No. L-62339. October 27, 1983.

*
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 of First Instance of Cebu, Branch
XI, respondents.

Courts; Barangay Courts; Extent of authority of the Lupon Tagapamayapa in the settlement of cases.—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.”

Same; Same; Purpose of Pres. Decree 1508 in the settlement of disputes at barangay level.—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.

Same; Same; Cases falling within the jurisdiction of Courts of First Instance must also be coursed first to the
barangay court in the cases mentioned by law cognizable by the Lupon.—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, x x x,” 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.

Same; Same; The Chief Justice has directed all courts, including CFIs, not to receive complaints in cases
falling under the authority of the Lupon.—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].”

PETITION for certiorari and prohibition with preliminary injunction to review the order of the Court of First
Instance of Cebu, Br. XI Tomol, Jr., J.

The facts are stated in the opinion of the Court.

Amado G. Olis for petitioners.
Paul G. Gorres for private respondents.

ESCOLIN., J.:

In this petition for certiorari and prohibition with prayer for writ of preliminary injunction, the Court is called upon
to determine the classes of actions which fall within the coverage of Presidential Decree No. 1508,1 otherwise
known as Katarungang Pambarangay Law. This law requires the compulsory process of arbitration at the
Barangay level as a pre-condition for filing a complaint in court. Petitioners contend that said legislation is so
broad and all-embracing as to apply to actions 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 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.

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 money plus damages
amounting to P49,400.00. The case was docketed as Civil Case No. R-22154.

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 prior availment by the
plaintiffs of the barangay conciliation process required by P.D. 1508, as well as 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.

On September 2, 1982, respondent judge issued an order denying the motion to dismiss.
Petitioners filed a motion for reconsideration, but the same was denied in an order dated October 3, 1982, as
follows:
“Considering the specific reference to City or Municipal Courts in the provisions of Sections 11 and 12
of P.D. No. 1508, as the Courts to which the dispute settled or arbitrated by the Lupon Chairman or
the Pangkat, shall be elevated for nullification of the award or for execution of the same, and
considering that from the provision of Section 14 of the same law, the pre-condition to the 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 cognizable by the inferior
courts mentioned in Sections 11 and 12 of the law.

“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].

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

We find the petition impressed with merit.

Section 6 of P.D. 1508 reads as follows:

“SECTION 6. Conciliation, pre-condition to filing of complaint.—No complaint, petition, action for

proceeding involving any matter within the authority of the Lupon as provided in Section 2 hereof shall
be filed or instituted in court or any other government office for adjudication unless there has been a
confrontation of the parties before the Lupon Chairman or the Pangkat and no conciliation or
settlement has been reached as certified by the Lupon Secretary or the Pangkat Secretary attested
by the Lupon or Pangkat Chairman, or unless the settlement has been repudiated. However, the
parties may go directly to court in the following cases:

[1]
Where the accused is under detention;
[2]
Where a person has otherwise been deprived of personal liberty calling for habeas corpus
proceedings;
[3]
Actions 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.”

Section 2 of the law defines the scope of authority of the Lupon thus:

“SECTION 2. Subject matters for amicable settlement.—The Lupon of each barangay shall have
authority to bring together the parties actually residing in the same city or municipality for amicable
settlement of all disputes except:
 “[1]
Where one party is the government, or any subdivision or instrumentality thereof;
“[2]
Where one party is a public officer or employee, and the dispute relates to the performance of his
official functions;
“[3] Offenses punishable by imprisonment exceeding 30 days, or a fine exceeding P200.00;
“[4]
Offenses where there is no private offended party;
“[5]
Such other classes of disputes which the Prime Minister may in the interest of justice determine upon
recommendation of the Minister of Justice and the Minister of Local Government.”

Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon has the authority to settle
amicably all types of disputes involving parties who actually reside in the same city or municipality. The law,
as written, makes no distinction whatsoever with respect to the classes of civil disputes that should be
compromised at the barangay level, in contradistinction to the limitation imposed upon the Lupon by paragraph
(3), section 2 thereof as regards its authority over criminal cases. In fact, in defining the Lupon’s authority,
Section 2 of said law employed the universal and comprehensive term “all”, to which usage We should neither
add nor subtract in consonance with the rudimentary precept in statutory construction that “where the law does
not distinguish, We should not distinguish.”2

By compelling the disputants to settle their differences through the intervention of the barangay leader and
other respected members of the barangay, the animosity generated by protracted court litigations between
members of the same political unit, a disruptive factor toward unity and cooperation, is avoided. It must be
borne in mind that the conciliation process at the barangay level is likewise designed to discourage
indiscriminate filing of cases in court in order to decongest its clogged dockets and, in the process, enhance
the quality of justice dispensed by it. Thus, to say that the authority of the Lupon is limited to cases exclusively
cognizable by the inferior courts is to lose sight of this objective. Worse, it would make the law a self-defeating
one. For what would stop a party, say in an action for a sum of money or damages, as in the instant case, from
bloating up his claim in order to place his case beyond the jurisdiction of the inferior court and thereby avoid
the mandatory requirement of P.D. 1508? And why, indeed, should the law seek to ease the congestion of
dockets only in inferior courts and not in the regional trial courts where the log-jam of cases is much more
serious? Indeed, the lawmakers could not have intended such half-measure and self-defeating legislation.

The objectives of the law are set forth in its preamble thus:

“WHEREAS, the perpetuation and official recognition of the time-honored tradition of amicably settling
disputes among family and barangay level without judicial resources would promote the speedy
administration of justice and implement the constitutional mandate to preserve and develop Filipino
culture and to strengthen the family as a basic social institution;

“WHEREAS, the indiscriminate filing of cases in the courts of justice contributes heavily and
unjustifiably to the congestion of court dockets, thus causing a deterioration in the quality of justice;

“WHEREAS, in order to help relieve the courts of such docket congestion and thereby enhance the
quality of justice dispensed by the courts, it is deemed desirable to formally organize and
institutionalize a system of amicably settling disputes at the barangay level.”

There can be no question that when the law conferred upon the Lupon “the authority to bring together the
parties actually residing in the same city or municipality for amicable settlement of all disputes, x x x,” 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. x x x However, all disputes which involve real property or any interest therein
shall be brought in the Barangay where the real property or any part thereof is situated.”
for it should be noted that, traditionally and historically,jurisdiction over cases involving real property or any
interesttherein, except forcible entry and detainer cases, has alwaysbeen vested in the courts of first instance
[now regional trialcourt].

But it is pointed out by the respondent judge that Sections 11,3 12,4 and 145 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 competent 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, C.J., Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana, Relova and
Gutierrez, Jr., JJ., concur.
Teehankee, J., reserves his vote.
Makasiar, J., reserves his vote.
De Castro, J., on sick leave.
 G.R. No. 167261. March 2, 2007.*
ROSARIA LUPITAN PANG-ET, petitioner, vs. CATHERINE MANACNES-DAO-AS, Heir of LEONCIO
MANACNES and FLORENTINA MANACNES, respondent.

Katarungang Pambarangay Law; The object of the Katarungang Pambarangay Law is the amicable settlement
of disputes through conciliation proceedings voluntarily and freely entered into by the parties; The disputing
parties are not compelled to settle their controversy during the barangay proceedings before the Lupon or the
Pangkat, as they are free to instead find recourse in the courts.—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. Through this mechanism, the parties are
encouraged to settle their disputes without enduring the rigors of court litigation. Nonetheless, the disputing
parties are not compelled to settle their controversy during the barangay proceedings before the Lupon or the
Pangkat, as they are free to instead find recourse in the courts in the event that no true compromise is reached.

Same; 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.—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. 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.

