8 kilometers away from Barangay 873 in Sta. Ana, where Pablo and the Palanca
heirs resided.[17]
On August 20, 2002, the RTC rendered judgment granting the appeal and setting aside the appealed
decision. The fallo of the decision reads:
WHEREFORE, the decision of the Court a quo is ordered set aside. The
complaint is also ordered DISMISSED WITHOUT PREJUDICE. The Writ of Execution
issued by the Court a quo pending appeal is also set aside.
SO ORDERED.[18]
The RTC ruled that under Section 408 of the Local Government Code, parties who reside in
the same city or municipality although in different barangays are mandated to go through conciliation
proceedings in the Lupon.[19] The court cited the rulings of this Court in Morata v. Go,[20] and Vda. de
Borromeo v. Pogoy.[21]
Berba filed a motion for the reconsideration[22] of the decision, which the RTC denied in its
Order[23] dated October 2, 2002. She then elevated the case to the CAvia petition for review, where
she averred:
a) The raising of other affirmative defenses apart from the non-referral to
the Barangay Court by the respondents constitute a waiver of such
requirement; and
b) There was substantial compliance on the part of the petitioner with respect to
referring her complaint before the Barangay Court.[24]
Citing the ruling of this Court in Diu v. Court of Appeals,[25] Berba claimed that Section 408 of the
Local Government Code should be construed liberally together with Section 412. She further averred
that she had complied substantially with the requisites of the law, and recalls that conciliation
proceedings before the Luponresulted in the execution of an Agreement on June 5, 1999. Upon failure
to comply with the agreement, all chances of amicable settlement were effectively foreclosed. Hence,
Pablo and the Heirs of Palanca were estopped from claiming that she failed to comply with the Local
Government Codes requirement of prior referral of their dispute to the Lupon.
After due proceedings, the CA rendered judgment dismissing the petition and affirming
the RTC decision. Berba moved for a reconsideration of the decision, which proved futile.
In the instant petition for review on certiorari, the petitioner alleges that:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED TO
CONSIDER THE DECISION OF THIS HONORABLE COURT IN THE CASE OF DIU VS.
COURT OF APPEALS (251 SCRA 478) AND IN DECLARING THAT THERE WAS NO
SUBSTANTIAL COMPLIANCE WITH THE MANDATE OF PD 1508 (NOW R.A. 7160)
WITH RESPECT TO PRIOR REFERRAL TO THE BARANGAY COURT, THEREBY
DECIDING THE CASE NOT IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF
THE COURT.[26]
The petitioner avers that she is a sickly widow, in the twilight of her years, and whose only
source of income are the rentals generated from the property, which she also uses to pay her medical
expenses. She avers that the continued denial of her right to the fruits of the subject property is
highly unjust and contrary to the spirit behind the enactment of Presidential Decree (P.D.) No.
1508.[27]
The petitioner also points out that, for her to pay obeisance to the decision of the CA, she
would have to go through the tedious, not to mention horrendous, process of going back to square
one; that is, referring the dispute to the barangay which, in all likelihood, would be rendered useless
considering that respondents had already been validly and effectively ejected from the leased
premises. She would then have to go through the rungs of the judicial ladder a second time to
vindicate her trampled rights. She further claims that the CAs affirmation of the RTC decision is
equivalent to sanctioning a legal anomaly. She points out that the very purpose
of barangay conciliation is to abbreviate disputes between members of the same or
adjacent barangays to the end that their disputes will not reach the doors of the courts. Clearly, it
does not contemplate a protracted process as suggested by the RTC ruling and affirmed by the CA.[28]
In their comment on the petition, the respondents aver that the petitioner was estopped
from relying on the June 5, 1999 Agreement between her and respondent Josephine Pablo before
the Lupon because the respondent Heirs of Carlos Palanca were not parties thereto. The respondents
maintained that the petitioner must bear the blame for her failure to comply with the Local
Government Code. At first, she insisted that there was no need for prior referral of the dispute to
theLupon, claiming that she resided in a barangay other than where the respondents resided.
Thereafter, she made a volte face and invoked the June 5, 1999 Agreement between her and
respondent Josephine Pablo. Moreover, the respondents aver, the MTC had no jurisdiction over the
petitioners action for unlawful detainer because it was filed only on June 21, 2001, or more than one
year from June 5, 1999 when the petitioner and respondent Josephine Pablo executed the agreement.
As such, the action should be one for recovery of possession of property (accion publiciana).
On June 2, 2004, the Court resolved to give due course to the petition and required the
parties to file their respective memoranda.[29] The parties complied.
The Court rules that the CA cannot be faulted for affirming the decision of the RTC reversing
the decision of the MTC and ordering the dismissal of the complaint for unlawful detainer without
prejudice.
The records show that petitioner and respondent Josephine Pablo executed an Agreement on June 5,
1999, which was approved by the Lupon. Respondent Josephine Pablo did not repudiate the
agreement; hence, such agreement of the parties settling the case had the force and effect of a final
judgment. As the Court declared inVidal v. Escueta,[30] the settlement of the parties may be enforced
by the Lupon, through the punong barangay, within
six months; and if the settlement is not enforced after the lapse of said period, it may be enforced by
an action in the proper city or municipal court, as provided in Section 417 of the Local Government
Code:
We also agree that the Secretary of the Lupon is mandated to transmit the
settlement to the appropriate city or municipal court within the time frame under
Section 418 of the LGC and to furnish the parties and the Lupon Chairman with
copies thereof. The amicable settlement which is not repudiated within the period
therefor may be enforced by execution by the Lupon through the Punong
Barangay within a time line of six months, and if the settlement is not so enforced
by the Lupon after the lapse of said period, it may be enforced only by an action in
the proper city or municipal court as provided for in Section 417 of the LGC of 1991,
as amended, which reads:
SEC. 417. Execution. The amicable settlement or arbitration
award may be enforced by execution by the Lupon within six (6) months
from the date of the settlement. After the lapse of such time, the
settlement may be enforced by action in the proper city or municipal
court. (Italics supplied).
Section 417 of the Local Government Code provides a mechanism for the
enforcement of a settlement of the parties before the Lupon. It provides for a two-
tiered mode of enforcement of an amicable settlement executed by the parties
before the Lupon, namely, (a) by execution of the Punong Barangay which is quasi-
judicial and summary in nature on mere motion of the party/parties entitled
thereto; and (b) by an action in regular form, which remedy is judicial. Under the
first remedy, the proceedings are covered by the LGC and the Katarungang
Pambarangay Implementing Rules and Regulations. The Punong Barangay is called
upon during the hearing to determine solely the fact of non-compliance of the terms
of the settlement and to give the defaulting party another chance at voluntarily
complying with his obligation under the settlement. Under the second remedy, the
proceedings are governed by the Rules of Court, as amended. The cause of action is
the amicable settlement itself, which, by operation of law, has the force and effect
of a final judgment.
Section 417 of the LGC grants a period of six months to enforce the
amicable settlement by the Lupon through the Punong Barangay before such party
may resort to filing an action with the MTC to enforce the settlement. The raison
detre of the law is to afford the parties during the six-month time line, a simple,
speedy and less expensive enforcement of their settlement before the Lupon.[31]
In the present case, respondent Josephine Pablo failed to comply with her obligation of repaying the
back rentals of P81,818.00 and the current rentals for the house. Hence, the petitioner had the right
to enforce the Agreement against her and move for her eviction from the premises. However, instead
of filing a motion before theLupon for the enforcement of the agreement, or (after six months), an
action in the Metropolitan Trial Court (MTC) for the enforcement of the settlement, the petitioner filed
an action against respondent Josephine Pablo for unlawful detainer and the collection of unpaid
rentals, inclusive of those already due before the June 5, 1999 Agreement was executed. The action
of the petitioner against respondent Pablo was barred by the Agreement of June 5, 1999.
The Court notes that the petitioner even submitted with the MTC a copy of her June 5, 1999
Agreement with respondent Josephine Pablo. Instead of dismissing the complaint as against such
respondent, the MTC rendered judgment against her and ordered her eviction from the leased
premises.
The Court thus rules that the petitioners complaint against respondent Heirs of Carlos
Palanca was premature. It bears stressing that they were not impleaded by the petitioner as parties-
respondents before the Lupon. The petitioner filed her complaint solely against respondent Josephine
Pablo. Moreover, the said respondent heirs were not privy to the said agreement, and, as such, were
not bound by it. Section 412 of the Local Government Code, sets forth the precondition to filing of
complaints in court, to wit:
SEC. 412 Conciliation.- (a) Pre-condition to filing of complaint in court. No
complaint, petition, action, or proceeding involving any matter within the authority
of thelupon shall be filed or instituted directly in court or any other government
office for adjudication, unless there has been a confrontation between the parties
before the luponchairman or the pangkat, and that no conciliation or settlement has
been reached as certified by the lupon secretary or pangkat secretary as attested to
by the lupon chairman orpangkat chairman or unless the settlement has been
repudiated by the parties thereto.
(b) Where parties may go directly to court. The parties may go directly to
court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal liberty calling
for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies such as
preliminary injunction, attachment, delivery of personal property, and
support pendente lite; and
(4) Where the action may otherwise be barred by the statute of limitations.
(c) Conciliation among members of indigenous cultural communities. The
customs and traditions of indigenous cultural communities shall be applied in
settling disputes between members of the cultural communities.
Under Sec. 408 of the same Code, parties actually residing in the same city or municipality
are bound to submit their disputes to the Lupon for conciliation/amicable settlement, unless otherwise
provided therein:
SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of
each barangay shall have authority to bring together the parties actually residing in
the same city or municipality for amicable settlement of all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute relates
to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine
exceeding Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
 (e) Where the dispute involves real properties located in different cities or
municipalities unless the parties thereto agree to submit their differences to
amicable settlement by an appropriate lupon;

