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Morata v. Go
125 SCRA 444 (1983)
Petition for certiorari and prohibition with prayer for writ of prelim injunction to
review the order of Judge Tomol CFI CebuBR11.
FACTS:
Respondent spouses Victor & Flora Go filed in the CFI of Cebu a complaint against
petitioners Julius & Ma. Luisa Morata for recovery of a sum of money plus damages
amounting to Php49,400. Petitioners filed a motion to dismiss on grounds that of
failure of the complaint to allege prior availment by plaintiffs of the barangay
conciliation process required by PD 1508, as well as the absence of a certification by
the Lupon or Pangkat Secretary that no conciliation or settlement had been reached
by the parties. The motion was opposed by private respondents. Respondent judge
denied the said motion to dismiss. Petitioners filed a motion for recon but the same
was denied.
ISSUE:
Whether or not there should be barangay conciliation.
HELD:
The Lupon has the authority to settle amicably all types of disputes involving parties
who actually reside in the same city or municipality. The law makes no distinction with
respect to the classes of civil disputes that should be compromised at the barangay
level, in contradistinction to the limitation imposed upon the Lupon over criminal
cases. The fact that the city or municipal courts are forum for the nullification or
execution of the settlement or arbitration award issued by the Lupon cannot be
construed as a limitation of the scope of authority of the Lupon. This merely confers
upon the city and municipal courts the jurisdiction to pass upon and resolve petitions
or actions for nullification or enforcement of settlement/arbitration awards issued by
the Lupon, regardless of the amount involved or the nature of the original dispute. But
there is nothing in the context of said sections to justify the thesis that the mandated
conciliation process in other types of cases applies exclusively to said inferior courts.
The conciliation process at the barangay level is compulsory not only for cases falling
under the exclusive competent of the MeTCs and MTCs, but for actions cognizable by
the RTCs as well.
Candido v. Macapagal
221 SCRA 328 (1993)
FACTS:
This is a petition for certiorari to annul and set aside 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.
Respondents Sagraria Lozada, Jorge Candido, et al, 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
(Agapito Candido) and sold to private respondent Mila Contreras in whose name said
properties are now registered.
Petitioners instituted an action with the Regional Trial Court of Bulacan
defendants 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.
Private respondent filed a Motion to Dismiss 4 on the ground that petitioners
failed to comply with the mandatory conciliation process required under P.D. No. 1508
as she resides in the same municipality with the petitioners.
RTC ruling: dismissed the case for lack of prior referral of the dispute before
the Katarungang Pambarangay. Motion for reconsiderations were denied.
Hence, petitioners file 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.
ISSUE:
WON prior referral of the said dispute before the Katarungang Pambarangay
is necessary before filing the case to the RTC.
HELD:
No. 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.
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.
Ramos v. CA
174 SCRA 690 (1989)
G.R. No. L-85475, June 30, 1989
Facts:
Domingo Ramos authorized his brother Manuel Ramos to sell his share of
certain lands owned by them in common with their other brothers and sisters. Manuel
did. Later, Domingo revoked the power of attorney and demanded an accounting from
Manuel. Manuel refused. Domingo then filed a complaint with the Punong Barangay
of Pampanga, Buhangin District, City of Davao.
The Punong Barangay scheduled a hearing, Manuel appeared but Domingo
did not. He was represented, however, by his wife who said her husband wanted to
avoid a direct confrontation with his brother.
She requested that the Punong Narangay issue a certification that no
settlement had been reached so a complaint could be filed in court. The Punong
Barangay complied.
Thereupon, Domingo sued Manuel in the Regional Trial Court of Davao City.
Manuel moved to dismiss the complaint on the ground of non-compliance
with the requirements of P.D. 1508. Specifically, he cited the failure of the Punong
Barangay to refer the dispute to the Pangkat ng Tagapagkasundo after the
unsuccessful mediation proceedings convened by him. The motion was denied.
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Manuel then filed with this court a petition for certiorari which we referred
to the Court of Appeals. That court denied the petition. it held that there was no need
for such referral because Domingo had clearly indicated, by his refusal to appear
before the Punong Barangay, that no extrajudicial settlement was possible between
him and his brother.