Same; What is compulsory under the Katarungang Pambarangay Law is that there be a confrontation between
the parties before the Lupon Chairman or the Pangkat and that a certification be issued that no conciliation or
settlement has been reached, as attested to by the Lupon or Pangkat Chairman, before a case falling within
the authority of the Lupon may be instituted in court or any other government office for adjudication.—What is
compulsory under the Katarungang Pambarangay Law is that there be a confrontation between the parties
before the Lupon Chairman or the Pangkat and that a certification be issued that no conciliation or settlement
has been reached, as attested to by the Lupon or Pangkat Chairman, before a case falling within the authority
of the Lupon may be instituted in court or any other government office for adjudication. 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.

Same; As reflected in Section 413 of the Revised Katarungang Pambarangay Law, in order that a party may
be bound by an arbitration award, said party must have agreed in writing that they shall abide by the arbitration
award of the Lupon or the Pangkat.—The MCTC should not have persisted in ordering the Lupon ng
Tagapamayapa to render an arbitration award upon the refusal of the spouses Manacnes to submit the case
for arbitration since such arbitration award will not bind the spouses. As reflected in Section 413 of the Revised
Katarungang Pambarangay Law, in order that a party may be bound by an arbitration award, said party must
have agreed in writing that they shall abide by the arbitration award of the Lupon or the Pangkat. Like in any
other contract, parties who have not signed an agreement to arbitrate will not be bound by said agreement
since it is axiomatic that a contract cannot be binding upon and cannot be enforced against one who is not a
party to it. In view of the fact that upon verification by the Pangkat Chairman, in order to settle the issue of
whether or not they intend to submit the matter for arbitration, the spouses Manacnes refused to affix their
signature or thumb mark on the Agreement for Arbitration Form, the Manacnes spouses cannot be bound by
the Agreement for Arbitration and the ensuing arbitration award since they never became privy to any
agreement submitting the case for arbitration by the Pangkat.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Ma. Inglay Capuyan-Fokno for petitioner.
Johnny Ekid for respondent.

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the
Decision1 of the Court of Appeals in CA-G.R. SP No. 78019, dated 9 February 2005, which reversed and set
aside the Judgment2 of the Regional Trial Court (RTC), Branch 36, Bontoc, Mountain Province, and reinstated
the Resolution3 of the Municipal Circuit Trial Court (MCTC) of Besao-Sagada, Mountain Province dismissing
herein petitioner’s action for Enforcement of Arbitration Award and Damages.

The instant petition draws its origin from an Action4 for recovery of possession of real property situated in Sitio
Abatan, Barrio Dagdag, Sagada filed by herein petitioner before the MCTC of Besao-Sagada, Mountain
Province on 9 November 1994, against the spouses Leoncio and Florentina Manacnes, the predecessors-in-
interest of herein respondent.
On 23 February 1995, during the course of the pre-trial, the parties, through their respective counsels, agreed
to refer the matter to the Barangay Lupon (Lupon) of Dagdag, Sagada for arbitration in accordance with the
provisions of the Katarungang Pambarangay Law.5 Consequently, the proceedings before the MCTC were
suspended, and the case was remanded to the Lupon for resolution.6

Thereafter, the Lupon issued a Certification to File Action on 26 February 1995 due to the refusal of the
Manacnes spouses to enter into an Agreement for Arbitration and their insistence that the case should go to
court. On 8 March 1995, the Certification, as well as the records of the case, were forwarded to the MCTC.

An Order was issued by the MCTC on 7 April 1995, once more remanding the matter for conciliation by the
Lupon and ordering the Lupon to render an Arbitration Award thereon. According to the MCTC, based on the
records of the case, an Agreement for Arbitration was executed by the parties concerned; however, the Lupon
failed to issue an Arbitration Award as provided under the Katarungang Pambarangay Law, so that, the case
must be returned to the Lupon until an Arbitration Award is rendered.

In compliance with the MCTC Order, the Lupon rendered an Arbitration Award on 10 May 1995 ordering herein
petitioner to retrieve the land upon payment to the spouses Manacnes of the amount of P8,000.00 for the
improvements on the land. Aggrieved, Leoncio’s widow,7 Florentina Manacnes, repudiated the Arbitration
Award but her repudiation was rejected by the Lupon. Thereafter, the MCTC was furnished with copies of the
Arbitration Award.

On 1 June 1995, herein petitioner filed with the Lupon a Motion for Execution of the Arbitration Award. On the
other hand, Florentina Manacnes filed a Motion with the MCTC for the resumption of the proceedings in the
original case for recovery of possession and praying that the MCTC consider her repudiation of the Arbitration
Award issued by the Lupon.

Subsequently, the MCTC heard the Motion of Florentina Manacnes notwithstanding the latter’s failure to
appear before the court despite notice. The MCTC denied Florentina Manacnes’ Motion to repudiate the
Arbitration Award elucidating that since the movant failed to take any action within the 10-day reglementary
period provided for under the Katarungang Pambarangay Law, the arbitration award has become final and
executory. Furthermore, upon motion of herein petitioner Pang-et, the MCTC issued an Order remanding the
records of the case to the Lupon for the execution of the Arbitration Award. On 31 August 1995, the then
incumbent Punong Barangay of Dagdag issued a Notice of Execution of the Award.
Said Notice of Execution was never implemented. Thus, on 16 October 2001, herein petitioner Pang-et filed
with the MCTC an action for enforcement of the Arbitration Award which was sought to be dismissed by the
heir of the Manacnes spouses.8 The heir of the Manacnes spouses argues that the Agreement for Arbitration
and the Arbitration Award are void, the Agreement for Arbitration not having been personally signed by the
spouses Manacnes, and the Arbitration Award having been written in English—a language not understood by
the parties.
In its Resolution dated 20 August 2002, the MCTC dismissed the Petition for Enforcement of Arbitration Award
in this wise:

“x x x Are defendants estopped from questioning the proceedings before the Lupon Tagapamayapa
concerned?

The defendants having put in issue the validity of the proceedings before the lupon concerned and the products
thereof, they are not estopped. It is a hornbook rule that a null and void act could always be questioned at any
time as the action or defense based upon it is imprescriptible.

The second issue: Is the agreement to Arbitrate null and void? Let us peruse the pertinent law dealing on this
matter which is Section 413 of the Local Government Code of 1991 (RA 7160), to wit:

“Section 413—(a) The parties may, at any stage of the proceedings, agree in writing that they shall
abide by the arbitration award of the lupon chairman or the pangkat. x x x” The foregoing should be
taken together with Section 415 of the same code which provides:

“Section 415. Appearance of parties in person.—In all katarungang pambarangay

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

It is very clear from the foregoing that personal appearance of the parties in conciliation proceedings before a
Lupon Tagapamayapa is mandatory. Likewise, the execution of the agreement to arbitrate must be done
personally by the parties themselves so that they themselves are mandated to sign the agreement.

Unfortunately, in this case, it was not respondents-spouses [Manacnis] who signed the agreement to arbitrate
as plaintiff herself admitted but another person. Thus, it is very clear that the mandatory provisos of Section
413 and 415 of RA 7160 are violated. Granting arguendo that it was Catherine who signed the agreement per
instruction of her parents, will it cure the violation? The answer must still be in the negative. As provided for by
the cited provisos of RA 7160, if ever a party is entitled to an assistance, it shall be done only when the party
concerned is a minor or incompetent. Here, there is no showing that the spouses [Manacnis] were incompetent.
Perhaps very old but not incompetent. Likewise, what the law provides is assistance, not signing of agreements
or settlements.