(f) Disputes involving parties who actually reside in barangays of different

cities or municipalities, except where such barangay units adjoin each other and the
parties thereto agree to submit their differences to amicable settlement by an
appropriate lupon;

(g) Such other classes of disputes which the President may determine in
the interest of justice or upon the recommendation of the Secretary of Justice.

The court in which non-criminal cases not falling within the authority of
the lupon under this Code are filed may, at any time before trial, motu proprio refer
the case to thelupon concerned for amicable settlement.

If the complainant/plaintiff fails to comply with the requirements of the Local Government
Code, such complaint filed with the court may be dismissed for failure to exhaust all administrative
remedies.[32]
The petitioners reliance on the ruling of this Court in Diu v. Court of Appeals[33] is misplaced.
In that case, there was a confrontation by the parties before theBarangay Chairman and no
agreement was reached. Although no pangkat was formed, the Court held in that instance that there
was substantial compliance with the law. In any event, the issue in that case was whether the failure
to specifically allege that there was no compliance with the barangay conciliation procedure
constitutes a waiver of that defense. Moreover, no such confrontation before the Lupon occurred with
respect to the unlawful detainer suit against Josephine Pablo before the MTC.[34]

In this case, the petitioner and the respondent Heirs of Carlos Palanca resided in the City of
Manila, albeit in different barangays. The dispute between the petitioner and the respondent heirs was
thus a matter within the authority of the Lupon. Hence, the petitioners complaint for unlawful detainer
and the collection of back rentals should have been first filed before the Lupon for mandatory
conciliation, to afford the parties an opportunity to settle the case amicably. However, the petitioner
filed her complaint against the respondent Heirs of Carlos Palanca directly with the MTC. Clearly then,
her complaint was premature. The execution of the June 5, 1999 Agreement between petitioner and
respondent Josephine Pablo does not amount to substantial compliance to the requirements of the
Local Government Code on mandatory barangayconciliation proceedings.

Indeed, considering that the MTC had already rendered a decision on the merits of the case,
it is not without reluctance that the Court reaches this conclusion which would require the petitioner
to start again from the beginning. The facts of the present case, however, do not leave us any choice.
To grant the petition under these circumstances would amount to refusal to give effect to the Local
Government Code and to wiping it off the statute books insofar as ejectment and other cases
governed by the Rule on Summary Procedure are concerned. This Court has no authority to do
that.[35]

IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED.

