G.R. No. 101328. April 7, 1993.
On December 5, 1990, private respondent filed a Motion to
EMILIANA CANDIDO AND FRANCISCA CANDIDO,
petitioners,  1508 as she resides in the same municipality with the
vs.
HONORABLE DEMETRIO MACAPAGAL, PRESIDING
JUDGE, BRANCH 18, REGIONAL TRIAL COURT OF
BULACAN AND MILA CONTRERAS, respondents.
SYLLABUS
1. REMEDIAL LAW; KATARUNGANG PAMBARANGAY (P.D. NO.
1508); SCOPE OF POWER; RULE. — From the provisions of
P.D. No. 1508, it is clear that the barangay court or Lupon has
jurisdiction over disputes between parties who are actual
residents of barangays located in the same city or municipality
or adjoining barangays of different cities or municipalities. The
Lupon of the barangay ordinarily has the authority to settle
amicably all types of disputes involving parties who actually
reside in the same municipality, city or province. Where the
complaint does not state that it is one of the excepted cases,
or it does not allege prior availment of said conciliation
process, or it does not have a certification that no conciliation
or settlement had been reached by the parties, the case could
be dismissed on motion. In the instant case, the fact that
petitioners and private respondent, reside in the same
municipality of Obando, Bulacan does not justify compulsory
conciliation under P.D. No. 1508 where the other co-
defendants reside in barangays of different municipalities,
cities and provinces.
DECISION
NOCON, J p:
This is a petition for certiorari to annul and set aside the
Orders 1 dated July 10, 1991 and August 9, 1991 of the trial
court dismissing the complaint of petitioners Emiliana and
Francisca Candido against private respondent Mila Contreras
on the ground of lack of jurisdiction for petitioners' failure to
comply with the mandatory barangay conciliation process
required by Presidential Decree No. 1508, otherwise known as
the Katarungang Pambarangay Law.
It appears on record that petitioners Emiliana and Francisca
Candido are the only legitimate children of spouses Agapito
Candido and Florencia Santos as shown by the certificates 2 of
the latter's Record of Marriage and the petitioners' Record of
Birth.
However, petitioners' father eventually left his legitimate family
and lived with Sagraria Lozada until his death on May 6, 1987.
On May 11, 1990, Sagraria Lozada, Jorge Candido, Virginia
Candido, Maximina Candido and Eduardo Candido who
represented themselves to be the sole heirs of the late Agapito
Candido executed a Deed of Extra-judicial Settlement of Estate
with Sale 3 covering parcels of land owned by the latter and
sold to private respondent Mila Contreras in whose name said
properties are now registered under TCT No. T-120656-M.
On November 6, 1990, petitioners instituted an action with the
Regional Trial Court of Bulacan, Branch 18 in Civil Case No.
697-M-90 against Sagraria Lozada, Gorge Candido, Virginia
Candido, Maximina Candido, Eduardo Candido, Register of
Deeds of Bulacan and private respondent Mila Contreras to
annul the Deed of Extra-judicial Settlement of Estate with Sale,
to cancel TCT No. 120656-M issued in the name of private
respondent and to reinstate TCT No. 223602 in the name of
Agapito Candido married to Sagraria Lozada.
Dismiss 4 on the ground that petitioners failed to comply with
the mandatory conciliation process required under P.D. No.
petitioners.
On July 10, 1991, the trial court issued an Order, the
dispositive portion of which reads, as follows:
"WHEREFORE, as prayed for, let this case be, as it is hereby
DISMISSED in so far as defendant Mila Contreras is concerned
for lack of prior referral of the dispute before the Katarungang
Pambarangay, without prejudice." 5
Thereafter, petitioners filed a Motion for Reconsideration 6
which was denied in an Order 7 dated August 9, 1991.
Hence, this petition alleging grave abuse of discretion on the
part of the respondent judge dismissing private respondent in
the complaint instituted by the petitioners notwithstanding the
fact that the other defendants in Civil Case No. 697-M-90
reside in different municipalities and cities.
The petition is impressed with merit.
Section 2 of P.D. No. 1508 provides:
"SEC. 2. Subject matters for amicable settlement. — The
Lupon of each barangay shall have authority to bring together
the parties actually residing in the same city or municipality for
amicable settlement of all disputes except:
"(1) Where one party is the government, or any subdivision or
instrumentality thereof:
"(2) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
"(3) Offenses punishable by imprisonment exceeding 30 days,
or a fine exceeding P200.00;
"(4) Offenses where there is no private offended party;
"(5) Such other classes of disputes which the Prime Minister
may in the interest of justice determine upon recommendation
of the Minister of Justice and the Minister of Local
Government."
Further, section 3 of the same law provides:
"SEC. 3. Venue. — Disputes between or among persons
actually residing in the same barangay shall be brought for
amicable settlement before the Lupon of said barangay. Those
involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay
where the respondent or any of the respondents actually
resides, at the election of the complainant. However, all
disputes which involve real property or any interest therein
shall be brought in the barangay where the real property or
any part thereof is situated.
"The Lupon shall have no authority over disputes:
(1) involving parties who actually reside in barangays of
different cities or municipalities, except where such barangays
adjoin each other; . . ."
From the foregoing provisions of P.D. No. 1508, it is clear that
the barangay court or Lupon has jurisdiction over disputes
between parties who are actual residents of barangays located
in the same city or municipality or adjoining barangays of
different cities or municipalities.
In the instant case, petitioners alleged in their complaint that
they are residents of Barrio Paliwas, Municipality of Obando,
Bulacan while defendants' residences are as follows: Sagraria
Lozada and Jorge Candido at Javier Compound, Bo. Sto. Niño,
Taytay, Rizal; Virginia and Maximina Candido at Road 2, Doña
Faustina Village, San Bartolome, Novaliches, Quezon City;
Eduardo Candido at 388 Barrio Paliwas, Municipality of
Obando, Bulacan; Mila Contreras at San Pascual, Municipality
of Obando, Bulacan; and the Registrar of Deeds of Bulacan at
his official address in Bulacan.
The Lupon of the barangay ordinarily has the authority to
settle amicably all types of disputes involving parties who
actually reside in the same municipality, city or province.
Where the complaint does not state that it is one of the
excepted cases, or it does not allege prior availment of said
conciliation process, or it does not have a certification that no
conciliation or settlement had been reached by the parties, the
case could be dismissed on motion. 8 In the instant case, the
fact that petitioners and private respondent, reside in the same
municipality of Obando, Bulacan does not justify compulsory
conciliation under P.D. No. 1508 where the other co-
defendants reside in barangays of different municipalities,
cities and provinces.
Petitioners can immediately file the case in court. It would not
serve the purpose of the law in discouraging litigation among
members of the same barangay through conciliation where the
other parties reside in barangays other than the one where the
Lupon is located and where the dispute arose.
WHEREFORE, the petition is GRANTED and the appealed
Orders of the trial court dated July 10, 1991 and August 9,
1991 dismissing Civil Case No. 697-M-90 in so far as defendant
Mila Contreras is concerned are hereby annulled and set aside.
The case is remanded to the Regional Trial Court of Bulacan
for further proceedings and to REINSTATE private respondent
Mila Contreras as defendant in Civil Case No. 697-M-90. No
costs.
SO ORDERED.
G.R. No. L-l0874             January 28, 1958
RUFINO D. ANDRES, plaintiff-appellant,  1951, wherein it is stated that the balance unpaid is the sum
vs.
THE CROWN LIFE INSURANCE COMPANY, defendant-
appellee.
REYES, J.B.L., J.:
On April 20, 1952, Rufino D. Andres filed a complaint in the
Court of First Instance of Ilocos Norte against the Crown Life
Insurance Company for the recovery of the amount of P5,000,
as the face value of a joint 20-year endowment insurance
policy issued in favor of the plaintiff Rufino D. Andres and his
wife Severa G. Andres on the 13th of February, 1950, by said
insurance company. On Jun 7, 1951, Rufino Andres presented
his death claim as survivor-beneficiary of the deceased Severa
G. Andres, who died May 3, 1951. Payment having been
denied by the insurance company on April 20, 1952, this case
was instituted.
Defendant Company filed its answer in due time disclaiming
liability and setting forth the special defense that the
aforementioned policy had already lapsed. Later, on March 25,
1954, the parties submitted the case for decision by the lower
court upon a stipulation of facts, fully quoted hereunder:
1. That on October 20, 1949, plaintiff and Severa G. Andres
filed an application for insurance No. 536,423, which are
marked as common Exhibits "1" and "l-A", respectively;
2. That on February 13, 1950, defendant isssued Crown Life
Policy No. 536,423 for the sum of P5,000, in the name of
Rufino D. Andres, plaintiff, and Severa G. Andres, which is
hereto marked as common Exhibit "2";
3. That the premiums are to be paid as called for in the policy
Exhibit '2", semi-annually, and the amount of P165.15 for the
first semester beginning November 25, 1949 to May 25, 1950
was paid on November 25, 1949, which is hereby marked as
common Exhibit "3", and the premium likewise in the sum of
P165.15 for the second semester beginning May 25, 1950 to
November 25, 1950, was paid on June 24, 1950, as evidenced
by common Exhibit "3-A"; and the premium for the third
semester beginning November 25, 1950 to May 25, 1951 was
not paid;
4. That on January 6, 1951,the defendant, thru Mr. I.B.
Melendres, wrote to Mr. and Mrs. Rufino D. Andres advising
them that the said Policy No. 536,423 lapsed on December 25,
1950 and the amount overdue was P165.15, giving them a
period of sixty (60) days from the date of lapse to file an
application for reinstatement, which letter is made as common
Exhibit "4";
5. That on February 12, 1951, the said Mr. I.B. Melendres,
branch secretary of the defendant, wrote Mr. and Mrs. Rufino
D. Andres, telling the latter that Policy No. 536,423 was no
longer in force and it lapsed on December 25, 1950, which
letter is herewith made as common Exhibit "5";
6. That in the month of February, 1951, plaintiff executed a
Statement of Health which is at the same time an Application
for Reinstatement of the aforesaid policy, which application is
herewith made as common Exhibit "6" (Note: Exhibit "6" is the
reverse side of Exhibit "4"). and Severa G. Andres also
executed in the month of February, 1951, an Application for
Reinstatement, which Application for Reinstatement is made as
common Exhibit "7";
7. That on February 20, 1951, plaintiff wrote a letter to the
defendant and enclosed therewith a money order for P100,
which letter was received by the defendant on February 26,
of P65.15, which letter is hereby made as common Exhibit "8";
8. That on April 14, 1951, the said Mr. I.B. Melendres, as
branch secretary for the defendant; wrote plaintiff advising
him that the Home Office has approved the reinstatement of
the lapsed policy, subject to the payment of P65.15 due on
November, 1950 premium, a duplicate original copy of the said
letter is hereby made as common Exhibit "9";
9. That on April 27, 1951, said Mr. I.B. Melendres, branch
secretary, again wrote the plaintiff requesting the remittance
of the balance of P65.15 due on the semi-annual premium for
November, 195O, and upon receipt of the said amount, there
will be sent to him the Certificate of Reinstatement of the
policy, a duplicate original copy of the said letter is hereto
made as common Exhibit "10";
10. That on May 5, 1951, plaintiff sent a letter to the
defendant and enclosed therewith a Money Order in the
amount of P65.00 for the balance due on the Crown Life Policy
No. 536,423, which letter has been received in the office of the
defendant on May 11, 1951, which letter is herewith made as
common Exhibit "11";
11. That on May 15, 1951, said Mr. I.B. Melendres wrote a
letter to Mr. and Mrs. Rufino D. Andres, enclosing an Official
Receipt for the receipt of P165.15, which Official Receipt is
hereby made as common Exhibit "12", and also enclosed
therewith a Certificate of Reinstatement dated April 2, 1951,
which is herewith made as common Exhibit "13" and the
duplicate original copy of the aforesaid letter dated May 15,
1951 is herewith made as common Exhibit "14", and premium
notice addressed to Mr. and Mrs. Rufino D. Andres, wherein it
is shown that the semi-annual premium in the sum of P165.15
on the said policy would be due on May 15, 1951, which
premium notice is herwith made as common Exhibit "14-A";
12. That on June 7, 1951, plaintiff presented his Death Claim
as survivor-beneficiary of the deceased Severa G. Andres
which has been received in the office of the defendant on June
11, 1951, which letter is herewith made as common Exhibit
"15", and there were therein enclosed in the said letter an
affidavit dated June 6, 1951 of the plaintiff, which is herewith
made as common Exhibit "15-A", and a Certificate of Death
dated May 29, 1951, issued by the Local Civil Registrar of the
municipality of Sarrat, wherein it is shown that Mrs. Severa G.
Andres died on May 3, 1951 of dystocia, second degree,
contracted pelvis, which Certificate of Death is herewith made
as common Exhibit "15-B", and a medical certificate of Dr. R.
de la Cuesta, senior resident physician of the Ilocos Norte
Provincial Hospital, dated May 20, 1951, showing the cause of
death of the said deceased, Mrs. Severa G. Andres, which
medical certificate is herewith made as common Exhibit "15-
C";
13. That on June 30, 1951, Mr. I.B. Melendres wrote to
plaintiff stating defendant's reasons for its refusal to pay the
death claim of the plaintiff which letter is herewith made as
common Exhibit "16", in which there was therein enclosed a
Death Claim Discharge to be signed by the plaintiff but the
plaintiff refused to sign, which Death Claim Discharge is
herewith made as common Exhibit "16-A";
14. That on November 23, 1951, the said Mr. I.B. Melendres
wrote plaintiff enclosing therewith a National City Bank of New
York Check No. D-115356 for P165.00 payable to plaintiff,
dated June 21, 1951, an original duplicate copy of which is
herewith made as common Exhibit "17";
15. That on December 1, 1951, the plaintiff wrote defendant
company and enclosed therewith the aforesaid National City
Bank of New York Check No. D-115356 dated June 21, 1951,
which letter is herewith made as Common Exhibit "18", and
the check returned to the defendant company as Exhibit "18-
A";
16. That with the approval of this stipulation of facts, the
parties hereby submit the same and do hereby request the
Honorable Court to give them twenty (20) days within which to
file simultaneously their corresponding memoranda and
another fifteen (15) days for a reply memorandum." (Rec.
App., pp. 17-22).
On August 5, 1954, Judge Julio Villamor rendered decision
absolving the defendant from any liability on the ground that
the policy having lapsed, it was not reinstated at the time the
plaintiff's wife died. Not satisfied with the decision, plaintiff
appealed to the Court of Appeals, but the appeal was later
certified to this Court, for there is no question of fact involved
therein.
As has been correctly stated by the lower court, the resolution
of the issues in this case centers on whether or not policy No.
536423 (Exhibit "2") which has been in a state of lapse before
May 3, 1951, has been validly and completely reinstated after
said date. In other words, was there a perfected contract of
reinstatement after the policy lapsed due to non-payment of
premiums?
The stipulation of facts and accompanying exhibits render it
undisputable that the original policy No. 536423 lapsed for
non-payment of premiums on December 26, 1950, upon
expiration of the customary 31-day period of grace. The
subsequent reinstatement of the policy was provided for in the
contract itself in the following terms:
If this policy lapses, it may be reinstated upon application
made within three years from the date of lapse, and upon
production of evidence of the good health of the injured (and
also of the Beneficiary, if the rate of premium depends upon
the age of the Beneficiary), and such other evidence of
insurability at the date of application for reinstatement as
would then satisfy the Company to issue a new Policy on the
same terms as this Policy, and upon payment of all overdue
premiums and other indebtedness in respect of this Policy,
together with interest at six per cent, compounded annually,
and provided also that no change has taken place in such good
health and insurability subsequent to the date of such
application and before this Policy is reinstated.
As stated by the lower court, the conditions set forth in the
policy for reinstatement are the following: (a) application shall
be made within three years from the date of lapse; (b) there
should be a production of evidence of the good health of the
insured: (c) if the rate of premium depends upon the age of
the Beneficiary, there should likewise be a production of
evidence of his or her good health; (d) there should be
presented such other evidence of insurability at the date of
application for reinstatement; (e) there should be no change
which has taken place in such good health and insurability
subsequent to the date of such application and before the
policy is reinstated; and (f) all overdue premiums and other
indebtedness in respect of the policy, together with interest at
six per cent, compounded annually, should first be paid.
The plaintiff-appellant did not comply with the last condition;
for he only paid P100 (on account of the over due semi-annual
premium of P165.15) on February 20, 1951, before his wife's
death (Stipulation, par. 7) ; and, despite the Company's
reminders on April 14 and 27, he remitted the balance of P65
on May 5, 1951 (received by the Company's agency on May
11), two days after his wife died. On the face of such facts, the
Company had the right to treat the contract as lapsed and
refuse payment of the policy.
Appellant, however, contends that the condition regarding
payment of the premium was waived by the insurance
Company by its letters (signed by I. B. Melendres, cashier)
Exhibits 4 and 5 wherein the Company manifested to
appellant:
If you can not pay the full amount immediately, send as large
an amount as possible and advise us how soon you expect to
be able to pay the balance. Every consideration will be given to
your request consistent with the company's regulations
(Exhibit 4).
If you are unable to cover this amount in full, send us as big
an amount as you are able and we will work out an adjustment
most beneficial to you. (Exhibit 5)
We see nothing in these expressions that would indicate an
intention on the insurer's part to waive the full payment of the
overdue premium as prerequisite to the reinstatement of the
lapsed policy, considering the well settled rule that a waiver
must be clear and positive, and intent to waive shown clearly The petitioner seeks a review of the orders dated August 9,
and convincingly (Fernandez vs. Sebido, 70 Phil. 151, 159; 1983, and February 20, 1985, of respondent Judge Jose
Lang vs. Sheriff* 49 Off. Gaz. 3323, 3329; Jocson vs. Capitol Coscolluela, Jr., of the Regional Trial Court of Makati, Branch
Subdivision, Inc. G.R. L-6573, February 28, 1955). The CXLVI, amending the order of his predecessor, Judge Segundo
promise to give plaintiff's case every consideration does not Soza, (which dismissed private respondent's petition for
import any decision to renounce the insurer's rights; and as to dissolution of the conjugal partnership and partition of
the "working out of an adjustment most beneficial" to the conjugal properties) by requiring petitioner to submit an
insured, the proposal is obviously so vague and indefinite as to accounting of his salaries, allowances, bonuses and
require further negotiations between the parties, for their commissions.
criteria might differ as to what would be the most beneficial
arrangement. The petitioner and the private respondent are spouses. They
were married on April 30, 1975. During their marriage, they
Upon the other hand, the subsequent letters of the insurance begot one child named Patricia Araneta Blardony, who was
Company (Exhibits 9 and 10) patently indicated that the born on November 10, 1975. Due to irreconcilable differences,
Company insisted on the full payment of the premium before petitioner and private respondent separated in March, 1981.
the policy was reinstated.
On different dates, the spouses executed the following
We take this opportunity of advising you that our Home Office agreements:
has approved the reinstatement of your lapsel policy subject to
the payment of the balance of P65.15 due on your November (a) Memorandum of Agreement dated July 1981 for the
1950 premium. Kindly remitthis amount in order that you may support of their child, Patricia;
once more enjoy the benefits of insurance protection" (Exibit
(b) Receipt dated January 11, 1982, evidencing the
9, April 14, 1951).
Compromise of Settlement of Advances claimed by private
We may now reinstate your policy if you will kindly remit to us respondent from petitioner;
the balance of P65.15 due on your semi-annual premium for
(c) The Deed of Conveyance of a property situated in Alabang,
November, 1950. Please send us this amount by return mail
Muntinlupa; and
and upon its receipt we will in turn send the Certificate of
Reinstatement of your policy, thus rendering it once again in
(d) The Confirmation of the waiver by private respondent in
full force and effect, (Exhibit 10, April 21, 1951) (Emphasis
favor of petitioner over a property situated in Calatagan,
supplied).
Batangas. (p. 25, Rollo.)
Clearly the Company did not consider the partial payment as
On May 3, 1982, the wife filed a Petition for Dissolution of
sufficient consideration for the reinstatement. Appellant's
Conjugal Partnership and Partition of Conjugal Partnership
failure to remit the balance before the death of his wife
Properties in the Court of First Instance of Rizal, Branch XXXVI,
operated to deprive him of any right to waive the policy and
in Makati, where it was docketed as Sp. No. 9711.
recover the face value thereof.
The husband, in his answer, admitted that he had abandoned
This Court, in the case of James McGuire vs. The
the conjugal home since March 1981; that before the filing of
Manufacturer's Life Insurance Co. (87 Phil,. 370, 48 Off. Gaz.
the petition, he and his wife, assisted by their respective
[1], 114), said.
counsel, tried to file a joint petition for the dissolution of their
conjugal partnership but their attempt failed due to their
The stipulation in a life insurance policy giving the insured the
inability to agree upon the equitable partition of their conjugal
privilege to reinstate it upon written application does not give
partnership properties and he prayed the court to order "a fair
the insured absolute right to such reinstatement by the mere
and equitable dissolution of their conjugal partnership in
filing of an application. The Company has the right to deny the
accordance with law." (p. 74, Rollo.)
reinstatement if it is not satisfied as to the insurability of the
insured and if the latter does no pay all overdue premium and
On October 8, 1982, the husband filed a motion to dismiss the
all other indebtedness to the Company. After the death of the
petition on jurisdictional grounds, claiming that it should have
insured the insurance Company cannot be compelled to
been filed first in the Lupon Tagapamayapa as provided in P.D.
entertain an application for reinstatement of the policy because
1508, because both are residents of the same Municipality of
the conditions precedent to reinstatement can no longer be
Makati.
determined and satisfied.
Mrs. Blardony opposed the motion to dismiss. Nevertheless,
Wherefore, finding no error in the judgment appealed from,
Judge Segundo Soza dismissed her petition on October 8, 1982
we hereby affirm the same, with costs against appellant.
for her failure, as plaintiff, to comply with Section 6 of P.D.
1508.
So ordered.
Mrs. Blardony filed a motion for reconsideration. In the
G.R. No. 70261 February 28, 1990
meantime, the courts were reorganized and the case was
MAURO BLARDONY, JR., petitioner,  transferred to Branch CXLVI (146) of the Regional Trial Court
vs. of Makati, presided over by Judge Jose Coscolluela, Jr.
HON. JOSE L. COSCOLLUELA, JR., as Presiding Judge of
On August 9, 1983, Judge Coscolluela set aside Judge Soza's
Branch CXLVI, REGIONAL TRIAL COURT NATIONAL
order of dismissal and required the defendant to submit an
CAPITAL REGION, MAKATI, METRO MANILA and MA.
accounting of his salaries, allowances, bonuses, and
ROSARIO ARANETA BLARDONY, respondents.
commissions. The latter's motion for reconsideration of that
GRIÑO-AQUINO,  J.: order was denied by the court on February 20, 1985. Hence,
this petition for certiorari under Rule 65 of the Rules of Court
with a prayer for a writ of preliminary injunction on the this date, is not yet 8 years old, and because the resolution or
grounds that respondent Judge exceeded his jurisdiction: decision of this court on the pending petition would be
incomplete without a clear cut disposition on the partition of
1. in assuming jurisdiction over the case without prior referral the personal and real properties of the conjugal partnership
to the Lupon Tagapamayapa as required by P.D. 1508; and and consequent delivery thereof to the proper parties. (p. 20,
Rollo.)
2. in declaring that the issues of support pendente lite and
delivery of personal property belonging to the conjugal WHEREFORE, finding no reversible error in the orders
partnership of the parties are essentially involved in the complained of, the petition for certiorari is denied for lack of
petition, hence, the parties could go directly to court without merit. Costs against the petitioner. This decision is immediately
passing through the Lupon Tagapamayapa, as provided in executory.
Section 6 of P.D. 1508.
SO ORDERED.
The petition has no merit. Our jurisprudence is replete with
decisions of this Court to the effect that while the referral of a
case to the Lupon Tagapayapa is a condition precedent for
filing a complaint in court, it is not a jurisdictional requirement,
"its non-compliance cannot affect the jurisdiction which the
court has already acquired over the subject matter or over the
person of the defendant." (Fernandez vs. Militante, May 31,
1988; Gonzales vs. Court of Appeals, 151 SCRA 287; Royales
vs. Intermediate Appellate Court, 127 SCRA 470). Petitioner
waived the pre-litigation conciliation procedure prescribed in
P.D. No. 1508 when he did not file a motion to dismiss the
complaint on that score, but filed his answer thereto wherein
he prayed the court to make an equitable partition of the
conjugal properties.

While petitioners could have prevented the trial court from

G.R. No. L-60367 September 30, 1982
exercising jurisdiction over the case by seasonably taking
exception thereto, they instead invoked the very same
ATTY. VENUSTIANO T. TAVORA, petitioner, 
jurisdiction by filing an answer and seeking affirmative relief
vs.
from it. ... . Upon this premise, petitioners cannot be allowed
HON. ROSARIO R. VELOSO, in her capacity as the
belatedly to adopt an inconsistent posture by attacking the
Presiding Judge of Branch III of the City Court of
jurisdiction of the court to which they had submitted
Manila, and JULIETA CAPATI, respondents.
themselves voluntarily. (Royales vs. Intermediate Appellate
Court, 127 SCRA 470.) PLANA, J.:

Furthermore, under Section 6 of P.D. 1508, the complaint may
be filed directly in a competent court without passing the
Lupon Tagapayapa in the following cases:
SECTION 6. Conciliation, pre-condition to filing of complaint . —
No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon as provided in Section
2 hereof, shall be filed or instituted in court or any other
government office for adjudication unless there has been a
confrontation of the parties before the Lupon Chairman or the
Pangkat and no conciliation or settlement has 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:
xxx xxx xxx
(3) Actions coupled with provisional remedies such as
preliminary injunction, attachment,delivery of personal
properly  and support pendente lite; and
xxx xxx xxx
(Emphasis supplied.)
Respondent Judge correctly observed that:
... the issues of support pendente lite and delivery of personal
properties belonging to the conjugal partnership, although not
coupled in the strict sense of the word with the instant
petition, are essentially involved in this petition because of the
minority of the daughter, Patricia Araneta Blardony who, as of
Venustiano T. Tavora, a resident of Marikina, Metro Manila,
owns an apartment in Quiapo, Manila which he has leased to
Julieta Capati, a resident of Quiapo. On account of alleged
violations of the lease agreement by the lessee (unauthorized
subleasing and failure to pay rent), the lessor filed on January
12, 1981 an ejectment suit (Civil Case No. 060828) in the City
Court of Manila. The defendant filed a motion t/ dismiss on the
sole ground of lack of jurisdiction for failure of the plaintiff to
bring the dispute first to the barangay court for possible
amicable settlement under PD 1508. Parenthetically, there is
no question that there has been no attempt to amicably settle
the dispute between Tavora and Capati at the barangay level.
After denying the motion to dismiss as well as a subsequent
motion for reconsideration, the municipal court reversed itself
and dismissed the ejectment case.
Alleging grave abuse of discretion amounting to lack of
jurisdiction, petitioner Tavora has come to this Court on
certiorari and mandamus praying that the order of dismissal be
set aside and that respondent judge be ordered to hear and
decide the case.
The sole issue raised is one of law: Under the given facts, is
the respondent judge barred from taking cognizance of the
ejectment case pursuant to Sec-6 of PD 1508 establishing a
system of amicably settling disputes at the barangay level?
The section reads:
SECTION 6. Conciliation, precondition to filing of complaint. —
No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon  as provided in Section
2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a
confrontation of the parties before the Lupon Chairman or the
Pangkat and no conciliation or settlement has been reached as
certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the
settlement has been repudiated ... (Emphasis supplied.)
For the above provision to be operative, the controversy must
be within the jurisdiction of the Lupong Tagapayapa (Lupon or
Barangay court). On this point, the relevant provisions of PD
1508 are:
SECTION 2. Subject matters for amicable settlement. — The
Lupon of each barangay shall have authority to bring together
the parties actually residing in the same city or municipality  for
amicable settlement of all disputes except:
(1) Where one party is the government, or any subdivision or
instrumentality thereof;
(2) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(3) Offenses punishable by imprisonment exceeding 30 days,
or a fine exceeding P200.00;
(4) Offenses where there is no private offended party;
(5) Such other classes of disputes which the Prime Minister
may in the interest of justice determine, upon recommendation
of the Minister of Justice and the Minister of Local
Government.
SECTION 3. Venue. — Disputes between or among persons
actually residing in the same barangay  shall be brought for
amicable settlement before the Lupon of said barangay. Those
involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay
where the respondent or any of the respondents actually
resides, at the election of the complainant. However, all
disputes which involve real property or any interest therein
shall be brought in the barangay where the real property or
any part thereof is situated.
The Lupon shall have no authority  over disputes:
(1) involving parties who actually reside in barangays of
different cities or municipalities,  except where such barangays
adjoin each other; and
(2) involving real property located in different municipalities.
(Emphasis supplied.)
It is true that immediately after specifying the barangay whose
Lupon shall take cognizance of a given dispute, Sec. 3 of PD
1508 adds:
However, all disputes which involve real property or any
interest therein shall be brought in the barangay where the
real property or any part thereof is situated.
Actually, however, this added sentence is just an
ordinary proviso and should operate as such. The operation of
a proviso, as a rule, should be limited to its normal function,
which is to restrict or vary the operation of the principal clause,
rather than expand its scope, in the absence of a clear
indication to the contrary.
The natural and appropriate office of a proviso is . . . to except
something from the enacting clause; to limit, restrict, or qualify
the statute in whole or in part; or to exclude from the scope of
the statute that which otherwise would be within its terms. (73
Am Jur 2d 467.)
Therefore, the quoted proviso should simply be deemed to
restrict or vary the rule on venue prescribed in the principal
clauses of the first paragraph of Section 3, thus: Although
venue is generally determined by the residence of the parties,
disputes involving real property shall be brought in the
barangay where the real property or any part thereof is
situated, notwithstanding that the parties reside elsewhere
within the same city/municipality.
In the instant case, the plaintiff in the ejectment case
(petitioner herein) is a resident of Marikina, while the
defendant (private respondent) is a resident of Quiapo. No
Lupon therefore is authorized to take cognizance of their
dispute.
Finding the petition to be meritorious, the dismissal of Civil
Case No. 060828 (ejectment) by the respondent Judge being
predicated upon a misconstruction of PD 1508, the same
should be granted. (Co Tiamco vs. Diaz, 75 Phil. 672.)
Accordingly, the assailed order of dismissal dated February 22,
1982 as well as the order dated March 23, 1982 denying
reconsideration thereof are hereby set aside; and the
respondent Judge is directed to hear and decide the aforesaid
ejectment case on its merits. Costs against private
respondents.
SO ORDERED.