Just suppose the spouses [Manacnis] executed a special power of attorney in favor of their daughter Catherine
to attend the proceedings and to sign the agreement to arbitrate? The more that it is proscribed by the
Katarungang Pambarangay Law specifically Section 415 of RA 7160 which mandates the personal
appearance of the parties before the lupon and likewise prohibits the appearance of representatives.

In view of the foregoing, it could now be safely concluded that the questioned agreement to arbitrate is
inefficacious for being violative of the mandatory provisions of RA 7160 particularly sections 413 and 415
thereof as it was not the respondents-spouses [Manacnis] who signed it.

The third issue: Is the Arbitration Award now sought to be enforced effective? Much to be desired, the natural
flow of events must follow as a consequence. Considering that the agreement to arbitrate is inefficacious as
earlier declared, it follows that the arbitration award which emanated from it is also inefficacious. Further, the
Arbitration Award by itself, granting arguendo that the agreement to arbitrate is valid, will readily show that it
does not also conform with the mandate of the Katarungang Pambarangay Law particularly Section 411 thereto
which provides:

“Sec. 411. Form of Settlement.—All amicable settlements shall be in writing in a language or dialect
known to the parties x x x. When the parties to the dispute do not use the same language or dialect,
the settlement shall be written in the language known to them.”

Likewise, the implementing rules thereof, particularly Section 13 provides:

 “Sec. 13. Form of Settlement and Award.—All settlements, whether by mediation, conciliation or
arbitration, shall be in writing, in a language or dialect known to the parties. x x x”

It is of no dispute that the parties concerned belong to and are natives of the scenic and serene community
of Sagada, Mt. Province who speak the Kankanaey language. Thus, the Arbitration Award should have been
written in the Kankanaey language. However, as shown by the Arbitration Award, it is written in English
language which the parties do not speak and therefore a further violation of the Katarungang Pambarangay
Law.

IN THE LIGHT of all the foregoing considerations, the aboveentitled case is hereby dismissed.”9

Petitioner Pang-et’s Motion for Reconsideration having been denied, she filed an Appeal before the RTC which
reversed and set aside the Resolution of the MCTC and remanded the case to the MCTC for further
proceedings. According to the RTC:

“As it appears on its face, the Agreement for Arbitration in point found on page 51 of the expediente,
dated Feb. 6, 1995, and attested by the Pangkat Chairman of the Office of the Barangay Lupon of
Dagdag, Sagada was signed by the respondents/defendants spouses Manacnis. The representative
of the Appellee in the instant case assails such Agreement claiming that the signatures of her aforesaid
predecessors-in-interest therein were not personally affixed by the latter or are falsified-which in effect
is an attack on the validity of the document on the ground that the consent of the defendants spouses
Manacnis is vitiated by fraud. Indulging the Appellee Heirs of Manacnis its contention that such indeed
is the truth of the matter, the fact still remains as borne out by the circumstances, that neither did said
original defendants nor did any of such heirs effectively repudiate the Agreement in question in
accordance with the procedure outlined by the law, within five (5) days from Feb. 6, 1995, on the
ground as above-stated (Secs. 413 (a), 418, RA 7160; Secs. 7, 13, KP Law; Sec. 12, Rule IV, KP
Rules). As mandated, such failure is deemed a waiver on the part of the defendants spouses Manacnis
to challenge the Agreement for Arbitration on the ground that their consent thereto is obtained and
vitiated by fraud (Sec. 12, Par. 3, KP Rules). Corollarily, the Appellee Heirs being privy to the now
deceased original defendants should have not been permitted by the court a quo under the equitable
principle of estoppel, to raise the matter in issue for the first time in the present case (Lopez vs. Ochoa,
103 Phil. 94).

The Arbitration Award relative to Civil Case 83 (B.C. No. 07) dated May 10, 1995, written in English, attested
by the Punong Barangay of Dagdag and found on page 4 of the record is likewise assailed by the Appellee as
void on the ground that the English language is not known by the defendants spouses Manacnis who are
Igorots. Said Appellee contends that the document should have been written in Kankana-ey, the dialect known
to the party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP law, Sec. 11, KP Rules). On this score, the court a quo
presumptuously concluded on the basis of the selfserving mere say-so of the representative of the Appellee
that her predecessors did not speak or understand English. As a matter of judicial notice, American
Episcopalian Missionaries had been in Sagada, Mountain Province as early as 1902 and continuously stayed
in the place by turns, co-mingling with the indigenous people thereat, instructing and educating them, and
converting most to the Christian faith, among other things, until the former left about twenty years ago. By
constant association with the white folks, the natives too old to go to school somehow learned the King’s
English by ear and can effectively speak and communicate in that language. Any which way, even granting
arguendo that the defendants spouses Manacnis were the exceptions and indeed totally ignorant of English,
no petition to nullify the Arbitration award in issue on such ground as advanced was filed by the party or any
of the Appellee Heirs with the MCTC of Besao-Sagada, within ten (10) days from May 10, 1995, the date of
the document. Thus, upon the expiration thereof, the Arbitration Award acquired the force and effect of a final
judgment of a court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP Rules); conclusive upon the original
defendants in Civil Case 83 (B.C. No. 07) and the Appellee Heirs herein privy to said defendants.

In the light thereof, the collateral attack of the Appellee on the Agreement for Arbitration and Arbitration Award
re Civil Case 83 (B.C. No. 07) should not have in the first place been given due course by the court a quo. In
which case, it would not have in the logical flow of things declared both documents “inefficacious;” without
which pronouncements, said court would not have dismissed the case at bar.

Wherefore, Judgment is hereby rendered Reversing and Setting Aside the Resolution appealed from, and
ordering the record of the case subject thereof remanded to the court of origin for further proceedings.”10

Aggrieved by the reversal of the RTC, herein respondent filed a petition before the Court of Appeals seeking
to set aside the RTC Judgment. On 9 February 2005, the appellate court rendered the herein assailed
Decision, to wit:
 “After thoroughly reviewing through the record, We find nothing that would show that the spouses
Manacnes were ever amenable to any compromise with respondent Pang-et. Thus, We are at a loss
as to the basis of the Arbitration Award sought to be enforced by respondent Pang-et’s subsequent
action before the MCTC.

There is no dispute that the proceeding in Civil Case No. 83 was suspended and the same remanded
to the Lupon on account of the Agreement to Arbitrate which was allegedly not signed by the parties
but agreed upon by their respective counsels during the pretrial conference. In the meeting before the
Lupon, it would seem that the agreement to arbitrate was not signed by the spouses Manacnes. More
importantly, when the pangkat chairman asked the spouses Manacnes to sign or affix their
thumbmarks in the agreement, they refused and insisted that the case should instead go to court.
Thus, the Lupon had no other recourse but to issue a certificate to file action. Unfortunately, the case
was again remanded to the Lupon to “render an arbitration award.” This time, the Lupon heard the
voice tape of the late Beket Padonay affirming respondent Pang-et’s right to the disputed property.
While Pang-et offered to pay 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 of Barangay Dagdag. Petitioner insists that the parties must be
bound by the initial agreement by their counsels during pre-trial to an amicable settlement as any
representation made by the lawyers are deemed made with the conformity of their clients. Furthermore,
petitioner maintains that if indeed the spouses Manacnes did not want to enter into an amicable settlement,
then they should have raised their opposition at the first instance, which was at the pre-trial on Civil Case No.
83 when the MCTC ordered that the case be remanded to the Lupon ng Tagapamayapa for arbitration.

We do not agree with the petitioner.