SO ORDERED.
 2. The amount of Php10,000.00 as and by way of attorneys fees;
CRISANTA ALCARAZ MIGUEL, G.R. No. 191336
and the costs.
Petitioner,
Present:
SO ORDERED. [5]
CARPIO, J.,
- versus - Chairperson,
On appeal to the Regional Trial Court (RTC) of Makati City, Branch 146, the respondent
PEREZ,
raised the same issues cited in his Answer. In its March 14, 2007 Decision,[6] the RTC affirmed the
SERENO,
MeTC Decision, disposing as follows:
REYES, and
PERLAS-BERNABE, JJ. *
WHEREFORE, finding no cogent reason to disturb the findings of the court a
quo, the appeal is hereby DISMISSED, and the DECISION appealed from is hereby
JERRY D. MONTANEZ, Promulgated:
AFFIRMED in its entirety for being in accordance with law and evidence.
Respondent.
January 25, 2012
SO ORDERED.[7]
x------------------------------------------------------------------------------------x
Dissatisfied, the respondent appealed to the CA raising two issues, namely, (1) whether or
DECISION
not venue was improperly laid, and (2) whether or not theKasunduang Pag-aayos effectively novated
the loan agreement. On September 17, 2009, the CA rendered the assailed Decision, disposing as
REYES, J.:
follows:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner
WHEREFORE, premises considered, the petition is hereby GRANTED. The
Crisanta Alcaraz Miguel (Miguel) seeks the reversal and setting aside of the September 17, 2009
appealed Decision dated March 14, 2007 of the Regional Trial Court (RTC)
Decision[1] and February 11, 2010 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No.
of Makati City, Branch 146, is REVERSED and SET ASIDE. A new judgment is
100544, entitled Jerry D. Montanez v. Crisanta Alcaraz Miguel.
entered dismissing respondents complaint for collection of sum of money, without
prejudice to her right to file the necessary action to enforce the Kasunduang Pag-
Antecedent Facts
aayos.
On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One Hundred Forty-
SO ORDERED.[8]
Three Thousand Eight Hundred Sixty-Four Pesos (P143,864.00), payable in one (1) year, or until
February 1, 2002, from the petitioner. The respondent gave as collateral therefor his house and lot
located at Block 39 Lot 39 Phase 3, Palmera Spring, Bagumbong, Caloocan City.
Anent the issue of whether or not there is novation of the loan
contract, the CA ruled in the negative. It ratiocinated as follows:
Due to the respondents failure to pay the loan, the petitioner filed a complaint against the
respondent before the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties
Judging from the terms of the Kasunduang Pag-aayos, it is clear that no
entered into a Kasunduang Pag-aayos wherein the respondent agreed to pay his loan in installments
novation of the old obligation has taken place. Contrary to petitioners assertion,
in the amount of Two Thousand Pesos (P2,000.00) per month, and in the event the house and lot
there was no reduction of the term or period originally stipulated. The original
given as collateral is sold, the respondent would settle the balance of the loan in full. However, the
period in the first agreement is one (1) year to be counted from February 1, 2001,
respondent still failed to pay, and on December 13, 2004, the Lupong Tagapamayapa issued a
or until January 31, 2002. When the complaint was filed before the barangay on
certification to file action in court in favor of the petitioner.
February 2003, the period of the original agreement had long expired without
compliance on the part of petitioner. Hence, there was nothing to reduce or extend.
On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati
There was only a change in the terms of payment which is not incompatible with the
City, Branch 66, a complaint for Collection of Sum of Money. In his Answer with Counterclaim,[3] the
old agreement. In other words, the Kasunduang Pag-aayos merely supplemented
respondent raised the defense of improper venue considering that the petitioner was a resident of
the old agreement.[9]
Bagumbong, Caloocan Citywhile he lived in San Mateo, Rizal.

After trial, on August 16, 2006, the MeTC rendered a Decision,[4] which disposes as follows:
The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before
the Lupon ng Barangay, such settlement has the force and effect of a court judgment, which may be
WHEREFORE, premises considered[,] judgment is hereby rendered ordering
enforced by execution within six (6) months from the date of settlement by the Lupon ng Barangay,
defendant Jerry D. Montanez to pay plaintiff the following:
or by court action after the lapse of such time.[10] Considering that more than six (6) months had
elapsed from the date of settlement, the CA ruled that the remedy of the petitioner was to file an
1. The amount of [Php147,893.00] representing the obligation
action for the execution of the Kasunduang Pag-aayos in court and not for collection of sum of
with legal rate of interest from February 1, 2002 which was
money.[11] Consequently, the CA deemed it unnecessary to resolve the issue on venue.[12]
the date of the loan maturity until the account is fully paid;