The foregoing provisions are quite clear. Section 2 specifies the

conditions under which the Lupon of a barangay "shall have
authority" to bring together the disputants for amicable
settlement of their dispute: The parties must be "actually
residing in the same  city or municipality." At the same time,
Section 3 — while reiterating that the disputants must be
"actually residing in the same barangay" or in "different
barangays within the same  city or municipality —
unequivocably declares that the Lupon shall have "no
authority" over disputes "involving parties who actually reside
in barangays of different cities or municipalities," except where
such barangays adjoin each other.
G.R. No. 76836 June 23, 1988
Thus, by express statutory inclusion and exclusion, the Lupon
shall have no jurisdiction over disputes where the parties are TRIUMFO GARCES, petitioner, 
not actual residents of the same city or municipality, except vs.
where the barangays in which they actually reside adjoin each HON. COURT OF APPEALS and DAISY
other, ESCALANTE, respondents.
FELICIANO, J.:
Petitioner Triumfo Garces (plaintiff below) is owner of an
apartment building located at No. 1603 Indiana Street, now
General Malvar Street, Malate, Metropolitan Manila. On 14
August 1984, he filed with Branch 13 of the Metropolitan Trial
Court of Manila a Complaint for ejectment 1 (docketed as Civil
Case No. 102100-CV) against respondent Daisy Escalante
(defendant below), the lessee of Room B in that apartment
building. Petitioner Garces claimed in his complaint that the
verbal contract of lease with respondent Escalante, being on a
month-to-month basis, had already expired, but that the latter
had unreasonably refused to vacate the leased premises
despite oral and written demands. In an Amended Complaint
dated 15 October 1984 2 it was further alleged, as an
additional ground for eviction, that respondent Escalante had
converted the leased premises into a boarding house without
the prior consent or approval of petitioner Garces, in violation
of the terms and conditions of their verbal lease agreement.
On 30 August 1985, the Metropolitan Trial Court, in
accordance with the Rule on Summary Procedure, rendered a
Decision 3 the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff [Garces] and against the
defendant [Escalante], ordering the latter:
(a) and as others claiming rights or title under her to vacate
the premises known as Room B of a residential house
designated as No. 1603 Indiana Street, Malate, Manila;
(b) to pay the plaintiff the sum of P3,000.00 as and for
attorney's fees; and
(c) to pay the costs of suit.
For utter lack of merit, defendant's answer with counterclaim is
hereby dismissed.
SO ORDERED.
Respondent Escalante subsequently interposed an appeal
(docketed as Civil Case No. 85-33232) with Branch 13 of the
Regional Trial Court of Manila which, in a Decision dated 28
January 1986 4 reversed the decision of the Metropolitan Trial
Court in the following manner:
PREMISES CONSIDERED, the judgment appealed from as well
as the writ of execution issued pursuant thereto, are hereby
set aside for failure of the complaint to state a cause of action
and/or want of jurisdiction on the part of the court a quo to
take cognizance of the instant case by reason thereof.
The regional trial judge, noting that both parties were then
residents of Manila, based his decision on the finding that
there had been a failure on the part of plaintiff to comply with
the requirements of Section 6 of Presidential Decree No. 1508
— i.e., the controversy had not been submitted for conciliation
before the barangay Lupong Tagapayapa or Pangkat ng
Tagapagkasundo, and no Certification to File Action had been
issued by the appropriate barangay official, prior to the
institution of ejectment proceedings in court.
On 22 September 1986, upon Petition for Review filed by
plaintiff Garces (docketed as CA-G.R. SP No. 08386), the Court
of Appeals (Tenth Division) affirmed in toto  the decision of the
Regional Trial Court. 5 Petitioner's Motion for Reconsideration
was subsequently denied for having been filed late. 6
The present Petition for Review was filed on 14 January 1987.
After a Comment thereon and a Reply to the comment had
been submitted by respondent Escalante and petitioner
Garces, respectively, the Court, in a Resolution dated 22 July
1987, gave due course to the Petition. The parties have since
then filed their respective memoranda.
After careful consideration of the record, we find, however,
that the Petition must fail.
In paragraph 1 of both the Complainant and the Amended
Complaint filed with the Metropolitan Trial Court, it was alleged
that "plaintiff [i.e., petitioner Garces] is a Filipino of legal age,
and residing at 2363 Jacobo Street, Singalong, Manila, while
defendant [i.e., respondent Escalante] is, likewise, of legal
age, Filipino and residing at 1603 Indiana, Malate, Manila,
where she may be served with summons and other court
processes. 7 A similar allegation appeared in the Petition for
Review filed by plaintiff Garces with the Court of
Appeals. 8 Furthermore, the record of this case indicates that
no Certificate to File Action was issued by the barangay official
concerned prior to the initial filing by petitioner Garces of his
complaint in court. Clearly, therefore, dismissal of the
ejectment suit — ordered initially by the Regional Trial Court
and later affirmed by the Court of Appeals was not improper,
especially considering that, per allegations of complainant
himself in his pleadings, both parties were then in fact
residents of barangays situated "in the same city or
municipality." 9
Petitioner Garces, however, in order to justify non-application
in this case of P.D. 1508, would now urge the Court to reverse
the dismissal of his complaint on the assertion that the leased
apartment unit in Malate "is only the place where (respondent
stays) during workdays as respondent Daisy Escalante is
working in Manila" — i.e., "(respondent's) intention to establish
residence is in Cavite where she has her house." 10 The
argument is not persuasive. Section 3 of P.D. 1508 specifically
provides that the Decree shall be applicable to disputes
"between or among persons actually residing in the same
barangay" and to disputes "involving actual residents of
different barangays within the same city or municipality." We
think it clear, and so hold, that P.D. 1508 does not refer here
to one's legal residence or domicile which, for differing
purposes may differ from the actual or physical habitation of a
litigant. The policy of the law is evidently to promote dispute
settlement through non-litigious, compulsory conciliation
procedures and disputes arise where people actually or
physically reside. The fact that respondent Escalante stays in
the apartment unit in Malate five (5) days a week, every week,
is more than adequate proof that, within the meaning of the
Decree, respondent "actually resides" in Manila.
In fine, we have held in the past that prior recourse to the
conciliation procedure required under P.D. 1508 is not a
jurisdictional requirement, non-compliance with which would
deprive a court of its jurisdiction either over the subject matter
or over the person of the defendant. 11 Where, however, the
fact of non-compliance with and non-observance of such
procedure has been seasonably raised as an issue before the
court first taking cognizance of the complaint, dismissal of the
action is proper. 12 We note from the record that respondent
Escalante had filed with the Metropolitan Trial Court a total of
four (4) pleadings — an Answer, a Motion for Opposition of
Plaintiffs Motion for Leave to Amend Complaint, an Amended
Answer, and a Position Paper — before a decision was
rendered in this case. In those four pleadings, respondent,
then defendant argued, among other things, that the
procedural requirement under Section 6 of P.D. 1508 had been
improperly by passed by the plaintiff Garces. It should also be
borne in mind that this case was, before the Metropolitan Trial
Court, governed by the Rule on Summary Procedure and that
under Section 15 (a) and (g) of that Rule, no motion to dismiss
and no petition for certiorari or prohibition against any
interlocutory order issued by the trial court, is possible. Thus,
respondent Escalante could not have moved to dismiss, in the
Metropolitan Trial Court, upon the ground of failure to comply
with the requirements of P.D. 1508. Neither could respondent
Escalante have gone on certiorari before the Regional Trial
Court at anytime before rendition by the Metropolitan Trial
Court of its decision. We conclude that respondent Escalante
(contrary to the suggestion of petitioner) had not waived
expressly or impliedly the procedural requirement under P.D.
1508 and that, since the Decree is applicable in the present
case, petitioner Garces' complaint should have been dismissed
outright.
The precise technical effect of failure to comply with the
requirement of P.D. 1508 where applicable is much the same
effect produced by non-exhaustion of administrative remedies:
the complaint becomes afflicted with the vice of pre-maturity;
the controversy there alleged is not ripe for judicial
determination. 13 The complaint becomes vulnerable to a
motion to dismiss. 14
It is not without reluctance that we reach the conclusion set
forth above which would require petitioner to start again from
the beginning, considering that the Metropolitan Trial Court
had rendered a decision on the merits of the case. The facts of
the present case, however, do not leave us any choice. To
grant the Petition for Review under these circumstances would
amount to refusal to give effect to P.D. 1508 and to wiping it
off the statute books insofar as ejectment and other cases
governed by the Rule on Summary Procedure are concerned.
This Court has no authority to do that.
WHEREFORE, the Petition for Review is DENIED. The Decision
of the Metropolitan Trial Court of Manila dated 30 August 1985
is SET ASIDE and the Complaint in Civil Case No. 102100-CV is
hereby DISMISSED, without prejudice. Costs against the
petitioner.
SO ORDERED.
G.R. No. 153567             February 18, 2008
LIBRADA M. AQUINO, petitioner,  the same ground that the dispute was not brought before the
vs.
ERNEST S. AURE1, respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari2  under
Rule 45 of the Revised Rules of Court filed by petitioner
Librada M. Aquino (Aquino), seeking the reversal and the
setting aside of the Decision3 dated 17 October 2001 and the
Resolution4 dated 8 May 2002 of the Court of Appeals in CA-
G.R. SP No. 63733. The appellate court, in its assailed Decision
and Resolution, reversed the Decision5 of the Regional Trial
Court (RTC) of Quezon City, Branch 88, affirming the
Decision6 of the Metropolitan Trial Court (MeTC) of Quezon
City, Branch 32, which dismissed respondent Ernesto Aure’s
(Aure) complaint for ejectment on the ground, inter alia, of
failure to comply with barangay conciliation proceedings.
The subject of the present controversy is a parcel of land
situated in Roxas District, Quezon City, with an area of 449
square meters and covered by Transfer Certificate of Title
(TCT) No. 205447 registered with the Registry of Deeds of
Quezon City (subject property).7
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed
a Complaint for ejectment against Aquino before the MeTC
docketed as Civil Case No. 17450. In their Complaint, Aure and
Aure Lending alleged that they acquired the subject property
from Aquino and her husband Manuel (spouses Aquino) by
virtue of a Deed of Sale 8 executed on 4 June 1996. Aure
claimed that after the spouses Aquino received substantial
consideration for the sale of the subject property, they refused
to vacate the same.9
In her Answer,10 Aquino countered that the Complaint in Civil
Case No. 17450 lacks cause of action for Aure and Aure
Lending do not have any legal right over the subject property.
Aquino admitted that there was a sale but such was governed
by the Memorandum of Agreement11 (MOA) signed by Aure. As
stated in the MOA, Aure shall secure a loan from a bank or
financial institution in his own name using the subject property
as collateral and turn over the proceeds thereof to the spouses
Aquino. However, even after Aure successfully secured a loan,
the spouses Aquino did not receive the proceeds thereon or
benefited therefrom.
On 20 April 1999, the MeTC rendered a Decision in Civil Case
No. 17450 in favor of Aquino and dismissed the Complaint for
ejectment of Aure and Aure Lending for non-compliance with
the barangay conciliation process, among other grounds. The
MeTC  observed that Aure and Aquino are residents of the
same barangay but there is no showing that any attempt has
been made to settle the case amicably at the barangay level.
The MeTC further observed that Aure Lending was improperly
included as plaintiff in Civil Case No. 17450 for it did not stand
to be injured or benefited by the suit. Finally, the MeTC ruled
that since the question of ownership was put in issue, the
action was converted from a mere detainer suit to one
"incapable of pecuniary estimation" which properly rests within
the original exclusive jurisdiction of the RTC. The dispositive
portion of the MeTC Decision reads:
WHEREFORE, premises considered, let this case be, as it is,
hereby ordered DISMISSED. [Aquino’s] counterclaim is likewise
dismissed.12
On appeal, the RTC affirmed the dismissal of the Complaint on
Barangay Council for conciliation before it was filed in court. In
a Decision dated 14 December 2000, the RTC stressed that
the barangay conciliation process is a conditio sine qua non  for
the filing of an ejectment complaint involving residents of the
same barangay, and failure to comply therewith constitutes
sufficient cause for the dismissal of the action. The RTC
likewise validated the ruling of the MeTC that the main issue
involved in Civil Case No. 17450 is incapable of pecuniary
estimation and cognizable by the RTC. Hence, the RTC ruled:
WHEREFORE, finding no reversible error in the appealed
judgment, it is hereby affirmed in its entirety.13
Aure’s Motion for Reconsideration was denied by the RTC in an
Order14 dated 27 February 2001.
Undaunted, Aure appealed the adverse RTC Decision with the
Court of Appeals arguing that the lower court erred in
dismissing his Complaint for lack of cause of action. Aure
asserted that misjoinder of parties was not a proper ground for
dismissal of his Complaint and that the MeTC should have only
ordered the exclusion of Aure Lending as plaintiff without
prejudice to the continuation of the proceedings in Civil Case
No. 17450 until the final determination thereof. Aure further
asseverated that mere allegation of ownership should not
divest the MeTC of jurisdiction over the ejectment suit since
jurisdiction over the subject matter is conferred by law and
should not depend on the defenses and objections raised by
the parties. Finally, Aure contended that the MeTC erred in
dismissing his Complaint with prejudice on the ground of non-
compliance with barangay conciliation process. He was not
given the opportunity to rectify the procedural defect by going
through the barangay mediation proceedings and, thereafter,
refile the Complaint.15
On 17 October 2001, the Court of Appeals rendered a
Decision, reversing the MeTC and RTC Decisions and
remanding the case to the MeTC   for further proceedings and
final determination of the substantive rights of the parties. The
appellate court declared that the failure of Aure to subject the
matter to barangay conciliation is not a jurisdictional flaw and
it will not affect the sufficiency of Aure’s Complaint since
Aquino failed to seasonably raise such issue in her Answer.
The Court of Appeals further ruled that mere allegation of
ownership does not deprive the MeTC of jurisdiction over the
ejectment case for jurisdiction over the subject matter is
conferred by law and is determined by the allegations
advanced by the plaintiff in his complaint. Hence, mere
assertion of ownership by the defendant in an ejectment case
will not oust the MeTC of its summary jurisdiction over the
same. The decretal part of the Court of Appeals Decision
reads:
WHEREFORE, premises considered, the petition is hereby
GRANTED - and the decisions of the trial courts below
REVERSED and SET ASIDE. Let the records be remanded back
to the court a quo  for further proceedings – for an eventual
decision of the substantive rights of the disputants. 16
In a Resolution dated 8 May 2002, the Court of Appeals denied
the Motion for Reconsideration interposed by Aquino for it was
merely a rehash of the arguments set forth in her previous
pleadings which were already considered and passed upon by
the appellate court in its assailed Decision.
Aquino is now before this Court via  the Petition at bar raising
the following issues:
I.
WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY
CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT
THAT WARRANTS THE DISMISSAL OF THE COMPLAINT.
II.
WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE
MeTC OF ITS JURISDICTION OVER AN EJECTMENT CASE.
The barangay justice system was established primarily as a
means of easing up the congestion of cases in the judicial
courts. This could be accomplished through a proceeding
before the barangay courts which, according to the conceptor
of the system, the late Chief Justice Fred Ruiz Castro, is
essentially arbitration in character, and to make it truly
effective, it should also be compulsory. With this primary
objective of the barangay justice system in mind, it would be
wholly in keeping with the underlying philosophy of
Presidential Decree No. 1508, otherwise known as the
Katarungang Pambarangay Law, and the policy behind it would
be better served if an out-of-court settlement of the case is
reached voluntarily by the parties.17
The primordial objective of Presidential Decree No. 1508 is to
reduce the number of court litigations and prevent the
deterioration of the quality of justice which has been brought
by the indiscriminate filing of cases in the courts. 18 To ensure
this objective, Section 6 of Presidential Decree No.
150819 requires the parties to undergo a conciliation process
before the Lupon Chairman or the Pangkat ng
Tagapagkasundo as a precondition to filing a complaint in
court subject to certain exceptions20 which are inapplicable to
this case. The said section has been declared compulsory in
nature.21
Presidential Decree No. 1508 is now incorporated in Republic
Act No. 7160, otherwise known as The Local Government
Code, which took effect on 1 January 1992.
The pertinent provisions of the Local Government Code making
conciliation a precondition to filing of complaints in court, read:
SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint
in court. – No complaint, petition, action, or proceeding
involving any matter within the authority of the lupon shall be
filed or instituted directly in court or any other government
office for adjudication, unless there has been a confrontation
between the parties before the lupon chairman or the pangkat,
and that no conciliation or settlement has been reached as
certified by the lupon secretary or pangkat secretary as
attested to by the lupon chairman or pangkat chairman or
unless the settlement has been repudiated by the parties
thereto.
(b) Where parties may go directly to court . – The parties may
go directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal
liberty calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies such
as preliminary injunction, attachment, delivery of personal
property, and support pendente lite; and
(4) Where the action may otherwise be barred by the statute
of limitations.
(c) Conciliation among members of indigenous cultural
communities. – The customs and traditions of indigenous
cultural communities shall be applied in settling disputes
between members of the cultural communities.
SEC. 408. Subject Matter for Amicable Settlement; Exception
Therein. – The lupon of each barangay shall have authority to
bring together the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1)
year or a fine exceeding Five thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto
agree to submit their differences to amicable settlement by an
appropriate lupon;
(f) Disputes involving parties who actually reside in barangays
of different cities or municipalities, except where such
barangay units adjoin each other and the parties thereto agree
to submit their differences to amicable settlement by an
appropriate lupon;
(g) Such other classes of disputes which the President may
determine in the interest of justice or upon the
recommendation of the Secretary of Justice.
There is no dispute herein that the present case was never
referred to the Barangay Lupon for conciliation before Aure
and Aure Lending instituted Civil Case No. 17450. In fact, no
allegation of such barangay conciliation proceedings was made
in Aure and Aure Lending’s Complaint before the MeTC. The
only issue to be resolved is whether non-recourse to
the barangay conciliation process is a jurisdictional flaw that
warrants the dismissal of the ejectment suit filed with the
MeTC.
Aquino posits that failure to resort to barangay conciliation
makes the action for ejectment premature and, hence,
dismissible. She likewise avers that this objection was timely
raised during the pre-trial and even subsequently in her
Position Paper submitted to the MeTC.
We do not agree.
It is true that the precise technical effect of failure to comply
with the requirement of Section 412 of the Local Government
Code on barangay conciliation (previously contained in Section
5 of Presidential Decree No. 1508) is much the same effect
produced by non-exhaustion of administrative remedies -- the
complaint becomes afflicted with the vice of pre-maturity; and
the controversy there alleged is not ripe for judicial
determination. The complaint becomes vulnerable to a motion
to dismiss.22 Nevertheless, the conciliation process is not
a jurisdictional requirement, so that non-compliance
therewith cannot affect the jurisdiction which the court
has otherwise acquired over the subject matter or over
the person of the defendant.23
As enunciated in the landmark case of Royales v. Intermediate
Appellate Court24:
Ordinarily, non-compliance with the condition precedent
prescribed by P.D. 1508 could affect the sufficiency of the
plaintiff's cause of action and make his complaint vulnerable to
dismissal on ground of lack of cause of action or
prematurity; but the same would not prevent a court of
competent jurisdiction from exercising its power of
adjudication over the case before it, where the
defendants, as in this case, failed to object to such
exercise of jurisdiction in their answer and even during
the entire proceedings a quo.
While petitioners could have prevented the trial court from
exercising jurisdiction over the case by seasonably taking
exception thereto, they instead invoked the very same
jurisdiction by filing an answer and seeking affirmative relief
from it. What is more, they participated in the trial of the case
by cross-examining respondent Planas. Upon this premise,
petitioners cannot now be allowed belatedly to adopt
an inconsistent posture by attacking the jurisdiction of
the court to which they had submitted themselves
voluntarily.x x x (Emphasis supplied.)
In the case at bar, we similarly find that Aquino cannot be
allowed to attack the jurisdiction of the MeTC over Civil Case
No. 17450 after having submitted herself voluntarily thereto.
We have scrupulously examined Aquino’s Answer before the
MeTC in Civil Case No. 17450 and there is utter lack of any
objection on her part to any deficiency in the complaint which
could oust the MeTC of its jurisdcition.
We thus quote with approval the disquisition of the Court of
Appeals:
Moreover, the Court takes note that the defendant [Aquino]
herself did not raise in defense the aforesaid lack of
conciliation proceedings in her answer, which raises the
exclusive affirmative defense of simulation. By this
acquiescence, defendant [Aquino] is deemed to have waived
such objection. As held in a case of similar circumstances, the
failure of a defendant [Aquino] in an ejectment suit to
specifically allege the fact that there was no compliance with
the barangay conciliation procedure constitutes a waiver of
that defense. x x x.25
By Aquino’s failure to seasonably object to the deficiency in the
Complaint, she is deemed to have already acquiesced or
waived any defect attendant thereto. Consequently, Aquino
cannot thereafter move for the dismissal of the ejectment suit
for Aure and Aure Lending’s failure to resort to
the barangay conciliation process, since she is already
precluded from doing so. The fact that Aquino raised such
objection during the pre-trial and in her Position Paper is of no
moment, for the issue of non-recourse to barangay mediation
proceedings should be impleaded in her Answer.
As provided under Section 1, Rule 9 of the 1997 Rules of Civil
Procedure:
Sec. 1. Defenses and objections not pleaded . – Defenses and
objections not pleaded either in a motion to dismiss or
in the answer are deemed waived. However, when it
appears from the pleadings or the evidence on record that the
court has no jurisdiction over the subject matter, that there is
another action pending between the same parties for the same
cause, or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.
(Emphasis supplied.)
While the aforequoted provision applies to a pleading
(specifically, an Answer) or a motion to dismiss, a similar or
identical rule is provided for all other motions in Section 8 of
Rule 15 of the same Rule which states:
Sec. 8. Omnibus Motion. - Subject to the provisions of Section
1 of Rule 9, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available, and all
objections not so included shall be deemed waived.
The spirit that surrounds the foregoing statutory norm is to
require the party filing a pleading or motion to raise all
available exceptions for relief during the single opportunity so
that single or multiple objections may be avoided. 26 It is clear
and categorical in Section 1, Rule 9 of the Revised Rules of
Court that failure to raise defenses and objections in a motion
to dismiss or in an answer is deemed a waiver thereof; and
basic is the rule in statutory construction that when the law is
clear and free from any doubt or ambiguity, there is no room
for construction or interpretation. 27 As has been our consistent
ruling, where the law speaks in clear and categorical language,
there is no occasion for interpretation; there is only room for
application.28 Thus, although Aquino’s defense of non-
compliance with Presidential Decree No. 1508 is meritorious,
procedurally, such defense is no longer available for failure to
plead the same in the Answer as required by
the omnibus motion rule.
Neither could the MeTC dismiss Civil Case No. 17450 motu
proprio. The 1997 Rules of Civil Procedure provide only three
instances when the court may motu proprio dismiss the claim,
and that is when the pleadings or evidence on the record show
that (1) the court has no jurisdiction over the subject matter;
(2) there is another cause of action pending between the same
parties for the same cause; or (3) where the action is barred
by a prior judgment or by a statute of limitations. Thus, it is
clear that a court may not motu proprio dismiss a case on the
ground of failure to comply with the requirement
for barangay conciliation, this ground not being among those
mentioned for the dismissal by the trial court of a case on its
own initiative.
Aquino further argues that the issue of possession in the
instant case cannot be resolved by the MeTC without first
adjudicating the question of ownership, since the Deed of Sale
vesting Aure with the legal right over the subject property is
simulated.
Again, we do not agree. Jurisdiction in ejectment cases is
determined by the allegations pleaded in the complaint. As
long as these allegations demonstrate a cause of action either
for forcible entry or for unlawful detainer, the court acquires
jurisdiction over the subject matter. This principle holds, even
if the facts proved during the trial do not support the cause of
action thus alleged, in which instance the court -- after
acquiring jurisdiction -- may resolve to dismiss the action for
insufficiency of evidence.
The necessary allegations in a Complaint for ejectment are set
forth in Section 1, Rule 70 of the Rules of Court, which reads:
SECTION 1. Who may institute proceedings, and when . –
Subject to the provisions of the next succeeding section, a
person deprived of the possession of any land or building by
force, intimidation, threat, strategy, or stealth, or a lessor,
vendor, vendee, or other person against whom the possession
of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by
virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee,
or other person may at any time within one (1) year after such
unlawful deprivation or withholding of possession, bring an
action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, or
any person or persons claiming under them, for the restitution
of such possession, together with damages and costs.
In the case at bar, the Complaint filed by Aure and Aure
Lending on 2 April 1997, alleged as follows:
2. [Aure and Aure Lending] became the owners of a house and
lot located at No. 37 Salazar Street corner Encarnacion Street,
B.F. Homes, Quezon City by virtue of a deed of absolute sale
executed by [the spouses Aquino] in favor of [Aure and Aure
Lending] although registered in the name of x x x Ernesto S.
Aure; title to the said property had already been issued in the
name of [Aure] as shown by a transfer Certificate of Title , a
copy of which is hereto attached and made an integral part
hereof as Annex A;
3. However, despite the sale thus transferring ownership of the
subject premises to [Aure and Aure Lending] as above-stated
and consequently terminating [Aquino’s] right of possession
over the subject property, [Aquino] together with her family, is
continuously occupying the subject premises notwithstanding
several demands made by [Aure and Aure Lending] against
[Aquino] and all persons claiming right under her to vacate the
subject premises and surrender possession thereof to [Aure
and Aure Lending] causing damage and prejudice to [Aure and
Aure Lending] and making [Aquino’s] occupancy together with
those actually occupying the subject premises claiming right
under her, illegal.29
It can be inferred from the foregoing that Aure, together with
Aure Lending, sought the possession of the subject property
which was never surrendered by Aquino after the perfection of
the Deed of Sale, which gives rise to a cause of action for an
ejectment suit cognizable by the MeTC. Aure’s assertion of
possession over the subject property is based on his ownership
thereof as evidenced by TCT No. 156802 bearing his name.
That Aquino impugned the validity of Aure’s title over the
subject property and claimed that the Deed of Sale was
simulated should not divest the MeTC of jurisdiction over the
ejectment case.30
As extensively discussed by the eminent jurist Florenz D.
Regalado in Refugia v. Court of Appeals31:
As the law on forcible entry and unlawful detainer cases now
stands, even where the defendant raises the question of
ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership,
the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts nevertheless have the undoubted
competence to resolve the issue of ownership albeit only to
determine the issue of possession.
x x x. The law, as revised, now provides instead that
when the question of possession cannot be resolved
without deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the issue
of possession. On its face, the new Rule on Summary
Procedure was extended to include within the jurisdiction of
the inferior courts ejectment cases which likewise involve the
issue of ownership. This does not mean, however, that blanket
authority to adjudicate the issue of ownership in ejectment
suits has been thus conferred on the inferior courts.
At the outset, it must here be stressed that the resolution of
this particular issue concerns and applies only to forcible entry
and unlawful detainer cases where the issue of possession is
intimately intertwined with the issue of ownership. It finds no
proper application where it is otherwise, that is, where
ownership is not in issue, or where the principal and main
issue raised in the allegations of the complaint as well as the
relief prayed for make out not a case for ejectment but one for
recovery of ownership.
Apropos thereto, this Court ruled in Hilario v. Court of
Appeals32:
Thus, an adjudication made therein regarding the issue of
ownership should be regarded as merely provisional and,
therefore, would not bar or prejudice an action between the
same parties involving title to the land. The foregoing doctrine
is a necessary consequence of the nature of forcible entry and
unlawful detainer cases where the only issue to be settled is
the physical or material possession over the real property, that
is, possession de facto and not possession de jure."
In other words, inferior courts are now "conditionally vested
with adjudicatory power over the issue of title or ownership
raised by the parties in an ejectment suit." These courts shall
resolve the question of ownership raised as an incident in an
ejectment case where a determination thereof is necessary for
a proper and complete adjudication of the issue of
possession.33
WHEREFORE, premises considered, the instant Petition
is DENIED. The Court of Appeals Decision dated 17 October
2001 and its Resolution dated 8 May 2002 in CA-G.R. SP No.
63733 are hereby AFFIRMED.
Costs against the petitioner.
G.R. No. 132624             March 13, 2000
FIDEL M. BAÑARES II, LILIA C. VALERIANO, EDGAR M.
BAÑARES, EMILIA GATCHALIAN and FIDEL
BESARINO, petitioners,  claiming that the Order of the municipal trial court, dated
vs.
ELIZABETH BALISING, ROGER ALGER, MERLINDA
CAPARIC, EUSTAQUIO R. TEJONES, ANDREA SAYAM,
JENNY ISLA, WILMA ROGATERO, PABLITO ALEGRIA,
ROLANDO CANON, EDITHA ESTORES, EDMUNDO
DOROYA, TERESITA GUION, DANNY ANDARAYAN,
LOURDES CADAY, ROGELIO MANO, EVANGELINE
CABILTES AND PUBLIC PROSECUTOR OF RIZAL,
Antipolo, Rizal, respondents.
KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45 of the
Decision of the Regional Trial Court of Antipolo, Rizal, Branch
71 dated August 26, 1997. 1
The antecedent facts are as follows:
Petitioners Fidel M. Bañares II, Lilia C. Valeriano, Edgar M.
Bañares, Emilia Gatchialian and Fidel Besarino were the
accused in sixteen criminal cases for estafa 2 filed by the private
respondents. The cases were assigned to the Municipal Trial
Court of Antipolo, Rizal, Branch II.
After the petitioners were arraigned and entered their plea of
not guilty,3 they filed a Motion to Dismiss the aforementioned
cases on the ground that the filing of the same was premature,
in view of the failure of the parties to undergo conciliation
proceedings before the Lupong Tagapamayapa of Barangay
Dalig, Antipolo, Rizal.4 Petitioners averred that since they lived
in the same barangay as private respondents, and the amount
involved in each of the cases did not exceed Two Hundred
Pesos (P200.00), the said cases were required under Section
412 in relation to Section 408 of the Local Government Code of
19915 and Section 18 of the 1991 Revised Rule on Summary
Procedure6 to be referred to the Lupong Tagapamayapa or
Pangkat ng Tagapagkasundo of the barangay concerned for
conciliation proceedings before being filed in court.7
The municipal trial court issued an Order, dated July 17,
19958 denying petitioners' motion to dismiss on the ground
that they failed to seasonably invoke the non-referral of the
cases to the Lupong Tagapamayapa or Pangkat ng
Tagapagkasundo. It added that such failure to invoke non-
referral of the case to the Lupon amounted to a waiver by
petitioners of the right to use the said ground as basis for
dismissing the cases.9
Petitioners filed a motion for reconsideration of the
aforementioned Order, claiming that nowhere in the Revised
Rules of Court is it stated that the ground of prematurity shall
be deemed waived if not raised seasonably in a motion to
dismiss. 10
On November 13, 1995, the municipal trial court issued an
Order dismissing the sixteen criminal cases against petitioners
without prejudice, pursuant to Section 18 of the 1991 Revised
Rule on Summary Procedure. 11
More than two months later, on February 26, 1996, private
respondents through counsel, filed a motion to revive the
abovementioned criminal cases against petitioners, stating that
the requirement of referral to the Lupon for conciliation had
already been complied with. 12 Attached to the motion was a
Certification, dated February 13, 1996 from the Lupong
Tagapamayapa of Barangay Dalig, Antipolo, Rizal 13 stating that
the parties appeared before said body regarding the charges of
estafa filed by private respondents against petitioners but they
failed to reach an amicable settlement with respect thereto.
Petitioners filed a comment and opposition to motion to revive
November 13, 1995 dismissing the cases had long become
final and executory; hence, private respondents should have
re-filed the cases instead of filing a motion to revive 14 .
On March 18, 1996, the municipal trial court issued an
Order 15 granting private respondents' motion to revive.
Petitioners filed a motion for reconsideration 16 of the
aforementioned Order which was denied by the municipal trial
court. 17
Petitioners thereafter filed with the Regional Trial Court of
Antipolo, Rizal, a petition for certiorari, injunction and
prohibition assailing the Order, dated March 18, 1996 of the
municipal trial court. They claimed that the said Order, dated
November 13, 1995 dismissing the criminal cases against them
had long become final and executory considering that the
prosecution did not file any motion for reconsideration of said
Order. 18 In response thereto, private respondents filed their
Comment, 19 arguing that the motion to revive the said cases
was in accordance with law, particularly Section 18 of the
Revised Rule on Summary Procedure. 20
After the parties submitted additional pleadings to support
their respective contentions 21 , the regional trial court
rendered the assailed decision denying the petition
for certiorari, injunction and prohibition, stating as follows:
Evaluating the allegations contained in the petition and
respondents' comment thereto, the Court regrets that it cannot
agree with the petitioner ( sic). As shown by the records the 16
criminal cases were dismissed without prejudice at the
instance of the petitioners for failure of the private respondent
to comply with the mandatory requirement of PD 1508. Since
the dismissal of said cases was without prejudice, the Court
honestly believes that the questioned order has not attained
finality at all.
WHEREFORE, premises considered, the petition is hereby
DENIED for lack of merit.
SO ORDERED. 22
The regional trial court, likewise, denied petitioners' motion for
reconsideration 23 of the aforementioned decision for lack of
merit. 24
Hence, this petition.
Petitioners raise the following questions of law:
1. Whether or not an order dismissing a case or action without
prejudice may attain finality if not appealed within the
reglementary period, as in the present case;
2. Whether or not the action or case that had been dismissed
without prejudice may be revived by motion after the order of
dismissal had become final and executory; and
3. Whether or not the court that had originally acquired
jurisdiction of the case that was dismissed without prejudice
still have jurisdiction to act on the motion to revive after the
order of dismissal has become final and executory. 25
Petitioners contend that an order dismissing a case or action
without prejudice may attain finality if not appealed within the
reglementary period. Hence, if no motion to revive the case is
filed within the reglementary fifteen-day period within which to
appeal or to file a motion for reconsideration of the court's
order, the order of dismissal becomes final and the case may
only be revived by the filing of a new complaint or
information. 26 Petitioners further argue that after the order of
dismissal of a case attains finality, the court which issued the
same loses jurisdiction thereon and, thus, does not have the
authority to act on any motion of the parties with respect to
said case. 27
On the other hand, private respondents submit that cases
covered by the 1991 Revised Rule on Summary Procedure
such as the criminal cases against petitioners are not covered
by the rule regarding finality of decisions and orders under the
Revised Rules of Court. They insist that cases dismissed
without prejudice for non-compliance with the requirement of
conciliation before the Lupong Tagapamayapa or Pangkat ng
Tagapagkasundo of the barangay concerned may be revived
summarily by the filing of a motion to revive regardless of the
number of days which has lapsed after the dismissal of the
case. 28
Petitioners' contentions are meritorious.
A "final order" issued by a court has been defined as one
which disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing
else to be done but to enforce by execution what has been
determined by the court. 29 As distinguished therefrom, an
"interlocutory order" is one which does not dispose of a case
completely, but leaves something more to be adjudicated
upon. 30
This Court has previously held that an order dismissing a case
without prejudice is a final order 31 if no motion for
reconsideration or appeal therefrom is timely filed.
In Olympia International vs. Court of Appeals, 32 we stated,
thus:
The dismissal without prejudice of a complaint does not
however mean that said dismissal order was any less final.
Such Order of dismissal is complete in all details, and though
without prejudice, nonetheless finally disposed of the matter.
It was not merely an interlocutory order but a final disposition
of the complaint.
The law grants an aggrieved party a period of fifteen (15) days
from his receipt of the court's decision or order disposing of
the action or proceeding to appeal or move to reconsider the
same. 33
After the lapse of the fifteen-day period, an order becomes
final and executory and is beyond the power or jurisdiction of
the court which rendered it to further amend or revoke. 34 A
final judgment or order cannot be modified in any respect,
even if the modification sought is for the purpose of correcting
an erroneous conclusion by the court which rendered the
same. 35
After the order of dismissal of a case without prejudice has
become final, and therefore becomes outside the court's power
to amend and modify, a party who wishes to reinstate the case
has no other remedy but to file a new complaint.
This was explained in Ortigas & Company Limited Partnership
vs. Velasco, 36 where we ruled thus:
The dismissal of the case, and the lapse of the reglementary
period to reconsider or set aside the dismissal, effectively
operated to remove the case from the Court's docket. Even
assuming the dismissal to be without prejudice, the case could
no longer be reinstated or "revived" by mere motion in the
original docketed action, but only by the filing of another
complaint accompanied, of course, by the payment of the
corresponding filing fees prescribed by law.
x x x           x x x          x x x
[S]ince theoretically every final disposition of an action does
not attain finality until after fifteen (15) days therefrom, and
consequently within that time the action still remains within
the control of the Court, the plaintiff may move and set aside
his notice of dismissal and revive his action before that period
lapses. But after dismissal has become final after the lapse of
the fifteen-day reglementary period, the only way by which
the action may be resuscitated or  "revived" is by the
institution of a subsequent action through the filing of another
complaint and the payment of fees prescribed by law. This is
so because upon attainment of finality of the dismissal through
the lapse of said reglementary period, the Court loses
jurisdiction and control over it and can no longer make a
disposition in respect thereof inconsistent with such
dismissal. 37 (Emphasis supplied.)
Contrary to private respondents' claim, the foregoing rule
applies not only to civil cases but to criminal cases as well.
In Jaca vs. Blanco, 38 the Court defined a provisional dismissal
of a criminal case as a dismissal without prejudice to the
reinstatement thereof before the order of dismissal becomes
final or to the subsequent filing of a new information for the
offense. 39
Thus, the regional trial court erred when it denied the petition
for certiorari, injunction and prohibition and ruled that the
order of the municipal trial court, dated November 13, 1995
dismissing without prejudice the criminal cases against
petitioners had not attained finality and hence, could be
reinstated by the mere filing of a motion to revive.
Equally erroneous is private respondents' contention that the
rules regarding finality of judgments under the Revised Rules
of Court 40 do not apply to cases covered by the 1991 Revised
Rule on Summary Procedure. Private respondents claim that
Section 18 of the 1991 Revised Rule on Summary Procedure
allows the revival of cases which were dismissed for failure to
submit the same to conciliation at the barangay level, as
required under Section 412 in relation to Section 408 of the
Local Government Code. The said provision states:
Referral to Lupon. — Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No.
1508 41 where there is no showing of compliance with such
requirement, shall be dismissed without prejudice, and may be
revived only after such requirement shall have been complied
with. This provision shall not apply to criminal cases where the if not raised seasonably in a motion to dismiss. 54The Court
accused was arrested without a warrant. 42 notes that although petitioners could have invoked the ground
of prematurity of the causes of action against them due to the
There is nothing in the aforecited provision which supports failure to submit the dispute to Lupon prior to the filing of the
private respondents' view. Section 18 merely states that when cases as soon as they received the complaints against them,
a case covered by the 1991 Revised Rule on Summary petitioners raised the said ground only after their arraignment.
Procedure is dismissed without prejudice for non-referral of the
issues to the Lupon, the same may be revived only after the However, while the trial court committed an error in dismissing
dispute subject of the dismissed case is submitted to barangay the criminal cases against petitioners on the ground that the
conciliation as required under the Local Government Code. same were not referred to the Lupon prior to the filing thereof
There is no declaration to the effect that said case may be in court although said ground was raised by them belatedly,
revived by mere motion even after the fifteen-day period the said order may no longer be revoked at present
within which to appeal or to file a motion for reconsideration considering that the same had already become final and
has lapsed. executory, and as earlier stated, may no longer be
annulled 55 by the Municipal Trial Court, nor by the Regional
Moreover, the 1991 Revised Rule on Summary Procedure Trial Court or this Court. 56
expressly provides that the Rules of Court applies suppletorily
to cases covered by the former: WHEREFORE, the petition is hereby GRANTED. The Decision of
the Regional Trial Court of Antipolo, Rizal, Branch II dated
Sec. 22. Applicability of the regular rules . — The regular August 26, 1997 and its Order dated January 29, 1998 in SCA
procedure prescribed in the Rules of Court shall apply to the Case No. 96-4092 are hereby SET ASIDE and Criminal Cases
special cases herein provided for in a suppletory capacity Nos. 94-0829, 94-0830, 94-0831, 94-0832, 94-0833, 94-0836,
insofar as they are not inconsistent therewith. 43 94-0838, 94-0839, 94-0841, 94-0843, 94-0847, 94-0848, 94-
0850, 94-0854 and 94-0058 of the Municipal Trial Court of
A careful examination of Section 18 in relation to Section 22 of
Antipolo are ordered DISMISSED, without prejudice, pursuant
the 1991 Revised Rule of Summary Procedure and Rule 40,
to Sec. 18 of the 1991 Revised Rule on Summary Procedure.
Section 2 in relation to Rule 13, Sections 9 and 10, 44 and Rule
36, Section 2 45 of the 1997 Rules of Civil Procedure, as SO ORDERED.
amended, leads to no other conclusion than that the rules
regarding finality of judgments also apply to cases covered by
the rules on summary procedure. Nothing in Section 18 of the
1991 Revised Rule on Summary Procedure conflicts with the
prevailing rule that a judgment or order which is not appealed
or made subject of a motion for reconsideration within the
prescribed fifteen-day period attains finality. 46 Hence, the
principle expressed in the maxim interpretare et concordare
legibus est optimus interpretandi, or that every statute must
be so construed and harmonized with other statutes as to form
a uniform system of jurisprudence 47 applies in interpreting
both sets of Rules.