First and foremost, in order to resolve the case before us, it is pivotal to stress that, during the initial hearing
before the Lupon ng Tagapamayapa, the spouses Manacnes declined to sign the Agreement for Arbitration
and were adamant that the proceedings before the MCTC in Civil Case No. 83 must continue. As reflected in
the Minutes12 of the Arbitration Hearing held on 26 February 1995, the legality of the signature of Catherine
Manacnes, daughter of the Manacnes spouses, who signed the Agreement for Arbitration on behalf of her
parents, was assailed on the ground that it should be the spouses Manacnes themselves who should have
signed such agreement. To resolve the issue, the Pangkat Chairman then asked the spouses Manacnes that
if they wanted the arbitration proceedings to continue, they must signify their intention in the Agreement for
Arbitration form. However, as stated earlier, the Manacnes spouses did not want to sign such agreement and
instead insisted that the case go to court.

Consequently, the Lupon issued a Certification to File Action on 26 February 1995 due to the refusal of the
Manacnes spouses. Indicated in said Certification are the following: 1) that there was personal confrontation
between the parties before the Punong Barangay but conciliation failed and 2) that the Pangkat ng
Tagapagkasundo was constituted but the personal confrontation before the Pangkat failed likewise
because respondents do not want to submit this case for arbitration and insist that said case will go
to court.13 Nevertheless, upon receipt of said certification and the records of the case, the MCTC ordered that
the case be remanded to the Lupon ng Tagapamayapa and for the latter to render an arbitration award,
explaining that:
“Going over the documents submitted to the court by the office of the Lupon Tagapamayapa of
Dagdag, Sagada, Mountain Province, the court observed that an “Agreement for Arbitration” was
executed by the parties anent the above-entitled case. However, said Lupon did not make any
arbitration award as mandated by the Katarungang Pambarangay Law but instead made a finding that
the case may now be brought to the court. This is violative of the KP Law, which cannot be sanctioned
by the court.”14

At this juncture, it must be stressed that the object of the Katarungang Pambarangay Law is the amicable
settlement of disputes through conciliation proceedings voluntarily and freely entered into by the parties.15
Through this mechanism, the parties are encouraged to settle their disputes without enduring the rigors of
court litigation. Nonetheless, the disputing parties are not compelled to settle their controversy during the
barangay proceedings before the Lupon or the Pangkat, as they are free to instead find recourse in the courts16
in the event that no true compromise is reached.

The key in achieving the objectives of an effective amicable settlement under the Katarungang Pambarangay
Law is the free and voluntary agreement of the parties to submit the dispute for adjudication either by the
Lupon or the Pangkat, whose award or decision shall be binding upon them with the force and effect of a final
judgment of a court.17 Absent this voluntary submission by the parties to submit their dispute to arbitration
under the Katarungang Pambarangay Law, there cannot be a binding settlement arrived at effectively resolving
the case. Hence, we fail to see why the MCTC further remanded the case to the Lupon ng Tagapamayapa
and insisted that the arbitration proceedings continue, despite the clear showing that the spouses Manacnes
refused to submit the controversy for arbitration.

It would seem from the Order of the MCTC, which again remanded the case for arbitration to the Lupon ng
Tagapamayapa, that it is compulsory on the part of the parties to submit the case for arbitration until an
arbitration award is rendered by the Lupon. This, to our minds, is contrary to the very nature of the proceedings
under the Katarungang Pambarangay Law which espouses the principle of voluntary acquiescence of the
disputing parties to amicable settlement.

What is compulsory under the Katarungang Pambarangay Law is that there be a confrontation between the
parties before the Lupon Chairman or the Pangkat and that a certification be issued that no conciliation or
settlement has been reached, as attested to by the Lupon or Pangkat Chairman, before a case falling within
the authority of the Lupon may be instituted in court or any other government office for adjudication.18 In other
words, the only necessary pre-condition before any case falling within the authority of the Lupon or the Pangkat
may be filed before a court is that there has been personal confrontation between the parties but despite
earnest efforts to conciliate, there was a failure to amicably settle the dispute. It should be emphasized that
while the spouses Manacnes appeared before the Lupon during the initial hearing for the conciliation
proceedings, they refused to sign the Agreement for Arbitration form, which would have signified their consent
to submit the case for arbitration. Therefore, upon certification by the Lupon ng Tagapamayapa that the
confrontation before the Pangkat failed because the spouses Manacnes refused to submit the case for
arbitration and insisted that the case should go to court, the MCTC should have continued with the proceedings
in the case for recovery of possession which it suspended in order to give way for the possible amicable
resolution of the case through arbitration before the Lupon ng Tagapamayapa.
Petitioner’s assertion that the parties must be bound by their respective counsels’ agreement to submit the
case for arbitration and thereafter enter into an amicable settlement is imprecise. What was agreed to by the
parties’ respective counsels was the remand of the case to the Lupon ng Tagapamayapa for conciliation
proceedings and not the actual amicable settlement of the case. As stated earlier, the parties may only be
compelled to appear before the Lupon ng Tagapamayapa for the necessary confrontation, but not to enter into
any amicable settlement, or in the case at bar, to sign the Agreement for Arbitration. Thus, when the Manacnes
spouses personally appeared during the initial hearing before the Lupon ng Tagapamayapa, they had already
complied with the agreement during the pre-trial to submit the case for conciliation proceedings. Their presence
during said hearing is already their acquiescence to the order of the MCTC remanding the case to the Lupon
for conciliation proceedings, as there has been an actual confrontation between the parties despite the fact
that no amicable settlement was reached due to the spouses Manacnes’ refusal to sign the Agreement for
Arbitration.

Furthermore, the MCTC should not have persisted in ordering the Lupon ng Tagapamayapa to render an
arbitration award upon the refusal of the spouses Manacnes to submit the case for arbitration since such
arbitration award will not bind the spouses. As reflected in Section 413 of the Revised Katarungang
Pambarangay Law, in order that a party may be bound by an arbitration award, said party must have agreed
in writing that they shall abide by the arbitration award of the Lupon or the Pangkat. Like in any other contract,
parties who have not signed an agreement to arbitrate will not be bound by said agreement since it is axiomatic
that a contract cannot be binding upon and cannot be enforced against one who is not a party to it.19 In view
of the fact that upon verification by the Pangkat Chairman, in order to settle the issue of whether or not they
intend to submit the matter for arbitration, the spouses Manacnes refused to affix their signature or thumb mark
on the Agreement for Arbitration Form, the Manacnes spouses cannot be bound by the Agreement for
Arbitration and the ensuing arbitration award since they never became privy to any agreement submitting the
case for arbitration by the Pangkat.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision of the Court of
Appeals in CAG.R. SP No. 78019 is hereby AFFIRMED. The Municipal Circuit Trial Court of Besao-Sagada,
Mountain Province, is hereby ORDERED to proceed with the trial of Civil Case No. 83 for Recovery of
Possession of Real Property, and the immediate resolution of the same with deliberate dispatch. No costs.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez and Nachura, JJ., concur.
Callejo, Sr., J., On Leave.
Petition denied, judgment affirmed.

G.R. No. 157830. November 17, 2005.*

DANTE M. PASCUAL, represented by REYMEL R. SAGARIO, petitioner, vs. MARILOU M. PASCUAL,
respondent.

Actions; Katarungang Pambarangay; 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.—In the 1982
case of Tavora v. Veloso, 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-à-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.

Same; Same; Parties; To construe the express statutory requirement of “actual residency” as applicable to the
attorney-in-fact of the party-plaintiff would abrogate the meaning of “real party in interest”; Where the plaintiff
is not an actual resident of the barangay where the defendant resides, the local lupon has no jurisdiction over
their dispute, hence, prior referral to it for conciliation is not a precondition to its filing in court.—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 of the 1997 Rules of Court vis-à-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.