The petitioner now comes to this Court.
Issues
(1) Whether or not a complaint for sum of money is the proper remedy for the petitioner,
notwithstanding the Kasunduang Pag-aayos;[13] and
(2) Whether or not the CA should have decided the case on the merits
rather than remand the case for the enforcement of the Kasunduang Pag-aayos.[14]
Our Ruling
Because the respondent failed to comply with the terms of the Kasunduang Pag-aayos, said
agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the
petitioner can insist on his original demand. Perforce, the complaint for collection of sum of
money is the proper remedy.
The petitioner contends that the CA erred in ruling that she should have followed the
procedure for enforcement of the amicable settlement as provided in theRevised Katarungang
Pambarangay Law, instead of filing a collection case. The petitioner points out that the cause of action
did not arise from the Kasunduang Pag-aayos but on the respondents breach of the original loan
agreement.[15]
This Court agrees with the petitioner.
It is true that an amicable settlement reached at the barangay conciliation proceedings, like
the Kasunduang Pag-aayos in this case, is binding between the contracting parties and, upon its
perfection, is immediately executory insofar as it is not contrary to law, good morals, good
customs, public order and public policy.[16] This is in accord with the broad precept of Article 2037 of
the Civil Code, viz:
A compromise has upon the parties the effect and authority of res judicata;
but there shall be no execution except in compliance with a judicial compromise.
Being a by-product of mutual concessions and good faith of the parties, an amicable
settlement has the force and effect of res judicata even if not judicially approved.[17] It transcends
being a mere contract binding only upon the parties thereto, and is akin to a judgment that is subject
to execution in accordance with the Rules.[18] Thus, under Section 417 of the Local Government
Code,[19] such amicable settlement or arbitration award may be enforced by execution by
the Barangay Lupon within six (6) months from the date of settlement, or by filing an action to
enforce such settlement in the appropriate city or municipal court, if beyond the six-month period.
Under the first remedy, the proceedings are covered by the Local Government Code and
the Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is called
upon during the hearing to determine solely the fact of non-compliance of the terms of the settlement
and to give the defaulting party another chance at voluntarily complying with his obligation under the
settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as
amended. The cause of action is the amicable settlement itself, which, by operation of law, has the
force and effect of a final judgment.[20]
It must be emphasized, however, that enforcement by execution of the amicable settlement,
either under the first or the second remedy, is only applicable if the contracting parties have not
repudiated such settlement within ten (10) days from the date thereof in accordance with Section 416
of the Local Government Code. If the amicable settlement is repudiated by one party, either expressly
or impliedly, the other party has two options, namely, to enforce the compromise in accordance with
the Local Government Code or Rules of Court as the case may be, or to consider it rescinded and insist
upon his original demand. This is in accord with Article 2041 of the Civil Code, which qualifies the
broad application of Article 2037, viz:
If one of the parties fails or refuses to abide by the compromise, the
other party may either enforce the compromise or regard it as rescinded and insist
upon his original demand.
In the case of Leonor v. Sycip,[21] the Supreme Court (SC) had the occasion to explain this
provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved
party, by the breach of compromise agreement, may just consider it already rescinded, to wit:
It is worthy of notice, in this connection, that, unlike Article 2039 of the
same Code, which speaks of "a cause of annulment or rescission of the compromise"
and provides that "the compromise may be annulled or rescinded" for the cause
therein specified, thus suggesting an action for annulment or rescission, said Article
2041 confers upon the party concerned, not a "cause" for rescission, or the right to
"demand" the rescission of a compromise, but the authority, not only to "regard it
as
rescinded", but, also, to "insist upon his original demand". The language of this
Article 2041, particularly when contrasted with that of Article 2039,
denotes that no action for rescission is required in said Article 2041, and
that the party aggrieved by the breach of a compromise agreement may, if
he chooses, bring the suit contemplated or involved in his original demand,
as if there had never been any compromise agreement, without bringing an
action for rescission thereof. He need not seek a judicial declaration of
rescission, for he may "regard" the compromise agreement already
"rescinded".[22] (emphasis supplied)
As so well stated in the case of Chavez v. Court of Appeals,[23] a party's non-compliance with
the amicable settlement paved the way for the application of Article 2041 under which the other party
may either enforce the compromise, following the procedure laid out in the Revised Katarungang
Pambarangay Law, or consider it as rescinded and insist upon his original demand. To quote:
In the case at bar, the Revised Katarungang Pambarangay Law provides for
a two-tiered mode of enforcement of an amicable settlement, to wit: (a) by
execution by thePunong Barangay which is quasi-judicial and summary in nature on
mere motion of the party entitled thereto; and (b) an action in regular form, which
remedy is judicial. However, the mode of enforcement does not rule out the right of
rescission under Art. 2041 of the Civil Code. The availability of the right of rescission
is apparent from the wording of Sec. 417 itself which provides that the amicable
settlement "may" be enforced by execution by the lupon within six (6) months from
its date or by action in the appropriate city or municipal court, if beyond that period.
The use of the word "may" clearly makes the procedure provided in the Revised
Katarungang Pambarangay Lawdirectory or merely optional in nature.
Thus, although the "Kasunduan" executed by petitioner and
respondent before the Office of the Barangay Captain had the force and
 effect of a final judgment of a court, petitioner's non-compliance paved the
way for the application of Art. 2041 under which respondent may either
enforce the compromise, following the procedure laid out in the Revised
Katarungang Pambarangay Law, or regard it as rescinded and insist upon
his original demand. Respondent chose the latter option when he instituted
Civil Case No. 5139-V-97 for recovery of unrealized profits and
reimbursement of advance rentals, moral and exemplary damages, and
attorney's fees. Respondent was not limited to claiming P150,000.00 because
although he agreed to the amount in the "Kasunduan," it is axiomatic that a
compromise settlement is not an admission of liability but merely a recognition that
there is a dispute and an impending litigation which the parties hope to prevent by
making reciprocal concessions, adjusting their respective positions in the hope of
gaining balanced by the danger of losing. Under the "Kasunduan," respondent was
only required to execute a waiver of all possible claims arising from the lease
contract if petitioner fully complies with his obligations thereunder. It is undisputed
that herein petitioner did not.[24] (emphasis supplied and citations omitted)