The rationale behind the doctrine of finality of judgments and

orders, likewise, supports our conclusion that said doctrine
applies to cases covered by the 1991 Revised Rule on
Summary Procedure:

The doctrine of finality of judgments is grounded on

fundamental considerations of public policy and sound practice
that at the risk of occasional error, the judgments of the courts
must become final at some definite date set by law. 48

It is but logical to infer that the foregoing principle also applies
to cases subject to summary procedure especially since the
objective of the Rule governing the same is precisely to settle
these cases expeditiously. 49 To construe Section 18 thereof as
allowing the revival of dismissed cases by mere motion even
after the lapse of the period for appealing the same would
prevent the courts from settling justiciable controversies with
finality, 50 thereby undermining the stability of our judicial
system.
The Court also finds it necessary to correct the mistaken
impression of petitioners and the municipal trial court that the
non-referral of a case for barangay conciliation as required
under the Local Government Code of 1991 51 may be raised in
a motion to dismiss even after the accused has been
arraigned.1âwphi1
It is well-settled that the non-referral of a case for barangay
conciliation when so required under the law 52 is not
jurisdictional in nature 53 and may therefore be deemed waived
G.R. No. 167261             March 2, 2007
ROSARIA LUPITAN PANG-ET, Petitioner, 
vs. 
CATHERINE MANACNES-DAO-AS, Heir of LEONCIO
MANACNES and FLORENTINA MANACNES,Respondent.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45
of the Rules of Civil Procedure, assailing the Decision 1 of the
Court of Appeals in CA-G.R. SP No. 78019, dated 9 February
2005, which reversed and set aside the Judgment 2 of the
Regional Trial Court (RTC), Branch 36, Bontoc, Mountain
Province, and reinstated the Resolution 3 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 Action 4 for
recovery of possession of real property situated in Sitio Abatan,
Barrio Dagdag, Sagada filed by herein petitioner before the
MCTC of Besao-Sagada, Mountain Province on 9 November
1994, against the spouses Leoncio and Florentina Manacnes,
the predecessors-in-interest of herein respondent.
On 23 February 1995, during the course of the pre-trial, the
parties, through their respective counsels, agreed to refer the
matter to the Barangay Lupon (Lupon) of Dagdag, Sagada for
arbitration in accordance with the provisions of the
Katarungang Pambarangay Law.5 Consequently, the
proceedings before the MCTC were suspended, and the case
was remanded to the Lupon for resolution.6
Thereafter, the Lupon issued a Certification to File Action on
26 February 1995 due to the refusal of the Manacnes spouses
to enter into an Agreement for Arbitration and their insistence
that the case should go to court. On 8 March 1995, the
Certification, as well as the records of the case, were
forwarded to the MCTC.
An Order was issued by the MCTC on 7 April 1995, once more
remanding the matter for conciliation by the Lupon and
ordering the Lupon to render an Arbitration Award thereon.
According to the MCTC, based on the records of the case, an
Agreement for Arbitration was executed by the parties
concerned; however, the Lupon failed to issue an Arbitration
Award as provided under the Katarungang Pambarangay Law,
so that, the case must be returned to the Lupon until an
Arbitration Award is rendered.
In compliance with the MCTC Order, the Lupon rendered an
Arbitration Award on 10 May 1995 ordering herein petitioner to
retrieve the land upon payment to the spouses Manacnes of
the amount of ₱8,000.00 for the improvements on the land.
Aggrieved, Leoncio’s widow,7 Florentina Manacnes, repudiated
the Arbitration Award but her repudiation was rejected by the
Lupon. Thereafter, the MCTC was furnished with copies of the
Arbitration Award.
On 1 June 1995, herein petitioner filed with the Lupon a
Motion for Execution of the Arbitration Award. On the other
hand, Florentina Manacnes filed a Motion with the MCTC for
the resumption of the proceedings in the original case for
recovery of possession and praying that the MCTC consider her
repudiation of the Arbitration Award issued by the Lupon.
Subsequently, the MCTC heard the Motion of Florentina
Manacnes notwithstanding the latter’s failure to appear before
the court despite notice. The MCTC denied Florentina
Manacnes’ Motion to repudiate the Arbitration Award
elucidating that since the movant failed to take any action
within the 10-day reglementary period provided for under the
Katarungang Pambarangay Law, the arbitration award has
become final and executory. Furthermore, upon motion of
herein petitioner Pang-et, the MCTC issued an Order
remanding the records of the case to the Lupon for the
execution of the Arbitration Award. On 31 August 1995, the
then incumbent Punong Barangay of Dagdag issued a Notice
of Execution of the Award.
Said Notice of Execution was never implemented. Thus, on 16
October 2001, herein petitioner Pang-et filed with the MCTC an
action for enforcement of the Arbitration Award which was
sought to be dismissed by the heir of the Manacnes
spouses.8 The heir of the Manacnes spouses argues that the
Agreement for Arbitration and the Arbitration Award are void,
the Agreement for Arbitration not having been personally
signed by the spouses Manacnes, and the Arbitration Award
having been written in English – a language not understood by
the parties.
In its Resolution dated 20 August 2002, the MCTC dismissed
the Petition for Enforcement of Arbitration Award in this wise:
x x x Are defendants estopped from questioning the
proceedings before the Lupon Tagapamayapa concerned?
The defendants having put in issue the validity of the
proceedings before the lupon concerned and the products
thereof, they are not estopped. It is a hornbook rule that a null
and void act could always be questioned at any time as the
action or defense based upon it is imprescriptible.
The second issue: Is the agreement to Arbitrate null and void?
Let us peruse the pertinent law dealing on this matter which is
Section 413 of the Local Government Code of 1991 (RA 7160),
to wit:
"Section 413 – (a) The parties may, at any stage of the
proceedings, agree in writing that they shall abide by the
arbitration award of the lupon chairman or the pangkat. x x x"
The foregoing should be taken together with Section 415 of
the same code which provides:
"Section 415. Appearance of parties in person. In all
katarungang pambarangay proceedings, the parties must
appear in person without the assistance of counsel or
representative, except for minors and incompetents who may
be assisted by their next-of-kin who are not lawyers."
It is very clear from the foregoing that personal appearance of
the parties in conciliation proceedings before a Lupon
Tagapamayapa is mandatory. Likewise, the execution of the
agreement to arbitrate must be done personally by the parties
themselves so that they themselves are mandated to sign the
agreement.
Unfortunately, in this case, it was not respondents-spouses
[Manacnis] who signed the agreement to arbitrate as plaintiff
herself admitted but another person. Thus, it is very clear that
the mandatory provisos of Section 413 and 415 of RA 7160 are
violated. Granting arguendo that it was Catherine who signed
the agreement per instruction of her parents, will it cure the
violation? The answer must still be in the negative. As provided
for by the cited provisos of RA 7160, if ever a party is entitled
to an assistance, it shall be done only when the party
concerned is a minor or incompetent. Here, there is no
showing that the spouses [Manacnis] were incompetent.
Perhaps very old but not incompetent. Likewise, what the law
provides is assistance, not signing of agreements or
settlements.
Just suppose the spouses [Manacnis] executed a special power
of attorney in favor of their daughter Catherine to attend the
proceedings and to sign the agreement to arbitrate? The more
that it is proscribed by the Katarungang Pambarangay Law
specifically Section 415 of RA 7160 which mandates the
personal appearance of the parties before the lupon and
likewise prohibits the appearance of representatives.
In view of the foregoing, it could now be safely concluded that
the questioned agreement to arbitrate is inefficacious for being
violative of the mandatory provisions of RA 7160 particularly
sections 413 and 415 thereof as it was not the respondents-
spouses [Manacnis] who signed it.
The third issue: Is the Arbitration Award now sought to be
enforced effective? Much to be desired, the natural flow of
events must follow as a consequence. Considering that the
agreement to arbitrate is inefficacious as earlier declared, it
follows that the arbitration award which emanated from it is
also inefficacious. Further, the Arbitration Award by itself,
granting arguendo that the agreement to arbitrate is valid, will
readily show that it does not also conform with the mandate of
the Katarungang Pambarangay Law particularly Section 411
thereto which provides:
"Sec. 411. Form of Settlement – All amicable settlements shall
be in writing in a language or dialect known to the parties x x
x. When the parties to the dispute do not use the same
language or dialect, the settlement shall be written in the
language known to them."
Likewise, the implementing rules thereof, particularly Section
13 provides:
"Sec. 13 – Form of Settlement and Award. – All settlements,
whether by mediation, conciliation or arbitration, shall be in
writing, in a language or dialect known to the parties. x x x"
It is of no dispute that the parties concerned belong to and are
natives of the scenic and serene community of Sagada, Mt.
Province who speak the Kankanaey language. Thus, the
Arbitration Award should have been written in the Kankanaey
language. However, as shown by the Arbitration Award, it is
written in English language which the parties do not speak and
therefore a further violation of the Katarungang Pambarangay
Law.
IN THE LIGHT of all the foregoing considerations, the above-
entitled case is hereby dismissed.9
Petitioner Pang-et’s Motion for Reconsideration having been
denied, she filed an Appeal before the RTC which reversed and
set aside the Resolution of the MCTC and remanded the case
to the MCTC for further proceedings. According to the RTC:
As it appears on its face, the Agreement for Arbitration in point
found on page 51 of the expediente, dated Feb. 6, 1995, and
attested by the Pangkat Chairman of the Office of the
Barangay Lupon of Dagdag, Sagada was signed by the
respondents/defendants spouses Manacnis. The representative
of the Appellee in the instant case assails such Agreement
claiming that the signatures of her aforesaid predecessors-in-
interest therein were not personally affixed by the latter or are
falsified-which in effect is an attack on the validity of the
document on the ground that the consent of the defendants
spouses Manacnis is vitiated by fraud. Indulging the Appellee
Heirs of Manacnis its contention that such indeed is the truth
of the matter, the fact still remains as borne out by the
circumstances, that neither did said original defendants nor did
any of such heirs effectively repudiate the Agreement in
question in accordance with the procedure outlined by the law,
within five (5) days from Feb. 6, 1995, on the ground as
above-stated (Secs. 413 (a), 418, RA 7160; Secs. 7, 13, KP
Law; Sec. 12, Rule IV, KP Rules). As mandated, such failure is
deemed a waiver on the part of the defendants spouses
Manacnis to challenge the Agreement for Arbitration on the
ground that their consent thereto is obtained and vitiated by
fraud (Sec. 12, Par. 3, KP Rules). Corollarily, the Appellee Heirs
being privy to the now deceased original defendants should
have not been permitted by the court a quo under the
equitable principle of estoppel, to raise the matter in issue for
the first time in the present case (Lopez vs. Ochoa, 103 Phil.
94).
The Arbitration Award relative to Civil Case 83 (B.C. No. 07)
dated May 10, 1995, written in English, attested by the Punong
Barangay of Dagdag and found on page 4 of the record is
likewise assailed by the Appellee as void on the ground that
the English language is not known by the defendants spouses
Manacnis who are Igorots. Said Appellee contends that the
document should have been written in Kankana-ey, the dialect
known to the party (Sec. 413 (b), RA 7160; Sec. 7, Par. 2, KP
law, Sec. 11, KP Rules). On this score, the court a quo
presumptuously concluded on the basis of the self-serving
mere say-so of the representative of the Appellee that her
predecessors did not speak or understand English. As a matter
of judicial notice, American Episcopalian Missionaries had been
in Sagada, Mountain Province as early as 1902 and
continuously stayed in the place by turns, co-mingling with the
indigenous people thereat, instructing and educating them,
and converting most to the Christian faith, among other things,
until the former left about twenty years ago. By constant
association with the white folks, the natives too old to go to
school somehow learned the King’s English by ear and can
effectively speak and communicate in that language. Any
which way, even granting arguendo that the defendants
spouses Manacnis were the exceptions and indeed totally
ignorant of English, no petition to nullify the Arbitration award
in issue on such ground as advanced was filed by the party or
any of the Appellee Heirs with the MCTC of Besao-Sagada,
within ten (10) days from May 10, 1995, the date of the
document. Thus, upon the expiration thereof, the Arbitration
Award acquired the force and effect of a final judgment of a
court (Sec. 416, RA 7160; Sec. 11, KP Law; Sec. 13, KP Rules);
conclusive upon the original defendants in Civil Case 83 (B.C.
No. 07) and the Appellee Heirs herein privy to said defendants.
In the light thereof, the collateral attack of the Appellee on the
Agreement for Arbitration and Arbitration Award re Civil Case
83 (B.C. No. 07) should not have in the first place been given
due course by the court a quo. In which case, it would not
have in the logical flow of things declared both documents
"inefficacious"; without which pronouncements, said court
would not have dismissed the case at bar.
Wherefore, Judgment is hereby rendered Reversing and
Setting Aside the Resolution appealed from, and ordering the
record of the case subject thereof remanded to the court of
origin for further proceedings.10
Aggrieved by the reversal of the RTC, herein respondent filed a
petition before the Court of Appeals seeking to set aside the
RTC Judgment. On 9 February 2005, the appellate court
rendered the herein assailed Decision, to wit:
After thoroughly reviewing through the record, We find nothing
that would show that the spouses Manacnes were ever
amenable to any compromise with respondent Pang-et. Thus,
We are at a loss as to the basis of the Arbitration Award
sought to be enforced by respondent Pang-et’s subsequent
action before the MCTC.
There is no dispute that the proceeding in Civil Case No. 83
was suspended and the same remanded to the Lupon on
account of the Agreement to Arbitrate which was allegedly not
signed by the parties but agreed upon by their respective
counsels during the pre-trial conference. In the meeting before
the Lupon, it would seem that the agreement to arbitrate was
not signed by the spouses Manacnes. More importantly, when
the pangkat chairman asked the spouses Manacnes to sign or
affix their thumbmarks in the agreement, they refused and
insisted that the case should instead go to court. Thus, the
Lupon had no other recourse but to issue a certificate to file
action. Unfortunately, the case was again remanded to the
Lupon to "render an arbitration award". This time, the Lupon
heard the voice tape of the late Beket Padonay affirming
respondent Pang-et’s right to the disputed property. While
Pang-et offered to pay ₱8,000.00 for the improvements made
by the spouses Manacnes, the latter refused to accept the
same and insisted on their right to the subject property.
Despite this, the Lupon on May 10, 1995 issued an Arbitration
award which favored respondent Pang-et.
From the time the case was first referred to the Lupon to the
time the same was again remanded to it, the Spouses
Manacnes remained firm in not entering into any compromise
with respondent Pang-et. This was made clear in both the
minutes of the Arbitration Hearing on 26 February 1995 and on
9 April 1995. With the foregoing, We find it evident that the
spouses Manacnes never intended to submit the case for
arbitration.
Moreover, the award itself is riddled with flaws. First of all
there is no showing that the Pangkat ng Tagapagkasundo was
duly constituted in accordance with Rule V of the Katarungan
Pambarangay Rules. And after constituting of the Pangkat,
Rule VI, thereof the Punong Barangay and the Pangkat must
proceed to hear the case. However, according to the minutes
of the hearing before the lupon on 9 April 1995, the pangkat
Chairman and another pangkat member were absent for the
hearing.
Finally, Section 13 of the same Rule requires that the Punong
Barangay or the Pangkat Chairman should attest that parties
freely and voluntarily agreed to the settlement arrived at. But
how can this be possible when the minutes of the two hearings
show that the spouses Manacnes neither freely nor voluntarily
agreed to anything.
While RA 7160 and the Katarungan Pambarangay rules provide
for a period to repudiate the Arbitration Award, the same is
neither applicable nor necessary since the Agreement to
Arbitrate or the Arbitration Award were never freely nor
voluntarily entered into by one of the parties to the dispute. In
short, there is no agreement validly concluded that needs to
be repudiated.
With all the foregoing, estoppel may not be applied against
petitioners for an action or defense against a null and void act
does not prescribe. With this, We cannot but agree with the
MCTC that the very agreement to arbitrate is null and void.
Similarly, the arbitration award which was but the off shoot of
the agreement is also void.
WHEREFORE, the RTC judgment of 2 June 2003 is REVERSED
and SET ASIDE, the MCTC Resolution DISMISSING the Civil
Case No. 118 for enforcement of Arbitration Award is
REINSTATED.11
Vehemently disagreeing with the Decision of the Court of
Appeals, petitioner Pang-et filed the instant petition. Petitioner
maintains that the appellate court overlooked material facts
that resulted in reversible errors in the assailed Decision.
According to petitioner, the Court of Appeals overlooked the
fact that the original parties, as represented by their respective
counsels in Civil Case No. 83, mutually agreed to submit the
case for arbitration by the Lupon ng Tagapamayapa of
Barangay Dagdag. Petitioner insists that the parties must be
bound by the initial agreement by their counsels during pre-
trial to an amicable settlement as any representation made by
the lawyers are deemed made with the conformity of their
clients. Furthermore, petitioner maintains that if indeed the
spouses Manacnes did not want to enter into an amicable
settlement, then they should have raised their opposition at
the first instance, which was at the pre-trial on Civil Case No.
83 when the MCTC ordered that the case be remanded to the
Lupon ng Tagapamayapa for arbitration.
We do not agree with the petitioner.
First and foremost, in order to resolve the case before us, it is
pivotal to stress that, during the initial hearing before the
Lupon ng Tagapamayapa, the spouses Manacnes declined to
sign the Agreement for Arbitration and were adamant that the
proceedings before the MCTC in Civil Case No. 83 must
continue. As reflected in the Minutes 12 of the Arbitration
Hearing held on 26 February 1995, the legality of the signature
of Catherine Manacnes, daughter of the Manacnes spouses,
who signed the Agreement for Arbitration on behalf of her
parents, was assailed on the ground that it should be the
spouses Manacnes themselves who should have signed such
agreement. To resolve the issue, the Pangkat Chairman then
asked the spouses Manacnes that if they wanted the
arbitration proceedings to continue, they must signify their
intention in the Agreement for Arbitration form. However, as
stated earlier, the Manacnes spouses did not want to sign such
agreement and instead insisted that the case go to court.
Consequently, the Lupon issued a Certification to File Action on
26 February 1995 due to the refusal of the Manacnes spouses.
Indicated in said Certification are the following: 1) that there
was personal confrontation between the parties before the
Punong Barangay but conciliation failed and 2) that the
Pangkat 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.
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.

What is compulsory under the Katarungang Pambarangay Law WHEREFORE, premises considered, the instant petition is
is that there be a confrontation between the parties before the hereby DENIED. The Decision of the Court of Appeals in CA-
Lupon Chairman or the Pangkat and that a certification be G.R. SP No. 78019 is hereby AFFIRMED. The Municipal Circuit
issued that no conciliation or settlement has been reached, as Trial Court of Besao-Sagada, Mountain Province, is hereby
attested to by the Lupon or Pangkat Chairman, before a case ORDERED to proceed with the trial of Civil Case No. 83 for
falling within the authority of the Lupon may be instituted in Recovery of Possession of Real Property, and the immediate
court or any other government office for adjudication. 18 In resolution of the same with deliberate dispatch. No costs.
other words, the only necessary pre-condition before any case
falling within the authority of the Lupon or the Pangkat may be SO ORDERED.
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 G.R. No. 162084               June 28, 2005
bound by an arbitration award, said party must have agreed in
writing that they shall abide by the arbitration award of the APRIL MARTINEZ, FRITZ DANIEL MARTINEZ and
Lupon or the Pangkat. Like in any other contract, parties who MARIA OLIVIA MARTINEZ, petitioners, 
have not signed an agreement to arbitrate will not be bound vs.
by said agreement since it is axiomatic that a contract cannot RODOLFO G. MARTINEZ, respondent.
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 DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 59420 setting aside
and reversing the decision of the Regional Trial Court (RTC) of
Manila, Branch 30, in Civil Case No. 00-96962 affirming, on
appeal, the decision of the Metropolitan Trial Court (MTC) of
Manila in Civil Case No. 164761 (CV) for ejectment.
The Antecedents
The spouses Daniel P. Martinez, Sr. and Natividad de Guzman-
Martinez were the owners of a parcel of land identified as Lot
18-B-2 covered by Transfer Certificate of Title (TCT) No.
54334, as well as the house constructed thereon. 2 On March 6,
1993, Daniel, Sr. executed a Last Will and Testament 3 directing
the subdivision of the property into three lots, namely, Lots 18-
B-2-A, 18-B-2-B and 18-B-2-C. He then bequeathed the three
lots to each of his sons, namely, Rodolfo, Manolo and Daniel,
Jr.; Manolo was designated as the administrator of the estate.
In May 1995, Daniel, Sr. suffered a stroke which resulted in
the paralysis of the right side of his body. Natividad died on
October 26, 1996.4 Daniel, Sr. passed away on October 6,
1997.5
On September 16, 1998, Rodolfo found a deed of sale
purportedly signed by his father on September 15, 1996,
where the latter appears to have sold Lot 18-B-2 to Manolo
and his wife Lucila.6 He also discovered that TCT No. 237936
was issued to the vendees based on the said deed of sale. 7
Rodolfo filed a complaint 8 for annulment of deed of sale and
cancellation of TCT No. 237936 against his brother Manolo and
his sister-in-law Lucila before the RTC. He also filed a criminal
complaint for estafa through falsification of a public document
in the Office of the City Prosecutor against Manolo, which was
elevated to the Department of Justice.9
On motion of the defendants, the RTC issued an Order 10 on
March 29, 1999, dismissing the complaint for annulment of
deed of sale on the ground that the trial court had no
jurisdiction over the action since there was no allegation in the
complaint that the last will of Daniel Martinez, Sr. had been
admitted to probate. Rodolfo appealed the order to the CA.11
On October 4, 1999, Rodolfo filed a Petition with the RTC of
Manila for the probate of the last will of the deceased Daniel
Martinez, Sr.12
In the meantime, the spouses Manolo and Lucila Martinez
wrote Rodolfo, demanding that he vacate the property.
Rodolfo ignored the letter and refused to do so. This prompted
the said spouses to file a complaint for unlawful detainer
against Rodolfo in the MTC of Manila. They alleged that they
were the owners of the property covered by TCT No. 237936,
and that pursuant to Presidential Decree (P.D.) No. 1508, the
matter was referred to the barangayfor conciliation and
settlement, but none was reached. They appended the
certification to file action executed by the barangay chairman
to the complaint.
In his Answer13 to the complaint filed on October 11, 1999,
Rodolfo alleged, inter alia, that the complaint failed to state a
condition precedent, namely, that earnest efforts for an
amicable settlement of the matter between the parties had
been exerted, but that none was reached. He also pointed out
that the dispute had not been referred to the barangay before
the complaint was filed.
On October 20, 1999, the spouses Martinez filed an Amended
Complaint in which they alleged that earnest efforts toward a
settlement had been made, but that the same proved futile.
Rodolfo filed his opposition thereto, on the ground that there
was no motion for the admission of the amended complaint.
The trial court failed to act on the matter.
The spouses Martinez alleged in their position paper that
earnest efforts toward a compromise had been made and/or
exerted by them, but that the same proved futile. 14 No
amicable settlement was, likewise, reached by the parties
during the preliminary conference because of irreconcilable
differences. The MTC was, thus, impelled to terminate the
conference.15
On February 21, 2000, the trial court rendered judgment in
favor of the spouses Martinez. The fallo of the decision reads:
WHEREFORE, premises considered, judgment is rendered in
favor of plaintiff. The defendant, including any person claiming
right under him, is ordered:
1) To vacate the subject premises;
2) To pay plaintiff the sum of ₱10,000.00 a month starting July
17, 1999, the date of last demand until he vacates the same;
3) To pay the sum of ₱10,000.00 as and for attorney’s fees;
and
4) Costs of suit.
SO ORDERED.16
The trial court declared that the spouses Martinez had
substantially complied with Article 151 of the Family Code of
the Philippines17 based on the allegations of the complaint and
the appended certification to file action issued by
the barangay captain.
Rodolfo appealed the decision to the RTC. On May 31, 2000,
the RTC rendered judgment affirming the appealed decision.
He then filed a petition for review of the decision with the CA,
alleging that:
1. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND WITHOUT MERIT THE DEFENSE OF
PETITIONER THAT THERE IS NO ALLEGATION IN THE
COMPLAINT THAT PETITIONER HAS UNLAWFULLY WITHHELD
POSSESSION OF THE PROPERTY FROM RESPONDENTS – A
REQUIREMENT IN [AN] UNLAWFUL DETAINER SUIT.
2. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND THAT PETITIONER’S POSSESSION OF
THE PROPERTY IS BY MERE TOLERANCE OF RESPONDENTS.
3. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND THAT THE RESPONDENTS HAVE A CAUSE
OF ACTION.
4. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH DID NOT RESOLVE THE SIXTH ISSUE, TO WIT,
"Whether or not this Court has jurisdiction over this case
considering that the allegations in the complaint makes out a
case of accion publiciana."
5. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH HAS NO JURISDICTION OVER THE CASE.
6. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND THAT THE MANDATORY REQUIREMENT
OF CONCILIATION HAS BEEN COMPLIED WITH.
7. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND THAT THERE WAS SUBSTANTIAL
COMPLIANCE WITH THE KATARUNGANG PAMBARANGAY LAW.
8. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH FOUND THAT THE PENDENCY OF CIVIL CASE
NO. 98-91147 AND SPECIAL PROCEEDINGS NO. 99-95281,
INVOLVING THE PETITIONER AND RESPONDENTS AND
INVOLVING THE SAME PROPERTY DID NOT DIVEST THE MTC
OF AUTHORITY TO DECIDE THE CASE.
9. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC WHICH GRANTED THE RELIEF PRAYED FOR BY THE
RESPONDENTS.
10. THE RTC ERRED IN AFFIRMING THE DECISION OF THE
MTC.18
On November 27, 2003, the CA rendered judgment granting
the petition and reversing the decision of the RTC. The
appellate court ruled that the spouses Martinez had failed to
comply with Article 151 of the Family code. The CA also held
that the defect in their complaint before the MTC was not
cured by the filing of an amended complaint because the latter
pleading was not admitted by the trial court.
Upon the denial of their motion for reconsideration of the said
decision, the spouses Martinez filed the present petition for
review on certiorari, in which they raise the following issues:
I.
WHETHER OR NOT THE CERTIFICATION TO FILE ACTION
AND THE ALLEGATIONS IN THE COMPLAINT THAT THE CASE
PASSED [THROUGH] THE BARANGAY BUT NO SETTLEMENT
WAS REACHED, ARE SUFFICIENT COMPLIANCE TO PROVE
THAT, INDEED, EARNEST EFFORTS WERE, IN FACT, MADE
BUT THE SAME HAVE FAILED PRIOR TO THE FILING OF THE
COMPLAINT.
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY AND
SERIOUSLY ERRED IN FINDING THAT THERE WAS NON-
COMPLIANCE WITH THE REQUIREMENT PROVIDED FOR
UNDER ARTICLE 151 OF THE FAMILY CODE, CONSIDERING
THAT ONE OF THE PARTIES TO A SUIT IN THIS CASE IS NOT
A MEMBER OF THE SAME FAMILY.19
The petitioners alleged that they substantially complied with
Article 151 of the Family Code, since they alleged the following
in their original complaint:
2. In compliance with P.D. 1508, otherwise known as the
"Katarungang Pambarangay," this case passed [through] the
Barangay and no settlement was forged between plaintiffs and
defendant as a result of which Certification to File Action was
issued by Barangay 97, Zone 8, District I, Tondo, Manila. xxx"
(Underscoring supplied)20
Further, the petitioners averred, they alleged in their position
paper that they had exerted earnest efforts towards a
compromise which proved futile. They also point out that the
MTC resolved to terminate the preliminary conference due to
irreconcilable difference between the parties. Besides, even
before they filed their original complaint, animosity already
existed between them and the respondent due to the latter’s
filing of civil and criminal cases against them; hence, the
objective of an amicable settlement could not have been
attained. Moreover, under Article 150 of the Family Code,
petitioner Lucila Martinez had no familial relations with the
respondent, being a mere sister-in-law. She was a stranger to
the respondent; hence, there was no need for the
petitioners21 to comply with Article 151 of the Family Code.
The petition is meritorious.
Article 151 of the Family Code provides:
Art. 151. No suit between members of the same family shall
prosper unless it should appear from the verified complaint or
petition that earnest efforts toward a compromise have been
made, but that the same have failed. If it is shown that no
such efforts were, in fact, made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject
of compromise under the Civil Code.
The phrase "members of the family" must be construed in
relation to Article 150 of the Family Code, to wit:
Art. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half-
blood.
Article 151 of the Family code must be construed strictly, it
being an exception to the general rule. Hence, a sister-in-law
or brother-in-law is not included in the enumeration. 22
As pointed out by the Code Commission, it is difficult to
imagine a sadder and more tragic spectacle than a litigation
between members of the same family. It is necessary that
every effort should be made toward a compromise before a
litigation is allowed to breed hate and passion in the family and
it is known that a lawsuit between close relatives generates
deeper bitterness than between strangers.23
Thus, a party’s failure to comply with Article 151 of the Family
Code before filing a complaint against a family member would
render such complaint premature.
In this case, the decision of the CA that the petitioners were
mandated to comply with Article 151 of the Family code and
that they failed to do so is erroneous.
First. Petitioner Lucila Martinez, the respondent’s sister-in-law,
was one of the plaintiffs in the MTC. The petitioner is not a
member of the same family as that of her deceased husband
and the respondent:
As regards plaintiff’s failure to seek a compromise, as an
alleged obstacle to the present case, Art. 222 of our Civil Code
provides:
"No suit shall be filed or maintained between members of the
same family unless it should appear that earnest efforts toward
a compromise have been made, but that the same have failed,
subject to the limitations in Article 2035."
It is noteworthy that the impediment arising from this
provision applies to suits "filed or maintained
between members of the same family. " This phrase, "members
of the same family," should, however, be construed in the light
of Art. 217 of the same Code, pursuant to which:
"Family relations shall include those:
(1) Between husband and wife;
(2) Between parent and child;
(3) Among other ascendants and their descendants;
(4) Among brothers and sisters."
Mrs. Gayon is plaintiff’s sister-in-law, whereas her children are
his nephews and/or nieces. Inasmuch as none of them is
included in the enumeration contained in said Art. 217 – which
should be construed strictly, it being an exception to the
general rule – and Silvestre Gayon must necessarily be
excluded as party in the case at bar, it follows that the same
does not come within the purview of Art. 222, and plaintiff’s
failure to seek a compromise before filing the complaint does
not bar the same.24
Second. The petitioners were able to comply with the
requirements of Article 151 of the Family Code because they
alleged in their complaint that they had initiated a proceeding
against the respondent for unlawful detainer in
the Katarungang Pambarangay, in compliance with P.D. No.
1508; and that, after due proceedings, no amicable settlement
was arrived at, resulting in the barangay chairman’s issuance
of a certificate to file action. 25 The Court rules that such
allegation in the complaint, as well as the certification to file
action by the barangay chairman, is sufficient compliance with
article 151 of the Family Code. It bears stressing that under
Section 412(a) of Republic Act No. 7160, no complaint
involving any matter within the authority of the Lupon shall be
instituted or filed directly in court for adjudication unless there
has been a confrontation between the parties and no
settlement was reached.26
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 59420 is REVERSED AND SET ASIDE. The Decision of the
Metropolitan Trial Court of Manila, as affirmed on appeal by
the Regional Trial Court of Manila, Branch 30, in Civil Case No.
164761(CV) is REINSTATED. No costs.
SO ORDERED.
G.R. No. 155713             May 5, 2006
MILAGROS G. LUMBUAN,* Petitioner, 
vs.
ALFREDO A. RONQUILLO, Respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse and set
aside the Decision1 dated April 12, 2002, of the Court of
Appeals in CA-G.R. SP No. 52436 and its Resolution 2 dated
October 14, 2002, denying the petitioner’s motion for
reconsideration.
The salient facts, as found by the Court of Appeals, 3 are as
follows:
Petitioner Milagros G. Lumbuan is the registered owner of Lot
19-A, Block 2844 with Transfer Certificate of Title No. 193264,
located in Gagalangin, Tondo, Manila. On February 20, 1995,
she leased it to respondent Alfredo A. Ronquillo for a period of
three years with a monthly rental of P5,000. The parties also
agreed that there will be a 10% annual increase in rent for the
succeeding two years, i.e., 1996 and 1997, 4 and the leased
premises will be used exclusively for the respondent’s fastfood
business, unless any other use is given, with the petitioner’s
prior written consent.5
While the respondent at the start operated a fastfood business,
he later used the premises as residence without the
petitioner’s prior written consent. He also failed to pay the
10% annual increase in rent of P500/month starting 1996
and P1,000/month in 1997 to the present. Despite repeated
verbal and written demands, the respondent refused to pay
the arrears and vacate the leased premises.
On November 15, 1997, the petitioner referred the matter to
the Barangay Chairman’s office but the parties failed to arrive
at a settlement. The Barangay Chairman then issued a
Certificate to File Action.6
On December 8, 1997, the petitioner filed against the
respondent an action for Unlawful Detainer, docketed as Civil
Case No. 157922-CV. It was raffled to the Metropolitan Trial
Court (MeTC) of Manila, Branch 6. On December 15, 1997, the
respondent received the summons and copy of the complaint.
On December 24, 1997, he filed his Answer by mail. Before the
MeTC could receive the respondent’s Answer, the petitioner
filed a Motion for Summary Judgment dated January 7,
1998.7 Acting upon this motion, the MeTC rendered a
decision8 on January 15, 1998, ordering the respondent to
vacate and surrender possession of the leased premises; to
pay the petitioner the amount of P46,000 as unpaid rentals
with legal interest until fully paid; and to pay the
petitioner P5,000 as attorney’s fees plus cost of the suit.
The respondent then filed a Manifestation calling the attention
of the MeTC to the fact that his Answer was filed on time and
praying that the decision be set aside. The MeTC denied the
prayer, ruling that the Manifestation was in the nature of a
motion for reconsideration which is a prohibited pleading under
the Rules on Summary Procedure.
Upon appeal, the case was raffled to the Regional Trial Court
(RTC) of Manila, Branch 38, and docketed as Civil Case No. 98-
87311. On July 8, 1998, the RTC rendered its decision 9 setting
aside the MeTC decision. The RTC directed the parties to go
back to the Lupon Chairman or Punong Barangay for further
proceedings and to comply strictly with the condition that
should the parties fail to reach an amicable settlement, the
entire records of the case will be remanded to MeTC of Manila,
Branch 6, for it to decide the case anew.
The respondent sought reconsideration but the RTC denied the
motion in an Order dated March 15, 1999. Thus, he sought
relief from the Court of Appeals through a petition for
review.10 On April 12, 2002, the appellate court promulgated a
decision, reversing the decision of the RTC and ordering the
dismissal of the ejectment case. The appellate court ruled that
when a complaint is prematurely instituted, as when the
mandatory mediation and conciliation in the barangay level
had not been complied with, the court should dismiss the case
and not just remand the records to the court of origin so that
the parties may go through the prerequisite proceedings.
The petitioner filed a motion for reconsideration, which was
denied by the appellate court. Hence, this present petition.
In the meantime, while this petition was pending before this
Court, the parties went through barangay conciliation
proceedings as directed by the RTC of Manila, Branch 38.
Again, they failed to arrive at an amicable settlement
prompting the RTC to issue an Order 11 remanding the case to
the MeTC of Manila, Branch 6, where the proceedings took
place anew. On April 25, 2000, the MeTC rendered a second
decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment on the merits is
hereby rendered for the plaintiff as follows:
1. Ordering defendant and all persons claiming right of
possession under him to voluntarily vacate the property
located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and
surrender possession thereof to the plaintiff;
2. Ordering defendant to pay to plaintiff the amount of
P387,512.00 as actual damages in the form of unpaid rentals
and its agreed increase up to January 2000 and to pay the
amount of P6,500.00 a month thereafter until the same is
actually vacated;
3. Ordering the defendant to pay to plaintiff the sum of
P10,000.00 as and for attorney’s fees plus cost of the suit.
SO ORDERED.12
The respondent appealed the foregoing
decision.1avvphil.net The case was raffled to RTC of Manila,
Branch 22, and docketed as Civil Case No. 00-98173. The RTC
ruled in favor of the petitioner and dismissed the appeal. The
respondent elevated the case to the Court of Appeals, where it
is now pending.
The sole issue for our resolution is:
[WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN
DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF
THE PARTIES TO COMPLY WITH THE MANDATORY
MEDIATION AND CONCILIATION PROCEEDINGS IN THE
BARANGAY LEVEL.13
With the parties’ subsequent meeting with the Lupon Chairman
or Punong Barangay for further conciliation proceedings, the
procedural defect was cured. Nevertheless, if only to clear any
lingering doubt why the Court of Appeals erred in dismissing
the complaint, we shall delve on the issue.
The petitioner alleges that the parties have gone through
barangay conciliation proceedings to settle their dispute as
shown by the Certificate to File Action issued by the
Lupon/Pangkat Secretary and attested by the Lupon/Pangkat
Chairman. The respondent, on the other hand, contends that
whether there was defective compliance or no compliance at
all with the required conciliation, the case should have been
dismissed.
The primordial objective of the Katarungang
Pambarangay Rules,14 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
Republic Act No. 716015 requires the parties to undergo a
conciliation process before the Lupon Chairman or
the Pangkat  as a precondition to filing a complaint in
court,16thus:
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 secretary or pangkat
secretary as attested to by the lupon or pangkat chairman….
Here, the Lupon/Pangkat Chairman and Lupon/Pangkat
Secretary signed the Certificate to File Action stating that no
settlement was reached by the parties. While admittedly
no pangkat was constituted, it was not denied that the parties
met at the office of the Barangay Chairman for possible
settlement. The efforts of the Barangay Chairman, however,
proved futile as no agreement was reached. Although
no pangkat was formed, in our mind, there was substantial
compliance with the law. It is noteworthy that under the
aforequoted provision, the confrontation before
the Lupon Chairman or the pangkat is sufficient compliance
with the precondition for filing the case in court. 17 This is true
notwithstanding the mandate of Section 410(b) of the same
law that the Barangay Chairman shall constitute a pangkat if
he fails in his mediation efforts. Section 410(b) should be
construed together with Section 412, as well as the
circumstances obtaining in and peculiar to the case. On this
score, it is significant that the Barangay Chairman
or Punong  Barangay is herself the Chairman of the Lupon
under the Local Government Code.18
Finally, this Court is aware that the resolution of the
substantial issues in this case is pending with the Court of
Appeals. While ordinarily, we would have determined the
validity of the parties’ substantial claims since to await the
appellate court’s decision will only frustrate speedy justice and,
in any event, would be a futile exercise, as in all probability the
case would end up with this Court, we find that we cannot do
so in the instant case.
It must be underscored that supervening events have taken
place before the lower courts where the parties have been
adequately heard, and all the issues have been ventilated.
Since the records of those proceedings are with the Court of
Appeals, it is in a better position to fully adjudicate the rights
of the parties. To rely on the records before this Court would
prevent us from rendering a sound judgment in this case.
Thus, we are left with no alternative but to leave the matter of
ruling on the merits to the appellate court.
WHEREFORE, the petition is GRANTED. The decision and
resolution of the Court of Appeals in CA-G.R. SP No. 52436
are REVERSED and SET ASIDE, and the decision of the
Regional Trial Court of Manila, Branch 38, in Civil Case No. 98-
87311 is AFFIRMED.
The Court of Appeals is ordered to proceed with the appeal in
CA – G.R. No. 73453 and decide the case with dispatch.
SO ORDERED.