PETITION for review on certiorari of the order and resolution of the Regional Trial Court of Isabela, Br. 23.

The facts are stated in the opinion of the Court.

Pedro C. Antonio for petitioner.
Bob Armand L. Lecitona for respondent.

CARPIO-MORALES, J.:

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. Pascual, the
complaint filed against her by her brother herein petitioner Dante M. Pascual, 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 Government Code).

Petitioner, a permanent resident of the United States of America, appointed Sagario as his attorney-in-fact
by a Special Power of Attorney (SPA) dated April 10, 2002:

1.
To file a case for the cancellation of Transfer Certificate of Title No. T-271656 issued in the name of
Marilou M. Pascual as well as the Deed of Sale of Registered Land (Dec. No. 639; Page No. 52; Book
No. XXI; Series of 1994) and/or Reconveyance at the appropriate court;
2.
To collect the monthly rentals from the tenant;
3.
To enter into amicable settlement with Marilou M. Pascual or any other mode of payment/and/or
dispute resolution;
4. To execute and sign any and all papers, contracts/documents which may be necessary relative to
the above acts.
x x x1

Pursuant to the SPA, Sagario filed on October 14, 2002 before the Isabela RTC at Roxas a complaint 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 and Deed of Absolute
Sale of Registered Land and/or Reconveyance with Damages.2

To the Complaint the defendant-herein respondent Marilou M. Pascual filed a Motion to Dismiss3 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 barangay court before the
case was filed in court.

By the assailed Order of February 10, 2003,5 Branch 23 of the Isabela RTC at Roxas granted respondent’s
Motion to Dismiss in this wise:

. . . RA 7160 repealing P.D. 1508 otherwise known as the Revised Katarungang Pambarangay
provides under Section 409 “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.” 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 dispute shall be filed before the barangay where the property is located, regardless of
the residence of the parties. Besides, it is incorrect to say that the parties are 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, Isabela, and he substitute (sic) Dante Pascual by virtue of said Special
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 Royales vs. Intermediate Appellate Court,
127 SCRA 470, “Ordinarily, noncompliance with the condition precedent prescribed by P.D. 1508
 could affect the sufficiency of the plaintiff’s cause of action and make his complaint vulnerable to
dismissal on ground of lack of cause of action or prematurity.”6 (Emphasis and italics supplied)

Petitioner’s Motion for Reconsideration7 of the above-said order was denied by Order of March 24, 2003:8

xxx

Consequently, the Court is [of] the opinion that the said Attorney-in-fact shall be deemed to be the real
party in interest, reading from the tenor of the provisions of the Special Power of Attorney. Being a real
party in interest, the Attorney-in-fact is therefore obliged to bring this case first before the Barangay
Court. Sec. 3, Rule 3 of the Rules of Court provides that “Where the action is allowed to be prosecuted
or defended by a 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.

xxx

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 is the owner of the land.9 (Emphasis and italics
supplied)

Hence, the present petition questioning “the palpable legal errors” of the RTC.

Petitioner argues that since he, not his attorney-in-fact Sagario, is the real party in interest, and since he
actually resides abroad, the lupon would have no jurisdiction to pass upon the dispute involving real property,
he citing Agbayani v. Belen.10

Respondent submits, on the other hand, that Section 408, paragraph (f), of the Local Government Code, is
qualified by paragraph (c) of Section 409 of the same Code the latter of which provides that “[a]ll disputes
involving real property or any interest therein shall be brought in the barangay where the real property is
located,” hence, the use of the word “shall” makes it mandatory for the bringing of the dispute before the lupon.

That attorney-in-fact Sagario is a resident of the same barangay as that of hers, respondent argues in any
event, brings the matter under the jurisdiction of the lupon, for Sagario, following Section 3 of Rule 3 of the
1997 Rules of Civil Procedure which provides:
Sec. 3. Representative as parties.—Where the action is allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the
case and shall be deemed to be the real party in interest.

A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party

authorized by law or these Rules. An agent acting in his own name for the benefit of an undisclosed principal
may sue or be sued without joining the principal except when the contract involves things belonging to the
principal, being a substitute, becomes the real party-in-interest.

Respondent’s 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-à-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. (Italics 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 Agbayani13 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 314 of the 1997 Rules of Court vis-à-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 petitioner’s 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.
 Panganiban (Chairman), Corona and Garcia, JJ.,concur.
Sandoval-Gutierrez, J.,On Leave.
Petition granted, assailed order and resolution set aside.

Notes.—Judges should take judicial notice of the Local Government Code of 1991, specifically on the
provisions on the katarungang pambarangay, and a judge’s total unawareness thereof is distressing. (Uy vs.
Contreras, 237 SCRA 167 [1994])

The primordial objective of P.D. 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. (Zamora vs. Heirs of Carmen-Izquierdo, 443 SCRA 24 [2004])
 A.C. No. 6296. November 22, 2005.*
ATTY. EVELYN J. MAGNO, complainant, vs. ATTY. OLIVIA VELASCO-JACOBA, respondent.

Legal Ethics; Attorneys; Code of Professional Responsibility; Local Government Code (LGC) of 1991 [R.A.
No. 7160]; Katarungang Pambarangay; Section 415 of the Local Government Code (LGC) clearly requires the
personal appearance of the parties in katarungang pambarangay conciliation proceedings, unassisted by
counsel or representative; There can be no quibbling that laymen of good will 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.—Section 415 of the LGC of 1991, 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, the exception being in cases where minors or incompetents are parties. There can
be no quibbling that laymen of goodwill can easily agree to conciliate and settle their disputes between
themselves without what sometimes is the unsettling assistance of lawyers whose presence could sometimes
obfuscate and confuse issues. Worse still, the participation of lawyers with their penchant to use their analytical
skills and legal knowledge tend to prolong instead of expedite settlement of the case.

Same; Same; Same; Same; Same; That the Sumbong was addressed to the barangay captain instead of the
lupong tagapamayapa is of no moment since the barangay captain chairs the Lupong Tagapamayapa.—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.

Same; Same; Same; Same; Same; The prohibition in Section 415 of the Local Government Code (LGC)
applies to all the katarungang barangay proceedings.—Lest it be overlooked, the prohibition in question applies
to all katarungan barangay proceedings. Section 412(a) 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.

ADMINISTRATIVE CASE in the Supreme Court. Willful Violation of Section 415 of the Local Government
Code of 1991 and Canon 4 of the Code of Professional Responsibility.
The facts are stated in the resolution of the Court.
RESOLUTION

GARCIA, J.:

In her sworn complaint, as endorsed by the President of the Integrated Bar of the Philippines (IBP), Nueva
Ecija Chapter, Atty. Evelyn J. Magno charged Atty. Olivia Velasco-Jacoba, a member of the same IBP
provincial chapter, with willful violation of (a) Section 415 of the Local Government Code (LGC) of 1991 and
(b) Canon 4 of the Code of Professional Responsibility.

This disciplinary case arose out of a disagreement that complainant had with her uncle, Lorenzo Inos, over a
landscaping contract they had entered into. In a bid to have the stand-off between them settled, complainant
addressed a letter, styled “Sumbong,”1 to Bonifacio Alcantara, barangay captain of Brgy. San Pascual,
Talavera, Nueva Ecija. At the barangay conciliation/confrontation proceedings conducted on January 5, 2003,
respondent, on the strength of a Special Power of Attorney signed by Lorenzo Inos, appeared for the latter,
accompanied by his son, Lorenzito. Complainant’s objection to respondent’s appearance elicited the response
that Lorenzo Inos is entitled to be represented by a lawyer inasmuch as complainant is herself a lawyer. And
as to complainant’s retort that her being a lawyer is merely coincidental, respondent countered that she is
appearing as an attorney-in-fact, not as counsel, of Lorenzo Inos.