Issue:
Whether or not there is non-compliance with PD 1508.
Held:
In the case before us, it is Manuel Ramos, the respondent in the barangay
proceedings, who actually appeared therein and is now invoking the non-appearance
of Domingo Ramos, the complainant himself. Domingo, the herein private respondent,
is the party who did not appear to support his own complaint before the Punong
Barangay. He invoked the Punong Barangay’s jurisdiction and then disregarded it.
Under Section 4(d), he is now barred, as complainant in the barangay proceedings,
“from seeking judicial recourse for the same cause of action.”
Domingo argues that he did appear through his wife, but this was not
permitted by P.D. 1508. Its Section 8 reads: Appearance of parties in person. -- In all
proceedings provided for herein, the parties must appear in person without the
assistance of counsel/representative, with the exception of minors and incompetents
who may be assisted by their next of kin who are not lawyers.
In Alinsugay, the Court said that “where one party fails to appear for no
justifiable reason, convening the Pangkat as a necessary second step will serve no
useful purpose.” True, but we must stress the word justifiable. Mere refusal to appear
at the confrontation as required by the law, when the party invoking P.D. 1508 is the
one who disregarded it, is not a justifiable reason.
It remains to add that the other purpose of the Katarungang Pambarangay
Law is to relieve the trial courts of cases among neighbors that hopefully can be settled
through the mediation of their peers in peaceful and even friendly confrontations. This
purpose could be defeated if such cases were allowed immediate access to the already
clogged judicial dockets simply because one of the parties is unwilling to submit to
justice at the barangay level.
WHEREFORE, the petition is GRANTED and the appealed decision is
REVERSED. The respondent judge is ordered to DISMISS Civil Case No. 18560-87. Costs
against the private respondent.

Vda. De Borromeo v. Pogoy
126 SCRA 217 (1983)
FACTS:
Petitioner seeks to stop respondent Judge Pogoy from taking cognizance of
an ejectment suit for failure of the plaintiff to refer the dispute to the Barangay Lupon
for conciliation.
Deceased Vito Borromeo was the original owner of the building which was
leased to herein petitioner Petra Vda. De Borromeo for P500 per month payable within
the first five days of the month. On August 28, 1982, Atty Ricardo Reyes, administrator
of the estate, served upon petitioner a letter demanding that she pay the overde
rentals corresponding to the period from March to September (1982), and thereafter
vacate the premises. Petitioner failed to do so, thus the respondent instituted an
ejectment case against the former. Petitioner moved to dismiss for want of
jurisdiction. She points out that the parties are from the same cities and as such they
must refer the dispute to the barangay Court or Lupon before going through the
judicial courts. Respondent’s defense was that it was danger of prescribing under the
statute of limitations. The motion was dismissed thus this case.
ISSUES:
Whether or not it was indeed in danger of prescribing?
Whether or not going through Lupon was necessary?
RULING:
NO to both.
The defense of Atty Reyes regarding the statute of limitations is unacceptable
because the case was filed on September 16, 1982, less than a month before the letter
of demand was served. Forcible entry and detainer prescribes in one year counted
from demand to vacate the premises and the law only required 60 days upon which
the parties should try to reconcile in Lupon; Respondent had more than 9 months left
even if reconciliation failed.
However, PD No. 1508, wherein it is required to go through Lupon first before
going to courts only applies to “individuals”. In this case, Ricardo reyes is a mere
nominal party who is suing in behalf of the Intestate Estate of Vito Borromeo thus it is
inapplicable to them.
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San Miguel Village School v. Pundogar
173 SCRA 704 (1989)
FACTS:
Petitioner, a duly accredited private school located, entered into a contract
of services with private respondent Christina Trio. Under that contract, Christina Trio
would teach at the petitioner School during the schoolyear .The contract also provided
that any party desiring to terminate the contract before its scheduled expiration,
would give the other party at least one month notice of termination in writing.