A.M. No. MTJ-00-1308           December 16, 2002
BONIFACIO LAW OFFICE  (complainant) filed a Motion to Render Judgment in
Represented by Atty. RICARDO M. SALOMON
JR. complainant,  Summary Procedure. However, instead of rendering judgment,
vs.
Judge REYNALDO B. BELLOSILLO,  motion to render judgment. After defendants filed their
Metropolitan Trial Court, Branch 34, Quezon
City, respondent.
DECISION
PANGANIBAN, J.:
Under the Rules of Court, delay in the rendition of judgments
is administratively sanctionable with suspension or fine. When
judges cannot for good reason comply with legal deadlines for
rendering orders and decisions, they should file with this Court
a timely request for extension, if they want to avoid
administrative penalties.
The Case and the Facts
In a letter-complaint dated August 28, 1997, Atty. Ricardo M.
Salomon Jr. of the Bonifacio Law Office charged then acting
Judge Reynaldo B. Bellosillo of the Metropolitan Trial Court of
Quezon City, Branch 34, with ignorance of the law, grave
abuse of discretion, and obvious partiality. The Office of the
Court Administrator (OCA) summarized the factual antecedents
as follows:
"1. VERIFIED LETTER-COMPLAINT of Atty. Ricardo M. Salomon
of the Bonifacio Law Office charging Judge Reynaldo B.
Bellosillo, MeTC, Branch 34, Quezon City with Ignorance of the
Law, Grave Abuse of Discretion and Partiality in connection
with Civil Case No. 14913 for ejectment entitled ‘Ricardo M.
Salomon, Jr. vs. Spouses Severino Fulgencio.’
"Complainant assails the Order dated April 2, 1996 referring
the said ejectment case back to the barangay for conciliation
proceedings despite the fact that it was alleged in the verified
complaint, that the matter had already been referred to the
barangay and that a copy of the Certification to File Motion
was attached [to] the verified complaint as ANNEX E thereof.
Bewildered with such Order, he tried to talk with respondent
judge but was prevented to do so because of the strict and
extremely tight ‘cordon sanitaire’ of the latter. He then inquired
from the respondent’s branch clerk of court the reason behind
such order and he was advised that perhaps he should submit
the minutes of the hearings held in the barangay. Following
said advice, he filed a compliance with respondent’s court
attaching therewith a copy of his complaint filed before the
barangay and the minutes of the proceedings held thereat.
"After the filing of said compliance, no action was taken by the
court despite the fact that the case falls under the Rule on
Summary Procedure and respondent judge has still to come up
with a determination as to whether summons should be issued
or not. He then inquired personally with the court about the
status of the case and he was told that no action could be
taken unless the Order of April 2, 1996 had been complied
with. Dismayed by the Court’s insistence of referring the case
to the barangay though it had already gone through all the
requisite proceedings thereat, he decided not to pursue the
case and filed a notice to withdraw complaint dated August 20,
1996. Said withdrawal however was denied by respondent on
the basis of the action already taken thereon as contained in
the questioned Order dated April 2, 1996. He then filed a
Notice of Dismissal but the same was still unacted upon by
respondent.
"It was only after a year from the time the complaint was filed
that respondent ordered that summons be served on
defendants. When defendants failed to file an Answer, he
accordance with the provisions of Sec.5 of the Rule on
respondent merely required defendants to comment on the
comment, respondent still did not act on the said motion.
"The inordinate delay of respondent on acting upon said case
has caused him so much suffering as his family is forced to
rent a house to live in at a monthly rental rate of P19,000.00.
"2. ANSWER of respondent judge denying the charges leveled
against him and alleging the following arguments:
"a. In all cases where there is failure of settlement of
mediation proceedings before the Barangay Chairman, it is
necessary that the Pangkat be constituted by the parties from
the Lupon members in order that they may have a second
opportunity to amicably settle their dispute. It is a mandatory
duty of the Barangay Chairman to set the meeting of the
parties for the constitution of the Pangkat upon failure of
parties to amicably settle otherwise there is no compliance
with the requirements of P.D. 1508, now Sec. 412, 1991 Local
Government Code. In the case of complainant, it appears from
the records thereof that there was premature issuance of the
Certificate to File Action considering that there is no proof to
show that the Pangkat was duly constituted before the said
certificate was issued. Moreover, the belated submission by
complainant of the Minutes of Proceedings before the
Barangay Chairman, which was inaccurate and difficult to
decipher glaringly reveals the non-compliance of complainant
with the requirement of the aforecited law.
"As to the charge that there was inaction on his part on several
motions filed by complainant, he claim[s] that the same is
untrue and alleged the following:
"RE: NOTICE TO WITHDRAW COMPLAINT
"The same was noted without action as mediation process was
still on going at the barangay level.
"RE: NOTICE OF DISMISSAL
"Before he could act on the same, complainant filed a
manifestation praying that said notice be disregarded,
rendering the issue thereon as moot and academic.
"RE: MOTION TO RENDER JUDGMENT
"The said motion was resolved by him in an Order dated for the constitution of the pangkat in accordance with the
August 18, 1997 granting the same and submitting the case provisions of this Chapter."
for decision. However, considering that there was no proof yet
that the said order was received by defendants the decision in Furthermore, Administrative Circular No. 14-93 provides:
said case was held in abeyance as the latter upon receipt
"x x x x x x x x x
hereof may yet avail of the right to appeal therefrom.
"In order that the laudable purpose of the law may not be
"Respondent likewise avers that complainant should have
subverted and its effectiveness undermined by indiscriminate,
taken a more appropriate legal remedy than filing this instant
improper and/or premature issuance of certifications to file
administrative complaint which has deprived him of his
actions in court by the Lupon or Pangkat Secretaries, attested
precious time that could have been devoted to court hearing." 1
by the Lupon/Pangkat Chairmen, respectively, the following
Evaluation and Recommendation of the OCA guidelines are hereby issued for the information of trial court
judges in cases brought before them coming from the
The OCA found respondent either ignorant or negligent in Barangays:
referring the case back to the barangay despite the presence
of what it considered to be a valid Certification to File Action. It xxxxxxxxx
also faulted him for disregarding the Rules on Summary
"[II] 4. If mediation or conciliation efforts before the Punong
Procedure by (1) calling for a preliminary conference, (2)
Barangay proved unsuccessful, there having been no
directing the defendants to submit their Comment to
agreement to arbitrate (Sec. 410-{b}, Revised Rule
complainant’s Motion to Render Judgment, and (3) failing to
Katarungang Pambarangay Law; Sec. 1,c,[1], Rule III,
render judgment within the reglementary period.2
Katarungang Pambarangay Rules), or where the respondent
Finding merit in the charges, the OCA recommended "that the fails to appear at the mediation proceeding before the Punong
respondent Judge be FINED in the amount of Ten Thousand Barangay (3rd par. Sec. 8,a, Rule VI, Katarungang
Pesos (P10,000.00) with the STERN WARNING that a repetition Pambarangay Rules), the Punong Barangay shall not cause the
of the same will be dealt with more severely." 3 issuance of this stage of a certification to file action, because it
is now mandatory for him to constitute the Pangkat before
This Court’s Ruling whom mediation, conciliation, or arbitration proceedings shall
be held.
We agree with the findings of the OCA regarding the rules on
summary procedure, but disagree with those relating to the "III. All complaints and/or informations filed or raffled to your
barangay proceedings. sala/branch of the Regional Trial Court, Metropolitan Trial
Court or Municipal Trial Court shall be carefully read and
Administrative Liability scrutinized to determine if there has been compliance with
prior Barangay conciliation procedure under the Revised
Complainant contends that he has complied with the
Katarungang Pambarangay Law and its Implementing Rules
mandatory barangay conciliation proceedings as evidenced by
and Regulations, as a pre-condition to judicial action,
the Certification to File Action attached to the Complaint for
particularly whether the certification to file action attached to
ejectment.
the records of the case comply with the requirements
hereinabove enumerated in part II; (Emphasis and italics
The records, however, reveal that such Certification was
supplied)
improperly and prematurely issued. In what appears to be a
pre-printed standard form thereof, 4 the "x" before the second
"IV. A case filed in court without compliance with prior
enumerated statement clearly shows that no personal
Barangay conciliation which is a pre-condition for formal
confrontation before a duly constituted Pangkat ng
adjudication x x x may be dismissed upon motion of the
Tagapagkasundo took place. Respondent’s position that the
defendant/s x x x or the court may suspend proceedings upon
Pangkat was not constituted, and that no face to face
petition of any party x x x and refer the case motu proprio to
conciliation of the parties had taken place before it is
the appropriate Barangay authority. x x x."
substantiated by the Minutes5 submitted by complainant.
Evidently, complainant failed to complete the barangay Evidently, the barangay failed to exert enough effort required
conciliation proceedings. by law to conciliate between the parties and to settle the case
before it. Hence, respondent judge was not incorrect in
We also note that the Complaint6 before the barangay was
remanding the case to it for completion of the mandated
dated February 16, 1996. Records show that the hearing was
proceedings. We cannot fault him for seeking to promote the
scheduled for February 26, 1996 and was reset for February
objectives of barangay conciliation and for taking to heart the
29, 1996.7 And yet, the Certification to File Action8was issued
provisions of Supreme Court Circular No. 14-93. His referral of
on March 1, 1996, less than fifteen days after the first
the case back to the barangay cannot be equated with gross
scheduled hearing before the barangay chairman.
ignorance of the law. Neither does it constitute grave abuse of
discretion or obvious partiality.
Section 410 (b) of the Local Government Code is quoted
hereunder:
Thereafter, complainant filed a Motion 9 praying that the
proceedings already held before the barangay be considered
"Mediation by lupon chairman. – Upon receipt of the
as substantial compliance with the requirements of the law.
complaint, the lupon chairman shall within the next working
Acting on the Motion, respondent judge issued the summons
day summon the respondent(s), with notice to the
and opted to continue with the court proceedings without
complainant(s) for them and their witnesses to appear before
insisting on strict compliance with the mandated barangay
him for a mediation of their conflicting interests. If he fails in
proceedings. He did so after noting that complainant was
his mediation effort within fifteen (15) days from the first
apparently not making any move to complete the barangay
meeting of the parties before him, he shall forthwith set a date
proceedings after the case had been remanded to the
barangay, and that the case fell under the Rules on Summary
Procedure.
Section 18 of the Rules on Summary Procedure, however,
provides that such cases may be revived only after the
requirement for conciliation has been complied with.
Nevertheless, respondent judge’s error is judicial in nature and
cannot be corrected in administrative proceedings. At any rate,
because he chose to continue with the proceedings of the
case, and because respondents failed to answer the ejectment
Complaint on time, he should have rendered judgment within
thirty (30) days from the expiration of the period to file an
answer. This action is required under the Rules on Summary
Proceedings, which state:
"Sec. 6. Effect of failure to answer. - Should the defendant fail
to answer the complaint within the period above provided, the
court, motu proprio, or on motion of the plaintiff, shall render
judgment as may be warranted by the facts alleged in the
complaint and limited to what is prayed for therein x x x.
"x x x x x x x x x
"Sec. 10. Rendition of judgment. – Within thirty (30) days after
receipt of the last affidavits and position papers, or the
expiration of the period for filing the same, the court shall
render judgment."
Complainant filed a Motion to Render Judgment 10 dated March
25, 1997. Refusing to heed the Motion, respondent instead
called a preliminary conference and directed the defendants to
submit their Comment. The OCA correctly arrived at the
following findings:
"x x x [T]he Judge’s resolution [to] the complainant’s Motion to
Render Judgement casts serious doubt on his understanding of
the law. The express language of the law states that when an
Answer has not been filed within the reglementary period, the
judge, motu proprio, or on motion, ‘shall render judgment as
may be warranted by the facts alleged in the complaint’
(Section 6, Revised Rule on Summary Procedure). This
provision cannot, by any stretch of the imagination, be
construed to mean anything other than what the words
themselves communicate: that the rendition of judgment is
mandatory, and that the judgment should be based only on
what is contained within the four walls of the complaint.
"By calling for a preliminary conference and directing the
defendants to submit their Comment to the complainant’s
Motion, the Judge went beyond the bounds set by the law x x
x. Moreover, when he finally resolved the motion – after the
defendants had submitted their Comment – he merely ordered
that the case be ‘deemed submitted for decision.’ Needless to
say, ‘submission for decision’ is a far cry from ‘rendition of
judgment,’ the character of immediacy implicit in the latter
does not exist in the former. And in this case, supposedly to be
resolved under the Summary Rule, immediacy is the defining
characteristic. x x x."11
Respondent rendered judgment on the case only on January 7,
1998,12 almost a year from the time the case had been
deemed submitted for resolution. Unacceptable is his
explanation that he waited for the defendants to avail
themselves of their right to appeal the Order deeming the case
submitted for resolution. He has no duty to wait, because the
law mandates him to act and decide the case promptly. Delay
in the disposition of cases undermines the people’s faith and
confidence in the judiciary. Hence, judges are enjoined to
decide cases with dispatch. Their failure to do so constitutes
gross inefficiency and warrants the imposition of administrative
sanctions on them.13
Undue delay in rendering a decision constitutes a less serious
charge under Section 9, Rule 140 of the Rules of Court; and a
finding of guilt results in either suspension from the office
without salary and other benefits for not less than one (1)
month or more than three (3) months, or a fine of more
than P10,000 but not exceeding P20,000.14
In determining the sanction to be imposed, we note that there
was no showing of malice, corrupt motive or improper
consideration on the part of respondent judge. We also take
into consideration the fact that he has already resigned from
the service effective March 27, 2002.
WHEREFORE, Judge Reynaldo B. Bellosillo is hereby found
GUILTY of undue delay in rendering a decision and is ordered
to pay a fine of P11,000 to be taken from the retirement
benefits heretofore withheld from him.
SO ORDERED.
A.M. No. MTJ-00-1265               April 6, 2000
VALENCIDES VERCIDE, complainant, 
vs.
JUDGE PRISCILLA T. HERNANDEZ, Fifth Municipal
Circuit Trial Court, Clarin and Tudela, Misamis
Occidental, respondent.
DECISION
MENDOZA, J.:
This is a complaint filed against Judge Priscilla T. Hernandez of
the Fifth Municipal Circuit Trial Court, Clarin and Tudela,
Misamis Occidental, charging her with grave abuse of authority
and ignorance of the law for her dismissal of a case which
complainant Valencides Vercide and his wife had filed against
Daria Lagas Galleros for recovery of possession of a piece of
land. The land is located in Upper Centro, Tudela, Misamis
Occidental. Defendant Galleros is a resident of the same
municipality, while complainant and his wife are residents of
Dipolog City. Because of this fact, the case was filed in court
without prior referral to the Lupong Tagapamayapa.
However, this matter was raised by defendant in her answer
as an affirmative defense, and respondent, in her order of July
15, 1997, ordered the dismissal of the case without prejudice
to the prosecution of the counterclaim pleaded by the
defendant in her answer. In support of her order, respondent
cited P.D. No. 1508, §3 of which provides:
Venue. - Disputes between or among persons actually residing
in the same barangay shall be brought for amicable settlement
before the Lupon of said barangay. Those involving actual
residents of different barangays within the same city or
municipality shall be brought in the barangay where the
respondent or any of the respondents actually resides, at the
election of the complainant. However, all disputes which
involve real property or any interest therein shall be brought in
the barangay where the real property or any part thereof is
situated. (Emphasis added)
Complainant and his wife moved for a reconsideration, citing
the following provisions of R.A. 7160, "The Local Government
Code of 1991":
SEC. 408. Subject matter for Amicable Settlement; Exception
Thereto. — The lupon of each barangay shall have authority to
bring together the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:
(a) Where one party is the government of any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1)
year or a fine exceeding Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real property located in
different cities or municipalities unless the parties thereto
agree to submit their differences to amicable settlement by an
appropriate lupon;
(f) Disputes involving parties who actually reside in barangays
of different cities or municipalities, except where such
barangay units adjoin each other and the parties thereto agree
to submit their differences to amicable settlement by an
appropriate lupon;
(g) Such other classes of disputes which the President may
determine in the interest of justice or upon recommendation of
the Secretary of Justice. marie
The court in which the non-criminal cases not falling within the
authority of the lupon under this Code are filed may, at any
time before trial, motu proprio  refer the case to the lupon
concerned for amicable settlement.
SEC. 409. Venue. - (a) Disputes between persons actually
residing in the same barangay shall be brought for amicable
settlement before the lupon of said barangay.
(b) Those involving actual residents of different barangays
within the same city of municipality shall be brought in the
barangay where the respondent or any of the respondents
actually resides, at the election of the complainant.
(c) All disputes involving real property or any interest therein
shall be brought in the barangay where the real property or
the larger portion thereof is situated.
(d) Those arising at the workplace where the contending
parties are employed or at the institution where such parties
are enrolled for study shall be brought in the barangay where
such workplace or institution is located.
Objections to venue shall be raised in the mediation
proceedings before the punong barangay; otherwise, the same
shall be deemed waived. Any legal question which may
confront the punong barangay in resolving objections to venue
herein referred to may be submitted to the Secretary of Justice
or his duly designated representative whose ruling thereon
shall be binding.
They argued that under §408(f), in relation to §409(c), where
the parties to a dispute involving real property or any interest
therein are not actual residents of the same city or municipality
or of adjoining barangays, prior resort to barangay conciliation
is not required.
However, respondent denied the motion. In her order dated
September 9, 1997, respondent stated:
The Court after taking into consideration the Motion for
Reconsideration and the ground relied upon by the counsel
finds that counsel for the plaintiffs failed to correlate Sections
408 and 409 of Republic Act No. 7160 and to consider Rule
VIII, paragraph (a) of the Katarungang Pambarangay Rules,
the rules and regulations [of] which were promulgated to
implement Sections 399 to 422, Chapter 7, Title One Book III
and Section 515, Book IV of R.A. No. 7160, otherwise known
as the Katarungang Pambarangay Law, to wit:
"RULE VIII - PRE-CONDITION FOR FORMAL ADJUDICATION
Conciliation, pre-condition for filing of complaint in court or
government office. novero
(a) No individual may go directly to court or to any
government office for adjudication of his dispute with another
individual upon any matter falling within the authority of the
Punong Barangay or Pangkat ng Tagapagkasundo to settle
under these Rules, unless, after personal confrontation of the
parties before them earnest efforts to conciliate have failed to
result in a settlement or such settlement has been effectively
repudiated."
and also Rule VI, Section 3 paragraph (c) of the same
Katarungang Pambarangay Rules which provides:
"Rule VI - Amicable Settlement of Disputes
Section 3. Venue. The place of settlement shall be subject to
the following rules:
....
(c) Dispute involving real property shall be brought for
settlement in the Barangay where the real property or larger
portion thereof is situated.
From the provisions of the above-cited Rules it was very clear
that parties whose disputes involved real property should first
br[ing] the said dispute before the barangay where the
property was located, and that [because of] failure to bring the
dispute before the Barangay for conciliation no action may be
filed in court for final adjudication of the said dispute.
That parties should first comply with the provisions of the
Katarungang Pambarangay Law before the Court can acquire
jurisdiction over the complaint. That non-compliance of the
plaintiff to the requirement of the Katarungang Pambarangay
Law was admitted by her in paragraph 3 of the complaint. Her
allegation of non-compliance with the mandatory requirement
of Lupon Conciliation before the filing of the complaint, in a
way divest[s] the Court of its jurisdiction over the case. In the
1997 Rules of Civil Procedure, Rule 16, Section 1, paragraph
(j) provides:
"That a condition precedent for filing the claim has not been
complied with"
WHEREFORE, in view of the foregoing, the Motion for
Reconsideration is hereby denied.
Complainant alleges that in dismissing Civil Case No. 295,
respondent judge committed "(a) Grave abuse of authority by
knowingly rendering an unjust and unlawful order; (b)
Ignorance of the law in its highest order, she being a judge;
(c) Grave disobedience to the jurisprudence laid down by the
Supreme Court of the Philippines on the matter of exemption
of lupon conciliation of contending parties who are not
residen[ts] of the same city or municipality." He states that
respondent "practically threw several decisions of the Supreme
Court on the matter out of the window and obviously followed
hook, line and sinker the arguments of the [defendant] Daria
Galleros."
In answer, respondent judge claims that she merely followed
the law in dismissing the case. She prays that the complaint
against her be dismissed and that complainant be ordered to
stop harassing her just because he had not been able to obtain
the relief he wanted in Civil Case No. 295. nigel
In its memorandum dated February 29, 2000, the Office of the
Court Administrator recommends the dismissal of this case on
the ground that the "issue [raised] is purely judicial and is best
resolved by a court of competent jurisdiction" and that, even if
respondent had erred, she should not be held administratively
liable since there is no allegation that she acted in bad faith or
knowingly rendered an unjust judgment.
In Tavora v. Veloso,1 this Court already ruled that where
parties do not reside in the same city or municipality or in
adjoining barangays, there is no requirement for them to
submit their dispute involving real property to the Lupong
Tagapamayapa. As explained in that case:
The sole issue raised is one of law: Under the given facts, is
the respondent judge barred from taking cognizance of the
ejectment case pursuant to Sec. 6 of PD 1508 establishing a
system of amicably settling disputes at the barangay level?
The section reads:
"SECTION. 6. Conciliation, precondition to filing of complaint. -
No complaint, petition, action or proceeding involving any
matter within the authority of the Lupon  as provided in Section
2 hereof shall be filed or instituted in court or any other
government office for adjudication unless there has been a
confrontation of the parties before the Lupon Chairman or the
Pangkat and no conciliation or settlement has been reached as
certified by the Lupon Secretary or the Pangkat Secretary,
attested by the Lupon or Pangkat Chairman, or unless the
settlement has been repudiated. . . ." (Italics supplied)
For the above provision to be operative, the controversy must
be within the jurisdiction  of the Lupong Tagapayapa (Lupon or
Barangay court). On this point, the relevant provisions of PD
1508 are:
"SECTION 2. Subject matters for amicable settlement. - The
Lupon of each barangay shall have authority to bring together
the parties actually residing in the same city or municipality  for
amicable settlement of all disputes except:
(1) Where one party is the government, or any subdivision or
instrumentality thereof;
(2) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(3) Offenses punishable by imprisonment exceeding 30 days,
or a fine exceeding P200.00;
(4) Offenses were there is no private offended party;
(5) Such other classes of disputes which the Prime Minister
may in the interest of justice determine, upon recommendation
of the Minister of Justice and the Minister of Local
Government. ella
"SECTION 3. Venue. — Disputes between or among persons
actually residing in the same barangay  shall be brought for
amicable settlement before the Lupon of said barangay. Those
involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay
where the respondent or any of the respondents actually
resides, at the election of the complainant. However, all
disputes which involve real property or any interest therein
shall be brought in the barangay where the real property or
any part thereof is situated.
"The Lupon shall have no authority over disputes:
(1) involving parties who actually reside in barangays of
different cities or municipalities, except where such barangays
adjoin each other; and
(2) involving real property located in different municipalities."
(Italics supplied)
The foregoing provisions are quite clear. Section 2 specifies the
conditions under which the Lupon of a barangay "shall have
authority" to bring together the disputants for amicable
settlement of their dispute: The parties must be "actually
residing in the same  city or municipality." At the same time,
Section 3 — while reiterating that the disputants must be
"actually residing in the same  barangay" or in "different
barangays within the same  city or municipality" —
unequivocably declares that the Lupon shall have "no
authority" over disputes "involving parties who actually reside
in barangays of different  cities or municipalities," except where
such barangays adjoin each other.
Thus, by express statutory inclusion and exclusion, the Lupon
shall have no jurisdiction over disputes where the parties are
not actual residents of the same city or municipality, except
where the barangays in which they actually reside adjoin each
other.
It is true that immediately after specifying the barangay whose
Lupon shall take cognizance of a given dispute, Sec. 3 of PD
1508 adds:
"However, all disputes which involve real property or any
interest therein shall be brought in the barangay where the
real property or any part thereof is situated."
Actually, however, this added sentence is just an
ordinary proviso and should operate as such. marinella
The operation of a proviso, as a rule, should be limited to its
normal function, which is to restrict or vary the operation of
the principal clause, rather than expand its scope, in the
absence of a clear indication to the contrary. 2
To be sure, the Court was interpreting in that case the
provisions of P.D. No. 1508 which, except for some
modifications, are applicable to the case before respondent
judge because they are now found in §§408-409 of R.A. No.
7160 which took effect on January 1, 1992. The ruling
in Tavora v. Veloso, reiterated in other cases, 3 should be
familiar to the bench and the bar. As we have held in Espiritu
v. Jovellanos,4 the phrase "Ignorance of the law excuses no
one" has a special application to judges who, under the
injunction of Canon 1.01 of the Code of Judicial Conduct,
"should be the embodiment of competence, integrity, and
independence." In Bacar v. De Guzman ,5 it was held that when
the law violated is basic, the failure to observe it constitutes
gross ignorance. Reiterating this ruling, it was emphasized in
Almeron v. Sardido6 that the disregard of an established rule of
law amounts to gross ignorance of the law and makes the
judge subject to disciplinary action.
In the case at bar, respondent showed patent ignorance ¾ if
not disregard ¾ of this Court’s rulings on the jurisdiction of the
Lupong Tagapamayapa by her erroneous quotations of the
provisions of the Katarungang Pambarangay Rules
implementing R.A. No. 7160. While a judge may not be held
administratively accountable for every erroneous order or
decision he renders, his error may be so gross or patent that
he should be administratively disciplined for gross ignorance of
the law and incompetence.
In this case, respondent at first cited P.D. No. 1508, §3 as
basis of her action. When her attention was called to the fact
that this had been repealed by §409(c) of R.A. No. 7160,
respondent, who obviously was more intent in justifying her
previous order than correcting her error, quoted out of context
the provisions of the Katarungang Pambarangay Rules
implementing the Katarungang Pambarangay provisions of
R.A. No. 7160. She thus violated Canon 3 of the Code of
Judicial Conduct which provides that "In every case, a judge
shall endeavor diligently to ascertain the facts and the
applicable law unswayed by partisan interest, public opinion or
fear of criticism."
Contrary to respondent’s interpretation, it is clear even from
the Katarungang Pambarangay Rules that recourse to
barangay conciliation proceedings is not necessary where the
parties do not reside in the same municipality or city or in
adjoining barangays. Rule VI of the same states in pertinent
part:
SECTION 2. Subject matters for settlement. - All disputes may
be the subject of proceedings for amicable settlement under
these rules except the following enumerated cases:
(a) Where one party is the government, or any subdivision or
instrumentality thereof; alonzo
(b) Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(c) Offenses for which the law prescribes a maximum penalty
of imprisonment exceeding one (1) year or a fine exceeding
Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto
agree to submit their differences to amicable settlement by an
appropriate lupon;
(d) Disputes arising at the workplace where the contending
parties are employed or at the institution where such parties
are enrolled for study, shall be brought in the barangay where
such workplace or institution is located;
(e) Any objection relating to venue shall be raised before the
Punong Barangay during the mediation proceedings before
him. Failure to do so shall be deemed a waiver of such
objection;
(f) Any legal question which may confront the Punong
Barangay in resolving objections to venue herein referred to
may be submitted to the Secretary of Justice, or his duly
designated representative, whose ruling thereon shall be
binding. brando
(Emphasis added)
Indeed, these provisions, which are also found in P.D. No.
1508, have already been authoritatively interpreted by this
Court, and the duty of respondent judge was to follow the
rulings of this Court. Her insistence on her own interpretation
of the law can only be due either to an ignorance of this
Court’s ruling or to an utter disregard thereof. We choose to
believe that her failure to apply our rulings to the case before
her was simply due to gross ignorance which, nevertheless, is
inexcusable. In accordance with the ruling in Ting v. Atal,7 in
which a judge who was similarly found guilty of gross
ignorance of the law was fined P2,000.00, respondent judge
should likewise be fined the same amount.
WHEREFORE, respondent is hereby found guilty of gross
ignorance of the law and is hereby ordered to pay a FINE of
TWO THOUSAND (P2,000.00) PESOS with a WARNING that
repetition of the same or similar acts will be dealt with more
severely.
SO ORDERED.

(f) Disputes involving parties who actually reside in barangays

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

(g) Such other classes of disputes which the President may

determine in the interest of justice or upon the
recommendation of the Secretary of Justice.

