RULE 5 - BRGY

CRISANTA MIGUEL v. JERRY MONTANEZ

GR 191336
January 25, 2012
FACTS:
-

d.
MONTANEZ secured a loan P 143,864
Payable in 1 year OR until Feb 1, 2002
From MIGUEL
Collateral house and lot located at Caloocan
Failure to pay the loan
MIGUEL filed before the Lupong tagapamayapa of
Brgy San Jose, Rodriguez, Rizal
Entered into a KASUNDUANG PAGAAYOS
o
Respondent agreed to pay
o
Installments
o
2K/month
o
Fail settle in full
Res failed to pay
Lupong issued a CERTIFICATION to file action in court
in favor of MIGUEL
Filed before MTC Makati Collection of sum of money
ANSWER: Improper venue (petitioner was resident of
Caloocan while he lived in Rizal)
MTC: ordered JERRY to pay
Appeal to RTC of MAKATI
o
Respondent raised the same issue
RTC affirmed MTC
Appeal to CA
o
Whether or not venue was improperly laid
AND
o
Whether kasunduang pag-aayos effectively
novated the loan agreement
CA: Reversed and set aside RTC
o
No novation
o
Merely supplemented the old agreement
o
Such pagaayos has the force and effect of a
court judgment
Filed with SC

ISSUES:
a. Whether complaint for sum of money is the proper
remedy for the petitioner, notwithstanding the
Kasunduang Pagaayos
b. Whether CA should have decided the case on the
merits rather the case for the enforcement of the
Kasunduan
HELD:
a.

b.

c.

Respondent failed to comply with the kasunduan,

agreement is deemed RESCINDED (Art 2041)
i. Can enforce action for collection of
sum of money
Cause of action arose from the loan agreement not
the pagaayos.
i. Compromise: effect and authority
of res judicata but there shall be no
execution except in compliance
with a judicial compromise
ii. Even if not judicially approved
iii. Akin to a judgment that is subject
to execution
iv. Enforced within 6 months from date
of settlement by filing an action to
enforce inappropriate city or
municipal court, IF BEYOND 6
MONTH PERIOD.
1ST: Under the LOCAL GOVT CODE and
KATARUNGANG PAMBARANGAY IRR
i. Punong barangay is called to hear
and determine solely the fact of

e.

f.

g.

h.
i.

j.
k.

l.

non-compliance of the terms and

settlement and to give the
defaulting party another chance to
VOLUNTARILY COMPLY with his
obligation
2ND: proceedings are governed by the ROC
i. Cause of action is the amicable
settlement itself, by operation of
law, has the force and effect of a
final judgment.
Enforcement by execution of amicable settlement is
only applicable if the contracting parties have not
repudiated such settlement within 20 days from date
thereon
i. Accordance with: Sec 416 of the
LGC or ROC
ii. Considered rescinded and insist
upon his original demand
iii. Fail to abide by the compromise,
the other party may either enforce
the compromise or regard it as
rescinded and insist upon his
original demand
iv. 2041: consider it rescinded;
authority to insits on the original
demand
1. No action for rescission is
required
2. Pursue suit as if there had
never been any
compromise
3. Without bringing an action
for rescission
4. Need not ask for judicial
declaration of rescission
5. Regrard compromise
agreement as rescinded
v. 2039: cause of annulment or
rescission
2-TIERED MODE OF ENFORCEMENT OF AN AMICABLE
SETTLEMENT:
i. Execution by the punong barangay
(quasi-judicial and summary in
nature) AND
ii. Action in regular form, which
remedy is judicial
Petitioners noncompliance paved way for application
of 2041, enforce compromise
i. Following the procedure of Revised
Katarungang Pambarangay Law OR
ii. Regard as rescinded and insist on
his original demand
Respondent choose the latter option when instituted
the case
Non-compliance considered as REPUDIATION
i. Did not intend to be bound by the
terms thereof
ii. Petition has the option
Having instituted a collection for sum of money,
petitioner obviously chose to rescind the agreement
CA erred when it remanded the case to the trial court
i. Fact that petitioner opted it to be
rescinded, CA should decide on the
merits of the case
ii. Kasunduang Pagaayos well nigh
incontrovertible proof of the
respondents indebtedness with the
petitioner as it was executed
precisely to give the repspndent a
second chance to make good on his
undertaking.
PETITION GRANTED.