Complainant enumerated specific instances, with supporting documentation, tending to prove that respondent
had, in the course of the conciliation proceedings before the Punong Barangay, acted as Inos Lorenzo’s
counsel instead of as his attorney-in-fact. This is what complainant said in her complaint:2
 “5.
x x x Atty. Olivia Jacoba asked for an ocular inspection of the subject matter of the complaint. A heated
argument took place because Lorencito Inos said that [complainant’s brother] Melencio Magno, Jr.
made alterations in the lagoon …. Afterwards Atty. Olivia Jacoba . . . returned to the barangay hall to
have the incident recorded in the barangay blotter.... attached as Annex “A”

6. That on January 12, 2003, … Lorenzo Inos appeared before the hearing also with the
assistance of [respondent]. When the minutes of the proceeding (sic) was read, [respondent]
averred that the minutes is partial in favor of the complainant because only her statements
were recorded for which reason, marginal insertions were made to include what [respondent]
wanted to be put on record. She also signed as “saksi” in the minutes ….

7.
x x x In a letter (answer to the “sumbong”) sent to the Punong Barangay dated December 22,
2002, she signed representing herself as “Family Legal Counsel of Inos Family,” a copy of the
letter is attached as Annex “C” . . . . (Words in bracket added.)

In an Order dated February 17, 2003, Atty. Victor C. Fernandez, IBP Director for Bar Discipline, directed the
respondent to submit, within fifteen (15) days from notice, her answer to the complaint, otherwise she will be
considered as in default.3
The case, docketed as CBD No. 03-1061, was assigned to Commissioner Rebecca Villanueva-Maala, who
admitted respondent’s answer notwithstanding her earlier order of July 15, 2003, declaring respondent in
default for failure to file an answer in due time.4
In her Answer, respondent alleged that the administrative complaint was filed with the Office of the Punong
Barangay, instead of before the Lupong Tagapamayapa, and heard by Punong Barangay Bonifacio Alcantara
alone, instead of the collegial Lupon or a conciliation panel known as pangkat. Prescinding from this premise,
respondent submits that the prohibition against a lawyer appearing to assist a client in katarungan
pambarangay proceedings does not apply. Further, she argued that her appearance was not as a lawyer, but
only as an attorney-in-fact.

In her report dated October 6, 2003,5 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, respondent’s conduct tended to undermine
the laudable purpose of the katarungan pambarangay system. What compounded matters was when
respondent repeatedly ignored complainant’s protestation against her continued appearance in the barangay
conciliation proceedings.

WHEREFORE, Atty. Olivia Velasco-Jacoba is hereby FINED in the amount of Five Thousand Pesos
(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.

Panganiban (Chairman), Corona and Carpio-Morales, JJ., concur.

Sandoval-Gutierrez, J., On Official Leave.
Atty. Olivia Velasco-Jacoba meted with P5,000.00 fine for willful violation of Section 415 of the Local
Government Code of 1991, with warning against repetition of similar acts.

Notes.—A party’s act of trifling with the authority of the lupon by unjustifiably failing to attend the
scheduled mediation hearings and instead filing the complaint right away with the trial court cannot be
countenanced. (Uy vs. Contreras, 237 SCRA 167 [1994])

There is substantial compliance with the law even though no pangkat was constituted if the parties met at
the office of the barangay chairman for possible settlement yet the efforts of the barangay chairman proved
futile. (Diu vs. Court of Appeals, 251 SCRA 472 [1995])

It is clear from the Katarungang Pambarangay Rules that recourse to barangay conciliation proceedings is not
necessary where the parties do not reside in the same municipality or city or in adjoining barangays. (Vercide
vs. Hernandez,330 SCRA 49 [2000])

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.

Actions; Katarungang Pambarangay Law; The primordial objective of P.D. 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.—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. 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.”
Same; Same; Section 412(a) of R.A. No. 7160 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 Pangkat.—
We cannot sustain petitioners’ contention that the Lupon conciliation alone, without the proceeding before the
Pangkat ng Tagapagkasundo, contravenes the law on Katarungang 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, we held that “notwithstanding the mandate in Section
410(b) of R.A. No. 7160 that the Barangay Chairman shall constitute a Pangkat 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 Barangay Chairman 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.

Same; Same; Ejectment; Unlawful Detainer; Motions to Dismiss; Revised Rule on Summary Procedure; A
motion to dismiss may only be filed in an action for unlawful detainer if 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.—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.”

PETITION for review on certiorari and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Emmanuel M. Basa for petitioners.
Salonga, Hernandez & Mendoza for respondents.

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari1 assailing the Decision2 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 letter4 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 dismiss7 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. 71608
(otherwise known as the Local Government Code of 1991), which reads:

“SECTION 410. Procedure for Amicable Settlement.—

(a)
xxx
(b)
Mediation by lupon chairman—Upon receipt of the complaint, the lupon chairman9 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.” (Italics 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 611 of the same Rule.

On July 9, 1998, the MTC issued an Order12 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 Judgment14 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 attorney’s 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 Decision15 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 Decision17 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.” (Italics 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 on Katarungang 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 a Pangkat 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 Barangay Chairman 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.” (Italics 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.
Costs against petitioners.
SO ORDERED.
Panganiban (Chairman), Carpio-Morales and Garcia, JJ., concur.
Corona, J., On Leave.
Petition denied, assailed decision and resolution affirmed.

Notes.—Judges should take judicial notice of the Local Government Code of 1991, specifically on the
provisions on the katarungang pambarangay, and a judge’s total unawareness thereof is distressing. (Uy vs.
Contreras, 237 SCRA 167 [1994])
There is substantial compliance with the law even though no pangkat was constituted if the parties met at
the office of the barangay chairman for possible settlement yet the efforts of the barangay chairman proved
futile. (Diu vs. Court of Appeals, 251 SCRA 472 [1995])
It is clear from the Katarungang Pambarangay Rules that recourse to barangay conciliation proceedings is not
necessary where the parties do not reside in the same municipality or city or in adjoining barangays. (Vercide
vs. Hernandez, 330 SCRA 49 [2000])

No. L-63277. November 29, 1983.*

PETRA VDA. DE BORROMEO, petitioner, vs. HON. JULIAN B. POGOY, Municipal/City Trial Court of Cebu
City, and ATTY. RICARDO REYES, respondents.

Remedial Law; Special Civil Actions; Forcible entry and detainer; Prescription; Prescriptive period for filing
actions for forcible entry and detainer.—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.

Same; Same; Same; PD 1508 or Katarungang Pambarangay Law; Conciliation process at the barangay level
condition precedent for filing actions in applicable cases under PD 1508; Failure of complaint to allege
compliance with the requirement of referral of case first to the barangay courts under PD 1508, fatal.—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.
Same; Same; Same; Same; Words and phrases; Word "individual" in Section 4a of PD 1508 applies only to
cases involving natural persons.—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."
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.

PETITION for certiorari to review the order of the Municipal Trial Court of Cebu City.

The facts are stated in the opinion of the Court.

Antonio T. Uy for petitioner.
Numeriano G. Estenzo for respondents.

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.

Respondent judge denied the motion to dismiss. He justified the order in this wise:

"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 for certiorari.
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 mand 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:

"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. "

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 person6 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.
Makasiar (Chairman), Concepcion, Jr, Guerrero, Abad Santos and De Castro, JJ., concur.
Aquino; J., in the result.
Petition dismissed
Notes.—Fact that the owner made the tenant understand that he may need the premises in the future is
not sufficient basis to terminate a leasehold relationship. (F.S. Divinagracia Agro-Commercial vs. Court of
Appeals, 104 SCRA 180.)