The foregoing exceptions notwithstanding, the court in which

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

SECTION 3. Venue. The place of settlement shall be subject to

the following rules:

(a) Where the parties reside in the same barangay, the dispute
shall be brought for settlement in said barangay;

(b) Where the parties reside in different barangays in the same

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

(c) Dispute involving real property shall be brought for

settlement in the barangay where the real property or larger
portion thereof is situated;

G.R. No. L-35475. March 16, 1989
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 
vs.
DELFIN BUSTOS, defendant-appellant.
The Solicitor General for plaintiff-appellee.
GRIÑO-AQUINO, J.:
This crime of passion stemmed from the rivalry between the
appellant and the deceased for the favors of a taxi-dancer.
Delfin Bustos, his uncle Engracio Bustos alias "Gracing," and
Pablito Bungay alias "Roger Pogi," were charged with murder
in Criminal Case No. 6498 of the Court of First Instance of
Pampanga in an amended Information dated June 17, 1969
which alleged:
That on or about the 18th day of September, 1968, at barrio
San Matias, municipality of Sto. Tomas, province of Pampanga,
Philippines, and within the jurisdiction of this Hon. Court, the
above named accused Delfin Bustos, Pablito Bungay alias
"Roger Pogi" and Engracio Bustos alias "Gracing," with
deliberate intent to kill, nighttime purposely sought to facilitate
the commission of the offense, conspiring together and
mutually helping one another, with treachery, evident
premeditation, and with grave abuse of superior strength, did
then and there willfully, unlawfully and feloniously fire at and
shoot Cristorey Lopez with a firearm, caliber .22, inflicting
mortal and fatal injuries upon the said Cristorey Lopez, the
bullet entering the right chest, lacerating the upper and lower
lobes, of the left lungs, and which injuries caused the death of
the said Cristorey Lopez shortly thereafter. (p. 7, Rollo.)
Upon being arraigned on August 11, 1969, Delfin Bustos and
Engracio Bustos pleaded "not guilty." The third accused Pablito
Bungay, alias "Roger Pogi," has not yet been apprehended.
On the basis of the evidence presented at the trial, the court
found the following facts to have been established:
Between six and seven o'clock in the evening of September 18,
1968, Cristorey Lopez was shot inside the compound of the
Lopez Apartments owned by his family in Sitio Moras San
Matias, Sto. Tomas, Pampanga.
The incident was witnessed by Rodolfo Ortoleza, a thirteen-
year old boy who lives with his sister Cora in one of the Lopez
apartments, for the compound was well illumined with electric
bulbs. From a distance of about one arm's length (isang dipa),
he watched as "Roger Pogi" bodily dragged Cristorey Lopez out
of the fourth apartment which was occupied by two taxi-
dancers named Tessie and Lita who were the common law
wives of Engracio Bustos and Delfin Bustos, respectively. Lopez
vainly called out for help. "Roger Pogi" had Lopez' arms
pinioned around his waist while Engracio and Delfin walked on
both sides of him. Lopez struggled to extricate himself but, in
an instant, as soon as they stepped outside the door, Delfin
Bustos shot him on the chest at close range with a .22 caliber
revolver. "Roger Pogi" released his hold on the victim and
allowed him to break away. Running and stumbling toward the
gate of the compound, Lopez met his older brother Jesus who
had just arrived with a companion. Jesus immediately hailed a
jeep to take his wounded brother to the Virgen delos Remedios
Hospital. On the way to the hospital, Cristorey was gasping for
breath. Blood was splattered all over his chest. He was in a
semi-conscious state. Nevertheless, he indicated to Jesus the
exact spot where he had been shot and told Jesus that it was
Delfin Bustos, his "rival," who shot him and that it was
"Gracing" who gave the gun to Delfin. He expired at 9:00
o'clock that same night.
The autopsy report indicated that Lopez died of shock and
internal hemorrhage secondary to a gunshot wound at the
sternum of the second rib, fracture commuted at the posterior
left side, 7th rib and laceration of the upper and lower lobes of
the left lung (p. 26, Rollo).
The incident was reported by Gonzalo Pineda to a traffic
policeman, Patrolman Diosdado Canlas, at the San Matias
crossing. Together with Patrolman Quiambao and Sergeant
Daniel Canlas, Patrolman Diosdado Canlas immediately
repaired to the scene of the crime to conduct an investigation.
They interviewed Estelita (Lita) Ramos Javenir Teresita
(Tessie) Gumba Punsones both taxi-dancers at the Pavillon
Night Club in San Fernando, Pampanga, Jesus Bacud Palma,
and Rodolfo Ortoleza, occupants of various apartments inside
the Lopez compound. They were brought to the municipal
building where their written statements were taken. They told
Patrolman Canlas that they saw Delfin Bustos, Engracio Bustos,
and "Roger Pogi" come out of the taxi-dancers' apartment and
that Cristorey Lopez was shot by Delfin Bustos. They also
showed the policeman the exact spot where the killing
occurred. The girls also gave sworn statements before the
Acting Chief of Police. However, they and Jesus Palma could
not be prevented at the trial because they moved out of Sto.
Tomas to unknown addresses soon after the commission of
the crime.
Felicidad Miranda, rental collector of the Lopez compound,
testified that at around 6:00 o'clock in the afternoon of
September 19, 1968, she was in the Lopez compound to
inspect the apartments and collect the rentals from the
tenants. She saw Cristorey inside the apartment of the taxi-
dancer. She knew that both taxi-dancers were girlfriends of
Delfin and Engracio Bustos. She had earlier advised Cristorey
Lopez "not to be so close to the girls."
Delfin Bustos and his uncle Engracio Bustos admitted during
the trial that they were in Tessie's and Lita's apartment on
September 18, 1968 at six or seven in the evening. They had
gone to the Lopez compound to look for Agustin Bustos,
because they needed a car to bring Delfin's sister, Pamela, to
the Manila International Airport. They went to Tessie's
apartment to look for Agustin. They had a ten-minute
conversation with Tessie. When they stepped out of the
apartment, they allegedly heard a shot. They saw an injured
man about seven (7) meters away kneeling with head bowed,
and being held by somebody whom they failed to recognize.
The two men were grappling with each other. They were
allegedly so terrified that they scaled the concrete wall of the
compound and fled toward the MacArthur Highway.
Agustin Bustos testified that he had been invited to the
birthday party of a certain Lita in one of the apartments. From
where he sat at Lita's party, he saw Cristorey Lopez drinking
beer with some persons in Tessie's apartment. A small boy
informed him later that Delfin and Engracio were looking for
him, so be got out of Lita's apartment to talk to them. He
heard a shot. Most of the people scampered out of the front
gate. He, Delfin, and Engracio jumped over the fence and ran
toward the MacArthur Highway.
Delfin Bustos admitted on cross-examination, that on
September 20, 1968, or two days after the shooting, his father
Agustin advised him "to hide in the meanwhile as he (Agustin)
would try to fix the case." So, he stopped working at the La
Mallorca and hid in his aunt's house in Pangasinan. On October
2, 1968, his father and some PC soldiers arrived and took him
to Camp Olivas.
On March 15, 1977, the lower court rendered judgment finding
Delfin Bustos guilty of murder but acquitting Engracio Bustos.
The case against Pablito Bungay, alias "Roger Pogi" was
archived pending his arrest. The dispositive portion of the
decision reads:
WHEREFORE, the Court finds accused DELFIN BUSTOS guilty
beyond reasonable doubt of the crime of MURDER and
imposes upon him the penalty of RECLUSION PERPETUA, with
the accessory penalties incident thereto; to indemnify the heirs
of the victim Cristorey Lopez, the following- P 12,000.00, as
indemnity for the death of said Cristorey Lopez; P 50,000.00,
as indemnity for loss of earning capacity of the deceased; P
7,560.00, as actual damages representing hospital, funeral and
miscellaneous expenses; P 10,000.00, as moral damages; P
l,000.00, as attorney's fees, with costs of this suit (Heirs of
Raymundo Castro vs. Bustos, No. L-25913, February 28,
1969). No subsidiary imprisonment is imposed in case of
insolvency due to the nature of the penalty imposed (Article
39, R.P.C.).
Accused ENGRACIO BUSTOS, alias "Gracing," is hereby
acquitted on ground of reasonable doubt.
The record of this case is hereby archived insofar as Pablito
Bungay alias Roger Pogi is concerned. (pp. 34-35, Rollo.)
Delfin Bustos appealed to this Court.
Appellant argues that: (1) it was improbable for him to have
shot Lopez because his companion "Roger Pogi" was directly
behind the deceased; (2) that he could not have fired the gun,
as the trajectory of the bullet was downward on the 2nd rib
through the lower part of the 7th rib, and the deceased was
admittedly taller than the appellant; (3) that the declaration of
the deceased to his brother inside the jeep on the way to the
hospital was not a dying declaration because: (a) the alleged
statement came from a biased source; and (b) there was no
evidence that Cristorey Lopez had abandoned hope of living.
The appeal is devoid of merit.
A review of the records of the case and a careful consideration
of the arguments raised by the accused-appellant in his brief
disclose no reason why we should not accord the usual respect
given in the factual finding of the trial court that Delfin Bustos
was the gunman who killed Cristorey Lopez. The shooting was
witnessed by a 13-year old boy, Rodolfo Ortoleza. That the
shot was fired at close range was substantiated by the
presence of gun powder burns at the point of entry some 5
cm. at the level of the victim's second rib. As the appellant
fired the gun at the side of the victim his co-accused "Roger
Pogi" was in no danger of being hit also.
Ortoleza testified in a direct and candid manner, despite
rigorous cross- examination. The minor inconsistencies in some
details of his testimony do not destroy his credibility, but, on
the contrary, are indicative of his truthfulness and of the fact
that he had not been coached or rehearsed. His identification
of the accused was clear and unequivocal. Mere denials by the
accused, who admitted his presence at the scene of the crime,
may not prevail against the categorical declarations of the
prosecution witnesses that it was he who shot Rey Lopez.
The victim's dying declaration to his brother Jesus, that "his
rival Delfin Bustos" shot him deserves full credit for: (1) it was
made under the consciousness of impending death; (2) the
declaration referred to the cause of the declarant's injury and
impending death; and (3) the declarant was a competent
witness (People vs. Balbas, 122 SCRA 859; People vs. Sabio,
102 SCRA 219). That the ante mortem declaration was made
by the victim under consciousness of impending death can
hardly be doubted for, as a matter of fact, he died some two
hours later.
The appellant's flight and concealment of himself from the
authorities, as well as the attempts of his family to "settle" the
case with the Lopezes (p. 30, t. s. n. November 22, 1971)
constitute an implied admission of his guilt (People vs. Ornoza
151 SCRA 495; Sec. 24, Rule 130, Rules of Court).
Treachery in the commission of the crime was sufficiently
proven by the unrebutted testimony of Ortoleza that "Roger
Pogi," Engracio Bustos and Delfin Bustos forcibly dragged the
struggling victim out of Tessie's apartment, that the victim was
unarmed, and that, as soon as they were out of the door,
Delfin shot Lopez at close range, giving the victim no
opportunity to flee or defend himself (pp. 8-19, t.s.n., Aug. 12,
1969).
Alevosia is present when the victim is defenseless and killed in
such a manner as to insure the execution of the crime, or
make it impossible or difficult for the victim to retaliate or at
least defend himself (People vs. Gil Jumadaiao, 143 SCRA 371;
People vs. Leoncio Yusep, 151 SCRA 248).
In view of all the foregoing, We find no reversible error in the
trial court's finding that the appellant, Delfin Bustos, is guilty of
murder.
WHEREFORE, with the modification that the death indemnity
payable by the appellant Delfin Bustos to the heirs of Cristorey
Lopez is increased to P 30,000.00, the decision appealed from
is affirmed, with costs against the said appellant.
SO ORDERED.
G.R. No. L-59495-97
GREGORIO GONZALES, petitioner, 
vs.
THE HON. COURT OF APPEALS, MAR EVANGELISTA,
LUCIANO and ROSITA SESE and ESTRELLA
BAUTISTA, respondents.
SARMIENTO, J.:
The petition seeks the review of a judgment rendered by the
Court of Appeals, 1 setting aside the decision rendered by the
former City Court of Caloocan City, now Metropolitan Trial
Court, in Civil Cases Nos. 13501, 13502, and 13503 thereof, all
actions for unlawful detainer. The challenged decision
dismissed the cases for failure of the plaintiff, the petitioner
herein, to avail himself of the barangay conciliation process
under Presidential Decree No. 1508, preliminary to judicial
recourse.
There is no controversy as to the facts.
The petitioner is the owner of an apartment located in
Caloocan City. Three doors thereof, Nos. 110-D, 110-B, and
110-C, were leased to the private respondents for less than
P200.00 a month in rentals. 2
On October 1, 1979, the petitioner filed three separate Court of First Instance, is REINSTATED. No pronouncement as
complaints for ejectment against the private respondents in to costs.
the City Court of Caloocan City. According to him, he is in need
of the premises for the use of his married children who do not SO ORDERED.
allegedly have residences of their own, 3 which is a ground for
ejectment under the provisions of Batas Blg. 25. The private
respondents duly filed their answers, after which the cases
were consolidated and then heard.

On January 6, 1981, the said City Court rendered judgment

ejecting the private respondents. 4 They appealed to the then
Court of First Instance of Rizal, Branch XXXII, now Regional
Trial Court, which affirmed the trial court's
decision. 5 Reconsideration having been denied, 6 the private
respondents commenced proceedings in the respondent Court
of Appeals. Among others, the private respondents alleged that
the Court of First Instance erred in sustaining the jurisdiction
of the City Court "notwithstanding the admitted fact that there
was no compliance in the cases with the mandatory
requirements of P.D. No. 1508. 7