Sometime in August 1985, while the contract was in full force and effect, and during a
final examination period, private respondent suddenly stopped teaching at the
petitioner School, without giving notice of termination. Petitioner School immediately
sought the assistance of the Barangay Captain and the commencement of conciliation
proceedings, This attempt failed because private respondent could not be contacted.
A Certificate to File Action, signed by the Barangay Captain of Barangay. Private
respondent having failed to file an answer within the reglementary period, the
petitioner School moved to declare her in default. The trial court granted the motion,
declared private respondent in default. The judge rendered a judgment by default
against the respondent.Private respondent filed a Petition for Relief from Judgment
with the trial court, alleging that the court had no jurisdiction to render its decision for
failure of petitioner to go through the mandatory conciliation procedure. Judge
Pundogar granted the relief sought, holding that the Regional Trial Court in rendering
the decision, acted without jurisdiction "over the parties and the subject matter of the
action"1for failure of petitioner to comply with the requirements of P. D. No. 1508.
ISSUE:
(1) Won the failure to comply with the requirements of PD 1508 is jurisdictional.
(2) Won the requirements of PD 1508 of Confrontation before Issuance of
Certificate to file action has been satisfied despite the lack of confrontation.
RULING:
The failure of a plaintiff to comply with the requirements of P.D. No. 1508
does not affect the jurisdiction of the court that tried the action. Failure of a plaintiff
to go through the conciliation procedure established by P.D. No. 1508 merely affects
the sufficiency, or the maturity or ripeness of the plaintiffs cause of action and the
complaint becomes vulnerable to a motion to dismiss, not on the ground of lack of
jurisdiction, but rather for want of cause of action or for prematurity. If the defendant
in an action fails for one reason or another to respond to a notice to appear before
the Lupon, the requirement of P.D. No. 1508 must be regarded as having been

satisfied by the plaintiff. A defendant cannot be allowed to frustrate the requirements
of the statute by her own refusal or failure to appear before the Lupon and then later
to assail a judgment rendered in such action by setting up the very ground of non-
compliance with P.D. No. 1508.
In any event, the alleged failure on the part of a plaintiff to comply with the
procedural requirement established by P.D. No. 1508 must be raised in a timely
manner, that is, at the first available opportunity, if such alleged failure is to provide
legal basis for dismissal of the complaint. Such failure must be pleaded, in other words,
in a timely motion to dismiss or in the answer. Failure to so set up that defense
produces the effect of waiver of such defense. In the instant case, private respondent
was declared in default and that default order was never set aside. Accordingly, private
respondent must be held to have waived whatever right she may have had to raise the
defense of failure to comply with the compulsory conciliation procedure under P.D.
No. 1508.
Uy v. Contreras
237 SCRA 167 (1994)
Facts:
Felicidad Uy (Uy) subleased from Susanna Atayde (Atayde) half of the second
floor of a building located in Makati. Uy operated and maintained a beauty parlor
there. When the sublease contract expired, an argument arose between Uy and
Atayde because the former was unable to completely remove all her movable
properties from the premises. The argument led to a scuffle between Uy, Atayde, and
Atayde's employees. Six days later, Atayde and her employees filed a complaint with
the barangay captain of Valenzuela, Makati. On the scheduled confrontation between
the parties in the barangay, only Uy appeared. The confrontation was reset. Two
informations for slight physical injuries were filed against Uy with the MTC of Makati.
In her counter-affidavit, Uy alleged the prematurity of filing the criminal cases because
ofthe undergoing of conciliation proceedings between them. She later on filed a
motion to dismiss for non-compliance with the requirement of P.D. No. 1508 on prior
referral to the Lupong Tagapamayapa and pursuant to Section 18 of the 1991Revised
Rule on Summary Procedure. She also attached the certification of the barangay
captain, attesting to the existence of an ongoing conciliation proceedings between
them. MTC denied the motion to dismiss, explaining that the offense was about to
prescribe or barred by the statute of limitations anyway. The motion for
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reconsideration by Uy was denied, hence the filing of Uy with the Supreme Court of
the special civil action for certiorari.
Issue
Whether or not the judge of MTC Makati gravely abused his discretion when
he denied the motion to dismiss of the petitioner, considering that the private
respondents failed to comply with the mandatory requirement of P.D. 1508 as
reiterated in Sec. 412 of the Local Government Code and the 1991 Revised Rule on
Summary Procedure.