In case the defendant fails to make the monthly deposit of current rentals, it is generally mandatory for
the court to order execution of the appealed judgment. (Dehesa vs. Macalalag, 81 SCRA 543.)

The remedy of the tenant where the lessor refuses to make urgent repair of the leased premises is not to
suspend rental payments, but to make urgent repair himself and charge the cost thereof to the lessor under
Art. 1663 of the Civil Code. (Banson vs. Ubay, 94 SCRA 454.)

A mere caretaker of land is without right to possession of the disputed land. (Dalida vs. Court of Appeals, 117
SCRA 480.)
 G.R. No. 83907.September 13, 1989.*
NAPOLEON GEGARE, petitioner, vs. HON. COURT OF APPEALS (ELEVENTH DIVISION) AND ARMIE
ELMA, respondents.

Civil Procedure; Certiorari; Writ of certiorari or prohibition, available even in respect to interlocutory orders.—
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.

Same; Courts; Administrative Law; Courts of justice will not interfere with pure administrative matters rendered
by administrative bodies within the scope of their power and authority.—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.

Same; Parties; Petitioner is not a party-in-interest who can seek the nullification of the land grant.—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.

Same; Katarungang Pambarangay (PD 1508); When the government or its instrumentality is only one of the
contending parties, a confrontation should still be undertaken among the other parties.—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.

PETITION to review the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

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 WITHOUT FIRST
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 court6 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 Luponas 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
LuponorPangkatChairman, 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.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
Petition dismissed.
Notes.—Grave abuse of discretion as basis for the issuance of the writ of certiorari is a well-defined
concept. (Imutan vs. CA, 102 SCRA 286.)

Certiorari, even in instances of lack of jurisdiction or grave abuse of discretion, cannot as a rule be a substitute
for appeal. (People vs. Villanueva, 110 SCRA 465.)
 G.R. No. 137359. September 13, 2004.*
EDWIN N. TRIBIANA, petitioner, vs. LOURDES M. TRIBIANA, respondent.

Remedial Law; Dismissal of Actions; A dismissal under Section 1(j) of Rule 16 is warranted only if there is a
failure 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.—A dismissal under Section 1(j) of Rule 16 is
warranted only if there is a failure 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. It would have been
a different matter if Edwin had asserted that no efforts to arrive at a compromise have been made at all.

Same; Habeas Corpus; 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 the legal custody of the child.
Technicalities should not stand in the way of giving such child of tender age full protection.—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. 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.”

PETITION for review on certiorari of the resolutions of the Court of Appeals.

The facts are stated in the opinion of the Court.

Agripino C. Baybay III for petitioner.
Bridie O. Castronuevo for respondent.

CARPIO, J.:

The Case

This petition for review on certiorari1 seeks to reverse the Court of Appeals’ Resolutions2 dated 2 July 1998
and 18 January 1999 in CA-G.R. SP No. 48049. The Court of Appeals affirmed the Order3 of the Regional
Trial Court, Branch 19, Bacoor, Cavite (“RTC”), denying petitioner Edwin N. Tribiana’s (“Edwin”) motion to
dismiss the petition for habeas 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 Edwin’s 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 Edwin’s 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 Edwin’s 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 Edwin’s petition on 2 July 1998. The appellate court also denied Edwin’s
motion for reconsideration.

Hence, this petition.

The Rulings of the RTC and the Court of Appeals

The RTC denied Edwin’s 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 petition’s 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.

Edwin’s 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 Edwin’s 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 a failure 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 court’s power to resolve. If a party fails to raise such defect in a
motion to dismiss, such defect is deemed waived.7 Such defect is curable by amendment as a matter of right
without leave of court, if made before the filing of a responsive pleading.8 A motion to dismiss is not a
responsive pleading.9 More importantly, an amendment alleging compliance with a condition precedent is not
a jurisdictional matter. Neither does it alter the cause of action of a petition for habeas corpus. We have held
that in cases where the defect consists of the failure to state compliance with a condition precedent, the trial
court should order the amendment of the complaint.10 Courts should be liberal in allowing amendments to
pleadings to avoid multiplicity of suits and to present the real controversies between the parties.11

Moreover, in a habeas corpus proceeding involving the welfare and custody of a child of tender age, the
paramount concern is to resolve immediately the issue of who has legal custody of the child. Technicalities
should not stand in the way of giving such child of tender age full protection.12 This rule has sound statutory
basis in Article 213 of the Family Code, which states, “No child under seven years of age shall be separated
from the mother unless the court finds compelling reasons to order otherwise.” In this case, the child (Khriza)
was only one year and four months when taken away from the mother.
The Court of Appeals dismissed Edwin’s 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;

x x x.

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 Edwin’s 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 RTC’s denial of his motion to dismiss merely states a
blanket allegation of “grave abuse of discretion.” An order denying a motion to dismiss is interlocutory and is
not a proper subject of a petition for certiorari.14 Even in the face of an error of judgment on the part of a judge
denying the motion to dismiss, certiorari will not lie. Certiorari is not a remedy to correct errors of procedure.15
The proper remedy against an order denying a motion to dismiss is to file an answer and interpose as
affirmative defenses the objections raised in the motion to dismiss. It is only in the presence of extraordinary
circumstances evincing a patent disregard of justice and fair play where resort to a petition for certiorari is
proper.16

The litigation of substantive issues must not rest on a prolonged contest on technicalities. This is precisely
what has happened in this case. The circumstances are devoid of any hint of the slightest abuse of discretion
by the RTC or the Court of Appeals. A party must not be allowed to delay litigation by the sheer expediency of
filing a petition for certiorari under Rule 65 based on scant allegations of grave abuse. More importantly, any
matter involving the custody of a child of tender age deserves immediate resolution to protect the child’s
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.
Davide, Jr. (C.J., Chairman), Quisumbing, Ynares-Santiago and Azcuna, JJ., concur.
Petition dismissed, assailed resolutions affirmed.
 G.R. No. 160032. November 11, 2005.*
ESTELA L. BERBA, petitioner, vs. JOSEPHINE PABLO and THE HEIRS OF CARLOS PALANCA,
respondents.

Actions; Katarungang Pambarangay; Settlement Agreements; The Settlement Agreement of parties approved
by the Lupon ng Tagapamayapa 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.—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 in Vidal v. Escueta, 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.

Same; Same; Administrative Law; Doctrine of Exhaustion of Administrative Remedies; Under Section 408 of
the Local Government 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; If the
complainant/plaintiff fails to comply with the requirements of the Code, such complaint filed with the court may
be dismissed for failure to exhaust all administrative remedies.—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 the lupon 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.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Garcia, Ines, Villacarlos and Garcia Law Offices for petitioner.
Patricio Balao for respondents.

CALLEJO, SR., J.:

Assailed before the Court on a petition for review on certiorari is the Decision1 of the Court of Appeals (CA) in
CA-G.R. SP No. 73531, affirming the Decision2 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 complaint6 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 attorney’s 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 Barangay Cayetano 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, Berba’s 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
attorney’s 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 Berba’s 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 a Barangay 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 reconsideration22 of the decision, which the RTC denied in its Order23 dated
October 2, 2002. She then elevated the case to the CA via 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 Lupon
resulted 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 Code’s 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 CA’s
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 the Lupon, 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 petitioner’s 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 in Vidal 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 d’etre 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
the Lupon 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 petitioner’s 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 the lupon shall be filed or instituted
directly in court or any other government office for adjudication, unless there has been a confrontation
between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement
has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon
chairman or pangkat chairman or unless the settlement has been repudiated by the parties thereto.