On October 31, 1981, the respondent Court of Appeals

rendered the assailed decision. 8 On January 5, 1982, it denied
the petitioner's motion for reconsideration. 9 As we noted, the
respondent Court dismissed the ejectment cases on the ground
of lack of jurisdiction of the City Court for failure of the parties
to undergo a confrontation at the barangay level. Hence, this
G.R. No. 109853               October 11, 2000
petition.
PROVINCE OF ZAMBOANGA DEL NORTE, represented
The issue to be resolved here is not one of jurisdiction, as
by GOV. ISAGANI S. AMATONG, petitioner, 
erroneously supposed by the respondent Court of Appeals and
vs.
by the parties as well. The question, rather, is simply one of
COURT OF APPEALS and ZAMBOANGA DEL NORTE
procedure.
ELECTRIC COOPERATIVE, INC., respondents.
In Ebol v. Amin, 10 we held that the conciliation process under
DECISION
Presidential Decree No. 1508 is not jurisdictional. Jurisdiction is
conferred by Batas Blg. 129 and the Judiciary Act of 1948. 11
PARDO, J.:
Presidential Decree No. 1508 does not vest jurisdiction in
Which government agency has jurisdiction over a complaint for
the lupong tagapayapa. Jurisdiction means the power to try
illegal collection of power bills by an electric cooperative?
and decide a case.12 The lupon does not decide cases. It is
Petitioner submits that jurisdiction is vested with the Energy
vested only with conciliation functions. 13 It is not a court of
Regulatory Board or the regular trial courts, while respondents
law.
position is that jurisdiction lies with the National Electrification
Administration.
While in Royales v. Intermediate Appellate Court , 14 we ruled
that "non-compliance with the condition precedent prescribed
What is before the Court is a petition for review
by P.D. 1508 could affect the sufficiency of the plaintiff's cause
on certiorari assailing the decision of the Court of
of action and make his complaint vulnerable to dismissal on
Appeals,1 that reversed the orders of the Regional Trial Court,
ground of lack of cause of action or prematurity, 15 we held in
Zamboanga del Norte denying petitioner’s motion for dismissal
the same case that "the same would not prevent a court of
of the complaint.2
competent jurisdiction from exercising its power of
adjudication over the case before it, where the defendants, as On July 8, 1991, petitioner Province of Zamboanga del Norte
in this case, failed to object to such exercise of jurisdiction in (represented by Gov. Isagani S. Amatong) filed with the
their answer and even during the entire proceedings a Regional Trial Court, Zamboanga del Norte a complaint against
quo. 16 There is a similar waiver in the cases at bar. There is Zamboanga del Norte Electric Cooperative (ZANECO) for
no allegation in the private respondents' answers 17 that the "Illegal Collection Of Power Bills And Preliminary Injunction
petitioner failed to invoke the authority of the lupon With Restraining Order."3
tagapayapa before going to court. Moreover, they took part in
the trial, argued their case, and adduced their evidence. These Petitioner in its complaint alleged that as per electric bills
amount to a waiver. issued by ZANECO for the month of May 1991, respondent
increased the Fuel Compensating Charge (FCC) by P0.29 and
Other than these, we find the decision 18 of the then City Court Interim Adjustment by P0.02, or a total of P 0.31. This amount
of Caloocan, now Metropolitan Trial Court, as affirmed by the is added to the basic charge of P 1.90 per kilowatt.
Court of First Instance of Rizal, Branch XXXII, now Regional
Trial Court, in the aforesaid three cases to be in conformity By June 1991, ZANECO increased the FCC once more to P1.39
with the law and evidence. instead of only P0.29. The Interim Adjustment also increased
to P0.06 instead of only P 0.02.
WHEREFORE, the decision of the Court of Appeals, and its
resolution denying the petitioner's motion for reconsideration Petitioner claimed that the increase was arbitrary and illegal,
are hereby SET ASIDE. The decision of the City Court in Civil and that the Energy Regulatory Board (ERB) did not sanction
Cases Nos. 13501, 13502, and 13503, as sustained by the the collections.
As a result, the electric bills of the consumers almost doubled
in amount.
Further, petitioner alleged that ZANECO cannot increase the
bills since the power rate increase from the National Power
Corporation (NPC) of P0.17 per kilowatt hour was not
implemented yet due to a restraining order issued by the
Supreme Court.4
On July 22, 1991, ZANECO filed its answer to the complaint. It
assailed the jurisdiction of the trial court over the subject of
the case.5
On July 26, 1991, the trial court issued a writ of preliminary
injunction6 ordering respondent to desist from imposing,
charging, billing and collecting the FCC and other additional
charges upon its end-users in Zamboanga del Norte and the
cities of Dipolog and Dapitan. The court also ordered
respondent to refrain from cutting off the electric lines of those
who refused to pay the questioned charges, pending
determination of the litigation.
On October 8, 1991, respondent ZANECO filed with the trial
court a motion requesting the court to set for hearing the
affirmative defenses set in its answer, asking for the dismissal
of the case.
On March 27, 1992, respondent filed with the trial court a
third-party complaint7 against the National Power Corporation
(NPC) praying for the issuance of a writ of preliminary
injunction or a restraining order. On the same date, the trial
court issued an order restraining respondent to refrain from
disconnecting its electric service on March 28, 1992 or any
other date, effective until recalled.8 Respondent ZANECO
alleged that despite NPC’s knowledge of the restraining order
against the collection of the FCC, which later 9 became known
as Incremental Cost Charge (ICC), NPC sent a demand
letter10 with notice of disconnection of electric service if
ZANECO did not pay the FCC/ICC bills and extra-hydro rates.
On April 14, 1992, the trial court ordered the issuance of a writ
of preliminary injunction against NPC.11
On March 28, 1992, the trial court denied respondent
ZANECO’s motion to dismiss.12 The court ruled that (1) the
nullity of the charges imposed are matters not capable of
pecuniary estimation and thus fall within the jurisdiction of the
regional trial court; and (2) it is futile to file a complaint with
the National Electrification Administration (NEA) or the NPC
considering that charges imposed by respondent emanated
from these agencies.13
On April 18, 1992, respondent ZANECO filed with the trial court
a motion for reconsideration of the order dated March 28,
1992.14
On October 9, 1992 the trial court denied ZANECO’s motion for
reconsideration.15
On appeal to the Court of Appeals, on November 16, 1992, the
Court of Appeals issued a temporary restraining order, the
dispositive portion of which reads:
"WHEREFORE, let a temporary restraining order be issued
enjoining public respondent, its agents and representative
from proceeding with the case and from enforcing all the
questioned orders until further notice from this Court.
"In addition, private respondent is hereby given five (5) days
from notice to show cause why no writ of preliminary
injunction should be issued for the purpose."16
On January 28, 1993, the Court of Appeals rendered its
decision reversing that of the trial court. The decretal portion
reads:
"WHEREFORE, premises considered, the petition is GRANTED,
the order dated March 28, 1992 and October 9, 1992 are
hereby SET ASIDE and the respondent Court ordered to
DISMISS the complaint.
SO ORDERED."17
Hence, this petition.18
Petitioner assails the imposition of the FCC and Incremental
Costs Charge (ICC) as void, illegal, and unconstitutional for
lack of notice, hearing and consultation of the parties affected,
and without prior authority from the Energy Regulatory Board.
Petitioner finally prays that the case be remanded to the trial
court for trial on the merits.19
Petitioner rationalized that the Energy Regulatory Board (ERB)
has jurisdiction by virtue of Executive Order 172, Section 3 (a)
in that ERB is empowered to fix and regulate the prices of
petroleum products. It argued that diesel fuel is embraced
within the term petroleum products. Since the Fuel
Compensation Charge was imposed to compensate the cost of
diesel fuel, then such imposition must be approved by the
ERB.20
We disagree.
The real issue is not the compensation of the cost of diesel fuel
used to feed the generating set in Mindanao. 21Precisely, the
complaint was for "Illegal Collection of Power Bills." 22
Since the complaint is one questioning the increase in the
power rates, the proper body to investigate the case is the
NEA.
The regulation and fixing of power rates to be charged by
electric cooperatives remain within the jurisdiction of the
National Electrification Administration, 23 despite the enactment
of Executive Order No. 172,24 creating the Energy Regulatory
Board.25 The issue raised in the complaint is the legality of the
imposition of the FCC or ICC. Despite the fact that diesel fuel
was used to run its machinery, the fact is that respondent
charged its consumers to compensate for the increase in the
price of fuel. Petitioner did not question the price of diesel fuel.
Rather, it questioned the charges passed on to its end users as
a result of increase in the price of fuel. And the body with the
technical expertise to determine whether or not the charges
are legal is the NEA.
Electric cooperatives, such as the respondent, are vested
under Presidential Decree No. 269 26 with the power to fix,
maintain, implement and collect rates, fees, rents, tolls, and
other charges and terms and conditions for service. However,
the NEA requires that such must be in furtherance of the
purposes and in conformity with the provisions of Presidential
Decree No. 269.27
NEA, in the exercise of its power of supervision and control
over electric cooperatives and other borrowers, supervised or
controlled entities, is empowered to issue orders, rules and
regulations. It may also, motu proprio or upon petition of third
parties, conduct investigations, referenda and other similar
actions in all matters, affecting electric cooperatives and other
borrower, or supervised or controlled entities. 28
Thus, a party questioning the rates imposed by an electric
cooperative may file a complaint with the NEA as it is
empowered to conduct hearings and investigations and issue
such orders on the rates that may be charged.29Consequently,
the case does not fall within the jurisdiction of the ERB.
In case a party feels aggrieved by any order, ruling or decision
of the NEA, he may file a petition for review before the Court
of Appeals.30
Petitioner next maintains that the case qualifies as an
exception to the rule on exhaustion of administrative remedies,
basing its argument on the unconstitutionality and arbitrariness
of the imposition of the charges.
We are not persuaded.
The Court in a long line of cases has held that before a party is
allowed to seek the intervention of the courts, it is a pre-
condition that he avail himself of all administrative processes
afforded him. Hence, if a remedy within the administrative
machinery can be resorted to by giving the administrative
officer every opportunity to decide on a matter that comes
within his jurisdiction, then such remedy must be exhausted
first before the court’s power of judicial review can be sought.
The premature resort to the court is fatal to one’s cause of
action.31 Accordingly, absent any finding of waiver or estoppel,
the case may be dismissed for lack of cause of action. 32
The doctrine of exhaustion of administrative remedies is not
without its practical and legal reasons. Indeed, resort to
administrative remedies entails lesser expenses and provides
for speedier disposition of controversies. Our courts of justice
for reason of comity and convenience will shy away from a
dispute until the system of administrative redress has been
completed and complied with so as to give the administrative
agency every opportunity to correct its error and to dispose of
the case.33
True, the principle of exhaustion of administrative remedies
has certain exceptions as embodied in various cases. This
doctrine is a relative one and is flexible depending on the
peculiarity and uniqueness of the factual and circumstantial
settings of a case. It is disregarded: (1) when there is a
violation of due process; 34 (2) when the issue involved is purely
a legal question;35 (3) when the administrative action is
patently illegal and amounts to lack or excess of
jurisdiction;36 (4) when there is estoppel on the part of the
administrative agency concerned;37 (5) when there is
irreparable injury;38 (6) when the respondent is a department
secretary whose acts, as an alter ego of the President, bears
the implied and assumed approval of the latter; 39 (7) when to
require exhaustion of administrative remedies would be
unreasonable;40 (8) when it would amount to a nullification of a
claim;41 (9) when the subject matter is a private land in land
case proceedings;42 (10) when the rule does not provide a
plain, speedy and adequate remedy; (11) when there are
circumstances indicating the urgency of judicial
intervention;43 and unreasonable delay would greatly prejudice
the complainant;44 (12) when no administrative review is
provided by law;45 (13) where the rule of qualified political
agency applies;46 and (14) when the issue of non-exhaustion of
administrative remedies has been rendered moot.47
Petitioner fails to show that the instant case falls under any of
the exceptions.1âwphi1 Mere allegation of arbitrariness will not
suffice to vest in the trial court the power that has been
specifically granted by law to special government agencies.
The doctrine of primary jurisdiction does not warrant a court to
arrogate unto itself the authority to resolve a controversy the
jurisdiction over which is initially lodged with an administrative
body of special competence.48
We have held that while the administration grapples with the
complex and multifarious problems caused by unbridled
exploitation of our resources, the judiciary will stand clear. A
long line of cases establishes the basic rule that the court will
not interfere in matters which are addressed to the sound
discretion of government agencies entrusted with the
regulation of activities coming under the special technical
knowledge and training of such agencies.49
In fact, a party with an administrative remedy must not merely
initiate the prescribed administrative procedure to obtain relief,
but also pursue it to its appropriate conclusion before seeking
judicial intervention.50 The underlying principle of the rule on
exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance
machinery, is afforded a chance to pass upon the matter, it will
decide the same correctly.51
The premature invocation of the jurisdiction of the trial court
warrants the dismissal of the case.
WHEREFORE, we AFFIRM in toto  the decision of the Court of
Appeals in CA-G.R. SP No. 29361, promulgated on January 28,
1993 setting aside the trial court’s orders dated March 28,
1992 and October 9, 1992, in Civil Case No. 4386 and ordering
the trial court to dismiss the complaint.
No costs.
SO ORDERED.
A.C. No. 6296 November 22, 2005
ATTY. EVELYN J. MAGNO, Complainant, 
vs.
ATTY. OLIVIA VELASCO-JACOBA, Respondent.
RESOLUTION
GARCIA, J.:
In her sworn complaint, as endorsed by the President of the
Integrated Bar of the Philippines (IBP), Nueva Ecija Chapter,
Atty. Evelyn J. Magno charged Atty. Olivia Velasco-Jacoba, a
member of the same IBP provincial chapter, with willful
violation of (a) Section 415 of the Local Government Code
(LGC) of 1991 and (b) Canon 4 of the Code of Professional
Responsibility.
This disciplinary case arose out of a disagreement that
complainant had with her uncle, Lorenzo Inos, over a
landscaping contract they had entered into. In a bid to have
the stand-off between them settled, complainant addressed a
letter, styled "Sumbong",1 to Bonifacio Alcantara, barangay
captain of Brgy. San Pascual, Talavera, Nueva Ecija. At the
barangay conciliation/confrontation proceedings conducted on
January 5, 2003, respondent, on the strength of a Special
Power of Attorney signed by Lorenzo Inos, appeared for the
latter, accompanied by his son, Lorenzito. Complainant’s
objection to respondent’s appearance elicited the response
that Lorenzo Inos is entitled to be represented by a lawyer
inasmuch as complainant is herself a lawyer. And as to
complainant’s retort that her being a lawyer is merely
coincidental, respondent countered that she is appearing as an
attorney-in-fact, not as counsel, of Lorenzo Inos.
Complainant enumerated specific instances, with supporting
documentation, tending to prove that respondent had, in the
course of the conciliation proceedings before the Punong
Barangay, acted as Inos Lorenzo’s counsel instead of as his
attorney-in-fact. This is what complainant said in her
complaint: 2
5. xxx Atty. Olivia Jacoba asked for an ocular inspection of the
subject matter of the complaint. A heated argument took place
because Lorencito Inos said that [complainant’s brother]
Melencio Magno, Jr. made alterations in the lagoon ….
Afterwards Atty. Olivia Jacoba . . . returned to the barangay
hall to have the incident recorded in the barangay blotter....
attached as Annex "A"
6. That on January 12, 2003, … Lorenzo Inos appeared before
the hearing also with the assistance of [respondent]. When the
minutes of the proceeding (sic) was read, [respondent]
averred that the minutes is partial in favor of the complainant
because only her statements were recorded for which reason,
marginal insertions were made to include what [respondent]
wanted to be put on record. She also signed as "saksi" in the
minutes ….
7. xxx In a letter (answer to the "sumbong") sent to the
Punong Barangay dated December 22, 2002, she signed
representing herself as "Family Legal Counsel of Inos Family",
a copy of the letter is attached as Annex "C" . . . . (Words in
bracket added.)
In an Order dated February 17, 2003, Atty. Victor C.
Fernandez, IBP Director for Bar Discipline, directed the
respondent to submit, within fifteen (15) days from notice, her
answer to the complaint, otherwise she will be considered as in
default.3
The case, docketed as CBD No. 03-1061, was assigned to
Commissioner Rebecca Villanueva-Maala, who admitted
respondent’s answer notwithstanding her earlier order of July
15, 2003, declaring respondent in default for failure to file an
answer in due time.4
In her Answer, respondent alleged that the administrative
complaint was filed with the Office of the Punong
Barangay,  instead of before the Lupong Tagapamayapa,  and
heard by Punong Barangay Bonifacio Alcantara alone, instead
of the collegial Lupon  or a conciliation panel known
as pangkat. Prescinding from this premise, respondent submits
that the prohibition against a lawyer appearing to assist a
client in katarungan pambarangay proceedings does not apply.
Further, she argued that her appearance was not as a lawyer,
but only as an attorney-in-fact.
In her report dated October 6, 2003, 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 19917, on the subject Katarungang
Pambarangay, provides:
Section 415. Appearance of Parties in Person. - In all
katarungang pambarangay  proceedings, the parties must
appear in person without the assistance of the counsel or
representative, except for minors and incompetents who may
be assisted by their next of kin who are not lawyers.
The above-quoted provision clearly requires the personal
appearance of the parties in katarungan
pambarangayconciliation proceedings, unassisted by counsel or
representative. The rationale behind the personal appearance
requirement is to enable the lupon  to secure first hand and
direct information about the facts and issues, 8 the exception
being in cases where minors or incompetents are parties.
There can be no quibbling that laymen of goodwill can easily
agree to conciliate and settle their disputes between
themselves without what sometimes is the unsettling
assistance of lawyers whose presence could sometimes
obfuscate and confuse issues.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) 11the LGC
of 1991 clearly provides that, as a precondition to filing a
complaint in court, the parties shall go through the conciliation
process either before the lupon  chairman or
the lupon  or pangkat. As what happened in this case,
the punong barangay, as chairman of the Lupon
Tagapamayapa, conducted the conciliation proceedings to
resolve the disputes between the two parties.
Given the above perspective, we join the IBP Commission on
Bar Discipline in its determination that respondent
transgressed the prohibition prescribed in Section 415 of the
LGC. However, its recommended penalty of mere admonition
must have to be modified. Doubtless, respondent’s conduct
tended to undermine the laudable purpose of
the katarungan  pambarangay system. What compounded
matters was when respondent repeatedly ignored
complainant’s protestation against her continued appearance in
the barangay conciliation proceedings.
WHEREFORE, Atty. Olivia Velasco-Jacoba is hereby FINED in
the amount of Five Thousand Pesos (₱5,000.00) for willful
violation of Section 415 of the Local Government Code of 1991
with WARNING that commission of similar acts of impropriety
on her part in the future will be dealt with more severely.
SO ORDERED.
A.C. No. 000 (Unnumbered CAR Case) December 26,
1974
SERVILLANO EVANGELISTA, petitioner,  any error he commits provided he acts in good faith, and that
vs.
JUDGE JUAN A. BAES, respondent.
CASTRO, J.:pp
Except for the first, each of the above-captioned cases involves
multiple administrative charges filed against Judge Juan A.
Baes of the Court of Agrarian Relations, Branch I, 7th Regional
District.
In the first "case" captioned "Servillano Evangelista vs. Judge
Juan A. Baes" Evangelista, in an unverified letter, requests this
Court "to require the Court of Agrarian Relations ... to decide
the ... case (Servillano Evangelista vs. Josefina Calupitan, CAR
Case No. 1773), within the reglementary period as provided for
in the New Constitution," the same having allegedly pended
decision since 1970.
The letter can by no means be regarded as a complaint as it
does not comply with the requisites of a complaint, as set forth
in Section 1 of Rule 140 of the Rules of Court.
Section 1. Complaint. — All charges against judges of first
instance shall be in writing and shall set out distinctly, clearly,
and concisely the facts complained of as constituting the
alleged serious misconduct or inefficiency of the respondent,
and shall be sworn to and supported by affidavits of persons
who have personal knowledge of the facts therein alleged, and
shall be accompanied with copies of documents which may
substantiate said facts.
This provision equally applies to judges of agrarian relations,
as provided by Section 144 of Republic Act 3844, which reads
in pertinent part as follows:
The judge may be suspended or removed in the same manner
and upon the same grounds as judges of the Court of First
Instance.
Because Evangelista's letter is not sworn to, does not set out
facts constituting any alleged serious misconduct or
inefficiency of the respondent, and merely requests this Court
to order the agrarian court to decide a certain case within a
specified period, the said letter may not properly be treated as
an administrative complaint.
Administrative Case No. 585-CAR
Paciano Basuan vs. Judge Juan A. Baes
Judge Baes is here charged with (1) knowingly rendering an
unjust judgment in violation of art. 204 of the Revised Penal
code, and (2) a violation of the Anti-Graft and Corrupt
Practices Act.
The first charge. Ferardo Baeuan, one of the plaintiffs in CAR
Case No. 1438, failed to appear at the pre-trial, but Paciano
Basuan, his co-plaintiff, appeared. For failure of Ferardo to
appear, Judge Baes ordered the dismissal of the entire case,
thus affecting also Paciano, which should not have been the
case. The order is indeed erroneous, but the motivation for its
issuance excludes malice or a deliberate attempt on the part of
the respondent to cause injustice. The transcript of the
stenographic notes taken at the pre-trial indicates that the
hearing of the case had been postponed several times at the
behest of the plaintiffs; that they were previously warned that
the pre-trial would proceed whether they had a lawyer or not;
that despite this warning, Paciano appeared without counsel.
This Court has had occasion to restate a fundamental rule of
long standing, which is, that a judicial officer, when required to
exercise his judgment or discretion, is not liable criminally for
he may be held liable for knowingly rendering an unjust
judgment only if it is shown beyond cavil that the judgment is
unjust as being contrary to law or as not supported by the
evidence, and the same was rendered with conscious and
deliberate intent to do an injustice.1 There being good faith on
the part of the respondent judge in the issuance of the
questioned order, the charge should be dismissed.
The second charge. The respondent admits having sat and
partly acted in CAR Case No. 1438 wherein his nephew-in-law,
Atty. Manuel M. de Baybay, was the counsel for the defendant
Manuel Solomon. In his answer to the complaint, the
respondent does not controvert the charge that he violated
Section 1 of Rule 137 of the Rules of Court which bars a judge
from sitting in any case in which he is related to any counsel
appearing before him within the fourth degree, 2 and in his
"Supplemental Comment" he merely alleges that he
"subsequently disqualified himself from sitting in the case
without hearing even partially a single witness." The
respondent's subsequent inhibition does not extenuate his
culpability. The rule which he violated is intended to free
courts from any suspicion of bias and prejudice. In view of the
undisputed violation, a reprimand on the respondent is in
order.
Administrative Case No. 586-CAR
Silvestre Masa vs. Judge Juan A. Baes
The complaint in this case recites two charges.
The first charge. Judge Baes is charged with knowingly, or by
reason of inexcusable negligence or ignorance, rendering
unjust orders. The orders referred to are: (1) the resolution
dated June 11, 1968, setting aside the resolution dated
February 20, 1964 which was issued by the respondent's
predecessor, Judge Artemio Macalino in CAR Case No. 959;
and (2) the order dated October 8, 1969, directing the
execution of the decision of Judge Macalino's aforesaid
resolution.
In CAR Case No. 959 Judge De Guzman authorized landholder
Jose Tan Kapoe to eject his tenant Silvestre Masa. On May 8,
1963 Masa's counsel moved to reconsider; Judge Macalino,
then the presiding judge, ordered the clerk of court to furnish
a copy of the motion to Tan Kapoe's counsel. As no opposition
to the motion was interposed, Judge Macalino reconsidered
Judge De Guzman's decision, and rendered on February 20,
1964 a decision denying the petition for ejectment of Masa and
adjudging a leasehold system of tenancy between Tan Kapoe
and Masa. Three and a half years later, Judge Macalino, on
petition of Masa, rendered a supplemental decision fixing the
rental on the holding. On April 2, 1968 Tan Kapoe moved for
reconsideration of not only the supplemental decision but also
the decision of February 20, 1964. Judge Baes granted Tan
Kapoe's motion for reconsideration, with the justification that
Judge De Guzman's prior decision had become final and
executory allegedly because the motion for its reconsideration
that was granted by Judge Macalino was fatally defective for
lack of proof of service.
Judge Baes' justification for his orders of June 11, 1968 and
October 8, 1969 was rejected in Masa vs. Baes, et al.,L-29784,
May 21, 1969, 28 SCRA 263, where this Court held, inter alia,
that the alleged non-service upon Tan Kapoe of a copy of
Masa's motion to reconsider Judge De Guzman's decision "is
belied by the record" and that Tan Kapoe was in estoppel to
deny his receipt of a copy of the motion for reconsideration.
While Judge Baes acted in abuse of discretion in issuing the
orders complained of, it does not necessarily follow that he
acted in bad faith or that his abuse of discretion signifies
ignorance of the law in his part. Abuse of discretion signifies
ignorance of the law on his part. Abuse of discretion by a trial
court does not necessarily mean ulterior motive, arbitrary
conduct or willful disregard of a litigant's rights.
The second charge. Judge Baes is here charged with a
violation of the Anti-Graft and Corrupt Practices Act, consisting
of his participation as judge in CAR Case No. 959, despite the
fact that before his appointment to the bench he was the
lawyer of Tan Kapoe in the naturalization proceedings filed by
the latter.
The uncontroverted supporting documents attached to the
complaint show that on November 24, 1947 and January 5,
1948, respectively, Judge Fidel Ibañez of the Court of First
Instance of Laguna granted two requests of Atty. Juan A. Baes
for the postponement of the hearing of Tan Kapoe's petition
for naturalization. On the other hand, Judge Baes attached as
an annex to his comment on the complaint a certification by
the clerk of court that "there appears no pleading or any paper
signed by Atty. Juan A. Baes" in the naturalization case and
that the only lawyers furnished copies of the decision were
Atty. Alfonso Farcon states that he was the one retained as
Tan Kapoe's counsel. The respondent judge claims, and this is
not denied by the complainant Masa, that he merely
accomodated a brother lawyer. From these uncontroverted
allegations and unchallenged documents emerge the findings
that the respondent judge had no lawyer-client relationship
with Tan Kapoe, that his participation in the naturalization case
was minuscule, and that the accomodation was fraternally
rendered. These are sufficiently good grounds to absolve the
respondent from the second charge.
Administrative Case No. 741-CAR
Toribio Lescano vs. Judge Juan A. Baes
The charges in this complaint, namely, issuance of an unjust
interlocutory order, unjust vexation, corrupt practices,
oppression, abuse of discretion and improper use of the
Constabulary are substantially the same questions involved in
the complainant Toribio Lescano's petition for certiorari filed
with this Court and docketed as "L-37477, Toribio Lescano vs.
Hon. Juan A. Baes, etc., et al." Said petition for certiorari is
pending decision and therefore, sub judice; hence, the present
complaint should be dismissed as premature.
Administrative Case No. 1275
Danilo San Gil vs. Judge Juan A. Baes
Danilo San Gil seeks the disbarment of the respondent judge
on three grounds, namely, (1) inefficiency, for allegedly
incurring in delay in resolving two motions in CAR Case No.
2064; (2) extortion, for having allegedly demanded from
Geronimo de los Reyes, the complainant's grandfather, "for
countless times both directly and indirectly ... considerable
amounts of money;" and (3) abuse of authority, for having
ordered the arrest of Geronimo de los Reyes for disobedience
of a court order issued in CAR Case No. 425 "without giving
him a chance to explain and without complying with the
requirements in proceedings for indirect contempt, thereby
depriving him of his constitutional right to due process of law."
The first charge is a reckless accusation. CAR Case No. 2064
was never assigned to Judge Baes; it was tried by
Commissioner Fernando B. Dimaculangan and decided by
Executive Judge Artemio Macalino. The two motions attached
as Annexes "A" and "B" to the administrative complaint and
whose resolution was allegedly delayed were unquestionably
addressed to the commissioner, not to Judge Baes; and the
resolution of the Court of Appeals or September 25, 1973 in its
case G.R. No. SP-02192, "Geronimo de los Reyes vs. Hon.
Artemio C. Macalino," evinces the fact that the agrarian case
was decided, not by Judge Baes, but by Judge Macalino,
otherwise the respondent in the Court of Appeals case would
have been Judge Baes, not Judge Macalino. Fairness and
prudence on the part of the complainant San Gil were clearly
wanting in blaming the respondent for alleged inefficiency in a
case that never reached the threshold of his judicial office.
The charge of extortion deserves no serious consideration.
Sec. 1 of Rule 140 of the Rules of Court requires that charges
shall be supported by affidavits of persons who have personal
knowledge of the facts therein alleged, but Geronimo de los
Reyes, the alleged victim who should have first-hand
knowledge if indeed the respondent demanded money from
him, executed an affidavit, annex "D" to the complaint, which
mentions absolutely nothing about the alleged extortion.
The third charge. Judge Baes issued an order on September
29, 1973 in CAR Case No. 425 requiring Geronimo de los Reyes
to appear in court; the latter failed to appear, thus prompting
Judge Baes to issue an order on October 23, 1973 for de los
Reyes to show cause why he should not be punished for
contempt; on November 27, 1973, the respondent ordered the
arrest of de los Reyes was denied an opportunity to be heard.
The order of arrest was within the judge's authority to issue,
pursuant to Section 3 of Rule 71, of the Rules of Court, and for
good reason: de los Reyes was thwarting the court's efforts to
settle the matter of execution of the unsatisfied judgment
rendered against him.
For the foregoing reasons, and for failure of the complainant
San Gil to file a reply to the respondent's answer and
supplementary answer to the complaint, as required by this
Court in its resolution on February 26, 1974, copy of which
was served upon the said complainant on March 6, 1974, the
complaint should be dismissed.
ACCORDINGLY, for lack of a prima facie showing, all the
charges against the respondent Judge are dismissed, except
the second charge in Administrative Case No. 585-CAR, of
which the respondent is adjudged guilty and for which he is
hereby reprimanded.
G.R. No. 158901             March 9, 2004
PROCESO QUIROS and LEONARDA
VILLEGAS, petitioners, 
vs.
MARCELO ARJONA, TERESITA BALARBAR, JOSEPHINE
ARJONA, and CONCHITA ARJONA, respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review is the decision of the Court
of Appeals in an action for the execution/enforcement of
amicable settlement between petitioners Proceso Quiros and
Leonarda Villegas and respondent Marcelo Arjona. Appellate
court reversed the decision of the Regional Trial Court of
Dagupan City-Branch 44 and reinstated the decision of the
Municipal Trial Court of San Fabian-San Jacinto, Pangasinan.
On December 19, 1996, petitioners Proceso Quiros and
Leonarda Villegas filed with the office of the barangay captain
of Labney, San Jacinto, Pangasinan, a complaint for recovery
of ownership and possession of a parcel of land located at
Labney, San Jacinto, Pangasinan. Petitioners sought to recover
from their uncle Marcelo Arjona, one of the respondents
herein, their lawful share of the inheritance from their late
grandmother Rosa Arjona Quiros alias Doza, the same to be
segregated from the following parcels of land:
a) A parcel of land (Lot 1, plan Psu-189983, L.R. Case No. D-
614, LRC Record No. N- 22630), situated in the Barrio of
Labney, Torud, Municipality of San Jacinto, Province of
Pangasinan x x x Containing an area of Forty Four Thousand
Five Hundred and Twenty (44,520) square meters, more or
less, covered by Tax Decl. No. 607;
b) A parcel of Unirrig. riceland situated at Brgy. Labney, San
Jacinto, San Jacinto, Pangasinan with an area of 6450 sq.
meters, more or less declared under Tax Decl. No. 2066 of the
land records of San Jacinto, Pangasinan assessed at P2390.00
x x x;
c) A parcel of Unirrig. riceland situated at Brgy. Labney, San
Jacinto, Pangasinan with an area of 6450 sq. meters, more or
less, declared under Tax Declaration No. 2047 of the land
records of San Jacinto, Pangasinan assessed at P1700.00 x x x
d) A parcel of Unirrig. riceland situated at Brgy. Labney, San
Jacinto, Pangasinan assessed at P5610.00 x x x;
e) A parcel of Cogon land situated at Brgy. Labney, San
Jacinto, Pangasinan, with an area of 14133 sq. meters, more
or less declared under Tax Declaration No. 14 of the land
records of San Jacinto, Pangasinan assessed at P2830.00 x x
x.1
On January 5, 1997, an amicable settlement was reached
between the parties. By reason thereof, respondent Arjona
executed a document denominated as "PAKNAAN"
("Agreement", in Pangasinan dialect), which reads:
AGREEMENT
I, MARCELO ARJONA, of legal age, resident of Barangay
Sapang, Buho, Palayan City, Nueva Ecija, have a land
consisting of more or less one (1) hectare which I gave to
Proceso Quiros and Leonarda Villegas, this land was inherited
by Doza that is why I am giving the said land to them for it is
in my name, I am affixing my signature on this document for
this is our agreement besides there are witnesses on the
5th day (Sunday) of January 1997.
Signed in the presence of:
(Sgd) Avelino N. De la Masa, Jr.
(Sgd) Marcelo Arjona
Witnesses:
1) (Sgd.) Teresita Balarbar
2) (Sgd.) Josephine Arjona
3) (Sgd.) Conchita Arjona
On the same date, another "PAKNAAN" was executed by Jose
Banda, as follows:
AGREEMENT
I, JOSE BANDA, married to Cecilia L. Banda, of legal age, and
resident of Sitio Torrod, Barangay Labney, San Jacinto,
Pangasinan. There is a land in which they entrusted to me and
the same land is situated in Sitio Torrod, Brgy. Labney, San
Jacinto, Pangasinan, land of Arjona family.
I am cultivating/tilling this land but if ever Leonarda Villegas
and Proceso Quiros would like to get this land, I will voluntarily
surrender it to them.
In order to attest to the veracity and truthfulness of this
agreement, I affixed (sic) my signature voluntarily below this
document this 5th day (Sunday) of January 1997.
(Sgd.) Jose Banda
Signed in the presence of:
(Sgd) Avelino N. de la Masa, Sr. 
Barangay Captain
Brgy. Labney, San Jacinto
Pangasinan
Witnesses:
1) Irene Banda
(sgd.)
2) Jose (illegible) x x x
Petitioners filed a complaint with the Municipal Circuit Trial
Court with prayer for the issuance of a writ of execution of the
compromise agreement which was denied because the subject
property cannot be determined with certainty.
The Regional Trial Court reversed the decision of the municipal
court on appeal and ordered the issuance of the writ of
execution.
Respondents appealed to the Court of Appeals, which reversed
the decision of the Regional Trial Court and reinstated the
decision of the Municipal Circuit Trial Court.2
Hence, this petition on the following errors:
I
THE PAKNAAN BEING A FINAL AND EXECUTORY JUDGMENT
UNDER THE LAW IS AN IMMUTABLE JUDGMENT CAN NOT BE
ALTERED, MODIFIED OR CHANGED BY THE COURT
INCLUDING THE HIGHEST COURT; and
II
THE SECOND PAKNAAN ALLEGEDLY EXECUTED IN
CONJUNCTION WITH THE FIRST PAKNAAN WAS NEVER
ADDUCED AS EVIDENCE BY EITHER OF THE PARTIES, SO IT
IS ERROR OF JURISDICTION TO CONSIDER THE SAME IN THE
DECISION MAKING.
The pivotal issue is the validity and enforceability of the
amicable settlement between the parties and corollary to this,
whether a writ of execution may issue on the basis thereof.
In support of their stance, petitioners rely on Section 416 of
the Local Government Code which provides that an amicable
settlement shall have the force and effect of a final judgment
upon the expiration of 10 days from the date thereof, unless
repudiated or nullified by the proper court. They argue that
since no such repudiation or action to nullify has been initiated,
the municipal court has no discretion but to execute the
agreement which has become final and executory.
Petitioners likewise contend that despite the failure of the
Paknaan to describe with certainty the object of the contract,
the evidence will show that after the execution of the
agreement, respondent Marcelo Arjona accompanied them to
the actual site of the properties at Sitio Torod, Labney, San
Jacinto, Pangasinan and pointed to them the 1 hectare
property referred to in the said agreement.
In their Comment, respondents insist that respondent Arjona
could not have accompanied petitioners to the subject land at
Torrod, Labney because he was physically incapacitated and
there was no motorized vehicle to transport him to the said
place.
The Civil Code contains salutary provisions that encourage and
favor compromises and do not even require judicial approval.
Thus, under Article 2029 of the Civil Code, the courts must
endeavor to persuade the litigants in a civil case to agree upon
some fair compromise. Pursuant to Article 2037 of the Civil
Code, a compromise has upon the parties the effect and
authority of res judicata, and this is true even if the
compromise is not judicially approved. Articles 2039 and 2031
thereof also provide for the suspension of pending actions and
mitigation of damages to the losing party who has shown a
sincere desire for a compromise, in keeping with the Code’s
policy of encouraging amicable settlements.3
Cognizant of the beneficial effects of amicable settlements, the
Katarungang Pambarangay Law (P.D. 1508) and later the Local
Government Code provide for a mechanism for conciliation
where party-litigants can enter into an agreement in the
barangay level to reduce the deterioration of the quality of
justice due to indiscriminate filing of court cases. Thus, under
Section 416 of the said Code, an amicable settlement shall
have the force and effect of a final judgment of the court upon
the expiration of 10 days from the date thereof, unless
repudiation of the settlement has been made or a petition to
nullify the award has been filed before the proper court
Petitioners submit that since the amicable settlement had not
been repudiated or impugned before the court within the 10-
day prescriptive period in accordance with Section 416 of the
Local Government Code, the enforcement of the same must be
done as a matter of course and a writ of execution must
accordingly be issued by the court.
Generally, the rule is that where no repudiation was made
during the 10-day period, the amicable settlement attains the
status of finality and it becomes the ministerial duty of the
court to implement and enforce it. However, such rule is not
inflexible for it admits of certain exceptions. In Santos v. Judge
Isidro,4 the Court observed that special and exceptional
circumstances, the imperatives of substantial justice, or facts
that may have transpired after the finality of judgment which
would render its execution unjust, may warrant the suspension
of execution of a decision that has become final and executory.
In the case at bar, the ends of justice would be frustrated if a
writ of execution is issued considering the uncertainty of the
object of the agreement. To do so would open the possibility
of error and future litigations.
The Paknaan executed by respondent Marcelo Arjona purports
to convey a parcel of land consisting of more or less 1 hectare
to petitioners Quiros and Villegas. Another Paknaan, prepared
on the same date, and executed by one Jose Banda who
signified his intention to vacate the parcel of land he was tilling
located at Torrod, Brgy. Labney, San Jacinto, Pangasinan, for
and in behalf of the Arjona family. On ocular inspection
however, the municipal trial court found that the land referred
to in the second Paknaan was different from the land being
occupied by petitioners. Hence, no writ of execution could be
issued for failure to determine with certainty what parcel of
land respondent intended to convey.
In denying the issuance of the writ of execution, the appellate
court ruled that the contract is null and void for its failure to
describe with certainty the object thereof. While we agree that
no writ of execution may issue, we take exception to the
appellate court’s reason for its denial.
Since an amicable settlement, which partakes of the nature of
a contract, is subject to the same legal provisions providing for
the validity, enforcement, rescission or annulment of ordinary
contracts, there is a need to ascertain whether the Paknaan in
question has sufficiently complied with the requisites of validity
in accordance with Article 1318 of the Civil Code. 5
There is no question that there was meeting of the minds
between the contracting parties. In executing the Paknaan, the
respondent undertook to convey 1 hectare of land to
petitioners who accepted. It appears that while the Paknaan
was prepared and signed by respondent Arjona, petitioners
acceded to the terms thereof by not disputing its contents and
are in fact now seeking its enforcement. The object is a 1-
hectare parcel of land representing petitioners’ inheritance
from their deceased grandmother. The cause of the contract is
the delivery of petitioners’ share in the inheritance. The
inability of the municipal court to identify the exact location of
the inherited property did not negate the principal object of
the contract. This is an error occasioned by the failure of the
parties to describe the subject property, which is correctible by
reformation and does not indicate the absence of the principal
object as to render the contract void. It cannot be disputed
that the object is determinable as to its kind, i.e.1 hectare of
land as inheritance, and can be determined without need of a
new contract or agreement. 6 Clearly, the Paknaan has all the
earmarks of a valid contract.
Although both parties agreed to transfer one-hectare real
property, they failed to include in the written document a
sufficient description of the property to convey. This error is
not one for nullification of the instrument but only for
reformation.
Article 1359 of the Civil Code provides:
When, there having been a meeting of the minds of the parties
to a contract, their true intention is not expressed in the
instrument purporting to embody the agreement by reason of
mistake, fraud, inequitable conduct or accident, one of the
parties may ask for the reformation of the instrument to the
end that such true intention may be expressed.
If mistake, fraud, inequitable conduct, or accident has
prevented a meeting of the minds of the parties, the proper
remedy is not reformation of the instrument but annulment of
the contract.
Reformation is a remedy in equity whereby a written
instrument is made or construed so as to express or conform
to the real intention of the parties where some error or
mistake has been committed. 7 In granting reformation, the
remedy in equity is not making a new contract for the parties,
but establishing and perpetuating the real contract between
the parties which, under the technical rules of law, could not
be enforced but for such reformation.
In order that an action for reformation of instrument as
provided in Article 1359 of the Civil Code may prosper, the
following requisites must concur: (1) there must have been a
meeting of the minds of the parties to the contract; (2) the
instrument does not express the true intention of the parties;
and (3) the failure of the instrument to express the true
intention of the parties is due to mistake, fraud, inequitable
conduct or accident.8
When the terms of an agreement have been reduced to
writing, it is considered as containing all the terms agreed
upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than
the contents of the written agreement, except when it fails to
express the true intent and agreement of the parties thereto,
in which case, one of the parties may bring an action for the
reformation of the instrument to the end that such true
intention may be expressed. 9
Both parties acknowledge that petitioners are entitled to their
inheritance, hence, the remedy of nullification, which
invalidates the Paknaan, would prejudice petitioners and
deprive them of their just share of the inheritance. Respondent
can not, as an afterthought, be allowed to renege on his legal
obligation to transfer the property to its rightful heirs. A refusal
to reform the Paknaan under such circumstances would have
the effect of penalizing one party for negligent conduct, and at
the same time permitting the other party to escape the
consequences of his negligence and profit thereby. No person
shall be unjustly enriched at the expense of another.
WHEREFORE, in view of the foregoing, the petition is DENIED.
The Decision dated March 21, 2003 of the Court of Appeals,
which reversed the decision of the Regional Trial Court and
reinstated the decision of the Municipal Trial Court, is
AFFIRMED. This is without prejudice to the filing by either
party of an action for reformation of the Paknaan executed on
January 5, 1997.
SO ORDERED.
G.R. No. 130864             October 2, 2007
MARIA L. HAROLD, petitioner, 
vs.
AGAPITO T. ALIBA, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision 1 dated September 3,
1997 of the Court of Appeals in CA-G.R. SP No. 40416,
affirming the dismissal of petitioner Maria L. Harold’s complaint
before the Municipal Trial Court of La Trinidad, Benguet.
The pertinent facts are as follows:
Sometime in January 1993, Harold engaged the services of
respondent Agapito T. Aliba, a geodetic engineer, to conduct a
relocation survey and to execute a consolidation-subdivision of
their properties including that of Harold’s sister, Alice Laruan,
located in Pico, La Trinidad, Benguet. After completing his
work, Aliba was paid P4,050 for his services, but he failed to
return the certificates of title of the said properties for more
than one year, despite repeated demands to return them.
It also appears that sometime in January 1994, Aliba prevailed
upon Harold and her husband to sign a document which was
supposedly needed to facilitate the consolidation-subdivision
and the issuance of separate transfer certificates of title over
the properties. Harold and her husband signed the document
without reading it.
Thereafter, on April 18, 1994, a truck loaded with G.I. sheets
and construction materials came to the subject lot 2owned by
Harold. Upon inquiry, Harold and her husband were informed
that Aliba had sold the lot to a third person.
On several occasions, Aliba tried to convince Harold to accept
the sum of P400,000 which was later on increased
to P500,000, as purchase price of the said lot. It was only after
such offers were made that Aliba told Harold that he had
indeed sold the lot.
On May 3, 1994, Harold agreed to accept the P500,000 from
Aliba but only as partial payment, considering that the lot has
an aggregate value of P1,338,0003 or P6,000 per square
meter. On the same date, Harold was made to sign an
acknowledgment receipt and other papers which were made to
appear that Harold accepted the sum of P480,000 as full and
final payment for the lot.
Harold later discovered that Aliba made it appear that she had
sold the lot to him for P80,000 and had her certificates of title
cancelled and transferred to him. Harold also found out that
the alleged deed of sale was the document that Aliba caused
Harold and her husband to sign in January 1994.
Thinking that she can no longer recover her property, Harold
asked for the payment of the fair market value of her property
but to no avail. The dispute between Harold and Aliba was
referred to Punong Barangay Limson Ogas and the Lupong
Tagapamayapa. During the June 8, 1994 barangay conciliation
proceedings, the parties herein agreed that Aliba will pay an
additional amount of P75,000 to the initial P500,000 Aliba had
already given to Harold. In the same proceedings, Aliba
tendered P70,000, which Harold accepted.4 The receipt of the
amount given was evidenced by an acknowledgment receipt
signed by the parties herein, attested to by
the Lupon chairman, and witnessed by several barangay
officials.5
On June 9, 1994, as agreed upon, Aliba tendered the
remaining P5,000 to Harold to complete their amicable
settlement. Unfortunately, Harold refused to accept the same,
saying that P5,000 is not enough and insisted on the elevation
of the case to the court. 6 Thus, a certification to file
action7 was issued by the Office of the Lupong
Tagapamayapa on June 29, 1994. Immediately thereafter,
Harold filed a Complaint8 against Aliba before the Municipal
Trial Court (MTC) of La Trinidad, Benguet.
In his Answer,9 Aliba prayed for the dismissal of the complaint,
considering that he had already been absolutely released from
any obligation to Harold and that what remains to be done is
merely the completion of the amicable settlement of the
parties.
On September 4, 1995, the MTC issued an Order dismissing
Harold’s complaint, holding that
xxxx
It is not disputed that on June 8, 1994, both parties met
before Barangay Captain Limson Ogas. After a lengthy
deliberation, towards mediation, it was agreed by both parties
in the presence of Barangay Officials that Mr. Agapito Aliba will
pay an additional amount of P75,000.00 to settle once and for
all the case. Mr. Aliba at that time has in his possession
P70,000.00, because that was the amount previously agreed
upon by both parties. The amount of P70,000.00 was
personally handed by Mr. Aliba to Mrs. Harold, on that day, the
remaining balance of P5,000.00 to be paid the following day,
June 9, 1994. An Acknowledgment Receipt was signed by Mrs.
Harold and witnessed by the barangay officials. . . .
The said minutes further states therein, "continued for the
second day", which logically means that the balance be given
the following day.
In the afternoon of June 9, 1994, Mr. Aliba returned with the
remaining balance of P5,000.00. It was at this time that when
Mr. Aliba was supposed to hand the money Mrs. Harold bluntly
told him the amount of P5,000 is still not enough and instead
she started crying and shouting . . . .
The last paragraph [of the minutes] states "Mr. Aliba
requested then if the paid amount of P70,000.00 be returned.
Mrs. Harold refused and opted that this case be elevated to
the higher court."
Based on the minutes of the mediation proceedings, it is clear
that Barangay Captain Ogas was able to successfully mediate
the case between plaintiff and defendant. As a matter of fact,
Aliba has already substantially complied. It is not disputed that
he gave plaintiff, on that occasion, P70,000.00, and to give the
balance of P5,000.00, the day after. Thus, there was meeting
of the minds between the parties on a lawful subject, and
there was substantial fulfillment of the obligation.
Regret[t]ably, when the small balance is to be paid, Mrs.
Harold reneged on the agreement, saying P75,000.00 10 is not
enough, then insisted that the case be filed in court, but at the
same time refusing to return the P70,000.00, when defendant
tried to collect it back. Consequently, the issuance of the
Certificate to File Action, is improper because no valid
repudiation [of the amicable settlement] was made.
Obviously, Mrs. Harold wants her cake and eat it too, so to
speak. It is in[i]quitous to allow Mrs. Harold to exact
substantial fulfillment from Aliba then conveniently change her
mind overnight and worse, to refuse to give back what she
already received.
The Court agrees with defendant that there is no clear
repudiation of the agreement. It would have been different if
Mrs. Harold returned the P70,000.00 to the defendant, after
changing her mind. There would have been a clear repudiation
of the amicable settlement.11
The dispositive portion of the said MTC Order reads:
WHEREFORE, in view of the foregoing findings, the Motion to
Dismiss, incorporated in the Answer is hereby granted. This
case is hereby ordered dismissed.
However, defendant is hereby ordered to tender payment to
plaintiff his balance in the amount of P5,000.00 when this
order becomes final and executory.
SO ORDERED.12
Dissatisfied, Harold filed an appeal before the Regional Trial
Court (RTC), Branch 63, of La Trinidad, Benguet.
In an Order dated February 20, 1996, the RTC affirmed in toto
the assailed Order of the MTC.
Undaunted, Harold further appealed to the Court of Appeals,
which however denied the same. Hence this petition, on the
following grounds:
I.
WHETHER OR NOT THE THREE LOWER COURTS WERE
CORRECT IN DISMISSING HER COMPLAINT ON THE SOLE
GROUND THAT SHE AND RESPONDENT WERE ABLE TO
ARRIVE [AT] A MUTUALLY ACCEPTABLE AMICABLE
SETTLEMENT BEFORE THE BARANGAY COURT OF THEIR
PLACE WHEN CLEARLY ALL CIRCUMSTANCES SHOW THERE
WAS NO MEETING OF MINDS BETWEEN THEM.
II.
GRANTING, WITHOUT ADMITTING, THERE WAS A MEETING
OF MINDS BETWEEN THE PARTIES AND THEREFORE, THERE
WAS A VALID AMICABLE SETTLEMENT, WHETHER OR NOT
THE ACKNOWLEDGEMENT RECEIPT SIGNED BY PETITIONER
AND THE MINUTES OF THE PROCEEDINGS IS A SUBSTANTIAL
COMPLIANCE WITH THE REQUIREMENT OF SECTION 411 OF
RA 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT
CODE OF 1991 AS CONCLUDED BY THE MUNICIPAL TRIAL
COURT, AND AFFIRMED BY THE REGIONAL TRIAL COURT
AND COURT OF APPEALS.
III.
GRANTING, WITHOUT ADMITTING, SAID LAW WAS
SUBSTANTIALLY COMPLIED WITH, WHETHER OR NOT
PETITIONER’S ACT OF NOT ACCCEPTING THE REMAINING
BALANCE BEING PROFFERED BY RESPONDENT AND HER
INSISTENCE THAT THE CASE BE INSTEAD ELEVATED TO THE
COURTS DURING THE SECOND DAY OF HEARING SHOULD
NOT ALSO BE CONSIDERED A REPUDIATION OF SAID
AMICABLE SETTLEMENT OR AT THE VERY LEAST A
SUBSTANTIAL COMPLIANCE THEREOF.13
Essentially, we are asked to resolve whether the Court of
Appeals committed reversible error in affirming the dismissal of
the complaint on the ground that the dispute between the
parties had already been amicably settled during the barangay
conciliation proceedings.
After a careful scrutiny of the records of this case, we hold that
no reason exists to overturn the decision of the Court of
Appeals affirming the dismissal of the subject complaint.
In this case, Harold’s main contention was hinged on the
alleged non-perfection of the questioned amicable settlement
between her and Aliba because there was allegedly no meeting
of the minds between them regarding the subject matter and
the cause thereof.14 On the other hand, Aliba’s principal
defense is anchored on the alleged existence and validity of
the said amicable settlement.15
Harold’s submission that there was no meeting of the minds
between the parties herein pertaining to the subject matter
and cause of the questioned amicable settlement is a clear
deviation from the facts on record. Admittedly, both parties
agreed during the June 8, 1994 barangay conciliation
proceedings for Aliba to pay an additional amount of P75,000
(which was the object or subject matter of the amicable
settlement) to the initial P500,000 Aliba had given to Harold as
purchase price for the subject lot in order to put an end to
their dispute (which was the cause or reason of the amicable
settlement). Thus, it is evident that the parties herein entered
into an amicable settlement, or more specifically, a
compromise agreement, during the said barangay conciliation
proceedings.
Under Article 2028 of the Civil Code, a compromise
agreement was defined as "a contract whereby the parties, by
making reciprocal concessions, avoid litigation or put an end to
one already commenced." In Sanchez v. Court of Appeals ,16 we
held that a "compromise is a form of amicable settlement that
is not only allowed but also encouraged in civil cases." 17
It must also be highlighted that Harold expressly
acknowledged that the offer made by Aliba to pay an
additional P75,000 was made in order for her to desist from
pursuing her case against him.18 By reason of her unconditional
acceptance of the offer and the P70,000 tendered to her,
Harold had already effectively waived whatever claims she
might have against Aliba regarding the subject lot. Moreover,
she is likewise barred from pursuing her case against Aliba
under the principle of estoppel now._
Under Article 1431 of the Civil Code, through estoppel, an
admission or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved as
against the person relying on it. Expounding on the principle of
estoppel, we held in Springsun Management Systems
Corporation v. Camerino19 that "where a party, by his deed or
conduct, has induced another to act in a particular manner,
estoppel effectively bars the former from adopting an
inconsistent position, attitude or course of conduct that causes
loss or injury to the latter."20
The doctrine of estoppel is based upon the grounds of public
policy, fair dealing, good faith and justice, and its purpose is to
forbid one to speak against his own act, representations, or
commitments to the injury of one to whom they were directed
and who reasonably relied thereon.21
The issue concerning the alleged non-compliance of the
amicable settlement pursuant to the mandate of Section
41122 of Republic Act No. 7160 or the Local Government Code
(LGC) arose because there was no formal document
denominated as "Amicable Settlement" signed by the parties.
However, we agree with the similar holdings of the Court of
Appeals and the RTC that the requirements under Section 411
of the LGC had been substantially complied with. The minutes
of the barangay conciliation proceedings readily disclose the
terms agreed upon by the parties for the settlement of their
dispute, and that the acknowledgment receipt, which was
written in a language known to the parties, signed by them,
attested to by the Lupon Chairman, and witnessed by several
barangay officials, serves as an indubitable proof of the
amicable settlement and of the substantial compliance of its
terms by respondent Aliba.
Moreover, even without the minutes of the meeting and the
acknowledgment receipt, the amicable settlement, or more
specifically the compromise agreement, entered into by the
parties is undeniably valid, considering that "a compromise
agreement is a consensual contract, and as such, it is
perfected upon the meeting of' the minds of the parties to the
contract."23
Furthermore, to rule against the validity of the cited amicable
settlement herein would militate against the spirit and purpose
of the Katarungang Pambarangay Law,24 which is to encourage
the amicable settlement of disputes at the barangay level as
an alternative to court litigation.
Harold’s refusal to accept the remaining P5,000 that Aliba had
tendered cannot constitute an effective repudiation of the
questioned amicable settlement, considering that the reason
for her refusal to accept the said amount or alleged
repudiation of the assailed amicable settlement is not one of
the grounds for repudiation clearly specified under Section
41825 of the LGC. As borne out by the records, her refusal to
accept the same was based on the alleged insufficiency of the
remaining P5,000 as settlement for the lot, without any
reference to vitiation of her consent by any fraud, violence or
intimidation on Aliba’s part.
WHEREFORE, the petition is DENIED for lack of merit. The
assailed Decision dated September 3, 1997 of the Court of
Appeals in CA-G.R. SP No. 40416 is AFFIRMED. Costs against
the petitioner.
SO ORDERED.
the ground that the labor arbiter had no jurisdiction over said
complaint and 2) the order of the same respondent clarifying
its previous order and ruling that it had jurisdiction over the
case.
The facts of the case are as follows:
PSSLU had an existing CBA with Sanyo Philippines Inc. (Sanyo,
for short) effective July 1, 1989 to June 30, 1994. The same
CBA contained a union security clause which provided:

Sec. 2. All members of the union covered by this agreement

must retain their membership in good standing in the union as
condition of his/her continued employment with the company.
The union shall have the right to demand from the company
the dismissal of the members of the union by reason of their
voluntary resignation from membership or willful refusal to pay
the Union Dues or by reasons of their having formed,
organized, joined, affiliated, supported and/or aided directly or
indirectly another labor organization, and the union thus
hereby guarantees and holds the company free and harmless
from any liability whatsoever that may arise consequent to the
implementation of the provision of this article. (pp. 5-6, Rollo)

In a letter dated February 7, 1990, PSSLU, through its national

president, informed the management of Sanyo that the
following employees were notified that their membership with
PSSLU were cancelled for anti-union, activities, economic
sabotage, threats, coercion and intimidation, disloyalty and for
joining another union: Benito Valencia, Bernardo Yap, Arnel
Salvo, Renato Baybon, Eduardo Porlaje, Salvador Solibel,
Conrado Sarol, Angelito Manzano, Allan Misterio, Reynaldo
Ricohermoso, Mario Ensay and Froilan Plamenco. The same
letter informed Sanyo that the same employees refused to
submit themselves to the union's grievance investigation
committee (p. 53, Rollo). It appears that many of these
employees were not members of PSSLU but of another union,
KAMAO.

