LocGov Digest by M.

Dizon
Katarungang Pambarangay
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Pang-et v. Dao-as
G.R. No. 167261 | March 7, 2007 | Chico-Nazario, J.

Parties:

PETITIONER RESPONDENT

Rosaria Lupitan Pang-et (Pang-et) Catherine Manacnes-Dao-as, heir of Lencio

Manacnes and Florentina Manacnes (Dao-as)

Doctrine: The object of the KPL is the amicable settlement of disputes through conciliation proceedings
voluntarily entered into by the parties. The disputing parties are not compelled to settle their controversy
during the barangay proceedings before the Lupon or Pangkat, as they are free to find recourse in the courts
in the event that no true compromise is reached. Sec. 413 of the Revised KPL states that in order that a party
may be bound by an arbitration award, said party must have agreed in writing that they shall abide by the
arbitration award of the Lupon or the Pangkat.
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CASE SUMMARY
FACTS: Pang-et filed an action for recovery of possession of real property before the MCTC against Sps.
Manacnes over property situated in Dagdag, Sagada. During pre-trial, the parties agreed to refer the matter
to the Lupon for arbitration in accordance with the Katarungang Pambarangay Law (KPL). The case before
the MCTC was suspended and the case remanded to the Lupon. Due to the refusal of the Spouses to enter
into an Agreement for Arbitration and their insistence to go to court, the Lupon issued a Certificate to File
Action and forwarded the same, with the records of the case, to the MCTC. The MCTC remanded the case
once more to the Lupon and ordered the latter to render an Arbitration Award thereon, which was required
under the KPL. The Lupon did so, ordering Pang-et to retrieve the land upon payment to the Spouses for the
land improvements.

Pang-et filed an action for the enforcement of the Notice of Execution Award, which was opposed by Dao-
as, daughter of the now-deceased Spouses. Dao-as argued that the a) Agreement for Arbitration and
Arbitration Award are void, as the former was not personally signed by the Spouses, and b) the Award
for having been written in English, which was a language not understood by the parties.

ISSUE: W/N the Agreement for Arbitration and Arbitration Award are valid—NO.

HELD: The Agreement for Arbitration is void because records show that the Spouses consistently refused
to sign the Agreement and insisted to go to court. The object of the KPL is the amicable settlement of disputes
through conciliation proceedings voluntarily entered into by the parties. The disputing parties are not
compelled to settle their controversy during the barangay proceedings before the Lupon or Pangkat, as they
are free to find recourse in the courts in the event that no true compromise is reached. Absent this voluntary
submission by the parties, there cannot be a binding settlement arrived at effectively resolving the case.
• It is not compulsory on the part of the parties to submit the case for arbitration until an
arbitration award is rendered. The only necessary pre-condition before any case falling within
the authority of the Lupon or the Pangkat may be filed before a court is that there has been personal
confrontation between the parties but despite earnest efforts to conciliate, there was a failure to
amicably settle the dispute.

The Arbitation Award is likewise void, as Sec. 413 of the Revised KPL states that in order that a party may
be bound by an arbitration award, said party must have agreed in writing that they shall abide by the
arbitration award of the Lupon or the Pangkat. ITC, the Spouses refused to affix their signature or thumb
mark on the Agreement for Arbitration Form even after verification by the Pangkat Chairman; hence the
Spouses cannot be bound by the Agreement and the ensuing Award since they never became privy to any
agreement submitting the case for arbitration by the Pangkat.

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Katarungang Pambarangay
FACTS
• Pang-et filed an action for recovery of possession of real property situated in Sitio Abatan, Barrio
Dagdag, Sagada before the MCTC against Sps. Manacnes.
o During pre-trial, the parties agreed to refer the matter to the Barangay Lupon (Lupon) of
Dagdag for arbitration in accordance with the Katarungang Pambarangay Law (KPL). The
proceedings before the MCTC were suspended, and the case remanded to the Lupon.
• The Lupon issued a Certificate to File Action due to the refusal of the Spouses to enter into an
Agreement for Arbitration and their insistence to go to court. The Certification and records of the case
were forwarded to the MCTC.
o The MCTC remanded the case to the Lupon once more and ordered the latter to render an
Arbitration Award thereon. The MCTC stated that based on the records, an Agreement for
Arbitration was executed by the parties, but the Lupon failed to issue an Arbitration Award as
provided under the KPL.
• In compliance, the Lupon rendered an Arbitration Award ordering Pang-et to retrieve the land upon
payment to the Spouses an amount equivalent to the improvements on the land.
o Aggrieved, Florentina, the widow, repudiated the Arbitration Award but this was rejected by
the Lupon. The MCTC was then furnished with copies of the Arbitration Award.
• Pang-et filed a Motion for Execution of the Arbitration Award, while Florentina filed a Motion for the
resumption of the proceedings in the original case for recovery of possession with the MCTC and
praying that her repudiation of the Arbitration Award be considered.
o The MCTC denied Florentina’s motion, ruling that since she failed to take any action within
the 10-day reglementary period provided for under the KPL, the arbitration award has become
final and executory.
o MCTC, upon Pang-et’s motion, issued an order remanding the case records to the Lupon for
the execution of the Award.
• The incumbent Punong Barangay issued a Notice of Execution of Award.
o Said Notice was never implemented.
o Pang-et filed with the MCTC an action for enforcement of the Award which Dao-as sought to
be dismissed.
▪ Dao-as argued that the a) Agreement for Arbitration and Arbitration Award are
void, as the former was not personally signed by the Spouses, and b) the Award
for having been written in English, which was a language not understood by the
parties.
o The MCTC dismissed the petition for enforcement for the Award, finding that a) the
Agreement was not signed by the Spouses, but Dao-as. Since the agreement is inefficacious,
the Award is also inefficacious, and b) the Award itself does not conform with the mandate of
the KPL, in that it was not written in a language known to the parties.
• Pang-Et filed an appeal before the RTC after her MFR was denied by the MCTC.