(b)
Where parties may go directly to court.—The parties may go directly to court in the following
instances:
(1)
Where the accused is under detention;
(2)
Where a person has otherwise been deprived of personal liberty calling for habeas
corpus proceedings;
(3) Where actions are coupled with provisional remedies such as preliminary
injunction, attachment, delivery of personal property, and support pendente lite; and
(4)
Where the action may otherwise be barred by the statute of limitations.

(c)
Conciliation among members of indigenous cultural communities.—The customs and traditions of
indigenous cultural communities shall be applied in settling disputes between members of the
cultural communities.
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 the lupon 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 petitioner’s reliance on the ruling of this Court in Diu v. Court of Appeals33 is misplaced. In that case, there
was a confrontation by the parties before the Barangay 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 petitioner’s 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 barangay conciliation 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.
Puno (Actg. C.J., Chairman), Austria-Martinez and Tinga, JJ., concur.
Chico-Nazario, J.,On Leave.
Petition denied.

Notes.—While the Local Government Code of 1991 revised the law on katarungang pambarangay, and
expressly repealed P.D. No. 1508, the jurisprudence built on P.D. 1508 regarding prior referral to the lupon as
a pre-condition to the filing of an action in court remains applicable. (Uy vs. Contreras, 237 SCRA 167 [1994])

Where only a postal office address is indicated in the complaint, it cannot be said that the parties reside in the
same city or municipality, and the dispute is excepted from the requirement of referral to the barangay lupon
or pangkat for conciliation or settlement prior to filing with the court. (Boleyley vs. Villanueva, 314 SCRA 364
[1999])
 G.R. No. 191336. January 25, 2012.*
CRISANTA ALCARAZ MIGUEL, petitioner, vs. JERRY D. MONTANEZ, respondent.

Civil Law; Compromise Agreements; Amicable Settlements; Barangay Conciliation; An amicable settlement
reached at the barangay conciliation proceedings, 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.—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. 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. 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. Thus, under Section 417 of the Local Government Code, 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.

Same; Same; Same; Same; 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.—
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.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Arellano Law Firm for petitioner.
Calberto M. Caballero for respondent.

REYES, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. Petitioner Crisanta
Alcaraz Miguel (Miguel) seeks the reversal and setting aside of the September 17, 2009 Decision1 and
February 11, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 100544, entitled “Jerry D.
Montanez v. Crisanta Alcaraz Miguel.”

Antecedent Facts

On February 1, 2001, respondent Jerry Montanez (Montanez) secured a loan of One Hundred Forty-Three
Thousand Eight Hundred Sixty-Four Pesos (P143,864.00), payable in one (1) year, or until February 1, 2002,
from the petitioner. The respondent gave as collateral therefor his house and lot located at Block 39 Lot 39
Phase 3, Palmera Spring, Bagumbong, Caloocan City.

Due to the respondent’s failure to pay the loan, the petitioner filed a complaint against the respondent before
the Lupong Tagapamayapa of Barangay San Jose, Rodriguez, Rizal. The parties entered into a Kasunduang
Pag-aayos wherein the respondent agreed to pay his loan in installments in the amount of Two Thousand
Pesos (P2,000.00) per month, and in the event the house and lot given as collateral is sold, the respondent
would settle the balance of the loan in full. However, the respondent still failed to pay, and on December 13,
2004, the Lupong Tagapamayapa issued a certification to file action in court in favor of the petitioner.

On April 7, 2005, the petitioner filed before the Metropolitan Trial Court (MeTC) of Makati City, Branch 66, a
complaint for Collection of Sum of Money. In his Answer with Counterclaim,3 the respondent raised the defense
of improper venue considering that the petitioner was a resident of Bagumbong, Caloocan City while he lived
in San Mateo, Rizal.After trial, on August 16, 2006, the MeTC rendered a Decision,4 which disposes as follows:
 “WHEREFORE, premises considered[,] judgment is hereby rendered ordering defendant Jerry D.
Montanez to pay plaintiff the following:

1. The amount of [Php147,893.00] representing the obligation with legal rate of interest from
February 1, 2002 which was the date of the loan maturity until the account is fully paid;
2. The amount of Php10,000.00 as and by way of attorney’s fees; and the costs.
SO ORDERED.” 5

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

“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 AFFIRMED in its entirety for being
in accordance with law and evidence.

SO ORDERED.”7

Dissatisfied, the respondent appealed to the CA raising two issues, namely, (1) whether or not venue was
improperly laid, and (2) whether or not the Kasunduang Pag-aayos effectively novated the loan agreement.
On September 17, 2009, the CA rendered the assailed Decision, disposing as follows:

“WHEREFORE, premises considered, the petition is hereby GRANTED. The appealed Decision dated
March 14, 2007 of the Regional Trial Court (RTC) of Makati City, Branch 146, is REVERSED and SET
ASIDE. A new judgment is entered dismissing respondent’s complaint for collection of sum of money,
without prejudice to her right to file the necessary action to enforce the Kasunduang Pag-aayos.

SO ORDERED.”8

Anent the issue of whether or not there is novation of the loan contract, the CA ruled in the negative. It
ratiocinated as follows:

“Judging from the terms of the Kasunduang Pag-aayos, it is clear that no novation of the old obligation
has taken place. Contrary to petitioner’s assertion, there was no reduction of the term or period
originally stipulated. The original period in the first agreement is one (1) year to be counted from
February 1, 2001, or until January 31, 2002. When the complaint was filed before the barangay on
February 2003, the period of the original agreement had long expired without compliance on the part
of petitioner. Hence, there was nothing to reduce or extend. There was only a change in the terms of
payment which is not incompatible with the old agreement. In other words, the Kasunduang Pag-aayos
merely supplemented the old agreement.”9

The CA went on saying that since the parties entered into a Kasunduang Pag-aayos before the Lupon ng
Barangay, such settlement has the force and effect of a court judgment, which may be enforced by execution
within six (6) months from the date of settlement by the Lupon ng Barangay, or by court action after the lapse
of such time.10 Considering that more than six (6) months had elapsed from the date of settlement, the CA
ruled that the remedy of the petitioner was to file an action for the execution of the Kasunduang Pag-aayos in
court and not for collection of sum of money.11 Consequently, the CA deemed it unnecessary to resolve the
issue on venue.12

The petitioner now comes to this Court.

Issues

(1) Whether or not a complaint for sum of money is the proper remedy for the petitioner,
notwithstanding the Kasunduang Pag-aayos;13 and
(2) Whether or not the CA should have decided the case on the merits rather than remand the case
for the enforcement of the Kasunduang Pag-aayos.14
Our Ruling

Because the respondent failed to comply with

the terms of the Kasunduang Pag-aayos, said
agreement is deemed rescinded pursuant to
Article 2041 of the New Civil Code and the
petitioner can insist on his original demand. Perforce, the complaint for collection of sum
of money is the proper remedy.

The petitioner contends that the CA erred in ruling that she should have followed the procedure for enforcement
of the amicable settlement as provided in the Revised 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 respondent’s 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 the Punong 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 Law directory 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 the Kasunduang
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 agree-
ment 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 the Kasunduang 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 respondent’s 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.
Carpio (Chairperson), Perez, Sereno and Perlas-Bernabe,** JJ., concur.
Petition granted, judgment and resolution set aside.

Note.—A detainer suit is premature if it fails to exhaust all administrative remedies, such as compliance with
Section 412 of the Local Government Code on the need for prior barangay conciliation proceedings. (Villadar,
Jr. vs. Zabala, 545 SCRA 325 [2008])