On February 14, 1990, some officers of KAMAO, which

included Yap, Salvo, Baybon, Solibel, Valencia, Misterio and
Ricohermoso, executed a pledged of cooperation with PSSLU
promising cooperation with the latter union and among others,
respecting, accepting and honoring the CBA between Sanyo
and specifically:

1. That we shall remain officers and members of KAMAO until

we finally decide to rejoin Sanyo Phil. Workers Union-PSSLU;

G.R. No. 101619 July 8, 1992 2. That henceforth, we support and cooperate with the duly
elected union officers of Sanyo Phil. Workers Union-PSSLU in
SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL
any and all its activities and programs to insure industrial
CHAPTER NO. 109 AND/OR ANTONIO DIAZ, PSSLU
peace and harmony;
NATIONAL PRESIDENT, petitioners, 
vs. 3. That we collectively accept, honor, and respect the
HON. POTENCIANO S. CANIZARES, in his capacity as Collective Bargaining Agreement entered into between Sanyo
Labor Arbiter, BERNARDO YAP, RENATO BAYBON, Phil. Inc. and Sanyo Phil. Workers Union-PSSLU dated
SALVADOR SOLIBEL, ALLAN MISTERIO, EDGARDO February 7, 1990;
TANGKAY, LEONARDO DIONISIO, ARNEL SALVO,
REYNALDO RICOHERMOSO, BENITO VALENCIA, 4 That we collectively promise not to engage in any activities
GERARDO LASALA AND ALEXANDER inside company premises contrary to law, the CBA and existing
ATANASIO, respondents. policies;

  5 That we are willing to pay our individual agency fee in

MEDIALDEA, J.:
This petition seeks to nullify: 1) the order of respondent Labor
Arbiter Potenciano Cañizares dated August 6, 1991 deferring
the resolution of the motion to dismiss the complaint of private
respondents filed by petitioner Sanyo Philippines Workers
Union-PSSLU Local Chapter No. 109 (PSSLU, for brevity) on
accordance with the provision of the Labor Code, as amended;
6 That we collectively promise not to violate this pledge of
cooperation. (p. 55, Rollo)
On March 4, 1991, PSSLU through its national and local
presidents, wrote another letter to Sanyo recommending the
dismissal of the following non-union workers: Bernardo Yap,
Arnel Salvo, Renato Baybon, Reynaldo Ricohermoso, Salvador
Solibel, Benito Valencia, and Allan Misterio, allegedly because:
1) they were engaged and were still engaging in anti-union
activities; 2) they willfully violated the pledge of cooperation
with PSSLU which they signed and executed on February 14,
1990; and 3) they threatened and were still threatening with
bodily harm and even death the officers of the union (pp. 37-
38, Rollo).
Also recommended for dismissal were the following union
members who allegedly joined, supported and sympathized
with a minority union, KAMAO: Gerardo Lasala, Legardo
Tangkay, Alexander Atanacio, and Leonardo Dionisio.
The last part of the said letter provided:
The dismissal of the above-named union members is without
prejudice to receive (sic) their termination pay if management
decide (sic) to grant them benefits in accordance with law. The
union hereby holds the company free and harmless from any
liability that may arise consequent to the implementation by
the company of our recommendations for the dismissal of the
above-mentioned workers.
It is however suggested that the Grievance Machinery be
convened pursuant to Section 3, Article XV of the Collective
Bargaining Agreement (CBA) before their actual dismissal from
the company. (p. 38, Rollo)
Pursuant to the above letter of the union, the company sent a
memorandum to the same workers advising them that:
As per the attached letter from the local union President SPWU
and the federation President, PSSLU, requesting management
to put the herein mentioned employees on preventive
suspension, effective immediately, preliminary to their
subsequent dismissal, please be informed that the following
employees are under preventive suspension effective March
13, 1991 to wit:
1. Bernardo Yap
2. Renato Baybon
3. Salvador Solibel
4. Allan Misterio
5. Edgardo Tangkay
6. Leonardo Dionisio
7. Arnel Salvo
8. Reynaldo Ricohermoso
9. Benito Valencia
10. Gerardo Lasala
11. Alexander Atanacio
The above listed employees shall not be allowed within
company premises without the permission of management.
As per request of the union's letter to management, should the
listed employees fail to appeal the decision of the union for
dismissal, then effective March 23, 1991, said listed employees
shall be considered dismissed from the company. (p 39, Rollo)
The company received no information on whether or not said
employees appealed to PSSLU. Hence, it considered them
dismissed as of March 23, 1991 (p. 40, Rollo).
On May 20, 1991, the dismissed employees filed a complaint
(pp. 32-35, Rollo) with the NLRC for illegal dismissal. Named
respondent were PSSLU and Sanyo.
On June 20, 1991, PSSLU filed a motion to dismiss the
complaint alleging that the Labor Arbiter was without
jurisdiction over the case, relying on Article 217 (c) of P.D.
442, as amended by Section 9 of Republic Act No. 6715 which
provides that cases arising from the interpretation or
implementation of the collective bargaining agreements shall
be disposed of by the labor arbiter by referring the same to the
grievance machinery and voluntary arbitration.
The complainants opposed the motion to dismiss complaint on
these grounds: 1) the series of conferences before the
National Conciliation and Mediation Board had been
terminated; 2) the NLRC Labor Arbiter had jurisdiction over the
case which was a termination dispute pursuant to Article 217
(2) of the Labor Code; and 3) there was nothing in the CBA
which needs interpretation or implementation (pp. 44-
46, Rollo).
On August 7, 1991, the respondent Labor Arbiter issued the
first questioned order. It held that:
xxx xxx xxx
While there are seemingly contradictory provisions in the
aforecited article of the Labor Code, the better interpretation
will be to give effect to both, and termination dispute being
clearly spelled as falling under the jurisdiction of the Labor
Arbiter, the same shall be respected. The jurisdiction of the
grievance machinery and voluntary arbitration shall cover other
controversies.
However, the resolution of the instant issue shall be suspended
until both parties have fully presented their respective
positions and the said issue shall be included in the final
determination of the above-captioned case.
WHEREFORE, the instant Motions to Dismiss are hereby held
pending.
Consequently, the parties are hereby directed to submit their
position papers and supporting documents pursuant to Section
2, Rule VII of the Rules of the Commission on or before the
hearing on the merit of this case scheduled on August 29,
1991 at 11:00 a.m. (p. 23, Rollo)
On August 27, 1991, PSSLU filed another motion to resolve
motion to dismiss complaint with a prayer that the Labor
Arbiter resolve the issue of jurisdiction.
On September 4, 1991, the respondent Labor Arbiter issued
the second questioned order which held that it was assuming
jurisdiction over the complaint of private respondents, in
effect, holding that it had jurisdiction over the case.
On September 19, 1991, PSSLU filed this petition alleging that
public respondent Labor Arbiter cannot assume jurisdiction
over the complaint of public respondents because it had no
jurisdiction over the dispute subject of said complaint. It is
their submission that under Article 217 (c) of the Labor Code,
in relation to Article 261 thereof, as well as Policy Instruction
No. 6 of the Secretary of Labor, respondent Arbiter has no
jurisdiction and authority to take cognizance of the complaint
brought by private respondents which involves the
implementation of the union security clause of the CBA. The
function of the Labor Arbiter under the same law and rule is to
refer this case to the grievance machinery and voluntary
arbitration.
In its comment, private respondents argue that Article 217(a)
2 and 4 of the Labor Code is explicit, to wit:
Art. 217. Jurisdiction of the Labor Arbiters and
Commission.
a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide . . . the following cases involving all workers, . . . :
xxx xxx xxx
2) Termination disputes,
xxx xxx xxx
4) Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations.
The private respondents also claimed that insofar as Salvo,
Baybon, Ricohermoso, Solibel, Valencia, Misterio and Lasala
were concerned, they joined another union, KAMAO during the
freedom period which commenced on May 1, 1989 up to June
30, 1989 or before the effectivity of the July 1, 1989 CBA.
Hence, they are not covered by the provisions of the CBA
between Sanyo and PSSLU. Private respondents Tangkay,
Atanacio and Dionisio admit that in September 1989, they
resigned from KAMAO and rejoined PSSLU (pp.
66(a)-68, Rollo).
For its part, public respondent, through the Office of the
Solicitor General, is of the view that a distinction should be
made between a case involving "interpretation or
implementation of collective bargaining agreement or
"interpretation" or "enforcement" of company personnel
policies, on the one hand and a case involving termination, on
the other hand. It argued that the case at bar does not involve
an "interpretation or implementation" of a collective bargaining
agreement or "interpretation or enforcement" of company
policies but involves a "termination." Where the dispute is just
in the interpretation, implementation or enforcement stage, it
may be referred to the grievance machinery set up in the CBA
or by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by
the Labor Arbiter.
Article 217 of the Labor Code defines the jurisdiction of the
Labor Arbiter.
Art. 217. Jurisdiction of Labor Arbiters and the Commission . a)
Except as otherwise provided under this Code the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and
lockouts;
6. Except claims for Employees Compensation, Social Security,
the Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of
collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same
to the grievance machinery and voluntary arbitration as may
be provided in said agreements.
It is clear from the above article that termination cases fall
under the jurisdiction of the Labor Arbiter. It should be noted
however that said article at the outset excepted from the said
provision cases otherwise provided for in other provisions of
the same Code, thus the phrase "Except as otherwise provided
under this Code . . . ." Under paragraph (c) of the same article,
it is expressly provided that "cases arising from the
interpretation or implementation of collective bargaining
agreements and those arising from the interpretation and
enforcement of company personnel policies shall be disposed
of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said
agreements.
It was provided in the CBA executed between PSSLU and
Sanyo that a member's voluntary resignation from
membership, willful refusal to pay union dues and his/her
forming, organizing, joining, supporting, affiliating or aiding
directly or indirectly another labor union shall be a cause for it
to demand his/her dismissal from the company. The demand
for the dismissal and the actual dismissal by the company on
any of these grounds is an enforcement of the union security
clause in the CBA. This act is authorized by law provided that
enforcement should not be characterized by arbitrariness
(Manila Mandarin Employee Union v. NLRC, G.R. No. 76989, 29
Sept. 1987, 154 SCRA 368) and always with due process
(Tropical Hut Employees Union v. Tropical Food Market, Inc.,
L-43495-99, Jan. 20, 1990).
The reference to a Grievance Machinery and Voluntary
Arbitrators for the adjustment or resolution of grievances
arising from the interpretation or implementation of their CBA
and those arising from the interpretation or enforcement of
company personnel policies is mandatory. The law grants to
voluntary arbitrators original  and exclusive jurisdiction  to hear
and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or
enforcement of company personnel policies (Art. 261, Labor
Code).
In its order of September 4, 1991, respondent Labor Arbiter
explained its decision to assume jurisdiction over the
complaint, thus:
The movants failed to show (1) the provisions of the CBA to be
implemented, and (2) the grievance machinery and voluntary
arbitrator already formed and properly named. What self-
respecting judge would refer a case from his responsibility to a
shadow? To whom really and specifically shall the case be
indorsed or referred? In brief, they could have shown the (1)
existence of the grievance machinery and (2) its being
effective.
Furthermore, the aforecited law merely directs the "referral"
cases. It does not expressly confer jurisdiction on the
grievance machinery or voluntary arbitration panel, created or
to be created. Article 260 of the Labor Code describes the
formation of the grievance and voluntary arbitration. All this of
course shall be on voluntary basis. Is there another meaning of
voluntary arbitration? (The herein complainant have strongly
opposed the motion to dismiss. Would they go willingly to the
grievance machinery and voluntary arbitration which are
installed by their opponents if directed to do so?) (p. 26, Rollo)
The failure of the parties to the CBA to establish the grievance
machinery and its unavailability is not an excuse for the Labor
Arbiter to assume jurisdiction over disputes arising from the
implementation and enforcement of a provision in the CBA. In
the existing CBA between PSSLU and Sanyo, the procedure
and mechanics of its establishment had been clearly laid out as
follows:
ARTICLE XV — GRIEVANCE MACHINERY
Sec. 1. Whenever any controversy should arise between the
company and the union as to the interpretation or application
of the provision of this agreement, or whenever any difference
shall exist between said parties relative to the terms and
conditions of employment, an earnest effort shall be made to
settle such controversy in substantially the following manner:
First step. (Thru Grievance) The dispute shall initially be
resolved by conference between the management to be
represented by the Management's authorized representatives
on the one hand, and the Union to be represented by a
committee composed of the local union president and one of
the local union officer appointed by the local union president,
on the other hand within three days from date of concurrence
of grievance action. In the absence of the local union
president, he (shall) appoint another local union officer to take
over in his behalf. Where a controversy personally affects an
employee, he shall not be allowed to be a member of the
committee represented by the union.
Second step. (Thru Arbitrator mutually chosen) Should such
dispute remain unsettled after twenty (20) days from the first
conference or after such period as the parties may agree upon
in specified cases, it shall be referred to an arbitrator chosen
by the consent of the company and the union. In the event of
failure to agree on the choice of voluntary arbitrator, the
National Conciliation and Mediation Board, Department of
Labor and Employment shall be requested to choose an
Arbitrator in accordance with voluntary arbitration procedures.
Sec. 2. The voluntary Arbitrator shall have thirty (30) days to
decide the issue presented to him and his decision shall be
final, binding and executory upon the parties. He shall have no
authority to add or subtract from and alter any provision of this
agreement. The expenses of voluntary arbitration including the
fee of the arbitrator shall be shared equally by the company
and the union. In the event the arbitrator chosen either by the
mutual agreement of the company and the union by (the) way
of voluntary arbitration or by the National Conciliation and
Mediation Board (NCMB) failed to assume his position, died,
become disabled or any other manner failed to function and or
reach a decision, the company and the union shall by mutual
agreement choose another arbitrator; in the event of failure to
agree on the choice of a new voluntary arbitrator, the matter
shall again be referred back to the NCMB who shall be
requested again to choose a new arbitrator as above provided.
Any grievance not elevated or processed as above provided
within the stipulated period shall be deemed settled and
terminated.
Sec. 3. It is hereby agreed that decisions of the union relative
to their members, for implementation by the COMPANY, should
be resolved for review thru the Grievance Machinery; and
management be invited to participate in the Grievance
procedure to be undertaken by the union relative to (the) case
of the union against members. (pp. 134-135, Rollo)
All that needs to be done to set the machinery into motion is
to call for the convening thereof. If the parties to the CBA had
not designated their representatives yet, they should be
ordered to do so.
The procedure introduced in RA 6715 of referring certain
grievances originally and exclusively to the grievance
machinery and when not settled at this level, to a panel of
voluntary arbitrators outlined in CBA's does not only include
grievances arising from the interpretation or implementation of
the CBA but applies as well to those arising from the
implementation of company personnel policies. No other body
shall take cognizance of these cases. The last paragraph of
Article 261 enjoins other bodies from assuming jurisdiction
thereof:
The commission, its Regional Offices and the Regional
Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator or
panel of voluntary arbitrators and shall immediately dispose
and refer the same to the grievance machinery or voluntary
arbitration provided in the Collective Bargaining Agreement.
In the instant case, however, We hold that the Labor Arbiter
and not the Grievance Machinery provided for in the CBA has
the jurisdiction to hear and decide the complaints of the
private respondents. While it appears that the dismissal of the
private respondents was made upon the recommendation of
PSSLU pursuant to the union security clause provided in the
CBA, We are of the opinion that these facts do not come within
the phrase "grievances arising from the interpretation or
implementation of (their) Collective Bargaining Agreement and
those arising from the interpretation or enforcement of
company personnel policies," the jurisdiction of which pertains
to the Grievance Machinery or thereafter, to a voluntary
arbitrator or panel of voluntary arbitrators. Article 260 of the
Labor Code on grievance machinery and voluntary arbitrator
states that "(t)he parties to a Collective Bargaining Agreement
shall include therein provisions that will ensure the mutual
observance of its terms and conditions. They shall establish a
machinery for the adjustment and resolution of grievances
arising from the interpretation or implementation of their
Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies."
It is further provided in said article that the parties to a CBA
shall name or designate their respective representatives to the
grievance machinery and if the grievance is not settled in that
level, it shall automatically be referred to voluntary arbitrators
(or panel of voluntary arbitrators) designated in advance by
the parties. It need not be mentioned that the parties to a CBA
are the union and the company. Hence, only disputes involving
the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.
In the instant case, both the union and the company are
united or have come to an agreement regarding the dismissal
of private respondents. No grievance between them exists
which could be brought to a grievance machinery. The
problem or dispute in the present case is between the union
and the company on the one hand and some union and non-
union members who were dismissed, on the other hand. The
dispute has to be settled before an impartial body. The
grievance machinery with members designated by the union
and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the
dismissed workers grievances be ventilated before an impartial
body. Since there has already been an actual termination, the
matter falls within the jurisdiction of the Labor Arbiter.
ACCORDINGLY, the petition is DISMISSED. Public respondent
Labor Arbiter is directed to resolve the complaints of private
respondents immediately.
SO ORDERED.
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner, 
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK
EMPLOYEES and ATTY. ESTER S. GARCIA in her
capacity as VOLUNTARY ARBITRATOR, respondents.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank
(LDB) and the Association of Luzon Development Bank
Employees (ALDBE) arose an arbitration case to resolve the
following issue:
Whether or not the company has violated the Collective
Bargaining Agreement provision and the Memorandum of
Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their
respective Position Papers on December 1-15, 1994. Atty.
Ester S. Garcia, in her capacity as Voluntary Arbitrator,
received ALDBE's Position Paper on January 18, 1995. LDB, on
the other hand, failed to submit its Position Paper despite a
letter from the Voluntary Arbitrator reminding them to do so.
As of May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not
adhered to the Collective Bargaining Agreement provision nor
the Memorandum of Agreement on promotion.
Hence, this petition for certiorari  and prohibition seeking to set
aside the decision of the Voluntary Arbitrator and to prohibit
her from enforcing the same.
In labor law context, arbitration is the reference of a labor
dispute to an impartial third person for determination on the
basis of evidence and arguments presented by such parties
who have bound themselves to accept the decision of the
arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on
which it is based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a
dispute are compelled by the government to forego their right
to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party. 1 The essence of
arbitration remains since a resolution of a dispute is arrived at
by resort to a disinterested third party whose decision is final
and binding on the parties, but in compulsory arbitration, such
a third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a
dispute by the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to an impartial
third person for a final and binding resolution. 2 Ideally,
arbitration awards are supposed to be complied with by both
parties without delay, such that once an award has been
rendered by an arbitrator, nothing is left to be done by both
parties but to comply with the same. After all, they are
presumed to have freely chosen arbitration as the mode of
settlement for that particular dispute. Pursuant thereto, they
have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to
de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining
Agreement (CBA) are required to include therein provisions for
a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company
personnel policies.3 For this purpose, parties to a CBA shall
name and designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection,
preferably from those accredited by the National Conciliation
and Mediation Board (NCMB). Article 261 of the Labor Code
accordingly provides for exclusive original jurisdiction of such
voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the
interpretation or enforcement of company personnel policies.
Article 262 authorizes them, but only upon agreement of the
parties, to exercise jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the
Labor Code has jurisdiction over the following enumerated
cases:
. . . (a) Except as otherwise provided under this Code the
Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and
lockouts;
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a
voluntary arbitrator or a panel of such arbitrators is quite
limited compared to the original jurisdiction of the labor arbiter
and the appellate jurisdiction of the National Labor Relations
Commission (NLRC) for that matter. 4 The state of our present
law relating to voluntary arbitration provides that "(t)he award
or decision of the Voluntary Arbitrator . . . shall be final and
executory after ten (10) calendar days from receipt of the copy
of the award or decision by the parties," 5 while the "(d)ecision,
awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt of such decisions,
awards, or orders." 6 Hence, while there is an express mode of
appeal from the decision of a labor arbiter, Republic Act No.
6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator.
Yet, past practice shows that a decision or award of a
voluntary arbitrator is, more often than not, elevated to the
Supreme Court itself on a petition for certiorari,7 in effect
equating the voluntary arbitrator with the NLRC or the Court of
Appeals. In the view of the Court, this is illogical and imposes
an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled
premise that the judgments of courts and awards of quasi-
judicial agencies must become final at some definite time, this
Court ruled that the awards of voluntary arbitrators determine
the rights of parties; hence, their decisions have the same
legal effect as judgments of a court. In Oceanic Bic Division
(FFW), et al. v. Romero, et al.,9 this Court ruled that "a
voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys
in law the status of a quasi-judicial agency  but independent of,
and apart from, the NLRC since his decisions are not
appealable to the latter.10
Section 9 of B.P. Blg. 129, as amended by Republic Act No.
7902, provides that the Court of Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of Regional Trial
Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and
the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo  that the voluntary arbitrator or the panel
of voluntary arbitrators may not strictly be considered as a
quasi-judicial agency, board or commission, still both he and
the panel are comprehended within the concept of a "quasi-
judicial instrumentality." It may even be stated that it was to
meet the very situation presented by the quasi-judicial
functions of the voluntary arbitrators here, as well as the
subsequent arbitrator/arbitral tribunal operating under the
Construction Industry Arbitration Commission, 11 that the
broader term "instrumentalities" was purposely included in the
above-quoted provision.
An "instrumentality" is anything used as a means or
agency.12 Thus, the terms governmental "agency" or
"instrumentality" are synonymous in the sense that either of
them is a means by which a government acts, or by which a
certain government act or function is performed. 13 The word
"instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for
the performance of a state function. 14 An individual person, like
an administrator or executor, is a judicial instrumentality in the
settling of an estate, 15 in the same manner that a sub-agent
appointed by a bankruptcy court is an instrumentality of the
court,16and a trustee in bankruptcy of a defunct corporation is
an instrumentality of the state.17
The voluntary arbitrator no less performs a state function
pursuant to a governmental power delegated to him under the
provisions therefor in the Labor Code and he falls, therefore,
within the contemplation of the term "instrumentality" in the
aforequoted Sec. 9 of B.P. 129. The fact that his functions and
powers are provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that,
although the Employees Compensation Commission is also
provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No.
1-95, laid down the procedure for the appealability of its
decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No.
7902 in amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or
panel of arbitrators should likewise be appealable to the Court
of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasi-
judicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the
original purpose of Circular No. 1-91 to provide a uniform
procedure for the appellate review of adjudications of all quasi-
judicial entities18 not expressly excepted from the coverage of
Sec. 9 of B.P. 129 by either the Constitution or another
statute. Nor will it run counter to the legislative intendment
that decisions of the NLRC be reviewable directly by the
Supreme Court since, precisely, the cases within the
adjudicative competence of the voluntary arbitrator are
excluded from the jurisdiction of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22
of Republic Act No. 876, also known as the Arbitration Law,
arbitration is deemed a special proceeding of which the court
specified in the contract or submission, or if none be specified,
the Regional Trial Court for the province or city in which one of
the parties resides or is doing business, or in which the
arbitration is held, shall have jurisdiction. A party to the
controversy may, at any time within one (1) month after an
award is made, apply to the court having jurisdiction for an
order confirming the award and the court must grant such
order unless the award is vacated, modified or corrected. 19
In effect, this equates the award or decision of the voluntary
arbitrator with that of the regional trial court. Consequently, in
a petition for certiorari from that award or decision, the Court
of Appeals must be deemed to have concurrent jurisdiction
with the Supreme Court. As a matter of policy, this Court shall
henceforth remand to the Court of Appeals petitions of this
nature for proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the
Court of Appeals.
SO ORDERED.
G.R. No. 140960            January 20, 2003
LUDO & LUYM CORPORATION, petitioner, 
vs.
FERDINAND SAORNIDO as voluntary arbitrator and
LUDO EMPLOYEES UNION (LEU) representing 214 of its
officers and members, respondents.
QUISUMBING, J.:
This petition for review on certiorari seeks to annul and set
aside the decision1 of the Court of Appeals promulgated on
July 6, 1999 and its Order denying petitioner’s motion for
reconsideration in CA-G.R. SP No. 44341.
The relevant facts as substantially recited by the Court of
Appeals in its decision are as follows:
Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is
a domestic corporation engaged in the manufacture of coconut
oil, corn starch, glucose and related products. It operates a
manufacturing plant located at Tupas Street, Cebu City and a
wharf where raw materials and finished products are shipped
out.
In the course of its business operations, LUDO engaged the
arrastre services of Cresencio Lu Arrastre Services (CLAS) for
the loading and unloading of its finished products at the wharf.
Accordingly, several arrastre workers were deployed by CLAS
to perform the services needed by LUDO.
These arrastre workers were subsequently hired, on different
dates, as regular rank-and-file employees of LUDO every time
the latter needed additional manpower services. Said
employees thereafter joined respondent union, the LUDO
Employees Union (LEU), which acted as the exclusive
bargaining agent of the rank-and-file employees.
On April 13, 1992, respondent union entered into a collective
bargaining agreement with LUDO which provides certain
benefits to the employees, the amount of which vary according
to the length of service rendered by the availing employee.
Thereafter, the union requested LUDO to include in its
members’ period of service the time during which they
rendered arrastre services to LUDO through the CLAS so that
they could get higher benefits. LUDO failed to act on the
request. Thus, the matter was submitted for voluntary
arbitration.
The parties accordingly executed a submission agreement
raising the sole issue of the date of regularization of the
workers for resolution by the Voluntary Arbitrator.
In its decision dated April 18, 1997, the Voluntary Arbitrator
ruled that: (1) the respondent employees were engaged in
activities necessary and desirable to the business of petitioner,
and (2) CLAS is a labor-only contractor of petitioner. 2 It
disposed of the case thus:
WHEREFORE, in view of the foregoing, this Voluntary
Arbitrator finds the claims of the complainants meritorious and
so hold that:
a. the 214 complainants, as listed in the Annex A, shall be
considered regular employees of the respondents six (6)
months from the first day of service at CLAS;
b. the said complainants, being entitled to the CBA benefits
during the regular employment, are awarded a) sick leave, b)
vacation leave & c) annual wage and salary increases during
such period in the amount of FIVE MILLION SEVEN HUNDRED
SEVEN THOUSAND TWO HUNDRED SIXTY ONE PESOS AND
SIXTY ONE CENTAVOS (P5,707,261.61) as computed in
"Annex A";
c. the respondents shall pay attorney’s fees of ten (10) percent
of the total award;
d. an interest of twelve (12) percent per annum or one (1)
percent per month shall be imposed to the award from the
date of promulgation until fully paid if only to speed up the
payment of these long over due CBA benefits deprived of the
complaining workers.
Accordingly, all separation and/or retirement benefits shall be
construed from the date of regularization aforementioned
subject only to the appropriate government laws and other
social legislation.
SO ORDERED.3
In due time, LUDO filed a motion for reconsideration, which
was denied. On appeal, the Court of Appeals affirmed in toto
the decision of the Voluntary Arbitrator, thus:
WHEREFORE, finding no reversible error committed by
respondent voluntary arbitrator, the instant petition is hereby
DISMISSED.
SO ORDERED.4
Hence this petition. Before us, petitioner raises the following
issues:
I
WHETHER OR NOT BENEFITS CONSISTING OF SALARY
INCREASES, VACATION LEAVE AND SICK LEAVE BENEFITS
FOR THE YEARS 1977 TO 1987 ARE ALREADY BARRED BY
PRESCRIPTION WHEN PRIVATE RESPONDENTS FILED THEIR
CASE IN JANUARY 1995;
II
WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN AWARD
BENEFITS NOT CLAIMED IN THE SUBMISSION AGREEMENT.5
Petitioner contends that the appellate court gravely erred when
it upheld the award of benefits which were beyond the terms
of submission agreement. Petitioner asserts that the arbitrator
must confine its adjudication to those issues submitted by the
parties for arbitration, which in this case is the sole issue of the
date of regularization of the workers. Hence, the award of
benefits by the arbitrator was done in excess of jurisdiction.6
Respondents, for their part, aver that the three-year
prescriptive period is reckoned only from the time the obligor
declares his refusal to comply with his obligation in clear and
unequivocal terms. In this case, respondents maintain that
LUDO merely promised to review the company records in
response to respondents’ demand for adjustment in the date of
their regularization without making a categorical statement of
refusal.7 On the matter of the benefits, respondents argue that
the arbitrator is empowered to award the assailed benefits
because notwithstanding the sole issue of the date of
regularization, standard companion issues on reliefs and
remedies are deemed incorporated. Otherwise, the whole
arbitration process would be rendered purely academic and the
law creating it inutile.8
The jurisdiction of Voluntary Arbitrator or Panel of Voluntary
Arbitrators and Labor Arbiters is clearly defined and specifically
delineated in the Labor Code. The pertinent provisions of the
Labor Code, read:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. ---
(a) Except as otherwise provided under this Code the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases:
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wage, rates of pay, hours of
work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
xxx
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators. — The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising
from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies
referred to in the immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as
unfair labor practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement.
The Commission, its Regional Offices and the Regional
Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the
exclusive and original jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary
Arbitration provided in the Collective Bargaining Agreement.
Art. 262. Jurisdiction over other labor disputes . — The
Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining
deadlocks."
In construing the above provisions, we held in San Jose vs.
NLRC, 9 that the jurisdiction of the Labor Arbiter and the
Voluntary Arbitrator or Panel of Voluntary Arbitrators over the
cases enumerated in the Labor Code, Articles 217, 261 and
262, can possibly include money claims in one form or
another.10 Comparatively, in Reformist Union of R.B. Liner, Inc.
vs. NLRC,11 compulsory arbitration has been defined both as
"the process of settlement of labor disputes by a government
agency which has the authority to investigate and to make an
award which is binding on all the parties, and as a mode of
arbitration where the parties are compelled to accept the
resolution of their dispute through arbitration by a third party
(emphasis supplied)."12 While a voluntary arbitrator is not part
of the governmental unit or labor department’s personnel, said
arbitrator renders arbitration services provided for under labor
laws.
Generally, the arbitrator is expected to decide only those
questions expressly delineated by the submission agreement.
Nevertheless, the arbitrator can assume that he has the
necessary power to make a final settlement since arbitration is
the final resort for the adjudication of disputes. 13 The succinct
reasoning enunciated by the CA in support of its holding, that
the Voluntary Arbitrator in a labor controversy has jurisdiction
to render the questioned arbitral awards, deserves our
concurrence, thus:
In general, the arbitrator is expected to decide those questions
expressly stated and limited in the submission agreement.
However, since arbitration is the final resort for the
adjudication of disputes, the arbitrator can assume that he has
the power to make a final settlement. Thus, assuming that the
submission empowers the arbitrator to decide whether an
employee was discharged for just cause, the arbitrator in this
instance can reasonable assume that his powers extended
beyond giving a yes-or-no answer and included the power to
reinstate him with or without back pay.
In one case, the Supreme Court stressed that "xxx the
Voluntary Arbitrator had plenary jurisdiction and authority to
interpret the agreement to arbitrate and to determine the
scope of his own authority subject only, in a proper case, to
the certiorari jurisdiction of this Court. The Arbitrator, as
already indicated, viewed his authority as embracing not
merely the determination of the abstract question of whether
or not a performance bonus was to be granted but also, in the
affirmative case, the amount thereof.
By the same token, the issue of regularization should be
viewed as two-tiered issue. While the submission agreement
mentioned only the determination of the date or regularization,
law and jurisprudence give the voluntary arbitrator enough
leeway of authority as well as adequate prerogative to
accomplish the reason for which the law on voluntary
arbitration was created – speedy labor justice. It bears
stressing that the underlying reason why this case arose is to
settle, once and for all, the ultimate question of whether
respondent employees are entitled to higher benefits. To
require them to file another action for payment of such
benefits would certainly undermine labor proceedings and
contravene the constitutional mandate providing full protection
to labor.14
As regards petitioner’s contention that the money claim in this
case is barred by prescription, we hold that this contention is
without merit. So is petitioner’s stance that the benefits
claimed by the respondents, i.e., sick leave, vacation leave and
13th-month pay, had already prescribed, considering the
three-year period for the institution of monetary claims. 15 Such
determination is a question of fact which must be ascertained
based on the evidence, both oral and documentary, presented
by the parties before the Voluntary Arbitrator. In this case, the
Voluntary Arbitrator found that prescription has not as yet set
in to bar the respondents’ claims for the monetary benefits
awarded to them. Basic is the rule that findings of fact of
administrative and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific
matters, are generally accorded not only great respect but
even finality.16 Here, the Voluntary Arbitrator received the
evidence of the parties first-hand. No compelling reason has
been shown for us to diverge from the findings of the
Voluntary Arbitrator, especially since the appellate court
affirmed his findings, that it took some time for respondent
employees to ventilate their claims because of the repeated
assurances made by the petitioner that it would review the
company records and determine therefrom the validity of the
claims, without expressing a categorical denial of their claims.
R. No. 124823 July 28, 1999
As elucidated by the Voluntary Arbitrator:
PASVIL/PASCUAL LINER, INC., WORKERS UNION-
The respondents had raised prescription as defense. The
NAFLU, and DONATO BUGTONG, PEDRO FERNANDO,
controlling law, as ruled by the High Court, is:
RODANTE AMBAS, RODOLFO PASCUAL, FELIZARDO
GASPAR, CONRADO CLEMENTE, PONCIANO GABRIEL
"The cause of action accrues until the party obligated refuses
SR., ROBERTO ESPEJON, MARCELO MOJAR JR.,
xxx to comply with his duty. Being warded off by promises, the
ARNULFO GERMAN, JOSE OGAO, ARNEL FORTALEZA,
workers not having decided to assert [their] right[s], [their]
MERLITO DELA CRUZ, ROMMEL BUENAVENTE, MANUEL
causes of action had not accrued…" (Citation omitted.)
TRINIDAD, JOSELITO MENDIOLA, PEDRO OCIONES,
Since the parties had continued their negotiations even after GUILLERMO NARANJO and FREDENILL
the matter was raised before the Grievance Procedure and the LAZO, petitioners, 
voluntary arbitration, the respondents had not refused to vs.
comply with their duty. They just wanted the complainants to NATIONAL LABOR RELATIONS COMMISSION and
present some proofs. The complainant’s cause of action had PASVIL/PASCUAL LINER, INC., respondents.
not therefore accrued yet. Besides, in the earlier voluntary
 