Ruling
Yes. The respondent judge acted with grave abuse of discretion in refusing to
dismiss the criminal cases. It may thus be observed that the revised Katarungang
Pambarangay law has at least three new significant features, to wit:
a) It increased the authority of the lupon in criminal offenses from those
punishable by imprisonment not exceeding thirty days or a fine not exceeding
P200.00 in P.D. No. 1508 to those offenses punishable by imprisonment not
exceeding one year or a fine not exceeding P5,000.00.
b) As to venue, it provides that 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.
c) It provides for the suspension of the prescriptive periods of offenses during
the pendency of the mediation, conciliation, or arbitration process.
While P.D. No. 1508 has been repealed by the Local Government Code of
1991, the jurisprudence built thereon regarding prior referral to the lupon as a pre-
condition to the filing of an action in court remains applicable because its provisions
on prior referral were substantially reproduced in the Code.
Pursuant to paragraph (a), Section 412 of the Local Government Code,
respondent Judge Contreras should have granted the motion to dismiss the criminal
cases. He cannot justify its denial by taking refuge under Section 6 of P.D. No. 1508
(more properly, Section 412(b)(4) of the Local Government Code of 1991) which states
that the parties may go directly to court where the action is about to prescribe. This is
because, as earlier stated, pursuant to paragraph (c),Section 410 of the Code, the
prescriptive period was automatically suspended for a maximum period of sixty days
from 23 April 1993 when the private respondents filed their complaints with the lupon
of Valenzuela, Makati.
 Page |5

Moreover, having brought the dispute before the lupon of Barangay P.D. 1508. The motion was granted. Petitioner MfR thereof to which an opposition
Valenzuela, Makati, the private respondents are estopped from disavowing the was filed by private respondent. The motion for reconsideration was granted and
authority of the body which they themselves had sought. Their act of trifling with the private respondent was required to file his responsive pleading. Private respondent
authority of the lupon by unjustifiably failing to attend the scheduled mediation filed his answer. On July 24, 1986, private respondent asked for a preliminary hearing
hearings and instead filing the complaint right away with the trial court cannot be of the grounds for the motion to dismiss in his affirmative defenses. This was denied.
countenanced for to do so would wreak havoc on the barangay conciliation system. Private respondent filed a petition for certiorari and prohibition in the CA questioning
the said orders of the trial court. CA granted the petition, declaring the questioned
orders null and void, and directing the trial court to dismiss the civil case for lack of
Gegare v. CA jurisdiction. Motion for reconsideration filed by petitioner was denied. Thus, the
herein petition.
177 SCRA 471 (1989)
ISSUE:
This case involves a small piece of land. The decision was to cut it into 2 between the
parties. Petitioner wants the whole lot while the private respondent if happy with his Whether or not there should be a barangay conciliation.
half.
HELD:
FACTS:
Conciliation process at the Barangay level is a condition precedent for the
A 270sq.mtr lot situated in Gen San was titled in the name of Paulino Elma. A filing of a complaint in Court. Non-compliance with that condition precedent could
reversion case was filed by the Republic against Paulino and the lot was reverted to affect the sufficiency of the plaintiff's cause of action and make his complaint
the mass of public domain subject to disposition and giving preferential right to its vulnerable to dismissal on the ground of lack of cause of action or prematurity.
actual occupant, Napoleon Gegare. Both petitioner and private respondent filed an Pending the first mediation, no case could be validly filed with the courts. Filing of
application for the lot in the Board of Liquidators (Board). Board resolved to dispose complaint with the lupon suspends the prescriptive period for 60 days at most. Rogie:
the lot in favor of petitioner by way of a negotiated sale. Private respondent protested Filing a complaint with the lupon signifies that you want to conciliate or mediate. Since
against the application of petitioned, then Board denied the said protest. A request filing a case in court would signify that you want to litigate and not mediate. Therefore
for recon of private respondent was referred by the Board to Artemio Garlit, the conciliation should be finished before one can file a case in court. Escolin: Labor
liquidator-designee, Gen San Branch for verification and investigation. After which, cases are exempt from Barangay Conciliation proceedings because the labor court has
Garlit submitted a report to the Manila Ofc recommending division of the lot to the its own experts at arriving at an amicable settlement.