CASE TRAIL
• RTC – set aside MCTC resolution and remanded the case to the MCTC for further proceedings.
o Ruled that the failure of the Spouses to repudiate the Agreement is deemed a waiver to
challenge the Agreement on the ground that their consent thereto was obtained and vitiated
by Fraud.
▪ Dao-as, as the heir privy to the deceased Spouses, should have not been permitted
by the court a quo, under the principle of estoppel, to raise the matter in issue for the
first time in the present case.
o Ruled that the Award being written in English was presumptuously concluded on the basis of
the self-serving mere say-so of Dao-as that her predecessors did not speak nor understand
English.
▪ As a matter of judicial notice, American Episcopalian Missionaries had been in Sagada
as early as 1902 and continously stayed in the place, educating and converting most
of the people to the Christian faith. By constant association with the whites, natives too
old to go to school learned the King’s English by ear and can effectively communicate
in Engllsh.
▪ Granting arguendo that the Spouses were the exceptions and totally ignorant of
English, no petition to nullify the Award on such ground was filed by the party or of the
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Katarungang Pambarangay
heirs with the MCTC within 10 days from the date of the Award. Thus, the Award
acquired the force and effect of a final judgment of a court.
• CA – reversed and set aside RTC decision and reinstated the MCTC resolution dismissing the
enforcement of the Award.
o Records show that the Spouses remained firm in not entering into any compromise agreement
with Pang-et. Thus, there is no basis for the Award sought to be enforced by Pang-et.
o The period for the repudiation of the Award is not applicable since the Agreement/Award were
never freely nor voluntarily entered into by the parties.
• Pang-et filed a petition for review on certiorari with the SC.
o Pang-et 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 lawyers are deemed made
in conformity with their clients.
o Further, if the Spouses indeed 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.
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ISSUES & HELD

1. W/N the Agreement for Arbitration was valid—NO.

● Records show that the Spouses consistently refused to sign the Agreement and insisted the case
go to court.
o These were evidenced by records from the initial hearing before the Lupon ng
Tagapamayapa, the Minutes of the Arbitration Hearing, and the Certification to File Action.
Nevertheless, upon receiving these records, the MCTC ordered the case be remanded to
the Lupon and for the latter to render an arbitration award.
o The MCTC based its decision on the Agreement for Arbitration executed by the parties,
which was signed by Dao-as on behalf of her parents, but was not supported by the
Spouses even after the Pangkat Chairmain asked them to signify their intention in the
Agreement for the arbitration proceedings to continue.
● It must be stressed that the object of the KPL is the amicable settlement of disputes through
conciliation proceedings voluntarily entered into by the parties.
o Nonetheless, the disputing parties are not compelled to settle their controversy during the
barangay proceedings before the Lupon or Pangkat, as they are free to find recourse in
the courts in the event that no true compromise is reached.
o Absent this voluntary submission by the parties, there cannot be a binding settlement
arrived at effectively resolving the case. Hence, the Court cannot see why the MCTC
remanded the case to the Lupon and insisted the arbitration proceedings to continue,
despite the clear showing that the Spouses refused to submit the controversy for
arbitration.
● It is not compulsory on the part of the parties to submit the case for arbitration until an
arbitration award is rendered.
o The only necessary pre-condition before any case falling within the authority of the
Lupon or the Pangkat may be filed before a court is that there has been personal
confrontation between the parties but despite earnest efforts to conciliate, there was a
failure to amicably settle the dispute.

2. W/N the Arbitration Award was valid—NO.

● Sec. 413 of the Revised KPL states that in order that a party may be bound by an arbitration
award, said party must have agreed in writing that they shall abide by the arbitration award of the
Lupon or the Pangkat.
o In view of the fact that the Spouses refused to affix their signature or thumb mark on the
Agreement for Arbitration Form even after verification by the Pangkat Chairman, the
Spouses cannot be bound by the Agreement and the ensuing Award since they never
became privy to any agreement submitting the case for arbitration by the Pangkat.
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RULING
Petition DENIED. CA decision AFFIRMED. MCTC ordered to proceed with the trial of the civil case for
recovery of possession of real property and the immediate resolution of the same with deliberate dispatch.
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