arbitration case aforementioned involving exactly the same
issue and employees similarly situated as the complainants’,
BELLOSILLO, J.:
the same defense was raised and dismissed by Honorable
Thelma Jordan, Voluntary Arbitrator. THE RIGHT TO STRIKE is one of the rights recognized and
guaranteed by the Constitution as an instrument of labor for its
In fact, the respondents’ promised to correct their length of
protection against management exploitation. By virtue of this
service and grant them the back CBA benefits if the
right the workers are able to press their demands for better
complainants can prove they are entitled rendered the former
terms and conditions of employment with more energy and
in estoppel, barring them from raising the defense of laches or
persuasiveness, poising the threat to strike as their reaction to
prescription. To hold otherwise amounts to rewarding the
their employer's intransigence. The strike is indeed a powerful
respondents for their duplicitous representation and abet them
weapon of the working class. But precisely, if not because of
in a dishonest scheme against their workers. 17
this, it must be handled carefully, like a sensitive explosive,
lest it blows up in the workers' own hands. 1 Simply put, a
Indeed, as the Court of Appeals concluded, under the
strike is recognized and protected by our labor laws only when
equitable principle of estoppel, it will be the height of injustice
waged on account of a labor dispute. In the absence thereof,
if we will brush aside the employees’ claims on a mere
the employees who engage themselves in work stoppage
technicality, especially when it is petitioner’s own action that
commit an illegal strike and should face the consequences
prevented them from interposing the claims within the
thereof.1âwphi1.nêt
prescribed period.
On 3 August 1994 petitioner PASVIL/Pascual Liner, Inc.,
WHEREFORE, the petition is denied. The appealed decision of
Workers Union — NAFLU (UNION for short) 2 filed a notice of
the Court of Appeals in CA-G.R. SP No. 44341 and the
strike with the National Conciliation and Mediation Board —
resolution denying petitioner’s motion for reconsideration, are
National Capital Region (NCMB-NCR for short) against private
AFFIRMED. Costs against petitioner.
respondent PASVIL/Pascual Liner, Inc., (PASVIL for short) for
SO ORDERED. unfair labor practices consisting in union busting,
discrimination and discouraging union membership. 3 On 24
January 1995 the NCMB-NCR notified UNION President Donato
Bugtong thus —
During the conciliation meetings conducted by this Office, it
was clearly established that the real issues raised are the
dismissal of the Union President (referring to Bugtong himself)
which is pending adjudication before Labor Arbiter Melquiades
Del Rosario of the NLRC-NCR, and the certification election
case which is pending resolution before the Office of the
Secretary. The issues raised are therefore not proper subjects
of a Notice of Strike but are appropriate for Preventive
Mediation. 4
A series of conciliation conferences was thereafter conducted
by the NCMB-NCR which failed however to amicably settle the
dispute. As a consequence, on 18 February 1995 petitioner
UNION staged a strike. Further efforts to effect settlement
achieved nothing and the strike continued.
On 21 February 1995, upon petition of private respondent
PASVIL, then Secretary of Labor and Employment Ma. Nieves
R. Confesor, pursuant to Art. 263, par. (g), of the Labor Code,
assumed jurisdiction over the dispute and certified it to public
respondent National Labor Relations Commission (NLRC) for
compulsory arbitration. Secretary Confesor justified her direct
intervention —
The Company is engaged in the transportation business and
has in its employ more or less 900 workers. It services the
needs of thousands of commuters in Metro Manila mostly
students, professionals, government and private employees as
well as traders and merchants. A prolonged work stoppage,
therefore, at the Company would not only cause unnecessary
inconvenience and adverse effects to the riding public but also
to the livelihood of its direct employees not to mention their
families and those indirectly dependent upon the continued
operation of the Company.
At this critical time when efforts of the present administration
is (sic) seriously focused on sustaining the economic gains
already achieved and putting in place the much needed social
reforms, it is the utmost concern of this Office to avert
unnecessary work stoppages that might result into untold dire
consequences. 5
Secretary Confesor directed all striking workers to return to
work within twenty-four (24) hours from receipt thereof and
for PASVIL to accept them back under the same terms and
conditions of employment prevailing before the strike.
Furthermore, she directed the parties to cease and desist from
committing acts that would prejudice the other party or
exacerbate the situation. The directive was published in Daily
Balita 6 and Bulgar. 7
Notwithstanding receipt of the aforementioned order,
Secretary Confesor found that petitioner UNION continued to
picket and barricade PASVIL's premises thereby preventing the
workers wanting to report back to work from entering the
premises. On 24 February 1995 she reiterated her directive in
the previous return-to-work order and deputized the Station
Commander of the Novaliches Police Station to assist in the
orderly and peaceful enforcement of her order including the
removal of all forms of obstruction and barricades to ensure
free ingress to or egress from the premises of PASVIL. 8
The conciliation conferences were then scheduled by the NLRC
on 28 March and 19 April 1995 but only representatives of
PASVIL appeared. On this account, an order was issued on 12
May 1995 directing the parties to submit their Position Papers.
The parties complied.
On 21 August 1995 PASVIL moved for the early resolution of
the case on the ground that the strike was still ongoing thus
causing it vast revenue losses. A hearing was set for 29 August
1995 to determine whether a formal hearing on the merits was
necessary or whether PASVIL's motion should be granted.
However, both parties failed to appear so a second hearing
was set on 11 October 1995. On this date, the parties were
asked if they wished to have the case submitted for resolution.
Petitioner UNION, through Board Member Ponciano Gabriel Sr.,
requested and was granted up to 23 October 1995 to notify
the NLRC regarding its intention with respect to the
proceedings. On the deadline, petitioner UNION moved for a
formal trial on the merits. A hearing on the motion was set on
6 November 1995. However, only PASVIL's counsel attended
the hearing and was given until 15 November 1995 to
comment on the motion. In the comment subsequently filed,
PASVIL alleged that all questions raised by petitioner UNION
had been traversed by the documents already submitted in
evidence. Another hearing was scheduled for 7 December
1995. Again, only PASVIL appeared.
On the belief that petitioner UNION's motion for a formal trial
on the merits was a mere dilatory move and on the
consideration that the evidence on hand would sufficiently
allow it to reach a conclusion, the NLRC denied the motion for
a formal trial and proceeded to resolve the legality of petitioner
UNION's purposes for staging the strike, i.e., that twenty-four
(24) airconditioned buses were surreptitiously removed from
the company premises to deprive UNION officers and members
of their jobs, and that Bugtong was arbitrarily dismissed from.
employment due to UNION activities. PASVIL countered that
the buses were sold to E & J Transport and Mayami Transit the
proceeds of which were applied to the payment of interest on
its principal obligations and that Bugtong was dismissed due to
gross and habitual neglect of duty/willful disobedience.
On 15 January 1996 the NLRC declared the still-ongoing strike
illegal and consequently deemed the UNION officers who acted
as leaders thereof, petitioners herein, to have lost their
employment status, namely, President Donato Bugtong, Vice
President Pedro Fernando, Secretary Rodante Ambas,
Treasurer Rodolfo Pascual, Auditor Felizardo Gaspar,
Spokesman Conrado Clemente and Board Members Ponciano
Gabriel Sr., Roberto Espejon, Marcelo Mojar Jr., Arnulfo
German, Jose Ogao, Arnel Fortaleza, Merlito Dela Cruz,
Rommel Buenavente, Manuel Trinidad, Joselito Mendiola,
Pedro Ociones, Guillermo Naranjo and Fredenill Lazo. However,
the charge of unfair labor practice was dismissed for lack of
merit. 9
In support of its ruling, the NLRC ratiocinated that although
PASVIL did not prove that the sale of the buses actually
materialized there was evidence showing that even without
those buses there was a sufficient number of buses remaining
for the employees to continue working and that PASVIL even
exhorted its drivers and dispatchers to accept their respective
assignments and operate the buses. 10 Yet petitioners did not
explain why they failed to man the remaining buses. The NLRC
also found that petitioners did not specify the wage benefits
they were entitled to that were not granted by PASVIL nor did
they clarify the particular working conditions existing at their
workplace which they could not tolerate. At any rate, the NLRC
opined that the issue of underpayment or non-payment of
wage benefits should have been addressed to the Labor
Arbiter, whereas that of poor working conditions should have
been brought to the attention of the Department of Labor and
Employment or, if related to the condition of the buses
themselves, to the Department of Transportation and
Communication which had the authority to suspend or cancel
the franchise of PASVIL.
With regard to the dismissal from employment of petitioner
Bugtong, the NLRC found that as previously ruled by the
NCMB-NCR, a complaint therefor has been filed before Labor
Arbiter Melquiades Sol D. Del Rosario who on 25 May 1995
held that the totality of infractions committed by Bugtong
justified his dismissal. 11 Still another rationale for the NLRC's
ruling against petitioners was its finding that the strikers did
not comply with Secretary Confesor's directive for them to
return to work. To sum up, the NLRC ruled that there was no
legitimate reason for petitioners to strike. On 31 January 1996
reconsideration was denied.
Did the NLRC act with grave abuse of discretion in: (a) ruling
on the illegality of the strike thus violating the doctrine laid
down in Philippine Airlines, Inc. v. Secretary of Labor and
Employment 12 that the Labor Secretary's authority to resolve a
labor dispute over which he has assumed jurisdiction
encompasses only the issues involved therein, not the legality
or illegality of the strike; (b) refusing to hold a formal trial; (c)
holding that PASVIL was not guilty of unfair labor practice;
and, (d) declaring the strike illegal and considering petitioners
to have lost their employment status?
Petitioners allege that on the basis of Art. 217 of the Labor
Code which explicitly provides that Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide cases
involving the legality of strikes and lock-outs, the NLRC was
not clothed with authority to decide on the legality of the
strike. Moreover, they stress that the dispute did not involve
any complaint for illegal strike but for unfair labor practice
such that in Philippine Airlines involving the same factual milieu
this Court held that the Secretary of Labor and Employment
acted without or in excess of jurisdiction when he ruled on the
legality of the strike.
There is no grave abuse of discretion. Article 217 of the Labor
Code categorically provides that Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide cases
involving the legality of strikes and lock-outs. But the opening
phrase of the law is as categorical in mentioning an exception
thereto. Thus —
Art. 217. Jurisdiction of Labor Arbiters and the Commission . —
(a) Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, the following cases involving all workers, whether
agricultural or non-agricultural . . . . 5. Cases arising from any
violation of Article 264 of this Code, including questions on the
legality of strikes and lock-outs . . . . (emphasis supplied).
An exception to the original and exclusive jurisdiction lodged in
the Labor Arbiters is found in Art. 263, par. (g), of the same
Code —
Art. 263. Strikes, picketing, and lockouts . — . . . . (g) When, in
his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration. Such
assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or
lockout as specified in the assumption or certification order. If
one has already taken place at the time of assumption or
certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately
resume operations and readmit all workers under the same
terms and conditions prevailing before the strike or lockout.
The Secretary of Labor and Employment or the Commission
may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such
orders as he may issue to enforce the same . . . .
In 1992 we clarified this point in International
Pharmaceuticals, Inc. v. Secretary of Labor and
Employment 13 thus —
. . . [T]he Secretary was explicitly granted by Article 263 (g) of
the Labor Code the authority to assume jurisdiction over a
labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, and decide the
same accordingly. Necessarily, this authority to assume
jurisdiction over the said labor dispute must include and
extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has
exclusive jurisdiction(emphasis supplied).
In the same manner, when the Secretary of Labor and
Employment certifies the labor dispute to the NLRC for
compulsory arbitration the latter is concomitantly empowered
to resolve all questions and controversies arising therefrom
including cases otherwise belonging originally and exclusively
to the Labor Arbiter.
In Philippine Airlines we ruled that the jurisdiction of the
Secretary of Labor and Employment in assumption and/or
certification cases is limited to the issues that are involved in
the disputes or to those submitted to him for resolution. Since
the legality or illegality of the strike resolution he was thus
found to have exceeded his jurisdiction when he restrained the
employer from taking disciplinary action against the employees
who staged an illegal strike. The Philippine Airlines case finds
no application to the present case because, as distinguished
therefrom and as properly observed by the Office of the
Solicitor General, the certification by Secretary Confesor to the
NLRC of the issues sought to be settled involved the strike of
petitioners. The certification stated —
On 3 August 1994, the PASVIL/Pascual Liner, Inc. Workers
Union — NAFLU, hereinafter referred to as the Union, filed a
Notice of Strike with the National Conciliation and Mediation
Board — National Capital Region (NCMB-NCR) against
PASVIL/Pascual Liner, Inc., hereinafter referred to as the
Company, on grounds of unfair labor practices acts. Series of
conciliation conferences conducted by the Board failed to
arrive at an amicable settlement on the alleged specific acts
committed by the Company.
On 18 February 1995, the Union struck. Further efforts to
effect settlement yielded negative results. In the meantime,
the strike continues with no settlement in sight. 14
Clearly, what was certified to the NLRC was the entire labor
dispute including the strike which was then ongoing. It was
thus necessary for the NLRC to rule on the matter.
In St. Scholastica's College v. Torres 15 where petitioner
questioned the assumption by the Secretary of Labor and
Employment of jurisdiction to decide on termination disputes,
likewise maintaining that such jurisdiction was vested instead
in the Labor Arbiter pursuant to Art. 217 of the Labor Code
and invoking Philippine Airlines, we emphasized that —
Before the Secretary of Labor and Employment may take
cognizance of an issue which is merely incidental to the labor
dispute, therefore, the same must be involved in the labor
dispute itself, or otherwise submitted to him for resolution. If it
was not, as was the case in PAL v. Secretary of Labor and
Employment, supra, and he nevertheless acted on it, that
assumption of jurisdiction is tantamount to a grave abuse of
discretion. Otherwise, the ruling in International
Pharmaceuticals, Inc. v. Secretary of Labor and
Employment, supra, will apply.
Petitioners assert that since the NLRC did not act as an
appellate body in resolving the dispute it should have been
guided by Rule V, Sec. 5, par. (b), of its New Rules of
Procedure  mandating that —
Sec. 5. Period to Decide Case . . . . (b) If the Labor Arbiter
finds no necessity of further hearing after the parties have
submitted their position papers and supporting documents, he
shall issue an Order to that effect and shall inform the parties,
stating the reasons therefor . . . .
Petitioners advance that conformably therewith the NLRC
should have issued a separate ruling on their motion for formal
trial, instead of having merely incorporated its ruling in its
assailed decision, so that they could have supplied or
completed whatever deficiencies there might be in their
evidence. They add that there were factual issues which could
not be resolved by documentary evidence, i.e., blockade of the
free ingress to and egress from the company premises and
non-compliance with the return-to-work order.
We are not persuaded. The purpose of the rule requiring the
issuance of an order submitting the case for decision is to
provide a period from which to reckon the time frame within
which to decide the case. We discern this purpose from a
reading of Rule V, Sec. 5, par. (a), of the same rules which
commands the Labor Arbiter to render his decision within thirty
(30) calendar days, without extension, after submission of the
case for decision. We find that the NLRC did not commit a
serious violation of its own rules when it incorporated its ruling
on petitioners' motion for formal trial in its decision.
Determining the reckoning period to decide the case was no
longer necessary since, after all, the NLRC had already
prepared a decision. It was enough that it acted on the motion
in its decision stating the following as reasons for denial —
Considering the fact, however, that the Union's counsel has
not bothered to appear at any of the previous hearings called
by this Office, which number at least five, We sincerely doubt
his sincerity in wanting to proceed with a formal trial of this
case.
Indeed, his (sic) counsel's seeming hide-and-seek attitude
tends to make Us believe this request for a trial on the merits
is merely a dilatory tactic resorted to, to delay the resolution of
this certified case.
Besides, after painstakingly reviewing the documents and
supporting proofs on record, we are convinced that there is
sufficient evidence to allow Us to reach a conclusion in this
case. . . . 16
Petitioners' theory — that had the NLRC issued a separate
ruling on their motion they could have rectified whatever
deficiencies there might have been in their evidence — is
outrightly fallacious. Rule V, Sec. 3, of the same Rules is
specific —
Sec. 3. Submission of Position Paper/Memorandum . — . . . .
These verified position papers shall . . . . be accompanied by
all supporting documents  including the affidavits of their
respective witnesses which shall take the place of the latter's
testimony. The parties shall thereafter not be allowed to allege
facts, or present evidence to prove facts, not referred to and
any cause or causes of action not included in the complaint or
position papers, affidavits and other documents . . . .
(emphasis supplied).
We deduce from petitioners' theory that only upon a denial of
their motion will the occasion arise for them to augment their
evidence. Here lies the fallacy. The opportune time to do so
was when they submitted their position papers. They should
have attached thereto all the documents that would have
proved their claim. 17 In PMI Colleges v. NLRC  18 we made it
clear that —
. . . . The absence of a formal hearing or trial before the Labor
Arbiter is no cause for petitioner to impute grave abuse of
discretion. Whether to conduct one or not depends on the sole
discretion of the Labor Arbiter, taking into account the position
papers and supporting documents submitted by the parties on
every issue presented. If the Labor Arbiter, in his judgment, is
confident that he can rely on the documents before him, he
cannot be faulted for not conducting a formal trial anymore,
unless it would appear that, in view of the particular
circumstances of a case, the documents, without more, are
really insufficient.
Applying the ruling to the present case and dwelling on the
more important consideration of the NLRC in not granting
petitioners' motion for a formal trial, i.e., the existence of
sufficient evidence allowing it to reach a conclusion, we fully
agree in the denial of petitioners' motion. PASVIL's evidence
adequately proved that it was not guilty of unfair labor
practice; consequently, there was no legitimate reason for
petitioners to hold a strike and thereafter defy the return-to-
work order of Secretary Confesor.
Petitioners maintain that PASVIL committed unfair labor
practice when it surreptitiously pulled out twenty-four (24)
buses from its garage, then manned by active UNION
members, thereby substantially affecting their jobs. In the
alternative, they argue that, citing People's Industrial and
Commercial Employees and Workers Organization (FFW)
v. People's Industrial and Commercial Corporation,  19 a strike
may be considered legal where the union believed that the
company committed unfair labor practices and the
circumstances warranted such belief in good faith although
subsequently such allegations are found to be untrue. They
insist also that, as averred in their affidavit, they wanted to
comply with the return-to-work order of Secretary Confesor
but that the bus company refused to reinstate them.
Factual findings of the NLRC are entitled to respect and finality
in the absence of proof, as herein, that they were arrived at
arbitrarily or
capriciously. 20 Although PASVIL failed to prove that the sale of
the buses pushed through, we agree with the NLRC that there
is evidence showing that a sufficient number of units remained
for the employees to continue working. PASVIL, in its letter of
2 August 1994, exhorted its drivers and dispatchers individually
to accept their respective assignments and operate the buses
thus —
Ikaw ay sinasabihan na magpa-schedule sa Dispatcher upang
maibiyahe ang bus.
Maraming bus ang kumpanya kaya marami ang nakahilera
lang sa ready line. Wala namang sira ang mga bus kaya
kailangang maibiyahe ang mga ito. 21
Moreover, the NCMB-NCR conducted on 7 September 1994 an
ocular inspection of PASVIL's facilities and determined that
there were thirty-seven (37) buses "ready for trip" but that
these remained unmanned. 22 Petitioners did not bother to
explain why they failed to operate the remaining buses.
Good faith is still a valid defense against the claim of illegality
of a strike. However, petitioners cannot find refuge in People's
Industrial & Commercial Employees and Workers
Organization (FFW) because, on the basis of PASVIL's letters
to its individual employees and the ocular inspection by the
NCMB-NCR, we do not find even a semblance of good faith on
the part of petitioners. 23 The NLRC was correct in dismissing
the charge of unfair labor practice against PASVIL and in
declaring the strike illegal. Article 264, par. (a), of the Labor
Code provides the sanction of loss of employment status for
any union officer who knowingly participates in an illegal
strike. The NLRC found that petitioners led the illegal strike
against PASVIL. This is not disputed by petitioners. We thus
sustain the NLRC's declaration that petitioners lost their
employment status with PASVIL.
Petitioners lay the blame on PASVIL's alleged refusal to accept
them back to its fold for their failure to comply with the
directive of Secretary Confesor to return to work. They invite
our attention to an averment in their affidavit —
28. Na ang ilan sa mga manggagawa na gusto sanang bumalik
din at sumunod sa Return to Work Order ngunit ayaw talagang
pabalikin ng manedsment (sic) at ni ayaw papasukin sa loob
ng garahe ay ang mga sumusunod. . . . 24
As thus worded, it is unclear as to which orders of Secretary
Confesor petitioners allegedly displayed willingness to obey.
Exploring the other averments in their affidavit we note that
they actually referred the first order of Secretary Confesor. We
took into account their previous averments —
23. Na nagsimula kaming mag-strike noong Pebrero 18, 1995
ngunit noong Pebrero 21, 1995 ay nagbaba ng return to work
order ang Secretary of Labor no nagsasaad na ang aming
strike ay doon na lang didinggin sa NLRC para sa Compulsory
Arbitration at inaatasan kaming bumalik sa aming trabaho;
24. Na tumalima naman ang mga miyembro ng unyon sa
Order ng DOLE Secretary at bumalik na nga kami sa aming
mga trabaho ngunit hindi kami lahat ng (sic) kanilang
tinanggap . . . . 26
Yet it is hard to believe that such was the situation. If this
were so and that they wanted to resume their jobs but PASVIL
did recourse to Secretary Confesor would not have been
undertaken by PASVIL. This second recourse paved the way
for Secretary Confesor to arrive at the finding that —
Notwithstanding due receipt of the (21 February 1995) Order,
the Union continues picket and barricade the premises of the
Company, thereby preventing those workers who would want
to report back to work from entering the Company. . . . . 26
Secretary Confesor thus reiterated her previous return-to-work
order. Pitted against the aforementioned finding, petitioners'
averments cannot be sustained. Unless there are cogent
reasons, and we do not find any, this Court will not alter,
modify or reverse the factual findings of the Secretary of Labor
and Employment because by reason of her official position she
is considered to have acquired expertise as her jurisdiction is
confined to specific matters. 27
A stronger proof that petitioners and other UNION members
defied the return-to-work order of Secretary Confesor is the
letter of petitioner Bugtong himself to the Social Security
System of 3 August 1995 certifying that "employees of
PASVIL/PASCUAL LINER, INC. is (sic) on strike effective last
February 18, 1995 up to the present." 28 This certification
effectively binds petitioners and relegates to insignificance
their pretension to the contrary.
Under the same Art. 264, par. (a), St. Scholastica's
College  expressed in no uncertain terms that from the moment
a worker defies a return-to-work order he is deemed to have
abandoned his job. It is already in itself knowingly participating
in an illegal act. The present case is one instance when, sadly,
the law cannot interpose its hand to protect the employees
from the consequences of their misbehavior. 29
WHEREFORE, the petition is, DISMISSED. The decision, of
public respondent National Labor Relations Commission of 15
January 1996 declaring illegal the strike staged by petitioners
PASVIL/Pascual Liner, Inc., Workers Union — NAFLU and its
officers and members on 18 February 1995 against respondent
PASVIL/Pascual Liner, Inc.; declaring petitioners Donato
Bugtong, Pedro Fernando, Rodante Ambas, Rodolfo Pascual,
Felizardo Gaspar, Conrado Clemente, Ponciano Gabriel Sr.,
Roberto Espejon, Marcelo Mojar Jr., Arnulfo German, Jose
Agao, Arnel Fortaleza, Merlito dela Cruz, Rommel Buenavente,
Manuel Trinidad, Joselito Mendiola, Pedro Ociones, Guillermo
Naranjo and Fredenill Lazo as having lost their employment
status as a consequence; and, practice against private
respondent company PASVIL/Pascual Liner, Inc., is AFFIRMED.
The resolution of 30 January 1996 denying reconsideration is
likewise AFFIRMED.1âwphi1.nêt
SO ORDERED.
G.R. No. 127598           February 22, 2000
MANILA ELECTRIC COMPANY, petitioner, 
vs.
Hon. SECRETARY OF LABOR LEONARDO QUISUMBING
and MERALCO EMPLOYEES and WORKERS
ASSOCIATION (MEWA), respondent.
RESOLUTION
YNARES-SANTIAGO, J.:
In the Decision promulgated on January 27, 1999, the Court
disposed of the case as follows:
WHEREFORE, the petition is granted and the orders of public
respondent Secretary of Labor dated August 19, 1996 and
December 28, 1996 are set aside to the extent set forth above.
The parties are directed to execute a Collective Bargaining
Agreement incorporating the terms and conditions contained in
the unaffected portions of the Secretary of Labor's orders of
August 19, 1996 and December 28, 1996, and the
modifications set forth above. The retirement fund issue is
remanded to the Secretary of Labor for reception of evidence
and determination of the legal personality of the MERALCO
retirement fund.1
The modifications of the public respondent's resolutions president of the Union.5 Other subsequent pleadings were filed
include the following: by the parties and intervenors.

January 27, 1999 Secretary's The issues raised in the motions for reconsideration had
decision resolution already been passed upon by the Court in the January 27,
1999 decision. No new arguments were presented for
consideration of the Court. Nonetheless, certain matters will be
P1,900.00 for
Wages - P2,200.00 considered herein, particularly those involving the amount of
1995-96
wages and the retroactivity of the Collective Bargaining
Agreement (CBA) arbitral awards.
modified to one
X'mas bonus - 2 months
month Petitioner warns that if the wage increase of P2,200.00 per
month as ordered by the Secretary is allowed, it would simply
remanded to the pass the cost covering such increase to the consumers through
Retirees - granted an increase in the rate of electricity. This is a non sequitur. The
Secretary
Court cannot be threatened with such a misleading argument.
An increase in the prices of electric current needs the approval
Loan to coops - denied granted
of the appropriate regulatory government agency and does not
automatically result from a mere increase in the wages of
GHSIP, HMP petitioner's employees. Besides, this argument presupposes
and  granted up to that petitioner is capable of meeting a wage increase. The All
Housing loans - P60,000.00 granted Asia Capital report upon which the Union relies to support its
position regarding the wage issue cannot be an accurate basis
Signing bonus - denied granted and conclusive determinant of the rate of wage increase.
Section 45 of Rule 130 Rules of Evidence provides:
40 days (typo
Union leave - 30 days Commercial lists and the like. — Evidence of statements of
error) matters of interest to persons engaged in an occupation
contained in a list, register, periodical, or other published
High - not apply to those members of a compilation is admissible as tending to prove the truth of any
voltage/pole who are  team relevant matter so stated if that compilation is published for
not exposed to the use by persons engaged in that occupation and is generally
risk used and relied upon by them therein.

Under the afore-quoted rule, statement of matters contained in

Collectors - no need for cash
a periodical, may be admitted only "if that compilation is
bond, no 
published for use by persons engaged in that occupation and is
need to reduce
generally used and relied upon by them therein." As correctly
quota and MAPL
held in our Decision dated January 27, 1999, the cited report is
a mere newspaper account and not even a commercial list. At
exclude most, it is but an analysis or opinion which carries no
CBU - confidential include persuasive weight for purposes of this case as no sufficient
employees figures to support it were presented. Neither did anybody
testify to its accuracy. It cannot be said that businessmen
maintenance of generally rely on news items such as this in their occupation.
Union security - closed shop
membership Besides, no evidence was presented that the publication was
regularly prepared by a person in touch with the market and
Contracting no need to consult that it is generally regarded as trustworthy and reliable. Absent
- consult first extrinsic proof of their accuracy, these reports are not
out union
admissible.6 In the same manner, newspapers containing stock
quotations are not admissible in evidence when the source of
existing terms and
All benefits - all terms the reports is available.7 With more reason, mere analyses or
conditions
projections of such reports cannot be admitted. In particular,
the source of the report in this case can be easily made
Dec. 28, 1996- from Dec. 1, available considering that the same is necessary for
Retroactivity -
Dec. 27, 199(9) 1995 compliance with certain governmental requirements.

Dissatisfied with the Decision, some alleged members of
private respondent union (Union for brevity) filed a motion for
intervention and a motion for reconsideration of the said
Decision. A separate intervention was likewise made by the
supervisor's union (FLAMES 2) of petitioner corporation alleging
that it has bona fide legal interest in the outcome of the
case.3 The Court required the "proper parties" to file a
comment to the three motions for reconsideration but the
Solicitor-General asked that he be excused from filing the
comment because the "petition filed in the instant case was
granted" by the Court.4 Consequently, petitioner filed its own
consolidated comment. An "Appeal Seeking Immediate
Reconsideration" was also filed by the alleged newly elected
Nonetheless, by petitioner's own allegations, its actual total net
income for 1996 was P5.1 billion. 8 An estimate by the All Asia
financial analyst stated that petitioner's net operating income
for the same year was about P5.7 billion, a figure which the
Union relies on to support its claim. Assuming without
admitting the truth thereof, the figure is higher than the
P4.171 billion allegedly suggested by petitioner as its projected
net operating income. The P5.7 billion which was the
Secretary's basis for granting the P2,200.00 is higher than the
actual net income of P5.1 billion admitted by petitioner. It
would be proper then to increase this Court's award of
P1,900.00 to P2,000.00 for the two years of the CBA award.
For 1992, the agreed CBA wage increase for rank-and-file was
P1,400.00 and was reduced to P1,350.00; for 1993; further
reduced to P1,150.00 for 1994. For supervisory employees, the
agreed wage increase for the years 1992-1994 are P1,742.50,
P1,682.50 and P1,442.50, respectively. Based on the foregoing
figures, the P2,000.00 increase for the two-year period
awarded to the rank-and-file is much higher than the highest
increase granted to supervisory employees. 9 As mentioned in
the January 27, 1999 Decision, the Court does "not seek to
enumerate in this decision the factors that should affect wage
determination" because collective bargaining disputes
particularly those affecting the national interest and public
service "requires due consideration and proper balancing of
the interests of the parties to the dispute and of those who
might be affected by the dispute." 10 The Court takes judicial
notice that the new amounts granted herein are significantly
higher than the weighted average salary currently enjoyed by
other rank-and-file employees within the community. It should
be noted that the relations between labor and capital is
impressed with public interest which must yield to the common
good.11 Neither party should act oppressively against the other
or impair the interest or convenience of the public. 12Besides,
matters of salary increases are part of management
prerogative.13
On the retroactivity of the CBA arbitral award, it is well to
recall that this petition had its origin in the renegotiation of the
parties' 1992-1997 CBA insofar as the last two-year period
thereof is concerned. When the Secretary of Labor assumed
jurisdiction and granted the arbitral awards, there was no
question that these arbitral awards were to be given
retroactive effect. However, the parties dispute the reckoning
period when retroaction shall commence. Petitioner claims that
the award should retroact only from such time that the
Secretary of Labor rendered the award, invoking the 1995
decision in Pier 8 case 14 where the Court, citing Union of
Filipino Employees v. NLRC,15 said:
The assailed resolution which incorporated the CBA to be
signed by the parties was promulgated on June 5, 1989, the
expiry date of the past CBA. Based on the provision of Section
253-A, its retroactivity should be agreed upon by the parties.
But since no agreement to that effect was made, public
respondent did not abuse its discretion in giving the said CBA a
prospective effect. The action of the public respondent is
within the ambit of its authority vested by existing law.
On the other hand, the Union argues that the award should
retroact to such time granted by the Secretary, citing the 1993
decision of St. Luke's.16
Finally, the effectivity of the Order of January 28, 1991, must
retroact to the date of the expiration of the previous CBA,
contrary to the position of petitioner. Under the circumstances
of the case, Article 253-A cannot be properly applied to herein
case. As correctly stated by public respondent in his assailed
Order of April 12, 1991 dismissing petitioner's Motion for
Reconsideration —
Anent the alleged lack of basis for the retroactivity provisions
awarded; we would stress that the provision of law invoked by
the Hospital, Article 253-A of the Labor Code, speaks of
agreements by and between the parties, and not arbitral
awards . . .
Therefore, in the absence of a specific provision of law
prohibiting retroactivity of the effectivity of arbitral awards
issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to
determine the effectivity thereof.
In the 1997 case of Mindanao Terminal, 17 the Court applied the
St. Luke's doctrine and ruled that:
In St. Luke's Medical Center v. Torres, a deadlock also
developed during the CBA negotiations between management
and the union. The Secretary of Labor assumed jurisdiction
and ordered the retroaction of the CBA to the date of
expiration of the previous CBA. As in this case, it was alleged
that the Secretary of Labor gravely abused its discretion in
making his award retroactive. In dismissing this contention this
Court held:
Therefore, in the absence of a specific provision of law
prohibiting retroactive of the effectivity of arbitral awards
issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is
deemed vested with plenary and discretionary powers to
determine the effectivity thereof.
The Court in the January 27, 1999 Decision, stated that the
CBA shall be "effective for a period of 2 years counted from
December 28, 1996 up to December 27, 1999."
Parenthetically, this actually covers a three-year period. Labor
laws are silent as to when an arbitral award in a labor dispute
where the Secretary had assumed jurisdiction by virtue of
Article 263 (g) of the Labor Code shall retroact. In general, a
CBA negotiated within six months after the expiration of the
existing CBA retroacts to the day immediately following such
date and if agreed thereafter, the effectivity depends on the
agreement of the parties.18 On the other hand, the law is silent
as to the retroactivity of a CBA arbitral award or that granted
not by virtue of the mutual agreement of the parties but by
intervention of the government. Despite the silence of the law,
the Court rules herein that CBA arbitral awards granted after
six months from the expiration of the last CBA shall retroact to
such time agreed upon by both employer and the employees
or their union. Absent such an agreement as to retroactivity,
the award shall retroact to the first day after the six-month
period following the expiration of the last day of the CBA
should there be one. In the absence of a CBA, the Secretary's
determination of the date of retroactivity as part of his
discretionary powers over arbitral awards shall control.
It is true that an arbitral award cannot  per se be categorized
as an agreement voluntarily entered into by the parties
because it requires the interference and imposing power of the
State thru the Secretary of Labor when he assumes
jurisdiction. However, the arbitral award can be considered as
an approximation of a collective bargaining agreement which
would otherwise have been entered into by the parties. 19 The
terms or periods set forth in Article 253-A pertains explicitly to
a CBA. But there is nothing that would prevent its application
by analogy to an arbitral award by the Secretary considering
the absence of an applicable law. Under Article 253-A: "(I)f
any such agreement is entered into beyond six months, the
parties shall agree on the duration of retroactivity thereof." In
other words, the law contemplates retroactivity whether the
agreement be entered into before or after the said six-month
period. The agreement of the parties need not be categorically
stated for their acts may be considered in determining the
duration of retroactivity. In this connection, the Court
considers the letter of petitioner's Chairman of the Board and
its President addressed to their stockholders, which states that
the CBA "for the rank-and-file employees covering the period
December 1, 1995 to November 30, 1997 is still with the
Supreme Court,"20 as indicative of petitioner's recognition that
the CBA award covers the said period. Earlier, petitioner's
negotiating panel transmitted to the Union a copy of its
proposed CBA covering the same period inclusive.21 In
addition, petitioner does not dispute the allegation that in the
past CBA arbitral awards, the Secretary granted retroactivity
commencing from the period immediately following the last
day of the expired CBA. Thus, by petitioner's own actions, the
Court sees no reason to retroact the subject CBA awards to a
different date. The period is herein set at two (2) years from
December 1, 1995 to November 30, 1997.
monetary advances granted by petitioner to its rank-and-file
employees during the pendency of this case assuming such
advances had actually been distributed to them. The assailed
Decision is AFFIRMED in all other respects.
SO ORDERED.

On the allegation concerning the grant of loan to a

cooperative, there is no merit in the union's claim that it is no
different from housing loans granted by the employer. The
award of loans for housing is justified because it pertains to a
basic necessity of life. It is part of a privilege recognized by the
employer and allowed by law. In contrast, providing seed
money for the establishment of the employee's cooperative is a
matter in which the employer has no business interest or legal
obligation. Courts should not be utilized as a tool to compel
any person to grant loans to another nor to force parties to
undertake an obligation without justification. On the contrary,
it is the government that has the obligation to render financial
assistance to cooperatives and the Cooperative Code does not
make it an obligation of the employer or any private
individual.22

Anent the 40-day union leave, the Court finds that the same is
a typographical error. In order to avoid any confusion, it is
herein declared that the union leave is only thirty (30) days as
granted by the Secretary of Labor and affirmed in the Decision
of this Court.

The added requirement of consultation imposed by the

Secretary in cases of contracting out for six (6) months or
more has been rejected by the Court. Suffice it to say that the
employer is allowed to contract out services for six months or
more. However, a line must be drawn between management
prerogatives regarding business operations per se and those
which affect the rights of employees, and in treating the latter,
the employer should see to it that its employees are at least
properly informed of its decision or modes of action in order to
attain a harmonious labor-management relationship and
enlighten the workers concerning their rights. 23 Hiring of
workers is within the employer's inherent freedom to regulate
and is a valid exercise of its management prerogative subject
only to special laws and agreements on the matter and the fair
standards of justice.24 The management cannot be denied the
faculty of promoting efficiency and attaining economy by a
study of what units are essential for its operation. It has the
ultimate determination of whether services should be
performed by its personnel or contracted to outside agencies.
While there should be mutual consultation, eventually
deference is to be paid to what management
decides.25 Contracting out of services is an exercise of business
judgment or management prerogative. 26 Absent proof that
management acted in a malicious or arbitrary manner, the
Court will not interfere with the exercise of judgment by an
employer.27 As mentioned in the January 27, 1999 Decision,
the law already sufficiently regulates this
matter.28 Jurisprudence also provides adequate limitations,
such that the employer must be motivated by good faith and
the contracting out should not be resorted to circumvent the
law or must not have been the result of malicious or arbitrary
actions.29 These are matters that may be categorically
determined only when an actual suit on the matter arises.

WHEREFORE, the motion for reconsideration is PARTIALLY

GRANTED and the assailed Decision is MODIFIED as follows:
(1) the arbitral award shall retroact from December 1, 1995 to
November 30, 1997; and (2) the award of wage is increased
from the original amount of One Thousand Nine Hundred
Pesos (P1,900.00) to Two Thousand Pesos (P2,000.00) for the
years 1995 and 1996. This Resolution is subject to the