parties. Nevertheless, the Board denied the protest because the case had already been
decided by the court. However, a motion for reconsideration filed by private
respondent was favorably considered by the Board. The Board directed the chief of
LASEDECO to investigate the occupancy and area of the lot. Findings were that only
private respondent was the actual occupant so the LASEDECO chief recommended the
division of the property. Both parties appealed to the Ofc of the President but both
appeals were dismiss. A motion for reconsideration filed by petitioner was denied on
May, 29 1984. Private respondent paid for the value of ½ of the lot and applied for the
issuance of a patent. Patent was issued to ½ portion of the lot. Petitioner was also
advised to file his application and pay his portion. Petitioner filed an action for
“Annulment and Cancellation of Partition” and/or to Declare them Null and Void”
against private respondent and the Board. Private respondent filed motion to dismiss
the complaint on the grounds et al …(5) lack of conciliation efforts pursuant to sec 6,

Galuba v. Spouses Laureta
157 SCRA 627 (1988)
FACTS:
Alfredo and Revelina Laureta ceded to petitioner all their rights and interests
over a house and lot located in Quezon Hill, Baguio City for P70,000. Petitioner paid
the Lauretas P50,000 with the balance payable later.
When P18,000 of the balance remained unpaid, the parties brought the
matter before the barangay captain of Victoria Village in Baguio City. On February 10,
1984, the parties entered into an amicable settlement whereby they agreed that the
P18,000 would be paid in monthly installments starting April, 1984 and that
noncompliance therewith would "mean execution in accordance with the Barangay
Law.
A month later, petitioner discovered that the house he had bought was
encroaching on the adjoining lot, that the owner thereof was demanding payment for
such encroachment, and that there were arrears on electric bills and taxes amounting
to P6,117. Consequently, on July 17, 1984, he filed in the office of the barangay captain
of Victoria Village an unsworn complaint for the annulment of the amicable
settlement. He alleged therein that his consent to said settlement had been vitiated
by mistake or fraud and therefore, the amicable settlement should be annulled and a
new one entered into by the parties.
Meanwhile, the Lauretas filed in the Municipal Trial Court of Baguio City,
Branch IV, a motion for the issuance of a writ of execution based on the amicable
settlement. As the inferior court issued the writ, petitioner filed in the Regional Trial
Court of Baguio City a complaint for the annulment of the amicable settlement with
prayer for a writ of preliminary injunction and/or restraining order.
The lower court denied the prayer for the issuance of a restraining order
and/or writ of preliminary injunction. Thereafter, the Lauretas filed a motion to dismiss
the complaint on the ground of lack of jurisdiction over the nature of the action.
Alleging that in praying for a restraining order and/or writ of preliminary injunction,
petitioner wanted to "circumvent the mandatory provisions of P.D. 1508", the
Lauretas averred that "without the unmeritorious petition for preliminary injunction",
the dispute between them and petitioner was subject to amicable settlement.
The lower court issued an order granting the motion to dismiss on the
grounds of lack of jurisdiction as well as cause of action. Citing Sections 11 and 13 of
P.D. 1508, the lower court said: "x x x [T]here is no authorized judicial procedure under
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P.D. 1508 for the annulment of an amicable settlement. Only an arbitration award,
which is different from an amicable settlement, may become the subject of a petition
for nullification to be filed yet with the proper municipal trial court. x x x." The court
noted the fact that petitioner failed to repudiate the amicable settlement within the
10-day period provided for in Section 11 of P.D. 1508 as the parties entered into said
amicable settlement on February 10, 1984 and yet it was only on July 27, 1984 when
petitioner repudiated it through an unsworn complaint for its annulment.
ISSUE:
WON RTC has jurisdiction to annul an amicable settlement arrived at by the
parties through the mediation of the Lupong Tagapayapa, in the absence of a
repudiation of said amicable settlement within the 10-day period provided for in
Section 11 of Presidential Decree No. 1508.