In the instant case, the respondent did not comply with the terms and conditions of
the Kasunduang Pag-aayos. Such non-compliance may be construed as repudiation because it denotes
that the respondent did not intend to be bound by the terms thereof, thereby negating the very
purpose for which it was executed. Perforce, the petitioner has the option either to enforce
the Kasunduang Pag-aayos, or to regard it as rescinded and insist upon his original demand, in
accordance with the provision of Article 2041 of the Civil Code. Having instituted an action for
collection of sum of money, the petitioner obviously chose to rescind theKasunduang Pag-aayos. As
such, it is error on the part of the CA to rule that enforcement by execution of said agreement is the
appropriate remedy under the circumstances.

Considering that the Kasunduang Pag-aayos is deemed rescinded by the non-compliance of

the respondent of the terms thereof, remanding the case to the trial court for the
enforcement of said agreement is clearly unwarranted.

The petitioner avers that the CA erred in remanding the case to the
trial court for the enforcement of the Kasunduang Pag-aayos as it prolonged the process, thereby
putting off the case in an indefinite pendency.[25] Thus, the petitioner insists that she should be
allowed to ventilate her rights before this Court and not to repeat the same proceedings just to comply
with the enforcement of theKasunduang Pag-aayos, in order to finally enforce her right to payment.[26]

The CA took off on the wrong premise that enforcement of the Kasunduang Pag-aayos is the
proper remedy, and therefore erred in its conclusion that the case should be remanded to the trial
court. The fact that the petitioner opted to rescind the Kasunduang Pag-aayos means that she is
insisting upon the undertaking of the respondent under the original loan contract. Thus, the CA should
have decided the case on the merits, as an appeal before it, and not prolong the determination of the
issues by remanding it to the trial court. Pertinently, evidence abounds that the respondent has failed
to comply with his loan obligation. In fact, the Kasunduang Pag-aayos is the well nigh incontrovertible
proof of the respondents indebtedness with the petitioner as it was executed precisely to give the
respondent a second chance to make good on his undertaking. And since the respondent still reneged
in paying his indebtedness, justice demands that he must be held answerable therefor.

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals
is SET ASIDE and the Decision of the Regional Trial Court, Branch 146, Makati City, dated March 14,
2007 is REINSTATED.

SO ORDERED.