HELD:
No.
Section 6 of P.D. 1508 is mandatory in character. Thus, in Morata v. Go, 125
SCRA 444, Vda. de Borromeo v. Pogoy, 126 SCRA 216 and Peregrina v. Panis, 133 SCRA
72, We accordingly held that the conciliation process at the barangay level is a
condition precedent for the filing of a complaint in court. In Royales v. Intermediate
Appellate Court, 127 SCRA 470, We ruled that 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 the ground of lack of cause
of action or prematurity.
Once the parties have signed an amicable settlement, any party who finds
reasons to reject it must do so in accordance with Section 13 of P.D. 1508 which states:
"SEC. 13. Repudiation.- Any party to the dispute may, within ten [10] days
from the date of the settlement, repudiate the same by filing with the Barangay
Captain a statement to that effect sworn to before him, where the consent is vitiated
by fraud, violence or intimidation. Such repudiation shall be sufficient basis for the
issuance of the certification for filing of a complaint, provided for in Section 6, hereof."
Pursuant to P.D. 1508, Section 12, Rule VI of the Katarungang Pambarangay
Rules which were promulgated "for the amicable settlement of disputes at the
barangay level, without judicial recourse”, also provides that "[f]ailure to repudiate
the settlement or the arbitration agreement within the time limits respectively set [in
Section 10 thereof], shall be deemed a waiver of the right to challenge on said
grounds", i.e., fraud, violence or intimidation.

Any party, therefore, who fails to avail himself of the remedy set forth in
Section 13 must face the consequences of the amicable settlement for he can no
longer file an action in court to redress his grievances arising from said settlement.
It should be emphasized that under Section 11 of said law, "[t]he amicable
settlement and arbitration award shall have the force and effect of a final judgment of
a court upon the expiration of the ten [10] days from the date thereof unless
repudiation of the settlement has been made or a petition for nullification of the
award has been filed before the proper city or municipal court".
Pepsi Cola Distributors v. Galang
FACTS
The private respondents were employees of the petitioner who were
suspected of complicity in the irregular disposition of empty Pepsi Cola bottles. On July
16, 1987, the petitioners filed a criminal complaint for theft against them but this was
later withdrawn and substituted with a criminal complaint for falsification of private
documents. After a preliminary investigation conducted by the municipal Trial Court
of Tanauan, Leyte, the complaint was dismissed.
Allegedly after an administrative investigation, the private respondents were
dismissed by the petitioner company on November 23, 1987. As a result, they lodged
a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC in
Tacloban City and decisions mandated reinstatement with damages. In addition, they
instituted in the Regional Trial Court of Leyte, a separate civil complaint against the
petitioners for damages arising from what they claimed to be their malicious
prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the
trial court had no jurisdiction over the case because it involved employee/employer
relations that were exclusively cognizable by the labor arbiter. The motion was granted
.On July 6, 1989, however, the respondent judge, acting on the motion for
reconsideration, reinstated the complaint, saying it was “distinct from the labor case
for damages now pending before the labor courts.” The petitioners then came to this
Court for relief.
ISSUE:
Whether or not it is the Labor Arbiter has jurisdiction over the claim for
damages arising from the malicious prosecution of the petitioner company.
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RULING:
No. It must be stressed that not every controversy involving workers and
their employers can be resolved only by the labor arbiters. This will be so only if there
is a “reasonable causal connection” between the claim asserted and
employee/employer relations to put the case under the provisions of Article 217.
Absent such a link, the complaint will be cognizable by the regular courts of Justice in
the exercise of their civil and criminal jurisdiction. The case now before the Court
involves a complaint for damages for malicious prosecution which was filed with the
Regional Trial Court of Leyte by the employees of the defendant company. It does not
appear that there is a “reasonable causal connection” between the complaint and the
relations of the parties as employer and employees. The complaint did not arise from
such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor practice is
asserted. What the employees are alleging is that the petitioners acted with bad faith
when they filed the criminal complaint which the Municipal Trial Court said was
intended “to harass the poor employees” and the dismissal of which was affirmed by
the Provincial Prosecutor "for lack of evidence to establish even a slightest probability
that all the respondents herein have committed the crime imputed against them." This
is a matter which the labor arbiter has no competence to resolve as the applicable law
is not the Labor Code but the Revised Penal Code.
Agustin v. Bacalan
135 SCRA 340
G.R. No. L-46000, March 18, 1985,
Facts:
The precursor of this case was a complaint for ejectment with damages filed
by plaintiff-appellant Agustin, as administrator of the Intestate Estate of Susana
Agustin, against defendant-appellee Bacalan, before the City Court of Cebu. Bacalan is
a lessee of a one-door ground floorspace in a building owned by the late Susana
Agustin. Due to nonpayment of rentals despite repeated demands an action to eject
him was filed wherein the City Court of Cebu rendered judgment dismissing the
counterclaim and ordering the defendant to vacate the premises in question and to
pay the plaintiff unpaid back rentals. From this decision, the defendant filed an appeal
with Branch Ill of the Court of First Instance of Cebu which rendered judgment
reversing that of the City Court. No appeal was taken by the plaintiff-appellant hence
the decision lapsed into finality and became executory. A writ of execution was issued

by virtue of which a notice to sell at public auction real properties belonging to the
estate of Susana Agustin was issued by the Deputy Sheriff to satisfy judgment in the
case. Plaintiff's counsel filed a motion for reconsideration, confessing his fault and
giving the reason why he failed to perfect the appeal on time. The motion was denied.
Thereafter, with the aid of new counsel, the plaintiff-appellant filed a complaint with
Branch V, Court of First Instance of Cebu, against the defendant and the Deputy Sheriff
of Cebu for the declaration of the nullity of the above-cited decision of Branch III, Court
of First Instance of Cebu in the ejectment case on the ground that the exercise of its
appellate jurisdiction was null and void. The court sustained the defendant.
Issues:
I. Whether or not the present action for the annulment of the judgment in
the ejectment case is the proper remedy after it has become final and
executory.
II. Whether or not the Court of First Instance may, in an appeal, award the
defendant-appellee's counterclaim in an amount exceeding or beyond
the jurisdiction of the court of origin
Held:
I. To this procedural dilemma, the solution lies in the determination of the
validity of the judgment sought to be annulled, for against a void
judgment, plaintiff-appellant's recourse would be proper. There is no
question as to the validity of the court's decision with respect to the issue
of physical possession of property, the defendant-appellee's right to the
same having been upheld. However, the plaintiff-appellant assails the
money judgment handed down by the court which granted damages to
the defendant-appellee. By reason thereof, he seeks the declaration of
the nullity of the entire judgment. Plaintiff-appellant loses sight of the
fact that the money judgment was awarded the defendant-appellee in
the concept of a counterclaim. A defending party may set up a claim for
money or any other relief which he may have against the opposing party
in a counterclaim(Section 6, Rule 6, Revised Rules of Court). And the
court may, if warranted, grant actual, moral, or exemplary damages as
prayed for. The grant of moral damages, in the case at bar, as a
counterclaim, and not as damages for the unlawful detention of property
must be upheld. However, the amount thereof is another matter.
II. It is well-settled that a court has no jurisdiction to hear and determine a
set-off or counterclaim in excess of its jurisdiction (Section 5, Rule 5,
Revised Rules of Court; Ago v. Buslon,10 SCRA 202). A counterclaim
Page |8
beyond the court's jurisdiction may only be pleaded by way of defense,
the purpose of which, however, is only to defeat or weaken plaintiff's
claim, but not to obtain affirmative relief (Section 5, Rule 5, Revised Rules
of Court). Nevertheless, the defendant-appellee, in the case at bar, set
up his claim in excess of the jurisdiction of the city court as a compulsory
counterclaim. As a consequence, the doctrine enunciated under
the case of One Heart Club, Inc. vs. Court of Appeals, an appellant
who files his brief and submits his case to the Court of Appeals for
decision, without questioning the latter's jurisdiction until decision is
rendered therein, should be considered as having voluntarily waives so
much of his claim as would exceed the jurisdiction of said Appellate
Court; for the reason that a contrary rule would encourage the
undesirable practice of appellants submitting their cases for decision to
the Court of Appeals in expectation of favorable judgment, but with
intent of attacking its jurisdiction should the decision be unfavorable.
The rule is that a counterclaim not presented in the inferior court cannot be
entertained in the Court of First Instance on appeal. The amount of judgment,
therefore, obtained by the defendant-appellee on appeal, cannot exceed the
jurisdiction of the court in which the action began. Since the trial court did not
acquire jurisdiction over the defendant's counterclaim in excess of the
jurisdictional amount, the appellate court, likewise, acquired no jurisdiction over
the same by its decisions or otherwise. Appellate jurisdiction being not only a
continuation of the exercise of the same judicial power which has been executed
in the court of original jurisdiction, also presupposes that the original and
appellate courts are capable of participating in the exercise of the same judicial
power.
 Page |9

Ortigas v. Herrera contract to make a refund but under certain specific conditions still to be proven or
established. In a case for the recovery of a sum of money, as the collection of a debt,
120 SCRA 89
the claim is considered capable of pecuniary estimation because the obligation to pay
G.R. No. L-36098, January 21, 1983 the debt is not conditioned upon any specific fact or matter. But when a party to a
contract has agreed to refund to the other party a sum of money upon compliance by
Facts: the latter of certain conditions and only upon compliance therewith may what is
legally due him under the written contract be demanded, the action is one not capable
Petitioner and private respondent entered into an agreement whereby for
of pecuniary estimation. The payment of a sum of money is only incidental which can
and in consideration of P55,430, the former agreed to sell to the latter a parcel of land
only be ordered after a determination of certain acts the performance of which being
with a special condition that should private respondent as purchaser complete the
the more basic issue to be inquired into.
construction including the painting of his residential house on said lot within two
years, petitioner, as owner, has agreed to refund to private respondent the amount of (2) NEGATIVE. JURISDICTION IS LODGED TO CFI (now RTC). Although private
P10.00 per square meter. When the aforesaid special condition was fulfilled, private respondent's complaint in the court a quo is designated as one for a sum of money
respondent accordingly notified in writing the petitioner of the same and requested and damages, an analysis of all the factual allegations of the complaint patently shows
for his refund amounting to P4,820. Upon failure of petitioner to pay his obligation, that what private respondent seeks is the performance of petitioner's obligation under
private respondent filed a complaint for sum of money and damages with the City the written contract to make the refund of the rate of P10 per square meter or in the
Court of Manila, against petitioner. A motion to dismiss was filed by petitioner on total amount of P4,820, but only after proof of having himself fulfilled the conditions
grounds of lack of jurisdiction, failure of the complaint to state a cause of action and that will give rise to petitioner's obligation, a matter clearly incapable of pecuniary
improper venue. City Court Judge Jose B. Herrera in his order held in abeyance the estimation and thus fall under CFI’s Jurisdiction (now the RTC).
resolution on the motion until after the trial of the case on the merits. A
reconsideration of the said order having been denied, petitioner filed with the Court
of First Instance of Manila, a special civil action for certiorari and prohibition with
preliminary injunction. A motion to dismiss was filed by private respondent, and on
November 17, 1972, the petition was dismissed on the ground that the claim of private
respondent in his complaint, being less than P10,000, is within the exclusive
jurisdiction of the city court. Petitioner thus filed the present petition and argues
among others that: (a) as detriment from the allegations of the complaint, the action
is for specific performance of contract; and (b) actions in which the subject of litigation
is not capable of pecuniary estimation such as complaints for specific performance of
contract are exclusively cognizable by the Court of First Instance.

Issues:

(1) Whether or not the case is for the collection of a sum of money.

(2) Whether or not the city court has jurisdiction to hear and decide the case on its
merits

Ruling:

(1) NEGATIVE. The action involved in this case is one for specific performance and not
for a sum of money and therefore incapable of pecuniary estimation, because what
private respondent seeks is the performance of petitioner's obligation under a written